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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
SMURFIT-STONE CONTAINER CORPORATION
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
475086104
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(CUSIP Number)
Michael R.J. Pettigrew, Secretary
Jefferson Smurfit Group plc, Beech Hill, Clonskeagh,
Dublin 4, Ireland
011-353-1-202-7000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 18, 1998
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(Date of Event Which Requires Filing of This
Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b)
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 43 Pages)
- ------------------
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act,
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP No. 475086104 Page 2 of 43 Pages
- ---------------------------- ------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SMURFIT PACKAGING CORPORATION
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY [ ]
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
DELAWARE
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7
SOLE VOTING POWER
0
NUMBER OF
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8
SHARES SHARED VOTING POWER
36,800,000 shares
BENEFICIALLY
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9
OWNED BY SOLE DISPOSITIVE POWER
0
EACH
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10
REPORTING SHARED DISPOSITIVE POWER
36,800,000 shares
PERSON WITH
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,800,000 shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP No. 475086104 Page 3 of 43 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SMURFIT INTERNATIONAL B.V.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY [ ]
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4 SOURCE OF FUNDS*
BK; OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE ORGANIZATION
THE NETHERLANDS
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7
SOLE VOTING POWER
0
NUMBER OF
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8
SHARES SHARED VOTING POWER
71,638,462 shares (includes 36,800,000 shares held by
subsidiary)
BENEFICIALLY
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9
OWNED BY SOLE DISPOSITIVE POWER
0
EACH
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10
REPORTING SHARED DISPOSITIVE POWER
71,638,462 shares (includes 36,800,000 shares held by
subsidiary)
PERSON WITH
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,638,462
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.3%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP No. 475086104 Page 4 of 43 Pages
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
JEFFERSON SMURFIT GROUP PLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY [ ]
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4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE ORGANIZATION
IRELAND
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7
SOLE VOTING POWER
0
NUMBER OF
-------------------------------------------------------------------
8
SHARES SHARED VOTING POWER
71,638,462 (includes 71,638,462 shares held by
subsidiaries)
BENEFICIALLY
-------------------------------------------------------------------
9
OWNED BY SOLE DISPOSITIVE POWER
0
EACH
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10
REPORTING SHARED DISPOSITIVE POWER
71,638,462 (includes 71,638,462 shares held by
subsidiaries)
PERSON WITH
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,638,462
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
33.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 5 of 43 Pages
Item 1. Security and Issuer.
-------------------
This Statement relates to the common stock, par value $0.01 per
share (the "SSCC Common Stock"), of Smurfit-Stone Container Corporation, a
Delaware corporation (the "Issuer" or "SSCC"), whose principal executive offices
are located at 150 North Michigan Avenue, Chicago, Illinois 60601.
Item 2. Identity and Background.
-----------------------
This Statement is filed by Smurfit Packaging Corporation, a Delaware
corporation ("SPC"), Smurfit International B.V., a corporation organized under
the laws of the Netherlands ("SIBV"), and Jefferson Smurfit Group plc, a
corporation organized under the laws of Ireland ("JSG," and collectively with
SPC and SIBV, the "Reporting Persons").
JSG is a geographically diversified company, engaged through
subsidiaries and affiliates in the manufacture of paperboard, packaging products
and newsprint and the reclamation of waste paper, aluminum and glass. JSG's
principal business and office address is Beech Hill, Clonskeagh, Dublin 4,
Ireland. SIBV is a wholly owned subsidiary of JSG and its principal business and
office address is Strawinskylaan 2001, Amsterdam 1077ZZ, The Netherlands. SPC is
a wholly owned subsidiary of SIBV and its principal business and office address
is Jefferson Smurfit Centre, 8182 Maryland Avenue, St. Louis, Missouri 63105.
Information with respect to the executive officers and directors of
each of the Reporting Persons, including name, business address, present
principal occupation or employment, and the name, principal business and address
of any corporation or other organization in which such employment is conducted,
is listed on the schedule attached hereto as Schedule I, which is incorporated
herein by reference.
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Page 6 of 43 Pages
None of the Reporting Persons, nor, to the best of their knowledge,
any executive officer or director of any of the Reporting Persons, has during
the last five years been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceedings was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
The citizenship of each of the executive officers and directors of
the Reporting Persons, to the best knowledge of the Reporting Persons, is set
out in Schedule I, which is incorporated herein by reference.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The consideration paid by the Reporting Persons pursuant to the
transactions described in Item 4 below was comprised of $515,780,800 in cash
(for which the Reporting Persons acquired 20,000,000 shares of SSCC Common
Stock). Of the $515,780,800 in cash paid by the Reporting Persons (i)
$345,000,000 was obtained from a drawdown on an existing FF4,000,000,000 seven
year multicurrency revolving credit facility and (ii) the remainder was obtained
from the sale of certain assets to Jefferson Smurfit Corporation (U.S.).
Item 4. Purpose of Transaction.
----------------------
The Issuer, Stone Container Corporation ("Stone"), Morgan Stanley
Leveraged Equity Fund II, Inc. ("MSLEF"), Mr. Roger Stone and/or the Reporting
Persons have entered into six agreements which set out certain transactions
briefly summarized below. These agreements consist of (1) a Merger Agreement
dated as of May 10, 1998, as
<PAGE>
Page 7 of 43 Pages
amended, among the Issuer (formerly named Jefferson Smurfit Corporation), Stone
and JSC Acquisition Corporation ("JSC Sub"), a wholly owned subsidiary of the
Issuer (the "Merger Agreement"), (2) a Stock Purchase Agreement dated as of May
10, 1998 among SIBV, JSG, MSLEF, certain other stockholders of the Issuer party
thereto (together with MSLEF, the "Sellers"), and the Issuer (the "Stock
Purchase Agreement"), (3) a Voting Agreement dated as of May 10, 1998, as
amended, among SIBV, MSLEF and Mr. Stone (the "Voting Agreement"), (4) a
Standstill Agreement dated as of May 10, 1998, as amended, between JSG, MSLEF
and the Issuer (the "Standstill Agreement"), (5) a Registration Rights Agreement
dated as of May 10, 1998 among MSLEF, SIBV, the Issuer and certain other parties
identified on the signature pages thereto (the "Registration Rights Agreement")
and (6) an Agreement dated as of May 10, 1998 between SIBV and MSLEF (the "First
Refusal Agreement" and collectively with the Merger Agreement, the Stock
Purchase Agreement, the Voting Agreement, the Registration Rights Agreement, and
the Standstill Agreement, the "Agreements"). All summary descriptions of the
Agreements set forth herein are qualified in their entirety by reference to the
full text of the Agreements, filed or incorporated by reference as Exhibits
hereto and incorporated by reference herein.
