<PAGE>
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)(4) 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:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO]
SMURFIT-STONE CONTAINER CORPORATION
150 N. Michigan Avenue
Chicago, Illinois 60601-7568
April 14, 2000
Dear Stockholder:
You are cordially invited to attend our Company's 2000 Annual Meeting of
Stockholders, which will be held on Thursday, May 18, 2000, at 1:00 p.m.
(C.S.T.) at the Sheraton Chicago Hotel & Towers, 301 East North Water Street,
Chicago, Illinois. 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. Alternatively,
you may vote either by telephone or via the Internet. Instructions for using
these convenient services 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
Chairman of the Board
<PAGE>
SMURFIT-STONE CONTAINER CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, May 18, 2000
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
Smurfit-Stone Container Corporation, a Delaware corporation (the "Company"),
will be held on Thursday, May 18, 2000, at 1:00 p.m. (C.S.T.) at the Sheraton
Chicago Hotel & Towers, 301 East North Water Street, Chicago, Illinois, 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 2001;
2. The ratification of the appointment of Ernst & Young LLP as
independent auditors of the Company for 2000; 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 21, 2000, are
entitled to notice of, and to vote at, the Annual Meeting 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 2000; 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
Secretary
Chicago, Illinois
April 14, 2000
<PAGE>
SMURFIT-STONE CONTAINER CORPORATION
--------------------------
PROXY STATEMENT
--------------------------
FOR 2000 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 2000 Annual Meeting of Stockholders to be
held on Thursday, May 18, 2000 at 1:00 p.m. (C.S.T.) at the Sheraton Chicago
Hotel & Towers, 301 East North Water Street, Chicago, Illinois (the "Annual
Meeting"). The Board of Directors of the Company urges that your proxy be
executed and returned promptly in the enclosed envelope. Alternatively,
stockholders may also deliver proxies via the Internet or by calling a toll-free
telephone number (1-800-840-1208). Each of these voting procedures 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 and via the Internet
are set forth on the enclosed proxy card.
Any stockholder submitting a proxy may revoke such proxy (including a proxy
by telephone or the Internet) 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 or the Internet) 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 21, 2000 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 21, 2000, the Company had 218,185,597 outstanding shares of
common stock, $.01 per share (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 2000, 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 (109,092,799 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 persons will not be counted toward 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 have the same effect as a vote against the proposal. Broker non-votes will
not be considered as present and 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 21, 2000, Smurfit International B.V., an entity organized
under the laws of The Netherlands ("SIBV"), and certain of its subsidiaries were
the owners of approximately 32.8% of the outstanding Common Stock and The Morgan
Stanley Leveraged Equity Fund II, L.P. ("MSLEF") and certain related entities
were the owners of approximately 7.3% of the outstanding Common Stock. SIBV and
MSLEF 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 is a Delaware limited partnership investment fund managed
by Morgan Stanley Dean Witter & Co. 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 14, 2000.
1
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of nine directors.
Each of the directors is serving a term expiring at 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 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. 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 2001 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 all have been approved unanimously by the Board of Directors
of the Company for re-election to the Board. 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 2000 Annual Meeting for Terms
Expiring in 2001
<TABLE>
<CAPTION>
Name & Year First Elected a Director Principal Occupation and Other Information
- ------------------------------------ -------------------------------------------------------------------------------
<S> <C>
Ray M. Curran Mr. Curran, born May 13, 1946, became President and Chief Executive Officer of
1998 the Company on April 1, 1999. He was Executive Vice President and Deputy
Chief Executive Officer from November 1998 until March 31, 1999. He was
Financial Director of JS Group from February 1996 to November 1998 and, prior
to that, served as Chief Financial Officer of JS Group since 1992.
Richard A. Giesen Mr. Giesen, born October 7, 1929, is Chairman of the Board and Chief Executive
1998 Officer of Continental Glass & Plastic, Inc. Mr. Giesen is a director of GATX
Corporation and Chairman and Chief Executive Officer of Continere Corporation.
He served as a director of Stone Container Corporation ("Stone") from 1974 to
1998.
Alan E. Goldberg Mr. Goldberg, born September 1, 1954, has been Chairman and Chief Executive
1989 Officer of Morgan Stanley Dean Witter ("MSDW") Private Equity since February
1998. Prior thereto, he was co-head of MSDW Private Equity. He has been a
Managing Director of Morgan Stanley & Co. Incorporated since January 1988.
