<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 Section240.14a-11(c) or
Section240.14a-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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<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 12, 1998
To the Stockholders of
Stone Container Corporation:
You are cordially invited to attend the Annual Meeting of Stockholders of
Stone Container Corporation (the "Company") to be held on Tuesday, May 12, 1998
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 twelve 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. The Mid-America Club is accessible to handicapped
persons.
Only stockholders of record at the close of business on March 31, 1998 will
be entitled to vote at the Annual Meeting.
By order of the Board of Directors.
[\S\ LESLIE T. LEDERER]
LESLIE T. LEDERER,
SECRETARY
Chicago, Illinois, April 14, 1998
<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 12, 1998, 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 March 31, 1998 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 99,717,665 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 14, 1998. 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, twelve 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 (12). Each stockholder may cast all of such votes for
a single candidate or distribute them among the number of director positions to
be filled or among any two or more candidates 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
proposed by the Company 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 proposed by the Company 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
proposed by the Company 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 twelve 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 proposed by the Company
1
<PAGE>
named below. The 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.
MULTIPLE COPIES OF ANNUAL REPORT TO SHAREHOLDERS
The Company's 1997 Annual Report to Shareholders has been mailed to
Shareholders. If more than one copy of the Annual Report is sent to your address
and you wish to reduce the number of reports you receive and save the Company
the cost of producing and mailing these reports, we will discontinue the mailing
of reports on the accounts you select if you mark the designated box on the
Prox(ies).
At least one account must continue to receive the Annual Report. Mailing of
dividends, proxy materials and special notices will not be affected by your
election to discontinue duplicate mailings of the Annual Report. To discontinue
or resume the mailing of an Annual Report to an account, call the Stone
Container Corporation Shareholders Services toll-free number, 1-800-446-2617.
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 were elected directors at the last Annual Meeting. It is
intended that the Proxy, if given, and unless otherwise specified thereon, will
be voted for the persons proposed by the Company named below. In case any of the
named nominees proposed by the Company 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 by the
Company.
The Company's commitment to diversity at all levels of the Company extends
to its selection process for nominees for directors for the Company's Board of
Directors. The Nominating Committee of the Board of Directors includes as a part
of its process the identification of those individuals who can best serve the
needs of the Company as a Director. The process for selecting nominees includes
the identification and consideration of women and minority nominees who have the
qualifications, experience and skills that will fit the needs of the Company at
the time of election.
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>
William F. Aldinger+++ Chairman of the Board and Chief 1996 1,475 (a)
Executive Officer of Household
International, Inc.
Dionisio Garza*++ Chairman of the Board and Chief 1997 12,620 (a)
Executive Officer of Alfa, S.A. de
C.V.
Richard A. Giesen++# Chairman of the Board and Chief 1974 15,317 (a)
Executive Officer of Continental Glass
& Plastic, Inc.
James J. Glasser+# Chairman Emeritus of GATX Corporation 1986 11,720 (a)
Jack M. Greenberg*++ Chairman and Chief Executive Officer of 1995 1,100 (a)
McDonald's USA and Vice Chairman of
McDonald's Corporation
John D. Nichols*# Retired Chairman of the Board and Chief 1989 2,640 (a)
Executive Officer of Illinois Tool
Works Inc.
Jerry K. Pearlman*+ Retired Chairman of the Board and Chief 1984 7,772 (a)
Executive Officer of Zenith
Electronics Corporation
Richard J. Raskin Attorney 1983 613,347 (a)(b)
Phillip B. Rooney+# Vice Chairman -- ServiceMaster Company 1997 5,920 (a)
Ira N. Stone Consultant 1969 901,164 (a)(b)
James H. Stone President of Stone Management 1969 644,697 (a)(b)
Corporation
Roger W. Stone Chairman of the Board, President and 1969 1,183,203 1.2%(b)
Chief Executive Officer
</TABLE>
- ------------------------
<TABLE>
<S> <C>
*Member of the Finance Committee ++Member of the Compensation Committee
+Member of the Audit Committee #Member of the Nominating 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, 1998.
