SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. )*
Stone Container Corporation
(Name of Issuer)
$1.75 Series E Cumulative Convertible Exchangeable
Preferred Stock, $.01 par value per share
(Title of Class of Securities)
861589307
(CUSIP Number)
Mariner Investment Group, Inc.
65 East 55th Street - 9th Floor
New York, New York 10022
(212) 758-6200
(Name, address and telephone number of person
authorized to receive notices and communications)
August 8, 2000
(Date of event which requires filing of this statement)
(Continued on following pages)
(Page 1 of 35 Pages)
______________
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
CUSIP No. 861589307 13D Page 2 of 35 Pages
_____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Mariner LDC .
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
See Item 5 (b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
OO See Item 3
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Island
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
0
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
455,350
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
0
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
455,350
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
455,350 See Item 5
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
9.9%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
CO
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 861589307 13D Page 3 of 35 Pages
_____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Caspian Capital Partners, L.P.
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
See Item 5 (b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
00 See Item 3
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
0
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
166,850
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
0
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
166,850
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
166,850 See Item 5
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
3.6%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
PN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 861589307 13D Page 4 of 35 Pages
_____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Mariner Investment Group, Inc.
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
See Item 5 (b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
OO See Item 3
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
New York
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
0
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
622,200
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
0
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
622,200
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
680,200 See Item 5
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** See Item 5 [x]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
14.8%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
CO
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 861589307 13D Page 5 of 35 Pages
_____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Mark Weissman
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
See Item 5 (b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
OO See Item 3
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
0
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
622,200
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
0
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
622,200
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
680,200 See Item 5
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** See Item 5 [x]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
14.8%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 861589307 13D Page 6 of 35 Pages
_____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
William Michaelcheck
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
See Item 5 (b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
OO See Item 3
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
0
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
622,200
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
0
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
622,200
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
622,200 See Item 5
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** See Item 5 [x]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
13.5%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 861589307 13D Page 7 of 35 Pages
_____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Delta Dividend Group, Inc.
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
See Item 5 (b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
OO
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
0
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
57,000
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
0
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
57,000
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
680,200 See Item 5
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** See Item 5 [x]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
14.8%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
CO
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 861589307 13D Page 8 of 35 Pages
_____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
David Gale
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
See Item 5 (b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
PF, 00 See Item 3
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
1,000
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
57,000
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
1,000
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
57,000
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
680,200 See Item 5
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** See Item 5 [x]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
14.8%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 861589307 13D Page 9 of 35 Pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to the shares of $1.75 Series E Cumulative
Convertible Exchangeable Preferred Stock, par value $0.01 per share (the
"Shares") of Stone Container Corporation (the "Issuer"). The Issuer's
principal executive office is located at 150 North Michigan Avenue, Chicago, IL
60601.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by the following persons (each a "Reporting
Person" and collectively the "Reporting Persons"):
Mariner LDC, a Cayman Island limited duration corporation ("LDC");
Caspian Capital Partners, L.P., a Delaware limited partnership
("Caspian");
Mariner Investment Group, Inc., a New York corporation ("Mariner");
Mark Weissman, an individual;
William Michaelcheck, an individual;
Delta Dividend Group, Inc., a Delaware corporation ("Delta"); and
David Gale, an individual.
LDC directly owns 455,350 Shares and Caspian directly owns 166,850
Shares. Mariner is the investment advisor for both LDC and Caspian and
exercises the sole voting and dispositive authority over the Shares held by
LDC and Caspian. Mr. Weissman is Manager of Corporate Bond Trading of Mariner
and is responsible for the investment decisions made by Mariner relating to
the Shares. Mr. Michaelcheck is the sole shareholder and President of
Mariner. Mariner, Mr. Weissman and Mr. Michaelcheck may be deemed to share
the voting and dispositive power with respect to the Shares owned by LDC and
Caspian and may, therefore, be deemed to have indirect beneficial ownership of
such Shares. Mariner, Mr. Weissman and Mr. Michaelcheck disclaim beneficial
ownership of such Shares.
Delta directly owns 57,000 Shares and Mr. Gale directly owns 1,000
Shares. Mr. Gale is the President of Delta and as a 49% shareholder, is the
largest shareholder of Delta. Mr. Gale may be deemed to share the voting and
dispositive power with respect to the Shares owned by Delta and may,
therefore, be deemed to have indirect beneficial ownership of such Shares.
Mr. Gale disclaims beneficial ownership of the Shares held by Delta.
(b) The address of the principal office of LDC, Caspian, Mariner and
the business address of Mr. Weissman and Mr. Michaelcheck is 65 East 55th
Street, New York, New York 10022.
The address of the principal office of Delta and the business
address of Mr. Gale is 301 Pine Street, San Francisco, California 94104.
<PAGE>
CUSIP No. 861589307 13D Page 10 of 35 Pages
(c) The principal businesses of LDC, Caspian and Mariner are to
engage in investments. Mr. Weissman's principal occupation is to act as
Manager of Corporate Bond Trading of Mariner. Mr. Michaelcheck's principal
occupation is to serve as President of Mariner. Attached as Schedule I hereto
and incorporated by reference herein is a list of the general partner of
Caspian and the officers and directors of LDC and Mariner. Schedule I also
sets forth the business address, occupation and citizenship of each person
listed therein.
The principal business of Delta is to engage in investments. Mr.
Gale's principal occupation is to serve as President of Delta. Attached as
Schedule II hereto and incorporated by reference herein is a list of the
officers and directors of Delta. Schedule II also sets forth the business
address, occupation and citizenship of each person listed therein.
