SMURFIT STONE CONTAINER CORP, DEF 14A, 1999-04-19

SMURFIT STONE CONTAINER CORP
DEF 14A, 1999-04-19
PAPERBOARD MILLS

Previous: AMERICAN EAGLE OUTFITTERS INC, SC 13D, 1999-04-19

Next: LACROSSE FOOTWEAR INC, DEF 14A, 1999-04-19

Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

SMURFIT-STONE CONTAINER CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

............................................................

(2) Aggregate number of securities to which transaction
applies:

.......................................................

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):

.......................................................

(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

.......................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

.......................................................

(2) Form, Schedule or Registration Statement No.:

.......................................................

(3) Filing Party:

.......................................................

(4) Date Filed:

.......................................................

[LOGO]

SMURFIT-STONE CONTAINER CORPORATION
150 N. MICHIGAN AVENUE
CHICAGO, ILLINOIS 60601-7568

April 23, 1999

Dear Stockholder:

You are cordially invited to attend our Company's 1999 Annual
Meeting of Stockholders, which will be held on Thursday, May 27, 1999,
at 1:00 p.m. (C.S.T.) at the Renaissance St. Louis Hotel, 9801 Natural
Bridge Road, St. Louis, Missouri. The formal Notice of Annual Meeting
of Stockholders and Proxy Statement accompanying this letter describe
the business to be acted upon at the meeting.

Your vote is important and your shares should be represented at
the meeting whether or not you are personally able to attend.
Accordingly, you are requested to mark, sign, date and return the
accompanying proxy promptly. Also, this year registered stockholders
may vote for the first time by telephone. Instructions for using this
convenient new service are set forth on the proxy card.

On behalf of the Board of Directors, thank you for your continued
support of Smurfit-Stone Container Corporation.

Sincerely,

MICHAEL W. J. SMURFIT
MICHAEL W. J. SMURFIT
Chairman of the Board

SMURFIT-STONE CONTAINER CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 27, 1999

NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders of
Smurfit-Stone Container Corporation, a Delaware corporation (the 'Company'),
will be held on Thursday, May 27, 1999, at 1:00 p.m. (C.S.T.) at the Renaissance
St. Louis Hotel, 9801 Natural Bridge Road, St. Louis, Missouri to act upon the
following matters which are described more fully in the accompanying Proxy
Statement:

1. The election of nine directors for terms of office expiring at the
annual meeting of stockholders in 2000;

2. The ratification of the appointment of Ernst & Young LLP as
independent auditors of the Company for 1999; and

3. Such other business as may properly come before the meeting and/or
any adjournment or postponement thereof.

All stockholders of record at the close of business on March 29, 1999 are
entitled to notice of, and to vote at, the Annual Meeting and/or any adjournment
or postponement thereof.

The Board of Directors of the Company has authorized the solicitation of
proxies. Unless otherwise directed, the proxies will be voted FOR the election
of the nominees listed in the attached Proxy Statement to be members of the
Board of Directors of the Company; FOR the ratification of the appointment of
independent auditors of the Company for 1999; and, on any other business that
may properly come before the Annual Meeting, as the named proxies in their best
judgment shall decide.

Any stockholder submitting a proxy may revoke such proxy at any time prior
to its exercise by notifying the Secretary of the Company in writing at 150 N.
Michigan Avenue, Chicago, Illinois 60601-7568, prior to the Annual Meeting, and
if you attend the Annual Meeting you may revoke your proxy if previously
submitted and vote in person by notifying the Secretary of the Company at the
Annual Meeting.

By Order of the Board of Directors

CRAIG A. HUNT
CRAIG A. HUNT
Secretary

Chicago, Illinois
April 23, 1999

SMURFIT-STONE CONTAINER CORPORATION

---------------------------------
PROXY STATEMENT
---------------------------------

FOR 1999 ANNUAL MEETING OF STOCKHOLDERS

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Smurfit-Stone Container Corporation, a
Delaware corporation (the 'Company'), 150 North Michigan Avenue, Chicago,
Illinois 60601-7568, for use at the 1999 Annual Meeting of Stockholders to be
held on Thursday, May 27, 1999 at 1:00 (C.S.T.) at the Renaissance St. Louis
Hotel, 9801 Natural Bridge Road, St. Louis, Missouri (the 'Annual Meeting'). The
Board of Directors of the Company urges that your proxy be executed and returned
promptly in the enclosed envelope. This year, for the first time stockholders
may also deliver proxies by calling a toll-free telephone number (1-800-
840-1208). The telephone voting procedure is designed to authenticate
stockholders' identities, to allow stockholders to give their voting
instructions and to confirm that stockholders' instructions have been recorded
properly. Instructions for voting by telephone are set forth on the enclosed
proxy card.

Any stockholder submitting a proxy may revoke such proxy (including a proxy
by telephone) at any time prior to its exercise by notifying the Secretary of
the Company, in writing, prior to the Annual Meeting. Any stockholder attending
the Annual Meeting may revoke his proxy, including a proxy by telephone, and
vote personally by notifying the Secretary of the Company at the Annual Meeting.
Only stockholders of record at the close of business on March 29, 1999 will be
entitled to notice of, and to vote at, the Annual Meeting and/or any adjournment
or postponement thereof. At the close of business on March 29, 1999, the Company
had 215,209,173 outstanding shares of common stock, $.01 par value (the 'Common
Stock'). Each share of Common Stock entitles the holder thereof to one vote.

If the accompanying proxy card is signed and returned, the shares
represented thereby will be voted in accordance with the directions on the proxy
card. Unless a stockholder specifies otherwise therein, the proxy will be voted
in favor of the election of the nine nominees named below to the Board of
Directors of the Company and in favor of ratifying the appointment of Ernst &
Young LLP as independent auditors for the Company for 1999 and with respect to
any other matter that may properly come before the meeting, as the named proxies
in their best judgement shall decide. The presence in person or by proxy of a
majority of the voting power represented by outstanding shares of the Common
Stock (107,604,587 shares) will constitute a quorum for the transaction of
business at the Annual Meeting. Directors will be elected by a plurality of the
voting power represented and entitled to vote at the meeting and the
ratification of the appointment of independent auditors will be determined by
the affirmative vote of the majority of the voting power represented and
entitled to vote at the meeting. In the election of directors, abstentions and
broker non-votes will not affect the outcome except in determining the presence
of a quorum and in the sense that such proxies will not be counted towards the
number of votes required for any nominee's election. An instruction to 'abstain'
from voting on the proposal to ratify the appointment of independent auditors
will be treated as shares present and will have the same effect as a vote
against the proposal. Broker non-votes will not be considered 'entitled to vote'
on the proposal to ratify the appointment of independent auditors; therefore,
broker non-votes will have no effect on the number of affirmative votes required
to adopt such proposal.

