-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WNRq0UbLskyBryG0nz1kFL+sfhGrcW+y/ZJb+FcRCDR82Wj0j6GFJl15pbcIDP67 X81kXzrcbFX6PFdKkpQ+5g== 0000898822-98-001048.txt : 19981125 0000898822-98-001048.hdr.sgml : 19981125 ACCESSION NUMBER: 0000898822-98-001048 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19981124 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SMURFIT STONE CONTAINER CORP CENTRAL INDEX KEY: 0000919226 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD MILLS [2631] IRS NUMBER: 431531401 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-43979 FILM NUMBER: 98758284 BUSINESS ADDRESS: STREET 1: JEFFERSON SMURFIT CENTRE STREET 2: 8182 MARYLAND AVE CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3147461100 MAIL ADDRESS: STREET 1: 8182 MARYLAND AVENUE CITY: ST LOUIS STATE: MO ZIP: 63105 FORMER COMPANY: FORMER CONFORMED NAME: JEFFERSON SMURFIT CORP /DE/ DATE OF NAME CHANGE: 19941205 FORMER COMPANY: FORMER CONFORMED NAME: JEFFERSON SMURFIT CORP /DE/ DATE OF NAME CHANGE: 19940523 FORMER COMPANY: FORMER CONFORMED NAME: SIBV MS HOLDINGS INC DATE OF NAME CHANGE: 19940222 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SMURFIT PACKAGING CORP CENTRAL INDEX KEY: 0000937272 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 8182 MARYLAND AVENUE CITY: ST. LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3147461100 SC 13D 1 SCHEDULE 13D ============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 SMURFIT-STONE CONTAINER CORPORATION -------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share ------------------------------------------------------------ (Title of Class of Securities) 475086104 ------------------------------------------------ (CUSIP Number) Michael R.J. Pettigrew, Secretary Jefferson Smurfit Group plc, Beech Hill, Clonskeagh, Dublin 4, Ireland 011-353-1-202-7000 ------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 18, 1998 ------------------------------------------------------------------ (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 43 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 disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose 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). SCHEDULE 13D - ---------------------------- ------------------------ CUSIP No. 475086104 Page 2 of 43 Pages - ---------------------------- ------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SMURFIT PACKAGING CORPORATION - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (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 ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ------------------------------------------------------------------- 8 SHARES SHARED VOTING POWER 36,800,000 shares BENEFICIALLY ------------------------------------------------------------------- 9 OWNED BY SOLE DISPOSITIVE POWER 0 EACH ------------------------------------------------------------------- 10 REPORTING SHARED DISPOSITIVE POWER 36,800,000 shares PERSON WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,800,000 shares - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D - ---------------------------- ------------------------ CUSIP No. 475086104 Page 3 of 43 Pages - ---------------------------- ------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SMURFIT INTERNATIONAL B.V. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY [ ] - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* BK; OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE ORGANIZATION THE NETHERLANDS - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ------------------------------------------------------------------- 8 SHARES SHARED VOTING POWER 71,638,462 shares (includes 36,800,000 shares held by subsidiary) BENEFICIALLY ------------------------------------------------------------------- 9 OWNED BY SOLE DISPOSITIVE POWER 0 EACH ------------------------------------------------------------------- 10 REPORTING SHARED DISPOSITIVE POWER 71,638,462 shares (includes 36,800,000 shares held by subsidiary) PERSON WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 71,638,462 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 33.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D - ---------------------------- ------------------------ CUSIP No. 475086104 Page 4 of 43 Pages - ---------------------------- ------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON JEFFERSON SMURFIT GROUP PLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY [ ] - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE ORGANIZATION IRELAND - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ------------------------------------------------------------------- 8 SHARES SHARED VOTING POWER 71,638,462 (includes 71,638,462 shares held by subsidiaries) BENEFICIALLY ------------------------------------------------------------------- 9 OWNED BY SOLE DISPOSITIVE POWER 0 EACH ------------------------------------------------------------------- 10 REPORTING SHARED DISPOSITIVE POWER 71,638,462 (includes 71,638,462 shares held by subsidiaries) PERSON WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 71,638,462 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 33.