Mr. Gale and Mr. Weissman also serve as directors on the board of
directors of the Issuer and were appointed to such position by the holders of
the majority of the outstanding Shares.
(d) None of the persons identified in Item 2(a) or the persons
identified in Schedule I and Schedule II has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) during the
last 5 years.
(e) None of the persons identified in Item 2(a) or the persons
identified in Schedule I and Schedule II was a party to any civil proceeding
during the last 5 years as a result of which it or he has been subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) Mr. Weissman, Mr. Michaelcheck and Mr. Gale are citizens of the
United States.
ITEM 3. SECURITY AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
The Shares held by each of LDC and Caspian were purchased with funds
available for investment to each such person. The Shares held by Delta were
purchased with funds available for investment. The Shares owned by Mr. Gale
were purchased with personal funds.
ITEM 4. PURPOSE OF TRANSACTION.
The Issuer, Smurfit-Stone Container Corporation, the parent of the
Issuer ("Smurfit") and SCC Merger Co., a wholly-owned subsidiary of Smurfit
("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") on August 8, 2000. Pursuant to the Merger Agreement, Merger Sub
will be merged with and into the Issuer and as a result, each of the issued and
outstanding Shares will be converted into the right to receive (i) one share of
a newly issued 7% Series A Cumulative Exchangeable Redeemable Convertible
Preferred Stock of Smurfit, par value $0.01 per share (the "Series A Preferred
Stock") and (ii) an amount in cash equal to (A) the accrued and unpaid
dividends in respect of such Share less (B) $0.12 (the "Merger"). The Series A
Preferred Stock will be listed on the Nasdaq National Market. This summary of
the Merger Agreement is qualified in its entirety by reference to the full
text of the Merger Agreement which is filed as Exhibit 1 hereto and is
incorporated by reference in response to this Item 4.
<PAGE>
CUSIP No. 861589307 13D Page 11 of 35 Pages
The consummation of the Merger will require the affirmative vote of at
least two-thirds of the outstanding shares of the Issuer's common stock and the
Shares, voting as a single class, and the affirmative vote of at least two-
thirds of the outstanding Shares, voting as a separate class. Upon
consummation of the transaction, the Shares will be delisted and both Mr.
Weissman and Mr. Gale will resign as members of the Issuer's board of
directors.
Concurrently with the execution and delivery of the Merger Agreement,
Mariner, Delta, Mr. Weissman and Mr. Gale (collectively the "Voting Parties")
entered into a voting agreement (the "Voting Agreement") with the Issuer and
Smurfit, pursuant to which the Voting Parties agreed to vote the aggregate
680,200 Shares or 14.8% of the outstanding Shares, held by them in favor of
approving the Merger Agreement and the Merger. This summary of the Voting
Agreement is qualified in its entirety by reference to the full text of the
Voting Agreement which is filed as Exhibit 2 hereto and is incorporated by
reference in response to this Item 4.
No Reporting Person has any present plan or proposal which would
relate to or result in any of the matters set forth in subparagraphs (a)-(j)
of Item 4 of Schedule 13D except as set forth herein or such as would occur
upon completion of any of the actions set forth herein.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The number of Shares beneficially owned as stated herein is given
as of September 26, 2000 and the percentage of outstanding shares is based on
4,599,300 Shares outstanding reported in Amendment No. 1 to Schedule 13E-3 of
the Issuer, filed on September 20, 2000 (the "Outstanding Shares").
LDC is the direct beneficial owner of 455,350 Shares, representing
approximately 9.9% of the Outstanding Shares. Caspian is the direct
beneficial owner of 166,850 Shares, representing approximately 3.6% of the
Outstanding Shares.
Mariner is the investment advisor for both LDC and Caspian and
exercises sole voting and dispositive authority over the Shares held directly
by LDC and Caspian. Mr. Weissman is Manager of Corporate Bond Trading and is
responsible for the investment decisions Mariner makes related to the Shares.
Mr. Michaelcheck is the President and sole shareholder of Mariner. By virtue
of these relationships, Mariner, Mr. Weissman and Mr. Michaelcheck may be
deemed to have indirect ownership of the Shares beneficially owned directly by
LDC and Caspian. Mariner, Mr. Weissman and Mr. Michaelcheck disclaim all such
beneficial ownership.
Delta is the direct beneficial owner of 57,000 Shares, representing
approximately 1.2% of the Outstanding Shares. Mr. Gale is the direct
beneficial owner of 1,000 Shares. Mr. Gale is the President of Delta and as a
49% shareholder, is the largest shareholder of Delta. By virtue of this
relationship, Mr. Gale may be deemed to have indirect beneficial ownership of
the Shares beneficially owned directly by Delta. Mr. Gale disclaims
beneficial ownership of the Shares held by Delta.
<PAGE>
CUSIP No. 861589307 13D Page 12 of 35 Pages
The response to Item 4 above is incorporated by reference in response
to this Item 5. On August 8, 2000, the Voting Parties entered into a voting
agreement with the Issuer and Smurfit pursuant to which the Voting Parties
agreed to vote the aggregate 680,200 Shares owned by them in favor of the
Merger Agreement and the Merger. By entering into the Voting Agreement, the
Voting Parties may be deemed to have formed a group for purposes of Section
13(d) and each of the Voting Parties may be deemed the beneficial owner of the
aggregate 680,200 Shares beneficially owned by the Voting Parties in the
aggregate. Each Voting Party disclaims the existence of a group or group
ownership of the Shares held by each other Voting Party.