As noted under the 'Principal Stockholders' section herein, as of the close
of business on March 29, 1999, Smurfit International B.V., an entity organized
under the laws of the The Netherlands ('SIBV'), and certain of its subsidiaries
owned approximately 33.3% of the outstanding Common Stock and The Morgan Stanley
Leveraged Equity Fund II, L.P. ('MSLEF II') and certain related entities were
the owner of approximately 7.4% of the outstanding Common Stock. SIBV and MSLEF
II have advised the Company that they intend to vote their respective shares of
Common Stock FOR the nominees of the Board of Directors named herein, and FOR
the ratification of the appointment of independent auditors. SIBV is an indirect
wholly-owned subsidiary of Jefferson Smurfit Group plc, a public corporation
organized under the laws of the Republic of Ireland ('JS Group'), which, through
its

subsidiaries, is principally an integrated manufacturer and converter of paper
and board. MSLEF II is a Delaware limited partnership investment fund formed to
make investments in industrial and other companies. See 'Principal Stockholders'
and 'Certain Transactions.'

This Proxy Statement and the enclosed proxy card are being mailed to the
stockholders of the Company on or about April 23, 1999.

PROPOSAL 1 -- ELECTION OF DIRECTORS

On November 18, 1998, a wholly-owned subsidiary of the Company merged (the
'Merger') with Stone Container Corporation ('Stone'), and the name of the
Company was changed from Jefferson Smurfit Corporation ('JSC') to Smurfit-Stone
Container Corporation. The Board of Directors prior to the Merger (the 'JSC
Board') was comprised of ten members pursuant to the terms of a Stockholders
Agreement between SIBV and MSLEF II and certain related entities, which
terminated at the effective time of the Merger. The Board of Directors following
the Merger (the 'SSCC Board') consisted of twelve members pursuant to the
Amended and Restated Bylaws of the Company (the 'Bylaws'), which took effect as
of the effective time of the Merger. Pursuant to Article 5 of the Bylaws,
representatives of JSC nominated six (6) directors, representatives of Stone
nominated five (5) directors ('Stone Directors') and representatives of MSLEF II
nominated one (1) director (the 'MSLEF Director'). As of March 31, 1999, Roger
W. Stone, Matthew S. Kaplan and Dionisio Garza (all of whom were Stone
Directors) resigned from the SSCC Board. Mr. Stone's resignation caused the
occurrence of the 'Article 5 Termination Date' as defined in Article 5 of the
Bylaws, and all of the provisions set forth therein governing the composition of
the SSCC Board and its committees terminated on such date, except as provided
therein. As a result, the SSCC Board has voted to reduce its size from twelve
members to nine members effective as of the time of the Annual Meeting.

Set forth below is information concerning the nine nominees for director.
For purposes of the Bylaws, Alan E. Goldberg has been designated to be the
nominee to serve as the MSLEF Director. Pursuant to a Voting Agreement dated May
10, 1998 (the 'Voting Agreement') each of SIBV and MSLEF II are obliged to vote
their respective shares of Common Stock in favor of Mr. Goldberg's election to
the Board of Directors as the MSLEF Director. See 'Certain Transactions -- Board
Membership.' The Board of Directors of the Company recommends a vote FOR these
nine nominees. If elected, each nominee will serve until the annual election of
directors in the year 2000 or until his successor is duly elected and qualified,
or until his earlier death, resignation or removal. All of the nominees are
presently members of the Board of Directors of the Company and have been
approved unanimously by the Board of Directors of the Company for re-election.
If any of the nominees are unavailable for election, an event which the Board of
Directors of the Company does not presently anticipate, the persons named in the
enclosed proxy intend to vote the proxies solicited hereby FOR the election of
such other nominee or nominees, as may be nominated by the Board of Directors.

NOMINEES FOR DIRECTORS TO BE ELECTED AT THE 1999 ANNUAL MEETING FOR TERMS
EXPIRING IN 2000

<TABLE>
<CAPTION>
NAME & YEAR
FIRST ELECTED
A DIRECTOR PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - --------------------------------------------- ------------------------------------------------------------------
<S> <C>
Alan E. Goldberg
1989......................................... Mr. Goldberg, born September 1, 1954, has been Chairman and Chief
Executive Officer of Morgan Stanley Dean Witter Capital Partners
since February 1998. Prior thereto, he was co-head of MSDW
Capital Partners. He has been a Managing Director of Morgan
Stanley & Co. Incorporated since January 1988. Mr. Goldberg also
serves as a director of Amerin Corporation, Allegiance Telecom,
Inc., Catalytica, Inc., Equant, N.V. and several private
companies.
Richard W. Graham
1997......................................... Mr. Graham, born November 25, 1934, is the former President and
Chief Executive Officer of JSC, having served from January 1997
until November 1998. He was President of JSC from July 1996 to
December 1996 and Senior Vice President from February 1994 to
July 1996. Prior to that, he held various positions in the
Folding Carton and Boxboard Mill Division, including Vice
President and General Manager from February 1991 to January
1994.
James J. O'Connor
1998......................................... Mr. O'Connor, born March 15, 1937, is the former Chairman and
Chief Executive Officer of Unicom Corporation and its
subsidiary, Commonwealth Edison Company. He is a director of
Corning Incorporated, Everen Capital Corporation, Scotsman
Industries, Inc., The Tribune Company, United Airlines, and
various other Chicago-based businesses, cultural and charitable
organizations.
Jerry K. Pearlman
1998......................................... Mr. Pearlman, born March 27, 1939, is the retired Chairman of the
Board and Chief Executive Officer of Zenith Electronics
Corporation. Mr. Pearlman is a director of Ryerson-Tull Inc.,
Royal Packaging Industries Van Lier NV and Parsons Group L.L.C.,
and served as director of Stone from 1984 to 1998.
Thomas A. Reynolds, III
1997......................................... Mr. Reynolds, born May 12, 1952, has been a Partner since 1984
with Winston & Strawn, a law firm that regularly represents the
Company on numerous matters. Mr. Reynolds is an adjunct faculty
member in trial advocacy at Northwestern University School of
Law. He also serves as Director of Georgetown University.
Dermot F. Smurfit
1998......................................... Dr. Dermot F. Smurfit, born October 8, 1944, has been Joint Deputy
Chairman of JS Group since January 1984 and World Vice
President -- Marketing and Sales since July 1997. Prior to July
1997, he held various senior positions in JSGroup. Dr. Dermot
Smurfit is also a member of the Board of the Confederation of
European Paper Industries, Aon BV & Aon Groupe Netherlands and
ACE Ltd. He is a brother of Dr. Michael W. J. Smurfit.
Michael W. J. Smurfit
1989......................................... Dr. Michael W. J. Smurfit, born August 7, 1936, is Chairman of the
Board of Directors of the Company. He has been Chairman and
Chief Executive Officer of JS Group since 1977. Dr. Smurfit was
Chief Executive Officer of the Company prior to July 1990. He is
a brother of Dr. Dermot F. Smurfit.
</TABLE>

INFORMATION AS TO EXECUTIVE OFFICERS

MICHAEL W. J. SMURFIT -- See Nominees for Director.