Prior to the execution of the Agreements, the Reporting Persons
beneficially owned 51,638,462 shares of SSCC Common Stock, constituting
approximately 46.5% of the outstanding SSCC Common Stock. As a result of the
merger of JSC Sub with and into Stone (the "Merger") pursuant to the Merger
Agreement, SSCC issued 103,927,909 shares of SSCC Common Stock. Pursuant to the
Stock Purchase Agreement, SIBV purchased 20,000,000 shares of SSCC Common Stock
from the Sellers, bringing the Reporting Persons' beneficial ownership to
approximately 33.3% of the outstanding SSCC Common
<PAGE>
Page 8 of 43 Pages
Stock after giving effect to the Merger. The purpose of this purchase was to
reduce the dilutive impact of the Merger on the Reporting Persons' percentage
interest in the SSCC Common Stock. The purpose of the Reporting Persons'
beneficial ownership of SSCC Common Stock is to hold and exercise the rights
with respect to SSCC, including the right to vote for the election of directors,
provided to the Reporting Persons pursuant to their ownership and in accordance
with the Agreements described below.
Merger Agreement
- ----------------
Pursuant to the Merger Agreement, on November 18, 1998 (the
"Effective Time"), JSC Sub merged with and into Stone. Stone survived the Merger
and became a subsidiary of the Issuer. At the Effective Time, each issued and
outstanding share of common stock, par value $0.01 per share (the "Stone Common
Stock"), of Stone (other than Stone Common Stock held by Stone, the Issuer or
any of the Issuer's wholly owned subsidiaries) was automatically converted into
.99 shares of SSCC Common Stock (with cash paid in lieu of all fractional shares
that were otherwise issuable). Each share of Series E Cumulative Convertible
Exchangeable Preferred Stock, par value $0.01 per share (the "Stone Series E
Preferred Stock") of Stone remained outstanding and became convertible pursuant
to its terms into the number of shares of SSCC Common Stock that its holder
would have received in the Merger had such holder converted such share of Stone
Series E Preferred Stock immediately prior to the Effective Time. In addition,
after the Effective Time, the holders of shares of Stone Series E Preferred
Stock became entitled, among other things and in addition to their existing
voting rights, to vote upon all matters upon which
<PAGE>
Page 9 of 43 Pages
holders of shares of Stone Common Stock have the right to vote and became
entitled to one vote per share of Stone Series E Preferred Stock upon such
matters.
In accordance with the Merger Agreement, after the Effective Time,
the Issuer was renamed Smurfit-Stone Container Corporation. In addition, Dr.
Michael W.J. Smurfit remained Chairman of the Board of SSCC, Mr. Roger Stone,
formerly Chairman of the Board, President and Chief Executive Officer of Stone,
became Chief Executive Officer of SSCC, Mr. Raymond M. Curran, formerly Finance
Director of JSG, became Executive Vice President, Deputy Chief Executive Officer
of SSCC, and Mr. Patrick J. Moore remained Chief Financial Officer of SSCC.
After the Effective Time, the SSCC Board of Directors became composed of 12
members, four of whom were nominated by SIBV, four of whom were nominated by
Stone, one of whom was nominated by MSLEF, and the remaining three of whom
consist of Dr. Smurfit, Mr. Stone and Mr. Curran. The directors nominated by
SIBV are Dr. Dermot Smurfit, Mr. Richard W. Graham, Mr. James J. O'Connor, and
Mr. Thomas A. Reynolds, III. The directors nominated by Stone are Mr. Matthew S.
Kaplan, Mr. Dionisio Garza, Mr. Richard A. Giesen, and Mr. Jerry K. Pearlman.
The director nominated by MSLEF is Mr. Alan E. Goldberg.
Pursuant to the Merger Agreement, SSCC caused its Bylaws to be
amended and restated as of the Effective Time (as amended, the "SSCC Bylaws").
These amendments, among other things, implemented certain governance
arrangements relating to Board composition, Board and other committees,
management, and certain additional related matters, including the requirement
that at least 75% of the members of the entire SSCC Board approve certain
recommendations to the stockholders.
<PAGE>
Page 10 of 43 Pages
As contemplated by the Merger Agreement, the SSCC certificate of
incorporation was amended (as amended, the "SSCC Charter"), among other things,
to require all directors of the Board to be elected at each annual meeting of
stockholders for a term of one year. In addition, the SSCC Charter was amended
to provide that the amendment of the following SSCC Charter provisions will
require the affirmative vote of stockholders holding at least 75% of the voting
power of SSCC's then outstanding capital stock entitled to vote: (x) SSCC
Charter provisions requiring a 75% stockholder vote to amend certain SSCC Bylaw
provisions and (y) SSCC Charter provisions which repeat certain provisions of
the SSCC Bylaws where, pursuant to the SSCC Bylaws, stockholder amendment of
such provisions requires a 75% stockholder vote.
In addition, both the SSCC Charter and SSCC Bylaws were amended to
provide that, until the Article 5 Termination Date (as defined in the SSCC
Bylaws), amendment of certain provisions of the SSCC Bylaws will require the
approval of at least 75% of the members of the entire SSCC Board or the
affirmative vote of the holders of at least 75% of the voting power of SSCC's
outstanding capital stock entitled to vote thereon. From and after the Article 5
Termination Date, the SSCC Bylaws were amended to provide that the SSCC Bylaws
may not be amended except by a majority of the members of the entire SSCC Board
or by the affirmative vote of the stockholders as required by Delaware law.
Stock Purchase Agreement
- ------------------------
Pursuant to the Stock Purchase Agreement, on November 18, 1998, SIBV
purchased from the Sellers 20,000,000 shares of SSCC Common Stock for an amount
per
<PAGE>
Page 11 of 43 Pages
share equal to $25.00 plus interest from May 10, 1998, or an aggregate
amount of $515,780,800.
In accordance with the Stock Purchase Agreement, the Stockholders'
Agreement dated as of May 3, 1994 among SIBV, The Morgan Stanley Leveraged
Equity Fund II, L.P. and SSCC (as amended, the "Stockholders' Agreement") and
the related registration rights agreement were terminated as of November 18,
1998.
The Stock Purchase Agreement provides that SIBV, the Sellers and
SSCC indemnify each other and certain related parties (including JSG) for Losses
(as defined in the Stock Purchase Agreement) arising out of their breach of any
of the representations or warranties contained in the Stock Purchase Agreement
or their non-performance of any covenant or agreement under the Stock Purchase
Agreement. The Stock Purchase Agreement also provides that SSCC indemnify SIBV,
the Sellers and certain related parties (including JSG) against any Losses
arising out of the Stock Purchase Agreement, the Merger Agreement or the
transactions contemplated by the Merger Agreement, subject to certain
exceptions. The indemnification by SSCC contained in the immediately preceding
sentence survives the closing under the Stock Purchase Agreement for ten months.
The foregoing transactions were consummated on November 18, 1998.
Voting Agreement
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Pursuant to the Voting Agreement, each of SIBV, MSLEF, and Mr. Stone
has agreed to vote or cause to be voted all shares of SSCC Common Stock
beneficially owned by such stockholder in favor of (i) the persons designated
for nomination to the SSCC Board by the Nominating Committees (as defined in the
Voting Agreement) and (ii) Mr. Stone (if
<PAGE>
Page 12 of 43 Pages
Mr. Stone has not been designated for nomination by any of the Nominating
Committees). The obligation of the parties to vote for Mr. Stone as a director
terminates (i) if Mr. Stone is removed as Chief Executive Officer for Cause (as
defined in the Voting Agreement) or (ii) when Mr. Stone reaches the age of 72.