Mr. Goldberg also serves as a director of Allegiance Telecom, Inc.,
Catalytica, Inc., Equant, N.V. and several private companies.
Howard E. Kilroy Mr. Kilroy, born January 30, 1936, was Chief Operations Director of JS Group
1999 from 1978 and President of JS Group from 1986 until March 1995. He was also
Senior Vice President of the Company. Mr. Kilroy retired from his executive
positions with JS Group and the Company at the end of March 1995, but remains
a director of JS Group. He previously was a director of the Company from 1989
until 1998. Mr. Kilroy is Governor (Chairman) of Bank of Ireland and a
director of CRH plc.
James J. O'Connor Mr. O'Connor, born March 15, 1937, is the former Chairman and Chief Executive
1998 Officer of Unicom Corporation and its subsidiary, Commonwealth Edison Company.
He is a director of American National Can, Corning Incorporated, The Tribune
Company, United Airlines, and various other Chicago businesses, cultural and
charitable organizations.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
Jerry K. Pearlman Mr. Pearlman, born March 27, 1939, is the retired Chairman of the Board and
1998 Chief Executive Officer of Zenith Electronics Corporation. Mr. Pearlman is a
director of Ryerson-Tull, Inc., Parsons Group L.L.C. and Nanophase, Inc. and
served as a director of Stone from 1984 to 1998.
Thomas A. Reynolds, III Mr. Reynolds, born May 12, 1952, has been a Partner since 1984 with Winston &
1997 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 a director of Westell
Technologies, Inc.
Dermot F. Smurfit Dr. Dermot F. Smurfit, born October 8, 1944, has been Joint Deputy Chairman of
1998 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 JS
Group. Dr. Dermot Smurfit is Chairman of Kraft Manufacturers Institute and a
member of the Board of the Confederation of European Paper Industries, JS
Group and ACE Ltd. He is a brother of Dr. Michael W. J. Smurfit.
Michael W. J. Smurfit Dr. Michael W. J. Smurfit, born August 7, 1936, is Chairman of the Board of
1989 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>
BOARD AND BOARD COMMITTEE MEETINGS,
COMMITTEE FUNCTIONS AND COMPOSITION
Each non-employee director receives as compensation for serving on the
Board an annual fee of $35,000 and travel expenses in connection with attendance
at Board meetings, plus a fee of $1,500 for each Board meeting attended. Non-
employee directors also receive an annual grant of 3,000 options to purchase
Common Stock at an exercise price equal to the fair market value of the Common
Stock on the date of grant. Directors who are employees of the Company or JS
Group do not receive any additional compensation by reason of their membership
on, or attendance at, meetings of the Board. The Board held five meetings in
1999.
The Board of Directors has appointed an Audit Committee, a Compensation
Committee and a Nominating Committee. The number of meetings held by these
committees, their functions and the members of the Board serving on such
committees are set forth below. Each non-employee director receives $1,500 for
each committee meeting attended that is held on a day other than a Board
meeting. The Chairman of each of the Audit Committee and the Compensation
Committee receives an additional fee of $3,000 annually.
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 Board are
Messrs. Giesen, O'Connor and Kilroy. In February 2000, Mr. Kilroy replaced Mr.
Reynolds, who served on the Audit Committee throughout 1999. The Audit
Committee held four meetings during 1999.
The Compensation Committee is responsible for administering stock-based
compensation programs (including the Company's 1998 Long-Term Incentive Plan and
the Management Incentive Plan) for all participants in such programs and
determining other compensation (including fringe benefits) of the Chairman,
Chief Executive Officer, Chief Financial Officer and certain other senior
executives. The members of the Compensation Committee are Messrs. Goldberg,
Pearlman and Reynolds. The Compensation Committee held two meetings during
1999.
In February 2000, the Board established a Nominating Committee to nominate
individuals to serve on the Board. The Nominating Committee is responsible for
reviewing and recommending to the Board criteria for Board membership and for
identifying, evaluating and proposing to the Board nominees for membership on
the Board. The Nominating Committee consists of Messrs. Reynolds,
3
<PAGE>
Goldberg, Giesen, Pearlman and O'Connor. The Nominating Committee will consider
nominees recommended by stockholders of the Company. Each stockholder must
comply with applicable requirements of the Company's bylaws and the Securities
Exchange Act of 1934, as amended, and the regulations thereunder with respect to
the nomination of, or proposal of, nominees for election as directors of the
Company.