(b) LDC has the shared power to vote and direct the disposition of
the 455,350 Shares, and Caspian has the shared power to vote and direct the
disposition of 166,850 Shares. By virtue of the relationships described in
Item 5(a) above, Mariner, Mr. Weissman and Mr. Michaelcheck may be deemed to
have the shared power to vote and direct the disposition of the Shares
beneficially owned directly by LDC and Caspian.
Delta has the shared power to vote and direct the disposition of
57,000 Shares and Mr. Gale has the sole power to vote and direct the
disposition of 1,000 Shares. By virtue of the relationship described in Item
5(a) above, Mr. Gale may be deemed to have the shared power to vote and direct
the disposition of the Shares beneficially owned directly by Delta.
By virtue of the relationship described in Item 5(a) and Item 4 above,
the Voting Parties may be deemed to have the shared power to vote the 680,200
Shares beneficially owned by the Voting Parties in the aggregate. However,
each Voting Party disclaims the existence of a group or group ownership of the
Shares held by each other Voting Party.
(c) None of the persons named in response to Item 5(a) effected any
transactions in the securities of the Issuer during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The response to Item 4 above is incorporated by reference in response
to this Item 6. In connection with the Merger contemplated by the Merger
Agreement, the Voting Parties have entered into a voting agreement with the
Issuer and Smurfit to vote in favor of the Merger Agreement and the Merger.
The Merger Agreement is filed as Exhibit 1 and the Voting Agreement is filed as
Exhibit 2 hereto and are incorporated by reference in response to this Item 6.
<PAGE>
CUSIP No. 861589307 13D Page 13 of 35 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A Joint Filing Agreement pursuant to Rule 13d-1(k)
Exhibit 1 Agreement and Plan of Merger, among the Issuer,
Smurfit and Merger Sub dated as of August 8, 2000.
Exhibit 2 Voting Agreement, among the Issuer, Smurfit, Mariner,
Delta, Mr. Weissman and Mr. Gale dated as of August 8,
2000.
<PAGE>
CUSIP No. 861589307 13D Page 14 of 35 Pages
SIGNATURES
After reasonable inquiry and to the best of knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
DATED: September 26, 2000
Mariner LDC
By: /s/ Charles R. Howe, II
--------------------------------
Charles R. Howe, II
Director
Caspian Capital Partners, L.P.
By: Caspian Capital Advisors, LLC, its
general partner
By: /s/ Mark Weissman
--------------------------------
Mark Weissman
Managing Member
Mariner Investment Group, Inc.
By: /s/ Mark Weissman
--------------------------------
Mark Weissman
Manager of Corporate Bond Trading
Delta Dividend Group, Inc.
BY: /s/ David Gale
--------------------------------
David Gale
President
/s/ Mark Weissman
---------------------------------------
MARK WEISSMAN, as an individual
/s/ William Michaelcheck
---------------------------------------
WILLIAM MICHAELCHECK, as an individual
/s/ David Gale
---------------------------------------
DAVID GALE, as an individual
<PAGE>
CUSIP No. 861589307 13D Page 15 of 35 Pages
SCHEDULE I
The business address of each of the persons named below is 65 East 55th
Street, New York, New York 10022. Each natural person is a citizen of the
United States.
I. Mariner LDC
Executive Officers and Directors:
Name Position
Christopher Wetherhill Director
Charles R. Howe, II Director
Christine Perinchief Secretary
Tammy J. Robinson Assistant Secretary
Quin & Hampson Corporate
Services, Ltd Assistant Secretary
II. Caspian Capital Partners, L.P.
General Partner:
Caspian Capital Advisors, LLC, a Delaware limited liability company
Mark Weissman, Managing Member of Caspian Capital Partners, LLC
III. Mariner Investment Group, Inc.
Executive Officers and Directors:
Name Position
William J. Michaelcheck President/Director
Charles R. Howe, II Treasurer
<PAGE>
CUSIP No. 861589307 13D Page 16 of 35 Pages
SCHEDULE II
The business address of each of the persons named below is 301 Pine
Street, San Francisco, California 94104. Each person is a citizen of the
United States.
I. Delta Dividend Group, Inc.
Executive Officers and Directors:
Name Position
David Gale President and Director
Traci A. Hill Assistant Secretary and Director
Jeffrey Brown Director
<PAGE>
CUSIP No. 861589307 13D Page 17 of 35 Pages
EXHIBIT A
JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)
Mariner LDC, Inc., Caspian Capital Partners, L.P., Mariner
Investment Group, Inc., Mark Weissman, William Michaelcheck, Delta Dividend
Group, Inc. and David Gale (hereinafter collectively referred to as the
"Reporting Persons") each hereby agrees to file jointly a Schedule 13D and any
amendments thereto relating to the $1.75 Series E. Cumulative Convertible
Exchangeable Preferred Stock, par value $0.01 per share of Stone Container
Corporation, a Delaware corporation, as permitted by Rule 13d-1 of the
Securities Exchange Act of 1934, as amended. Each of the Reporting Persons
agrees that the information set forth in such Schedule 13D and any amendments
thereto with respect to such person will be true, complete and correct as of
the date of such Schedule 13D or such amendment to the best of such Person's
knowledge and belief after reasonable inquiry. Each of the Reporting Persons
makes no representation as to the accuracy or adequacy of the information set
forth in such Schedule 13D and any amendments thereto with respect to any
other Reporting Person. Each of the Reporting Persons shall promptly notify
the other Reporting Persons if any of the information set forth in such
Schedule 13D shall be or become inaccurate in any material respect or if he or
it learns of information which would require an amendment to such Schedule
13D.
IN WITNESS WHEREOF, the parties hereto have set forth their hand as
of the 26th day of September, 2000.
