SHOREWOOD PACKAGING CORP, PREC14A, 1999-12-13

SHOREWOOD PACKAGING CORP
PREC14A, 1999-12-13
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PRELIMINARY COPY SUBJECT TO COMPLETION DATED DECEMBER 10, 1999

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN CONSENT STATEMENT

SCHEDULE 14A INFORMATION
CONSENT REVOCATION STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[X] Preliminary Consent Revocation Statement [_] Confidential, For Use
of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Consent Revocation Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

SHOREWOOD PACKAGING CORPORATION
(Name of Registrant as Specified in its Charter)

SHOREWOOD PACKAGING CORPORATION
(Name of Person(s) Filing Consent Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)1 and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:

[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:

[LOGO OF SHOREWOOD PACKAGING CORPORATION]

PRELIMINARY COPY
SUBJECT TO COMPLETION, DATED DECEMBER 10, 1999

CONSENT REVOCATION STATEMENT
BY THE BOARD OF DIRECTORS OF SHOREWOOD PACKAGING CORPORATION
IN OPPOSITION TO THE SOLICITATION OF CONSENTS
BY CHESAPEAKE CORPORATION AND SHEFFIELD, INC.

This Consent Revocation Statement and the accompanying BLUE Consent
Revocation Card are being furnished by the Board of Directors (the "Board
of Directors" or the "Board") of Shorewood Packaging Corporation, a
Delaware corporation (the "Company" or "Shorewood"), to the holders of the
outstanding shares of Shorewood common stock, par value $0.01 per share
(the "Common Stock"), in opposition to the solicitation by Chesapeake
Corporation, a Virginia corporation ("Chesapeake"), and its wholly owned
subsidiary Sheffield, Inc., a Delaware corporation ("Sheffield"), of
written consents from the stockholders of Shorewood (the "Consent
Solicitation").

On December 3, 1999, Chesapeake, acting through Sheffield, commenced a
consent solicitation in an effort to remove, WITHOUT CAUSE, your Company's
entire Board of Directors and to replace your duly elected directors with a
slate of nominees hand-picked by Chesapeake. This action by Chesapeake was
taken in conjunction with the commencement by Chesapeake, through
Sheffield, of an unsolicited tender offer (the "Chesapeake Offer") to
purchase all of the outstanding shares of Common Stock, including the
associated rights to purchase preferred stock of Shorewood (the "Rights"),
issued pursuant to the Rights Agreement, dated as of June 12, 1995 (the
"Rights Agreement"), between Shorewood and The Bank of New York (the Common
Stock and the Rights together are referred to herein as the "Shares"), at
$17.25 in cash per Share.

Chesapeake took this action before your Board of Directors had the
opportunity to review the Chesapeake Offer and the strategic alternatives
available to Shorewood and to communicate to you and the other stockholders
its position with respect to the Chesapeake Offer.

A consent in favor of Chesapeake's proposals is a consent to replace
your duly elected directors with Chesapeake's hand-picked nominees who
would then comprise the entire board of your Company. Chesapeake's
nominees would then control the Company and would be in a position to
ensure that Chesapeake can acquire Shorewood at a price determined by
Chesapeake. BECAUSE WE BELIEVE YOUR CURRENT BOARD OF DIRECTORS IS IN THE
BEST POSITION TO EVALUATE THE STRATEGIC ALTERNATIVES AVAILABLE TO SHOREWOOD
AND TO DECIDE ON THE COURSES OF ACTION THAT ARE IN THE BEST INTERESTS OF
SHOREWOOD'S STOCKHOLDERS, WE ARE SEEKING THE REVOCATION OF ANY CONSENTS
THAT MAY HAVE BEEN GIVEN IN RESPONSE TO CHESAPEAKE'S SOLICITATION.

We believe that a Board of Directors composed of Chesapeake's hand-
picked nominees would have substantial conflicts of interest in evaluating
these matters and would only attempt to complete a transaction with
Chesapeake. Your Board of Directors believes that your interests will be
best served if Shorewood's current directors, acting independently of
Chesapeake, evaluate the strategic alternatives available to Shorewood and
decide and implement Shorewood's strategic plans. The Board of Directors
is asking for your support in opposing Chesapeake's attempt to gain control
of your Board of Directors so that it can be assured that Shorewood gets
sold to Chesapeake.

YOUR BOARD UNANIMOUSLY OPPOSES THE CONSENT SOLICITATION AND URGES YOU
NOT TO SIGN THE WHITE CONSENT CARD SENT TO YOU BY CHESAPEAKE. WE ALSO URGE
YOU IN ANY EVENT NOT TO SIGN ANY CONSENT CARD UNTIL YOU HAVE HEARD FROM
YOUR BOARD OF DIRECTORS ITS POSITION WITH RESPECT TO THE CHESAPEAKE OFFER,
WHICH WILL BE ANNOUNCED ON OR PRIOR TO DECEMBER 16, 1999.

EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED CHESAPEAKE'S WHITE CONSENT
CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. WE URGE YOU TO SIGN, DATE
AND MAIL THE ENCLOSED BLUE CONSENT REVOCATION CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED. YOUR PROMPT ACTION IS IMPORTANT. PLEASE RETURN THE
BLUE CONSENT REVOCATION CARD TODAY.

IF YOUR SHARES ARE HELD IN "STREET NAME," ONLY YOUR BROKER OR BANKER
CAN VOTE YOUR SHARES. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND INSTRUCT HIM OR HER TO VOTE A BLUE CONSENT REVOCATION CARD ON
YOUR BEHALF TODAY.

This Consent Revocation Statement and the enclosed BLUE Consent
Revocation Card are first being mailed to stockholders on or about December
__, 1999.

If you have any questions about giving your revocation of consent or
require assistance, please call Innisfree M&A Incorporated ("Innisfree"),
the firm assisting Shorewood in this solicitation, at the phone numbers
shown below:

INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks & Brokers Call Collect: (212) 750-5833

REASONS YOUR BOARD OF DIRECTORS
OPPOSES THE CHESAPEAKE CONSENT SOLICITATION

Chesapeake is soliciting consents in favor of five separate proposals
(collectively, the "Proposals"), each designed to enable Chesapeake to take
control of your Board of Directors. The Proposals are set forth below.
Your Board of Directors believes that the Consent Solicitation is an
attempt to pressure the current Board of Directors of Shorewood to accept
Chesapeake's unsolicited and highly conditional merger proposal without
first having the opportunity to consider all of Shorewood's strategic
alternatives and decide what courses of action are in the best interest of
Shorewood and its stockholders. WE BELIEVE THAT SUCH UNDUE PRESSURE BY
CHESAPEAKE IS NOT IN THE BEST INTERESTS OF SHOREWOOD'S STOCKHOLDERS.

Chesapeake PROPOSAL 1:

Amend Article III, Section 1 of the Amended and Restated By-laws of
the Company (the "Amended By-laws") to remove the provision establishing a
staggered board of directors by deleting the second, third and fourth
sentences of Article III, Section 1 and inserting in lieu thereof the
sentence "Directors shall be elected annually to serve for one year terms"
and amend Article III, Section 2 of the Amended By-laws by deleting in the
third sentence the phrase "at which directors of this class are to be
elected."

Chesapeake PROPOSAL 2:

Remove each of the nine current members of the Board of Directors and
any other person or persons who may be members of the Board at the time the
Proposals become effective (other than the persons elected as a result of
the adoption of Proposal 4 set forth below).

Chesapeake PROPOSAL 3:

Amend Article III, Section 1 of the Amended By-laws to fix the number
of directors of Shorewood at three, by deleting the phrase "to consist of
not less than three nor more than twelve directors, as shall be determined
by resolution of the Board of Directors from time to time" and inserting
in lieu thereof the phrase "to consist of three (3) directors."

Chesapeake PROPOSAL 4:

Elect three persons who have not yet been identified by Chesapeake
(the "Nominees") as members of the Board of Directors.

Chesapeake PROPOSAL 5:

Repeal each amendment to the Amended By-laws (whether effected by
supplement to, deletion from or revision of the Amended By-laws) adopted
subsequent to November 22, 1999, and at or prior to the time the Proposals
become effective (other than the amendments adopted as a result of the
adoption of Proposal 1 and Proposal 3 set forth above).

Chesapeake has imposed the following conditions on the adoption of its
Proposals: (i) each of Proposals 3, 4 and 5 is conditioned upon the
approval of Proposal 1 and (ii) Proposal 2 is conditioned upon the approval
of Proposal 1 and at least one of the Nominees listed in Proposal 4 being
elected as a member of the Board of Directors. Chesapeake has stated that
none of Proposals 3, 4 and 5 is conditioned upon the approval of any of the
other Proposals 3, 4 and 5.

Chesapeake commenced the Chesapeake Offer on December 3, 1999. Your
Board of Directors, with the assistance of its legal and financial
advisors, is currently reviewing the Chesapeake Offer and Shorewood's
strategic alternatives. Shorewood stockholders should be assured that the
Board of Directors is acutely aware of its fiduciary duties and intends
to, and will, act in a manner consistent with such duties and in the best
interests of Shorewood and its stockholders. In accordance with applicable
provisions of the federal securities laws, the Board of Directors will
take a position with respect to the Chesapeake Offer on or before December
16, 1999, and will inform stockholders as to its position and its reasons
therefor. We urge you not to sign any Consent Card until your Board
announces its position with respect to the Chesapeake Offer.

All of the Proposals, taken together, are designed to enable
Chesapeake to take control of Shorewood's Board and expedite the prompt
consummation of Chesapeake's proposed acquisition of Shorewood without
having to negotiate with the current Board. Proposal 5 is designed to
nullify unspecified By-laws which may be adopted by your Board in its
efforts to act in, and protect, the interests of, Shorewood's stockholders.
As of the date of this Consent Revocation Statement, Shorewood has not
adopted any amendments to the Amended By-laws subsequent to November 22,
1999.

Chesapeake's acknowledged purpose in pursuing the Consent Solicitation
is to replace Shorewood's duly elected Board of Directors with Chesapeake's
own hand-picked nominees. Chesapeake also acknowledges that it expects
that the Chesapeake nominees, if elected, would cause Shorewood to be
acquired by Chesapeake. While the Board recognizes that the Chesapeake
nominees, if elected, would have certain fiduciary obligations under
Delaware law to Shorewood and its stockholders, the Board expects that the
Chesapeake nominees act in furtherance of the interests of Chesapeake.
In particular, if Chesapeake's nominees are elected as your directors,
conflicts of interests are inevitable and would surely be detrimental to
the interests of Shorewood and its stockholders.

We believe your duly elected Board of Directors, not Chesapeake's
proposed slate of hand-picked nominees, is in the best position to evaluate
Shorewood's strategic alternatives, decide on the courses of action that
are in the best interests of Shorewood's stockholders and to implement
those decisions.

For the foregoing reasons, your Board of Directors believes that the
interests of Shorewood stockholders are best served if Shorewood's current
directors, acting independently of Chesapeake, continue to manage Shorewood
and are in a position to implement such plans determined to be in the best
interests of Shorewood's stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY OPPOSES THE CHESAPEAKE CONSENT
SOLICITATION AND URGES YOU NOT TO SIGN THE WHITE CONSENT CARD SENT TO YOU
BY CHESAPEAKE.

EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED CHESAPEAKE'S WHITE CONSENT
CARD, YOU CAN CHANGE YOUR MIND AND REVOKE YOUR CONSENT. WE URGE YOU TO
SIGN, DATE AND MAIL THE ENCLOSED BLUE CONSENT REVOCATION CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.

If you have any questions, please call Innisfree toll-free at (888)
750-5834. Banks and brokers should call collect at (212) 750-5833.

BACKGROUND

Beginning in February 1999, Shorewood began accumulating shares of
Chesapeake's common stock solely for investment purposes. The investment
was motivated by Shorewood's view that Chesapeake's stock was undervalued
at the time.

On June 4, 1999, Mr. Shore met in New York City with Thomas H.
Johnson, President and Chief Executive Officer of Chesapeake, and two other
Chesapeake officials. At this meeting, Mr. Shore advised Mr. Johnson that
Shorewood had purchased shares of Chesapeake for investment purposes only.

Acquisitions of Chesapeake stock continued until July 16, 1999, at
which time Shorewood held 809,000 shares of Chesapeake, with a value of
$26,201,646. This represents approximately 4.6% of Chesapeake's
outstanding voting securities.

Mr. Shore met again with Mr. Johnson in New York City on August 17,
1999. Once again, Mr. Shore advised Mr. Johnson that Shorewood's purchase
of Chesapeake's stock was only for investment purposes.

Despite the fact that Chesapeake had announced its intention to do a
stock buyback, Chesapeake's stock price did not rise as expected by
Shorewood and began to decline, falling from $37 3/8 per share around the
end of June to approximately $30 per share by the end of July. While
Chesapeake's stock reached a price of $35 per share in early September, the
stock price again declined in September and October, falling to $27 1/2 per
share by late October.

By the latter half of October 1999, Shorewood began to reassess its
position respecting Shorewood's holdings of Chesapeake's stock. Shorewood
believed that Chesapeake's stock was not likely to turn around because it
did not believe that the investment community properly understood the
company. Accordingly, Shorewood commenced consideration of a possible
negotiated acquisition of Chesapeake.

At a meeting of Shorewood's Board of Directors on October 26, 1999,
the Board authorized Shorewood to make an offer to negotiate the
acquisition of all of Chesapeake's issued and outstanding common stock for
$40 per share.

On October 26, 1999, Mr. Shore called Mr. Johnson to inform him that a
letter would be forthcoming that would contain a proposal by Shorewood to
acquire Chesapeake (the "Shorewood Proposal"). During the telephone call,
Mr. Johnson, without inquiring as to any of the terms (including price) of
the Shorewood Proposal, informed Mr. Shore that Chesapeake was not for
sale. Mr. Johnson did, however, acknowledge his responsibility to bring
the Shorewood Proposal before the Chesapeake Board of Directors. Later
that day, the following letter was sent by Mr. Shore to Mr. Johnson:

October 26, 1999

STRICTLY CONFIDENTIAL

The Board of Directors
Chesapeake Corporation
1021 East Cary Street
Richmond, VA 23218

ATTENTION: Mr. Thomas H. Johnson, Chief Executive Officer

Dear Tom:

As you know, you and I have had a number of discussions regarding various
business arrangements between Shorewood and Chesapeake. I believe it is in
both of our companies' and their respective stockholders' best interest to
move these discussions forward. The purpose of this letter is to propose
that Shorewood acquire Chesapeake at a substantial premium to your current
market value. Shorewood's Board of Directors met today and has authorized
transmittal of this proposal to you and your Board.

Tom, I believe our proposal is a compelling one and would be very exciting
for Chesapeake's stockholders, employees, management and customers. We are
in a position to make a proposal to acquire Chesapeake at $40 per share in
cash which represents a 41% premium to yesterday's closing price and a 38%
premium to the 20-day average closing price. This proposal reflects the
input of our senior management team, many of whom were part of the
Shorewood due diligence team that reviewed our potential acquisition of
Field, and it also reflects a thorough review of all publicly available
information.