The Board maintains an Independent Committee to evaluate certain
transactions between the Company and JS Group and its subsidiaries, which
committee consists of Messrs. Goldberg, O'Connor, Giesen and Reynolds. The
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 JS Group Supervisory Committee, which
monitors compliance by JS Group, consists of Messrs. Giesen, Goldberg and
Pearlman. The MSLEF Supervisory Committee, which monitors compliance by MSLEF,
consists of all directors other than Mr. Goldberg. Neither of the Supervisory
Committees nor the Independent Committee held any meetings in 1999. 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
21, 2000. 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.
Amount and
Nature of Percent of
Name and Address of Beneficial Common
Beneficial Owner Ownership Stock
---------------- --------- ----------
SIBV ............................................ 71,638,462 32.8%
Smurfit International B.V.
Strawinskylaan 2001
Amsterdam 1077ZZ, The Netherlands
Attention: Rokin Corporate Services B.V.
MSLEF Associated Entities ....................... 15,820,101 7.3%
c/o Morgan Stanley Dean Witter & Co.
1221 Avenue of the Americas
New York, NY 10020
Attention: Alan E. Goldberg
- ---------
4
<PAGE>
Security Ownership of Management
The table below sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 1, 2000 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
Beneficial Percent of
Ownership Common
Beneficial Owner (a)(b) Stock(c)
--------------- -------------- -------------
<S> <C> <C>
Michael W. J. Smurfit(d)............................................................. 1,112,579 0.5%
Ray M. Curran........................................................................ 696,879 0.3%
Roger W. Stone....................................................................... 1,437,753 0.7%
Richard A. Giesen.................................................................... 16,663 *
Alan E. Goldberg (e)................................................................. 0 *
Howard E. Kilroy (d)................................................................. 423,000 0.2%
James J. O'Connor.................................................................... 10,750 *
Jerry K. Pearlman.................................................................... 9,194 *
Thomas A. Reynolds, III.............................................................. 4,000 *
Dermot F. Smurfit(d)................................................................. 91,000 *
Patrick J. Moore..................................................................... 553,299 0.3%
William N. Wandmacher................................................................ 193,308 0.1%
David C. Stevens..................................................................... 91,862 *
All directors and executive officers as a group (30 persons)(d)(e)................... 5,979,032 2.7%
</TABLE>
- ---------
(a) Shares shown as beneficially owned include shares of Common Stock that
directors and executive officers have the right to acquire within 60 days
after March 1, 2000 pursuant to exercisable options under stock option
plans.
(b) Shares shown include shares of Common Stock held in the savings plans
maintained by the Company as of December 31, 1999 that the executive
officers have the right to vote.
(c) Based upon a total of 218,183,257 shares of Common Stock issued and
outstanding as of March 1, 2000. Percentages less than 0.1% are indicated
by an asterisk.
(d) Excludes shares of Common Stock owned by JS Group. Dr. Michael Smurfit, Dr.
Dermot Smurfit and Mr. Kilroy beneficially owned 7.4%, 0.5%, and 0.8%,
respectively, of the outstanding shares of JS Group as of March 1, 2000.
Dr. Michael Smurfit and Dr. Dermot Smurfit are officers and directors of JS
Group. Mr. Kilroy is a director of JS Group.
(e) Excludes shares of Common Stock owned by MSLEF and related entities.