Mariner LDC
By: /s/ Charles R. Howe, II
--------------------------------
Charles R. Howe, II
Director
Caspian Capital Partners, L.P.
By: Caspian Capital Advisors, LLC, its
general partner
By: /s/ Mark Weissman
---------------------------------
Mark Weissman
Managing Member
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CUSIP No. 861589307 13D Page 18 of 35 Pages
Mariner Investment Group, Inc.
By: /s/ Mark Weissman
---------------------------------
Mark Weissman
Manager of Corporate Bond Trading
Delta Dividend Group, Inc.
BY: /s/ David Gale
---------------------------------
David Gale
President
/s/ Mark Weissman
---------------------------------------
MARK WEISSMAN, as an individual
/s/ William Michaelcheck
---------------------------------------
WILLIAM MICHAELCHECK, as an individual
/s/ David Gale
---------------------------------------
DAVID GALE, as an individual
<PAGE>
CUSIP No. 861589307 13D Page 19 of 35 Pages
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
AMONG
SMURFIT-STONE CONTAINER CORPORATION,
SCC MERGER CO.,
AND
STONE CONTAINER CORPORATION
AUGUST 8, 2000
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CUSIP No. 861589307 13D Page 20 of 35 Pages
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered
into as of August 8, 2000 by and among Smurfit-Stone Container Corporation, a
Delaware corporation ("SSCC"), SCC Merger Co., a Delaware corporation and a
wholly-owned subsidiary of SSCC ("Sub"), and Stone Container Corporation, a
Delaware corporation ("Stone").
RECITALS
A. The parties to this Agreement believe it is in the best interests
of each company and the stockholders of SSCC that Sub merge with and into
Stone pursuant to which Stone shall continue as the surviving corporation and
as a wholly-owned subsidiary of SSCC (the "Merger").
B. Pursuant to the Merger, among other things, each of the issued
and outstanding shares of $1.75 Series E Cumulative Convertible Exchangeable
Preferred Stock, $.01 par value per share, of Stone (the "Series E Preferred
Stock") shall be converted into the right to receive (i) one Series A
Preferred Share of SSCC (as defined below) and (ii) the Cash Consideration (as
defined below) as provided herein.
C. As a condition to, and in connection with the execution of this
Agreement, certain holders of the Series E Preferred Stock have entered into a
Voting Agreement with SSCC in the form attached hereto as Exhibit A.
D. The parties to this Agreement desire to make certain
representations, warranties, covenants and other agreements in connection with
the Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time and subject to and upon the
terms and conditions of this Agreement and the applicable provisions of the
Delaware General Corporation Law (the "DGCL"), Sub shall be merged with and
into Stone, and the separate corporate existence of Sub shall cease, Stone
shall continue as the surviving corporation and as a wholly-owned subsidiary
of SSCC following the Merger. Stone, as the surviving corporation after the
Merger, is hereinafter sometimes referred to as the "Surviving Corporation."
1.2 Closing; Effective Time. Unless it is earlier terminated
pursuant to Section 6.1 below, the closing of the Merger (the "Closing")
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CUSIP No. 861589307 13D Page 21 of 35 Pages
will take place no later than three business days after the satisfaction or,
if permissible, waiver of the conditions set forth in Article V, at the
offices of Winston & Strawn, 35 West Wacker Drive, Chicago, Illinois 60601, at
10:00 a.m. (Chicago time). The date upon which the Closing actually occurs is
herein referred to as the "Closing Date." On the Closing Date, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger in the form required by the DGCL with the Secretary of State of
Delaware (the "Certificate of Merger"), in accordance with the relevant
provisions of the DGCL (the time of acceptance by the Secretary of State of
Delaware of such filing being referred to herein as the "Effective Time").
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the property, assets,
rights, privileges, powers and franchises of Stone and Sub shall vest in the
Surviving Corporation, and all debts, liabilities, duties and obligations of
Stone and Sub shall become the debts, liabilities, duties and obligations of
the Surviving Corporation.
1.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of
Sub shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter amended as provided by law and such Certificate of
Incorporation.
(b) At the Effective Time, the Bylaws of Sub shall be the
Bylaws of the Surviving Corporation until thereafter amended as provided
therein.
1.5 Directors and Officers. The directors of Sub immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The officers of Stone
immediately prior to the Effective Time (with the exception of those
individuals above) shall be the initial officers of the Surviving Corporation
each to hold office in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation.
1.6 Merger Consideration; Exchange Procedures.
(a) Merger Consideration. Each share of Series E Preferred
Stock of Stone (each a "Series E Preferred Share") that is issued and
outstanding immediately prior to the Effective Time shall become and be
converted into the right to receive (i) an amount in cash equal to (A) the
accrued and unpaid dividends in respect of such share as of the Effective Time
less (B) $0.12 ( the "Cash Consideration") and (ii) one share of 7% Series A
Cumulative Exchangeable Redeemable Convertible Preferred Stock of SSCC, par
value $0.01 per share, (each a "Series A Preferred Share" and, in the
aggregate, the "Series A
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CUSIP No. 861589307 13D Page 22 of 35 Pages
Preferred Shares"), which shares shall be issued at Closing (the "Share
Consideration" and together with the Cash Consideration, the "Merger
Consideration").
(b) Exchange Procedures. At the Effective Time, SSCC shall
deposit with an exchange agent (the "Exchange Agent") (as directed pursuant to
a disbursement letter executed by the Exchange Agent), to distribute to the
holders of the Series E Preferred Shares (the "Series E Stockholders"), the
aggregate amount of the Merger Consideration. The Exchange Agent shall
deliver the Merger Consideration to the Series E Stockholders in accordance
with the provisions of the Exchange Agreement.