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 5 of 43 Pages Item 1. Security and Issuer. ------------------- This Statement relates to the common stock, par value $0.01 per share (the "SSCC Common Stock"), of Smurfit-Stone Container Corporation, a Delaware corporation (the "Issuer" or "SSCC"), whose principal executive offices are located at 150 North Michigan Avenue, Chicago, Illinois 60601. Item 2. Identity and Background. ----------------------- This Statement is filed by Smurfit Packaging Corporation, a Delaware corporation ("SPC"), Smurfit International B.V., a corporation organized under the laws of the Netherlands ("SIBV"), and Jefferson Smurfit Group plc, a corporation organized under the laws of Ireland ("JSG," and collectively with SPC and SIBV, the "Reporting Persons"). JSG is a geographically diversified company, engaged through subsidiaries and affiliates in the manufacture of paperboard, packaging products and newsprint and the reclamation of waste paper, aluminum and glass. JSG's principal business and office address is Beech Hill, Clonskeagh, Dublin 4, Ireland. SIBV is a wholly owned subsidiary of JSG and its principal business and office address is Strawinskylaan 2001, Amsterdam 1077ZZ, The Netherlands. SPC is a wholly owned subsidiary of SIBV and its principal business and office address is Jefferson Smurfit Centre, 8182 Maryland Avenue, St. Louis, Missouri 63105. Information with respect to the executive officers and directors of each of the Reporting Persons, including name, business address, present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted, is listed on the schedule attached hereto as Schedule I, which is incorporated herein by reference. Page 6 of 43 Pages None of the Reporting Persons, nor, to the best of their knowledge, any executive officer or director of any of the Reporting Persons, has during the last five years been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceedings was or is 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. The citizenship of each of the executive officers and directors of the Reporting Persons, to the best knowledge of the Reporting Persons, is set out in Schedule I, which is incorporated herein by reference. Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- The consideration paid by the Reporting Persons pursuant to the transactions described in Item 4 below was comprised of $515,780,800 in cash (for which the Reporting Persons acquired 20,000,000 shares of SSCC Common Stock). Of the $515,780,800 in cash paid by the Reporting Persons (i) $345,000,000 was obtained from a drawdown on an existing FF4,000,000,000 seven year multicurrency revolving credit facility and (ii) the remainder was obtained from the sale of certain assets to Jefferson Smurfit Corporation (U.S.). Item 4. Purpose of Transaction. ---------------------- The Issuer, Stone Container Corporation ("Stone"), Morgan Stanley Leveraged Equity Fund II, Inc. ("MSLEF"), Mr. Roger Stone and/or the Reporting Persons have entered into six agreements which set out certain transactions briefly summarized below. These agreements consist of (1) a Merger Agreement dated as of May 10, 1998, as Page 7 of 43 Pages amended, among the Issuer (formerly named Jefferson Smurfit Corporation), Stone and JSC Acquisition Corporation ("JSC Sub"), a wholly owned subsidiary of the Issuer (the "Merger Agreement"), (2) a Stock Purchase Agreement dated as of May 10, 1998 among SIBV, JSG, MSLEF, certain other stockholders of the Issuer party thereto (together with MSLEF, the "Sellers"), and the Issuer (the "Stock Purchase Agreement"), (3) a Voting Agreement dated as of May 10, 1998, as amended, among SIBV, MSLEF and Mr. Stone (the "Voting Agreement"), (4) a Standstill Agreement dated as of May 10, 1998, as amended, between JSG, MSLEF and the Issuer (the "Standstill Agreement"), (5) a Registration Rights Agreement dated as of May 10, 1998 among MSLEF, SIBV, the Issuer and certain other parties identified on the signature pages thereto (the "Registration Rights Agreement") and (6) an Agreement dated as of May 10, 1998 between SIBV and MSLEF (the "First Refusal Agreement" and collectively with the Merger Agreement, the Stock Purchase Agreement, the Voting Agreement, the Registration Rights Agreement, and the Standstill Agreement, the "Agreements"). All summary descriptions of the Agreements set forth herein are qualified in their entirety by reference to the full text of the Agreements, filed or incorporated by reference as Exhibits hereto and incorporated by reference herein. Prior to the execution of the Agreements, the Reporting Persons beneficially owned 51,638,462 shares of SSCC Common Stock, constituting approximately 