SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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14a-6(e)(2))
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[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SHOREWOOD PACKAGING CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
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[SHOREWOOD LETTERHEAD]
December 22, 1999
Dear Fellow Stockholder:
On December 16, 1999, Shorewood's Board of Directors unanimously
rejected Chesapeake's unsolicited, highly conditional tender offer of
$17.25 per share. Your Board determined that the offer is inadequate and
does not reflect the value or prospects of Shorewood.
Chesapeake, however, appears intent on pursuing its plan to acquire
your shares at an inadequate price. In furtherance of that goal, you can
expect that Chesapeake will be seeking your vote to remove Shorewood's
entire Board of Directors --without cause --through a consent solicitation
process. Chesapeake also will solicit consents to install its own
hand-picked nominees as Shorewood's directors, and these nominees are
committed to Chesapeake's inadequate and opportunistic offer.
YOUR BOARD OF DIRECTORS UNANIMOUSLY URGES YOU NOT TO LET CHESAPEAKE
DO THIS! WE URGE YOU NOT TO TENDER YOUR SHARES TO CHESAPEAKE AND CAUTION
YOU NOT TO SIGN ANY WHITE PROXY OR CONSENT CARD THAT MAY BE SENT TO YOU BY
CHESAPEAKE.
There are numerous reasons why your Board believes that Chesapeake's
efforts to seize control of your Board is unwise and not in the best
interests of Shorewood and its stockholders. Your Board's reasons for
rejecting Chesapeake's offer are set forth in Shorewood's Schedule 14D-9
which previously was mailed to you. In the meantime, we ask you to remember
the following:
o CHESAPEAKE'S INTERESTS ARE NOT THE SAME AS YOURS: Chesapeake's
interest is to acquire your Company as quickly and cheaply as
possible and not to give you the opportunity to obtain the best
value for your shares.
o SHOREWOOD IS PURSUING STRATEGIC ALTERNATIVES: Your Board of
Directors has instructed management and Shorewood's financial
advisors to explore strategic alternatives which would enhance
the value of your shares. We already have received several
unsolicited inquiries from third parties who have indicated an
interest in pursuing an extraordinary transaction with
Shorewood, and we have engaged in preliminary discussions
concerning these inquiries.
o CHESAPEAKE'S $17.25 PRICE UNDERVALUES YOUR SHOREWOOD SHARES: As
discussed in our Schedule 14D-9, Chesapeake's offer does not
reflect the long-term value inherent in Shorewood and is
nothing more than an opportunistic attempt by Chesapeake to
capture for is own stockholders the future value of your
shares.
o CHESAPEAKE'S OFFER IS HIGHLY CONDITIONAL: Chesapeake's offer is
subject to numerous conditions -- and I can assure you that
these conditions will not be satisfied by the initial
expiration date of January 3. Some of these conditions may
never be satisfied. Accordingly, there is no need to tender
your shares into Chesapeake's inadequate offer -- which as of
today is for a price that is below the market value of your
shares. You still have every right to withdraw any shares you
may have tendered. If you need assistance in withdrawing
tendered shares, please call Innisfree M&A Incorporated,
toll-free, at (888) 750-5834.
I look forward to updating you in the coming weeks on the progress of
our efforts to enhance stockholder value. Meanwhile, we urge you not to
tender your shares to Chesapeake's opportunistic offer and not to sign any
white proxy or consent card that Chesapeake may send you.
Thank you for your continued trust and support.
Sincerely,
/s/ Marc P. Shore
Marc P. Shore
Chairman of the Board and
Chief Executive Officer
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Shorewood Packaging Corporation ("Shorewood") and certain other
persons named below may be deemed to be participants in the solicitation of
revocations of consents in response to the consent solicitation being
conducted by Chesapeake Corporation ("Chesapeake"). The participants in
this solicitation may include: (i) the directors of Shorewood (Marc P.
Shore (Chairman of the Board and Chief Executive Officer), Howard M.
Liebman (President and Chief Financial Officer), Leonard Verebay (Executive
Vice President), Andrew N. Shore (Vice President and General Counsel),
Kevin J. Bannon, Sharon R. Fairley, Virginia A. Kamsky, R. Timothy
O'Donnell and William P. Weidner; and (ii) William H. Hogan (Senior Vice
President, Finance and Corporate Controller). As of the date of this
communication, the number of shares of common stock, par value $0.01 per
share ("Common Stock"), beneficially owned by the Shorewood participants
(including shares subject to stock options exercisable within 60 days) is
as follows: Marc P. Shore (4,750,485), Howard M. Liebman (233,269), Leonard
J. Verebay (500,180), Andrew N. Shore (169,052), Kevin J. Bannon (33,000),
Virginia A. Kamsky (4,500), R. Timothy O'Donnell (326,118); William P.
Weidner (57,000); and William H. Hogan (30,500).
Shorewood has retained Bear, Stearns & Co. Inc. ("Bear Stearns") and
Jefferson Capital Group, Ltd. ("Jefferson Capital") to act as its
co-financial advisors in connection with the tender offer (the "Offer") by
Chesapeake and its wholly owned subsidiary, Sheffield, Inc., to purchase
shares of Common Stock for $17.25 per share net to the seller in cash, for
which Bear Stearns and Jefferson Capital may receive substantial fees, as
well as reimbursement of reasonable out-of-pocket expenses. In addition,
Shorewood has agreed to indemnify Bear Stearns, Jefferson Capital and
certain related persons against certain liabilities, including certain
liabilities under the federal securities laws, arising out of their
engagement. Neither Bear Stearns nor Jefferson Capital admit that they or
any of their partners, directors, officers, employees, affiliates or
controlling persons, if any, is a "participant" as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934, as amended, in the
solicitation of consent revocations, or that Schedule 14A requires the
disclosure of certain information concerning Bear Stearns and Jefferson
Capital, respectively.
In connection with Bear Stearns' role as co-financial advisor to
Shorewood, Bear Stearns and the following investment banking employees of
Bear Stearns may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are
stockholders of Shorewood and may solicit consent revocations therefrom:
Terence Cryan (Senior Managing Director), Charles Edelman (Senior Managing
Director), Mark A. Van Lith (Managing Director) and Karen Duffy (Vice
President). Bear Stearns engages in a full range of investment banking,
securities trading, market-making and brokerage services for institutional
and individual clients. In the normal course of its 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. Bear Stearns has informed Shorewood that, as
of the date hereof, Bear Stearns held no shares of Common Stock for its own
account. 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.
In connection with Jefferson Capital's role as co-financial advisor
to Shorewood, Jefferson Capital and the following investment banking
employees of Jefferson Capital may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other persons
who are stockholders of Shorewood and may solicit consent revocations
therefrom: R. Timothy O'Donnell (President) and Louis W. Moelchert (Vice
President). R. Timothy O'Donnell is the beneficial owner of 276,118 shares
of Common Stock. Louis W. Moelchert is the beneficial owner of 1,500 shares
of Common Stock. Jefferson Capital has informed Shorewood that, as of the
date hereof, it held 22,231 shares of Common Stock in its investment
account.