(c) Cancellation of Series E Preferred Shares. From and after
the Effective Time all Series E Preferred Shares shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease
to exist, and each holder of a Certificate representing any such Series E
Preferred Shares shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration represented by such Certificate.
1.7 Surrender of Certificates. The Exchange Agent shall deliver the
Merger Consideration contemplated to be paid to the Series E Stockholders
pursuant to Section 1.6 hereof in accordance with the terms of the Exchange
Agreement to be entered into on the Closing Date between SSCC and the Exchange
Agent (the "Exchange Agreement"). Within five (5) days after the Effective
Time, SSCC shall instruct the Exchange Agent to mail to each holder of record
of a certificate representing outstanding Series E Preferred Shares (the
"Certificates") (1) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass
only upon proper delivery by such Series E Stockholder of his or its
Certificates to the Exchange Agent) and (2) instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration
contemplated to be paid to the Series E Stockholders pursuant to Section 1.6
hereof. Upon surrender of a Certificate to the Exchange Agent for
cancellation, the holder of such Certificate shall be entitled to receive in
exchange therefor (i) the Cash Consideration represented by such Certificate
as set forth above which shall be payable upon such proper surrender and (ii)
the Share Consideration which shall be delivered upon such proper surrender,
which Cash Consideration shall be payable as set forth in Section 1.6 hereof,
in each case by the Exchange Agent by delivery of a certified or bank
cashier's check and which Share Consideration shall be delivered via certified
mail, and the Certificate so surrendered shall forthwith be canceled upon
delivery thereof to the Exchange Agent. No interest will be paid or accrued
on any cash payable to holders of Certificates. In the event of a transfer of
ownership of Series E Preferred Shares which is not registered in the transfer
records of Stone, payment may be made to a transferee if the Certificate
representing such Series E Preferred Shares is presented to SSCC, accompanied
by all documents required to evidence and effect such transfer and by evidence
that any applicable stock transfer taxes have been paid.
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CUSIP No. 861589307 13D Page 23 of 35 Pages
1.8 No Further Ownership or Other Rights in Series E Preferred
Shares. From and after the Effective Time, each Certificate, until
surrendered as contemplated by Section 1.7, shall be deemed at any time after
the Effective Time to represent only the right to receive upon such surrender
the Merger Consideration which the holder thereof has the right to receive in
respect of such Certificate pursuant to this Article I. The payments to be
made to Series E Stockholders in the manner set forth in Section 1.6 in
accordance with the terms hereof shall be deemed to have been in full
satisfaction of all rights pertaining to Series E Preferred Shares represented
by such Certificates and there shall be no further registration of transfers
on the appropriate transfer books of the Surviving Corporation of Series E
Preferred Shares which were outstanding immediately prior to the Effective
Time. Subject to applicable law, Certificates presented after the Effective
Time to the Surviving Corporation shall be canceled and exchanged as provided
herein.
1.9 Lost, Stolen and Destroyed Certificates. If any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by SSCC, the posting by such Person of a bond in
such reasonable amount as SSCC may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Surviving
Corporation will issue in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration deliverable in respect thereof pursuant
to this Agreement.
1.10 Effect of Merger on Capital Stock of Sub. At the Effective
Time, each share of Sub's common stock, $0.01 par value per share that is
issued and outstanding immediately prior to the Effective Time, shall, by
virtue of the Merger and without any action on the part of SSCC, Sub, or
Stone, be converted automatically into and exchanged for one share of common
stock of the Surviving Corporation.
1.11 Effect of Merger on Common Stock of Stone. At the Effective
Time, each share of Stone's common stock, $0.01 par value per share that is
issued and outstanding immediately prior to the Effective Time, shall remain
outstanding as the common stock of the Surviving Corporation and shall be
unaffected by the Merger.
ARTICLE II
PRE-CLOSING COVENANTS
The parties to this Agreement covenant as follows with respect to the
period between the execution of this Agreement and the Closing.
2.1 General. Each of the parties will use its commercially
reasonable efforts to take all action and to do all things necessary, proper,
or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Article V below).
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CUSIP No. 861589307 13D Page 24 of 35 Pages
2.2 Notices and Consents. Each of the parties shall give any
notices to third parties, and will use commercially reasonable efforts to
obtain any third party consents that are necessary to vest in the Surviving
Corporation all right, title and interest of Sub and Stone or that any of the
parties may reasonably request in connection with the matters referred to
herein. Each of the parties will give any notices to, make any filings with,
and use commercially reasonable efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies necessary or
desirable in connection with the matters referred to herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF STONE
Stone hereby represents and warrants to SSCC and Sub that the
statements contained in this Article III are correct and complete as of the
date of this Agreement and, unless such statement shall refer to a date other
than the date of this Agreement, will be correct and complete as of the
Closing Date.
3.1 Organization. Stone is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware.
3.2 Corporate Authority. Stone has full corporate power and
authority to enter into this Agreement and this Agreement constitutes the
valid and legally binding obligation of Stone, enforceable in accordance with
its terms and conditions.
3.3 Opinion of Financial Advisor. Stone has received the opinion of
its financial advisor, dated as of the date of this Agreement, to the effect
that, as of the date of this Agreement, the Merger Consideration to be
received in the Merger by the holders of the Series E Preferred Shares is fair
to such holders from a financial point of view. A complete and correct signed
copy of such opinion will be delivered to SSCC as soon as practicable after
the date of this Agreement, and such opinion has not been withdrawn or
modified.
