UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For Quarter Ended September 30, 1996
Commission File Number 0-23876
JEFFERSON SMURFIT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 43-1531401
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
8182 Maryland, St. Louis, Missouri 63105
(Address of principal executive offices) (Zip Code)
(314) 746-1100
Registrant's telephone number, including area code
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of September 30, 1996, the registrant had outstanding
110,989,156 shares of common stock, $.01 par value per share.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $ 834 $1,051 $ 2,594 $ 3,120
Costs and expenses
Cost of goods sold 683 806 2,083 2,460
Selling and administrative expenses 65 60 195 184
Income from operations 86 185 316 476
Other income (expense)
Interest expense (49) (59) (148) (181)
Other, net 1 1 2
Income before income taxes and
extraordinary item 38 126 169 297
Provision for income taxes 16 49 67 115
Income before extraordinary item 22 77 102 182
Extraordinary item
Loss from early extinguishment of debt,
net of income tax benefits (3) (4) (3)
Net income $ 22 $ 74 $ 98 $ 179
Per share of common stock:
Income before extraordinary item $ .20 $ .70 $ .92 $1.65
Extraordinary item (.03) (.04) (.03)
Net income $ .20 $ .67 $ .88 $1.62
Weighted average shares outstanding 111 111 111 111
</TABLE>
See note to consolidated financial statements.
<PAGE>
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
<CAPTION>
September 30, December 31,
1996 1995
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 10 $ 27
Receivables, less allowances of
$9 in 1996 and 1995 300 339
Inventories
Work-in-process and finished goods 84 85
Materials and supplies 112 139
196 224
Deferred income taxes 42 45
Prepaid expenses and other current assets 7 9
Total current assets 555 644
Net property, plant and equipment 1,465 1,456
Timberland, less timber depletion 258 258
Goodwill, less accumulated amortization of
$48 in 1996 and $42 in 1995 248 253
Other assets 164 172
$ 2,690 $ 2,783
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current maturities of long-term debt $ 6 $ 81
Accounts payable 287 290
Accrued compensation and payroll taxes 99 101
Interest payable 51 37
Other accrued liabilities 118 88
Total current liabilities 561 597
Long-term debt, less current maturities 1,942 2,111
Other long-term liabilities 226 234
Deferred income taxes 350 328
Stockholders' deficit
Preferred stock, par value $.01 per share;
50,000,000 shares authorized; none issued
and outstanding
Common stock, par value $.01 per share;
250,000,000 shares authorized; 110,989,156
issued and outstanding in 1996 and 1995 1 1
Additional paid-in capital 1,168 1,168
Retained earnings (deficit) (1,558) (1,656)
Total stockholders' deficit (389) (487)
$ 2,690 $ 2,783
</TABLE>
See note to consolidated financial statements.
<PAGE>
<TABLE>
JEFFERSON SMURFIT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
<CAPTION>
Nine months ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities
Net income $ 98 $ 179
Adjustments to reconcile net income to
net cash provided by operating activities
Extraordinary loss from early extinguishment of debt 7 6
Depreciation, depletion and amortization 101 104
Amortization of deferred debt issuance costs 10 11
Deferred income taxes 25 79
Non-cash employee benefit (income) expense 12 (5)
Change in current assets and liabilities,
net of effects from acquisitions
Receivables 39 (69)
Inventories 28 (54)
Prepaid expenses and other current assets (1)
Accounts payable and accrued liabilities 10 (24)
Interest payable 16 18
Income taxes payable 1 10
Other, net (3) (2)
Net cash provided by operating activities 344 252
Cash flows from investing activities
Property additions (88) (104)
Timberland additions (14) (14)
Construction funds held in escrow (8)
Investment in affiliates and acquisitions (33)
Proceeds from property and timberland disposals 5 8
Net cash used for investing activities (105) (143)
Cash flows from financing activities
Proceeds from long-term borrowings 261 227
Repayment of long-term debt (511) (379)
Deferred debt issuance costs (6) (4)
Net cash used for financing activities (256) (156)
Decrease in cash and cash equivalents (17) (47)
Cash and cash equivalents
Beginning of period 27 62
End of period $ 10 $ 15
</TABLE>
See note to consolidated financial statements.
<PAGE>
JEFFERSON SMURFIT CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except share data)
(Unaudited)
1. -- Basis of Presentation
The accompanying consolidated financial statements of Jefferson
Smurfit Corporation ("JSC" or the "Company") have been prepared in
accordance with the instructions to Form 10-Q and reflect all
adjustments which management believes necessary (which include only
normal recurring accruals) to present fairly the financial position
and results of operations. These statements, however, do not
include all information and footnotes necessary for a complete
presentation of financial position, results of operations and cash
flows in conformity with generally accepted accounting principles.
