<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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
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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
STONE CONTAINER CORPORATION
[LOGO]
150 North Michigan Avenue
Chicago, IL 60601-7568
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 14, 1996
To the Stockholders of
Stone Container Corporation:
The Annual Meeting of Stockholders of Stone Container Corporation (the
"Company") will be held on Tuesday, May 14, 1996 on the 80th Floor, The
Mid-America Club, 200 East Randolph Drive, Chicago, Illinois, at 10:30 a.m.
(C.D.S.T.) for the following purposes:
1. To elect fourteen directors to serve until the next succeeding Annual
Meeting of Stockholders or until their respective successors are elected
and qualified; and
2. To transact such other business as may properly come before the meeting.
Even though you may now plan to attend the Annual Meeting in person, please
complete, date, sign and promptly return the enclosed Proxy in the envelope
enclosed for that purpose, which requires no postage if mailed in the United
States. If you attend the Annual Meeting and desire to withdraw your Proxy and
vote in person, you may do so.
Only stockholders of record at the close of business on April 1, 1996 will
be entitled to vote at the Annual Meeting.
By order of the Board of Directors.
LESLIE T. LEDERER,
SECRETARY
Chicago, Illinois, April 9, 1996
<PAGE>
STONE CONTAINER CORPORATION
150 N. Michigan Avenue
Chicago, Illinois 60601-7568
----------
P R O X Y S T A T E M E N T
I. VOTING AND PROXY
The Annual Meeting of Stockholders of Stone Container Corporation (the
"Company") will be held on Tuesday, May 14, 1996, pursuant to the By-Laws, for
the purposes set forth in the accompanying notice. The only matters which the
Company's management intends to present are those set forth in such notice.
Management knows of no matters which will be presented by others. Should any
other matters properly come before the Annual Meeting, it is the intention of
the persons named in the enclosed Proxy to act upon them according to their best
judgment.
The close of business on April 1, 1996 has been fixed as the record date for
determining stockholders entitled to notice of and to vote at the Annual
Meeting. On that day, the issued and outstanding voting securities of the
Company consisted of 99,150,002 shares of Common Stock, $.01 par value (the
"Common Stock"). The Company first sent this Proxy Statement and enclosed Proxy
to stockholders entitled to notice and to vote at the Annual Meeting on or about
April 9, 1996. Each stockholder has one vote for each share of Common Stock
held, except in the case of the election of directors, and the holders of a
majority of the shares of Common Stock of the Company issued and outstanding and
entitled to vote at the Annual Meeting, present in person or by proxy, will
constitute a quorum for the transaction of business.
At the Annual Meeting, fourteen directors are to be elected with each
stockholder being entitled to cumulate his or her votes. Under cumulative
voting, each stockholder entitled to vote is entitled to vote as many votes as
shall equal the number of shares of Common Stock owned multiplied by the number
of directors to be elected (14). Each stockholder may cast all of such votes for
a single candidate or distribute them among the number of director positions to
be voted for or any two or more of them as such stockholder may see fit. Except
as otherwise instructed by a stockholder, each properly executed and returned
Proxy that grants authority to vote for one or more of the nominees named below
will authorize the proxies to cumulate all votes which the stockholder is
entitled to cast and to allocate such votes among such nominees as such proxies
determine, in their sole and absolute discretion. If individuals other than the
nominees named below are nominated for director of the Company, the proxies
intend to distribute the number of votes as to which they have discretionary
authority with respect to cumulative voting in such manner as will assure the
election of all nominees named below or, if they shall have insufficient votes
for such purpose, the election of as many of such nominees as is possible.
If a quorum is present at the Annual Meeting, the fourteen candidates for
director receiving the greatest number of votes will be elected. Except as
otherwise instructed by a stockholder, each properly executed and returned Proxy
will be voted FOR the election of the nominees named below. The
1
<PAGE>
enclosed Proxy permits each stockholder to withhold authority to vote for one or
more of such nominees, but withholding authority to vote for a director nominee
will not prevent such nominee from being elected.
The enclosed Proxy is solicited by the Board of Directors. If the Proxy in
such form is properly executed and returned, the shares of Common Stock
represented thereby will be voted in accordance with the instructions thereon at
the Annual Meeting. Such Proxy, if given, may be revoked by the stockholder
executing it any time prior to its being voted by giving written notice of such
revocation to the Secretary of the Company or by attending the Annual Meeting
and requesting its revocation at the beginning of the Annual Meeting.
II. DIRECTORS
NOMINEES FOR DIRECTORS
Directors are to be elected to serve until the next succeeding Annual
Meeting of Stockholders or until their successors are elected and qualified. All
of the nominees except William F. Aldinger, III were elected directors at the
last Annual Meeting. Mr. Aldinger has been a director since October 2, 1995,
when he was appointed by the Board of Directors. It is intended that the Proxy,
if given, and unless otherwise specified thereon, will be voted for the persons
named below. In case any of the named nominees is not a candidate at the Annual
Meeting, an event which management does not anticipate, it is intended that the
enclosed Proxy, if given, and unless it is otherwise specified thereon, may be
voted for a substitute nominee and will be voted for the other nominees named.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON PERCENT OF
YEAR FIRST STOCK COMMON
ELECTED A BENEFICIALLY STOCK
NAME PRINCIPAL OCCUPATION DIRECTOR OWNED(C) OUTSTANDING
- ------------------------------ ---------------------------------------- ---------- ------------ --------------
<S> <C> <C> <C> <C>
William F. Aldinger, III President and Chief Executive Officer of -- 1,175 (a)
Household International, Inc.
Richard A. Giesen* ++ Chairman of the Board and Chief 1974 15,017 (a)
Executive Officer of Continental Glass
& Plastic, Inc.
James J. Glasser ++ Chairman of the Board of GATX 1986 10,500 (a)
Corporation
Jack M. Greenberg+ Vice Chairman of the Board and Chief 1995 800 (a)
Financial Officer of McDonald's
Corporation
George D. Kennedy+ Former Chairman of the Board of 1989 13,320 (a)
Mallinckrodt Group Inc.