We have met with our financial advisors and financing sources and believe
that financing does not present an issue in this transaction. It would be
our expectation that the Board of Directors of Chesapeake would meet to
review this letter as soon as possible and authorize exclusive discussions
with us. At such time we would be prepared to discuss our financing plan
for the transaction with you (and would anticipate that our ultimate
agreement to acquire Chesapeake would not be subject to any type of
financing condition). Further, we do not believe that any significant
obstacles such as anti-trust or other conditions exist.

We are sensitive to the inherent difficulties faced by you in negotiating
this type of transaction in a public forum and are prepared to negotiate
confidentiality with you provided that you are prepared to begin these
negotiations in an exclusive and expedient fashion intended to result in a
transaction with Shorewood.

We feel that our proposal represents a significant immediate cash premium
to Chesapeake stockholders and represents a price that we believe your
Board and stockholders should enthusiastically support. We urge you and
your fellow directors to give serious consideration to the merits of this
transaction and reiterate our willingness to work with you in an expedient
and confidential manner intended to serve the interests of the stockholders
of Chesapeake Corporation.

I look forward to your response to this proposal and look forward to
working with all of you in achieving this major event for both of our
companies and their respective stockholders.

Sincerely,

SHOREWOOD PACKAGING CORPORATION

/s/ Marc P. Shore

Marc P. Shore
Chairman of the Board

On October 29, 1999, Mr. Johnson delivered the following letter to Mr.
Shore by facsimile:

October 29, 1999

Strictly Confidential

Mr. Marc P. Shore
Chairman of the Board & Chief Executive Officer
Shorewood Packaging Corporation
277 Park Avenue
New York, New York 10172

Dear Marc:

I have received your letter of October 26, 1999.

As you know, Chesapeake is not for sale. We are in the process of
executing our strategy of building a global specialty packaging and
merchandising company, which we believe is in the best interests of
Chesapeake and its stockholders.

However, our Board of Directors, consistent with its fiduciary duties,
will consider carefully your letter. Completion of the appropriate
analysis to give due consideration to your letter and enable our Board to
become fully informed will require some time. I will respond to your
letter no later than one week from today, or Friday, November 5, 1999.

Sincerely,

/s/ Thomas H. Johnson

Thomas H. Johnson
President & Chief Executive Officer

On November 4, 1999, Mr. Johnson called Mr. Shore to suggest a
meeting. At the meeting, on November 10, 1999, Mr. Johnson (i) advised Mr.
Shore that Chesapeake was not for sale and that the Chesapeake Board had
unanimously determined that the Shorewood Proposal was inadequate and not
in the best interests of Chesapeake and its stockholders, (ii) expressed a
willingness to consider acquiring Shorewood at a price of $16.50 per share
in cash and (iii) suggested that, given that Chesapeake was a Virginia
corporation, Chesapeake would be a difficult target to be acquired on an
unsolicited basis. Mr. Shore stated that Shorewood was not for sale, but
that he would communicate the offer to the Shorewood Board.

Later on November 10, 1999, Mr. Johnson delivered the following letter
to Mr. Shore:

November 10, 1999

Strictly Confidential

Mr. Marc P. Shore
Chairman of the Board & Chief Executive Officer
Shorewood Packaging Corporation
277 Park Avenue
New York, New York 10172

Dear Marc:

This letter follows our meeting today to discuss your letter, dated
October 26, 1999, in which you suggest a combination between Shorewood
Packaging Corporation and Chesapeake Corporation. Our Board of Directors,
in consultation with our management, legal, and financial advisors, has
reviewed thoroughly your expression of interest and related relevant
considerations.

As I advised you today, our Board of Directors, after careful review,
has unanimously determined that the acquisition of Chesapeake by Shorewood,
as set forth in your letter, is not in the best interests of Chesapeake and
its stockholders and has charged me with firmly and unambiguously rejecting
your proposal. Our Board of Directors' firm conviction is that the
interests of Chesapeake and its stockholders are best served by continuing
to pursue vigorously our current strategic plan as an independent company.

While we believe that your proposal is not in the best interests of
our stockholders, our analysis suggests that a combination of our
businesses through an acquisition of Shorewood by Chesapeake would be in
the best interests of our respective stockholders, employees, and
customers. Towards that end, Chesapeake's Board of Directors has
unanimously authorized me to propose that Chesapeake acquire Shorewood at
$16.50 in cash per share, representing nearly a 40% premium over
Shorewood's closing price yesterday. The transaction we propose can be
effected by Chesapeake immediately with its cash on hand and committed
credit facilities, and is, therefore, not subject to a financing condition.

Chesapeake has been evaluating a possible acquisition of Shorewood
since early 1998, as part of our ongoing strategy of building a global
specialty packaging and merchandising company. We believe that the
combination of Chesapeake and Shorewood would create one of the world's
premier specialty packaging and merchandising companies, enhancing
Chesapeake's position as a leader in this segment and benefitting our
customers through one-stop-shopping for complementary products.

We are prepared to commence immediately good faith negotiations on an
exclusive basis with the objective of entering into a definitive merger
agreement consistent with our proposal. To date, your letter to us has
been kept confidential, and we have reciprocally made our proposal to you
on a confidential basis. Should you choose to pursue this matter in the
public forum, be assured that we are prepared to pursue aggressively our
own objectives.

We appreciate the obligation of your Board of Directors, which you
acknowledged today, to meet and consider our proposal from the standpoint
of the best interests of all of your stockholders. Of course, we were
disappointed that you stated today that such a meeting would be a very
short one. Nevertheless, we hope that your Board will give our proposal
serious consideration.

I look forward to your prompt response.

Sincerely,

/s/ Thomas H. Johnson

Thomas H. Johnson
President & Chief Executive Officer

On November 18, 1999, Mr. Shore delivered the following letter to Mr.
Johnson by facsimile:

November 18, 1999

Mr. Thomas H. Johnson
President & Chief Executive Officer
Chesapeake Corporation
James Center II
1021 East Cary Street
Box 2350
Richmond, VA 23218

Dear Tom:

This is in response to the proposal you made at our meeting on
November 10, 1999 and in the letter you delivered to me late the same day.

Our Board of Directors has given due consideration to your proposal
and concluded that it is inconsistent with Shorewood's clear and
successfully implemented strategic direction and not in the best interests
of Shorewood's stockholders. After consulting with our legal and financial
advisors, our Board has determined that our stockholders will benefit most
if Shorewood continues to position itself as the premier supplier of high
end folding cartons to a multinational customer base. Accordingly, I have
been authorized to inform you that the Shorewood Board of Directors has
unanimously and unequivocally rejected your proposal that we enter into
negotiations for the acquisition of Shorewood by Chesapeake.

Nevertheless, we continue to believe that an acquisition of Chesapeake
by Shorewood, at a fair price and a significant premium to Chesapeake's
current market value would be a step in the best interests of Chesapeake's
stockholders, management, employees and customers. Moreover, we believe
that the price of $40 per share, which we have proposed, would be embraced
by Chesapeake's stockholders. That price would enable Chesapeake's
stockholders to realize a valuation nearly equivalent to their company's
all time market high and more than 30% above its current market value.

Tom, we want to enter into an amicable, albeit arm's length,
negotiated transaction with your company. Toward that end, we again
propose that your Board authorize you to enter into negotiations with us,
so that your stockholders may decide whether the proposal we have made is
fair, reasonable and in their best interests. We believe, without having
had an opportunity to do any due diligence other than with respect to
publicly available documents, that $40 fully values Chesapeake's stock. I
trust you will reconsider your position and respond so that we may further
our mutual interests.

Alternatively, we are willing to let Chesapeake's stockholders decide
if our proposal is acceptable to them, whether or not your Board endorses
the proposal. Therefore, if you and your Board are unwilling to enter into
negotiations with us, we request that you remove the existing legal
impediments to a Shorewood tender offer so that your stockholders may
decide for themselves where their best interests lie.

As you know, Shorewood has a shareholding in Chesapeake which, based
on your most recent published information, is almost 5% of Chesapeake's
outstanding common stock. If you make continued progress in your share
repurchase program, Shorewood will become a 5% stockholder in your company,
even if it does not increase its position. In any event, we believe it
appropriate that Chesapeake's stockholders be made aware of the opportunity
that Shorewood is seeking to provide and that they, as well as Shorewood's
stockholders, be informed of your response to our proposal. To accomplish
that, we are issuing the enclosed press release simultaneously with the
delivery of this letter.

Cordially,

/s/ Marc P. Shore

Marc P. Shore
Chairman and Chief Executive Officer

Also on November 18, 1999, Shorewood issued the following press
release:

CONTACTS:
Shorewood Packaging
Howard Liebman
President & Chief Financial Officer
(212) 371-1500

FOR IMMEDIATE RELEASE

Morgan-Walke Associates
Investors: Robert P. Jones/Stephanie
Prince
Media: Jennifer Kirksey
(212) 850-5600

SHOREWOOD PACKAGING CORPORATION PROPOSAL
TO CHESAPEAKE CORPORATION

NEW YORK, NY, November 18, 1999 - Shorewood Packaging Corporation
(NYSE:SWD) announced that Chesapeake Corporation's (NYSE:CSK) Board of
Directors has rejected a proposal by Shorewood to enter into negotiations
for the acquisition of Chesapeake with cash consideration of $40 per share,
a premium of 41% over the market price when the proposal was made, 33% over
yesterday's closing price and a valuation nearly equivalent to Chesapeake's
all time market high, reached in July 1998, well before it announced its
current stock buy-back program.

Shorewood stated that its proposal had been made to Chesapeake's Board
of Directors on October 26, 1999 and rejected by Chesapeake on November 10,
1999. Chesapeake's rejection included a counterproposal that Chesapeake
acquire Shorewood for cash consideration of $16.50 a share, a price well
below Shorewood's trailing 12 month closing high.

Shorewood's Board of Directors has rejected the counterproposal as
being inconsistent with the company's strategic plan to position itself as
the premier supplier of high end folding cartons to a multinational
customer base, as well as failing to recognize Shorewood's value and the
benefits that would be provided to Chesapeake's customers, employees and
stockholders if Shorewood were to acquire Chesapeake.

Shorewood owned 809,000 Chesapeake shares or 4.62% of Chesapeake as of
October 29, 1999, the date of Chesapeake's most recent 10-Q. Shorewood
noted that Chesapeake's anti-takeover provisions have the practical effect
of disenfranchising Chesapeake's stockholders. For example, Chesapeake's
"dead hand poison pill" makes it difficult for Shorewood to present its
proposal to Chesapeake's stockholders without the prior approval of
Chesapeake's Board of Directors. Accordingly, Shorewood stated, although it
is not currently contemplating a tender offer to Chesapeake's stockholders
without the prior approval of Chesapeake's Board of Directors, it has
requested Chesapeake's Board to redeem the "poison pill". If the "poison
pill" and other protective provisions were removed, Shorewood would move
promptly to bring its proposal directly to Chesapeake's stockholders.
Additionally, together with its financial and legal advisors, Shorewood is
considering other alternatives that would enable Chesapeake's stockholders
to decide whether $40 a share is a fair price.

Shorewood Packaging Corporation is a leading value-added provider of
high quality printing and paperboard packaging for the computer software,
cosmetics and toiletries, food, home video, music, tobacco and general
consumer markets in North America and China, with 16 plants in the United
States, Canada and China.

Certain statements included in this press release constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are typically identified by their
inclusions of phrases such as "the Company anticipates," "the Company
believes" and other phrases of similar meaning. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others: general economic and business conditions;
competition; political changes in international markets; raw material and
other operating costs; costs of capital equipment; changes in foreign
currency exchange rates; changes in business strategy or expansion plans;
the results of continuing environmental compliance testing and monitoring;
quality of management; availability, terms and development of capital;
fluctuating interest rates and other factors referenced in this release and
in the Company's annual report on Form 10-K and quarterly reports on Form
10-Q.

Also on November 18, 1999, Chesapeake issued the following press
release:

FOR IMMEDIATE RELEASE

Chesapeake Confirms Proposal to Acquire Shorewood for $16.50 Per Share
in Cash

RICHMOND, Va., Nov. 18/PRNewswire/ - Chesapeake Corporation (NYSE: CSK -
news) today confirmed that it made a proposal to acquire Shorewood
Packaging Corporation (NYSE: SWD - news) for $16.50 in cash per share, or
in the aggregate, approximately $480 million in equity plus approximately
$260 million in debt. This represents nearly a 40% premium over
Shorewood's closing price on November 9, 1999, the day prior to
Chesapeake's proposal. The transaction can be effected by Chesapeake
immediately with its cash on hand and committed credit facilities, and is
not subject to a financing condition.

Chesapeake noted that the company is prepared to commence immediate good
faith negotiations on an exclusive basis with the objective of entering
into a definitive merger agreement consistent with its proposal.

Thomas H. Johnson, president and chief executive officer of Chesapeake,
said, "Chesapeake has been evaluating a possible acquisition of Shorewood
since early 1998, as part of our ongoing strategy of building a global
specialty packaging and merchandising company. We believe Chesapeake's
acquisition of Shorewood would create, under Chesapeake's leadership, one
of the world's premier specialty packaging and merchandising companies,
enhancing Chesapeake's position as a leader in this segment and benefitting
customers through one-stop shopping for complementary products.

"We at Chesapeake are continuing to pursue our strategic plan of
redeploying our capital into appropriate acquisitions to further our growth
and enhance stockholder value. We are currently in discussions with
several other attractive acquisition candidates," Mr. Johnson continued.

"We believe that Shorewood's decision to make public its unsolicited
proposal is the latest in a series of ill-conceived actions by Shorewood
following Shorewood's unsuccessful attempt to acquire Field Group plc,
which Chesapeake acquired in March 1999," concluded Mr. Johnson.

Chesapeake noted that its board of directors, in consultation with its
financial advisors, Goldman, Sachs & Co. and Donaldson Lufkin & Jenrette,
and legal advisor, Hunton & Williams, carefully considered Shorewood's
unsolicited proposal and unanimously concluded that the proposal is
inadequate and not in the best interests of Chesapeake's stockholders.

Chesapeake also noted that it has referred Shorewood's heretofore-
undisclosed accumulation of Chesapeake stock to the Federal Trade
Commission, requesting an investigation as to whether Shorewood has
violated the Hart-Scott-Rodino Antitrust Improvement Act.

Chesapeake Corporation, headquartered in Richmond, Va., is primarily
engaged in the manufacturing and sale of specialty packaging and point-of-
purchase displays. Chesapeake has over 40 locations in North America,
Europe and Asia. Chesapeake's net sales in 1998 were $950.4 million.
Chesapeake's website is http://www.cskcorp.com.

This news release, including comments by Thomas H. Johnson, contains
forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The
accuracy of such statements is subject to a number of risks, uncertainties,
and assumptions that may cause Chesapeake's actual results to differ
materially from those expressed in the forward-looking statements
including, but not limited to: competitive products and pricing; production
costs, particularly for raw materials such as corrugated box and display
materials; fluctuations in demand; government policies and regulations
affecting the environment; interest rates; currency translation movements;
Year 2000 compliance issues; and other risks that are detailed from time to
time in reports filed by the Company with the Securities and Exchange
Commission.