Interim results may not necessarily be indicative of results which
may be expected for any other interim period or for the year as a
whole. For further information refer to the consolidated financial
statements and footnotes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed on March 8,
1996 with the Securities and Exchange Commission.
JSC owns 100% of the equity interest in JSCE, Inc. JSC has no
operations other than its investment in JSCE, Inc. JSCE, Inc. owns
100% of the equity interest in Jefferson Smurfit Corporation (U.S.)
("JSC (U.S.)"). JSC (U.S.) has extensive operations throughout the
United States. JSCE, Inc. has no operations other than its
investment in JSC (U.S.).
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
<TABLE>
Results of Operations
<CAPTION>
(In millions) Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales
Paperboard/Packaging Products $ 755 $ 949 $2,346 $2,847
Newsprint 79 102 248 273
Total net sales $ 834 $1,051 $2,594 $3,120
Income from operations
Paperboard/Packaging Products $ 78 $ 173 $ 263 $ 454
Newsprint 8 12 53 22
Total income from operations $ 86 $ 185 $ 316 $ 476
</TABLE>
Net sales of the Company for the three months and nine months ended
September 30, 1996 declined 21% and 17%, respectively, compared to
last year. The decreases in net sales were due primarily to lower
product pricing, particularly for containerboard, corrugated
shipping containers and reclaimed fiber. Sales volume improved in
the paperboard/packaging products segment in the third quarter,
particularly for corrugated shipping containers. The changes in
net sales for each of the Company's segments are summarized in the
chart below.
Income from operations of the Company for the three months and nine
months ended September 30, 1996 declined 54% and 34%, respectively,
compared to last year. The decreases in income from operations
were due primarily to the lower prices for containerboard and
corrugated shipping containers. The lower prices for reclaimed
fiber had a favorable effect on income from operations by reducing
fiber cost at the Company's paper mills.
<TABLE>
<CAPTION>
(In millions) Change in net sales analysis
Three months Nine months
1996 compared to 1995 1996 compared to 1995
<S> <C> <C>
Sales price and product mix
Paperboard/Packaging Products $(246) $(537)
Newsprint (16) 15
(262) (522)
Sales volume
Paperboard/Packaging Products 63 73
Newsprint (7) (40)
56 33
Acquisitions and new facilities
Paperboard/Packaging Products 1 3
Closed or sold facilities
Paperboard/Packaging Products (12) (40)
Total net sales decrease $(217) $(526)
</TABLE>
<PAGE>
Paperboard/Packaging Products Segment Sales
Net sales in the Paperboard/Packaging Products segment for the
three months and nine months ended September 30, 1996 declined 20%
and 18%, respectively, compared to last year. The declines for
both periods were due primarily to lower prices for containerboard,
corrugated shipping containers and reclaimed fiber.
Net sales of containerboard and corrugated shipping containers for
the three months and nine months ended September 30, 1996 decreased
24% and 17%, respectively. Prices of containerboard and corrugated
shipping containers have been under severe pressure this year due
to weak market conditions and excess capacity within the
containerboard industry. Domestic containerboard prices were
approximately $200/ton lower in September 1996 compared to
September 1995 and the average price of corrugated shipping
containers in the third quarter of 1996 was 24% lower compared to
the peak levels of the third quarter last year. There were signs
of increasing demand, however, during the third quarter, with
corrugated shipping container sales volume higher than last year by
6%. For the nine months ended September 30, 1996, corrugated
shipping container sales volume was higher than last year by 1%.
Net sales of reclaimed fiber for the three months and nine months
ended September 30, 1996 decreased 54% and 59%, respectively.
Recycled fiber prices decreased significantly compared to last year
due to lower demand as a result of extensive mill downtime taken by
domestic paper mills in the containerboard and newsprint
industries. On average, recycled fiber prices in the third quarter
of 1996 were lower by 60% compared to the third quarter of last
year.
Net sales of the Company's other major products in the
Paperboard/Packaging Products segment for the three months and nine
months ended September 30, 1996 were comparable to last year.
Newsprint
Net sales in the Newsprint segment for the three months and nine
months ended September 30, 1996 declined 23% and 9%, respectively,
compared to last year. The decline in the third quarter was due
primarily to an 18% decline in average newsprint prices and mill
downtime taken in response to reduced demand in 1996. On a
cumulative basis through September 1996, the average price of
newsprint was higher than last year by 6%.