5
<PAGE>
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
-----------------------------
Other Awards All Other
------
Annual Securities Payouts Compen-
-------
Annual Compensation Compensation Underlying LTIP Payouts sation
-------------------
Name and Principal Position Year Salary($) Bonus ($) ($) Options ($)(a) ($)(b)
- --------------------------- ---- --------- --------- ------------ ---------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael W. J. Smurfit (c)........ 1999 900,000 445,140 217,768 250,000 0 24,483
Chairman of the Board 1998 834,000 185,248 0 0 0 32,691
1997 834,000 0 0 0 0 26,757
Ray M. Curran (d) (f)............ 1999 1,206,252 1,274,970 4,213 0 0 5,000
President and 1998 102,567 0 0 910,000 0 0
Chief Executive Officer 1997 0 0 0 0 0 0
Roger W. Stone(d)................ 1999 212,500 0 0 0 0 6,055,064
Former President and 1998 106,250 0 0 297,000 0 0
Chief Executive Officer 1997 0 0 0 0 0 0
Patrick J. Moore (e) (f)......... 1999 761,250 573,752 0 0 0 11,257
Vice President and 1998 350,016 828,779 9,489 325,000 0 7,736
Chief Financial Officer 1997 305,000 0 70,333 200,000 337,671 6,987
William N. Wandmacher............ 1999 340,008 167,395 6,215 0 0 15,084
Vice President and General 1998 291,000 99,778 1,178 75,000 0 12,767
Manager - Containerboard 1997 279,000 0 532 54,000 498,674 11,616
Mill Division
David C. Stevens................. 1999 274,992 230,127 0 0 0 15,506
Vice President and General 1998 257,016 36,281 0 30,000 0 14,046
Manager - Reclamation 1997 238,000 131,648 0 100,000 270,048 12,276
Division
</TABLE>
- ---------
(a) Reflects amounts awarded under the Company'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 1999 include a $5,000
contribution to the Company's Savings Plan for each of the Named Executive
Officers (other than Dr. Smurfit) and Company-paid split-dollar term life
insurance premiums for Dr. Smurfit ($24,483) and Messrs. Moore ($6,257),
Wandmacher ($10,084) and Stevens ($10,506). Upon his retirement, Mr. Stone
received a payment of $5,833,747 under his severance agreement with Stone.
Mr. Stone also received $195,884 as a pension payment and $20,433 as
vacation pay.
(c) The amount shown in "Other Annual Compensation" for 1999 represents a
"gross up" payment for a portion of Dr. Smurfit's Federal and State income
tax liability.
(d) Mr. Curran was named to succeed Mr. Stone as President and Chief Executive
Officer of the Company as of April 1, 1999. Mr. Stone served as President
and Chief Executive Officer of the Company upon completion of the Company's
merger with Stone (the "Stone Merger") on November 18, 1998, and retired
from the Company as of March 31, 1999. All of Mr. Stone's restricted stock
and options were vested at the time of the Stone Merger and converted into
shares or options to acquire shares of Common Stock, adjusted to reflect
the .99 to one ratio at which shares of common stock of Stone were
exchanged into shares of Common Stock in connection with the Stone Merger.
(e) The amount under Bonus for 1998 includes a one-time special bonus of
$750,000 awarded to Mr. Moore in recognition of his significant
contributions in connection with the Stone Merger.
6
<PAGE>
(f) In addition to their awards under the MIP for 1999 ($630,670 for Mr. Curran
and $378,402 for Mr. Moore), Messrs. Curran and Moore received additional
bonuses of $644,300 and $195,350, respectively, for 1999 in recognition of
their performance in significantly exceeding the Company's objectives in
key areas such as asset divestitures, debt reduction and attainment of
synergies from the Stone merger.
Option Grants in Last Fiscal Year -- The following table provides
information concerning stock options granted to the Named Executive Officers
during 1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
Number of % of Total Potential Realizable Value
Securities Options at Annual Rates of Stock
Underlying Granted to Exercise or Price Appreciation
Options Employees in Base Price Expiration for Option Term ($)(b)
---------------------------
Name Granted Fiscal Year(a) ($ Per Share) Date 5% 10%
- --------------------------- ------- ------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Michael W. J. Smurfit (c).. 250,000 55.2% 17.19 03/03/09 2,702,282 6,848,112
Ray M. Curran.............. 0 N/A N/A N/A N/A N/A
Roger W. Stone............. 0 N/A N/A N/A N/A N/A
Patrick J. Moore........... 0 N/A N/A N/A N/A N/A
William N. Wandmacher...... 0 N/A N/A N/A N/A N/A
David C. Stevens........... 0 N/A N/A N/A N/A N/A
</TABLE>
- ---------
(a) Reflects percentage of total options granted to employees in 1999 under the
Company's 1998 Long-Term Incentive Plan (the "Long-Term Plan").
(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.
(c) Upon exercise of these options, Dr. Smurfit is also entitled to receive an
additional cash payment equal to $2.19 per option exercised.
As of December 31, 1999, there were approximately 18,317,149 shares of
Common Stock reserved for issuance under all of the stock-based incentive plans
of the Company, including approximately 3,357,000 shares available for future
grants.