On November 22, 1999, Chesapeake issued the following press release
which contained the full text of a letter which was sent on such date by
Mr. Johnson to each member of Shorewood's Board of Directors:

FOR IMMEDIATE RELEASE

CHESAPEAKE SENDS LETTER TO SHOREWOOD DIRECTORS
Indicates Willingness to Negotiate Price and Structure

(Richmond, VA - November 22, 1999) Thomas H. Johnson, President and CEO of
Chesapeake Corporation (NYSE:CSK), today sent the following letter to each
of the directors of Shorewood Packaging Corporation (NYSE:SWD) regarding
Chesapeake's proposal to acquire Shorewood for $16.50 per share in cash:

November 22, 1999

The Board of Directors
Shorewood Packaging Corporation
277 Park Avenue
New York NY 10172

Ladies and Gentlemen:

We were disappointed to learn of your rejection of our fully-financed
proposal to acquire Shorewood at $16.50 per share, representing a
substantial premium to your current market price. We continue to believe
that a combination of our businesses under Chesapeake's leadership would be
in the best interests of our respective stockholders, employees and
customers.

Your President, Mr. Liebman, was quoted in The Wall Street Journal as
saying that you are prepared to consider an offer at the "right price."
While we believe that our $16.50 proposal represents a full valuation, we
wish to reiterate that we are prepared to commence immediate good faith
negotiations regarding our proposal. Our offer is based on publicly
available information, and we remain open to the possibility that we may be
able to increase our offer with appropriate due diligence and access to
your business plan. We also stand ready to discuss alternatives to an all-
cash structure that may offer a tax- advantaged alternative for your
stockholders.

Given the importance to your stockholders of our continued interest and our
willingness to negotiate price and structure, we are issuing a press
release today concerning the subject of this letter.

We look forward to your prompt response, and to commencing good faith
negotiations regarding our proposal.

Sincerely,

/s/ Thomas H. Johnson
Thomas H. Johnson

Johnson commented that he hoped Shorewood's Board, upon receiving the
letter, would realize the promising opportunities that could be created
through a combination of the companies under Chesapeake's leadership.
"Under our proposal, the combined company would have a strong balance sheet
with financial and management capabilities to compete and grow globally.
Chesapeake has a proven track record as a global consolidator with
successful integration of acquired businesses."

Johnson continued, "Chesapeake Corporations's international strength is
important, because we believe that global consolidation to offer
multinational customers one-stop business solutions will drive our business
in the next century. Chesapeake has an experienced international
management team in place to operate a global packaging and merchandising
company."

Johnson also cited Chesapeake's multiple leadership positions in specialty
packaging and merchandising. "Chesapeake is the largest North American
producer of temporary and permanent point-of-purchase displays, the North
American leader for colorful, litho-laminated packaging, a leading European
folding carton, leaflet and label supplier, and a local leader in specific
U.S. markets for customized, corrugated packaging. Our net sales for 1998
were $950.4 million and our net sales for 1999's first three quarters,
ending September 30, are $916.8 million. We are clearly in a strong
position to make the combination of our two businesses successful."

Chesapeake Corporation, headquartered in Richmond, Va., is primarily
engaged in the manufacturing and sale of a specialty packaging and point-
of-purchase displays. Chesapeake has over 40 locations in North America,
Europe and Asia. Chesapeake's net sales in 1998 were $950.4 million.
Chesapeake's website is www.cskcorp.com.

###

For media relations, call: For investor relations, call

Molly Remes William Tolley/Joel Mostrom
804-697-1110 804-697-1157/804-697-1147

Joele Frank or Andy Brimmer
Abernathy MacGregor Frank
212-371-5999

On November 29, 1999, Shorewood issued the following press release:

SHOREWOOD PACKAGING CORPORATION ISSUES STATEMENT

NEW YORK, Nov. 29 /PRNewswire/ - Shorewood Packaging Corporation (NYSE: SWD
- news) remains committed to its $40 per share cash proposal to acquire
Chesapeake. Given the unwillingness of Chesapeake's management and Board
of Directors to consider Shorewood's proposal, Shorewood is continuing to
explore options to enable Chesapeake's stockholders to consider the
Shorewood proposal. Shorewood's proposal of $40 per share is significantly
above the consensus one year price target for Chesapeake and also
represents a 52-week high for the company.

Shorewood reiterated that it is not for sale and believes Chesapeake's
actions to date are solely in response to the Shorewood premium cash
proposal. Shorewood also believes that Chesapeake's actions reflect a
reckless disregard for the best interests of their stockholders and do not
reflect a careful evaluation of Shorewood or its business. Shorewood noted
that it views Chesapeake's proposal to acquire Shorewood for $16.50 per
share as grossly inadequate. That price is considerably below Shorewood's
52-week high and vastly below analysts' one-year price target for
Shorewood, which range as high as $25 per share.

Finally, Shorewood noted that an institutional investor has agreed to sell
14.9% of Shorewood to Chesapeake for $17.25 per share. In a call to
Shorewood, that investor informed Shorewood that its required regulatory
filing will disclose that the institution, which invested in Shorewood at a
low-cost basis, retains 100% of the upside with respect to those shares in
the event of a sale to Chesapeake at a higher price. Given the terms of
this arrangement, Shorewood does not believe the price to be paid by
Chesapeake reflects fair value for Shorewood, and believes its own $40 per
share offer for Chesapeake to represent superior value.

Shorewood Packaging Corporation is a leading value-added provider of high
quality printing and paperboard packaging for the computer software,
cosmetics and toiletries, food, home video, music, tobacco and general
consumer markets in North America and China, with 16 plants in the United
States, Canada and China.

Certain statements included in this press release constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are typically identified by their
inclusion of phrases such as "the Company anticipates," "the Company
believes" and other phrases of similar meaning. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others: general economic and business conditions;
competition; political changes in international markets; raw material and
other operating costs; costs of capital equipment; changes in foreign
currency exchange rates; changes in business strategy or expansion plans;
the results of continuing environmental compliance testing and monitoring;
quality of management; availability, terms and development of capital;
fluctuating interest rates and other factors referenced in this release and
in the Company's annual report on Form 10-K and quarterly reports on Form
10-Q.

Also on November 29, 1999, Chesapeake issued the following press
release:

FOR IMMEDIATE RELEASE

CHESAPEAKE CORPORATION AGREES TO ACQUIRE 14.9% OF
SHOREWOOD PACKAGING SHARES

(Richmond, VA - November 29, 1999) Chesapeake Corporation (NYSE:CSK) today
announced that it has agreed to purchase approximately 4.1 million shares,
or 14.9%, of Shorewood Packaging Corporation's (NYSE:SWD) outstanding
common stock from an institutional investor at a price of $17.25 per share.

Chesapeake previously announced that it has made a fully financed proposal
to Shorewood's directors to purchase Shorewood's shares at $16.50 per
share, nearly a 40% premium over Shorewood's closing price on November 9,
1999, the day before Chesapeake's proposal was presented to Shorewood.

Thomas H. Johnson, president and chief executive officer of Chesapeake,
said, "We are pleased with this agreement, which validates our view that
Chesapeake's acquisition of Shorewood makes great sense for Shorewood's
stockholders. We believe Chesapeake's acquisition of Shorewood would
create, under Chesapeake's leadership, one of the world's premier specialty
packaging and merchandising companies, enhancing Chesapeake's position as a
leader in this segment and benefitting customers through one-stop shopping
for complementary products.

"Chesapeake has a strong balance sheet with the management and financial
capabilities to compete and grow globally. Chesapeake also has a proven
track record as a global consolidator with successful integration of
acquired businesses. We renew our offer to Shorewood's directors to meet
and negotiate the terms of an acquisition of Shorewood by Chesapeake."

Closing of the purchase of the Shorewood shares is subject to completion of
review of the transaction under the Hart-Scott-Rodino Antitrust
Improvements Act. Chesapeake will commence the time period of review by a
filing to be made today. Additional information will be set forth in a
Schedule 13D expected to be filed with the Securities and Exchange
Commission today. Information in this release is qualified by reference to
the information to be included in the Schedule 13D.

Chesapeake is the largest North American producer of temporary and
permanent point-of-purchase displays, the North American leader for
colorful, litho- laminated packaging, the premiere European folding carton,
leaflet and label supplier, and a local leader in specific U.S. markets for
customized, corrugated packaging.

Chesapeake Corporation, headquartered in Richmond, Va., is primarily
engaged in the manufacturing and sale of specialty packaging and
merchandising services. Chesapeake has over 40 locations in North America,
Europe and Asia. Chesapeake's net sales in 1998 were $950.4 million.
Chesapeake's website is http://www.cskcorp.com.

# # #

costs, particularly for raw materials such as corrugated box and display
materials; fluctuations in demand; government policies and regulations
affecting the environment; interest rates; currency translation movements;
Year 2000 compliance issues; and other risks that are detailed from time to
time in reports filed by the Company with the Securities and Exchange
Commission.

For media relations, call: For investor relations, call
Molly Remes William Tolley/Joel Mostrom
804-697-1110 804-697-1157/804-697-1147

Joele Frank or Andy Brimmer
Abernathy MacGregor Frank
212-371-5999

On November 30, 1999, Chesapeake filed a Schedule 13D with the
Securities and Exchange Commission ("SEC") disclosing that on November 26,
1999, Chesapeake had entered into a stock purchase agreement (the "Purchase
Agreement") to purchase 4,106,440 shares of Common Stock, or approximately
14.9% of the outstanding Shares, from the clients of Ariel Capital
Management, Inc. ("Ariel") for $17.25 per Share. In the agreement, Ariel
also agreed that, if Chesapeake commenced a public tender offer for the
Shares at a price that equaled or exceeded $17.25 per share, then Ariel
would use its best efforts as investment adviser to exercise its
discretionary authority to cause its clients to (i) tender their shares in
such tender offer and (ii) execute proxies or written consents in the form
solicited by Chesapeake or any of its affiliates in any proxy or written
consent solicitation commenced in connection with such tender offer.

On December 3, 1999, Chesapeake commenced the Chesapeake Offer and
filed preliminary consent solicitation materials with the SEC in connection
with its intended solicitation of consents from the stockholders of
Shorewood.

In addition, on December 3, 1999, Chesapeake and Sheffield filed a
lawsuit in the Court of Chancery of the State of Delaware against Shorewood
and each member of Shorewood's Board of Directors, and filed a separate
lawsuit against Shorewood in the United States District Court for the
District of Delaware. See "Certain Litigation."

On December 10, 1999, Shorewood filed preliminary consent revocation
materials with the SEC in connection with its intended solicitation of
consent revocations from the stockholders of Shorewood.

THE CONSENT PROCEDURE

Article VI, Section 6 of the Amended By-laws establishes orderly
procedures for the setting of a record date for consent solicitations.
This section of the Amended By-laws provides that any stockholder of record
of Shorewood seeking to have Shorewood's stockholders authorize or take
corporate action by written consent shall, by written notice to Shorewood's
Corporate Secretary, request the Board of Directors to fix a record date.
The Board of Directors is required, within ten (10) days after the date on
which such request is received, to adopt a resolution fixing the record
date, which record date shall not be more than ten (10) days after the date
upon which the resolution was adopted.

As of the date hereof, neither Chesapeake nor Sheffield has requested
that Shorewood's Board of Directors fix a record date in connection with
the Consent Solicitation and, accordingly, no record date has been set.
Chesapeake and Sheffield have challenged the validity of Shorewood's By-law
provision relating to the fixing of the record date. See "Certain
Litigation."

Under the Delaware General Corporation Law, as amended (the "DGCL"),
unless otherwise provided in a corporation's certificate of incorporation,
stockholders may act without a meeting, without prior notice and without a
vote, if consents in writing setting forth the action to be taken are
signed by holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take the action at
a meeting at which all shares entitled to vote thereon were present and
voted.

Shorewood's Certificate of Incorporation does not prohibit stockholder
action by written consent. The unrevoked consent of the holders of not
less than (i) a majority of the outstanding Shares entitled to vote on the
record date, once established, must be obtained within the time limits
specified herein to adopt Chesapeake Proposals Nos. 2 and 4, and (ii) two-
thirds (66 2/3%) of the outstanding Shares entitled to vote on the record
date, once established, must be obtained within the time limits specified
herein to adopt Chesapeake Proposals 1, 3 and 5. Chesapeake and Sheffield
have challenged the validity of Shorewood's By-law which requires the
affirmative vote of the holders of two-thirds of Shorewood's outstanding
shares to amend the By-laws. See "Certain Litigation."

Shorewood's By-laws provide that each stockholder shall be entitled to
vote each share of stock which has voting rights on the matter in question.
Under Delaware law, no written consent is effective to take the action
referred to therein unless, within sixty (60) days of the date of the
earliest dated consent delivered, written consents signed by the holders of
a sufficient number of shares required to take such action are properly
delivered to the corporation. Failure to consent to any of the Proposals
and broker non-votes will have the effect of a vote against those
Proposals.

A stockholder may revoke any previously signed consent by signing,
dating and returning a BLUE Consent Revocation Card included with this
Consent Revocation Statement. If no direction is made on the Consent
Revocation Card with respect to one or more of the Proposals, or if a
stockholder marks either the "revoke consent" box or the "abstain" box on
the Consent Revocation Card with respect to one or more of those Proposals,
all previously executed consents with respect to such Proposals will be
revoked. A consent may also be revoked by delivery of a written consent
revocation to Shorewood or Chesapeake. STOCKHOLDERS ARE URGED, HOWEVER, TO
DELIVER ALL CONSENT REVOCATIONS TO INNISFREE M&A INCORPORATED, THE FIRM
ASSISTING SHOREWOOD IN THIS SOLICITATION, AT 501 MADISON AVENUE, 20TH
FLOOR, NEW YORK, NEW YORK 10022. Shorewood requests that if a consent
revocation is instead delivered to Chesapeake, a copy of the revocation
also be delivered to Shorewood, c/o Innisfree M&A Incorporated, at the
address set forth above, so that Shorewood will be aware of all
revocations. Any consent revocation may itself be revoked at any time by
signing, dating and returning to Chesapeake a subsequently dated white
Consent Card sent to you by Chesapeake, or by delivery of a written
revocation of such consent revocation to Shorewood or Chesapeake.

If any shares of Common Stock that you owned on the Record Date were
held for you in an account with a stock brokerage firm, bank nominee or
other similar "street name" holder, you are not entitled to vote such
shares directly, but rather must give instructions to the stock brokerage
firm, bank nominee or other "street name" holder to grant or revoke consent
for the shares held in your name. Accordingly, you should contact the
person responsible for your account and direct him or her to execute the
enclosed BLUE Consent Revocation Card on your behalf. You are urged to
confirm in writing your instructions to the person responsible for your
account and provide a copy of those instructions to Shorewood, c/o
Innisfree M&A Incorporated, at the address set forth above, so that
Shorewood will be aware of your instructions and can attempt to ensure that
those instructions are followed.