3.4 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will: (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Stone is subject or any
provision of its charter or bylaws; or (b) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Stone is a party or by which it is bound or to which any
of its assets is subject, which (in either case of clause (a) or clause (b))
would have a material adverse effect on the business, financial condition,
operations, or results of operations of Stone.
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CUSIP No. 861589307 13D Page 25 of 35 Pages
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SSCC AND SUB
SSCC and Sub hereby represent and warrant to Stone that the
statements contained in this Article IV are correct and complete as of the
date of this Agreement and, unless such statement shall refer to a date other
than the date of this Agreement, will be correct and complete as of the
Closing Date.
4.1 Organization. SSCC and Sub are each corporations duly
organized, validly existing and in good standing under the laws of the state
of Delaware.
4.2 Corporate Authority. Each of SSCC and Sub has full corporate
power and authority to enter into this Agreement and this Agreement
constitutes the valid and legally binding obligation of Stone, enforceable in
accordance with its terms and conditions.
4.3 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will: (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which SSCC or Sub is subject or
any provision of their charter or bylaws; or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or other
arrangement to which SSCC or Sub is a party or by which they are bound or to
which any of their assets is subject, which (in either case of clause (a) or
clause (b)) would have a material adverse effect on the business, financial
condition, operations, or results of operations of SSCC or Sub.
ARTICLE V
CONDITIONS TO OBLIGATION TO CLOSE
5.1 Conditions Precedent to the Obligations of Stone. All
obligations of Stone hereunder are subject to the fulfillment, to the
satisfaction of Stone and its legal counsel, prior to or at the Closing, of
each of the following conditions (any or all of which may be waived by Stone
in its sole discretion).
(a) The representations and warranties of SSCC and Sub set
forth in Article IV above shall be true and correct in all material respects
at and as of the Closing Date.
(b) The Series E Stockholders shall have approved this
Agreement and the Merger and the transactions contemplated thereby in
accordance with the terms of the DGCL and the certificate of incorporation and
the bylaws of Stone.
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CUSIP No. 861589307 13D Page 26 of 35 Pages
(c) Any and all notices, filings, authorizations, consents and
approvals of any federal, state, local or foreign governmental entity
necessary to consummate the transactions contemplated by this Agreement shall
have been given, made or obtained by the parties hereto.
(d) The Certificate of Designation setting forth the rights and
preferences of the holders of the Series A Preferred Shares shall have been
filed with the Secretary of State of Delaware in substantially the form
attached as Exhibit B hereto and in accordance with the relevant provisions of
the DGCL.
(e) The Series A Preferred Shares shall have been accepted for
quotation on the Nasdaq National Market, subject to official notice of
issuance.
(f) The Form S-4 Registration Statement registering the Series
A Preferred Shares shall have been declared effective by the Securities and
Exchange Commission (the "Commission"). No stop order suspending the
effectiveness of the Form S-4 Registration Statement shall have been issued by
the Commission and no proceedings for that purpose shall have been initiated
or threatened by the Commission.
(g) No material adverse effect on the business, financial
condition, operations, prospects or results of operations of SSCC (other than
a material adverse effect of SSCC resulting solely from a material adverse
effect of Stone) shall be or shall have been existing.
(h) Neither SSCC nor Sub shall be subject to any outstanding
injunction, judgment, order, decree, ruling or charge or a party to or, to its
knowledge, has been threatened to be made a party to any action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand of, in
or before any court or quasi judicial or administrative agency of any federal,
state, local or foreign jurisdiction or before any arbitrator which would
prevent or forbid the consummation of the transactions contemplated by this
Agreement.
5.2 Conditions Precedent to the Obligations of SSCC and Sub. All
obligations of SSCC and Sub hereunder are subject to the fulfillment, to the
satisfaction of SSCC and its legal counsel, prior to or at the Closing, of
each of the following conditions (any or all of which may be waived by SSCC in
its sole discretion).
(a) The representations and warranties of Stone set forth in
Article III above shall be true and correct in all material respects at and as
of the Closing Date.
(b) The Series E Stockholders shall have approved this
Agreement and the Merger and the transactions contemplated thereby in
accordance with the terms of the DGCL and the certificate of incorporation and
the bylaws of Stone.
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CUSIP No. 861589307 13D Page 27 of 35 Pages
(c) Any and all notices, filings, authorizations, consents and
approvals of any federal, state, local or foreign governmental entity
necessary to consummate the transactions contemplated by this Agreement shall
have been given, made or obtained by the parties hereto.
(d) No material adverse effect on the business, financial
condition, operations, prospects or results of operations of Stone shall be or
shall have been existing.
(e) The Form S-4 Registration Statement registering the Series
A Preferred Shares shall have been declared effective by the Commission. No
stop order suspending the effectiveness of the Form S-4 Registration Statement
shall have been issued by the Commission and no proceedings for that purpose
shall have been initiated or threatened by the Commission.
(f) Stone shall not be or have been subject to any outstanding
injunction, judgment, order, decree, ruling or charge or a party to or, to its
knowledge, has been threatened to be made a party to any action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand of, in
or before any court or quasi judicial or administrative agency of any federal,
state, local or foreign jurisdiction or before any arbitrator which would
prevent or forbid the consummation of the transactions contemplated by this
Agreement.
ARTICLE VI
TERMINATION
6.1 Termination of Agreement.
(a) The parties may terminate this Agreement by mutual written
consent at any time prior to the Closing.
(b) In addition, either party may terminate the Agreement if:
(i) the Series E Stockholders do not adopt the Agreement; (ii) a law or
regulation makes the transaction illegal or any order or injunction
permanently prohibits the transaction; or (iii) the other party breaches its
representations, warranties or other obligations under the Agreement in any
material respect and does not or cannot cure the breach.