3
<PAGE>
INFORMATION AS TO DIRECTORS AND EXECUTIVE OFFICERS
The following information indicates the principal occupation and employment
for the Directors and named Executive Officers for the last five years, unless
otherwise indicated.
DIRECTORS:
WILLIAM F. ALDINGER, born June 25, 1947, has been Chairman of the Board and
Chief Executive Officer of Household International, Inc., a major financial
services company, since May, 1996 and Chief Executive Officer from 1994 to 1996.
Previously, Mr. Aldinger was Vice Chairman of Wells Fargo Bank in San Francisco
from 1986 to 1994. Mr. Aldinger is a director of SunAmerica, Inc.
DIONISIO GARZA, born January 6, 1954, has been Chairman of the Board and
Chief Executive Officer of Alfa, S.A. de C.V., a Mexican Company, since 1994.
Previously, Mr. Garza was President of Sigma Alimentos, S.A. de C.V. from 1990
to 1993. Mr. Garza is a director of Vitro, S.A., Grupo Financiero Serfin, S.A.,
Grupo Financiero Bancomer, S.A., Cydsa, S.A., Cementos Mexicanos, S.A., Seguros
Comercial America, S.A., Afore Banamex, S.A. de C.V., Hylsamex, S.A. de C.V. and
Sigma Alimentos, S.A. de C.V.
RICHARD A. GIESEN, born October 7, 1929, is Chairman of the Board and Chief
Executive Officer of Continental Glass & Plastic, Inc., a rigid packaging
distribution company. Mr. Giesen is a director of GATX Corporation and Chairman
and Chief Executive Officer of Continere Corporation.
JAMES J. GLASSER, born June 5, 1934, is Chairman Emeritus of GATX
Corporation, a leasing and financial services company. Mr. Glasser is a director
of The B.F. Goodrich Company, Harris Bankcorp, Inc., Harris Trust & Savings Bank
and Mutual Trust Life Insurance Company.
JACK M. GREENBERG, born September 28, 1942, has been Chairman and Chief
Executive Officer of McDonald's USA since July, 1997 and Vice Chairman of the
Board of McDonald's Corporation, a food service and restaurant company, since
1992. Mr. Greenberg is a director of McDonald's Corporation, Arthur J. Gallagher
and Company and Harcourt General, Inc.
JOHN D. NICHOLS, born September 20, 1930, is retired Chairman of the Board
and Chief Executive Officer of Illinois Tool Works Inc., a diversified
manufacturing company. Mr. Nichols is a director of Philip Morris Companies,
Inc., Household International, Inc., Rockwell International Corporation and
Grand Eagle Companies, Inc.
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, Ryerson-Tull, Inc. and Current Assets L.L.C.
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".
PHILLIP B. ROONEY, born July 8, 1944, has been Vice Chairman and Director of
ServiceMaster Company since May, 1997. Previously, Mr. Rooney was the President,
Chief Operating Officer and Director of Waste Management Corporation from 1984
to 1996 and from June 7, 1996 to February 17, 1997 was the President, Chief
Executive Officer and Director. Mr. Rooney is a director of Illinois Tool Works,
Inc., Van Kampen American Capital and Urban Shopping Centers, Inc.
4
<PAGE>
IRA N. STONE, born February 4, 1932, has been a Consultant since retirement
on February 1, 1998. Prior to his retirement, he was Senior Vice President of
the Company since 1989, and was 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 of the Company. Mr. Stone is a director of
Abitibi-Consolidated, Inc. and Venepal S.A.C.A., both affiliates of the Company,
and McDonald's Corporation, Morton International, Inc., Option Care, Inc.,
Continere Corporation and Autoliv, Inc. See Footnote (b) under "Security
Ownership of Management".
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 P. CUTILLETTA, born July 5, 1943, Senior Vice President --
Administration and Corporate Controller, is the Company's Chief Accounting
Officer, since 1996. Previously, Mr. Cutilletta was Senior Vice President and
Controller. Mr. Cutilletta was elected Senior Vice President in January, 1991.