You have the right to revoke any consent you may have previously given
to Chesapeake. To do so, you need only sign, date and return in the
enclosed postage-paid envelope the BLUE Consent Revocation Card which
accompanies this Consent Revocation Statement. If you do not indicate a
specific vote on the BLUE Consent Revocation Card with respect to one or
more of the Chesapeake Proposals, the Consent Revocation Card will be used
in accordance with the recommendation of the Board of Directors to revoke
any consent with respect to the Proposals.

If you do not support the Proposals and have not signed Chesapeake's
white Consent Card, you may show your opposition to those Proposals by
signing, dating and returning the enclosed BLUE Consent Revocation Card.
This will better enable Shorewood to keep track of how many stockholders
oppose the Proposals.

Shorewood has retained Innisfree M&A Incorporated to assist in
communicating with stockholders in connection with the Chesapeake Consent
Solicitation and to assist in our efforts to obtain consent revocations.
If you have any questions about how to complete or submit your BLUE Consent
Revocation Card or any other questions, Innisfree will be pleased to assist
you. You may call Innisfree toll-free at (888) 750-5834. Banks and brokers
should call collect at (212) 750-5833.

CERTAIN LITIGATION

On December 3, 1999, Chesapeake and Sheffield commenced a lawsuit in
the Court of Chancery of the State of Delaware against Shorewood and each
of the members of its Board of Directors seeking, among other things, an
order (i) declaring that the Board of Directors breached its fiduciary
duties by adopting certain amendments to Shorewood's By-laws (the "By-law
Amendments"), which amendments, among other things (A) require the
affirmative vote of holders of two-thirds (66 2/3%) of the outstanding
shares of Common Stock for the stockholders to amend, add to, alter or
repeal Shorewood's By-laws or adopt new By-laws for Shorewood (the "Super
Majority By-law"), (B) revise the procedure by which the Board of Directors
fixes a record date for a solicitation of written consents from Shorewood's
stockholders (the "Consent Record Date By-law"), (C) eliminate the ability
of 20% of the stockholders to call a meeting of stockholders, (D) provide
that only the Chairman and the President of Shorewood can call a meeting of
the Board of Directors, (E) provide that only the Board can fill vacancies
on the Board between meetings of stockholders, and (F) provide that
directors can only be removed from the Board without cause pursuant to
Section 141(k) of the DGCL, (ii) declaring the Super Majority By-law and
the Consent Record Date By-law void, and enjoining the Board of Directors
from implementing the Super Majority By-law, the Consent Record Date By-law
and the By-law Amendments as a whole, (iii) declaring that failure to
redeem the Rights issued pursuant to the Rights Agreement, or to render the
Rights inapplicable to the Chesapeake Offer and the proposed merger by
Chesapeake (the "Proposed Merger") or to approve the Chesapeake Offer and
the Proposed Merger would constitute a breach of the Board of Directors'
fiduciary duties under Delaware law, (iv) invalidating the Rights or
compelling the Board of Directors to redeem the Rights or render the Rights
inapplicable to the Chesapeake Offer and the Proposed Merger, (v) declaring
that failure to approve the Chesapeake Offer and the Proposed Merger for
purposes of Section 203 of the DGCL would constitute a breach of the Board
of Directors' fiduciary duties under Delaware law, (vi) compelling the
Board of Directors to approve the Chesapeake Offer and the Proposed Merger
for purposes of Section 203 of the DGCL, (vii) enjoining the Board of
Directors from taking any other actions designed to impede or which have
the effect of impeding the Chesapeake Offer, the Consent Solicitation or
the Proposed Merger and declaring that any such actions would constitute a
breach of the Board of Directors' fiduciary duties under Delaware law, and
(viii) enjoining the Board of Directors from taking any other actions to
impede, or refuse to recognize the validity of, the Consent Solicitation.

Also on December 3, 1999, Chesapeake and Sheffield commenced
litigation against Shorewood in the United States District Court for the
District of Delaware seeking, among other things, a declaratory judgment
that Chesapeake and Sheffield have disclosed all information required by,
and are otherwise in full compliance with, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and any other federal securities
laws, rules or regulations deemed applicable to the Chesapeake Offer and
the Consent Solicitation.

The Court of Chancery of the State of Delaware has scheduled a trial
on certain issues for January 10, 11 and 13, 2000. The scope of issues to
be considered at such trial has not yet been determined.

Shorewood has not yet filed an answer to either of Chesapeake's
complaints but intends to vigorously defend against the claims therein.

INFORMATION ABOUT
THE BOARD OF DIRECTORS OF SHOREWOOD

The names of the current members of the Shorewood Board of Directors,
their ages and certain biographical information about each of them are set
forth below.

Name Age Director Since
---- --- --------------
Marc P. Shore 45 1996
Howard M. Liebman 57 1996
Sharon R. Fairley 39 1999
Leonard J. Verebay 55 1999
William P. Weidner 54 1993
R. Timothy O'Donnell 44 1991
Kevin J. Bannon 47 1992
Andrew N. Shore 47 1999
Virginia A. Kamsky 46 1999
Marc P. Shore

Marc P. Shore was elected Chairman of the Board and Chief Executive
Officer of Shorewood in January 1996 following the passing of his father,
Paul B. Shore, the founder of Shorewood. He served as the President of
Shorewood from October 1991 until the election of Howard M. Liebman as
President in June 1999. Mr. Shore has been employed by Shorewood in various
executive capacities since 1982.

Howard M. Liebman

Howard M. Liebman joined Shorewood as Executive Vice President and
Chief Financial Officer in June 1994. He was elected as a director of
Shorewood in January 1996, and was elected as President of Shorewood in
June 1999. Mr. Liebman is a Certified Public Accountant.

Sharon R. Fairley

Sharon R. Fairley has been employed by Pharmacia & UpJohn since 1998
as Director of Direct to Consumer Communications with responsibility for
consumer promotion of pharmaceutical products on a global basis. Prior to
joining Pharmacia & UpJohn, Ms. Fairley was Senior Vice President of the
Senior Network, Inc. overseeing Shorewood's consumer goods marketing
consulting practice. She served in that capacity from June 1995 to August
1998. From February 1993 through June 1995, Ms. Fairley was senior vice
president at the DMB&B advertising agency.

Leonard J. Verebay

Leonard J. Verebay joined Shorewood as Executive Vice President in
October 1998 following the acquisition (the "Queens Transaction") by
Shorewood of substantially all of the assets of the Queens Group, Inc. and
certain of its affiliates ("Queens"). He was elected as a Class III
Director in February 1999. Mr. Verebay served as the President of Queens,
a manufacturer of value added packaging for the music, multimedia and
consumer product industries, at the time of its acquisition by Shorewood.
Mr. Verebay had held such positions since 1979. Mr. Verebay was elected to
the Board pursuant to a right granted to Messrs. Leonard J. Verebay and
Eric Kaltman under a certain Stockholders' and Registration Rights
Agreement dated October 30, 1998 (the "Stockholders' Agreement") to
designate one member of the Board. Upon the expiration of Mr. Verebay's
term, if either Mr. Verebay or Mr. Kaltman (i) holds at least 400,000
shares of Common Stock (subject to adjustment for stock splits and like
events) and (ii) is then either employed by Shorewood or subject to a then
effective non-competition restriction, that person will be entitled to be
included in management's slate of nominees for election to the Board at the
next meeting. If both of them are so qualified, they shall jointly
designate one of them to so serve. Further, under the terms of the
Stockholders' Agreement, for so long as Messrs. Verebay and Kaltman own in
the aggregate at least 800,000 shares of Common Stock (subject to
adjustment for stock splits and like events), whichever one of Messrs.
Verebay and Kaltman is not then serving on the Board will, provided he
meets certain qualification requirements, be entitled to participate in
Board meetings as an observer, subject to certain limitations regarding
confidentiality. These provisions terminate under various circumstances,
including the occurrence of certain types of capital events and "change of
control" transactions, as defined in the Agreement.

William P. Weidner

William P. Weidner is the President and Chief Operating Officer of Las
Vegas Sands, Inc., a developer of hotel and casino properties based in Las
Vegas, Nevada. He assumed that position in December 1995. From 1985 until
December 1995, he served as the President and Chief Operating Officer of
Pratt Hotel Corporation, a worldwide operator and developer of casino and
resort properties. He also served as the President of Hollywood Casino-
Aurora, Inc., an operator of river boat casinos, from 1992 until December
1995.

R. Timothy O'Donnell

R. Timothy O'Donnell is the President of Jefferson Capital Group, Ltd.
("Jefferson Capital"), an investment banking firm located in Richmond,
Virginia. He has served in that capacity since August 1989. Previously he
served as First Vice President in charge of Leisure and Entertainment
Corporate Finance at PaineWebber. He is on the Board of Directors of
Global Trade Technologies, MicroMass Communications Inc., The Hobart West
Group and The University of Virginia's Health Medical Services Board.

Kevin J. Bannon

Kevin J. Bannon is an Executive Vice President and Chief Investment
Officer of the Asset Management Sector of The Bank of New York. From April
1979 to the present date, Mr. Bannon has held various management positions
with The Bank of New York. He is a Chartered Financial Analyst.

Andrew N. Shore

Andrew N. Shore joined Shorewood as General Counsel in June 1996. Mr.
Shore was elected Secretary of Shorewood in August 1996 and was appointed a
Vice President of Shorewood in November 1996. Prior to joining Shorewood,
Mr. Shore practiced law in Los Angeles, California, concentrating in the
areas of real estate finance and commercial law. For a period of two years
prior to joining Shorewood, Mr. Shore provided legal services to Shorewood.
Prior to engaging in private law practice, Mr. Shore served as general
counsel of DeAnza Group, Inc., a real estate investment firm. Andrew N.
Shore is the brother of Marc P. Shore, Shorewood's Chief Executive Officer
and Chairman of the Board.

Virginia A. Kamsky

Virginia A. Kamsky is the Founder, Chief Executive Officer and
Chairman of Kamsky Associates, Inc., a consulting firm, with offices in
both the United States and Beijing, China, which provides advisory services
to corporate clients in connection with commercial dealings in China and
the Far East. She has served in those capacities since 1980. Ms. Kamsky
serves on the Board of Directors and Compensation Committee of Sealed Air
Corporation.

BOARD MEETINGS AND COMMITTEES

During the fiscal year ended May 1, 1999 ("fiscal year 1999"), the
Board of Directors held five meetings, two of which were held by telephone
conference call, and the Compensation and Stock Option Committee (the
"Compensation Committee") held one meeting. In July 1999, the Audit
Committee held a meeting in respect of fiscal year 1999. During fiscal
year 1999, each of the directors attended at least 75% of the aggregate of
(1) the total number of meetings of the Board (held during the period that
such director served) and (2) the total number of meetings held by all
committees of the Board on which such director served (during the period
that he served). Shorewood's directors discharge their responsibilities
throughout the year, not only at Board of Directors' and committee
meetings, but also through personal meetings and other communications,
including telephone contacts with the Chairman and others.

Shorewood has an Executive Committee which is currently composed of
Marc P. Shore, Howard M. Liebman and Kevin J. Bannon. The Executive
Committee has the responsibility, between meetings of the Board, to take
all actions with respect to the management of Shorewood's business that
require action by the Board, except for certain specified matters that by
law must be approved by the entire Board. The Executive Committee also
coordinates and implements financial and other policies and reviews the
status of all operational activities.

In addition, Shorewood has an Audit Committee which is currently
composed of William P. Weidner, R. Timothy O'Donnell and Virginia A.
Kamsky, each of whom is not an officer or employee of Shorewood or its
subsidiaries. The Audit Committee has the responsibility of recommending
Shorewood's outside auditors, reviewing the scope and results of audits,
and examining procedures for ensuring compliance with Shorewood's policies
on conflicts of interest.

The Compensation Committee currently consists of William P. Weidner,
Kevin J. Bannon and R. Timothy O'Donnell. In addition, during fiscal year
1999, Melvin L. Braun served as an alternate member with respect to any
matter in connection with which a regular member is by statute or
regulation deemed not to be disinterested. No member or alternate member
of the Compensation Committee is a current or former officer or employee of
Shorewood or any of its subsidiaries. The Compensation Committee works
closely with the Board in establishing and implementing Shorewood's
compensation policies and practices. Additionally, it administers
Shorewood's bonus and other compensation programs and Shorewood's Incentive
Programs under which employees of Shorewood are eligible to receive stock
options, restricted stock and other benefits.

Shorewood does not have a nominating committee.

DIRECTOR COMPENSATION

During the fiscal year ended May 1, 1999, each director who was not an
officer or an employee of Shorewood (an "Outside Director") received a
director's fee of $8,000 per annum plus $2,000 for attendance at each
meeting of the Board of Directors and $1,000 for attendance at each meeting
of a committee of the Board of Directors, ordinarily excluding Board or
committee meetings held by telephone conference call. All directors of
Shorewood are also reimbursed for expenses. Under the 1993 Incentive
Program (the "1993 Program"), as amended in fiscal year 1997, the full
Board of Directors, in its discretion, is authorized to grant to each
Outside Director options to purchase shares of Common Stock, at option
prices equal to the fair market value of Common Stock on the date of grant.
In June 1999, each Outside Director received an option to purchase 4,000
shares of Common Stock pursuant to the 1993 Program on account of services
in 1999. The vesting of the options and certain other terms of the options
are determined by the full Board of Directors in its discretion.
Typically, the terms of the options provide that the options are
exercisable in full immediately upon the death of the grantee or retirement
from the Board by reason of disability or upon a "change of control" of
Shorewood (as defined in the 1993 Program). Any unexercised options shall
terminate upon the expiration of ten years from the date of grant or, if
sooner, two years after the termination of a director for any reason other
than cause. If a director is removed for cause, all director options
immediately terminate.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee currently consists of Messrs. William P.
Weidner, Kevin J. Bannon and R. Timothy O'Donnell. During fiscal year
1999, Melvin L. Braun served as an alternate member of the Compensation
Committee. No member of Shorewood's Compensation Committee is a current or
former officer or employee of Shorewood or any of its subsidiaries. There
are no compensation committee interlocks between Shorewood and any other
entities involving any of the executive officers or directors of such other
entities.

Jefferson Capital, of which R. Timothy O'Donnell is the President and
a principal stockholder, has served as an investment advisor to Shorewood
on various matters. In connection with investment advisory services
rendered by Jefferson Capital with respect to the Queens Transaction,
Shorewood, in November 1998, paid Jefferson Capital a fee of approximately
$1,300,000 and granted Jefferson Capital, effective as of October 30, 1998,
a warrant to purchase 50,000 shares of Common Stock at an exercise price of
$16 per share. The warrant was exercisable in full upon grant and may be
exercised by Jefferson Capital for a period of five years from grant. In
connection with the Chesapeake Offer and the related consent solicitation,
Shorewood has engaged Jefferson Capital to act as one of its financial
advisors. Pursuant to the terms of such engagement, Jefferson Capital will
receive a fee of approximately $[ ], as well as
reimbursement for reasonable out-of-pocket expenses. In addition,
Shorewood has agreed to indemnify Jefferson Capital for certain
liabilities, including liabilities under the federal securities laws,
arising out of such engagement. Additional information concerning
Jefferson Capital is set forth in Annex B.