46.5% of the outstanding SSCC Common Stock. As a result of the merger of JSC Sub with and into Stone (the "Merger") pursuant to the Merger Agreement, SSCC issued 103,927,909 shares of SSCC Common Stock. Pursuant to the Stock Purchase Agreement, SIBV purchased 20,000,000 shares of SSCC Common Stock from the Sellers, bringing the Reporting Persons' beneficial ownership to approximately 33.3% of the outstanding SSCC Common Page 8 of 43 Pages Stock after giving effect to the Merger. The purpose of this purchase was to reduce the dilutive impact of the Merger on the Reporting Persons' percentage interest in the SSCC Common Stock. The purpose of the Reporting Persons' beneficial ownership of SSCC Common Stock is to hold and exercise the rights with respect to SSCC, including the right to vote for the election of directors, provided to the Reporting Persons pursuant to their ownership and in accordance with the Agreements described below. Merger Agreement - ---------------- Pursuant to the Merger Agreement, on November 18, 1998 (the "Effective Time"), JSC Sub merged with and into Stone. Stone survived the Merger and became a subsidiary of the Issuer. At the Effective Time, each issued and outstanding share of common stock, par value $0.01 per share (the "Stone Common Stock"), of Stone (other than Stone Common Stock held by Stone, the Issuer or any of the Issuer's wholly owned subsidiaries) was automatically converted into .99 shares of SSCC Common Stock (with cash paid in lieu of all fractional shares that were otherwise issuable). Each share of Series E Cumulative Convertible Exchangeable Preferred Stock, par value $0.01 per share (the "Stone Series E Preferred Stock") of Stone remained outstanding and became convertible pursuant to its terms into the number of shares of SSCC Common Stock that its holder would have received in the Merger had such holder converted such share of Stone Series E Preferred Stock immediately prior to the Effective Time. In addition, after the Effective Time, the holders of shares of Stone Series E Preferred Stock became entitled, among other things and in addition to their existing voting rights, to vote upon all matters upon which Page 9 of 43 Pages holders of shares of Stone Common Stock have the right to vote and became entitled to one vote per share of Stone Series E Preferred Stock upon such matters. In accordance with the Merger Agreement, after the Effective Time, the Issuer was renamed Smurfit-Stone Container Corporation. In addition, Dr. Michael W.J. Smurfit remained Chairman of the Board of SSCC, Mr. Roger Stone, formerly Chairman of the Board, President and Chief Executive Officer of Stone, became Chief Executive Officer of SSCC, Mr. Raymond M. Curran, formerly Finance Director of JSG, became Executive Vice President, Deputy Chief Executive Officer of SSCC, and Mr. Patrick J. Moore remained Chief Financial Officer of SSCC. After the Effective Time, the SSCC Board of Directors became composed of 12 members, four of whom were nominated by SIBV, four of whom were nominated by Stone, one of whom was nominated by MSLEF, and the remaining three of whom consist of Dr. Smurfit, Mr. Stone and Mr. Curran. The directors nominated by SIBV are Dr. Dermot Smurfit, Mr. Richard W. Graham, Mr. James J. O'Connor, and Mr. Thomas A. Reynolds, III. The directors nominated by Stone are Mr. Matthew S. Kaplan, Mr. Dionisio Garza, Mr. Richard A. Giesen, and Mr. Jerry K. Pearlman. The director nominated by MSLEF is Mr. Alan E. Goldberg. Pursuant to the Merger Agreement, SSCC caused its Bylaws to be amended and restated as of the Effective Time (as amended, the "SSCC Bylaws"). These amendments, among other things, implemented certain governance arrangements relating to Board composition, Board and other committees, management, and certain additional related matters, including the requirement that at least 75% of the members of the entire SSCC Board approve certain recommendations to the stockholders. Page 10 of 43 Pages As contemplated by the Merger Agreement, the SSCC certificate of incorporation was amended (as amended, the "SSCC Charter"), among other things, to require all directors of the Board to be elected at each annual meeting of stockholders for a term of one year. In addition, the SSCC Charter was amended to provide that the amendment of the following SSCC Charter provisions will require the affirmative vote of stockholders holding at least 75% of the voting power of SSCC's then outstanding capital stock entitled to vote: (x) SSCC Charter provisions requiring a 75% stockholder vote to amend certain SSCC Bylaw provisions and (y) SSCC Charter provisions which repeat certain provisions of the SSCC Bylaws where, pursuant to the SSCC Bylaws, stockholder amendment of such provisions requires a 75% stockholder vote. In addition, both the SSCC Charter and SSCC Bylaws were amended to provide that, until the Article 5 Termination Date (as defined in the