Costs and Expenses
Compared to last year, cost of goods sold as a percent of net sales
for the Paperboard/Packaging Products segment increased for the
three months ended September 30 from 72% in 1995 to 81% in 1996 and
for the nine months ended September 30 from 78% in 1995 to 81% in
1996. For the Newsprint segment, cost of goods sold as a percent
of net sales increased from 84% in 1995 to 86% in 1996 for the
three months ended September 30 and decreased from 88% in 1995 to
76% in 1996 for the nine months ended September 30.
The increases in the cost of goods sold as a percent of net sales
for the periods shown were due primarily to lower sales prices.
The lower prices for recycled fiber resulted in lower fiber cost at
the Company's recycled paper mills, which partially offset the
lower pricing for other products. The Newsprint segment was also
negatively affected by market related downtime during the third
quarter of 1996. The decrease in the cost of goods sold as a
percent of net sales for the newsprint segment for the nine months
ended September 30, 1996 compared to last year was due to higher
average sales prices.
<PAGE>
Selling and administrative expenses as a percent of net sales for
the three months and nine months ended September 30, 1996 increased
compared to last year due primarily to overall lower sales prices,
higher personnel costs and inflationary increases in other costs.
Interest expense for the three months and nine months ended
September 30, 1996 declined $10 million and $33 million,
respectively due primarily to lower average debt levels outstanding
and lower effective interest rates.
In the first quarter of 1996, the Company adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of", the effect of which was immaterial.
<TABLE>
<CAPTION>
Statistical Data Three months ended Nine months ended
(In thousands of tons, September 30, September 30,
except as noted) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Mill production:
Containerboard 510 505 1,463 1,458
Recycled boxboard and
solid bleached sulfate 198 197 579 588
Newsprint 142 157 417 464
Corrugated shipping containers
sold (billion square feet) 7.8 7.3 22.5 22.2
Folding cartons sold 118 119 350 352
Fiber reclaimed and brokered 1,135 1,070 3,270 3,265
</TABLE>
Liquidity and Capital Resources
Operating activities have historically been the major source of
cash to fund the Company's capital expenditures and debt payments.
Net cash provided by operating activities for the nine months ended
September 30, 1996 of $344 million and excess cash at the end of
1995 were used primarily to fund capital investments of $102
million and to make net debt repayments of $250 million.
As a result of debt prepayments and refinancing, the aggregate
annual maturities of long term debt as of September 30, 1996, were
$8 million in 1997 and $14 million in 1998.
In May 1996, Jefferson Smurfit Corporation (U.S.) ("JSC (U.S.)")
amended and restated its bank credit facility (the "1994 Credit
Agreement"). The 1994 Credit Agreement includes a $450 million
revolving credit facility, a Tranche A Term Loan, a Tranche B Term
Loan and a Tranche C Term Loan. The 1994 Credit Agreement contains
various business and financial covenants including, among other
things, (i) limitations on dividends, redemptions and repurchases
of capital stock, (ii) limitations on the incurrence of
indebtedness, liens, leases and sale-leaseback transactions, (iii)
limitations on capital expenditures, (iv) maintenance of minimum
levels of consolidated earnings before depreciation, interest,
taxes and amortization, and (v) maintenance of minimum interest
coverage ratios. Such restrictions, together with the highly
leveraged position of the Company, could restrict corporate
activities, including the Company's ability to respond to market
conditions, to provide for unanticipated capital expenditures or to
take advantage of business opportunities.
<PAGE>
At September 30, 1996, JSC (U.S.) had $354 million in unused
borrowing capacity pursuant to the revolving credit facility under
the 1994 Credit Agreement. In addition, Jefferson Smurfit Finance
Corporation ("JSFC") had additional borrowing capacity of $120
million under its accounts receivable securitization program,
subject to JSC (U.S.)'s level of eligible accounts receivable. The
Company believes that cash provided by operating activities and
available financing sources will be sufficient for the next several
years to pay interest on the Company's obligations, amortize its
term loans and fund anticipated capital expenditures.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Mr. Patrick J. Moore has been appointed Vice President and
Chief Financial Officer of the Company effective October 1,
1996. He replaces Mr. John R. Funke, who will remain a
Vice President until April 30, 1997, when he will retire.
Item 6. Exhibits and Reports on Form 8-K
a) The following exhibits are included in this Form 10-Q.