The Bank of New York, of which Kevin J. Bannon is an Executive Vice
President, is a participant in Shorewood's lending syndicate. The
aggregate amount of The Bank of New York's participation in Shorewood's
outstanding borrowings pursuant to credit facilities as at the end of
fiscal year 1999 was approximately $25,039,500. The Bank of New York also
acts as Shorewood's transfer agent.

CERTAIN TRANSACTIONS

In May 1995, Shorewood loaned $2.0 million to Marc P. Shore, the
Chairman and Chief Executive Officer of Shorewood. The loan is due on May
4, 2000 and bears interest payable quarterly at the Applicable Federal
Rate, as defined, adjusted monthly. Mandatory prepayments of the loan are
required if Mr. Shore's compensation exceeds certain specified thresholds.
The Compensation Committee waived the required prepayment for 1999. The
aggregate principal amount outstanding under this loan as at the end of
fiscal year 1999 was $2.0 million.

In May 1997, Shorewood guaranteed a portion of an $8.5 million loan
made by The Chase Manhattan Bank to Marc P. Shore in connection with his
purchase of certain real estate. As a result of provisions in the related
agreement and payments made by Mr. Shore, the guaranty was terminated in
September 1998.

Bryan Shore Resnick, the sister of Marc P. Shore and Andrew N. Shore,
is a travel agent with Reliable Travel, a travel agency which provides
travel services to Shorewood. Based upon information provided to Shorewood
by Reliable Travel, in fiscal year 1999, Reliable Travel earned
approximately $182,500 in commissions, of which approximately $89,500 was
paid to Bryan Shore Resnick. Such commissions were earned in the ordinary
course of business and, to the best knowledge of Shorewood, the services
performed were at terms no less favorable to Shorewood than had the
services been provided by an unrelated third party.

In April 1998, Shorewood loaned $630,000 to Howard M. Liebman, the
President and Chief Financial Officer of Shorewood, in connection with his
purchase of a new residence. The loan is evidenced by a note which is
secured by a first priority mortgage on the property. Shorewood's interest
in the mortgage is insured by a title insurance company. The loan bears
interest at the rate of 6.5% per annum. Interest is payable annually on
August 1 of each year commencing August 1, 1999. The final payment of
principal and interest is due August 1, 2013. In addition, Shorewood may
accelerate repayment of the loan in the event Mr. Liebman sells the
property prior to maturity or ceases to be employed by Shorewood. The
aggregate principal amount outstanding under this loan as at the end of
fiscal year 1999 was $630,000.

Effective June 23, 1999, Shorewood loaned $341,145 to Howard M.
Liebman in connection with his exercise of stock options to purchase 60,000
shares of Common Stock. (Mr. Liebman paid the equivalent of $358,857 with
Common Stock already owned by him as part of the purchase price.) Effective
July 26, 1999 Shorewood loaned an additional $316,376 to Howard M. Liebman
in connection with his exercise of stock options to purchase 26,736 shares
of Common Stock. Both loans bear interest at the rate of 6.5% per annum,
commencing as of the respective effective dates of the loans. The
principal amounts of and accrued interest on the loans are due and payable
October 2, 2000. The loans are collateralized by a pledge of 55,977 shares
of Common Stock.

Effective July 26, 1999 Shorewood loaned $527,316 to Marc P. Shore in
connection with his exercise of stock options to purchase 44,562 shares of
Common Stock. The loan bears interest at the rate of 6.5% per annum,
commencing as of the effective date of the loan. The principal amount of
and accrued interest on the loan is due and payable October 2, 2000. The
loan is collateralized by a pledge of 44,562 shares of Common Stock.

EXECUTIVE OFFICERS OF SHOREWOOD

The names of the executive officers who are not also directors of
Shorewood, their ages and certain information about them are set forth
below:
Positions Principal Occupations
And Offices and Employment During
Name Age With Shorewood Past 5 Years
---- --- -------------- -----------------------
Charles Kreussling 70 Executive Vice Mr. Kreussling has been
President - employed by Shorewood
Manufacturing since its inception in
1966 and has been an
Executive Vice President
of Shorewood since 1979.
Mr. Kreussling is
responsible for
Shorewood's overall
manufacturing and plant
administration.

Kennth M Rosenblum 56 Senior Vice Mr. Rosenblum joined
President - Sales, Shorewood in 1969 as an
Home Entertainment account executive for
the music industry. From
1970 until 1993, Mr.
Rosenblum served as Vice
President - Sales of
Shorewood. In 1993, he
was promoted to Senior
Vice President - Sales,
Home Entertainment, and
he is presently
responsible for the
video and computer
software markets. Mr.
Rosenblum became an
executive officer in
1988.

William H. Hogan 40 Senior Vice Mr. Hogan joined
President - Finance Shorewood as Corporate
Controller in June 1995.
He was elected Vice
President - Finance of
Shorewood in October
1996 and was promoted to
Senior Vice President -
Finance of Shorewood in
June 1999. Mr. Hogan, a
Certified Public
Accountant, was a senior
manager with the
accounting firm of Grant
Thornton, LLP, from 1994
to 1995. From 1981 until
1994, Mr. Hogan was
employed by the
accounting firm of
Deloitte & Touche LLP,
where he was actively
involved in servicing
Shorewood. He was a
senior manager with
Deloitte & Touche LLP
from 1989 until 1994.

Eric Kaltman 56 Executive Vice Mr. Kaltman joined
President Shorewood as Executive
Vice President in
October 1998 following
the closing of the
Queens Transaction. Mr.
Kaltman was serving as
Vice President and Chief
Executive Officer of
Queens at the time of
its acquisition by
Shorewood. He held
various managerial
positions at Queens for
more than five years.

EXECUTIVE OFFICER COMPENSATION

Summary information with respect to the compensation of Shorewood's
chief executive officer and certain other executive officers is set forth
in Annex A.

SECURITY OWNERSHIP

SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS

According to information furnished to Shorewood as of December [ ],
1999, the directors of Shorewood, Shorewood's "named executive officers"
(the "Named Executive Officers") within the meaning of Item 402(a)(3) of
Regulation S-K, and all directors and executive officers as a group,
beneficially owned shares of Common Stock of Shorewood as set forth below.
Beneficial ownership has been determined for purposes herein in accordance
with Rule 13d-3 of the Exchange Act under which a person is deemed to be
the beneficial owner of securities if such person has or shares voting
power or investment power in respect of such securities or has the right to
acquire beneficial ownership within 60 days.

Number of Approximate Percentage
Common Shares and of Outstanding
Name Share Equivalents Common Shares
---- ----------------- ----------------------
Marc P. Shore(1) 4,800,336 17.36%
Leonard J. Verebay(2) 500,120 1.81%
Charles Kreussling(3) 322,377 1.17%
R. Timothy O'Donnell(4) 276,118 1%
Howard M. Liebman(5) 260,005 (6)
Kenneth M. Rosenblum(7) 123,342 (6)
William P. Weidner(8) 57,000 (6)
Kevin J. Bannon(9) 33,000 (6)
Virginia A. Kamsky 4,500 (6)
Andrew N. Shore(10) 173,552 (6)
William H. Hogan(11) 9,000 (6)
Sharon R. Fairley 0 (6)
All directors and
executive officers as a
group (12 persons)(12)(13) 6,559,350 23.72%

---------------
(1) See "Security Ownership of Other Beneficial Owners-Footnote (1)."

(2) Includes 500,000 shares held in grantor retained annuity trust. Under
the terms of the Stockholders' Agreement, these shares are subject to
contractual restrictions on transfer until October 30, 2000, with
limited exceptions for certain types of inter-family, estate planning
and affiliate transactions. These restrictions terminate in various
circumstances, including the occurrence of certain types of capital
events and "change of control" transaction.

(3) Includes 90,000 shares owned by Charles Kreussling's wife, as to which
Mr. Kreussling disclaims beneficial ownership. The table does not
include 750 shares owned by one of Mr. Kreussling's adult children who
shares the same household.

(4) Includes: (i) 450 shares owned by Mr. O'Donnell's wife as custodian
for their three minor children; (ii) 22,231 shares owned by Jefferson
Capital (of which Mr. O'Donnell is the President and a principal
stockholder); (iii) 87,500 shares which could be acquired on or within
60 days after December [ ], 1999 upon the exercise of warrants
granted to Jefferson Capital and (iv) 18,000 shares which could be
acquired on or within 60 days after December [ ], 1999 upon the
exercise of director options granted to Mr. O'Donnell under
Shorewood's Incentive Plans.

(5) Includes (i) 94,168 shares which could be acquired on or within sixty
(60) days after December [ ], 1999 upon the exercise of stock
options granted under Shorewood's Incentive Plans; (ii) 79,101 shares
of restricted stock awarded under Shorewood's Long-Term Incentive
Program, all of which are subject to forfeiture and (iii) 55,977
shares that are held by the Company as collateral for a $657,521 loan
in connection with the exercise of options.

(6) Less than 1%.

(7) Includes: (i) 34,060 shares which could be acquired on or within sixty
(60) days after December [ ], 1999 upon the exercise of stock options
granted under Shorewood's Incentive Plans; and (ii) 5,178 shares of
restricted stock awarded under Shorewood's Long-Term Incentive
Program, all of which are subject to forfeiture.

(8) Includes: 39,000 shares owned by William P. Weidner's ex-wife, as to
which Mr. Weidner disclaims beneficial ownership.

(9) Includes 18,000 shares which could be acquired on or within 60 days
after December [ ], 1999 upon the exercise of director options
granted under Shorewood's Incentive Plans.

(10) Includes: (i) 3,500 shares which could be acquired on or within sixty
(60) days after December [ ], 1999 upon exercise of stock options
granted under Shorewood's Incentive Plans; (ii) 6,000 shares of
restricted stock awarded under Shorewood's Long-Term Incentive
Program, all of which are subject to forfeiture; and (iii) 650 shares
owned by Andrew N. Shore's wife, as to which Mr. Shore disclaims
beneficial ownership.

(11) Shares of restricted stock awarded under [Shorewood's Long-Term
Incentive Program, all of which are subject to forfeiture].

(12) The total number of directors and executive officers of Shorewood
includes two executive officers who were not included in the above
table.

(13) Includes 695,181 shares subject to stock options or warrants which
could be acquired on or within sixty (60) days after December [ ],
1999 and 184,929 shares of restricted stock awarded pursuant to
Shorewood's Long-Term Incentive Program, all of which are subject to
forfeiture. Does not include the shares held by Messrs. Melvin L.
Braun and Floyd G. Glinert, who, until recently, were Directors of
Shorewood. Where more than one person is deemed to be a beneficial
owner of any particular shares, such shares have been counted toward
the total listed only once.

SECURITY OWNERSHIP OF OTHER BENEFICIAL OWNERS

The following table sets forth information with respect to the persons
known to Shorewood to beneficially own more than five percent (5%) of the
Shares, as of December [ ], 1999:

Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership of Class
------------------- -------------------- ----------
Marc P. Shore(1) 4,800,336 17.36%
c/o Shorewood Packaging
Corporation
277 Park Avenue
New York, New York 10172-0124

Ariel Capital Management, Inc.(2) 5,590,072 20.28%
307 North Michigan Avenue
Chicago, Illinois 60601

Chesapeake Corporation (3) 4,106,440 14.90%
1021 East Cary Street
Richmond, Virginia 23218-2350

Brinson Partners, Inc.(4) 1,548,722 5.62%
209 South LaSalle
Chicago, Illinois 60604-1295
_________

(1) Marc P. Shore is the Chairman and Chief Executive Officer of
Shorewood.

The Shares reflected include: (1) 1,000,163 Shares owned outright by
Marc P. Shore, of which 85,650 Shares are restricted shares awarded
pursuant to Shorewood's Long Term Incentive Program and are subject to
forfeiture; (2) 401,953 Shares which could be acquired on or within sixty
(60) days after December [ ], 1999 upon the exercise of stock options
granted under Shorewood's incentive and stock option plans (collectively,
the "Incentive Plans"); (3) 589,962 Shares held by a marital trust created
under the will of Paul B. Shore for the benefit of his wife (the "Marital
Trust") (see discussion below); (4) 2,700,000 Shares held by the Shore
Family Partnership, L.P., a California limited partnership (the "Family
Partnership") (see discussion below); and (5)108,258 Shares held by a
marital trust created for the benefit of the wife of Paul B. Shore.

The Marital Trust is a testamentary trust for the benefit of Paul B.
Shore's wife created under the terms of his will. By the terms of the
will, Marc P. Shore has sole decision-making power with respect to all
Shares owned by the Marital Trust. The Marital Trust held 3,900 Shares as
of December 1, 1999. Marc P. Shore disclaims beneficial ownership with
respect to 3,900 of such Shares.

The Family Partnership is an investment partnership for the benefit of
Marc P. Shore and the other children of Paul B. Shore. The Family
Partnership terminates on January 1, 2030, subject to earlier termination
by operation of law or under the terms of the Limited Partnership
Agreement. By virtue of his control over the Shore Family LLC, which is
the sole general partner of the Family Partnership, Marc P. Shore has
effective decision-making power with respect to all Shares owned by the
Family Partnership. The Family Partnership owned 2,700,000 Shares as of
December [ ], 1999. Marc P. Shore disclaims beneficial ownership as to
2,459,970 of such Shares.

As of December [ ], 1999, Marc P. Shore served as co-trustee of a
trust (the "Shore Trust") which held 66,300 Shares for the benefit of one
other child of Paul B. Shore. As co-trustee, Marc P. Shore shared
decision-making authority with respect to any Shares held by the Shore
Trust. Marc P. Shore disclaims beneficial ownership of all of such Shares.

(2) Represents shares held by investment advisory clients of Ariel. On
November 26, 1999, Chesapeake entered into the Purchase Agreement with
Ariel pursuant to which Chesapeake agreed to purchase 4,106,440 shares of
Shorewood Common Stock (the "Purchased Shares"), or approximately 14.9% of
Shorewood's outstanding shares, at a purchase price of $17.25 per share.
Pursuant to the Purchase Agreement, Ariel agreed to use its best efforts to
exercise its discretionary authority to cause its clients (i) to tender the
Purchased Shares in the Chesapeake Offer and (ii) to execute written
consents in the form solicited by Chesapeake in the Consent Solicitation.
This information is based solely upon the contents of filings made pursuant
to Section 13 of the Exchange Act by Ariel.

(3) See (2) above. This information is based solely upon the contents of
filings made pursuant to Section 13 of the Exchange Act by Chesapeake.