SSCC Bylaws), amendment of certain provisions of the SSCC Bylaws will require the approval of at least 75% of the members of the entire SSCC Board or the affirmative vote of the holders of at least 75% of the voting power of SSCC's outstanding capital stock entitled to vote thereon. From and after the Article 5 Termination Date, the SSCC Bylaws were amended to provide that the SSCC Bylaws may not be amended except by a majority of the members of the entire SSCC Board or by the affirmative vote of the stockholders as required by Delaware law. Stock Purchase Agreement - ------------------------ Pursuant to the Stock Purchase Agreement, on November 18, 1998, SIBV purchased from the Sellers 20,000,000 shares of SSCC Common Stock for an amount per Page 11 of 43 Pages share equal to $25.00 plus interest from May 10, 1998, or an aggregate amount of $515,780,800. In accordance with the Stock Purchase Agreement, the Stockholders' Agreement dated as of May 3, 1994 among SIBV, The Morgan Stanley Leveraged Equity Fund II, L.P. and SSCC (as amended, the "Stockholders' Agreement") and the related registration rights agreement were terminated as of November 18, 1998. The Stock Purchase Agreement provides that SIBV, the Sellers and SSCC indemnify each other and certain related parties (including JSG) for Losses (as defined in the Stock Purchase Agreement) arising out of their breach of any of the representations or warranties contained in the Stock Purchase Agreement or their non-performance of any covenant or agreement under the Stock Purchase Agreement. The Stock Purchase Agreement also provides that SSCC indemnify SIBV, the Sellers and certain related parties (including JSG) against any Losses arising out of the Stock Purchase Agreement, the Merger Agreement or the transactions contemplated by the Merger Agreement, subject to certain exceptions. The indemnification by SSCC contained in the immediately preceding sentence survives the closing under the Stock Purchase Agreement for ten months. The foregoing transactions were consummated on November 18, 1998. Voting Agreement - ---------------- Pursuant to the Voting Agreement, each of SIBV, MSLEF, and Mr. Stone has agreed to vote or cause to be voted all shares of SSCC Common Stock beneficially owned by such stockholder in favor of (i) the persons designated for nomination to the SSCC Board by the Nominating Committees (as defined in the Voting Agreement) and (ii) Mr. Stone (if Page 12 of 43 Pages Mr. Stone has not been designated for nomination by any of the Nominating Committees). The obligation of the parties to vote for Mr. Stone as a director terminates (i) if Mr. Stone is removed as Chief Executive Officer for Cause (as defined in the Voting Agreement) or (ii) when Mr. Stone reaches the age of 72. The Voting Agreement provides that, if at any time MSLEF owns less than the MSLEF Threshold Amount of Shares (as defined in the Voting Agreement), each of MSLEF, SIBV and Mr. Stone, at the request of either of the other parties, will vote or cause to be voted all shares of SSCC Common Stock beneficially owned by it in favor of (x) calling a special meeting of SSCC stockholders for the purpose of removing the MSLEF Director and (y) removing the MSLEF Director at such special meeting of stockholders. Other than as described in the preceding sentence, pursuant to the Voting Agreement each of SIBV, MSLEF and Mr. Stone has agreed not to vote or cause to be voted any shares of SSCC Common Stock beneficially owned by such stockholder in favor of the removal of any director nominated or appointed to the SSCC Board by any Nominating Committee other than for Cause. Pursuant to the Voting Agreement, each of the parties thereto has agreed that, so long as MSLEF has at no time beneficially owned less than the MSLEF Threshold Amount of Shares, if at any time there is no MSLEF Director on the SSCC Board (due to the MSLEF Director's resignation, retirement, death or otherwise), it will vote or cause to be voted all shares of SSCC Common Stock beneficially owned by it in favor of (x) calling a special meeting of SSCC stockholders for the purpose of removing an Unaffiliated Director (as defined in the Voting Agreement) (if any) and replacing such Unaffiliated Director (or filling the vacancy left by the MSLEF Director (as defined in the Voting Agreement)) with a Page 13 of 43 Pages person designated by MSLEF and (y) at such special meeting, removing such Unaffiliated Director, electing the designee of MSLEF to the SSCC Board and designating such person as the "MSLEF Director" on the SSCC Board. In addition, each of the parties to the Voting Agreement has agreed not to vote in favor of any resolution by any stockholder that seeks to amend, repeal, or adopt any provision inconsistent with (i) Article 5 of the SSCC Bylaws or (ii) the SSCC Charter provisions requiring, in the case of stockholder amendment or repeal of certain SSCC Bylaw provisions, the