The Voting Agreement provides that, if at any time MSLEF owns less
than the MSLEF Threshold Amount of Shares (as defined in the Voting Agreement),
each of MSLEF, SIBV and Mr. Stone, at the request of either of the other
parties, will vote or cause to be voted all shares of SSCC Common Stock
beneficially owned by it in favor of (x) calling a special meeting of SSCC
stockholders for the purpose of removing the MSLEF Director
and (y) removing the MSLEF Director at such special meeting of stockholders.
Other than as described in the preceding sentence, pursuant to the Voting
Agreement each of SIBV, MSLEF and Mr. Stone has agreed not to vote or cause to
be voted any shares of SSCC Common Stock beneficially owned by such stockholder
in favor of the removal of any director nominated or appointed to the SSCC Board
by any Nominating Committee other than for Cause.
Pursuant to the Voting Agreement, each of the parties thereto has
agreed that, so long as MSLEF has at no time beneficially owned less than the
MSLEF Threshold Amount of Shares, if at any time there is no MSLEF Director on
the SSCC Board (due to the MSLEF Director's resignation, retirement, death or
otherwise), it will vote or cause to be voted all shares of SSCC Common Stock
beneficially owned by it in favor of (x) calling a special meeting of SSCC
stockholders for the purpose of removing an Unaffiliated Director (as defined in
the Voting Agreement) (if any) and replacing such Unaffiliated Director (or
filling the vacancy left by the MSLEF Director (as defined in the Voting
Agreement)) with a
<PAGE>
Page 13 of 43 Pages
person designated by MSLEF and (y) at such special meeting, removing such
Unaffiliated Director, electing the designee of MSLEF to the SSCC Board and
designating such person as the "MSLEF Director" on the SSCC Board.
In addition, each of the parties to the Voting Agreement has agreed
not to vote in favor of any resolution by any stockholder that seeks to amend,
repeal, or adopt any provision inconsistent with (i) Article 5 of the SSCC
Bylaws or (ii) the SSCC Charter provisions requiring, in the case of stockholder
amendment or repeal of certain SSCC Bylaw provisions, the vote of holders of at
least 75% of the voting power of SSCC's outstanding capital stock.
Standstill Agreement
- --------------------
The Standstill Agreement governs certain aspects of the Reporting
Persons' investment in SSCC (a) for a period of five years from the Effective
Time or (b) from the Effective Time until the Article 5 Termination Date. JSG
has agreed in the Standstill Agreement that, subject to specified exceptions
contained therein, until the fifth anniversary of the Effective Time, it will
not, and will cause each of its Subsidiaries (as defined in the Standstill
Agreement) not to, directly or indirectly, acquire any Voting Securities (as
defined in the Standstill Agreement) if, after giving effect to such
acquisition, JSG and its Subsidiaries would beneficially own Voting Securities
representing more than 40% of the Total Voting Power (as defined in the
Standstill Agreement) represented by all outstanding Voting Securities. MSLEF
has also agreed in the Standstill Agreement that, until the fifth anniversary of
the Effective Time, it will not, and will cause each of its Subsidiaries not to,
<PAGE>
Page 14 of 43 Pages
directly or indirectly, acquire any Voting Securities (except pursuant to a
stock split, stock dividend, rights offering, recapitalization, reclassification
or similar transaction).
Except as expressly contemplated by the SSCC Bylaws or the Voting
Agreement, from the Effective Time until the Article 5 Termination Date (or, in
the case of clause (g) below, until the fifth anniversary of the Effective
Time), JSG has agreed in the Standstill Agreement that it will not, and will
cause each of its Subsidiaries not to: (a) make, or in any way participate in,
any "solicitation" of "proxies" to vote (as such terms are defined in Rule 14a-1
under the 1934 Act), solicit any consent or communicate with or seek to advise
or influence any person or entity with respect to the voting of any Voting
Securities or become a "participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 under the 1934 Act) with respect to SSCC; (b)
form, join or encourage the formation of any "group" (within the meaning of
Section 13(d)(3) of the 1934 Act) with respect to any Voting Securities, (c)
deposit any Voting Securities into a voting trust or subject any such Voting
Securities to any arrangement or agreement with respect to the voting thereof
(other than with its subsidiaries); (d) initiate, propose or otherwise solicit
stockholders for the approval of one or more stockholder proposals with respect
to SSCC as described in Rule 14a-8 under the 1934 Act, or induce or attempt to
induce any other person or entity to initiate any such stockholder proposal; (e)
seek election to or seek to place a representative on the SSCC Board or seek the
removal of any member of the SSCC Board; (f) call or seek to have called any
meeting of the stockholders of SSCC; (g) solicit, seek to effect, negotiate with
or provide any information to any other party with respect to, or make any
statement or proposal (except for any statement or proposal in response to an
acquisition or business combination proposal by a party other than JSG or its
Subsidiaries), whether
<PAGE>
Page 15 of 43 Pages
written or oral, to the SSCC Board or otherwise make any public announcement
(except as required by law or the requirements of any relevant stock exchange or
in the case of an acquisition or business combination proposal by a party other
than JSG or its Subsidiaries) whatsoever with respect to, any form of
acquisition or business combination transaction involving SSCC or any
significant portion of its assets, including, without limitation, a merger,
tender offer, exchange offer or liquidation, or any restructuring,
recapitalization or similar transaction with respect to SSCC; or (h) instigate
or encourage any third party to do any of the foregoing.
From the Effective Time until the Article 5 Termination Date, JSG
has agreed in the Standstill Agreement that it will not, and will cause its
Subsidiaries not to, directly or indirectly, sell or otherwise transfer in any
manner any Voting Securities to any "person" (within the meaning of Section
13(d)(3) of the 1934 Act) who, to the knowledge of JSG, after reasonable
inquiry, owns (or as a result of such sale or transfer would own) SSCC
securities representing more than 5% of the Total Voting Power.
The Standstill Agreement provides that the restrictions set forth in
the preceding three paragraphs as to JSG and its Subsidiaries will be suspended
(and during such period of suspension be of no force and effect) in the event
that SSCC enters into a written agreement concerning an Acquisition Proposal (as
in the Standstill Agreement) subject to reinstatement as described in the
Standstill Agreement.
The Standstill Agreement also provides that in the event that any
person (other than JSG or any of its Subsidiaries or any person acting on behalf
of or in participation with any of the foregoing) commences a tender or exchange
offer as described in the Standstill Agreement, then the restrictions contained
in the Standstill Agreement and
<PAGE>
Page 16 of 43 Pages
summarized herein as to JSG and its Subsidiaries will be suspended (and during
such period of suspension be of no force and effect) for such period as
described in the Standstill Agreement.
The Standstill Agreement further provides that in the event that it
is publicly announced or JSG or SSCC becomes aware (in which case it must
promptly notify the other) that any person (other than JSG or any of its
subsidiaries or any person acting on behalf of or in participation with any of
the foregoing), together with such person's subsidiaries, or any other person
acting on behalf of or in participation with such person or its subsidiaries has
become the beneficial owner of Voting Securities representing more than 15% of
the Total Voting Power, then certain of the restrictions set forth in the
Standstill Agreement will terminate (without reinstatement) subject to certain
exceptions.