Mr. Cutilletta is a director of the University of Illinois at Chicago HMO.
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.
GORDON L. JONES, born November 7, 1949, Senior Vice President and General
Manager Corrugated Container Division since April, 1997. From June, 1993 to
April, 1997, Mr. Jones was Vice President and General Manager -- Worldwide
Market Pulp Sales and Export Containerboard and Kraft Paper Sales and President
of Stone Container International and Division Vice President of Containerboard
and Kraft Paper Marketing from January, 1991.
MATTHEW S. KAPLAN, born March 13, 1957, Senior Vice President -- North
American Operations since April, 1997, is responsible for all manufacturing,
sales, marketing and converting operations in North America. Previously, Mr.
Kaplan was Senior Vice President and General Manager, Corrugated Container
Division since June, 1993 and prior to that Vice President and General Manager,
Retail Bag Division since May, 1990. Mr. Kaplan is a director of McMillan
Bathurst, Inc., an affiliate of the Company. 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 Abitibi-Consolidated Inc. and Venepal
S.A.C.A., both affiliates of the Company, Con Pac, Inc. and Railcar Specialties,
Inc.
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.
5
<PAGE>
WILLIAM J. KLAISLE, born September 13, 1941, Vice President Corporate
Development since April, 1993.
LESLIE T. LEDERER, born July 20, 1948, Vice President, Secretary and Counsel
since 1987.
JOHN RICONOSCIUTO, born September 4, 1952, Vice President and General
Manager -- Industrial and Specialty Packaging Division since January, 1997.
Previously, Mr. Riconosciuto was Vice President and General Manager of the
Multiwall Group from July, 1995 and prior to that Vice President of Marketing
and Specialty Packaging of the Industrial and Specialty Packaging Division since
1993.
MICHAEL B. WHEELER, born February 15, 1945, Vice President since 1984 and
Treasurer and Assistant Secretary since 1981.
EMIL B. WINOGRAD, born February 12, 1953, Vice President and General Manager
- -- Market Pulp Sales and Export Containerboard and Kraft Paper Sales and
President of Stone Container International since April, 1997. Previously, Mr.
Winograd was Division Vice President and Regional Manager, Corrugated Container
Division since December, 1995 and prior to that General Manager of the Company's
Glendale, AZ. Corrugated Container Plant from 1990.
MEETINGS AND COMMITTEES OF DIRECTORS
During 1997, the Board of Directors met nine times. As to meetings of the
Committees of the Board, the Audit Committee met two times, the Compensation
Committee met two times, and the Nominating Committee and the Finance Committee
did not meet. Each of the incumbent directors attended at least 75% of the
aggregate number of the meetings of the Board and the Committees of which he was
a member.
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 Finance Committee of the Board reviews various financial proposals of
the Company 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 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.
6
<PAGE>
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 director(s) 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 members of the Audit, Nominating, Compensation and Finance Committees,
none of whom is an employee of the Company, are indicated under "Nominees for
Directors".
CERTAIN TRANSACTIONS
During 1997, the Company paid approximately $225,000 to Decade Films, Inc.
for production services related to the Company's BREAKTIME video, an internal
employee communication presentation produced quarterly. Lauren Stone, daughter
of Roger Stone, is President of Decade Films, Inc.
At December 31, 1997, Sunland Sales Company owed the Company approximately
$480,000 as a result of sales made by the Company of kraft paper to Sunland.
Avery Stone owns the controlling interest of Sunland and is the brother of Roger
Stone.
During 1997, the Company sold to Morton International industrial bags for
approximately $4.9 million. Mr. Roger Stone is a Director of Morton
International.
During 1997, the Company sold to Prairie Packaging, Inc. containers produced
by the Company for $1.1 million. Mr. Roger Stone is a 6.45% owner of Prairie
Packaging.
During 1997, the Company sold to Con Pac, Inc. certain of the Company's
products for $639,747 and purchased from Con Pac products for $72,608. Mr.