Option Exercises and Year-End Value Table -- The following table
summarizes the exercise of options and the value of options held by the Named
Executive Officers as of December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired on Value at January 1, 2000(#) at January 1, 2000($)(a)
Name Exercise(#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Michael W. J. Smurfit...... 0 0 1,026,000 / 250,000 $14,879,000 / 1,828,125
Ray M. Curran.............. 0 0 393,333 / 606,667 4,850,204 / 7,090,421
Roger W. Stone............. 170,676 692,471 885,809 / 0 9,860,476 / 0
Patrick J. Moore........... 0 0 433,333 / 216,667 5,125,142 / 2,532,296
William N. Wandmacher...... 0 0 168,750 / 56,250 2,187,266 / 657,422
David C. Stevens........... 75,000 964,842 82,500 / 22,500 940,781 / 262,969
</TABLE>
- ---------
(a) The closing market value of the Common Stock on December 31, 1999 was
$24.50 per share. On that date, the exercise price per share for
outstanding options held by the Named Executive Officers ranged from $10.00
to $19.82.
7
<PAGE>
Pension Plans
Salaried Employees' Pension Plan and Supplemental Income Pension Plan
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 Company's annual management incentive
plan (the "MIP"), deferred or acquisition bonuses, fringe benefits and certain
other compensation. For purposes of the SIP, final average earnings equals the
participant's average earnings, including bonuses under the MIP, for the five
consecutive highest-paid calendar years of the participant's last 10 years of
service. The 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. Payments under
the SIP are an unsecured liability of the Company.
Each Year
in
Remuneration Excess of
------------
Final Average Earnings 5 years 10 years 15 years 20 years 20 years
---------------------- -------- -------- -------- ---------- --------
$ 200,000 $ 25,000 $ 50,000 $ 75,000 $ 100,000 *
400,000 50,000 100,000 150,000 200,000 *
600,000 75,000 150,000 225,000 300,000 *
800,000 100,000 200,000 300,000 400,000 *
1,000,000 125,000 250,000 375,000 500,000 *
1,200,000 150,000 300,000 450,000 600,000 *
1,400,000 175,000 350,000 525,000 700,000 *
1,600,000 200,000 400,000 600,000 800,000 *
1,800,000 225,000 450,000 675,000 900,000 *
2,000,000 250,000 500,000 750,000 1,000,000 *
- ---------
* An additional 1% of earnings is accrued for each year in excess of 20
years.
Dr. Smurfit and Messrs. Moore, Wandmacher and Stevens participate in the
SIP and have 45, 14, 13, and 35 years of credited service, respectively. Current
average annual earnings as of December 31, 1999, for each of the Named Executive
Officers was as follows: Dr. Smurfit ($1,182,927); Mr. Moore ($505,190); Mr.
Wandmacher ($371,743) and Mr. Stevens ($354,467). Mr. Curran is not a
participant in the SIP. He has one year of credited service under the Pension
Plan with average annual earnings of $160,000.
EMPLOYMENT AGREEMENTS AND SEVERANCE AGREEMENTS
The Company has entered into agreements (the "Employment Agreements") with
Messrs. Curran and Moore effective as of April 1, 1999. The Employment
Agreements require the executives to devote substantially all of their business
time to the Company's operations, each for a term expiring on April 1, 2002,
which term is automatically extended for a one-day period for each day that
passes after April 1, 1999, unless sooner terminated by either party in
accordance with the provisions of the Employment Agreements.
The Employment Agreements provide that Messrs. Curran and Moore shall be
eligible to participate in any annual performance bonus plans, long-term
incentive plans, and/or equity-based compensation plans established or
maintained by the Company for its senior executive officers, including the MIP
and the Long-Term Plan.
The Employment Agreements provide that if the Company terminates the
executive's employment "without cause" or the executive terminates his
employment with "good reason," the Company will: (i) pay the executive the full
amount of base salary and annual bonus that the Company would have paid under
the Employment Agreement had the executive's employment continued to the end of
the employment term; (ii) continue the executive's coverage under the Company's
medical, dental, life, disability, pension, profit sharing and other executive
benefit plans through the end of the employment term; (iii) provide the
executive with certain perquisites until the end
8
<PAGE>
of the employment term, provided that these Company-provided perquisites will be
reduced to the extent the executive receives comparable perquisites without cost
during the 36 month period following his employment termination; (iv) continue
to count the period through the end of the employment term for purposes of
determining the executive's age and service with the Company with respect to (A)
eligibility, vesting and the amount of benefits under the Company's executive
benefit plans, and (B) the vesting of any outstanding stock options, restricted
stock or other equity-based compensation awards; and (v) provide outplacement
services, as elected by the executive (and with a firm elected by the
executive), not to exceed $50,000 in total.