Registration Rights Agreement
- -----------------------------
Pursuant to the Registration Rights Agreement and subject to certain
limitations contained therein, each of SIBV and MSLEF is entitled to two demand
registrations. MSLEF has the right to effect its two demand registrations before
SIBV is allowed to effect a demand registration; provided that if the MSLEF
demand registrations are not effected by the third anniversary of the Effective
Time, SIBV is permitted to exercise its rights to request registration. The
Registration Rights Agreement requires that each of SIBV's and MSLEF's demand
registrations include at least 1,000,000 Registrable Securities (as defined in
the Registration Rights Agreement). In addition, MSLEF has agreed in the
Registration Rights Agreement to use reasonable best efforts to sell or cause to
be sold in each of its demand registrations the lesser of (x) all Registrable
Securities that it owns at the
<PAGE>
Page 17 of 43 Pages
time of such demand registration and (y) all Registrable Securities which the
managing underwriter advises MSLEF can be sold in such demand registration;
provided that notwithstanding the foregoing, neither MSLEF nor any other Morgan
Holder (as defined in the Registration Rights Agreement) who has requested that
its Registrable Securities be included in such demand registration will be under
any obligation to sell its Registrable Securities pursuant to the first MSLEF
demand registration if the price per share of SSCC Common Stock on the NYSE or
the Nasdaq on the effective date of the registration statement relating to such
demand registration has decreased by 5% since the date on which MSLEF requested
such demand registration.
Subject to certain exceptions specified therein, the Registration
Rights Agreement also entitles each of SIBV, MSLEF and SSCC to include shares
for its own account in the registrations initiated by the other parties;
provided that SIBV is not permitted to exercise its "piggyback" rights until the
third anniversary of the Effective Time; provided, further, that each of SIBV,
MSLEF and SSCC has priority with respect to registrations initiated by it.
The Registration Rights Agreement terminates, except with respect to
rights to indemnification, upon the earlier to occur of the mutual agreement of
the parties thereto and December 31, 2010. If earlier, the rights and
obligations of each of the Morgan Holders and the SIBV Holders (as defined in
the Registration Rights Agreement) terminate when such Morgan Holders or SIBV
Holders, as the case may be, cease to own, in the aggregate, at least 1,000,000
shares of SSCC Common Stock.
<PAGE>
Page 18 of 43 Pages
First Refusal Agreement
- -----------------------
Pursuant to the First Refusal Agreement, prior to the acceptance of
any Offer (as defined in the First Refusal Agreement) made by a Related Group
(as defined in the First Refusal Agreement) to purchase any of the shares of
SSCC Common Stock beneficially owned by MSLEF, MSLEF has agreed to give SIBV two
Business Days' notice of such proposed Transfer (as defined in the First Refusal
Agreement). MSLEF has agreed that such notice shall constitute an offer by MSLEF
to sell the shares of SSCC Common Stock subject to the Offer to SIBV on the same
terms and subject to the same conditions as the Offer. SIBV must notify MSLEF
whether it will accept MSLEF's offer prior to the expiration of the three
Business Day period described in the First Refusal Agreement, provided that SIBV
may only exercise its right of first refusal with respect to all shares of SSCC
Common Stock subject to the Offer, subject to certain exceptions.
SIBV's right of first refusal does not apply to (i) sales by MSLEF
in underwritten public offerings effected pursuant to the Registration Rights
Agreement, (ii) any sales effected by MSLEF in the open market pursuant to Rule
144 under the Securities Act of 1933, as amended, or (iii) any distribution of
shares by The Morgan Stanley Leveraged Equity Fund, L.P. to its limited
partners.
In addition, MSLEF has agreed that it will not effect a Transfer to
a Related Group of any shares of SSCC Common Stock it beneficially owns, subject
to certain provisions of the First Refusal Agreement, if such Transfer would
result in such Related Group beneficially owning more than five percent of the
then outstanding shares of SSCC Common Stock.
<PAGE>
Page 19 of 43 Pages
Subject to the terms of the Agreements, the Reporting Persons may
reconsider their ownership position with respect to the Issuer at any future
date in light of the circumstances that may exist at that time and may buy,
sell, hold or otherwise modify their beneficial ownership of securities of the
Issuer based upon such reconsideration.
Except as set forth above and in Item 6 below, the Reporting Persons
have no plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities
of the Issuer, or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
(d) any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
<PAGE>
Page 20 of 43 Pages
(h) causing a class of securities of the Issuer to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) SSCC has informed the Reporting Persons that after giving effect
to the transactions contemplated by the Merger Agreement and the Stock Purchase
Agreement, 214,925,671 shares of SSCC Common Stock were outstanding as of the
close of business on November 18, 1998.
As of the date of this Statement, the Reporting Persons beneficially
owned an aggregate of 71,638,462 shares of SSCC Common Stock (approximately
33.3% of the shares of SSCC Common Stock outstanding).
To the best knowledge of the Reporting Persons, only the executive
officers and directors of the Reporting Persons listed on the schedule attached
hereto as Schedule II, which is incorporated herein by reference, beneficially
own shares of SSCC Common Stock of the Issuer.
Of the shares set forth above, all such shares are beneficially
owned directly or indirectly by the persons named unless otherwise noted on
Schedule II.
(b) Except with respect to SPC, the Reporting Persons share the
power to vote or direct the voting of, or to dispose or direct the disposition
of, the shares of SSCC Common Stock held by the other Reporting Persons. SPC
shares the power to vote or direct
<PAGE>
Page 21 of 43 Pages
the voting of, or to dispose or direct the disposition of, the shares of SSCC
Common Stock held by SPC with the other Reporting Persons.
To the best knowledge of the Reporting Persons, except as set forth
on Schedule II, no executive officer or director of the Reporting Persons has or
shares the power to vote or direct the voting of, or to dispose or direct the
disposition of, any shares of SSCC Common Stock.
(c) Except as set forth on Schedule II, to the best knowledge of the
Reporting Persons, none of the above shares were acquired during the past 60
days, other than in connection with the Merger and the other transactions
described in this Schedule 13D. Except as set forth on Schedule II, to the best
knowledge of the Reporting Persons, no executive officer or director of the
Reporting Persons beneficially owns any shares of SSCC Common Stock or has a
right to acquire such shares, and no executive officer or director, or any of
them, has effected any transactions in the SSCC Common Stock during the past 60
days.
(d) To the best knowledge of the Reporting Persons, no other persons
have the right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the shares of SSCC Common Stock held by the
Reporting Persons or held by any executive officer or director of any Reporting
Person, except as set forth on Schedule II.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
----------------------------------------
Reference is hereby made to the description of the Agreements
described in Item 4 above. Although the Reporting Persons hereby describe a
relationship with other
<PAGE>
Page 22 of 43 Pages
persons pursuant to the Voting Agreement and may be deemed to be a group
pursuant to Rule 13d-5 under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the Reporting Persons hereby expressly disclaim the existence
of a group and the filing of this Statement shall not be construed as an
admission that the Reporting Persons are, for purposes of Section 13(d) or 13(g)
of the 1934 Act, the beneficial owners of any securities covered by the Voting
Agreement and not disclosed in this Statement.