RAY M. CURRAN -- See Nominees for Director.

PETER F. DAGES, born December 13, 1950, was appointed Vice President and
General Manager -- Corrugated Container Division in April, 1999. Mr. Dages was
Vice President and Regional Manager of the Corrugated Container Division of
Stone from 1996 until April 1999. Prior to that he held various managerial
positions in the Corrugated Container Division of Stone since 1991.

JAMES D. DUNCAN, born June 12, 1941, was appointed Vice President and
General Manager -- Specialty Packaging Division in November 1998. Mr. Duncan was
Vice President and General Manager -- Industrial Packaging Division from October
1996 to November 1998. He was Vice President and General Manager, Converting
Operations -- Industrial Packaging Division from April 1994 to October 1996 and
served as General Manager, Converting Operations -- Industrial Packaging
Division from February 1993 to April 1994. Prior to that, he was President and
Chief Executive Officer of Sequoia Pacific Systems, an affiliate of JS Group,
which he joined in August 1989.

MICHAEL F. HARRINGTON, born August 6, 1940, has been Vice
President -- Employee Relations since January 1992. Prior to joining the
Company, he was Corporate Director of Labor Relations/Safety and Health with
Boise Cascade Corporation for more than 5 years.

CHARLES A. HINRICHS, born December 3, 1953, has been Vice President and
Treasurer since April 1995. Prior to joining the Company, he was employed by The
Boatmen's National Bank of St. Louis for 13 years, where most recently he was
Senior Vice President and Chief Credit Officer.

CRAIG A. HUNT, born May 31, 1961, has been Vice President, Secretary and
General Counsel since November 1998. Prior to that he was Senior Counsel and
Assistant Secretary from January 1993 until November 1998. He joined the Company
in 1990 as Staff Counsel.

PAUL K. KAUFMANN, born May 11, 1954, was named Vice President and Corporate
Controller in July 1998. He was Corporate Controller from March 1998 to July
1998. Prior to that he was Division Controller for the Containerboard Mill
Division from November 1993 until March 1998. Prior to that, he held other
accounting positions since joining the Company in 1990.

JAY D. LAMB, born September 25, 1947, was appointed Vice President and
General Manager of Smurfit Newsprint Corporation ('SNC') in May 1996. He was
Director of Operations of SNC from May 1995 to May 1996. Prior to that, he held
various accounting and managerial positions with SNC since joining the Company
in 1970.

LESLIE T. LEDERER, born July 20, 1948, has been Vice President -- Strategic
Investment Dispositions since November 1998. He was Vice President, Secretary
and General Counsel of Stone from 1987 to November 1998.

F. SCOTT MACFARLANE, born January 17, 1946, has been Vice President and
General Manager -- Folding Carton and Boxboard Mill Division since November
1995. He served as Vice President and General Manager of the Folding Carton
Division from December 1993 to November 1995. Prior to that, he held various
managerial positions within the Folding Carton Division since joining the
Company in 1971.

TIMOTHY MCKENNA, born March 25, 1948, was named Vice President -- Investor
Relations and Communications in July 1997. He joined the Company in October 1995
as Director of Investor Relations and Communications. Prior to joining the
Company, he was employed by Union Camp Corporation for 14 years, where most
recently he was Director of Investor Relations.

PATRICK J. MOORE, born September 7, 1954, was named Vice President and
Chief Financial Officer of the Company in October 1996. He was Vice President
and General Manager -- Industrial Packaging Division from December 1994 to
October 1996. He served as Vice President and Treasurer from February 1993 to
December 1994 and was Treasurer from October 1990 to February 1993. He joined
the Company in 1987 as Assistant Treasurer.

THOMAS A. PAGANO, born January 21, 1947, was named Vice
President -- Planning in May 1996. He was Director of Corporate Planning from
September 1995 to May 1996. Prior to that, Mr. Pagano held

various managerial positions within the Company's Container Division since
joining the Company in 1971, including Area Regional General Manager from
January 1994 to September 1995.

JOHN M. RICONOSCIUTO, born September 4, 1952, has been Vice President and
General Manager -- Bag Packaging Division since November 1998. He was Vice
President and General Manager -- Industrial Bag and Specialty Packaging Division
of Stone from January 1997 to November 1998. From July 1995 to January 1997, he
was Vice President and General Manager of the Multiwall Group of Stone, and
prior to that, Vice President of Marketing and Specialty Packaging of the
Industrial and Specialty Packaging Division of Stone since 1993.

DAVID C. STEVENS, born August 11, 1934, has been Vice President and General
Manager -- Smurfit Recycling Company since January 1993. Prior to that, he was
General Sales Manager for the Reclamation Division since joining the Company in
1987.

WILLIAM N. WANDMACHER, born September 12, 1942, has been Vice President and
General Manager -- Containerboard Mill Division since January 1993. He served as
Division Vice President -- Medium Mills from October 1986 to January 1993. Prior
to that, he held various positions in production, plant management and planning
since joining the Company in 1966.

BOARD AND BOARD COMMITTEE MEETINGS,
COMMITTEE FUNCTIONS AND COMPOSITION

Each non-employee director receives as compensation for serving on the SSCC
Board an annual fee of $35,000, travel expenses in connection with attendance at
Board meetings, and also received a grant of options to purchase 3,000 shares of
Common Stock on December 29, 1998. Directors who are employees of the Company do
not receive any additional compensation by reason of their membership on, or
attendance at, meetings of the Board. The JSC Board held five meetings in 1998,
and the SSCC Board held one meeting in 1998.

The SSCC Board has appointed an Audit Committee, a Compensation Committee
and certain other committees. The number of meetings held by these committees,
their functions and the members of the Board serving on such committees are set
forth below. Committee members do not receive additional compensation for
committee service or attendance at committee meetings.

The Audit Committee is responsible for making recommendations to the Board
of Directors regarding the independent auditors to be appointed for the Company,
meeting with the independent auditors, the director of internal audit and other
corporate officers to review matters relating to corporate financial reporting
and accounting procedures and policies, adequacy of financial, accounting and
operating controls and the scope of the audits of the independent auditors and
internal auditors and reviewing and reporting on the results of such audits to
the Board of Directors. The members of the Audit Committee of the SSCC Board are
Messrs. Giesen, O'Connor and Reynolds. The Audit Committee of the JSC Board held
two meetings during 1998. The Audit Committee of the SSCC Board did not meet in
1998.

The Compensation Committee is responsible for overseeing the administration
of executive compensation programs and determining the compensation of the
executive officers, including the Chairman, Chief Executive Officer, Chief
Financial Officer, and certain other senior executives. The members of the
Compensation Committee of the SSCC Board are Messrs. Goldberg, Pearlman and
Reynolds. The Compensation Committees of the JSC Board and the SSCC Board each
held one meeting during 1998.