The Employment Agreements also provide that if, within 24 months following
a "change of control" of the Company, the Company terminates the executive's
employment "without cause" or the executive terminates his employment with "good
reason," the Company will (i) pay the executive three times the executive's base
salary, as in effect on the date of his termination; (ii) three times the
highest of (A) the average annual bonus paid for the three fiscal years
immediately preceding the executive's employment termination, (B) the target
bonus for the fiscal year in which such termination of employment occurs, or (C)
the actual bonus attained for the fiscal year in which such termination occurs;
(iii) continue the executive's coverage under the Company's medical, dental,
life, disability, pension, profit sharing and other executive benefit plans for
three years following employment termination; (iv) pay the value of three years
of continued coverage under any pension, profit sharing or other retirement plan
maintained by the Company; (v) continue to provide the executive with certain
perquisites, provided that these Company-provided perquisites will be reduced to
the extent the executive receives comparable perquisites without cost during the
36 month period following his employment termination; (vi) immediately vest all
stock options, restricted stock and other equity-based awards; and (vii) pay for
outplacement services to the executive not to exceed $50,000. The Company
generally must make the payments described above within 10 days of the
executive's employment termination. If the payments and benefits described
above would be "excess parachute payments" as defined in Code Section 280G, with
the effect that the executive is liable for the payment of an excise tax, then
the Company will pay the executive an additional amount to "gross-up" the
executive for such excise tax.
The Employment Agreements for Messrs. Curran and Moore also forbid the
executives from: (i) disclosing the Company's confidential information,
inventions or developments; (ii) diverting any business opportunities or
prospects from the Company; and (iii) during their employment and for a period
of up to two years following termination of his employment, competing with any
business conducted by the Company or any of its affiliates, or soliciting any
employees, customers or suppliers of the Company, within the United States.
In general, each of the following transactions is considered a change of
control under the Employment Agreements: (a) a third party's acquisition of 20%
or more of the Common Stock; (b) a change in the majority of the Board of
Directors; (c) completing certain reorganization, merger or consolidation
transactions or a sale of all or substantially all of the Company's assets; or
(d) the complete liquidation or dissolution of the Company. The Stone Merger
did not constitute a change of control for purposes of the Employment Agreements
because they became effective subsequent to its consummation.
Each of Messrs. Wandmacher and Stevens is a party to an Employment Security
Agreement (collectively, 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 fringe benefits under
certain circumstances within two years after a "change of control" (as such term
is defined in the Severance Agreements). The Stone Merger constituted a change
of control under the Severance Agreements.
The maximum severance benefit, including the value of pension and welfare
benefits, fringe benefits and perquisites payable under the Severance
Agreements, which would have been payable under the Severance Agreements to each
of Messrs. Wandmacher and Stevens in the event of termination of employment as
of December 31, 1999 by the Company without "cause" or resignation by the
executive officer for "good reason" is $1,024,101 for Mr. Wandmacher and
$846,588 for Mr. Stevens.
Mr. Stone retired as President and Chief Executive Officer of the Company
effective as of March 31, 1999. Upon his retirement, Mr. Stone received a
payment of $5,833,477 under his severance agreement with Stone. He also
received $195,884 as a pension payment and $20,433 as vacation pay.
9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
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 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 certain executive officers, including the Chairman, Chief
Executive Officer and Chief Financial Officer.
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 the senior executives, the Committee relies
upon national and local salary surveys and informal internal salary reviews. In
determining the compensation of the Chief Executive Officer and the Chief
Financial Officer in 1999, the Committee also relied upon a study prepared by a
nationally-recognized consultant that analyzed total compensation paid to
executives with comparable qualifications, experience and responsibilities at
other companies in similar circumstances, such as companies in merger or
turnaround situations.