(c) In addition, (i) Stone may, in its sole discretion,
terminate the Agreement if any of the conditions set forth in Section 5.1
above cannot be satisfied on or prior to December 31, 2000; and (ii) SSCC may,
in its sole discretion, terminate the Agreement if any of the conditions set
forth in Section 5.2 above cannot be satisfied on or prior to December 31,
2000; provided, however, that the right to terminate this Agreement under this
Section 6.1(c) shall not be available to any party whose failure to fulfill
any of its obligations under this Agreement has been the cause of, or resulted
in, the failure of the other party to satisfy the conditions set forth in
Article V above.
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CUSIP No. 861589307 13D Page 28 of 35 Pages
ARTICLE VII
MISCELLANEOUS
7.1 No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the parties named herein and
their respective successors and permitted assigns.
7.2 Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements, or representations by or
among the parties, written or oral, to the extent they related in any way to
the subject matter hereof.
7.3 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns.
7.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
7.5 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.6 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
SSCC, Sub and Stone. No waiver by any party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
7.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware
without giving effect to principles of conflicts of laws.
7.8 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. The parties further agree to replace
such invalid or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business or other purposes of the invalid or unenforceable provision.
7.9 Incorporation of Exhibits. The Exhibits identified in this
Agreement are incorporated herein by reference and made a part hereof.
[signature page follows]
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CUSIP No. 861589307 13D Page 29 of 35 Pages
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
SSCC:
SMURFIT-STONE CONTAINER CORPORATION,
a Delaware corporation
By: /s/ Craig A. Hunt
Name: Craig A. Hunt
Title: Vice President, General Counsel and
Secretary
SUB:
SCC MERGER CO., a Delaware corporation
and a wholly-owned subsidiary of SSCC
By: /s/ Craig A. Hunt
Name: Craig A. Hunt
Title: Vice President, General Counsel and
Secretary
STONE:
STONE CONTAINER CORPORATION, a Delaware
corporation
By: /s/ Craig A. Hunt
Name: Craig A. Hunt
Title: Vice President, General Counsel and
Secretary
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CUSIP No. 861589307 13D Page 30 of 35 Pages
EXHIBIT 2
August 8, 2000
Smurfit-Stone Container Corporation
150 North Michigan Avenue
Chicago, Illinois 60601
Attention: Craig A. Hunt
Stone Container Corporation
150 North Michigan Avenue
Chicago, Illinois 60601
Attention: Craig A. Hunt
Ladies and Gentlemen:
Each of the undersigned understands that Smurfit-Stone Container
Corporation, a Delaware corporation (the "Parent"), SCC Merger Co., a Delaware
corporation and wholly-owned subsidiary of the Parent ("Merger Sub"), and
Stone Container Corporation, a Delaware corporation (the "Company"), are
entering into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), providing for, among other things, a merger of
Merger Sub with and into the Company (the "Merger"), in which all of the
outstanding shares of $1.75 Series E Cumulative Convertible Exchangeable
Preferred Stock, par value $0.01 per share, of the Company (the "Series E
Shares") will be exchanged for (i) 7% Series A Cumulative Exchangeable
Redeemable Convertible Preferred Stock, par value $0.01 per share, of the
Parent (the "Series A Shares") and (ii) certain cash consideration as more
specifically set forth in the Merger Agreement. Terms that are defined in the
Merger Agreement but that are not defined in this letter agreement will have
the meaning ascribed to them in the Merger Agreement.
Each of the undersigned is a holder of certain of the Series E
Shares (each a "Series E Shareholder", and together with all other holders of
the Series E Shares, the "Series E Shareholders") and is entering into this
letter agreement to induce you to enter into the Merger Agreement and to
consummate the transactions contemplated thereby.
Each of the undersigned confirms its agreement with you as follows:
1. The undersigned represents, warrants and agrees that Schedule I
annexed hereto sets forth the number of Series E Shares of which the
undersigned is the beneficial owner. The undersigned represents, warrants and
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CUSIP No. 861589307 13D Page 31 of 35 Pages
Page 2
agrees that, as of the date hereof, the undersigned owns such shares free and
clear of all voting agreements and commitments of every kind.
2. The undersigned represents and warrants that the undersigned has
all necessary power and authority to enter into this letter agreement, and
that this agreement is the legal, valid and binding agreement of the
undersigned, and is enforceable against the undersigned in accordance with its
terms.
3. The undersigned represents and warrants that (A) no filing with,
and no permit, authorization, consent or approval of, any state or federal
public body or authority is necessary for the execution of this letter
agreement by the undersigned and the consummation by the undersigned of the
transactions contemplated hereby and (B) none of the execution and delivery of
this letter agreement by the undersigned, the consummation by the undersigned
of the transactions contemplated hereby or compliance by the undersigned with
any of the provisions hereof shall (i) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration of any obligation or to a loss of a material
benefit) under any of the terms, conditions or provisions of any contract,
agreement or arrangement to which the undersigned is a party or by which the
undersigned may be bound, or (ii) violate any law, order, injunction,
judgment, decree or award of any court, or quasi judicial or administrative
agency of any federal, state, local or foreign jurisdiction or arbitrator.
4. The undersigned agrees that, so long as the Merger is
consummated on or before December 31, 2000, it will not, and will not agree
to, contract to sell or otherwise transfer or dispose of any of the Series E
Shares, other than (A) pursuant to the Merger or (B) with your prior written
consent; provided, however, that nothing herein shall prevent the sale,
transfer, pledge, encumbrance, assignment or other disposition of any of such
Series E Shares, provided that the purchaser, transferee, pledgee or assignee
thereof agrees in writing to be bound by the terms of this letter agreement.