The SSCC Board maintains an Independent Committee to evaluate and recommend
certain transactions between the Company and JS Group and its subsidiaries,
which consists of Messrs. Goldberg, O'Connor, Pearlman and Reynolds. The SSCC
Board also maintains two Supervisory Committees to monitor compliance by JS
Group and MSLEF, respectively, with the terms of the Standstill Agreement
between such parties and the Company. The JSG Supervisory Committee, which
monitors compliance by JS Group, consists of Messrs. Giesen, Goldberg and
Pearlman. The MSLEF Supervisory Committee, which is to monitor compliance by
MSLEF, consists of all directors other than Mr. Goldberg. Neither of the
Supervisory Committees nor the Independent Committee held any meetings in 1998.
See 'Certain Transactions -- Standstill Agreement.'

PRINCIPAL STOCKHOLDERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The table below sets forth certain information regarding the beneficial
ownership of the Common Stock by each person who is known to the Company to be
the beneficial owner of more than 5% of the Company's voting stock as of March
29, 1999. Except as set forth below, the stockholders named below have sole
voting and investment power with respect to all shares of Common Stock shown as
being beneficially owned by them.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL COMMON
BENEFICIAL OWNER OWNERSHIP STOCK
- - ------------------------------------------------------------------------------ ---------- ----------

<S> <C> <C>
SIBV ......................................................................... 71,638,462 33.3%
Smurfit International B.V.
Strawinskylaan 2001
Amsterdam 1077ZZ, The Netherlands
MSLEF II Associated Entities ................................................. 15,820,101 7.4%
c/o Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, NY 10020
Wellington Management Company, LLP ........................................... 15,314,050 7.1%
75 State Street
Boston, MA 02109
Vanguard Windsor Funds ....................................................... 14,816,350 6.9%
P.O. Box 2600
Valley Forge, PA 19482-2600
J.P. Morgan & Co., Incorporated .............................................. 10,798,802 5.0%
60 Wall Street
New York, NY 10260
</TABLE>

SECURITY OWNERSHIP OF MANAGEMENT

The table below sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 1, 1999 for (i) each of the nominees
for director, (ii) each of the Named Executive Officers (as defined below), and
(iii) all directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
-----------------------------
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL COMMON
BENEFICIAL OWNER OWNERSHIP(a)(b) STOCK(c)
- - -------------------------------------------------------------------------- --------------- ----------

<S> <C> <C>
Michael W. J. Smurfit(d).................................................. 1,059,246 0.5%
Ray M. Curran............................................................. 90,000 *
Roger W. Stone............................................................ 2,075,304 1.0%
Richard W. Graham......................................................... 842,016 0.4%
Richard A. Giesen......................................................... 15,163 *
Alan E. Goldberg(e)....................................................... 0 *
James J. O'Connor......................................................... 7,000 *
Jerry K. Pearlman......................................................... 7,694 *
Thomas A. Reynolds, III................................................... 0 *
Dermot F. Smurfit(d)...................................................... 91,000 *
Patrick J. Moore.......................................................... 336,016 0.2%
F. Scott Macfarlane....................................................... 159,654 0.1%
William N. Wandmacher..................................................... 155,531 0.1%
James P. Davis............................................................ 157,440 0.1%
All directors and executive officers as a group (26 persons)(d)(e)........ 5,998,170 2.8%
</TABLE>

- - ------------

(a) Shares shown as beneficially owned include the number of shares of Common
Stock that directors and executive officers have the right to acquire
within 60 days after March 1, 1999 pursuant to exercisable options under
the stock option plans maintained by the Company and Stone.

(b) Shares shown include the number of shares of Common Stock held in the
Savings Plan maintained by the Company and Stone as of December 31, 1998,
which the executive officers have the right to vote.

(c) Based upon a total of 215,027,312 shares of Common Stock issued and
outstanding as of March 1, 1999. Percentages less than 0.1% are indicated
by *.

(d) Excludes shares of Common Stock owned by JS Group. Dr. M.W.J. Smurfit and
Dr. D.F Smurfit own 7.4% and 0.5%, respectively, of the outstanding shares
of JS Group. Dr. M.W.J. Smurfit and Dr. D. F. Smurfit are officers and
directors of JS Group.

(e) Excludes shares of Common Stock owned by MSLEF II and related entities.

EXECUTIVE COMPENSATION

The following table sets forth the cash and noncash compensation awarded to
or earned by each of the executive officers of the Company named below (the
'Named Executive Officers') for each of the last three fiscal years.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ---------- --------
------------------------------------------- SECURITIES LTIP ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING PAYOUTS COMPENSATION
POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS ($)(a) ($)(b)
- - ---------------------- ---- ---------- -------- --------------- ---------- -------- ------------

<S> <C> <C> <C> <C> <C> <C> <C>
Michael W. J. 1998 $ 834,000 $185,248 $ 0 0 $ 0 $ 32,691
Smurfit ............ 1997 834,000 0 0 0 0 26,757
Chairman of the 1996 834,000 0 30,000 0 0 18,611
Board

Roger W. Stone(c) .... 1998 106,250 0 0 297,000 0 0
Former President and 1997 0 0 0 0 0 0
Chief Executive 1996 0 0 0 0 0 0
Officer

Richard W. 1998 1,033,008 232,502 14,281 0 0 39,271
Graham(d) .......... 1997 900,000 0 145,494 300,000 676,611 26,768
Former President and 1996 581,833 0 3,975 390,000 0 16,712
Chief Executive
Officer

Patrick J. Moore ..... 1998 350,016 78,779 9,489 325,000 0 7,736
Vice President and 1997 305,000 0 70,333 200,000 337,671 6,987
Chief Financial 1996 230,000 104,218 5,875 57,000 0 6,566
Officer

F. Scott 1998 280,008 131,533 2,289 75,000 0 9,007
Macfarlane ......... 1997 264,000 42,054 5,047 60,000 0 8,370
Vice President and 1996 255,000 14,879 5,846 62,000 0 8,132
General
Manager -- Folding
Carton and Boxboard
Mill Division

William N. 1998 291,000 99,778 1,178 75,000 0 12,767
Wandmacher ......... 1997 279,000 0 532 54,000 498,674 11,616
Vice President and 1996 265,000 0 1,234 0 0 10,925
General
Manager -- Containerboard
Mill Division

James P. Davis(e) .... 1998 256,672 180,767 851 75,000 0 8,559
Vice President and 1997 210,000 0 3,915 100,000 0 8,692
Area 1996 185,000 21,960 99,548 40,000 0 8,512
Manager -- Container
Division
</TABLE>

- - ------------

(a) Reflects amounts awarded under JSC's 1994 Long-Term Incentive Plan. Amounts
were either payable in cash or deferred into the Company's Deferred
Compensation Plan at the election of the Named Executive Officer.

