This paper studies a two-level traffic shapero The cell arrival process is modeled by an on-off fluid source. The output rate of the shaper is regulated by the content of a finite token bank. Our interest focuses on the stationary joint distribution of the content of the cell buffer and the content of the token bank, from which various performance measures such as the steady-state cell delay and burst duration can be obtained. The system is analysed using an approximative model based on a stochastic discretization of the content of the token bank. We believe that this discretization technique has much wider applicability. Numerical results show the quality of the approximation and demonstrate the effect of the shaping mechanism.