(4) Represents Shares held in managed discretionary accounts for advisory
clients which are advised by Brinson Partners, Inc. and/or its parent, UBS
AG, Inc. This information is based solely upon the contents of filings
made pursuant to Section 13 of the Exchange Act by Brinson Partners, Inc.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires Shorewood's executive
officers and directors, and persons who own more than ten percent of the
Common Stock of Shorewood to file reports of ownership and changes in
ownership with the SEC and the exchange on which the Common Stock is listed
for trading. Executive officers, directors and more than ten percent
stockholders are required by regulations promulgated under the Exchange Act
to furnish Shorewood with copies of all Section 16(a) reports filed. Based
solely on Shorewood's review of copies of the Section 16(a) reports filed
for the fiscal year 1999, Shorewood believes that all reporting
requirements applicable to its executive officers, directors, and more than
ten percent stockholders were complied with for the fiscal year 1999,
except that (i) Jefferson Capital, of which R. Timothy O'Donnell, a member
of the Board of Directors, is the President and a principal stockholder,
failed to timely file a report in respect of the grant by Shorewood to
Jefferson Capital of a warrant to purchase 50,000 shares of Common Stock in
October 1998, (ii) Marc P. Shore failed to timely file a report in respect
of distributions by the Estate of Paul B. Shore (the "Estate") under Paul
B. Shore's will of an aggregate of 11,700 shares of Common Stock in
December 1998, and (iii) Andrew N. Shore failed to timely file a report in
respect of the transfer of 650 shares of Common Stock by the Estate to Mr.
Shore's wife in December 1998.

SOLICITATION OF CONSENT REVOCATIONS

Consent revocations may be solicited by mail, telephone, facsimile
transmission or other electronic media and in person. Solicitation of
consent revocations may be made by directors, officers and regular
employees of Shorewood for which they will receive no additional
compensation.

In addition, Shorewood has retained Innisfree to assist in the
solicitation of the consent revocations, for which Innisfree will receive a
fee of $[ ] plus reasonable out-of-pocket expenses.
Shorewood has also agreed to indemnify Innisfree for certain liabilities in
connection with this solicitation. Approximately [ ] persons will be
employed by Innisfree to solicit stockholders.

Banks, brokers, custodians, nominees and fiduciaries will be requested
to forward solicitation material to beneficial owners of shares of
Shorewood common stock. Shorewood will reimburse banks, brokers,
custodians, nominees and fiduciaries for their reasonable expenses for
sending solicitation material to the beneficial owners.

The entire cost of soliciting the consent revocations, including,
without limitation, costs, if any, relating to advertising, printing, fees
of attorneys, financial advisors, proxy solicitors, accountants, public
relations, transportation, litigation and related expenses and filing fees,
will be borne by Shorewood. Shorewood estimates that total expenditures
relating to the Board of Directors' solicitation of the consent revocations
will be approximately $[ ]. Such costs do not include the
amount normally expended for a solicitation for an uncontested election of
directors or costs represented by salaries and wages of regular employees
and officers. Approximately $[ ] has been expended by
Shorewood to date.

ABSENCE OF APPRAISAL RIGHTS

Under Delaware law, the stockholders of Shorewood are not entitled to
appraisal rights in connection with the solicitation of consents with
respect to the Proposals.

PARTICIPANTS IN THE SOLICITATION

Under applicable regulations of the SEC, each member of the Board of
Directors, certain executive officers and other employees of Shorewood and
certain other persons may be deemed to be a "participant" as defined in the
instructions to Item 4 of Schedule 14A promulgated under the Exchange Act
in Shorewood's solicitation of revocations of consent. The principal
occupations and business addresses of each such person are set forth in
Annex B. Information about the present ownership by directors and certain
executive officers of Shorewood Common Stock is provided in this Consent
Revocation Statement and the present ownership of Shorewood's Common Stock
by other persons who may be deemed to be participants is listed on Annex B.

STOCKHOLDER PROPOSALS

If a stockholder intends to present a proposal at Shorewood's 2000
Annual Meeting of Stockholders and seeks to have the proposal included in
Shorewood's proxy statement and form of proxy relating to that meeting,
pursuant to Rule 14a-8 of the Exchange Act, the proposal must be received
by Shorewood no later than the close of business on April 29, 2000. Any
such proposal must also comply with the other requirements of the proxy
solicitation rules of the SEC. Any proposals, as well as any related
questions, should be directed to the Secretary of Shorewood. In order for
stockholder proposals which are made outside of Rule 14a-8 under the
Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c)
under the Exchange Act, such proposals must be received by Shorewood at its
principal executive offices by July 12, 2000. The Amended By-laws require
that proposals made outside of Rule 14a-8 under the Exchange Act must be
submitted, in accordance with the requirements of the Amended By-laws, not
later than July 12, 2000 and not earlier than June 12, 2000.

SHOREWOOD PACKAGING CORPORATION

December [ ], 1999

IMPORTANT

1. If your shares are registered in your name, please sign, date and mail
the enclosed BLUE Consent Revocation Card to Innisfree in the postage-
paid envelope provided.

2. If you have previously signed and returned a white consent card to
Chesapeake, you have every right to change your vote. Only your
latest dated card will count. You may revoke any white consent card
already sent to Chesapeake by signing, dating and mailing the enclosed
BLUE Consent Revocation Card in the postage-paid envelope provided.

3. If your shares are held in the name of a brokerage firm, bank nominee
or other institution, only it can sign a BLUE Consent Revocation Card
with respect to your shares and only after receiving your specific
instructions. Accordingly, please sign, date and mail the enclosed
BLUE Consent Revocation Card in the postage-paid envelope provided.
To ensure that your shares are voted, you should also contact the
person responsible for your account and give instructions for a BLUE
Consent Revocation Card to be issued representing your shares.

4. After signing the enclosed BLUE Consent Revocation Card, do not sign
or return the white consent card. Do not even use Chesapeake's white
consent card to indicate your opposition to the Chesapeake Proposals.

If you have any questions above giving your revocation of consent or
require assistance, please call:

INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
CALL TOLL FREE: (888) 750-5834
BANKS & BROKERS CALL COLLECT: (212) 750-5833

ANNEX A

EXECUTIVE COMPENSATION

The following summary compensation table sets forth certain
information concerning the compensation of the Named Executive Officers for
each of the three fiscal years during the period ended May 1, 1999.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

Annual Long Term
Compensation(1) Compensation Awards
---------------------- -----------------------
Restricted Options to All Other
Stock Purchase Compen-
Awards Shares (4) sations(5)
Name and Principal Position Year* Salary($) Bonus($) ($)(3) (#) ($)
--------------------------- ----- --------- -------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Marc P. Shore Fiscal 1999 800,000 1,093,000 825,000 350,000 149,625
Chairman of the Board, Fiscal 1998 800,000 302,000 - - 149,125(6)
Chief Executive Officer Fiscal 1997 815,385 450,000(2) - 269,565 155,520(6)

Howard M. Liebman Fiscal 1999 450,000 150,000 481,250 150,000 107,875(7)(8)
Executive Vice President, Fiscal 1998 325,000 100,000 497,490 - 214,970(7)(8)
Chief Financial Officer Fiscal 1997 331,250 100,000 - 26,737 142,043(7)(8)
and Director

Floyd S. Glinert** Fiscal 1999 299,988 - - - 4,950
Executive Vice Fiscal 1998 299,988 - - - 5,950
President - Marketing Fiscal 1997 305,757 - - - 16,938
and Director

Charles Kreussling Fiscal 1999 250,000 125,000 - - 19,090
Executive Vice Fiscal 1998 250,000 125,000 - - 15,964
President - Manufacturing Fiscal 1997 215,385 125,000 - - 18,449

Kenneth M. Rosenblum Fiscal 1999 175,692 100,000 - 40,000 6,072
Senior Vice President - Fiscal 1998 163,366 125,000 - - 6,179
Sales Fiscal 1997 154,903 100,000 - 43,507 5,895 _________

</TABLE>
-------------
* 1997 was a 53-week year.

** Mr. Glinert resigned as an Executive Officer of Shorewood effective at
the end of fiscal year 1999.

(1) The aggregate amount of perquisites and other personal benefits for
each of the Named Executive Officers did not equal or exceed the
lesser of either $50,000 or 10% of the total of such individual's base
salary and bonus, as reported herein for the applicable fiscal years,
and is not reflected in the table.

(2) In fiscal 1997, Marc P. Shore received a $450,000 bonus. Mr. Shore
was entitled to receive a cash bonus in excess of $1.2 million in
fiscal 1997 under a bonus plan of Shorewood (the "Bonus Plan") (see
"Employment and Consulting Agreements"); however, Mr. Shore waived
such bonus and accepted the $450,000 bonus.

(3) Represents the dollar value on the date of grant of shares of
restricted stock awarded by the Compensation Committee to the named
recipients under Shorewood's Long-Term Incentive Program ("LTIP").
The value of the restricted shares reported in this column was
calculated by multiplying the closing market price of the Common Stock
as reported on the New York Stock Exchange ("NYSE") on the date of
grant by the number of restricted shares, without any adjustment for
forfeiture or termination contingencies. The restricted stock awards
identified in this column consist of the following stock grants: (i)
30,000 shares to Howard M. Liebman on October 30, 1997, (ii) 35,000
shares to Howard M. Liebman on June 8, 1998 and (iii) 60,000 shares to
Marc P. Shore on June 8, 1998. These awards are subject to three or
four year vesting requirements based on the performance of Shorewood's
Common Stock or, alternatively, an eight year employment vesting
requirement. Under the terms of the awards, if the grantee's
employment terminates prior to vesting, there restricted shares
awarded to him will be forfeited. During the vesting period, the
grantee may not dispose of, but may vote, the restricted shares and is
entitled to receive any dividends paid on such shares.

In addition, in July 1994 the Compensation Committee awarded
restricted stock to certain executives pursuant to the LTIP. Set
forth below are the number and value of the aggregate restricted share
holdings of each Named Executive Officer as of May 1, 1999. Values
were calculated by multiplying the closing price of the Common Stock
as reported on NYSE on April 30, 1999 (the last trading day in this
fiscal year) by the respective number of shares.

Name Executive Officer Shares(#) Value($)
---------------------- --------- --------
Marc P. Shore 85,650 1,691,588
Howard M. Liebman 79,101 1,562,245
Kenneth M. Rosenblum 5,178 102,266

(4) Stock options are granted under the terms and provisions of
Shorewood's Incentive Plans.

(5) Amounts reported under this column include the dollar value of the
following:

Value of Life Contributions to
Insurance 401(k) Employee
Name Year Premiums (a)($) Savings Plan (b)($)
---- ---- --------------- -------------------
Marc P. Shore Fiscal 1999 14,120 6,500
Fiscal 1998 15,170 6,500
Fiscal 1997 19,070 8,395
Howard M. Liebman Fiscal 1999 12,121 6,975
Fiscal 1998 13,501 4,371
Fiscal 1997 13,281 8,449
Floyd S. Glinert Fiscal 1999 - 4,950
Fiscal 1998 - 5,950
Fiscal 1997 10,538 6,400
Charles Kreussling Fiscal 1999 14,965 4,125
Fiscal 1998 12,214 3,750
Fiscal 1997 11,841 6,608
Kenneth M. Rosenblum Fiscal 1999 - 6,072
Fiscal 1998 1,800 4,379
Fiscal 1997 1,800 4,095
__________
(a) Reflects life-insurance premiums paid by Shorewood on behalf of the
Named Executive Officer.

(b) Reflects contributions to Shorewood's tax-qualified 401(k) Employee
Savings Plan that covers all employees who have completed 1,000 hours
of service and one year of employment.

(6) Includes (i) $122,367 paid in fiscal 1999, $120,817 paid in fiscal
1998 and $121,417 paid in fiscal 1997, which represent Shorewood's
share of premiums paid in the respective years under a Split Dollar
Life Insurance Arrangement for the benefit of Marc P. Shore whereby
Shorewood will generally recover in full its share of the premiums
upon the cancellation, or purchase by Mr. Shore, of the life insurance
policy or the payment of death benefits under the life insurance
policy and (ii) $6,638 paid in fiscal 1999, $6,638 paid in fiscal 1998
and in fiscal 1997, which represent disability premiums paid by
Shorewood in the respective years on behalf of Marc P. Shore.

(7) Includes ($1,585) lost in fiscal 1999, $108,114 earned in fiscal 1998,
and $30,959 earned in fiscal 1997 by a trust established by Shorewood
for Mr. Liebman's benefit, pursuant to which income earned on the
trust principal is accumulated for payment to Mr. Liebman upon his
retirement from Shorewood. For a description of the trust, see
"Employment and Consulting Agreements."

(8) Includes $90,364 paid in fiscal 1999, $88,984 paid in fiscal 1998 and
$89,354 paid in fiscal 1997, which represent Shorewood's share of
premiums paid in the respective years under a Split Dollar Life
Insurance Arrangement for the benefit of Howard M. Liebman whereby
Shorewood will generally recover in full its share of the premiums
upon the cancellation, or purchase by Mr. Liebman, of the life
insurance policy or the payment of death benefits under the life
insurance policy.

OPTION GRANTS TABLE

The following table provides certain summary information concerning
individual grants of stock options made to Named Executive Officers during
the fiscal year ended May 1, 1999 under Shorewood's Incentive Plans.
Except as set forth in the table below, during fiscal year 1999, Shorewood
did not grant any stock options under Shorewood's Incentive Plans to any of
the Named Executive Officers.

<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------
Potential Realizable
Value at Assumed
Rates of Stock Price
Number of Percent of Total Appreciation for
Share Options Granted Option Term (1)
Underlying to Employees in Exercise Expiration ----------------------
Grant (#) Fiscal Year (%) Price ($) Date 5%($) 10%($)
---------- ---------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Marc P. Shore 350,000 42.4% 13.75 6/08/08 3,026,555 7,669,886
Howard M. Liebman 150,000 18.2% 13.75 6/08/08 1,297,095 3,287,094
Kenneth M. Rosenblum 40,000 4.8% 13.75 6/08/08 345,892 876,558
</TABLE>

------------
(1) Amounts represent hypothetical gains that could be achieved from the
exercise of the respective stock options and the subsequent sale of
the Common Stock underlying such options if the options were exercised
at the end of the option terms. The gains are based upon assumed
rates of stock price appreciation of 5% and 10% compounded annually
from the date the respective options were granted. The rates of
appreciation are mandated by the rules of the Exchange Act and do not
represent Shorewood's estimate or projection of the future Common
Stock price.

(2) The stock options reported were awarded pursuant to the 1993 Program
at exercise prices equal to the fair market value of the Common Stock
on the date of grant. The options vest in specified installments over
a five-year period after the grant date and terminate ten years after
the grant date, subject to early termination in the event of death or
termination of the optionee's employment for any reason. Payment for
options exercised may be in cash or shares of Common Stock, the fair
market value of which is determined under the 1993 Program.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

The following table provides certain summary information concerning
stock option exercises during the fiscal year ended May 1, 1999 by the
Named Executive Officers and the value of unexercised stock options held by
the Named Executive Officers as of May 1, 1999.