Howard C. Miller, Jr.*+ Consultant 1981 2,366 (a)
John D. Nichols+ Chairman of the Board of Illinois Tool 1989 2,340 (a)
Works Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON PERCENT OF
YEAR FIRST STOCK COMMON
ELECTED A BENEFICIALLY STOCK
NAME PRINCIPAL OCCUPATION DIRECTOR OWNED(C) OUTSTANDING
- ------------------------------ ---------------------------------------- ---------- ------------ --------------
<S> <C> <C> <C> <C>
Jerry K. Pearlman*+ ++ Retired Chairman of the Board and Chief 1984 7,472 (a)
Executive Officer of Zenith
Electronics Corporation
Richard J. Raskin Attorney 1983 514,723 (a)(b)
Alan Stone* Consultant 1969 1,071,074 1.1%(b)
Avery J. Stone President of IDC Management Company 1969 896,715 0.9%(b)
Ira N. Stone Senior Vice President 1969 951,164 1.0%(b)
James H. Stone* President of Stone Management 1969 522,477 (a)(b)
Corporation
Roger W. Stone* Chairman of the Board, President and 1969 1,705,087 1.7%(b)
Chief Executive Officer
</TABLE>
- ------------------------
<TABLE>
<S> <C>
*Member of the Executive Committee ++Member of the Compensation Committee
+Member of the Audit Committee
</TABLE>
(a) Does not exceed one percent (1%) of the outstanding Common Stock.
(b) There is included in the common stock beneficially owned in the foregoing
table, Common Stock owned by spouses and associates, except those associates
separately listed in the table, beneficial ownership of which is disclaimed.
See footnote (b) under "Security Ownership by Management".
(c) Each person has sole voting and investment power with respect to the shares
listed. Shares are shown as of February 15, 1996.
INFORMATION AS TO DIRECTORS AND EXECUTIVE OFFICERS
The following information indicates the principal occupation and employment
for the named Directors and Executive Officers for the last five years, unless
otherwise indicated.
DIRECTORS:
WILLIAM F. ALDINGER, III, born June 25, 1947, has been President and Chief
Executive Officer of Household International, Inc., a major financial services
company since 1994. Previously, Mr. Aldinger was Vice Chairman of Wells Fargo
Bank in San Francisco from 1986 to 1994. Mr. Aldinger is a director of Household
International, Inc. and Venture Board of First Source Financial.
RICHARD A. GIESEN, born October 7, 1929, is Chairman of the Board and Chief
Executive Officer of Continental Glass & Plastic, Inc., a packaging distribution
company. Mr. Giesen is a director of GATX Corporation, Continere Corporation and
Asia House Funds.
3
<PAGE>
JAMES J. GLASSER, born June 5, 1934, is Chairman of the Board of GATX
Corporation, a leasing and financial services company. Mr. Glasser is a director
of General American Transportation Corporation, GATX Leasing Corporation, The
B.F. Goodrich Company, Harris Bankcorp, Inc., Harris Trust & Savings Bank and
Bank of Montreal.
JACK M. GREENBERG, born September 28, 1942, has been Vice Chairman of the
Board and Chief Financial Officer of McDonald's Corporation, a food service and
restaurant company, since January, 1992. Previously, Mr. Greenberg was Senior
Executive Vice President of McDonald's Corporation. Mr. Greenberg is a director
of Arthur J. Gallagher and Company and Harcourt General, Inc.
GEORGE D. KENNEDY, born May 30, 1926, is the former Chairman of the Board of
Mallinckrodt Group Inc. and a director of Illinois Tool Works Inc., Kemper
National Insurance Co., Brunswick Corporation, American National Can Corporation
and Scottsman Industries, Inc.
HOWARD C. MILLER, JR., born September 2, 1926, is a consultant in private
practice, consulting in general business matters. Mr. Miller is a director of
Automobile Protection Corporation.
JOHN D. NICHOLS, born September 20, 1930, is Chairman of the Board of
Illinois Tool Works Inc., a diversified manufacturing company. Mr. Nichols is a
director of Philip Morris Companies, Inc., Household International, Inc. and
Rockwell International Corporation.
JERRY K. PEARLMAN, born March 27, 1939, is the retired Chairman of the Board
and Chief Executive Officer of Zenith Electronics Corporation, a manufacturer of
consumer electronics and cable television products. Mr. Pearlman is a director
of American National Bank and Current Assets LLC.
RICHARD J. RASKIN, born April 4, 1945, is an attorney in private practice
with the law firm of Richard J. Raskin, Attorney at Law. See Footnote (b) under
"Security Ownership of Management".
ALAN STONE, born February 5, 1928, is a consultant to the Company since his
retirement from the Company on December 31, 1994. Prior to his retirement, Mr.
Stone was Senior Vice President of Purchasing and Transportation of the Company.
See Footnote (b) under "Security Ownership of Management".
AVERY J. STONE, born November 7, 1932, is President of IDC Management
Company, a management and investment company. See Footnote (b) under "Security
Ownership of Management".
IRA N. STONE, born February 4, 1932, Senior Vice President since 1989 is
responsible for Corporate Marketing, Communication and Public Affairs. See
Footnote (b) under "Security Ownership of Management".
JAMES H. STONE, born March 4, 1939, is President of Stone Management
Corporation, a management consulting firm (not affiliated with the Company). Mr.
Stone is a director of Fullerton Metals Company. See Footnote (b) under
"Security Ownership of Management".
ROGER W. STONE, born February 16, 1935, is Chairman of the Board, President
and Chief Executive Officer. Mr. Stone is a director of McDonald's Corporation,
Morton International, Inc., Stone-Consolidated Corporation, Option Care, Inc.,
Venepal S.A.C.A and Continere Corporation. See Footnote (b) under "Security
Ownership of Management".
4
<PAGE>
OTHER EXECUTIVE OFFICERS:
JOHN D. BENCE, born June 18, 1932, Senior Vice President, European Packaging
Operations, joined the Company in December 1988 and was elected Vice President
in March 1989 and Senior Vice President in January 1991.
THOMAS W. CADDEN, SR., born September 4, 1933, Senior Vice President and
General Manager Industrial and Retail Packaging since 1993. Previously, Mr.
Cadden was Senior Vice President and General Manager of the Corrugated Container
Division.
THOMAS P. CUTILLETTA, born July 5, 1943, Senior Vice President --
Administration and Corporate Controller, is the Company's Chief Accounting
Officer. Mr. Cutilletta was elected Senior Vice President in January 1991.