10.1 JSC (U.S.) Deferred Compensation Plan.
11.1 Calculation of Per Share Earnings.
27.1 Financial Data Schedule.
b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during
the three months ended September 30, 1996.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
JEFFERSON SMURFIT CORPORATION
(Registrant)
Date October 29, 1996 /s/ Patrick J. Moore
Patrick J. Moore
Vice President
and Chief Financial Officer
(Principal Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000919226
<NAME> JEFFERSON SMURFIT CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 309
<ALLOWANCES> 9
<INVENTORY> 196
<CURRENT-ASSETS> 555
<PP&E> 2550
<DEPRECIATION> 827
<TOTAL-ASSETS> 2690
<CURRENT-LIABILITIES> 561
<BONDS> 1942
1
0
<COMMON> 0
<OTHER-SE> (390)
<TOTAL-LIABILITY-AND-EQUITY> 2690
<SALES> 2594
<TOTAL-REVENUES> 2594
<CGS> 2083
<TOTAL-COSTS> 2083
<OTHER-EXPENSES> 195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 148
<INCOME-PRETAX> 169
<INCOME-TAX> 67
<INCOME-CONTINUING> 102
<DISCONTINUED> 0
<EXTRAORDINARY> (4)
<CHANGES> 0
<NET-INCOME> 98
<EPS-PRIMARY> .88
<EPS-DILUTED> .88
</TABLE>
Jefferson Smurfit Corporation (U.S.)
Deferred Compensation Plan
<PAGE>
Jefferson Smurfit Corporation (U.S.)
Deferred Compensation Plan
1. Statement of Purpose
The purpose of the Jefferson Smurfit Corporation (U.S.)
("JSC") Deferred Compensation Plan (the "Plan") is to aid JSC
(the "Company") in attracting and retaining key employees by
providing a non-qualified compensation deferral vehicle.
2. Definitions
2.1 Beneficiary - "Beneficiary" means the person or persons
designated as such in accordance with Section 8.
2.2 Committee - "Committee" means the Committee which will
administer the Plan pursuant to the provisions of Section
3 of the Plan. Until and unless changed by the Board of
Directors of the Company, the committee shall be The
Administrative Committee of the Jefferson Smurfit
Corporation Retirement Plans.
2.3 Compensation - "Compensation" means the Participant's
base salary, corporate bonus, or incentive payments.
2.4 Cycle - "Cycle" means the twelve month pay-in period for
each deferral; provided, however, that the initial Cycle
shall commence on August 1, 1996 and end on December 31,
1996, and subsequent Cycles shall commence on January 1
and end on December 31 of each calendar year.
2.5 Deferral Amount - "Deferral Amount" means the amount of
Elective Deferred Compensation or Non-Elective Deferred
Compensation actually deferred by the Participant.
2.6 Deferred Compensation Account - "Deferred Compensation
Account" means the account maintained on the books of
account of the Company for each Participant pursuant to
Section 6.
2.7 Disability - "Disability" means the Participant is
eligible to receive benefits under a long term disability
plan maintained by the Company.
2.8 Distribution Date - "Distribution Date" means the date on
which the Company makes distributions from the
Participant's Deferred Compensation Account.
2.9 Election Form - "Election Form" means the form or forms
attached to this Plan and filed with the Committee by the
Participant in order to participate in the Plan. The
terms and conditions specified in the Election Form(s)
are incorporated by reference herein and form a part of
the Plan.
2.10 Elective Deferred Compensation - "Elective Deferred
Compensation" means the amount elected to be deferred by
an Eligible Employee in his Election Form, subject to
approval by the Committee.
2.11 Eligible Employee - "Eligible Employee" means those
employees of the Company who have been selected by the
Committee.
2.12 Investment Vehicle - "Investment Vehicle" means the
Vanguard Index Trust 500 Portfolio, or any other
investment vehicle approved by the Committee from time-
to-time.
2.13 Non-Elective Deferred Compensation - "Non-Elective
Deferred Compensation" means the amount awarded to a
Participant by the Committee pursuant to Section 4.2.
2.14 Participant - "Participant" means an Eligible Employee
participating in the Plan in accordance with the
provisions of Section 4.
2.15 Plan Year - "Plan Year" means the twelve month period
beginning on the first day of the first Cycle in which
the Eligible Employee elects to participate in the Plan;
provided, however, that the initial Plan Year shall end
on December 31, 1996.
2.16 Related Employment - "Related Employment" means the
employment of a Participant by an employer which is not
the Company provided (i) such employment is undertaken by
the Participant at the request of the Company; (ii)
immediately prior to undertaking such employment the
Participant was an officer or employee of the Company, or
was engaged in Related Employment as herein defined; and
(iii) such employment is recognized by the Committee, in
its sole discretion, as Related Employment.