vote of holders of at least 75% of the voting power of SSCC's outstanding capital stock. Standstill Agreement - -------------------- The Standstill Agreement governs certain aspects of the Reporting Persons' investment in SSCC (a) for a period of five years from the Effective Time or (b) from the Effective Time until the Article 5 Termination Date. JSG has agreed in the Standstill Agreement that, subject to specified exceptions contained therein, until the fifth anniversary of the Effective Time, it will not, and will cause each of its Subsidiaries (as defined in the Standstill Agreement) not to, directly or indirectly, acquire any Voting Securities (as defined in the Standstill Agreement) if, after giving effect to such acquisition, JSG and its Subsidiaries would beneficially own Voting Securities representing more than 40% of the Total Voting Power (as defined in the Standstill Agreement) represented by all outstanding Voting Securities. MSLEF has also agreed in the Standstill Agreement that, until the fifth anniversary of the Effective Time, it will not, and will cause each of its Subsidiaries not to, Page 14 of 43 Pages directly or indirectly, acquire any Voting Securities (except pursuant to a stock split, stock dividend, rights offering, recapitalization, reclassification or similar transaction). Except as expressly contemplated by the SSCC Bylaws or the Voting Agreement, from the Effective Time until the Article 5 Termination Date (or, in the case of clause (g) below, until the fifth anniversary of the Effective Time), JSG has agreed in the Standstill Agreement that it will not, and will cause each of its Subsidiaries not to: (a) make, or in any way participate in, any "solicitation" of "proxies" to vote (as such terms are defined in Rule 14a-1 under the 1934 Act), solicit any consent or communicate with or seek to advise or influence any person or entity with respect to the voting of any Voting Securities or become a "participant" in any "election contest" (as such terms are defined or used in Rule 14a-11 under the 1934 Act) with respect to SSCC; (b) form, join or encourage the formation of any "group" (within the meaning of Section 13(d)(3) of the 1934 Act) with respect to any Voting Securities, (c) deposit any Voting Securities into a voting trust or subject any such Voting Securities to any arrangement or agreement with respect to the voting thereof (other than with its subsidiaries); (d) initiate, propose or otherwise solicit stockholders for the approval of one or more stockholder proposals with respect to SSCC as described in Rule 14a-8 under the 1934 Act, or induce or attempt to induce any other person or entity to initiate any such stockholder proposal; (e) seek election to or seek to place a representative on the SSCC Board or seek the removal of any member of the SSCC Board; (f) call or seek to have called any meeting of the stockholders of SSCC; (g) solicit, seek to effect, negotiate with or provide any information to any other party with respect to, or make any statement or proposal (except for any statement or proposal in response to an acquisition or business combination proposal by a party other than JSG or its Subsidiaries), whether Page 15 of 43 Pages written or oral, to the SSCC Board or otherwise make any public announcement (except as required by law or the requirements of any relevant stock exchange or in the case of an acquisition or business combination proposal by a party other than JSG or its Subsidiaries) whatsoever with respect to, any form of acquisition or business combination transaction involving SSCC or any significant portion of its assets, including, without limitation, a merger, tender offer, exchange offer or liquidation, or any restructuring, recapitalization or similar transaction with respect to SSCC; or (h) instigate or encourage any third party to do any of the foregoing. From the Effective Time until the Article 5 Termination Date, JSG has agreed in the Standstill Agreement that it will not, and will cause its Subsidiaries not to, directly or indirectly, sell or otherwise transfer in any manner any Voting Securities to any "person" (within the meaning of Section 13(d)(3) of the 1934 Act) who, to the knowledge of JSG, after reasonable inquiry, owns (or as a result of such sale or transfer would own) SSCC securities representing more than 5% of the Total Voting Power. The Standstill Agreement provides that the restrictions set forth in the preceding three paragraphs as to JSG and its Subsidiaries will be suspended (and during such period of suspension be of no force and effect) in the event that SSCC enters into a written agreement concerning an Acquisition Proposal (as in the Standstill Agreement) subject to reinstatement as described in the Standstill Agreement. The Standstill Agreement also provides that in the event that any person (other than JSG or any of its Subsidiaries or any person acting on behalf of or in