<TABLE>
<CAPTION>
Value of Unexercised
Number of Number of Unexercised Options "In the Money" Options a
Shares at Fiscal Year End(1) (#) Fiscal Year End (2) ($)
Acquired on Value ----------------------------- ---------------------------
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Marc P. Shore - - 331,953 376,739 2,626,682 2,330,996
Howard M. Liebman - - 124,168 166,042 1,025,973 1,038,585
Floyd S. Glinert - - -0- -0- -0- -0-
Charles Kreussling - - -0- -0- -0- -0-
Kenneth M. Rosenblum 10,856 87,271 18,560 66,104 162,801 468,009

</TABLE>
-----------------
(1) Represents the aggregate number of stock options held as of May 1,
1999 which could and could not be exercised on that date pursuant to
the terms of the stock option agreements related thereto and the
Incentive Plans.

(2) Values were calculated by multiplying (i) the respective number of
shares by (ii) the closing market price of the Common Stock as
reported on NYSE on April 30, 1999 (the last trading day of the fiscal
year) less the exercise price per share, without any adjustment for
any termination or vesting contingencies.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Overall Policy

Shorewood's executive compensation program is designed to be closely
linked to corporate performance and the total return to stockholders over
the long-term. To that end, Shorewood has developed an overall
compensation strategy and specific compensation plans which tie executive
compensation to Shorewood's success in meeting specified objectives and to
appreciation in Shorewood's stock price. The overall objectives are to
attract and retain the best possible executive talent, motivate key
executives to achieve the goals inherent in Shorewood's business strategy,
link executive and stockholder interests through participation in
Shorewood's Long-Term Incentive Plan (the "LTIP") and provide a
compensation package that recognizes individual contributions as well as
overall business results.

Each year the Compensation Committee conducts a review of Shorewood's
executive compensation program. The review includes a comparison of
Shorewood's executive compensation, corporate performance, stock price
appreciation and total return to stockholders with a peer group of public
corporations that represent Shorewood's direct competitors for executive
talent. The annual compensation reviews permit an ongoing evaluation of
the link between Shorewood's performance and its executive compensation in
the context of the compensation programs of other companies. The peer
group presently utilized by the Compensation Committee is the Peer Group.
See "Stock Performance Graph."

The Compensation Committee approves the compensation of executive
officers of Shorewood, including the individuals whose compensation is
detailed in this Proxy Statement. In reviewing the individual performance
of the executive officers of Shorewood whose compensation is detailed in
this Proxy Statement, the Compensation Committee takes into account the
views of Marc P. Shore, the Chairman and Chief Executive Officer of
Shorewood, and the other members of the Board of Directors.

The key elements of Shorewood's executive compensation during the last
fiscal year consisted of base salary, an annual bonus and grants of stock
options and restricted stock under the LTIP. The Compensation Committee's
policies with respect to each of these elements, are discussed below. In
addition, while the elements of compensation described below are considered
separately, the Compensation Committee takes into account the full
compensation package afforded by Shorewood to each individual.

Tax Deductibility of Executive Compensation Plans

It is the policy of the Compensation Committee to have the executive
compensation plans of Shorewood treated as fully tax deductible under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") whenever, in the judgment of the Committee, to do so would be
consistent with the business objectives of those plans. All compensation
paid during fiscal year 1999 was, in fact, fully tax deductible. The
Compensation Committee, however, has granted awards which may not be fully
tax deductible, and reserves the right to grant future compensation awards
in such amounts as it may deem appropriate in the exercise of its business
judgement, notwithstanding whether those awards are fully tax deductible.

Base Salaries and Annual Bonuses

Base salaries and annual bonuses for executive officers are determined
by evaluating the responsibilities of the position held and the experience
of the individual, and by reference to the competitive marketplace for
executive talent, including a comparison of base salaries for comparable
positions at other companies in the Peer Group. Annual salary adjustments
and bonuses, if any, are determined by evaluating the performance of
Shorewood and of each executive officer, and by taking into account added
responsibilities. The Compensation Committee, where appropriate, also
considers non-financial performance measures. These include increases in
market share, manufacturing efficiency gains, improvements in product
quality and improvements in relations with customers, suppliers and
employees. These factors are afforded varying levels of significance by
the Committee depending upon the circumstances. All final determinations
are subjective.

In establishing the annual base salary of Marc P. Shore, Shorewood's
Chairman and Chief Executive Officer, the Committee also took into account
a comparison of base salaries of chief executive officers of the Peer
Group, Shorewood's results of operations, the performance of Shorewood's
Common Stock and the subjective assessment by the members of the Committee
of Mr. Shore's individual performance.

The Committee has established, with the approval of the Board and the
Stockholders, a performance Bonus Plan for the benefit of Marc P. Shore,
which is effective through fiscal year 2003. The Bonus Plan provides for
the grant of graduated performance bonuses, up to $2.0 million per annum,
to Mr. Shore based upon yearly comparisons of Shorewood's earnings from
operations plus depreciation and amortization. Bonuses pursuant to the
Bonus Plan are payable only if certain pre-established thresholds are met.
The Bonus Plan is based solely upon the performance criteria described
above. Mr. Shore earned a bonus in the amount of $1,093,000 in respect of
fiscal year 1999 under the Bonus Plan. See "Executive Compensation --
Summary Compensation Table." Pursuant to the new five year employment
agreement which Shorewood and Mr. Shore entered into on June 8, 1998, Mr.
Shore was granted a signing bonus in the aggregate amount of $1,000,000,
payable immediately in full but earned ratably over his five year
employment period, provided that Mr. Shore continues to be employed with
Shorewood at the end of each such year. The full amount of the signing
bonus was paid to Mr. Shore in fiscal year 1999. Because Mr. Shore was
employed with Shorewood at the end of the first year of his employment
term, the ratable portion of the signing bonus for the first year has been
earned. See "Employment and Consulting Agreements."

The Committee may also grant, and has in the past granted, Mr. Shore
discretionary bonuses outside of the Bonus Plan and his employment
agreement.

Long Term Incentive Plans

Pursuant to the 1993 Program, approved by the Stockholders in 1993,
the Committee adopted the LTIP which allows various types of awards keyed
to corporate performance, including stock options (focus on absolute growth
in stockholder value) and restricted shares (focus on relative growth in
stockholder value), subject to performance-based contingencies, which are
made available in amounts which the Committee determines to be competitive
based on the competitive market analyses described above.

Stock Options

Under the LTIP and Shorewood's other Incentive Plans, stock options
are periodically granted to Shorewood's employees, including executive
officers. The Compensation Committee sets guidelines for the size of the
stock option awards based on similar factors, including competitive
compensation data, as are used to determine base salaries and bonuses, if
any. In the event of poor corporate performance, the Compensation
Committee can elect not to award stock options. Final determinations are
subjective.

Stock options are designed to align the interests of executives with
those of the stockholders. Stock options are granted with an exercise
price equal to the market price of the Common Stock on the date of grant
and generally vest in increments over a period of four or five years. This
approach is designed to incentivize the creation of stockholder value over
the long term since the full benefit of the compensation package cannot be
realized by the option recipients unless stock price appreciation occurs
over a number of years.

Performance Based Restricted Stock

Under the LTIP, awards of restricted stock are made preceding a three-
year or four-year performance period. The Committee, together with
Shorewood's Chief Executive Officer, determine the size of the awards based
on the same competitive compensation data as are used to determine base
salaries and bonuses. Final determinations are subjective. At the end of
the three-year or four-year performance period, some or all of the shares
of restricted stock may vest depending upon Shorewood's relative
stockholder growth compared to that of the peer group over the same period.
The peer group for grants of restricted stock through fiscal year 1998
consisted of the same companies that make up the Peer Group for the stock
performance graph. The peer group for grants of restricted stock in fiscal
year 1999 consists both of the companies that make up the Peer Group for
the stock performance graph plus certain other public companies. The
Committee chose to expand the peer group for grants of restricted stock in
order to have reference to a wider pool of companies including certain
companies not directly competitive with Shorewood. The Committee believes
that the expanded peer group for such purposes is more meaningful and
instructive. See "Stock Performance Graph." Shares that do not vest, due
to relative stockholder performance, will vest at the end of eight years
assuming continued employment. Initial grants of restricted stock were
made during fiscal year 1995, of which the first performance based vesting
opportunity arose in April 1997 and the remaining shares are due to vest in
April 2002. Additional grants of restricted stock were made during fiscal
years 1998 and 1999 to certain key employees and executives. See
"Executive Compensation -- Summary Compensation Table -- Footnote (3)."

In connection with the extension of Marc P. Shore's employment
agreement for a period of five years, and in order to adequately
incentivize Mr. Shore for the duration of the employment term extension,
the Committee granted Mr. Shore 60,000 shares of restricted Common Stock
and stock options to acquire 350,000 shares of Common Stock.

Bonus Plan

In July 1995, the Board of Directors approved the Bonus Plan,
applicable to the Chief Executive Officer Marc P. Shore. Under the Bonus
Plan, for each fiscal year of Shorewood through fiscal year 2003, Mr. Shore
will be entitled to a graduated bonus (the "Performance Bonus") based upon
a comparison of Shorewood's earnings from operations plus depreciation and
amortization (the "Performance Measure") in that award year with the
immediately preceding fiscal year. The size of the Performance Bonus, if
any, is tied to the level of Shorewood's performance, as measured by the
Performance Measure. The maximum Performance Bonus payable in respect of
any award year under the Bonus Plan is $2.0 million. No bonus was payable
under the terms of the Bonus Plan for 1996. For fiscal 1997, a bonus of
approximately $1.2 million would have been earned, had Mr. Shore not
voluntarily agreed to accept $450,000. For fiscal 1998, a bonus of
$302,000 was earned by Mr. Shore. For fiscal 1999, a bonus of
approximately $1.1 million was earned by Mr. Shore.

EMPLOYMENT AND CONSULTING AGREEMENTS

Marc P. Shore

Marc P. Shore, Shorewood's Chairman and Chief Executive Officer, and
Shorewood entered into a new five-year employment agreement on June 8,
1998, effective as of May 3, 1998. The agreement granted Mr. Shore a
signing bonus in the aggregate amount of $1.0 million, payable immediately
in full but earned ratably over his five-year employment period, provided
that Mr. Shore continues to be employed with Shorewood at the end of each
such year. If a "change in control" of Shorewood, as defined in the
agreement, occurs at any time during the last two years of the agreement,
the term of the agreement will be automatically extended for an additional
two years. If Mr. Shore's employment is terminated by Shorewood or Mr.
Shore within two years after the occurrence of a "change in control" of
Shorewood, as defined in the agreement, Mr. Shore would be entitled to a
lump sum payment equal to 2.99 times his average annual compensation during
the five calendar years preceding the year of the change in control. In
addition, any payments under the agreement would be reduced to the extent
necessary to avoid imposition of excise tax on "excess parachute payments."
The agreement grants Mr. Shore an annual base salary of $800,000 per annum,
subject to periodic increases at the discretion of the Board of Directors.
Mr. Shore's annual base salary is currently $800,000. Mr. Shore is also
entitled to participate in the Bonus Plan, effective until 2003, pursuant
to which he is eligible to receive performance bonuses of up to $2.0
million per covered year if certain pre-established thresholds are met.
Mr. Shore earned a bonus of $1,093,000 under the Bonus Plan on account of
fiscal year 1999. See "Executive Compensation -- Summary Compensation
Table" and "Report of the Compensation Committee." The agreement also
authorizes Shorewood to grant Mr. Shore discretionary bonuses outside of
the scope of the Bonus Plan. The agreement requires Shorewood to maintain
term life insurance on the life of Mr. Shore and to carry supplemental
disability insurance for his benefit. Simultaneously with the
authorization of Mr. Shore's employment agreement by the Board, Shorewood
granted to Mr. Shore 60,000 shares of restricted stock and options to
acquire 350,000 shares.

Howard M. Liebman

Shorewood and Howard M. Liebman entered into a new five-year employment
agreement on June 8, 1998, effective as of May 3, 1998. If a "change in
control" of Shorewood, as defined in the agreement, occurs at any time
during the last two years of the agreement, the term of the agreement will
be automatically extended for an additional two years. Pursuant to the
employment agreement, Mr. Liebman is entitled to receive an annual base
salary of $450,000, subject to periodic increases at the discretion of the
Board. Mr. Liebman's annual base salary is currently $450,000. The
agreement provides that if Mr. Liebman's employment is terminated by
Shorewood or Mr. Liebman within two years after the occurrence of a "change
in control" of Shorewood, as defined in the agreement, Mr. Liebman would be
entitled to receive a lump sum payment equal to 2.99 times his average
annual compensation during the five calendar years preceding the year of
the change of control. In addition, any payments under the agreement would
be reduced to the extent necessary to avoid imposition of excise tax on
"excess parachute payments." Simultaneously with the authorization of Mr.
Liebman's employment agreement by the Board, Shorewood granted to Mr.
Liebman 35,000 shares of restricted stock and options to purchase 150,000
shares. Shorewood has also established a trust, pursuant to which income
earned on the trust principal fund of $300,000 is accumulated for payment
to Mr. Liebman upon his retirement from Shorewood, with the principal fund
then being returned to Shorewood. However, the assets of the trust are
subject to claims of creditors of Shorewood in the event of its insolvency.
The trust declined in value by $1,585 in fiscal year 1999.

Leonard J. Verebay

In connection with the Queens Transaction, Leonard J. Verebay entered
into a three year employment agreement with Shorewood, expiring on December
31, 2001. The Agreement provides for a five year consulting period
following the expiration of the initial employment term. Under the
agreement, Mr. Verebay is to be employed by Shorewood as an Executive Vice
President at a salary of $500,000 per annum, subject to annual increases at
the discretion of the Board. Mr. Verebay is also entitled to participate,
to the extent eligible, in Company sponsored benefit plans to the same
extent as similarly situated executives. During any consultancy period,
Mr. Verebay would be entitled to receive a fee of $10,000 per annum and an
automobile allowance as well as participation, to the extent eligible, in
Shorewood's group family medical insurance plan. The agreement contains
customary confidentiality, work-for-hire and non-competition covenants
applicable for the duration of all applicable employment and consultancy
periods. The agreement is subject to early termination by Shorewood in the
case of the death or disability of Mr. Verebay or if he engages in certain
types of "objectionable conduct" specified in the agreement. Mr. Verebay
may terminate the agreement upon the occurrence of certain types of capital
events and "change of control" transactions specified in the agreement.

Eric Kaltman

In connection with the Queens Transaction, Eric Kaltman entered into a
three year employment agreement with Shorewood to be employed as an
Executive Vice President of Shorewood, which agreement is substantially
identical to the agreement between Shorewood and Mr. Verebay, as described
above.

Virginia A. Kamsky

Kamsky Associates, Inc. ("KAI"), of which Virginia A. Kamsky (a
director of Shorewood) is the founder, chief executive officer, chairman
and principal stockholder, has been advising Shorewood for approximately
three years in connection with the establishment of a manufacturing
facility for paperboard folding carton packages in Guangzhou, Guandong
Province, China (the "China Business"), pursuant to the terms of a
consulting agreement dated effective January 1, 1996 (the "KAI Consulting
Agreement"). Shorewood pays KAI a consulting fee of $25,000 per month
under the KAI Consulting Agreement. Additionally, under the terms of a
Profit Participation Agreement between KAI and Shorewood (the "Profit
Participation Agreement"), KAI is entitled to receive up to 5% of
Shorewood's allocable share (presently 55%) of any "net profits" -- as
defined in the agreement -- generated from the operation of the China
Business or from any sale of the China Business or Shorewood's interest in
the China Business (the "Profit Participation"). Transfer of the Profit
Participation is subject to a right of first refusal in favor of
Shorewood. KAI may put its Profit Participation rights to Shorewood at any
time after three years from the production of the China Business' first
commercial product at the then fair market value of such interest, as
determined by a mutually agreeable third party appraiser. Under the terms
of the Profit Participation Agreement, Shorewood is required to exert its
reasonable best efforts to cause Ms. Kamsky to be elected to the Board of
Directors or other governing body of the operating entity which manages
the China Business.