GERALD M. FREEMAN, born April 18, 1937, Senior Vice President and General
Manager, Forest Products Division since 1987, is responsible for the operations
of that division.
MATTHEW S. KAPLAN, born March 13, 1957, Senior Vice President and General
Manager, Corrugated Container Division, since June, 1993. Previously, Mr. Kaplan
was Vice President and General Manager, Retail Bag Division. Mr. Kaplan is the
son-in-law of Roger W. Stone.
RANDOLPH C. READ, born June 4, 1952, Senior Vice President and Chief
Financial and Planning Officer since January, 1996. Previously, Mr. Read was
President and Chief Executive Officer of International Capital Markets Group,
Inc. since 1990. Mr. Read is a director of Stone-Consolidated Corporation and
Venepal S.A.C.A.
HAROLD D. WRIGHT, born June 16, 1937, Senior Vice President North American
Containerboard, Paper and Pulp Division since January, 1996. Previously Mr.
Wright was Divisional Vice President of the Mill Division since September, 1988.
GORDON L. JONES, born November 7, 1949, Vice President since January, 1995
and General Manager -- Worldwide Market Pulp Sales and Export Containerboard and
Kraft Paper Sales and President of Stone Container International since June,
1993. Previously, Mr. Jones was Division Vice President of Containerboard and
Kraft Paper Marketing from January, 1991 and prior to that Division Vice
President Export Containerboard/Kraft Paper Sales from April 1, 1989.
WILLIAM J. KLAISLE, born September 13, 1941, Vice President Corporate
Development since April, 1993. Previously, Mr. Klaisle was Vice President,
Corporate Marketing and Communications.
LESLIE T. LEDERER, born July 20, 1948, Vice President, Secretary and Counsel
since 1987.
MICHAEL B. WHEELER, born February 15, 1945, Vice President since 1984 and
Treasurer and Assistant Secretary since 1981.
MEETINGS AND COMMITTEES OF DIRECTORS
During 1995, the Board of Directors met eight times. As to meetings of the
Committees of the Board, the Audit Committee met two times; the Compensation
Committee met four times and the Executive Committee did not meet. Each of the
incumbent directors attended at least 75% of the aggregate of the meetings of
the Board and the Committees of which he was a member.
5
<PAGE>
The Audit Committee of the Board meets, as necessary, to receive and review
the results of the audits of the Company's books and records performed by the
independent auditors, to review matters relating to internal auditing,
accounting policies, procedures and adjustments, and to participate in the
selection of independent auditors for the following year.
The Compensation Committee of the Board meets, as necessary, to review the
Company's programs for the development of management personnel and to consider
recommendations and proposals to be made to the Board on directors' fees and
management compensation.
The Company's By-Laws provide, in general, that any stockholder entitled to
vote in the election of directors generally may nominate one or more persons for
election as directors at a meeting of stockholders at which directors are to be
elected only if written notice of such stockholder's intent to make such
nomination has been received by the Secretary of the Company not less than 60
nor more than 90 days prior to such meeting. The By-Laws further specify the
requirements of such notice. Stockholders wishing to suggest nominees for the
Board may address their suggestions in writing to the Secretary of the Company,
Stone Container Corporation, 150 N. Michigan Avenue, Chicago, IL 60601.
The Executive Committee of the Board exercises the power and authority of
the Board of Directors as may be necessary during intervals between meetings of
the Board of Directors, subject to such limitations as are provided by law, the
Company's By-Laws or resolutions of the Board of Directors.
The members of the Audit and Compensation Committees, none of whom is an
employee of the Company, and members of the Executive Committee, are indicated
under "Nominees for Directors".
CERTAIN TRANSACTIONS
As of December 31, 1995, Sunland Sales Company, a Company controlled by Mr.
Avery Stone, a nominee for reelection to the Board of Directors, owed the
Company $1,079,006 as a result of sales by the Company of kraft paper to
Sunland.
During 1995, the Company received a management services fee of $600,000 from
Illinois Tool Works, Inc., and sold kraft paper and poly sheeting to Illinois
Tool Works, Inc. approximating $1.1 million. In addition, Illinois Tool Works,
Inc. sold materials and supplies to the Company approximating $5 million. Mr.
John Nichols is Chairman of Illinois Tool Works, Inc. and is a nominee for
reelection to the Board of Directors.
During 1995, the Company leased equipment from GATX Corporation and its
subsidiaries at an annual lease amount of approximately $2.6 million. Mr. James
Glasser is Chairman of GATX Corporation and is a nominee for reelection to the
Board of Directors.
During 1995, the Company sold to McDonald's Corporation retail bags for
approximately $3.475 million. Mr. Jack Greenberg, who is the Vice Chairman of
the Board and Chief Financial Officer of McDonald's Corporation, is a nominee
for reelection to the Board of Directors.
During 1995, and prior to Randolph C. Read becoming an executive officer of
the Company, the Company paid to Mr. Read and/or International Capital Markets
Group, Inc. (a corporation of which Mr. Read was a director, officer and
significant stockholder) fees of $385,415 for services and reimbursement of
expenses incurred in connection with such services. Also during 1995, the
Company sold to Con Pac, Inc. certain of the Company's products for $370,772 and
purchased from Con Pac products for $126,995. Mr. Read is a director of this
private corporation.
6
<PAGE>
During 1995, Mr. George Kennedy failed to file on a timely basis one report
required by Section 16(a) of the Securities Exchange Act of 1934, as amended
with respect to one purchase of the Company's Common Stock.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 15, 1996, the following persons were known to the Company to
own beneficially more than 5% of the outstanding Common Stock of the Company:
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENT OF
BENEFICIALLY COMMON STOCK
NAME AND ADDRESS OWNED(1) OUTSTANDING
- ---------------------------------------------- ----------------- --------------
<S> <C> <C>
Wellington Management Company/The Vanguard 9,470,000 9.55%
Group(2)(3)..................................
75 State Street P.O. Box 2600
Boston, MA 02109 Valley Forge,
PA 19482
Goldman, Sachs & Co........................... 8,469,912 8.40%
85 Broad Street
New York, NY 10004
Neuberger & Berman............................ 5,408,044 5.46%
605 Third Avenue
New York, NY 10158-3698
</TABLE>
- ------------------------
(1) Information with respect to beneficial ownership is based upon information
furnished by each owner.