To the best knowledge of the Reporting Persons and except as set
forth on Schedule II, there are no contracts, arrangements, understandings or
relationships between any executive officer or director of the Reporting
Persons, and any other person with respect to any securities of the Issuer,
including any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any securities of the Issuer, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
--------------------------------
See Exhibit Index on page 31.
<PAGE>
Page 23 of 43 Pages
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this Statement is true, complete and
correct.
SMURFIT PACKAGING CORPORATION
By: /s/ Charles A. Hinrichs
-------------------------------
Name: Charles A. Hinrichs
Title: Vice President and Treasurer
SMURFIT INTERNATIONAL B.V.
By: /s/ Michael O'Riordan
-------------------------------
Name: Michael O'Riordan
Title: Managing Director
JEFFERSON SMURFIT GROUP PLC
By: /s/ Michael R.J. Pettigrew
-------------------------------
Name: Michael R.J. Pettigrew
Title: Secretary
Date: November 24, 1998
<PAGE>
Page 24 of 43 Pages
SCHEDULE I
NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH
DIRECTOR AND OFFICER OF SMURFIT PACKAGING CORPORATION
Name and Business Address Principal Occupation Citizenship
- ------------------------- -------------------- -----------
Peter A. Cosgrove President and Chief Executive Ireland
American Lithographers Inc. Officer, Smurfit Packaging
21062 Forbes Street Corporation
Hayward, CA 94545
Patrick J. Moore Senior Vice President and Chief United
8182 Maryland Avenue Financial Officer, Smurfit-Stone States
St. Louis, MO 63105 Container Corporation
Charles A. Hinrichs Vice President and Treasurer, United
8182 Maryland Avenue Smurfit-Stone Container States
St. Louis, MO 63105 Corporation
Derry L. Hobson Divisional Vice President, United
8182 Maryland Avenue Smurfit Packaging Corporation States
St. Louis, MO 63105
Craig A. Hunt Vice President, Secretary and United
8182 Maryland Avenue General Counsel, Smurfit-Stone States
St. Louis, MO 63105 Container Corporation
James B. Malloy Chairman of the Board, Smurfit United
8182 Maryland Avenue Packaging Corporation States
St. Louis, MO 63105
Richard P. Marra Assistant Treasurer, Smurfit- United
8182 Maryland Avenue Stone Container Corporation States
St. Louis, MO 63105
<PAGE>
Page 25 of 43 Pages
NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH DIRECTOR AND
OFFICER OF SMURFIT INTERNATIONAL B.V.
Name and Business Address Principal Occupation Citizenship
- ------------------------- -------------------- -----------
Jaap Willeumier Lawyer Netherlands
Stibbe Simont Monahan Duhot
Strawinskylaan 2001
1077 ZZ Amsterdam
The Netherlands
Gert Mosler Lawyer Netherlands
Stibbe Simont Monahan Duhot
Strawinskylaan 2001
1077 ZZ Amsterdam
The Netherlands
Ben van der Weerden Chief Executive, Netherlands
Smurfit Lona Verpakking B.V. Smurfit Netherlands and
Voorsterweg 94, P.O. Box 1 Germany
7370 AA Loenen
The Netherlands
Leendert P. Van den Blink Retired Lawyer Netherlands
Jan van Goyenkade 17
1075 HR Amsterdam
The Netherlands
Michael J. Clayton Finance Director, United Kingdom
Smurfit UK Smurfit UK
2, The Beacons
Beaconsfield Rd.
Hatfield,
Hertfordshire AL 10 8EQ
England
J.M. van der Beek Retired Tax Lawyer Netherlands
Schouwweg 49
2243 BE Wassenarr,
The Netherlands
J.M. van den Wall Bake Lawyer Netherlands
Stibbe Simont Monahan Duhot
Strawinskylaan 2001
1077 ZZ Amsterdam
The Netherlands
<PAGE>
Page 26 of 43 Pages
NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH DIRECTOR AND
OFFICER OF SMURFIT INTERNATIONAL B.V.
Name and Business Address Principal Occupation Citizenship
- ------------------------- -------------------- -----------
Michael R.J. Pettigrew Group Secretary, Ireland
Jefferson Smurfit Group plc Jefferson Smurfit Group plc
Beech Hill,
Clonskeagh,
Dublin, 4,
Ireland
Gary McGann Chief Financial Officer, Ireland
Jefferson Smurfit Group plc Jefferson Smurfit Group plc
Beech Hill,
Clonskeagh,
Dublin, 4,
Ireland
Michael O'Riordan Managing Director, Ireland
Villa les Bruyeres, Smurfit International
1, Place Sainte Devote
98000 Monaco
Rokin Corporate Services, B.V. Management Company Netherlands
Strawinskylaan 2001
1077 ZZ Amsterdam
The Netherlands
<PAGE>
Page 27 of 43 Pages
NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH
DIRECTOR AND OFFICER OF JEFFERSON SMURFIT GROUP PLC
Name and Business Address Principal Occupation Citizenship
- ------------------------- -------------------- -----------
Michael W.J. Smurfit Chairman of the Board and Ireland; United
Jefferson Smurfit Group plc Chief Executive Officer, Kingdom
Beech Hill, Jefferson Smurfit Group plc
Clonskeagh,
Dublin, 4,
Ireland
P. Alan Smurfit Chairman of the Board and Ireland
Smurfit Latin America Chief Executive Officer,
One Turnberry Place Smurfit Latin America
19495 Biscayne Blvd.
Suite 300
Aventura, Florida 33180
Dermot F. Smurfit World Vice President, Ireland
Jefferson Smurfit Group plc Marketing and Sales,
Beech Hill, Jefferson Smurfit Group plc
Clonskeagh,
Dublin, 4,
Ireland
Howard E. Kilroy Governor, Ireland
Bank of Ireland, Bank of Ireland
Headquarters,
Lower Baggot Street
Dublin, 2,
Ireland
Peter J.P. Gleeson Chairman of the Board, Ireland
Castle Hosiery Co. Ltd. Castle Hosiery Co., Ltd.