(b) Amounts shown under 'All Other Compensation' for 1998 include a $4,000
contribution to Stone's Savings Plan for Mr. Stone and a $5,000
contribution to JSC's Savings Plan for each of the other Named Executive
Officers (other than Dr. Smurfit) and Company-paid split-dollar term life
insurance premiums for Dr. Smurfit ($25,771) and Messrs. Graham ($34,271),
Moore ($2,736), Macfarlane ($4,007), Wandmacher ($7,767) and Davis
($1,912). Mr. Davis also received a moving allowance of $1,647. Dr. Smurfit
also had reportable (above 120% of the applicable federal long-term rate)
earnings equal to $6,920 credited to his account under the Company's
Deferred Compensation Capital Enhancement Plan.

(c) Roger W. Stone began serving as President and Chief Executive Officer upon
completion of the Merger on November 18, 1998 and retired from the Company
as of March 31, 1999. Ray M. Curran was named to succeed Mr. Stone as
President and Chief Executive Officer of the Company as of April 1, 1999.
Upon his retirement, Mr. Stone received a payment of $5,833,747 under his
Severance Agreement with Stone.

(d) Richard W. Graham served as President and Chief Executive Officer of JSC
until November 18, 1998. Roger W. Stone was named to succeed Mr. Graham.
Mr. Graham continued to serve the Company during its transition period
until his retirement on March 31, 1999, at which time he received a payment
of $3,838,396 under his Severance Agreement with JSC.

(footnotes continued on next page)

(footnotes continued from previous page)

(e) James P. Davis served as Vice President and General Manager -- Container
Division of JSC until November 18, 1998.

Option Grants in Last Fiscal Year -- The following table provides
information concerning stock options granted to the Named Executive Officers
during 1998.

OPTION GRANTS IN 1998

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ANNUAL RATES OF
NUMBER OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM ($)(b)
OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION -----------------------
NAME GRANTED IN FISCAL YEAR(a) ($ PER SHARE) DATE 5% 10%
- - ------------------------------------------------------- ----------------- ------------- ---------- ---------- ----------

<S> <C> <C> <C> <C> <C> <C>
Michael W. J. Smurfit............ 0 N/A N/A N/A N/A N/A
Roger W. Stone................... 297,000 18.5% $ 11.87 1/19/08 $2,217,099 $5,618,564
Richard W. Graham................ 0 N/A N/A N/A N/A N/A
Patrick J. Moore................. 325,000 6.9% 12.81 12/29/08 2,618,757 6,636,443
F. Scott Macfarlane.............. 75,000 1.6% 12.81 12/29/08 604,328 1,531,487
William N. Wandmacher............ 75,000 1.6% 12.81 12/29/08 604,328 1,531,487
James P. Davis................... 75,000 1.6% 12.81 12/29/08 604,328 1,531,487
</TABLE>

- - ------------

(a) Reflects percentage of total options granted to employees in 1998 under
each of Stone's and SSCC's option plans, as applicable.

(b) The dollar amounts under these columns are the result of calculations at 5%
and 10% rates, as set by the Securities and Exchange Commission's executive
compensation disclosure rules. Actual gains, if any, on stock option
exercises depend on future performance of the Common Stock and overall
stock market conditions. No assurance can be made that the amounts
reflected in these columns will be achieved.

As of December 31, 1998, there were approximately 36,500,000 shares of
Common Stock reserved for issuance under all of the stock-based incentive plans
of the Company and Stone, including approximately 4,500,000 shares available for
future grants.

Option Exercises and Year-End Value Table -- The following table summarizes
the exercise of options and the value of options held by the Named Executive
Officers as of the end of 1998.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUE

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT JANUARY 1, 1999(#) AT JANUARY 1, 1999($)(a)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ----------------------------------------------------------- -------- ------------------------- -------------------------

<S> <C> <C> <C> <C>
Michael W. J. Smurfit................ 0 N/A 1,026,000 / 0 $5,963,625 / $ 0
Roger W. Stone....................... 0 N/A 1,056,035 / 0 2,280,351 / 0
Richard W. Graham.................... 0 N/A 800,000 / 0 2,461,875 / 0
Patrick J. Moore..................... 0 N/A 325,000 / 325,000 1,035,563 / 975,000
F. Scott Macfarlane.................. 0 N/A 150,000 / 75,000 589,625 / 225,000
William N. Wandmacher................ 0 N/A 150,000 / 75,000 674,063 / 225,000
James P. Davis....................... 0 N/A 150,000 / 75,000 496,875 / 225,000
</TABLE>

- - ------------

(a) The closing market value of the Common Stock on December 31, 1998 was
$15.81 per share. On that date, the exercise prices per share for
outstanding options held by the Named Executive Officers ranged from $10.00
to $19.82.

PENSION PLANS

The Company and its subsidiaries maintain a non-contributory pension plan
for salaried employees (the 'Pension Plan') and a non-contributory supplemental
income pension plan (the 'SIP') for certain key executive officers, under which
benefits are determined by final average earnings and years of credited service
and are offset by a certain portion of social security benefits. For purposes of
the Pension Plan, final average earnings equals the participant's average
earnings for the five consecutive highest-paid calendar years of the
participant's last 10 years of service, including overtime and certain bonuses,
but excluding bonus payments under the Management Incentive Plan, deferred or
acquisition bonuses, fringe benefits and certain other compensation. For
purposes of SIP, final average earnings equals the participant's average
earnings, including bonuses under the Management Incentive Plan, for the five
consecutive highest-paid calendar years of the participant's last 10 years of
service. SIP recognizes all years of credited service.

The pension benefits for the Named Executive Officers can be calculated
pursuant to the following table, which shows the total estimated single life
annuity payments (prior to adjustment for Social Security) that would be payable
to the Named Executive Officers participating in the Pension Plan and the SIP
after various years of service at selected compensation levels. Obligations
under the SIP are an unsecured liability of the Company.

<TABLE>
<CAPTION>
REMUNERATION EACH YEAR
- - ----------------------------- IN EXCESS OF
FINAL AVERAGE EARNINGS 5 YEARS 10 YEARS 15 YEARS 20 YEARS 20 YEARS
- - ----------------------------- -------- -------- -------- ---------- ------------

- - ------------

* An additional 1% of earnings is accrued for each year in excess of 20 years.

Dr. Smurfit and Messrs. Graham, Moore, Macfarlane, Wandmacher and Davis
participate in SIP and have 43, 40, 12, 27, 33 and 21 years of credited service,
respectively. Current average earnings as of December 31, 1998, for each of the
Named Executive Officers was as follows: Dr. Smurfit ($1,123,110); Mr. Graham
($790,830); Mr. Moore ($307,260); Mr. Macfarlane ($291,196); Mr. Wandmacher
($314,262) and Mr. Davis ($246,452).