(2) Wellington Management Company ("WMC"), in its capacity as investment
adviser, may be deemed to have beneficial ownership of these shares, which
are owned by the Vanguard/Windsor Fund. WMC reports that it has sole/shared
voting power as to no shares, and shares dispositive power as to 9,470,000
shares.
(3) Vanguard/Windsor Fund reports that it had sole voting power and shared
dispositive power with respect to the reported shares. These shares are also
included in the shares beneficially owned by Wellington Management Company,
as investment adviser to Vanguard/Windsor Fund, as explained in note (2).
7
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
As of March 1, 1996, each of the executive officers named in the Summary
Compensation Table, individually, and all directors and executive officers as a
group, beneficially owned the following shares of Common Stock of the Company:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON STOCK PERCENT OF
BENEFICIALLY COMMON STOCK
NAME OWNED OUTSTANDING
- ---------------------------------------------- ------------ ---------------
<S> <C> <C>
Arnold F. Brookstone.......................... 126,668 (a)
Thomas W. Cadden, Sr.......................... 73,855 (a)
James B. Heider............................... 25,846 (a)
Morty Rosenkranz.............................. 90,005 (a)
Roger W. Stone................................ 1,705,087 1.7%(b)
All directors and executive officers as a 11,113,645 11.2%(b)
group........................................
</TABLE>
- ------------------------
(a) Does not exceed one percent (1%) of the outstanding Common Stock.
(b) The shares of Common Stock owned by all directors and executive officers as
a group include those of Jerome H. Stone and Marvin N. Stone, each of whom
is a Founding Director and as such is, pursuant to the Company's By-Laws,
entitled to attend and participate at meetings of directors but have no
vote. Jerome H. Stone, Marvin N. Stone and Norman H. Stone (deceased) are
brothers. Alan Stone and Ira N. Stone are sons of Norman H. Stone. Avery J.
Stone and Roger W. Stone are sons of Marvin N. Stone. James H. Stone is the
son and Richard J. Raskin is the son-in-law of Jerome H. Stone. Matthew S.
Kaplan is the son-in-law of Roger W. Stone. The members of the Stone family
own an aggregate (but not as a group) of approximately 12,500,000 shares of
Common Stock (approximately 12.5% of the outstanding shares).
III. COMPENSATION
The following table sets forth the compensation paid to, as well as the
value of stock awards earned by, the Company's Chief Executive Officer and the
Company's four other most highly compensated executive officers during the past
three fiscal years.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
------------------------------ STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS ($) AWARDS(S)(1) OPTIONS
- ------------------------------- --------- -------------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Roger W. Stone 1995 $ 790,000 -- -0- 201,700
Chairman, President and 1994 730,000 -- $ 395,604 --
Chief Executive Officer 1993 730,000 -- 395,604 --
Morty Rosenkranz* 1995 461,000 -- $ 314,588(2) --
Executive Vice President 1994 420,000 -- 156,553 --
1993 410,000 -- 156,545 --
Arnold F. Brookstone * 1995 356,500 -- $ 210,808(2) --
Executive Vice President 1994 320,000 -- 104,844 --
1993 310,000 -- 113,004 --
James B. Heider** 1995 323,500 87,900 -0- 37,400
Senior Vice President 1994 285,000 -- $ 87,774 --
1993 275,000 -- 87,770 --
Thomas W. Cadden, Sr. 1995 275,500 81,050 $ 210,808(2) --
Senior Vice President 1994 250,000 -- 80,646 --
1993 244,000 -- 80,647 --
</TABLE>
- ------------------------
(1) Except as described in note (2) below, awards of shares of restricted Common
Stock made under the Long-Term Incentive Plan do not vest until the fifth
anniversary of the award. Dividends on shares of restricted stock will be
paid at the same time and at the same rate as dividends on all other shares
of the Company's Common Stock. The aggregate number and value of each named
executive's restricted stock holdings as of December 31, 1995 are as
follows: Mr. Stone, 158,153 shares, $2,273,449; Mr. Rosenkranz, 66,905
shares, $961,759; Mr. Brookstone, 45,271 shares, $650,771; Mr. Heider,
24,123 shares, $346,768 and Mr. Cadden, 37,959 shares, $545,661. Mr.
Rosenkranz and Mr. Brookstone received all of their respective restricted
shares upon their retirement in January, 1996 except for the restricted
shares awarded in 1995 as explained in footnote (2) below. Mr. Heider
forfeited his restricted shares in January, 1996.
(2) In 1995, shares of restricted stock were awarded to Mr. Rosenkranz, Mr.
Brookstone and Mr. Cadden and vesting of these shares are subject to
performance levels of the Company Common Stock over the three year period
ending December 31, 1997. Such share awards will become vested on January
23, 1998 if the average annual return to stockholders has been at least 5%
in such period which will result in 40% vesting; 7.5% in such period which
will result in 50% vesting, 10% in such period which will result in 75%
vesting, 12.5% in such period which will result in 90% vesting or 15% in
such period which will result in 100% vesting. If the returns to
stockholders are not achieved as of December 31, 1997, the stock or portions
of such stock will be forfeited at that time.
* Retired effective January 31, 1996
** Resigned from the Company January 31, 1996
9
<PAGE>
OPTION GRANTS IN 1995
The following table provides information with respect to option grants made
during 1995 to each of the executives named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS (1) ANNUAL RATES OF
---------------------------------------------------------------- STOCK PRICE
NUMBER OF APPRECIATION FOR
SECURITIES % OF TOTAL OPTIONS/ OPTION TERM
UNDERLYING GRANTED TO EXERCISE OR ------------------
OPTIONS/ EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE PRESENT VALUE
- --------------------------------------- ----------- ------------------------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Roger W. Stone......................... 172,400 16.9% $ 18.00 1/23/05 913,720
29,300 2.9% 19.625 5/09/05 169,061
James B. Heider **..................... 37,400 3.7% 18.00 1/23/05 198,220
6,400 .6% 19.625 5/09/05 36,928
Morty Rosenkranz*...................... -0- -0- n/a n/a n/a
Arnold F. Brookstone*.................. -0- -0- n/a n/a n/a
Thomas W. Cadden, Sr................... -0- -0- n/a n/a n/a
</TABLE>
- ------------------------
* Retired from the Company January 31, 1996
** Resigned from the Company effective January 31, 1996
(1) Each executive officer who received an award of stock options under the
Company's 1993 Incentive Option Plan (1993 Plan) and the Company's 1995
Long-Term Incentive Plan (1995 Plan) is eligible to exercise the option for
a ten year period. Options granted under both plans are vested over a five
year period with a right to exercise 25% of the option 24 months after the
grant and 25% in each of the remaining three years. The 1993 Plan permits
the exercise of the option within three months subsequent to the termination
of employment. In the event of death or disability the option can be
exercised within one year from such event. Currently the option agreements
under the 1995 Plan do not permit the exercise of an option upon voluntary
termination or termination for cause. In the event of death, disability or
other terminations, the option is exercisable until the expiration of the
option grant. In the event of a change-in-control all options granted become
immediately vested.