5. The undersigned agrees that, so long as the Merger is
consummated on or before December 31, 2000, all of the Series E Shares that
are beneficially owned by the undersigned at the record date for any meeting
of the Series E Shareholders called to consider and vote to approve the Merger
Agreement, the Merger and other transactions contemplated by the Merger
Agreement will be voted by the undersigned in favor thereof.
6. The undersigned agrees to cooperate fully with you in connection
with the Merger Agreement and the transactions contemplated thereby. The
undersigned and the Parent agree that all Covered Legal Fees (as defined
below) incurred by the undersigned in connection with the Merger Agreement and
the transactions contemplated thereby shall be borne by the Parent.
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CUSIP No. 861589307 13D Page 32 of 35 Pages
Page 3
As used herein, "Covered Legal Fees" shall mean legal fees and
expenses of Schulte Roth & Zabel L.L.P.; provided, however, that in no event
shall such Covered Legal Fees exceed $225,000.
7. Each of the undersigned agrees that at the Effective Time all
restricted stock agreements, registration rights agreements and shareholders'
agreement with the Company to which the undersigned is a party shall terminate
and be of no further force and effect, and the undersigned shall enter into
further documentation as requested by the Parent to evidence such termination
prior to the Effective Time.
8. Each of the undersigned agrees to surrender all Series E Shares
of which it has beneficial ownership in exchange for the Merger Consideration
in the manner described in the Merger Agreement.
9. In the event any of the undersigned is a director of the
Company, notwithstanding anything to the contrary in this letter agreement,
nothing in this letter agreement is intended or shall be construed to require
any of the undersigned to take or in any way limit any action that any of the
undersigned may take to discharge his fiduciary duties as a director of the
Company; provided, however, that no such duty shall excuse the undersigned as
a stockholder of the Parent from its obligations as a stockholder of the
Parent to vote their Series E Shares, to the extent that they may be so
voted, or otherwise perform any obligation as herein provided and to otherwise
comply with the terms and conditions of this letter agreement.
10. This letter agreement may be terminated at the option of any
party hereto at any time after the earliest of (a) termination of the Merger
Agreement in accordance with its terms, and (b) the day following the
Effective Time, provided that the obligations of the Parent under paragraphs
12 and 13 shall survive the termination of this letter agreement under this
clause (b). Notwithstanding any other provision hereof, this letter agreement
shall terminate automatically on the date of the termination of the Merger
Agreement.
11. The Parent and the Company each agree that, absent the prior
written consent of the undersigned, it will not amend, modify or waive any
provision of the Merger Agreement if such amendment, modification or waiver
would adversely affect the rights of the holders of the Series E Shares.
Without limiting the foregoing, the Parent and the Company each agree that it
will not terminate the Merger Agreement pursuant to Section 6.1(a) thereof
without the prior written consent of the undersigned. Nothing contained in
this Paragraph 11 will limit the ability of the Parent or the Company to
exercise its rights to terminate the Merger Agreement in accordance with
Sections 6.1(b) or (c) thereof.
12. The Parent agrees that its board of directors shall, from time
to time, authorize additional shares of Series A Shares as necessary to ensure
<PAGE>
CUSIP No. 861589307 13D Page 33 of 35 Pages
Page 4
that, at all times, shares of Series A Shares are available to pay unpaid
dividend obligations under Section 2 of the Certificate of Designation, to the
extent not paid in cash.
13. The Parent agrees that it shall use commercially reasonable
efforts to maintain the Series A Preferred Stock listed on the Nasdaq National
Market or a national securities exchange for as long as any Series A Preferred
Stock is outstanding.
14. The Parent acknowledges that, to the best of its knowledge, the
representations and warranties made in Article IV of the Merger Agreement are
true and correct in all material respects as of the date hereof. The Company
acknowledges that, to the best of its knowledge, the representations and
warranties made in Article III of the Merger Agreement are true and correct in
all material respects as of the date hereof.
15. This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without reference to
principles of conflicts of law. This letter agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts but
all such counterparts shall together constitute one and the same letter
agreement.
[signature page follows]
<PAGE>
CUSIP No. 861589307 13D Page 34 of 35 Pages
Page 5
Please confirm that the foregoing correctly states the understanding
between us and you by signing and returning to us a counterpart hereof.
Very truly yours,
MARINER INVESTMENT GROUP INC.
By: /s/ Mark Weissman
----------------------------------
Name: Mark Weissman
Title: Manager
DELTA DIVIDEND GROUP, INC.
By: /s/ David Gale
---------------------------------
Name: David Gale
Title: President
/s/ Mark Weissman
--------------------------------------
Mark Weissman
/s/ David Gale
--------------------------------------
David Gale
Confirmed as of the date
first above written:
SMURFIT-STONE CONTAINER CORPORATION
By: /s/ Craig Hunt
-----------------------------
Name: Craig Hunt
Title: Vice President, General Counsel and Secretary
STONE CONTAINER CORPORATION
By: /s/ Craig Hunt
-----------------------------
Name: Craig Hunt
Title: Vice President, General Counsel and Secretary
<PAGE>
CUSIP No. 861589307 13D Page 35 of 35 Pages
Page 6
SCHEDULE I
Number of Series E Cumulative Convertible
Stockholder Exchangeable Preferred Shares
Mariner Investment Group Inc. 622,200
Delta Dividend Group, Inc. 57,000
Mark Weissman 622,200
David Gale 58,000
<PAGE>