2.17 Termination of Employment - "Termination of Employment"
means the termination of a Participant's employment with
the Company for any reason other than Related Employment,
or the termination of a Participant's Related Employment.
2.18 Valuation Date - "Valuation Date" means the date on which
the value of a Participant's Deferred Compensation
Account for each Cycle is determined as provided in
Section 6 hereof. Unless and until changed by the
Committee, the Valuation Date for each Cycle shall be the
last day of the Cycle.
2.19 Years of Service - "Years of Service" means being in the
employ of the Company for a minimum of 1,000 hours during
a calendar year before or after adoption of the Plan.
3. Administration of the Plan
The Committee shall be the sole administrator of the Plan and
will administer the Plan. The Committee shall have full power
to formulate additional details and regulations for carrying
out this Plan. The Committee shall also be empowered to make
any and all of the determinations not herein specifically
authorized which may be necessary or desirable for the
effective administration of the Plan. Any decision or
interpretation of any provision of this Plan adopted by the
Committee shall be final and conclusive.
4. Participation
4.1 Elective Participation
a. Any Eligible Employee may elect to participate in
the Plan for a given Cycle by filing a completed
Election Form for the Cycle with the Committee.
With regard to an election to participate, the
Election Form must be filed with the Committee
prior to the commencement of the Cycle to which the
Election Form pertains. Notwithstanding the
foregoing, an employee who first becomes an
Eligible Employee during any Cycle may elect to
participate in the Plan for such Cycle by filing an
Election Form within thirty (30) days of becoming
an Eligible employee.
b. A Participant's election to defer future
Compensation is irrevocable upon the filing of his
Election Form with the Committee, provided,
however, that the election may be terminated with
respect to Compensation not yet earned by mutual
agreement in writing between the Participant and
the Committee. Such termination if approved shall
be effective immediately.
4.2 Non-Elective Participation. The Committee can, in its
discretion, award to an Eligible Employee Non-Elective
Deferred Compensation. Any such award shall, except as
otherwise provided, be subject to the same terms,
conditions, and benefits as Elective Deferred
Compensation for the Cycle.
5. Vesting of Deferred Compensation Account
A Participant's interest in his Deferred Compensation Account
shall vest immediately.
<PAGE>
6. Accounts and Valuations
6.1 Deferred Compensation Accounts. The Committee shall
establish and maintain a separate Deferred Compensation
Account for each Participant for each Cycle. Any
Elective Deferred Compensation shall be credited to the
Participant's Deferred Compensation Account when
deferred. Any Non-Elective Deferred Compensation awarded
to a Participant shall be credited to the Participant's
Deferred Compensation Account on such date as specified
by the Committee.
6.2 Account Valuation. Gain or loss shall be credited
quarterly to the Participant's Deferred Compensation
Account based upon gain or loss in the Investment
Vehicle.
7. Benefits
7.1 Normal Benefit
a. A Participant's Deferred Compensation Account shall
be paid to the Participant in accordance with the
terms of the Participant's Election Form, subject
to the terms and conditions specified in the
Election Form. If a Participant elects to receive
payment of his Deferred Compensation Account in
installments, the amount of each installment will
be determined by dividing the Participant's
Deferred Compensation Account as of the Valuation
Date preceding the payment by the number of
remaining installments (inclusive of the one being
calculated). Unless the Committee determines
otherwise, and subject to the provisions of Section
7.5 as to when payments shall commence,
installments shall be paid on or about the first
day of February of each year.
b. Notwithstanding the provisions of Section 7.1a, and
notwithstanding any contrary election made by the
Participant on his Election Form, if a Participant
terminates his employment for any reason other than
death or Disability, and if the Participant has
not completed three (3) Years of Service with the
Company at the time of his Termination of
Employment, the Participant's Deferred Compensation
Account balance will be paid to the Participant in
a lump sum in the year following the Participant's
Termination of Employment. However, upon the
written request of the Participant, the Committee,
in its sole discretion, may allow payments to be
made to the Participant in up to five (5) annual
installments.
7.2 Hardship Benefit. In the event that the Committee, upon
written petition of the Participant, determines in its
sole discretion, that the Participant has suffered an
unforeseeable financial emergency, the Company may pay to
the Participant, as soon as practicable following such
determination, an amount appropriate under the
circumstances, not in excess of the Deferred Compensation
Account credited to the Participant. The Deferred
Compensation Account of the Participant shall thereafter
be reduced to reflect the payment of a Hardship Benefit.