SEVERANCE AGREEMENTS

Mr. Stone was a party to a change in control agreement with Stone at the
time of the Merger. Mr. Stone's agreement provided for a lump sum payment equal
to three times his salary and bonus, plus the payment of certain fringe benefits
as well as payments providing for reimbursement of golden parachute excise
taxes. Mr. Graham was a party to a change of control agreement with JSC at the
time of the Merger that provided for similar payments. Upon their retirement on
March 31, 1999, Mr. Stone and Mr. Graham received payments of $5,833,747 and
$3,838,396, respectively, under such agreements.

Each of the other Named Executive Officers (other than Dr. Smurfit) are
parties to Employment Security Agreements (the 'Severance Agreements'). Among
other things, the Severance Agreements provide for a lump sum payment based on a
specified multiple of salary and bonus plus the payment of certain circumstances
within two years after a 'change in control' (as such term is defined in the
Severance Agreement). The Merger constituted a change in control under the
Severance Agreement.

The maximum JSC Severance Benefit, including the value of pension and
welfare benefits, fringe benefits and perquisites payable under the Severance
Agreements, which would be payable under the Severance Agreements to each of the
Named Executive Officers (other than Messrs. Stone, Graham and Dr. Smurfit) in
the event of termination of employment by the Company without 'cause' or
resignation by the executive officer for 'good reason' is as follows:

<TABLE>
<CAPTION>
MAXIMUM
AGGREGATE JSC
INDIVIDUAL SEVERANCE BENEFIT
- - ------------------------------------------------------------------------------------- -----------------

<S> <C>
Patrick J. Moore, Vice President and CFO............................................. $ 1,369,481
F. Scott Macfarlane, Vice President and General Manager -- Folding Carton and
Boxboard Mill Division............................................................. 1,095,821
William N. Wandmacher, Vice President and General Manager -- Containerboard Mill
Division........................................................................... 845,130
James P. Davis, Vice President and Area Manager -- Container Division................ 824,717
</TABLE>

REPORT OF THE COMPENSATION COMMITTEE

Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that might incorporate this Proxy Statement or future
filings with the Securities and Exchange Commission, in whole or in part, the
following report and the Performance Graph shall not be deemed to be
incorporated by reference into any such filings.

The Compensation Committee (the 'Committee') consists of three members of
the Company's Board of Directors who are not employees of the Company and who
have no interlocking relationships requiring disclosure. This committee oversees
the administration of executive compensation programs and determines the
compensation of the executive officers, including the Chairman, Chief Executive
Officer, Chief Financial Officer and certain other executives.

The goals of the Company's executive compensation program are: to attract,
retain and motivate qualified executives with outstanding abilities; to tie a
significant portion of the overall compensation of executive officers to the
Company's profitability; and to seek to enhance the Company's profitability by
aligning the interests of executive officers with those of the Company's
stockholders.

In determining base salaries for each of the Named Executive Officers, as
well as other executive officers, consideration is given to national and local
salary surveys and the results of an informal, internal review of salaries paid
to officers with comparable qualifications, experience and responsibilities at
other companies of similar size. The Committee retained an outside management
consulting firm in 1998 to provide such comparable information.

The Company's executive officers, as well as other key employees of the
Company, participate in an annual management incentive plan (the 'MIP'), with
awards based upon the attainment of pre-established individual goals and profit
targets for the Company.

Following the Merger, the Committee believed it would be desirable to grant
awards under the Company's 1998 Long-Term Incentive Plan (the 'Long-Term Plan')
to executive officers, including the officers listed above. In determining the
amount and nature of awards under the Long-Term Plan to executive officers, the
Committee took into account the respective scope of accountability, strategic
and operational goals, and anticipated performance requirements and
contributions of each executive officer. The Committee believes that past grants
of stock options have successfully focused the Company's senior management on
building profitability and shareholder value.

Section 162(m) of the Internal Revenue Code of 1986 generally limits the
Company's federal tax deductibility to $1 million for compensation (other than
performance-based compensation) paid in any year to the Company's Chief
Executive Officer and each of its four other highest paid executive officers.
The Committee will generally seek to qualify compensation paid to its executive
officers for deductibility under Section 162(m). The Committee will, however,
retain the flexibility to authorize payments of compensation that may not
qualify for deductibility if, in the Committee's judgment, it is in the
Company's interest to do so.

CEO COMPENSATION

Prior to the Merger, the JSC Board's Appointment Committee established the
compensation of the Chief Executive Officer. Mr. Graham's salary was based on an
informal review of salaries paid to officers with comparable qualifications,
experience and responsibilities at other companies of similar size. Based on
this assessment, Mr. Graham was awarded a base salary for 1998 of $1,033,000.
Pursuant to the terms of the MIP, he also received a performance based incentive
award for 1998 of $232,502.

The Compensation Committee undertakes the responsibility for reviewing the
salary level and the overall compensation of the Chief Executive Officer based
upon a periodic review of peer group companies, the performance of the Company
in relation to its peers and the performance of the individual. The evaluation
recognizes the major role of the Chief Executive Officer in strategic
initiatives to be accomplished by the Company, including cost savings measures
instituted under the tenure of the Chief Executive Officer; growth in the market
price for the Company's securities; and favorable corporate developments for
increased sales volume. Mr. Stone was awarded an annual base salary of $850,000
and was awarded 250,000 stock options under the Long-Term Plan, which were
cancelled upon the announcement of his retirement.

Prior to Mr. Stone's retirement, Mr. Curran was awarded by the Compensation
Committee an annual base salary of $1,000,000 for 1998 and was awarded 910,000
stock options under the Long-Term Plan based on his significant role in the
Company's strategic initiatives including cost savings measures and
divestitures. His salary and options were not adjusted as a result of his
promotion to President and Chief Executive Officer.

Submitted by the Compensation Committee of the Company's Board of
Directors.

COMPENSATION COMMITTEE
----------------------
Alan E. Goldberg
Jerry K. Pearlman
Thomas A. Reynolds, III

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Compensation Committee of the SSCC Board or the
Compensation Committee or the Appointment Committee of the JSC Board is
currently or was, during the year ended December 31, 1998, an officer, former
officer or employee of the Company or any of its subsidiaries. No executive
officer of the Company served as a member of (i) the compensation committee of
another entity in which one of the executive officers of such entity served on
the Company's Compensation Committee, (ii) the Board of Directors of another
entity in which one of the executive officers of such entity served on the
Company's Compensation Committee, or (iii) the compensation committee of another
entity in which one of the executive officers of such entity served as a member
of the Company's Board of Directors, during the year ended December 31, 1998.

STOCK PERFORMANCE GRAPH

The graph below compares the cumulative total stockholder return on the
Common Stock, the S&P 500 Index and an index of a peer group of paper companies
for the period from May 4, 1994, the date on which the Common Stock commenced
trading on the Nasdaq Stock Market, until December 31, 1998. The peer group
index comprises the following 11 medium to large sized companies whose primary
business is the manufacture and sale of paper products and packaging: Chesapeake
Corporation, Gaylord Container Corporation, Georgia Pacific Corporation,
International Paper, Rock-Tenn Company, Sonoco Products Company, Stone Container
Corporation (included through November 18, 1998), Temple-Inland Inc., Union Camp
Corporation, Weyerhaeuser Company and Willamette Industries, Inc. The graph
assumes the value of an investment in the Common Stock and each index was
$100.00 at May 4, 1994 and that all dividends were reinvested.