Randolph Read is a director of this private corporation.
During 1996 and 1997, the Company made loans to Mr. Randolph Read, Senior
Vice President and Chief Financial and Planning Officer of the Company, in the
aggregate amount of $611,384 in connection with Mr. Read's relocation to Chicago
upon his assuming his duties with the Company. Also during 1996, the Company
loaned to Mr. Harold Wright, Senior Vice President of the Company, the amount of
$300,000 in connection with his relocation to Chicago. In July, 1997, the
Company made a loan to Mr. Emil Winograd, Vice President and General Manager --
Market Pulp Sales and Export Containerboard and Kraft Paper Sales in the amount
of $100,000 in connection with his relocation to Chicago. These loans bear no
interest and are repayable (i) with respect to Mr. Read, on demand by the
Company, (ii) with respect to Mr. Wright, on or before December 1, 2002, and
(iii) with respect to Mr. Winograd, on or before June 11, 2002. The interest
rate imputed on all such loans was 5.85% during 1997. Such imputed interest is
reported by the Company as compensation to Mr. Read, Mr. Wright and Mr.
Winograd.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During 1997, Mr. Dionisio Garza 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.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 15, 1998, 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, 9,470,000 9.53%
L.L.P.(2)(3) ................................
75 State Street
Boston, MA 02109
Vanguard/Windsor Funds, Inc.(3) .............. 9,470,000 9.53%
100 Vanguard Boulevard
Post Office Box 2600
Malvern, PA. 19355
Massachusetts Financial Services 8,855,854 8.9%
Company(4) ..................................
500 Boylston Street
Boston, MA. 02116
Goldman Sachs & Co. .......................... 5,672,374 5.7%
The Goldman Sachs Group, L.P.(5)
85 Broad Street
New York, NY. 10004
</TABLE>
- ------------------------
(1) Information with respect to beneficial ownership is based upon information
furnished by each owner.
(2) Wellington Management Company, L.L.P. ("WMC"), in its capacity as investment
adviser, may be deemed to have beneficial ownership of these shares, which
are owned by the Vanguard/Windsor Funds, Inc. WMC reports that it has no
sole or shared voting power as to such shares, but has shared dispositive
power as to such shares.
(3) Vanguard/Windsor Funds, Inc. reports that it has 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, L.L.P. as investment adviser to Vanguard/Windsor Funds, Inc., as
described in note (2).
(4) Massachusetts Financial Services Company reports that it has sole voting
power with respect to 8,808,254 of such shares and sole dispositive power as
to all 8,855,854 shares.
(5) Goldman Sachs & Co/The Goldman Sachs Group, L.P. reports that it has shared
voting power with respect to 5,328,174 of such shares and shared dispositive
power as to all 5,672,374 shares.
8
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
As of February 15, 1998, 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>
Gordon L. Jones............................... 11,856 (a)
Matthew S. Kaplan............................. 266,143 (a)(b)
Randolph C. Read.............................. 38,871 (a)
Roger W. Stone................................ 1,183,203 1.2%(b)
Harold D. Wright.............................. 13,928 (a)
All directors and executive officers as a 8,883,762 8.9%(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 has no vote.
Jerome H. Stone, Marvin N. Stone and Norman H. Stone (deceased) are
brothers. Alan Stone, a former director, and Ira N. Stone are sons of Norman
H. Stone. Avery J. Stone, a former director, 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 12,107,719 shares of Common Stock (approximately
12.1% of the outstanding shares).