2001 City West Business Campus
Naas Road
Dublin, 24,
Ireland
James B. Malloy Chairman of the Board, United States
Smurfit Packaging Corporation Smurfit Packaging Corporation
8182 Maryland Avenue
St. Louis, MO 63105
<PAGE>
Page 28 of 43 Pages
NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH
DIRECTOR AND OFFICER OF JEFFERSON SMURFIT GROUP PLC
Name and Business Address Principal Occupation Citizenship
- ------------------------- -------------------- -----------
James M. O'Dwyer Chairman of the Board, Ireland
Arthur Cox & Co. Arthur Cox & Co.,
Arthur Cox Building Solicitors
Earlsfort Terrace,
Dublin, 2,
Ireland
Anthony P.J. Smurfit Deputy Chief Executive, Ireland
Smurfit Europe Smurfit Europe
2 rue Goethe
75116 Paris,
France
Ray Mac Sharry Company Director Ireland
46, Upper Mount Street,
Dublin, 2,
Ireland
Martin Rafferty Chairman of the Board, Ireland
United Drug plc United Drug plc
Belgard Road,
Tallaght,
Dublin, 24,
Ireland
Patrick J. Wright President and Ireland
Jefferson Smurfit Group plc Chief Operations Officer,
Beech Hill, Jefferson Smurfit Group plc
Clonskeagh,
Dublin, 4,
Ireland
Albert Reynolds Member of Parliament, Ireland
Dail Eireann Republic of Ireland
Kildare Street,
Dublin, 2,
Ireland
Gary McGann Chief Financial Officer, Ireland
Jefferson Smurfit Group plc Jefferson Smurfit Group plc
Beech Hill,
Clonskeagh,
Dublin, 4,
Ireland
<PAGE>
Page 29 of 43 Pages
Name and Business Address Principal Occupation Citizenship
- ------------------------- -------------------- -----------
Mary Redmond Ireland; United
36, Wellington Road, Lawyer Kingdom
Ballsbridge,
Dublin, 4,
Ireland
James R. Thompson United States
Winston & Strawn Chairman,
35 West Wacker Drive Winston & Strawn
Chicago, IL 60601
Michael R.J. Pettigrew Ireland
Jefferson Smurfit Group plc Group Secretary,
Beech Hill, Jefferson Smurfit Group plc
Clonskeagh,
Dublin, 4,
Ireland
<PAGE>
Page 30 of 43 Pages
SCHEDULE II
The following directors and officers of the Reporting Persons beneficially own,
directly or indirectly, the shares of SSCC Common Stock so indicated.
Shares of SSCC Common
Name of Officer or Director Stock Beneficially Owned
- --------------------------- ------------------------
Michael W.J. Smurfit 1,056,283^1
Dermot F. Smurfit 91,200^2
P. Alan Smurfit 385,000^3
Howard E. Kilroy 423,000^4
James B. Malloy 724,000^5
James R. Thompson 90
Anthony P.J. Smurfit 62,000^6
Patrick J. Moore 334,104^7
Charles A. Hinrichs 76,057^8
Derry L. Hobson 4,050
Craig A. Hunt 8,723^9
Richard P. Marra 10,111^10
- ---------------------------
1 Includes 1,026,000 options exercisable within 60 days.
2 Includes 91,200 options exercisable within 60 days.
3 Includes 234,500 shares pledged pursuant to bank loans and 151,000 options
exercisable within 60 days.
4 Includes 423,000 options exercisable within 60 days.
5 Includes 724,000 options exercisable within 60 days.
6 Includes 50,000 shares owned by trust under which Mr. Smurfit does not have
voting or investment power (which shares are pledged pursuant to bank
loans) and 12,000 options exercisable within 60 days.
7 Includes 325,000 options exercisable within 60 days.
8 Includes 70,000 options exercisable within 60 days.
9 Includes 6,500 options exercisable within 60 days.
10 Includes 6,000 options exercisable within 60 days.
<PAGE>
Page 31 of 43 Pages
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGES
------- ----------- -----
2.1 Agreement and Plan of Merger dated as of May 10,
1998 among Smurfit-Stone Container Corporation
("SSCC") (formerly known as Jefferson Smurfit
Corporation ("JSC")), Stone Container Corporation
("Stone") and JSC Acquisition Corporation
(incorporated by reference to Annex A to the
Joint Proxy Statement/Prospectus contained in
JSC's Registration Statement on Form S-4 (File
No. 333-65431) dated October 8, 1998).
2.2 Stock Purchase Agreement dated as of May 10,
1998 among Smurfit International B.V. ("SIBV"),
Jefferson Smurfit Group plc ("JSG"), Morgan
Stanley Leveraged Equity Fund II, Inc.
("MSLEF"), the other shareholders of JSC party
thereto and SSCC (incorporated by reference to
Annex G to the Joint Proxy Statement/Prospectus
contained in JSC's Registration Statement on
Form S-4 (File No. 333-65431) dated October 8,
1998).
10.1 Voting Agreement dated as of May 10, 1998, as
amended, among SIBV, MSLEF and Mr. Roger W. Stone
(incorporated by reference to Exhibit 10(f) to
JSC's Registration Statement on Form S-4 (File
No. 333-65431) dated October 8, 1998).
10.2 Standstill Agreement dated as of May 10, 1998, as
amended, among JSG, MSLEF and SSCC (incorporated
by reference to Annex H to the Joint Proxy
Statement/Prospectus contained in JSC's
Registration Statement on Form S-4 (File No.
333-65431) dated October 8, 1998).
10.3 Registration Rights Agreement dated as of May 10,
1998 among MSLEF, SIBV, SSCC and the other
parties identified on the signature pages thereto
(incorporated by reference to Exhibit 10(e) to
JSC's Registration Statement on Form S-4 (File
No. 333-65431) dated October 8, 1998).
10.4 Agreement dated as of May 10, 1998 between SIBV 32
and MSLEF.
99.1 Joint Filing Agreement, dated as of November 18, 42
1998 by and among Smurfit Packaging Corporation,
Smurfit International B.V., and Jefferson
Smurfit Group plc.
Page 32 of 43 Pages
Exhibit 10.4
AGREEMENT
AGREEMENT dated as of May 10, 1998 between Smurfit International B.V., a
corporation organized under the laws of the Netherlands ("SIBV"), and Morgan
Stanley Leveraged Equity Fund II, Inc., a Delaware corporation ("MSLEF").
W I T N E S S E T H
WHEREAS, SIBV and MSLEF are stockholders of Jefferson Smurfit
Corporation ("JSC"); and
WHEREAS, MSLEF and SIBV are parties to a Stock Purchase Agreement dated as
of the date hereof (the "Stock Purchase Agreement") among SIBV, Jefferson
Smurfit Group plc ("JSG"), MSLEF, JSC and certain other JSC stockholders,
pursuant to which SIBV has agreed to purchase from MSLEF and certain other JSC
stockholders, and MSLEF and certain other JSC stockholders have agreed to sell
to SIBV, shares of common stock, par value $0.01 per share, of JSC (the "Common
Stock"), upon the terms and subject to the conditions set forth therein; and
WHEREAS, in connection with the stock purchase pursuant to the Stock
Purchase Agreement, MSLEF has agreed to give SIBV a right of first refusal,
exercisable only under certain circumstances, on the shares of Common Stock that
it beneficially owns after the closing of the Stock Purchase Agreement.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. (A) The following terms, as used
herein, have the following meanings:
"Business Day" means any day other than a Saturday, a Sunday, or a bank
holiday in the United States or Ireland.
"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
<PAGE>
Page 33 of 43 Pages
"Transfer" shall mean sell, assign, transfer, exchange or otherwise
dispose of an interest in shares of Common Stock.
Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Common Stock................................. recitals
Encumbrances................................. 3.01
JSC.......................................... recitals
JSG.......................................... recitals
MSLEF........................................ preamble
Offer........................................ 4.01
Related Group................................ 4.01
SIBV......................................... preamble
Stock Purchase Agreement..................... preamble
Stockholders' Agreement ..................... 3.01
ARTICLE 2
Representations and Warranties of SIBV
SIBV represents and warrants to MSLEF as of the date of effectiveness of
this Agreement pursuant to Section 7.6 that:
Section 2.1. Organization. SIBV is a corporation duly organized
and validly existing under the laws of the Netherlands.
Section 2.2. Authority. SIBV has all corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by SIBV of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of SIBV. No other
action on the part of SIBV or its stockholders is necessary to authorize the
execution and delivery of this Agreement by SIBV or the performance by SIBV of
its obligations hereunder. This Agreement has been duly executed and delivered
by SIBV and constitutes a legal, valid and binding agreement of SIBV,
enforceable against SIBV in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and subject to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Section 2.3. No Violation. The execution and delivery of this Agreement by
SIBV, and the performance by SIBV of its obligations hereunder and the
consummation of the transactions contemplated hereby, will not: (a) violate any
provision of law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to SIBV, (b) require the consent, waiver,
approval, license or authorization or any filing by SIBV with any governmental
authority
<PAGE>
Page 34 of 43 Pages
(other than any filings by SIBV that may be required under the 1934 Act) or (c)
violate, result (with or without notice or the passage of time, or both) in a
breach of or give rise to the right to accelerate, terminate or cancel any
obligation under or constitute (with or without notice or the passage of time,
or both) a default under, any of the terms or provisions of any charter or other
governing document, bylaw, agreement, note, indenture, mortgage, contract,
order, judgment, ordinance, regulation or decree to which SIBV is subject or by
which SIBV is bound and which would have an adverse effect on the ability of
SIBV to perform its obligations under this Agreement.
Section 2.4. Securities Act Representation. SIBV will not purchase any
shares of Common Stock with a view to a distribution or resale of any of such
Shares in violation of any applicable securities laws. SIBV understands that the
shares of Common Stock constitute restricted securities, are not registered
under the 1933 Act or any state securities laws, and the certificates
representing such shares of Common Stock will bear a legend to that effect. SIBV
agrees that it shall not sell any of such shares of Common Stock in violation of
the 1933 Act. SIBV represents that it is a sophisticated investor and is able to
bear the risk of an investment in JSC.
ARTICLE 3
Representations and Warranties of MSLEF
MSLEF represents and warrants to SIBV as of the date of effectiveness of
this Agreement pursuant to Section 7.6 that:
Section 3.1. Title to Shares. MSLEF has good and valid title to the shares
of Common Stock that it owns, free and clear of any security interests, liens,
claims, pledges, encumbrances or other rights or claims of any other Person of
any kind or any preemptive rights (collectively, "Encumbrances"), except as may
exist under the Stockholders' Agreement (the "Stockholders' Agreement") dated as
of May 3, 1994 and amended as of January 13, 1997 or the related Registration
Rights Agreement dated as of the same date. At the closing of any purchase and
sale hereunder, SIBV will acquire all of MSLEF's right, title and interest in
and to the shares of Common Stock subject to such purchase and sale and will
receive good and valid title to such shares of Common Stock free and clear of
any and all Encumbrances. As of the date hereof, MSLEF beneficially owns the
shares of Common Stock set forth on Schedule I hereto.
Section 3.2. Organization. MSLEF is a corporation duly incorporated or
formed, validly existing and in good standing under the laws of jurisdiction of
its incorporation.
Section 3.3. Authority. MSLEF has all corporate power and authority to
execute and deliver this Agreement, and to consummate the transactions
contemplated on its part hereby. The execution, delivery and performance by
MSLEF of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action
<PAGE>
Page 35 of 43 Pages
on the part of MSLEF. No other action on the part of MSLEF or its stockholders
or partners, as the case may be, is necessary to authorize the execution and
delivery of this Agreement by MSLEF orthe performance by MSLEF of its
obligations hereunder. This Agreement has been duly executed and delivered by
MSLEF and constitutes a legal, valid and binding agreement of MSLEF, enforceable
against MSLEF in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting creditors'
rights generally and subject to general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 3.4. No Violation. The execution and delivery of this Agreement by
MSLEF, and the performance by MSLEF of its obligations hereunder and the
consummation of the transactions contemplated hereby, will not: (a) violate any
provision of law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to MSLEF, (b) require the consent, waiver,
approval, license or authorization or any filing by MSLEF with any governmental
authority, (c) violate, result (with or without notice or the passage of time,
or both) in a breach of or give rise to the right to accelerate, terminate or
cancel any obligation under or constitute (with or without notice or the passage
of time, or both) a default under, any of the terms or provisions of any charter
or other governing document, bylaw, agreement, note, indenture, mortgage,
contract, order, judgment, ordinance, regulation or decree to which MSLEF is
subject or by which MSLEF is bound and which would have an adverse effect on the
ability of MSLEF to perform its obligations under this Agreement or (d) result
in the creation or imposition of any tax or encumbrance on the shares of Common
Stock, except for transfer taxes, if any.
ARTICLE 4
Right of First Refusal
Section 4.1. Right of First Refusal. (a) Except as provided in this
Section 4.1, MSLEF agrees that it will not effect a Transfer to any Person or
member of a group (as such term is defined in Rule l3d-5 promulgated under the
1934 Act) (such Person or group, a "Related Group") of any shares of Common
Stock that it beneficially owns if after reasonable inquiry MSLEF believes that
the number of shares of Common Stock being Transferred to such Related Group by
MSLEF would, when taken together with all other shares of Common Stock then
beneficially owned by such Related Group, amount to more than five percent of
the then outstanding shares of Common Stock.
(b) Prior to the acceptance of any offer made by a Related Group (each
such offer, an "Offer") to purchase any of the shares of Common Stock that it
beneficially owns, MSLEF will give SIBV two Business Days' notice of such
proposed Transfer which notice shall state all of the material terms and
conditions of the Offer other than the identity of the Related Group. Delivery
of any such notice to SIBV will constitute an offer by MSLEF to sell the shares
of
<PAGE>
Page 36 of 43 Pages
Common Stock subject to the Offer to SIBV on the same terms and subject to
the same conditions as the Offer.
(c) Prior to the expiration of the three Business Day period referred to
in subsection (b), SIBV will notify MSLEF whether it will accept MSLEF's offer
to sell to SIBV the shares of Common Stock subject to the Offer; provided that
SIBV may only exercise its right of first refusal with respect to all shares of
Common Stock subject to the Offer unless such exercise would result in a breach
by SIBV of its obligations under the Standstill Agreement dated as of even date
herewith among JSG, JSC and MSLEF in which event SIBV may exercise its right of
first refusal but only to the fullest extent possible without breaching such
Agreement; provided, further, that MSLEF shall be free to Transfer to the
Related Group without restriction under this Agreement any shares of Common
Stock subject to the Offer that SIBV would have been required to purchase upon
exercise of its right of first refusal pursuant to the preceding proviso but for
the limitation contained in such proviso. Failure of SIBV to so notify MSLEF
during such period shall be deemed a decision not to purchase any of such shares
of Common Stock.