7.3 Request to Committee for Delay in Payment. A Participant
shall have no right to modify in any way the schedule for
the distribution of amounts from his Deferred
Compensation Account which he has specified in his
Election Form. However, upon a written request submitted
by the Participant to the Committee, the Committee may,
in its sole discretion:
a. Postpone one time the date on which payment shall
commence; and
b. Increase one time the number of installments, to a
number not to exceed fifteen (15).
Any such request(s) must be made at least ninety (90)
days prior to the earlier of (1) the beginning of the
year which the Participant has elected for distributions
to commence, or (2) the Participant's Termination of
Employment.
7.4 Taxes; Withholding. To the extent required by law, the
Company shall withhold from payments made hereunder an
amount equal to at least the minimum taxes required to be
withheld by the federal or any state or local government.
7.5 Date of Payments. Except as otherwise provided in this
Plan, payments under this Plan shall begin on or before
the first (1st) day of February of the calendar year
following receipt of notice by the Committee of an event
which entitles a Participant (or Beneficiary) to payments
under the Plan, or at such earlier date as may be
determined by the Committee.
8. Beneficiary Designation
A Participant shall have the right at any time, and from time
to time, to designate and/or change or cancel any person,
persons, or entity as his Beneficiary or Beneficiaries (both
principal and contingent) to whom payment under this Plan
shall be paid in the event of his death prior to complete
distribution to Participant of the benefits due him under the
Plan. Each beneficiary designation shall become effective
only when filed in writing with the Committee during the
Participant's lifetime on a form provided by the Committee.
The filing of a new beneficiary designation form will cancel
all beneficiary designations previously filed. Any finalized
divorce of a Participant subsequent to the date of filing of
a beneficiary designation form in favor of the Participant's
spouse shall revoke such designation. The spouse of a married
Participant domiciled in a community property jurisdiction
shall join in any designation of Beneficiary or Beneficiaries
other than the spouse.
If a Participant fails to designate a Beneficiary as provided
above, or if his beneficiary designation is revoked by
divorce, or otherwise, without execution of a new designation,
or if all designated Beneficiaries predecease the Participant
or die prior to complete distribution of the Participant's
benefits, then the distribution of such benefits shall be made
to the Participant's estate.
If the Company is unable to determine a Participant's
Beneficiary or if any dispute arises concerning a
Participant's Beneficiary, the Company may pay benefits to the
Participant's estate. Upon such payment, the Company shall
have no further liability hereunder.
If any distribution to a Beneficiary is to be made in
installments, and the primary Beneficiary dies before
receiving all installments, the remaining installments, if
any, shall be paid to the estate of the primary Beneficiary.
9. Amendment and Termination of Plan
9.1 Amendment. The Committee may at any time amend the Plan
in whole or in part, provided, however, that except as
provided in 9.2, no amendment shall be effective to
decrease the benefits under the Plan payable to any
Participant or Beneficiary with respect to any Elective
or Non-Elective Deferred Compensation deferred prior to
the date of the amendment. Written notice of any
amendments shall be given to each individual then
participating in the Plan.
9.2 Termination of Plan
a. Company's Right to Terminate. The Committee may at
any time terminate the Plan, if, in exercising good
faith business judgment, it determines that the
economic viability of the Plan has been
substantially impaired or eliminated.
b. Payments Upon Termination. Upon any termination of
the Plan under this section, Compensation shall
prospectively cease to be deferred and, with
respect to Compensation previously deferred, the
Company will pay to the Participant, in a lump-sum,
the value of his Deferred Compensation Account.
10. Miscellaneous
10.1 Unsecured General Creditor. Participants and their
beneficiaries, heirs, successors and assignees shall have
no legal or equitable rights, interests, or other claims
in any property or assets of the Company, nor shall they
be beneficiaries of, or have any rights, claims, or
interests in any life insurance policies, annuity
contracts, or the policies therefrom owned or which may
be acquired by Company ("policies"). Such policies or
other assets of the Company shall not be held under any
trust for the benefit of Participants, their
beneficiaries, heirs, successors, or assigns, or held in
any way as collateral security for the fulfilling of the
obligations of the Company under this Plan. Any and all
of the Company's assets and policies shall be and remain
general, unpledged, unrestricted assets of the Company.
The Company's obligation under the Plan shall be that of
an unfunded and unsecured promise of the Company to pay
money in the future.
10.2 Successors and Mergers, Consolidations or Change in
Control. The terms and conditions of this Plan shall
enure to the benefit of and bind the Company, the
Participants, their successors, assignees, and personal
representatives. If substantially all of the stock or
assets of the Company are acquired by another corporation
or entity or if the Company is merged into, or
consolidated with, another corporation or entity, then
the Company shall obligate the acquirer or successor
corporation or entity to expressly assume and perform the
obligations of the Company hereunder, unless such
obligations become binding upon the acquirer or successor
corporation or entity by operation of law.