9
<PAGE>
III. COMPENSATION
The following table sets forth the compensation earned by, as well as the
number of shares of Common Stock underlying options granted to, the Company's
Chief Executive Officer and the Company's four other most highly compensated
executive officers during the past three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS
------------------------- (NUMBER OF
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SHARES)
- ------------------------------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Roger W. Stone 1997 $ 858,475 -- 286,163
Chairman, President and 1996 934,000 -- 278,840
Chief Executive Officer 1995 790,000 $ 678,250 201,700
Randolph C. Read* 1997 $ 363,951 -- 55,932
Senior Vice President 1996 419,000 -- 100,000
Matthew S. Kaplan 1997 $ 331,970 -- 56,599
Senior Vice President 1996 274,000 -- 55,645
1995 235,000 110,100 40,300
Harold P. Wright 1997 $ 313,171 -- 55,932
Senior Vice President 1996 335,000 -- 60,555
1995 187,000 67,800 10,800
Gordon L. Jones 1997 $ 258,489 -- 24,220
Senior Vice President 1996 229,639 74,900 24,031
1995 185,669 40,300 17,400
</TABLE>
- ------------------------
* Randolph C. Read received $11,206 in relocation expenses, which amount is
included as compensation for 1997.
10
<PAGE>
OPTION GRANTS IN 1997
The following table provides information with respect to option grants made
during 1997 to each of the executives named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
-------------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE GRANT DATE
GRANTED EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME (# OF SHARES) FISCAL YEAR (DOLLAR/SHARE) DATE (DOLLARS)
- ------------------------------------ ------------- ------------------------ ------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Roger W. Stone...................... 286,163 21.8% $ 14.00 1/27/07 $ 1,178,992
Randolph C. Read.................... 55,932 4.3% 14.00 1/27/07 230,440
Harold D. Wright.................... 55,932 4.3% 14.00 1/27/07 230,440
Matthew S. Kaplan................... 56,599 4.3% 14.00 1/27/07 233,188
Gordon L. Jones..................... 24,220 1.8% 14.00 1/27/07 99,786
</TABLE>
- ------------------------
(1) Each executive officer who received a grant of stock options under the
Company's 1995 Long-Term Incentive Plan (the "1995 Plan") is eligible to
exercise the option for a ten year period. Options granted 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. 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 termination, the option is exercisable until the
expiration of the option grant. In the event of a change in control of the
Company, as such term is defined in the 1995 Plan, all options granted
become immediately vested.
AGGREGATED OPTION EXERCISES
IN 1997 AND 1997 YEAR END OPTION VALUES
The following table provides information with respect to the number of
securities underlying unexercised options held at the end of 1997 by the
executives named in the Summary Compensation Table. No options were exercised by
such executives in 1997.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN THE MONEY
1997 YEAR END (# OF
SHARES ACQUIRED VALUE SHARES) OPTIONS AT 1997 YEAR END (DOLLARS)
ON EXERCISE REALIZED -------------------------- ----------------------------------
NAME (# OF SHARES) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ------------------- ------------- ----------- ------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Roger Stone.................. -0- -0- 170,560 596,143 -0- -0-
Randolph Read................ -0- -0- 25,000 130,932 -0- -0-
Harold Wright................ -0- -0- 21,558 106,749 -0- -0-
Matthew Kaplan............... -0- -0- 36,101 118,483 -0- -0-
Gordon Jones................. -0- -0- 15,523 50,944 -0- -0-
</TABLE>
11
<PAGE>
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.
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 1998 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 1997 earnings.
12
<PAGE>
The compensation covered by the Retirement Plan includes salary and any
bonus earned. The years of service as of January 1, 1998 for the executive
officers named in the Summary Compensation Table are: 41.4 for Mr. Stone, 28.6
for Mr. Wright, 2.0 for Mr. Read, 19.8 for Mr. Kaplan and 14.4 for Mr. Jones.
COMPENSATION OF DIRECTORS
In 1997, non-employee directors received an annual retainer of $30,000
payable $20,000 in cash and $10,000 in Common Stock of the Company valued at the
date of the Annual Meeting of Stockholders. In addition, the Chairmen of the
various committees of the Board of Directors receive an additional $3,000 per
year retainer. Under the Company's unfunded deferred director fee plan, 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 maintains a
policy pursuant to which it appoints a director with five or more years of
service as a consultant to the Company for a number of years equal to the number
of years the director served on the Board and pays an annual consulting fee
equal to the director's retainer in effect at the date of such director's
retirement.