CUMULATIVE TOTAL RETURN
(FROM MAY 4, 1994 TO DECEMBER 31, 1998)

[PERFORMANCE GRAPH]

<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
MAY 4, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1994 1995 1996 1997 1998
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jefferson Smurfit Corporation $100.00 $ 130.77 $ 73.08 $ 123.55 $ 108.65 $ 121.64
- - ----------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index 100.00 105.91 145.71 179.16 238.94 307.22
- - ----------------------------------------------------------------------------------------------------------------------------------
Peer Group 100.00 109.21 116.41 129.78 141.68 152.81
- - ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

CERTAIN TRANSACTIONS

TRANSACTIONS WITH JS GROUP

Net sales by the Company to JS Group, its subsidiaries and its affiliates
were $40 million for the year ended December 31, 1998. Net sales by JS Group,
its subsidiaries and its affiliates to the Company were $54 million for the year
ended December 31, 1998. Product sales to and purchases from JS Group, its
subsidiaries and its affiliates were consummated on terms generally similar to
those prevailing with unrelated parties.

The Company provides certain subsidiaries and affiliates of JS Group with
general management and elective management services under separate management
services agreements. The elective services provided include, but are not limited
to, management information services, accounting, tax and internal auditing
services, financial management and treasury services, manufacturing and
engineering services, research and development services, employee benefit plan
and management services, purchasing services, transportation services and
marketing services. In consideration of general management services, the Company
is paid a negotiated fee, which amounted to approximately $0.7 million for 1998.
In consideration for elective services provided in 1998, the Company received
reimbursements of approximately $2.5 million in 1998. In addition, the Company
paid JS Group and its affiliates approximately $0.4 million in 1998 for certain
other services.

On November 18, 1998, Jefferson Smurfit Corporation (U.S.) ('JSC (U.S.)')
purchased the No. 2 paperboard machine (the 'Machine') located in JSC (U.S.)'s
Fernandina Beach, Florida paperboard mill (the 'Fernandina Mill') for $175
million from Smurfit Packaging Corporation, a subsidiary of SIBV ('SPC'). Until
that date JSC (U.S.) and SPC were parties to an operating agreement whereby JSC
(U.S.) operated and managed the Machine. JSC (U.S.) was compensated by SPC for
its direct production and manufacturing costs attributable to the Machine and a
portion of the indirect manufacturing, selling and administrative costs incurred
by JSC (U.S.) for the entire Fernandina Mill. The compensation was determined by
applying various formulae and agreed upon adjustments to the subject costs. The
amounts reimbursed to JSC (U.S.) totaled $50 million in 1998.

BOARD MEMBERSHIP

The Bylaws provide that for so long as MSLEF owns at least 1,000,000 shares
of Common Stock, adjusted for any stock dividend, stock split or similar change,
the Board will continue to nominate for election one designee of MSLEF, who
shall be entitled to serve as Chairman of the Compensation Committee, and until
November 18, 2003, shall also be entitled to serve on the Independent Committee.
Pursuant to the Voting Agreement, SIBV has agreed to vote all of its shares of
Common Stock in favor of MSLEF's designee for so long as MSLEF has the right to
nominate such individual.

STANDSTILL AGREEMENT

JS Group, MSLEF and the Company are parties to a Standstill Agreement,
dated as of May 10, 1998, which provides, among other things, that prior to
November 18, 2003: (a) JS Group is prohibited from directly or indirectly
acquiring any voting securities if, after giving effect to such acquisition, it
would beneficially own more than 40% of the total voting power of the
outstanding securities of the Company; (b) MSLEF is prohibited from acquiring
any voting securities of the Company (except pursuant to a stock split, stock
dividend, rights offering, recapitalization, reclassification or similar
transaction); and (c) JS Group is prohibited from soliciting, seeking, to
effect, negotiating with or providing any information to any other party with
respect to, or making any statement or proposal (except for any statement or
proposal in response to an acquisition or business combination proposal by a
party other than JS Group or its subsidiaries), whether written or oral, to the
Board of Directors of the Company 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 JS Group or its subsidiaries) whatsoever with respect to, any form of
acquisition or business combination transaction involving the Company 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 the Company.

REGISTRATION RIGHTS AGREEMENT

In connection with the Merger, the Company, SIBV, MSLEF and certain other
stockholders of the Company associated with MSLEF entered into a Registration
Rights Agreement dated as of May 10, 1998 (the 'Registration Rights Agreement')
that grants to SIBV, MSLEF and such other stockholders (collectively, the
'Holders') certain rights to require that the Company register shares of Common
Stock acquired by them prior to May 10, 1998 or issued thereafter in respect of
such shares (collectively, the 'Registrable Securities'). The Registration
Rights Agreement replaced a then existing registration rights agreement.

Under the Registration Rights Agreement, and subject to certain limitations
contained therein, each of SIBV and MSLEF is entitled to two demand
registrations. Subject to certain exceptions specified therein, the Registration
Rights Agreement entitles each of SIBV, MSLEF and the Company to include shares
for its own account or, in the case of the Company, for the account of any
holders of Common Stock other than the Holders, in the registrations initiated
by the other parties.

In connection with any demand registration or piggyback registration, the
Company will be responsible for all expenses incurred in connection with such
registration, except that each Holder will pay any underwriting discounts or
commissions that may be payable in connection with the sale of its Registrable
Securities. In addition, JSC will indemnify each Holder and its affiliates
against certain liabilities, including liabilities under the Securities Act of
1933, as amended, or will contribute to payments the Holders may be required to
make in respect thereof.

FEE AND EXPENSE REIMBURSEMENT LETTER

Pursuant to a letter dated May 10, 1998 from the Company to JS Group and
SIBV, the Company paid the fees and expenses of legal counsel to JS Group and
SIBV in connection with the transactions contemplated by the Merger Agreement.
Such fees and expenses aggregated $2.1 million. Under the terms of the letter,
the Company also paid the fees and expenses of SIBV's financial advisor totaling
$7.2 million.

RELEASE LETTER AND EXECUTIVE BONUS PROGRAM

Pursuant to a letter dated October 2, 1998 between the Company and JS
Group, the Company agreed to pay JS Group, in consideration of JS Group making
Mr. Curran available to the Company to serve as an executive officer, up to
$6,500,000 in reimbursement of amounts payable by JS Group to Mr. Curran (i) in
relation to funding certain pension payments for his benefit, and (ii) under the
terms of a long-term incentive plan maintained by JS Group. In addition, the
Company agreed to reimburse Mr. Curran for all reasonable direct costs of
relocation incurred by him in relation to his move to the United States and also
all reasonable legal and tax advisory fees incurred by him in connection with
such relocation and the purchase of a residence in Chicago.