10.3 Non-Assignability. Neither a Participant nor any other
person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage, or otherwise
encumber, transfer, hypothecate, or convey in advance of
actual receipt the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are,
expressly declared to be unassignable and
nontransferable. No part of the amounts payable shall,
prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or
any other person, nor be transferable by operation of law
in the event of a Participant's or any other person's
bankruptcy or insolvency.
10.4 Employment Or Future Eligibility to Participate Not
Guaranteed. Nothing contained in this Plan nor any
action taken hereunder shall be construed as a contract
of employment or as giving any Eligible Employee any
right to be retained in the employ of the Company.
Designation as an Eligible Employee may be revoked at
anytime by the Committee with respect to any Compensation
not yet deferred.
10.5 Gender, Singular and Plural. All pronouns and any
variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, as the identity of the
person or persons may require. As the context may
require, the singular may be read as the plural and the
plural as the singular.
10.6 Captions. The captions to the articles, sections, and
paragraphs of this Plan are for convenience only and
shall not control or affect the meaning or construction
of any of its provisions.
10.7 Applicable Law. This Plan shall be governed and
construed in accordance with the laws of the State of
Missouri.
10.8 Validity. In the event any provision of this Plan is
held invalid, void, or unenforceable, the same shall not
affect, in any respect whatsoever, the validity of any
other provision of this Plan.
10.9 Notice. Any notice or filing required or permitted to be
given to the Committee shall be sufficient if in writing
and hand delivered, or sent by registered or certified
mail, to the principal office of the Company at 8182
Maryland Avenue, St. Louis, MO 63105, directed to the
attention of Michael E. Tierney, Vice President and
General Counsel. Such notice shall be deemed given as of
the date of delivery or, if delivery is made by mail, as
of the date shown on the postmark on the receipt for
registration or certification. Any notice to the
Participant shall be addressed to the Participant at the
Participant's residence address as maintained in the
Company's records. Any party may change the address for
such party here set forth by giving notice of such change
to the other parties pursuant to this Section.
11. Claims Procedure
11.1 Named Fiduciary. The Committee is hereby designated as
the named fiduciary under this Plan. The named fiduciary
shall have authority to control and manage the operation
and administration of the Plan.
11.2 Claims Procedure. Any controversy or claim arising out
of or relating to this Plan shall be filed with the
Committee which shall make all determinations concerning
such claim. Any decision by the Committee denying such
claim shall be in writing and shall be delivered to all
parties in interest in accordance with the notice
provisions of Section 10.9 hereof. Such decision shall
set forth the reasons for denial in plain language.
Pertinent provisions of the Plan shall be cited and,
where appropriate, an explanation as to how the
Participant can perfect the claim will be provided. This
notice of denial of benefits will be provided within 90
days of the Committee's receipt of the Participant's
claim for benefits. If the Committee fails to notify the
Participant of its decision regarding the claim, the
claim shall be considered denied, and the Participant
shall then be permitted to proceed with the appeal as
provided in this Section.
A Participant who has been completely or partially denied
a benefit shall be entitled to appeal this denial of his
claim by filing a written statement of his position with
the Committee no later than sixty (60) days after receipt
of the written notification of such claim denial. The
Committee's decision on review shall set forth specific
reasons for the decision, and shall cite specific
references to the pertinent Plan provisions on which the
decision is based.
Following the review of any additional information
submitted by the Participant, either through the hearing
process or otherwise, the Committee shall render a
decisions on the review of the denied claim in the
following manner:
a. The Committee shall make its decision regarding the
merits of the denied claim within 60 days following
receipt of the request for review (or within 120
days after such receipt, in a case where there are
special circumstances requiring extension of time
for reviewing the appealed claim). The Committee
shall deliver the decision to the claimant in
writing. If an extension of time for reviewing the
appealed claim is required because of special
circumstances, written notice of the extension
shall be furnished to the Participant prior to the
commencement of the extension. If the decision on
review is not furnished within the prescribed time,
the claim shall be deemed denied on review.
b. The decision on review shall set forth specific
reasons for the decision, and shall cite specific
references to the pertinent Plan provisions on
which the decision is based.
Jefferson Smurfit Corporation (U.S.)
Deferred Compensation Plan
Election Form
Name:Social Security
No:
Complete Sections A, B, C D and E of this Form.
A. Deferred Compensation
To complete this Section, indicate the total amount you want
to defer from amounts otherwise payable to you in 199__.