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Board of Directors has authorized management to execute Change in
Control Agreements for corporate and divisional officers providing for lump sum
payment of salary and bonus (based upon the average bonus for the last three
calendar years) plus the payment of certain fringe benefits, in the event of
termination of employment of the executive by the Company without cause or by
the executive for good reason (as defined in the Agreement) after a change in
control (as defined in the Agreement) 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. The Company has entered into such Agreements with each of
the individuals named in the Summary Compensation Table. Mr. Stone, if he is
eligible to receive benefits under his Agreement, will receive three times
salary and bonus with a gross-up for any excise tax obligations on account of
such benefits. The other individuals named in the Summary Compensation Table
would receive benefits under their Agreements equal to three times salary and
bonus without any gross up for excise tax obligations on account of such
benefits.
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 in 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 as Chairman of the
Compensation Committee of the Company. Roger W. Stone also serves as a director
of McDonald's Corporation, whose Vice Chairman, Jack M. Greenberg, serves on the
Compensation Committee of the Company.
13
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, consisting of Mr. Giesen, as Chairman, Mr.
Aldinger, Mr. Garza, and Mr. Greenberg, 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 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. In 1996, the Company instituted a program which will require
key employees to maintain prescribed minimum stock ownership based on the
level of the key employee by the year 2001.
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 1997, the Company did not achieve
either its short-term or long-term goals.
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
14
<PAGE>
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 as important, the Company and the Compensation Committee concur in
the view that the more important considerations in setting annual compensation
are individual merit and the Company's financial performance.
In 1997, the Compensation Committee did not increase executive officer
salaries based upon the Company's current performance and economic conditions.
The Committee determined that any such increases should be deferred for 12
months.
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% depending on the
target level attained. In the event, however, that the Company does not have
positive consolidated net income for the relevant year executive officers will
not receive bonuses. The CEO and the other Executive Officers did not earn a
short-term incentive award for 1997.
EQUITY-BASED COMPENSATION
An important consideration in the design of the Company's compensation
program is the use of equity-based compensation to encourage stock ownership by
management. Equity-based compensation of executive officers was determined by
the Compensation Committee of the Board. In 1997, 51 individuals were eligible
to receive grants of stock options under the 1995 Long-Term Incentive Plan (the
"1995 Plan").
In January 1997, options were granted under the 1995 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 vest over a period of five years after the
date of grant of the option, subject to earlier termination of the option upon
voluntary termination of employment or 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 1995 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 amount of long-term
incentive compensation to be received to the
15
<PAGE>
performance of the Company following the date of grant. Options granted to each
executive were granted based upon the executive's "job value" at the 75th
percentile, multiplied by such executive's "opportunity percentage" divided by
the present value of the stock price of the Company on the grant date. All
options issued were non-qualified options.
During 1997, 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 1995 Plan 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, is
intended to have a correlative relationship to the Company's long-term
performance.
The Compensation Committee awarded options to executive officers under the
1995 Plan in accordance with the goals of the 1995 Plan, and upon a review of
each officer's individual performance goals, achievements, and long-term
potential to the Company. During fiscal year 1997, grants were awarded under the
1995 Plan to 51 employees, of whom five were officers named in the Summary
Compensation Table.
The Chief Executive Officer received 286,163 options to purchase shares
under the 1995 Plan in 1997, based upon a 133% opportunity 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 provide qualified performance-based
compensation. Accordingly, compensation in excess of $1 million paid under these
plans would be deductible.
COMPENSATION COMMITTEE
Richard A. Giesen -- Chairman
William F. Aldinger
Dionisio Garza
Jack Greenberg
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, 1992 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
which commenced January 1, 1993 and ended December 31, 1997.
COMPARISON OF FIVE YEAR TOTAL RETURN*
AMONG STONE CONTAINER CORPORATION, S&P 500 INDEX AND
S&P PAPER & FOREST PRODUCTS INDEX**
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 S&P PAPER & FOREST PRODUCTS STONE CONTAINER
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 110.08 110.21 57.46
1994 111.53 114.84 103.73
1995 153.45 126.44 87.24
1996 188.68 139.86 94.06
1997 251.63 149.97 68.76
Assumes $100 invested on December 31, 1992 in
Stone Container common stock, S&P 500 index and
S&P Paper & Forest Products index.