10
<PAGE>
AGGREGATED OPTION EXERCISES
IN 1995 AND 1995 YEAR END OPTION VALUES
<TABLE>
<CAPTION>
SECURITIES UNDERLYING
NUMBER OF
UNEXERCISED OPTIONS UNEXERCISED VALUE
AT 1995 YEAR END OF IN THE MONEY
SHARES ACQUIRED VALUE ------------------------------ OPTIONS AT
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE 1995 YEAR END
------------------- ------------- --------------- ------------- ---------------------
<S> <C> <C> <C> <C> <C>
Roger W. Stone........................ -0- -0- -0- 201,700 -0-
Morty Rosenkranz...................... n/a n/a n/a n/a -0-
Arnold Brookstone..................... n/a n/a n/a n/a -0-
James Heider.......................... -0- -0- -0- 43,800 -0-
Thomas Cadden......................... n/a n/a n/a n/a -0-
</TABLE>
SALARIED EMPLOYEES RETIREMENT PLAN
The Stone Container Corporation Salaried Employees Retirement Plan (the
"Retirement Plan") provides for the payment of a monthly pension to retiring
salaried employees equal to the larger of (a) 1.67% of his or her average
monthly compensation based on the highest 60 consecutive months compensation
(within the last 180 months) for each year of service to a maximum of 30 years
of service, reduced by 3/4 of 1% of the employee's covered compensation under
social security or (b) 1% of such average monthly compensation (not greater than
$900) for each year of service. This benefit is then reduced, if applicable, by
the monthly retirement income that could be provided on an actuarial equivalent
basis from the employee's participation in certain previously sponsored
retirement plans of the Company. Employees become vested for retirement income
benefits after completion of 5 years of service or, if earlier, upon reaching
age 65. The payment or accrual in respect of any specified person is not and
cannot readily be separately or individually calculated by the actuaries for
this defined benefit plan. The following table shows the estimated annual
benefits payable upon retirement to persons in specified remuneration and
years-of-service classifications.
11
<PAGE>
PENSION PLAN TABLE
ILLUSTRATIVE PROJECTED ANNUAL RETIREMENT BENEFIT
FOR SELECTED REMUNERATION AND YEARS OF SERVICE CLASSIFICATIONS(A)
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
---------------------------------------------------------------
REMUNERATION(B) 15 20 25 30 35
- ------------------------------------------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 100,000....................................... $ 25,050 $ 33,400 $ 41,750 $ 50,100 $ 50,100
150,000....................................... 37,575 50,100 62,625 75,150 75,150
200,000....................................... 50,100 66,800 83,500 100,200 100,200
250,000....................................... 62,625 83,500 104,375 125,250 125,250
300,000....................................... 75,150 100,200 125,250 150,300 150,300
400,000....................................... 100,200 133,600 167,000 200,400 200,400
600,000....................................... 150,300 200,400 250,500 300,600 300,600
800,000....................................... 200,400 267,200 334,000 400,800 400,800
1,000,000...................................... 250,500 334,000 417,500 501,000 501,000
</TABLE>
- ------------------------
(a) Benefit shown would be reduced by 3/4 of 1% of the retiree's covered
compensation under social security while employed by the Company, as defined
in the Retirement Plan, and would be limited to the extent required by the
provisions of the Internal Revenue Code of 1986. Under federal law, an
employee's benefits under a qualified pension plan such as the Retirement
Plan are limited to certain maximum amounts. The Company maintains the Stone
Container Corporation Excess Benefit Plan, which supplements the benefits of
any participant in the qualified pension plan by direct payment of a lump
sum or by an annuity, on an unfunded basis, of the amount by which any
participant's benefits under the pension plan are limited by law. The table
illustrates the amount of annual pension without regard to such limitations
for an employee retiring in 1996 calculated on a single life annuity basis.
(b) In estimating the annual benefit it is assumed that the five year average
monthly compensation is equal to 1995 earnings.
The compensation covered by the Retirement Plan includes salary and any
bonus earned. The years of service as of January 1, 1996 for such individuals
are: 39.4 for Mr. Stone, 31.9 for Mr. Rosenkranz, 17.6 for Mr. Cadden, 30.7 for
Mr. Brookstone and 15.2 for Mr. Heider.
COMPENSATION OF DIRECTORS
Non-employee directors receive an annual retainer of $25,000 for their
services plus $1,000 per meeting for attendance at Board and Board Committee
meetings. In addition, the Chairman of the Audit Committee and the Chairman of
the Compensation Committee receive an additional $3,000 per year retainer. In
addition each non-employee director receives an annual award of 300 shares of
the Company stock. Under the Company's unfunded deferred director fee plans, a
director may elect to defer payment of his director's fees to the year following
the director's retirement from the Board of Directors, plus earnings on the
deferred amounts under various options. In addition, the Company maintained a
policy pursuant to which it appointed a director with ten or more years of
service as a director to be a consultant to the Company for a period of five
years after retirement from the Board with an annual consulting fee, equal to an
annual fee based upon the director's retainer in effect at the date of
retirement. On January 23, 1995, this policy was amended to reduce the service
requirement to five
12
<PAGE>
years of service and to retain the Director as a consultant for the number of
years equal to the number of years the Director served on the Board with an
annual consulting fee equal to the director's retainer in effect at the date of
retirement.