participation with any of the foregoing) commences a tender or exchange offer as described in the Standstill Agreement, then the restrictions contained in the Standstill Agreement and Page 16 of 43 Pages summarized herein as to JSG and its Subsidiaries will be suspended (and during such period of suspension be of no force and effect) for such period as described in the Standstill Agreement. The Standstill Agreement further provides that in the event that it is publicly announced or JSG or SSCC becomes aware (in which case it must promptly notify the other) that any person (other than JSG or any of its subsidiaries or any person acting on behalf of or in participation with any of the foregoing), together with such person's subsidiaries, or any other person acting on behalf of or in participation with such person or its subsidiaries has become the beneficial owner of Voting Securities representing more than 15% of the Total Voting Power, then certain of the restrictions set forth in the Standstill Agreement will terminate (without reinstatement) subject to certain exceptions. Registration Rights Agreement - ----------------------------- Pursuant to the Registration Rights Agreement and subject to certain limitations contained therein, each of SIBV and MSLEF is entitled to two demand registrations. MSLEF has the right to effect its two demand registrations before SIBV is allowed to effect a demand registration; provided that if the MSLEF demand registrations are not effected by the third anniversary of the Effective Time, SIBV is permitted to exercise its rights to request registration. The Registration Rights Agreement requires that each of SIBV's and MSLEF's demand registrations include at least 1,000,000 Registrable Securities (as defined in the Registration Rights Agreement). In addition, MSLEF has agreed in the Registration Rights Agreement to use reasonable best efforts to sell or cause to be sold in each of its demand registrations the lesser of (x) all Registrable Securities that it owns at the Page 17 of 43 Pages time of such demand registration and (y) all Registrable Securities which the managing underwriter advises MSLEF can be sold in such demand registration; provided that notwithstanding the foregoing, neither MSLEF nor any other Morgan Holder (as defined in the Registration Rights Agreement) who has requested that its Registrable Securities be included in such demand registration will be under any obligation to sell its Registrable Securities pursuant to the first MSLEF demand registration if the price per share of SSCC Common Stock on the NYSE or the Nasdaq on the effective date of the registration statement relating to such demand registration has decreased by 5% since the date on which MSLEF requested such demand registration. Subject to certain exceptions specified therein, the Registration Rights Agreement also entitles each of SIBV, MSLEF and SSCC to include shares for its own account in the registrations initiated by the other parties; provided that SIBV is not permitted to exercise its "piggyback" rights until the third anniversary of the Effective Time; provided, further, that each of SIBV, MSLEF and SSCC has priority with respect to registrations initiated by it. The Registration Rights Agreement terminates, except with respect to rights to indemnification, upon the earlier to occur of the mutual agreement of the parties thereto and December 31, 2010. If earlier, the rights and obligations of each of the Morgan Holders and the SIBV Holders (as defined in the Registration Rights Agreement) terminate when such Morgan Holders or SIBV Holders, as the case may be, cease to own, in the aggregate, at least 1,000,000 shares of SSCC Common Stock. Page 18 of 43 Pages First Refusal Agreement - ----------------------- Pursuant to the First Refusal Agreement, prior to the acceptance of any Offer (as defined in the First Refusal Agreement) made by a Related Group (as defined in the First Refusal Agreement) to purchase any of the shares of SSCC Common Stock beneficially owned by MSLEF, MSLEF has agreed to give SIBV two Business Days' notice of such proposed Transfer (as defined in the First Refusal Agreement). MSLEF has agreed that such notice shall constitute an offer by MSLEF to sell the shares of SSCC Common Stock subject to the Offer to SIBV on the same terms and subject to the same conditions as the Offer. SIBV must notify MSLEF whether it will accept MSLEF's offer prior to the expiration of the three Business Day period described in the First Refusal Agreement, provided that SIBV may only exercise its right of first refusal with respect to all shares of SSCC Common Stock subject to the Offer, subject to certain exceptions. SIBV's right of first refusal does not apply to (i) sales by MSLEF in underwritten public offerings effected pursuant to the Registration Rights Agreement, (ii) any sales effected by MSLEF in the open market pursuant to Rule 144 under