(d) If SIBV fails to exercise its option to purchase shares of Common
Stock subject to the Offer, MSLEF shall be free to sell such shares of Common
Stock (or any portion thereof) to the Related Group without restriction under
this Agreement; provided that such sale is consummated within sixty days
thereafter at a per share price equal to or greater than the price, and upon the
same terms and conditions, as set forth in the notice delivered pursuant to
subsection (b) of this Section 4.1. If such sale is not so consummated within
such sixty-day period, such shares of Common Stock shall again be subject to
SIBV's rights as set forth in this Section 4.1.
(e) The election by SIBV to purchase shares of Common Stock subject to
the Offer shall result in the creation of a binding, irrevocable agreement on
the part of SIBV to purchase such shares and on the part of MSLEF to sell such
shares to SIBV, and the parties hereto shall consummate such purchase and sale
within three business days of the date on which SIBV notifies MSLEF of its
intent to exercise its right of first refusal, although no party shall be
required to consummate the transaction if such consummation would violate
applicable law. If the closing of such purchase and sale does not occur before
the expiration of the three Business Day period referred to in this subsection,
MSLEF shall be free to sell the shares of Common Stock (or any portion thereof)
subject to the Offer to the Related Group or any one or more parties, within the
succeeding 60 days, without restriction under this Agreement at any price and
upon any terms and conditions. If such sale is not so consummated within such
sixty-day period, such shares of Common Stock shall again be subject to SIBV's
rights as set forth in this Section 4.1.
(f) The provisions of this Section 4.1 shall be inapplicable (i) to sales
of shares of Common Stock by MSLEF in underwritten public offerings effected
pursuant to the Registration Rights Agreement dated of even date herewith among
JSC, SIBV, MSLEF and certain other JSC stockholders, (ii) to any sales of shares
of Common Stock effected by MSLEF in the open
<PAGE>
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market pursuant to Rule 144 under the 1933 Act or (iii) to any distribution of
shares by The Morgan Stanley Leveraged Equity Fund II, L.P. to its limited
partners.
ARTICLE 5
Survival
Section 5.1. Survival. The representations, warranties, covenants
and agreements of the parties contained in this Agreement shall survive
for the applicable statute of limitations period, notwithstanding any
investigation by or on behalf of any party before or after.
ARTICLE 6
Termination
Section 6.1. Termination. This Agreement may be terminated at any
time by mutual written agreement of SIBV and MSLEF. This Agreement shall
automatically terminate if the Stock Purchase Agreement is terminated.
Section 6.2. Effect of Termination. If this Agreement is terminated
pursuant to Section 6.1, all further obligations of the parties hereto under
this Agreement shall terminate without further liability or obligation of any
party to any other party, including liability for damages, except that no such
termination shall relieve any party hereto from liability for breach of this
Agreement.
ARTICLE 7
Miscellaneous
Section 7.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile transmission) and shall be given,
if to SIBV, to:
Smurfit International B.V.
Strawinskylaan 2001
Amsterdam 1077ZZ, The Netherlands
Attention: Rokin Corporate Services, B.V.
Fax: 31-20-546-0717
<PAGE>
Page 38 of 43 Pages
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Steven A. Rosenblum, Esq.
Fax: (212) 403-2000
William Fry
Fitzwilton House,
Wilton Place,
Dublin 2, Ireland
Attention: Houghton Fry, Esq.
Fax: 353-1-639-5333
if to MSLEF, to:
Morgan Stanley Leveraged Equity Fund II, Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: Alan E. Goldberg
Fax: (212)762-6466
with a copy to:
Morgan Stanley Capital Partners
1221 Avenue of the Americas
New York, New York 10020
Attention: Peter R. Vogelsang, Esq.
Fax: (212) 762-6466
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place of
receipt.
Section 7.2. Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby will be paid by the
party incurring such cost or expense; provided that SIBV and MSLEF will share
equally any transfer taxes payable in the United States in connection with any
purchase and sale of the shares of Common Stock hereunder.
Section 7.3. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior
<PAGE>
Page 39 of 43 Pages
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
Section 7.4. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that SIBV may transfer or
assign, in whole or from time to time in part, to any one or more of its direct
or indirect subsidiaries, the right to purchase all or a portion of the shares
of Common Stock beneficially owned by MSLEF, on the terms and subject to the
conditions specified herein, but no such transfer or assignment will relieve
SIBV of its obligations hereunder.
Section 7.5. Amendments and Waivers. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by SIBV and MSLEF, or in the case of
a waiver, by the party against whose rights the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 7.6. Effectiveness. Other than Section 6.1 and this Section 7.6,
which are effective on the date hereof, the provisions of this Agreement will
become effective only upon the closing of the stock purchase contemplated by the
Stock Purchase Agreement.
Section 7.7. Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of New York,
without regard to the conflicts of law rules of the State of New York.
Section 7.8. WAIVER OF JURY TRIAL, ETC. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. THE PARTIES AGREE, SOLELY IN RESPECT OF THE INTERPRETATION AND
ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT, TO SUBMIT TO THE EXCLUSIVE
JURISDICTION OF, AND TO WAIVE ANY OBJECTION AS TO VENUE IN, THE FEDERAL OR STATE
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. SERVICE OF PROCESS
IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE EFFECTIVE IF
DELIVERED OR SENT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7.1 HEREOF.
Section 7.9. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. Subject to Section
7.6, this Agreement shall become
<PAGE>
Page 40 of 43 Pages
effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.
Section 7.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
<PAGE>
Page 41 of 43 Pages
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
MORGAN STANLEY LEVERAGED
EQUITY FUND II, INC.
By: /s/ Alan E. Goldberg
---------------------------
Name: Alan E. Goldberg
Title: Managing Director
SMURFIT INTERNATIONAL B.V.
By: /s/ Houghton Fry
---------------------------
Name: Houghton Fry
Title: Attorney-in-Fact
<PAGE>
Page 42 of 43 Pages
SCHEDULE I
MSLEF's Beneficial Ownership of Shares of Common
Stock
31,574,540
Page 43 of 43 Pages
EXHIBIT 99.1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) promulgated under the Securities Exchange
Act of 1934, as amended, the undersigned hereby agree to the joint filing with
all other Reporting Persons (as such term is defined in the Schedule 13D
referred to below) on behalf of each of them of a statement on Schedule 13D
(including amendments thereto) with respect to the common stock, par value $0.01
per share of Smurfit-Stone Container Corporation, a Delaware corporation, and
that this Agreement may be included as an Exhibit to such joint filing. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of
the 24th day of November 1998.
SMURFIT PACKAGING CORPORATION
By: /s/ Charles A. Hinrichs
-----------------------------------
Name: Charles A. Hinrichs
Title: Vice President and Treasurer
SMURFIT INTERNATIONAL B.V.
By: /s/ Michael O'Riordan
-----------------------------------
Name: Michael O'Riordan
Title: Managing Director
JEFFERSON SMURFIT GROUP PLC
By: /s/ Michael R.J. Pettigrew
-----------------------------------
Name: Michael R.J. Pettigrew
Title: Secretary
Date: November 24, 1998
