In a bowl, cream shortening and sugar until light and fluffy. Combine the flour, baking powder and salt; add to the creamed mixture alternately with water. Add extracts, chocolate, nuts and cherries; mix well.
In a small bowl, beat egg whites until soft peaks form; fold into batter. Pour into a greased 13x9-in. baking pan. Bake at 350° for 30-35 minutes or until a toothpick inserted in the center comes out clean. Cool.
For frosting, cream shortening and butter in a bowl. Add extracts and salt. Beat in sugar and milk. Frost cake. Top with nut halves if desired.