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Board of Directors has authorized management to execute continuity
contracts for corporate and divisional officers (other than Roger W. Stone) who,
with certain exceptions approved by the Board of Directors, have been employed
by the Company for at least five years, providing for continuation of salary,
bonus (based upon the average bonus for the last three calendar years) and
certain fringe benefits, in the event of involuntary termination of employment
after a change in control as defined in such continuity contracts, which
includes the acquisition by a person or a group (other than those which are
exempt) of 20% or more of the Common Stock of the Company. Payments under these
contracts would continue until the earliest of three years from the date of such
officer's involuntary termination, age 70, death, disability or an offer of
comparable employment. The Company has entered into such contracts with each of
the individuals named in the Summary Compensation Table other than Mr. Stone.
The amount of such payments to be received by each individual named in the
Summary Compensation Table is dependent upon whether such individual obtains
employment elsewhere. Any amounts received by such individual from other
employment will offset the payment made pursuant to these contracts.
The Company entered into consulting agreements in 1974 with each of Messrs.
Jerome H. Stone, Marvin N. Stone and Norman H. Stone (deceased), under which
each serves or was to serve as a consultant to the Company for a fee of $80,000
per annum during his lifetime and, should he die leaving a widow, $40,000 per
annum to such widow during her lifetime. Mr. Norman H. Stone died during 1985
and his widow receives the specified payments. The consulting fees are in
addition to the retirement benefits previously noted.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Roger W. Stone, Chairman of the Board, President and Chief Executive Officer
of the Company, serves as a director of Continere Corporation, whose Chairman
and Chief Executive Officer, Richard A. Giesen, serves on the Compensation
Committee of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, consisting of Mr. Giesen as Chairman, Mr.
Glasser and Mr. Pearlman, has provided the following Board Compensation
Committee Report on Executive Compensation.
COMPENSATION POLICY
Under the direction of the Compensation Committee of the Board of Directors,
the Company's executive compensation program is based upon a "pay for
performance" philosophy and is designed to attract and retain highly qualified,
key executives by offering competitive base compensation supplemented with
performance-based incentives linked to corporate performance factors and
position within the Company. The Company has designed and administered executive
compensation programs so that
13
<PAGE>
compensation is linked to Company performance and so that the interests of
executives are aligned with the interests of stockholders. This philosophy is
articulated in the following guiding principles of the Company's compensation
programs:
-A significant percentage of compensation will be determined by the
Company's annual and long term financial performance, including the
creation of stockholder value.
-Compensation programs will be designed to encourage and balance the
attainment of short term operational goals and long term strategic goals.
-Total compensation will be targeted at competitive levels to allow the
Company to attract, retain and motivate highly qualified employees;
however, a greater percentage of compensation will be performance-based and
variable (versus fixed compensation) than competitive practices might
suggest.
-Compensation programs will be designed to encourage stock ownership by
executives.
There are three elements to the Company's compensation program, each consistent
with its compensation philosophy: annual base salary, annual cash bonus
incentives and long term incentives. Both the annual and the longer term
incentives are directed toward specific financial measures, including earnings
growth and total return to stockholders, with each of the targets calling for
progressively excellent results. The total compensation package is designed to
be competitive with compensation programs offered to comparable executive
officers in a hybrid model group consisting of a pool of executive officers who
are currently employed in similar positions in comparable paper companies and
with other companies with sales in excess of $1 billion (the "Peer Group"). The
Company believes that its total compensation practices will be competitive if
the Company performs within the targets established by the Company both on the
basis of short-term and long-term goals. In 1995, the Company achieved its
short-term goals but did not achieve its long-term goals due to underlying
performance of the Company's Common Stock.
BASE SALARIES
All executive officer base salaries are reviewed and adjustments, if any,
are approved annually by the Compensation Committee. The Company's executive
officers' base salaries are targeted to be in the 50th percentile of the average
base salaries of similarly situated executive officers within the Peer Group,
and a salary range is established for each position with the midpoint of the
range being set at such 50th percentile level. Any adjustment in an executive
officer's base salary is made each year based upon an evaluation of individual
performance subject to corporate salary budget guidelines and the relationship
of current salary level to the midpoint of the applicable salary range. Although
competitive practices are viewed importantly, the Company and the Compensation
Committee concur in the view that the most important considerations in setting
annual compensation are individual merit and the Company's financial
performance.
In March, 1995, the Compensation Committee reviewed executive officer
salaries to consider adjustments thereto. Based upon the Company's current
performance and economic conditions, the Committee recommended to the Board that
an adjustment should be made to current salary level of the CEO effective March
1, 1995. The Board adopted this recommendation effective March 1, 1995. The
increases to compensation were based upon individual performance as well as the
performance of the responsibility area of the executive as well as corporate
performance. The Compensation Committee recommended and the Board awarded the
other executive officers named in the Summary Compensation Table increases in
compensation based upon their individual performance.
14
<PAGE>
SHORT-TERM INCENTIVE AWARDS
The short-term incentive award component of the Company's executive
compensation program is based on the Company's consolidated operating division
profits and the Company's consolidated net income for the fiscal year just
completed. The program provides for the payment of cash incentive awards to
participants to the extent that actual consolidated operating division profits
or operating division profits, as applicable, and the Company's consolidated net
income meet or exceed certain target levels. Early in the calendar year, the
Committee establishes targeted consolidated operating division profit at four
distinct levels which trigger incentive payouts. The target levels for operating
division executives are established based upon budgeted consolidated operating
division profits for the fiscal year. For staff executives, the target levels
are based upon consolidated net income. To the extent that the Company attains a
targeted performance level, each participant is entitled to receive a cash
incentive award. Such cash awards are based upon the performance level attained
and each participant's level of responsibility within the Company, ranging from
40% to 100% of the participant's base salary multiplied by the incentive payout
percentage established for the targeted performance level attained. The four
levels of targeted profit are competent, commendable, excellent, and
distinguished. A participant will earn anywhere from 0% to 100% dependent on the
target level attained. In the event, however, that the Company does not have
positive consolidated net income for the relevant year all participants will be
limited to 2/3 of the maximum payout regardless of the consolidated operating
division profits or operating division profits, as applicable. For purposes of
the foregoing, consolidated operating division profits is defined as profit
prior to interest expense, corporate expenses, non-recurring charges and income
taxes. Executive officers, including the CEO, earned short-term incentive awards
for 1995 which were paid in 1996. The amounts shown in the Summary Compensation
Table do not include the bonuses paid in 1996. Bonuses for 1995 paid in 1996
were paid at approximately 86% of the targets set for Consolidated Net Income.