The Company's executive officers, as well as other key employees of the
Company, participate in the MIP, with awards based upon the attainment of pre-
established individual goals and profit targets for the Company. The Committee
established target awards of 40% of salary (based on the Company achieving 85%
of targeted profit performance) under the MIP in 1999 for each of the Chairman,
Chief Executive Officer and Chief Financial Officer.
From time to time the Committee considers the desirability of granting equity
awards to executive officers under the Long-Term Plan. In determining the amount
and nature of awards to executive officers under the Long-Term Plan, the
Committee takes into account the respective scope of accountability, strategic
and operational goals, and anticipated performance requirements and
contributions of each executive officer. In December 1998, the committee granted
stock options under the Long-Term Plan to all participants other than the
Chairman. The Committee granted 250,000 stock options to the Chairman under the
Long Term Plan in 1999, but did not grant additional awards under the Long-Term
Plan to either the Chief Executive Officer or Chief Financial Officer in 1999 in
light of the significant awards made in December 1998. The Committee believes
that past grants of stock options have successfully focused the Company's senior
management on building profitability and shareholder value.
Mr. Curran's salary as the Chief Executive Officer was based upon an analysis
prepared by a nationally-recognized consultant of total compensation paid to
executives with comparable qualifications, experience and responsibilities at
other companies in similar circumstances, such as companies in merger or
turnaround situations. Based on this assessment, Mr. Curran was awarded a base
salary of $1,275,000 per year, effective with his promotion to President and
Chief Executive Officer on April 1, 1999. Mr. Curran also received an award
under the MIP totaling $630,670 ($163,968 of which was paid in Common Stock),
and an additional bonus of $644,300 for 1999 in recognition of his performance
in significantly exceeding the Company's objectives in key areas such as asset
divestitures, debt reduction and attainment of synergies from the Stone Merger.
Mr. Stone was President and Chief Executive Officer of the Company from
November 18, 1998, the effective date of the Stone Merger, until his retirement
on March 31, 1999. Mr. Stone received a salary of $212,500 for the first three
months of 1999 until his retirement. Mr. Stone did not receive an award under
the MIP for 1999. Upon his retirement, Mr. Stone received a payment of
$5,833,477 under his severance agreement with Stone. He also received $195,884
as a pension payment and $20,433 as vacation pay.
In consideration of their substantial accomplishments and contributions to
the Company's return to profitability and enhancement of stockholder value, the
Committee determined that it was in the Company's best interest to enter into
employment agreements with Mr. Curran and Mr. Moore to incent such individuals
to remain employed by the Company. The terms of such agreements, which became
effective as of April 1, 1999, are set forth above under "Employment Agreements
and Severance Agreements."
10
<PAGE>
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.
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 Board currently is or was
during the year ended December 31, 1999, 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, 1999.
STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Common Stock, the S&P 500 Index, an index of the peer group of paper companies
used in the Company's Proxy Statement dated April 20, 1999 (the "1999 Peer
Group"), and an index of a newly defined peer group of paper companies (the
"2000 Peer Group") for the five-year period ended December 31, 1999. The 2000
Peer Group comprises the following 10 medium to large sized companies whose
primary business is the manufacture and sale of paper products and packaging:
Caraustar Industries, Inc., Gaylord Container Corporation, Georgia Pacific
Corporation, International Paper Company, Mead Corporation, Rock-Tenn Company,
Sonoco Products Company, Temple-Inland Inc., Weyerhaeuser Company and Willamette
Industries, Inc. The 2000 Peer Group does not include the following companies
that were part of the 1999 Peer Group: Stone (subsequently merged with a
subsidiary of the Company), Union Camp Corporation (subsequently acquired by
International Paper Company) and Chesapeake Corporation. Caraustar Industries,
Inc. and Mead Corporation are the only two companies included in the 2000 Peer
Group that were not part of the 1999 Peer Group. The revisions to the peer
group in 2000 were desirable, in the Company's view, in order to keep the peer
group list representative of the Company's lines of business. The graph assumes
the value of an investment in the Common Stock and each index was $100.00 at
December 31, 1994 and that all dividends were reinvested.