I elect to defer the following amount otherwise payable to me
in the year 199__: ______________.
B. Investment Election
I elect to have the deferred compensation invested in (check
as applicable):
a.The Vanguard Index Trust 500 Portfolio.
b.Other (please describe)_______________________________.
C.Form of Payment and Timing for Deferrals
Complete Part 1 of this Section to indicate whether you want
to receive payment in a lump sum or annual installments, and
complete Part 2 of this Section to indicate when you would
like to receive your deferred compensation distribution.
1. Form of Distribution
Indicate the form of distribution for your deferred
compensation. You can elect to receive payment in a
lump sum or in up to 15 annual installments.
I elect to receive payment of my deferred compensation
as follows (select a or b):
a.In a lump sum.
b.In _______ (specify number not exceeding 15)
annual installments.
2. Timing of Distribution
Indicate whether you want to receive your first
installment (or your entire amount, if you elect to
receive payment in a lump sum) of your deferred
compensation in a specific year or in the year
following termination of your employment. In general,
your first installment (or your entire account balance,
if you elect a lump sum) will be paid to you in
February in the year following the year in which you
terminate your employment (if you elect to receive
payment after your Termination of Employment), or in
February of the year elected (if you elect to receive
payment in a specific year); later installments will be
paid in February of each year.
I elect to receive the first installment (or my entire
account, if I elect a lump sum) of my deferred
compensation (select a or b):
a.in a specific year _______ .
b.following my Termination of Employment.
D.Death Benefits
In this Section, designate a beneficiary to receive any death
benefits payable from your deferred compensation account.
1. If I die prior to the receipt of all payments to which I
am entitled under the Plan, payments shall be made to
(select one):
a.My estate
b.the following beneficiary or beneficiaries:
If I fail to designate a beneficiary as provided above,
or if my beneficiary designation is revoked by divorce,
or otherwise, without execution of a new designation,
or if all my designated beneficiaries predecease me or
die prior to complete distribution of my benefits, then
the distribution of such benefits shall be made to my
estate. However, if any distribution to a spouse
beneficiary is to be made in installments, and such
spouse beneficiary dies before receiving all
installments, the remaining installments shall be paid
to the estate of such spouse beneficiary.
I reserve the right to change this designation of
beneficiary at any time by completing a Change of
Beneficiary Form.
2. As to any death benefits payable to my beneficiary or
to my estate, I elect to have payments made as follows
(select one):
a.In a lump sum in the year following my death.
b.In _____ (specify number, not to exceed 15) annual
installments beginning in the year following my death.
Notwithstanding the foregoing, if installment payments
are elected, and if I have been receiving installment
payments from my account before my death, the number of
installment payments elected in b. shall be reduced, if
necessary, so that the total number of installment
payments to me before my death and to my beneficiary or
estate after my death shall not exceed 15.
E. Acknowledgment
Sign and date in this Section.
I agree to be bound by the terms and conditions of the Plan
and agree that such terms and conditions shall be binding
upon my beneficiaries and personal representatives.
Signature of Employee
Date Acceptance:
The Committee, on behalf of Jefferson Smurfit Corporation (U.S.),
hereby accepts the Participant's Election Form.
By
Date
EXHIBIT 11.1
<TABLE>
JEFFERSON SMURFIT CORPORATION
CALCULATION OF PER SHARE EARNINGS
(In millions, except per share data)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Primary earnings per share <fn1>
Weighted average shares outstanding 111 111 111 111
Income applicable to common shares
before extraordinary item $ 22 $ 77 $ 102 $ 182
Extraordinary item (3) (4) (3)
Net income applicable to common shares $ 22 $ 74 $ 98 $ 179
Per share amounts
Income before extraordinary item $ .20 $ .70 $ .92 $1.65
Extraordinary item (.03) (.04) (.03)
Net income applicable to common shares $ .20 $ .67 $ .88 $1.62
Fully diluted earnings per share <fn1>
Weighted average shares outstanding 111 111 111 111
Income applicable to common shares
before extraordinary item $ 22 $ 77 $ 102 $ 182
Extraordinary item (3) (4) (3)
Net income applicable to common shares $ 22 $ 74 $ 98 $ 179
Per share amounts
Income before extraordinary item $ .20 $ .70 $ .92 $1.65
Extraordinary item (.03) (.04) (.03)
Net income applicable to common shares $ .20 $ .67 $ .88 $1.62
<FN>
<fn1> The computations do not include common stock equivalents associated with stock
options since the dilutive effect on earnings per share is not material.
</FN>
</TABLE>