R. Timothy O'Donnell

Shorewood has engaged Jefferson Capital to act as its co-financial
advisor in connection with the Chesapeake Offer. R. Timothy O'Donnell, a
member of the Board of Directors, is the President and principal
stockholder of Jefferson Capital. Additional information concerning
Jefferson Capital and its relationship with Shorewood is set forth in
"Compensation Committee Interlocks and Insider Participation" and in Annex
B.

STOCK PERFORMANCE GRAPH

Set forth below is a line graph comparing the yearly percentage change
in Shorewood's cumulative stockholder return on the Common Stock for the
last five fiscal years with the cumulative total return during the same
period of (i) the Russell 2000 Index and (ii) a peer group selected by the
Compensation Committee consisting of: R.R. Donnelley & Sons Co.,
International Paper Co., Gibraltar Packaging Group, Graphic Industries (and
Wallace Computer Services Inc. as successor to Graphic Industries as a
result of its acquisition of Graphic Industries on February 13, 1998),
Sonoco Products, Co., Union Camp Corporation and Westvaco Corporation (the
"Peer Group").

Shorewood has a 52-53 week fiscal year ending on the Saturday closest
to April 30th of each fiscal year. Accordingly, for purposes of the line
graph, Shorewood has selected as the "measurement period" the period
beginning on May 1, 1994 and ending on May 1, 1999.

Cumulative total returns are calculated assuming that $100 was
invested on May 1, 1994 in each of the Common Stock, the Russell 2000 Index
and the Peer Group, and that all dividends were reinvested.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG SHOREWOOD PACKAGING CORPORATION, RUSSELL 2000 INDEX
AND SELECTED PEER GROUP

INDEXED RETURNS FOR THE FIVE-YEAR PERIOD ENDED MAY 1, 1999

SHOREWOOD
PEER GROUP PACKAGING CORP RUSSELL 2000 INDEX

'1994' 100 100 100

'1995' 123.62 108.62 107.21

'1996' 134.78 118.96 142.58

'1997' 139.83 131.02 142.65

'1998' 179.27 178.86 200.83

'1999' 177.14 204.29 180

<S> <C> <C> <C> <C> <C> <C>
Company Name / Index 1994 1995 1996 1997 1998 1999
Shorewood Packaging 100.00 108.62 118.96 131.02 178.86 204.29
Russell 2000 Index 100.00 107.21 142.58 142.65 200.83 180.00
Peer Group Index 100.00 123.62 134.78 139.83 179.27 177.14

</TABLE>

ANNEX B

INFORMATION CONCERNING THE DIRECTORS
AND CERTAIN EXECUTIVE OFFICERS AND EMPLOYEES OF SHOREWOOD
AND OTHER PERSONS
WHO MAY ALSO SOLICIT REVOCATIONS OF CONSENTS

In connection with Shorewood's solicitation of revocations of consents
from its stockholders, certain persons may be deemed to be participants in
the solicitation.

DIRECTORS AND EXECUTIVE OFFICERS OF SHOREWOOD

The following table sets forth the name, principal business address
and the present employment or other principal occupation, and the name,
principal business and the address of any corporation or other organization
in which such employment is carried on, of the directors and executive
officers of Shorewood who may be deemed to be participants in the
solicitation of revocations of consents. Unless otherwise indicated, the
principal occupation refers to such person's position with Shorewood.

Name Business Address Principal Occupation
and Business

Marc P. Shore Shorewood Packaging Corporation Chairman and Chief
277 Park Avenue, 30th Floor Executive Officer.
New York, New York 10172

Howard M. Liebman Shorewood Packaging Corporation President and Chief
277 Park Avenue, 30th Floor Financial Officer.
New York, New York 10172

Leonard J. Verebay Shorewood Packaging Corporation Executive Vice
277 Park Avenue, 30th Floor President.
New York, New York 10172

Sharon R. Fairley Pharmacia & UpJohn, Inc. Director of Direct
100 Route 206 North to Consumer
Peapack, New Jersey 07977 Communications,
Pharmacia & UpJohn,
Inc. Pharmacia &
UpJohn is engaged in
the research,
development,
manufacture and sale
of pharmaceuticals
and other related
health care products.

William P. Weidner Las Vegas Sands, Inc. President and Chief
3355 Las Vegas Blvd., South Operating Officer,
Las Vegas, Nevada 89109 Las Vegas Sands,
Inc. Las Vegas Sands
manages hotel and
casino properties.

R. Timothy O'Donnell Jefferson Capital Group, Ltd. President, Jefferson
One James Center Capital Group, Ltd.
901 East Cary Street Jefferson Capital is
Richmond, Virginia 23219 an investment
banking firm.

Kevin J. Bannon The Bank of New York Executive Vice
One Wall Street President and Chief
New York, New York 10286 Investment Officer.
The Bank of New York
provides financial
services to
individuals,
businesses,
corporations,
financial
institutions,
governments and
public agencies.

Andrew N. Shore Shorewood Packaging Corporation Vice President,
277 Park Avenue, 30th Floor Secretary and
New York, New York 10172 General Counsel.

Virginia A. Kamsky Kamsky Associates, Inc. Chairman and Chief
563 Park Avenue Executive Officer,
New York, New York 10021 Kamsky Associates,
Inc. Kamsky
Associates is a
consulting firm.

William H. Hogan Shorewood Packaging Corporation Senior Vice President,
277 Park Avenue, 30th Floor Finance.
New York, New York 10172

INFORMATION REGARDING OWNERSHIP OF SHOREWOOD'S SECURITIES BY PARTICIPANTS

Except as otherwise provided in the Consent Solicitation Statement,
none of the persons listed in this Annex B owns any of Shorewood's
securities of record but not beneficially. The number of shares of Common
Stock held by directors and certain executive officers of Shorewood is set
forth in "Security Ownership" on pages __ and __ of this Consent Revocation
Statement.

INFORMATION REGARDING TRANSACTIONS IN SHOREWOOD'S COMMON STOCK BY
PARTICIPANTS

The following table sets forth purchases and sales of Shorewood's
Common Stock by the participants listed below during the past two years.
Unless otherwise indicated, all transactions were consummated in the public
market.

Name Transaction Date Number of Shares
Acquired or (Sold) Footnote

Kevin J. Bannon 9/23/99 5,250
William P. Weidner 3/24/99 (4,100) (1)
3/24/99 (1,900) (1)
3/24/99 (1,500) (1)
Marc P. Shore 12/10/97 (100,000)
12/31/97 (10,000)
02/03/98 (15,000)
01/15/99 (200,000)
07/06/99 44,562 (4)
11/30/99 7,524 (2)
Andrew N. Shore 1/4/99 (4,500)
1/5/99 (5,600)
1/6/99 (2,600)
1/14/99 (2,300)
11/30/99 10,102 (3)
Howard M. Liebman 1/28/98 150
6/23/99 60,000 (4)
6//23/99 (20,253) (5)
7/26/99 26,736 (4)
Leonard J. Verebay 10/30/98 500,000 (6)

_________

(1) Transferred to spouse pursuant to Post-Nuptial Agreement dated June 1,
1999.

(2) Transferred to Marc P. Shore from the Estate.

(3) Transferred to Andrew N. Shore from the Estate.

(4) Exercised options to purchase shares.

(5) Sold shares to the Company to pay for the exercise of options.

(6) Acquired shares as part of the Queens Transaction.

INFORMATION REGARDING OTHER PERSONS THAT MAY BE DEEMED TO BE PARTICIPANTS

Bear Stearns

Shorewood has engaged Bear, Stearns & Co. Inc. to act as its
financial advisor in connection with the Chesapeake Offer, for which Bear
Stearns will receive approximately $[ ] in fees, as well as
reimbursement for reasonable out-of-pocket expenses.

Certain employees of Bear Stearns may also assist in the solicitation
of consent revocations, including by communicating in person, by telephone
or otherwise with a limited number of institutions, brokers or other
persons who are stockholders of Shorewood. However, Bear Stearns does not
admit that it or any of its directors, officers, employees or affiliates is
a "participant," as defined in Schedule 14A promulgated under the Exchange
Act, or that Schedule 14A requires the disclosure of certain information
concerning Bear Stearns. Bear Stearns will not receive separate fees for
its solicitation activities. Bear Stearns is an investment banking firm.

In the normal course of business, Bear Stearns may trade securities of
Shorewood for its own account and the accounts of its customers and,
accordingly, may at any time hold a long or short position in such
securities. As of December [ ], 1999, Bear Stearns held a net long
position of [ ] shares of Common Stock. In the normal course of
business, Bear Stearns may finance its securities positions by bank and
other borrowings and repurchase and securities borrowing transactions.
Bear Stearns and certain of its affiliates may have voting and dispositive
power with respect to certain shares of Common Stock held in asset
management, brokerage and other accounts. Bear Stearns and such affiliates
disclaim beneficial ownership of such shares of Common Stock.

Information with respect to the employees of Bear Stearns who may be
deemed "participants" is set forth below. Except as set forth in this
Consent Revocation Statement, none of the individuals named below owns any
shares of Common Stock or has engaged in any transaction involving such
shares during the past two years. The principal business address of Bear
Stearns and each of the persons listed below is Bear, Stearns & Co. Inc.,
245 Park Avenue, New York, New York 10167.

Name Title

Terry Cryan . . . . . . . . . . . . . . . . . . . Senior Managing Director
Charles Edelman . . . . . . . . . . . . . . . . . Senior Managing Director
Mark A. Van Lith . . . . . . . . . . . . . . . . Managing Director
Karen Duffy . . . . . . . . . . . . . . . . . . . Vice President

Pursuant to its engagement letter with Bear Stearns, Shorewood has
also agreed to reimburse Bear Stearns for certain reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of legal counsel,
and to indemnify Bear Stearns and certain related parties from and against
certain liabilities, including liabilities under the federal securities
laws, arising out of its engagement by Shorewood.

Jefferson Capital

Shorewood has also engaged Jefferson Capital to act as its co-
financial advisor in connection with the Chesapeake Offer, for which
Jefferson Capital will receive a fee of approximately $[ ], as
well as reimbursement for reasonable out-of-pocket expenses.

Certain employees of Jefferson Capital may also assist in the
solicitation of consent revocations, including by communicating in person,
by telephone or otherwise with a limited number of institutions, brokers or
other persons who are stockholders of Shorewood. However, Jefferson
Capital does not admit that it or any of its directors, officers, employees
or affiliates is a "participant," as defined in Schedule 14A promulgated
under the Exchange Act, or that Schedule 14A requires the disclosure of
certain information concerning Jefferson Capital. Jefferson Capital will
not receive separate fees for its solicitation activities. Jefferson
Capital is an investment banking firm.

As of December [ ], 1999, Jefferson Capital held in its investment
account 22,231 shares of Common Stock.

Information with respect to the employees of Jefferson Capital who may
be deemed "participants" is set forth below. Except as set forth in this
Consent Revocation Statement, none of the individuals named below owns any
shares of Common Stock or has engaged in any transaction involving such
shares during the past two years. The principal business address of
Jefferson Capital and each of the persons listed below is Jefferson Capital
Group, Ltd., One James Center, 901 East Cary Street, Suite 1600, Richmond,
Virginia 23219.

Name Title

R. Timothy O'Donnell . . . . . . . . . . . President
Louis W. Moelchert . . . . . . . . . . . . Vice President

R. Timothy O'Donnell is the beneficial owner of 276,118 shares of
Common Stock. See "Security Ownership--Security Ownership of Officers and
Directors." Louis W. Moelchert is the beneficial owner of 1,500 shares of
Common Stock.

Pursuant to its engagement letter with Jefferson Capital, Shorewood
has also agreed to reimburse Jefferson Capital for certain reasonable out-
of-pocket expenses, including the reasonable fees and disbursements of
legal counsel, and to indemnify Jefferson Capital and certain related
parties from and against certain liabilities, including liabilities under
the federal securities laws, arising out of its engagement by Shorewood.

MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS

Except as described in this Annex B or in the Consent Revocation
Statement or in Annex A thereto, none of the persons who may be deemed
"participants" as defined in Schedule 14A promulgated under the Exchange
Act nor any of their respective affiliates or associates (together, the
"Participant Affiliates"), (1) directly or indirectly beneficially owns any
shares of Shorewood Common Stock or any securities of any subsidiary of
Shorewood or (2) has had any relationship with Shorewood in any capacity
other than as a stockholder, employee, officer or director. Furthermore,
except as described in this Annex B or in the Consent Revocation Statement
or in Annex A thereto, no Participant Affiliate is either a party to any
transaction or series of transactions since January 1, 1998, or has
knowledge of any currently proposed transaction or series of transactions,
(1) to which Shorewood or any of its subsidiaries was or is to be a party,
(2) in which the amount involved exceeds $60,000, and (3) in which any
Participant Affiliate had, or will have, a direct or indirect material
interest.

Except for the employment agreements described in the Consent
Revocation Statement or as otherwise described therein or in Annex A
thereto or in this Annex B, no Participant Affiliate has entered into any
agreement or understanding with any person respecting any future employment
by Shorewood or its affiliates or any future transactions to which
Shorewood or any of its affiliates will or may be a party. Except as
described in this Annex B or in the Consent Revocation Statement or in
Annex A thereto, there are no contracts, arrangements or understandings by
any Participant Affiliate within the past year with any person with respect
to Shorewood's securities.

PRELIMINARY COPY

SUBJECT TO COMPLETION, DATED DECEMBER 10, 1999

SHOREWOOD PACKAGING CORPORATION

THIS REVOCATION OF CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SHOREWOOD PACKAGING CORPORATION IN OPPOSITION TO THE CONSENT
SOLICITATION BY CHESAPEAKE CORPORATION.

The undersigned, a holder of shares of common stock, par value $0.01
per share, of Shorewood Packaging Corporation ("Shorewood"), is acting with
respect to all the shares of common stock of Shorewood held by the
undersigned, and hereby revokes any and all consents that the undersigned
may have given in respect of the following proposals:

[X] PLEASE MARK VOTE AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS OF SHOREWOOD UNANIMOUSLY RECOMMENDS A "REVOKE
CONSENT" ON EACH PROPOSAL SET FORTH BELOW. PLEASE SIGN, DATE AND MAIL THIS
CONSENT REVOCATION CARD TODAY.

1. Proposal made by Chesapeake Corporation ("Chesapeake") to amend
Shorewood's By-laws to require all directors to be elected annually.