the Securities Act of 1933, as amended, or (iii) any distribution of shares by The Morgan Stanley Leveraged Equity Fund, L.P. to its limited partners. In addition, MSLEF has agreed that it will not effect a Transfer to a Related Group of any shares of SSCC Common Stock it beneficially owns, subject to certain provisions of the First Refusal Agreement, if such Transfer would result in such Related Group beneficially owning more than five percent of the then outstanding shares of SSCC Common Stock. Page 19 of 43 Pages Subject to the terms of the Agreements, the Reporting Persons may reconsider their ownership position with respect to the Issuer at any future date in light of the circumstances that may exist at that time and may buy, sell, hold or otherwise modify their beneficial ownership of securities of the Issuer based upon such reconsideration. Except as set forth above and in Item 6 below, the Reporting Persons have no plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; Page 20 of 43 Pages (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. ------------------------------------ (a) SSCC has informed the Reporting Persons that after giving effect to the transactions contemplated by the Merger Agreement and the Stock Purchase Agreement, 214,925,671 shares of SSCC Common Stock were outstanding as of the close of business on November 18, 1998. As of the date of this Statement, the Reporting Persons beneficially owned an aggregate of 71,638,462 shares of SSCC Common Stock (approximately 33.3% of the shares of SSCC Common Stock outstanding). To the best knowledge of the Reporting Persons, only the executive officers and directors of the Reporting Persons listed on the schedule attached hereto as Schedule II, which is incorporated herein by reference, beneficially own shares of SSCC Common Stock of the Issuer. Of the shares set forth above, all such shares are beneficially owned directly or indirectly by the persons named unless otherwise noted on Schedule II. (b) Except with respect to SPC, the Reporting Persons share the power to vote or direct the voting of, or to dispose or direct the disposition of, the shares of SSCC Common Stock held by the other Reporting Persons. SPC shares the power to vote or direct Page 21 of 43 Pages the voting of, or to dispose or direct the disposition of, the shares of SSCC Common Stock held by SPC with the other Reporting Persons. To the best knowledge of the Reporting Persons, except as set forth on Schedule II, no executive officer or director of the Reporting Persons has or shares the power to vote or direct the voting of, or to dispose or direct the disposition of, any shares of SSCC Common Stock. (c) Except as set forth on Schedule II, to the best knowledge of the Reporting Persons, none of the above shares were acquired during the past 60 days, other than in connection with the Merger and the other transactions described in this Schedule 13D. Except as set forth on Schedule II, to the best knowledge of the Reporting Persons, no executive officer or director of the Reporting Persons beneficially owns any shares of SSCC Common Stock or has a right to acquire such shares, and no executive officer or director, or any of them, has effected any transactions in the SSCC Common Stock during the past 60 days. (d) To the best knowledge of the Reporting Persons, no other persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of SSCC Common Stock held by the Reporting Persons or held by any executive officer or director of any Reporting Person, except as set forth on Schedule II. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. ---------------------------------------- Reference is hereby made to the description of the Agreements described in Item 4 above. Although the Reporting Persons hereby describe a relationship with other Page 22 of 43 Pages persons pursuant to the Voting Agreement and may be deemed to be a group pursuant to Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Reporting Persons hereby expressly disclaim the existence of a group and the filing of this Statement shall not be construed as an admission that the Reporting Persons are, for purposes of Section 13(d) or 13(g) of the 1934 Act, the beneficial owners of any securities covered by the Voting Agreement and not disclosed in this Statement. To the best knowledge of the Reporting Persons and except as set forth on Schedule II, there are no contracts, arrangements, understandings or relationships between any executive officer or director of the Reporting Persons, and any other person with respect to any securities of the Issuer, including any contract, arrangement, understanding or relationship concerning the transfer or the voting of any securities of the Issuer, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. -------------------------------- See Exhibit Index on page 31. Page 23 of 43 Pages SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. SMURFIT