EQUITY-BASED COMPENSATION
An important consideration in the design of the Company's compensation
program is the use of stock to encourage ownership by management. Equity-based
compensation of executive officers was determined by the Compensation Committee
of the Board. In 1995, 42 individuals were eligible to receive grants of stock
options under two employee stock option plans: the 1995 Long-Term Incentive Plan
(the "1995 Plan") and the 1993 Stock Option Plan (the "1993 Plan" and together
with the 1995 Plan, the "Plans").
In January, 1995, options were granted under the 1993 Plan at an exercise
price equal to fair market value of the Company's Common Stock on the close of
business on the date of the grant, and, in general, vest in increments over a
period of five years after the date of grant of the option, subject to earlier
termination of the option upon voluntary or for termination of employment for
cause and subject to automatic acceleration of vesting upon death, disability or
retirement of the optionee or a change in control of the Company. All options
granted under the 1993 Plan expire ten years from the date of grant, unless
previously terminated or unless a shorter term is provided in the option
agreement. Executives were granted options to correlate the performance of the
Company to the amount of long-term incentive compensation received. Options were
granted based upon the executives "job value" percentage at the 75th percentile,
multiplied by such executives "job value" divided by the present value of the
stock price of the Company on the grant date.
In May, 1995, upon the recommendation of the Compensation Committee and the
Board, the stockholders approved the 1995 Plan. The Compensation Committee
granted further options under the 1995 Plan in May of 1995 as a result of the
1993 Plan having insufficient shares to complete the 1995 award which were based
upon the factors described below. The provisions of the grant were similar to
15
<PAGE>
the grants issued in January of 1995 under the 1993 Plan. All options issued
were non-qualified options. As a result of certain provisions in the 1993 Plan
relating to the time requirements of exercise of options subsequent to
retirement, executive officers who were within 5 years of expected retirement
were awarded performance based restricted stock under the Company's 1992
Long-Term Incentive Plan which had a vesting schedule over a three year period.
The value of the award is based upon an eligible employee's job value percentage
multiplied by such employee's job value salary at the 75th percentile. The
resultant value is then divided by the price of the Company's Common Stock on
the close of business in the calendar year preceding the date of the grant. The
awards will vest only to the extent the Company achieves targeted stock prices.
Failure to achieve the targeted stock prices will result in forfeiture of all or
a portion of the stock award.
During 1995, recommendations for grants of options to individual executive
officers were made based upon a market analysis of grants made to officers at
similar levels of responsibility by other companies, and also in comparison to
certain other companies in the paper industry with comparable product lines. The
Compensation Committee as administrator of the Plans determined stock option
awards for executive officers of the Company based on a comparison of what
officers in comparable positions at other companies receive in terms of the face
value of the options at the time of grant, expressed as an annualized award size
as a multiple of base salary. The value of the options will increase as the
price of the Company's Common Stock increases which while not assured will have
a correlative relationship to the Company's long-term performance.
The Compensation Committee awarded options to executive officers under the
Plans in accordance with the goals of the respective plans, and upon a review of
each officer's individual performance goals, achievements, and long-term
potential to the Company. During fiscal year 1995, grants were awarded under the
Plans to 42 employees, of whom three were officers named in the Summary
Compensation Table.
The Chief Executive Officer received 201,700 shares under the Plans in 1995,
based upon a 100% job value percentage.
As often as seems appropriate, but at least annually, the Compensation
Committee studies the Company's executive compensation programs to judge their
consistency with the Company's compensation philosophy, their support of the
Company's strategic and financial objectives and their market competitiveness.
The Company's performance targets will be changed from time to time so as to
maintain the most effective relationship between performance and compensation.
The limitation on the tax deductibility of executive compensation in excess
of $1 million under the Omnibus Budget Reconciliation Act of 1993 may impact the
Company. The Company received Stockholder approval of the 1995 Long-Term
Incentive Plan and the 1995 Key Executive Short-Term Incentive Plan and the
Company believes that these plans are qualified performance-based compensation.
Accordingly, compensation in excess of $1 million paid under these plans would
be deductible. In 1995, none of the executive officers named in the Summary
Compensation Table had current compensation in excess of $1 million.
COMPENSATION COMMITTEE
Richard A. Giesen -- Chairman
James J. Glasser
Jerry K. Pearlman
16
<PAGE>
IV. PERFORMANCE GRAPH
The following performance graph compares the yearly percentage change in the
Company's cumulative total stockholder return on its Common Stock (on a dividend
reinvested basis utilizing the closing price on December 31, 1990 as the base)
with the cumulative total return of the S & P Composite 500 Stock Index and the
S & P Paper and Forest Products Composite Index for the period of five years
commencing January 1, 1991 and ended December 31, 1995.
COMPARISON OF FIVE YEAR TOTAL RETURN*
AMONG STONE CONTAINER CORP., S&P 500 INDEX AND
S&P PAPER & FOREST PRODUCTS INDEX**
[GRAPH]
<TABLE>
<CAPTION>
S&P
PAPER & STONE
S&P 500 FOREST PROD CONTAINER
----------- ----------- -----------
<S> <C> <C> <C>
1990......................................................... 100.00 100.00 100.00
1991......................................................... 130.47 126.84 233.15
1992......................................................... 140.41 145.03 156.10
1993......................................................... 154.56 159.84 89.70
1994......................................................... 156.60 166.55 161.92
1995......................................................... 215.45 183.37 136.18
</TABLE>
17
<PAGE>
V. INDEPENDENT AUDITORS
The Board of Directors has, upon recommendation of its Audit Committee,
selected the certified public accounting firm of Price Waterhouse LLP as
independent auditors of the accounts of the Company for the year ending December
31, 1996. Price Waterhouse LLP served as independent auditors of the Company
during the past fiscal year. Price Waterhouse LLP has advised the Company that
neither it, nor any of its partners, has or has had any direct or indirect
financial interest in the Company or any of its subsidiaries. It is expected
that a representative of Price Waterhouse LLP will be present at the Annual
Meeting of Stockholders. Such representative may make a statement if he or she
desires to do so, and is expected to be available to respond to appropriate
questions.