* Total Return assumes reinvestment of dividends
**Fiscal year ending December 31
</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 L.L.P. as
independent auditors of the accounts of the Company for the year ending December
31, 1998. Price Waterhouse L.L.P. served as independent auditors of the Company
during the past fiscal year. Price Waterhouse L.L.P. 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 L.L.P. 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. STONE CONTAINER LAUNCHES CORPORATE WEB SITE
Shareholders can now visit the Company's Web Site at
"www.stonecontainer.com.". The site offers visitors a variety of information
about Stone's products, services and performance throughout the years. It also
includes the Company's goals, objectives, executive profiles, financial reports,
press releases, history and environmental initiatives.
VIII. 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. In addition,
D.F. King & Co., Inc., 77 Water Street, New York, NY 10005 has been engaged to
solicit proxies for the Company. The anticipated fees of D.F. King & Co., Inc.
are approximately $4,000, plus certain expenses.
Stockholders are referred to the Company's Annual Report for the fiscal year
ended December 31, 1997 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.
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
1999 Annual Meeting of Stockholders (to be held May 11, 1999), 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 9, 1998, as well as meet other SEC requirements.
In addition, the Company's By-laws
18
<PAGE>
provide, in general, that any stockholder who proposes to bring any item of
business before an annual 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.
[/S/ LESLIE T. LEDERER]
Leslie T. Lederer
Chicago, Illinois, April 14, 1998
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 Abitibi-Consolidated's Fort Frances mill.
<PAGE>
- --------------------------------------------------------------------------------
STONE CONTAINER CORPORATION
150 N. MICHIGAN AVENUE
P CHICAGO, IL 60601-7568
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
The undersigned stockholder of Stone Container Corporation (the "Company")
O 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
X 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
Y of Stockholders to be held on Tuesday, May 12, 1998, 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.
1. ELECTION OF DIRECTORS:
Nominees: William F. Aldinger, Dionisio Garza, Richard A. Giesen, James
J. Glasser, Jack M. Greenberg, John D. Nichols, Jerry K.
Pearlman, Richard J. Raskin, Phillip B. Rooney, Ira N. Stone,
James H. Stone and Roger W. Stone
(NOTE: If authority is granted to vote for one or 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 sole 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.)
---------------------------------------------------------------
| PLEASE VOTE, SIGN AND DATE THIS PROXY ON THE OTHER SIDE AND |
| RETURN PROMPTLY IN THE ENCLOSED ENVELOPE |
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------------------ ------------------------------------
------------------------------------ ------------------------------------
------------------------------------ ------------------------------------
- --------------------------------------------------------------------------------
ARROW FOLD AND DETACH HERE ARROW
<PAGE>
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--- | 3002
/X/ PLEASE MARK | |
YOUR VOTES |_____
AS IN THIS
EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDER VOTE FOR ALL THE
NOMINEES LISTED ON THE OTHER SIDE.
WITHHELD
AS TO ALL
FOR NOMINEES
IN THEIR DISCRETION,
1. / / / / THE PROXIES ARE
AUTHORIZED TO VOTE
ELECTION OF DIRECTORS UPON SUCH OTHER BUSINESS
To withhold authority to vote AS MAY PROPERLY COME
for any individual nominee(s), BEFORE THIS MEETING OR
mark the "FOR" box and write ANY ADJOURNMENT.
the name of each such nominee
on line provided below. ELIMINATE
ANNUAL REPORT / /
- ------------------------------
CHANGE OF ADDRESS/
COMMENTS ON REVERSE SIDE / /
Signature(s) of Stockholder(s) Date , 1998
------------------------- -----------
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.
- --------------------------------------------------------------------------------
ARROW FOLD AND DETACH HERE ARROW