[PERFORMANCE GRAPH]
Cumulative Total Return
(from December 31, 1994 to December 31, 1999)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31
Company Name / Index 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
SMURFIT-STONE CONTAINER CORP 100 55.88 94.48 83.09 93.01 144.12
S&P 500 INDEX 100 137.58 169.17 225.60 290.08 351.12
2000 PEER GROUP 100 108.15 122.54 127.87 138.91 186.96
1999 PEER GROUP 100 106.60 118.84 129.74 139.92 186.47
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
CERTAIN TRANSACTIONS
Transactions with JS Group
Net sales of the Company to JS Group, its subsidiaries and its affiliates
were $45 million for the year ended December 31, 1999. Net sales of JS Group,
its subsidiaries and its affiliates to the Company were $21 million for the year
ended December 31, 1999. 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 1999.
In consideration for elective services provided in 1999, the Company received
reimbursements of approximately $2.7 million in 1999. In addition, the Company
paid JS Group and its affiliates approximately $0.9 million in 1999 for certain
other services.
Board Membership
The bylaws of the Company 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 a Voting Agreement dated as of May 10, 1998
among SIBV, MSLEF and Mr. Stone, 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. Mr. Goldberg is the MSLEF designee for the Board.
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.
Subscription Agreement
SIBV, Jefferson Smurfit Corporation (U.S.) and the Company are parties to a
Stock Subscription Agreement dated as of May 3, 1994 which provides, among other
things, SIBV with certain rights which generally allow SIBV to maintain its
percentage ownership of Common Stock in the event of public or private issuances
of Common Stock (or securities of the Company convertible into or exchangeable
for Common Stock).
Registration Rights Agreement
In connection with the Stone 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
12
<PAGE>
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, the Company 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.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
Upon the recommendation of the Company's Audit Committee, Ernst & Young
LLP, independent auditors of the Company 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, 2000. 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, 1999
through February 28, 2000, its executive officers, directors and greater than
ten percent beneficial owners complied with all Section 16(a) filing
requirements applicable to them, except that a Form 4, Statement of Changes in
Beneficial Ownership, was not filed on a timely basis with the SEC by Dr.
Michael W. J. Smurfit, the Chairman of the Board, in connection with his receipt
on March 3, 1999 of options to purchase Common Stock pursuant to the Long Term
Plan.
OTHER MATTERS
Management does not know of any other business that 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 electronic mail,
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.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
13
<PAGE>
Stockholder proposals submitted for inclusion in the proxy statement for
the 2001 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 December 15, 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 Secretary at
the address indicated above.
By Order of the Board of Directors
CRAIG A. HUNT
Secretary
April 14, 2000
14
<PAGE>
COMMON STOCKHOLDERS
PROXY
SMURFIT-STONE CONTAINER CORPORATION
Annual Meeting May 18, 2000
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 Sheraton Chicago Hotel &
Towers, 301 East North Water Street, Chicago, Illinois, on May 18, 2000 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 three 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.
or
--
2. Vote via the Internet. The Web address is http://www.eproxy.com/sscc
or
--
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
<PAGE>
<TABLE>
<S> <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 2000.
FOR all nominees WITHHOLD AUTHORITY 01 Ray M. Curran
listed to the right to vote for all 02 Richard A. Giesen FOR AGAINST ABSTAIN
(except as marked to nominees listed 03 Alan E. Goldberg [_] [_] [_]
the contrary below) to the right. 04 Howard E. Kilroy
[_] [_] 05 James J. O'Connor On any other matter that may properly be submitted
06 Jerry K. Pearlman to a vote of stockholders.
07 Thomas A. Reynolds, III
08 Dermot F. Smurfit
09 Michael W.J. Smurfit I plan to attend the meeting [_]
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the line below. 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 ____________________________________, 2000
________________________________________________
________________________________________________
Please sign name or names exactly as appearing
(YOU ARE REQUESTED TO COMPLETE, SIGN, AND RETURN THIS PROXY PROMPTLY on this proxy. If signing as a representative,
UNLESS YOU VOTE YOUR SHARES BY TELEPHONE OR THE INTERNET) please include capacity.
---- FOLD AND DETACH HERE ----
--------------------------------------------
VOTE BY TELEPHONE OR INTERNET
QUICK * * * EASY * * * IMMEDIATE
--------------------------------------------
Your telephone or Internet 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 the Control Number located in the lower right corner 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: You may make your selection at any time: To vote FOR, press 1; AGAINST, press 9;
ABSTAIN, press 0.
When asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS http://www.eproxy.com/sscc
You will need the Control Number located in the lower right corner of this form.
Easy to follow instructions will guide you through this secure Internet voting site.
THANK YOU FOR VOTING.
</TABLE>