MACMILLAN BATHURST

On September 4, 1998, Stone announced that its Canadian subsidiary, Stone
Container (Canada) Inc. ('Stone Canada') purchased a 50% partnership interest in
MacMillan-Bathurst, Inc. ('MBI'), a Canadian corrugated box company, from
MacMillan Bloedel Inc. for $185 million (Cdn.). Stone Canada, which already
owned 50% of MBI, immediately resold the newly acquired 50% interest to a
subsidiary of JS Group at the same price.

PROPOSAL 2 -- RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS

Upon the recommendation of the Company's Audit Committee, Ernst & Young
LLP, independent auditors of JSC since July 1982, have been appointed by the
Board of Directors of the Company as independent auditors for the Company for
the fiscal year ending December 31, 1999. This selection is being presented to
the stockholders for ratification. The Board of Directors of the Company
recommends a vote FOR ratification. The persons named on the enclosed proxy card
intend to vote the proxies solicited hereby FOR ratification unless specifically
directed otherwise on such proxy card.

Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and such representatives are expected to be available to respond to appropriate
questions.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's common stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
('SEC'). Executive officers, directors and greater than ten percent beneficial
owners are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during the period from January 1, 1998
through February 28, 1999 its executive officers, directors and greater than ten
percent beneficial owners complied with all Section 16(a) filing requirements
applicable to them.

OTHER MATTERS

Management does not know of any other business which may be considered at
the Annual Meeting. However, if any matters other than those referred to above
should properly come before the Annual Meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the proxies held by them
in accordance with their best judgment.

The Company will bear the costs of its solicitation of proxies. In addition
to the use of the mails, proxies may be solicited by personal interview,
telephone, telegram and telefax by the directors, officers and employees of the
Company. Arrangements will also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and the
Company may reimburse such custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred by them in connection therewith. In addition,
D.F King & Co., Inc., 77 Water Street, New York, NY 10005 has been engaged to
solicit proxies for the Company. The anticipated fees of D.F. King & Co., Inc.,
are approximately $6,500, plus certain expenses.

STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING OF STOCKHOLDERS

Stockholder proposals submitted for inclusion in the proxy statement for
the 2000 Annual Meeting of Stockholders must be received at the corporate
offices of the Company, addressed to the attention of Mr. Craig A. Hunt,
Secretary, Smurfit-Stone Container Corporation, 150 N. Michigan Avenue, Chicago,
Illinois 60601-7568 no later than February 28, 2000. The Company's By-Laws
provide that no business may be brought before an annual meeting unless
specified in the notice of meeting, brought before the meeting by or at the
direction of the Board of Directors, or otherwise brought by a stockholder who
has delivered notice to the Company (containing certain information specified in
the By-Laws) not less than 60 or more than 90 days before the anniversary date
of the immediately preceding annual meeting of stockholders. A copy of the full
text of these By-Law provisions may be obtained by writing to the Corporate
Secretary at the address indicated above.

By Order of the Board of Directors

CRAIG A. HUNT
CRAIG A. HUNT
Secretary

April 23, 1999

APPENDIX 1
PROXY CARD

COMMON STOCKHOLDERS
PROXY

SMURFIT-STONE CONTAINER CORPORATION

ANNUAL MEETING MAY 27, 1999
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY

The undersigned stockholder of Smurfit-Stone Container Corporation, a
Delaware corporation, appoints PATRICK J. MOORE and CRAIG A. HUNT, or either of
them, with full power to act alone, the true and lawful attorneys-in-fact of the
undersigned, with full power of substitution and revocation, to vote all shares
of stock of said Corporation which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held at the Renaissance St. Louis Hotel,
9801 Natural Bridge Road, St. Louis, Missouri, on May 27, 1999 at 1:00 p.m.
(C.S.T.) and at any adjournment or postponement thereof, with all the powers the
undersigned would possess if personally present, as indicated on the reverse
hereof.

(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)

FOLD AND DETACH HERE

YOUR VOTE IS IMPORTANT!

YOU CAN VOTE IN ONE OF TWO WAYS:

1. Call TOLL-FREE 1-800-840-1208 using a touch-tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.

2. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.

PLEASE VOTE

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2 BELOW.

<TABLE>

<S> <C> <C> <C>
Please mark
your votes as
indicated in
this example X

1. Election of Directors: Nominees 2. Ratification of the appointment of
Ernst & Young LLP as independent
auditors for the Company for 1999.
FOR all nominees WITHHOLD AUTHORITY 01 Ray M. Curran 06 Jerry K. Pearlman
listed to the to vote for all 02 Richard A. Giesen 07 Thomas A. Reynolds, III FOR AGAINST ABSTAIN
right (except as nominees listed 03 Alan E. Goldberg 08 Dermot F. Smurfit
marked to the to the right. 04 Richard W. Graham 09 Michael W.J. Smurfit
contrary below) 05 James J. O'Connor

On any other matter that may properly
INSTRUCTION: To withhold authority to vote for any individual nominee, write be submitted to a vote of stockholders.
that nominee's name on the line below.

- - ---------------------------------------------------------------------------- I plan to attend the meeting

This proxy will be voted "FOR" items 1
and 2 if no instruction to the contrary
is indicated. If any other business is
presented at the meeting, this proxy
will be voted in accordance with the
recommendation of management. Please
date, sign and mail this proxy in the
enclosed envelope. No postage is
required.

Dated _____________________________,1999

----------------------------------------

----------------------------------------
(YOU ARE REQUESTED TO COMPLETE, SIGN, AND RETURN THIS PROXY PROMPTLY) Please sign name or names exactly as
appearing on this proxy. If signing as a
representative, please include capacity.

</TABLE>

FOLD AND DETACH HERE

----------------------------
VOTE BY TELEPHONE

QUICK EASY IMMEDIATE
----------------------------

Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.

VOTE BY PHONE: CALL TOLL-FREE ON A TOUCH-TONE TELEPHONE 1-800-840-1208 ANYTIME.
THERE IS NO CHARGE TO YOU FOR THIS CALL.
You will be asked to enter a CONTROL NUMBER located in the lower
right of this form.

- - --------------------------------------------------------------------------------
OPTION A: To vote as the Board of Directors recommends on ALL items, press 1.
- - --------------------------------------------------------------------------------

- - --------------------------------------------------------------------------------
OPTION B: If you choose to vote on each item separately, press 0. You will
hear these instructions:

ITEM 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, press 0 and listen to the
instructions.

ITEM 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
- - --------------------------------------------------------------------------------

WHEN ASKED, YOU MUST CONFIRM YOUR VOTE BY PRESSING 1.

THANK YOU FOR VOTING.

CALL TOLL-FREE ON A TOUCH-TONE TELEPHONE
1-800-840-1208 - ANYTIME
There is NO CHARGE to you for this call.