VI. DISCRETIONARY AUTHORITY
While the notice of the Annual Meeting of Stockholders calls for the
transaction of such other business as may properly come before the meeting,
management is not aware of any matters to be presented for action by the
stockholders at the meeting other than as set forth in this Proxy Statement. The
enclosed Proxy gives discretionary authority, however, in the event that any
additional matters should be presented.
VII. COST OF SOLICITATION; STOCKHOLDER PROPOSALS
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.
Stockholders are referred to the Company's Annual Report for the fiscal year
ended December 31, 1995 which has been mailed to stockholders, for financial and
other information about the activities of the Company for such fiscal year. The
Annual Report is not to be deemed incorporated in the Proxy Statement nor is it
to be deemed a part of the proxy solicitation material. 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
$4,000, plus certain expenses.
Under the rules of the Securities and Exchange Commission (the "SEC"), in
order to be considered for inclusion in the Company's Proxy Statement for the
1997 Annual Meeting of Stockholders (to be held May 13, 1997), a stockholder
proposal must be received by the Secretary of the Company at the offices of the
Company at 150 N. Michigan Avenue, Chicago, IL 60601-7568 no later than the
close of business on December 15, 1996, as well as meet other SEC requirements.
In addition, the Company's By-Laws provide, in general, that any stockholder who
proposes to bring any item of business before an annual
18
<PAGE>
meeting of stockholders must be a stockholder entitled to vote at such meeting
and written notice of such business must have been received by the Secretary of
the Company, not less than 60 nor more than 90 days prior to such annual
meeting, except as provided by the By-Laws.
By order of the Board of Directors.
Leslie T. Lederer
Chicago, Illinois -- April 9, 1996
19
<PAGE>
STONE CONTAINER CORPORATION
[LOGO]
150 North Michigan Avenue
Chicago, IL 60601-7568
T his entire document is printed on 75 brightness Mando-Registered Trademark-
Prime from Stone-Consolidated's Fort Frances mill.
<PAGE>
VOTING INSTRUCTION FORM
STONE CONTAINER CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - MAY 14, 1996
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned hereby directs the Trustee to vote, in person or by proxy, the
full and fractional shares of Common Stock of Stone Container Corporation
credited to my account, at the Annual Meeting of Stockholders to be held at the
Mid-America Club, 200 East Randolph Drive, 80th floor, Chicago, Illinois 60601
on Tuesday, May 14, 1996, at 10:30 a.m. (C.D.B.T.), and at any adjournment or
postponement of such meeting for the purposes identified on the reverse side of
this proxy and with discretionary authority as to any other matters that may
properly come before the meeting, including substitute nominees if any of the
named nominees for Director should be unavailable to serve, in accordance with
and as described in the Notice of Annual Meeting of Stockholders and Proxy
Statement.
If this proxy is completed, dated, signed and returned in the accompanying
envelope to the Trustee, the shares of stock represented by this proxy will be
voted in the manner directed herein by the undersigned. If this proxy is
returned to the Trustee without direction being given, this proxy will be voted
FOR Proposal 1.
<PAGE>
/X/ PLEASE MARK VOTE AS SHOWN
WITHHOLD FOR all nominees
AUTHORITY to vote listed below (except
For all nominees as may be marked
FOR listed below to the contrary below)
1. ELECTION OF DIRECTORS / / / / / /
The Board of Directors recommends that stockholders vote FOR all of the nominees
listed below.
William F. Aldinger, III, Richard A. Giesen, James J. Glasser, Jack
M. Greenberg, George D. Kennedy, Howard C. Miller, Jr., John D. Nichols, Jerry
K. Pearlman, Richard J. Raskin, Alan Stone, Avery J. Stone, Ira N. Stone, James
H. Stone and Roger W. Stone.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space that follows.)
- --------------------------------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting.
Please sign exactly as name(s) appear on the front of this proxy card. If
shares are held jointly or by two or more persons, each stockholder should sign.
Signature(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date , 1996
----------------------------------------------------------------------
<PAGE>
STONE CONTAINER CORPORATION PROXY/VOTING INSTRUCTION CARD
CHICAGO, ILLINOIS
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR
THE ANNUAL MEETING ON MAY 14, 1996.
The undersigned stockholder of Stone Container Corporation (the "Company")
hereby appoints Randolph C. Read and Leslie T. Lederer, or either of them, with
full power of substitution and revocation, to be attorneys and proxies to vote,
as designated below, all of the shares of Common Stock of the Company which the
undersigned would be entitled to vote at the Annual Meeting of Stockholders to
be held on Tuesday, May 14, 1996, at 10:30 a.m. (C.D.S.T.) on the 80th floor,
The Mid-America Club, 200 East Randolph Drive, Chicago, Illinois 60601, or any
adjournment thereof, upon all subjects that may properly come before the
meeting.
ELECTION OF DIRECTORS
Nominees: William F. Aldinger, III, Richard A. Giesen, James J.
Glasser, Jack M. Greenberg, George D. Kennedy, Howard C.
Miller, Jr., John D. Nichols, Jerry K. Pearlman, Richard J.
Raskin, Alan Stone, Avery J. Stone, Ira N. Stone, James H.
Stone and Roger W. Stone.
(NOTE: If authority is granted to vote for one of more nominees, unless
otherwise specified below this proxy will authorize the Proxies to cumulate all
votes represented hereby and to allocate such votes among such nominees as the
Proxies shall determine, in their role and absolute discretion, in order to
maximize the number of such nominees elected. To specify a different manner of
cumulative voting, write "Cumulate For", the name(s) of the nominee(s) and the
number of votes on the space that follows. See "Voting and Proxy" in the
accompanying proxy statement for further information.)________________________
______________________________________________________________________________
SEE REVERSE
SIDE
<PAGE>
/x/ PLEASE MARK YOUR 3002
VOTES AS IN THIS
EXAMPLE.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
- -------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. ELECTION OF / / / / To withhold authority to vote for
DIRECTORS any individual nominees(s), mark the
"FOR" box and write the name of each
such nominee on line provided below
__________________________
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Signature(s) of Stockholder(s)___________________________ DATE____________,1996
Please sign exactly as name(s) appear on the left side of this Proxy. If shares
are held jointly or by two or more persons, each stockholder named should sign.
When signing as executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign in full partnership
name by authorized person.