PACKAGING CORPORATION By: /s/ Charles A. Hinrichs ------------------------------- Name: Charles A. Hinrichs Title: Vice President and Treasurer SMURFIT INTERNATIONAL B.V. By: /s/ Michael O'Riordan ------------------------------- Name: Michael O'Riordan Title: Managing Director JEFFERSON SMURFIT GROUP PLC By: /s/ Michael R.J. Pettigrew ------------------------------- Name: Michael R.J. Pettigrew Title: Secretary Date: November 24, 1998 Page 24 of 43 Pages SCHEDULE I NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH DIRECTOR AND OFFICER OF SMURFIT PACKAGING CORPORATION Name and Business Address Principal Occupation Citizenship - ------------------------- -------------------- ----------- Peter A. Cosgrove President and Chief Executive Ireland American Lithographers Inc. Officer, Smurfit Packaging 21062 Forbes Street Corporation Hayward, CA 94545 Patrick J. Moore Senior Vice President and Chief United 8182 Maryland Avenue Financial Officer, Smurfit-Stone States St. Louis, MO 63105 Container Corporation Charles A. Hinrichs Vice President and Treasurer, United 8182 Maryland Avenue Smurfit-Stone Container States St. Louis, MO 63105 Corporation Derry L. Hobson Divisional Vice President, United 8182 Maryland Avenue Smurfit Packaging Corporation States St. Louis, MO 63105 Craig A. Hunt Vice President, Secretary and United 8182 Maryland Avenue General Counsel, Smurfit-Stone States St. Louis, MO 63105 Container Corporation James B. Malloy Chairman of the Board, Smurfit United 8182 Maryland Avenue Packaging Corporation States St. Louis, MO 63105 Richard P. Marra Assistant Treasurer, Smurfit- United 8182 Maryland Avenue Stone Container Corporation States St. Louis, MO 63105 Page 25 of 43 Pages NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH DIRECTOR AND OFFICER OF SMURFIT INTERNATIONAL B.V. Name and Business Address Principal Occupation Citizenship - ------------------------- -------------------- ----------- Jaap Willeumier Lawyer Netherlands Stibbe Simont Monahan Duhot Strawinskylaan 2001 1077 ZZ Amsterdam The Netherlands Gert Mosler Lawyer Netherlands Stibbe Simont Monahan Duhot Strawinskylaan 2001 1077 ZZ Amsterdam The Netherlands Ben van der Weerden Chief Executive, Netherlands Smurfit Lona Verpakking B.V. Smurfit Netherlands and Voorsterweg 94, P.O. Box 1 Germany 7370 AA Loenen The Netherlands Leendert P. Van den Blink Retired Lawyer Netherlands Jan van Goyenkade 17 1075 HR Amsterdam The Netherlands Michael J. Clayton Finance Director, United Kingdom Smurfit UK Smurfit UK 2, The Beacons Beaconsfield Rd. Hatfield, Hertfordshire AL 10 8EQ England J.M. van der Beek Retired Tax Lawyer Netherlands Schouwweg 49 2243 BE Wassenarr, The Netherlands J.M. van den Wall Bake Lawyer Netherlands Stibbe Simont Monahan Duhot Strawinskylaan 2001 1077 ZZ Amsterdam The Netherlands Page 26 of 43 Pages NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH DIRECTOR AND OFFICER OF SMURFIT INTERNATIONAL B.V. Name and Business Address Principal Occupation Citizenship - ------------------------- -------------------- ----------- Michael R.J. Pettigrew Group Secretary, Ireland Jefferson Smurfit Group plc Jefferson Smurfit Group plc Beech Hill, Clonskeagh, Dublin, 4, Ireland Gary McGann Chief Financial Officer, Ireland Jefferson Smurfit Group plc Jefferson Smurfit Group plc Beech Hill, Clonskeagh, Dublin, 4, Ireland Michael O'Riordan Managing Director, Ireland Villa les Bruyeres, Smurfit International 1, Place Sainte Devote 98000 Monaco Rokin Corporate Services, B.V. Management Company Netherlands Strawinskylaan 2001 1077 ZZ Amsterdam The Netherlands Page 27 of 43 Pages NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH DIRECTOR AND OFFICER OF JEFFERSON SMURFIT GROUP PLC Name and Business Address Principal Occupation Citizenship - ------------------------- -------------------- ----------- Michael W.J. Smurfit Chairman of the Board and Ireland; United Jefferson Smurfit Group plc Chief Executive Officer, Kingdom Beech Hill, Jefferson Smurfit Group plc Clonskeagh, Dublin, 4, Ireland P. Alan Smurfit Chairman of the Board and Ireland Smurfit Latin America Chief Executive Officer, One Turnberry Place Smurfit Latin America 19495 Biscayne Blvd. Suite 300 Aventura, Florida 33180 Dermot F. Smurfit World Vice President, Ireland Jefferson Smurfit Group plc Marketing and Sales, Beech Hill, Jefferson Smurfit Group plc Clonskeagh, Dublin, 4, Ireland Howard E. Kilroy Governor, Ireland Bank of Ireland, Bank of Ireland Headquarters, Lower Baggot Street Dublin, 2, Ireland Peter J.P. Gleeson Chairman of the Board, Ireland Castle Hosiery Co. Ltd. Castle Hosiery Co., Ltd. 2001 City West Business Campus Naas Road Dublin, 24, Ireland James B. Malloy Chairman of the Board, United States Smurfit Packaging Corporation Smurfit Packaging Corporation 8182 Maryland Avenue St. Louis, MO 63105 Page 28 of 43 Pages NAME, PRINCIPAL OCCUPATION AND CITIZENSHIP OF EACH DIRECTOR AND OFFICER OF JEFFERSON SMURFIT GROUP PLC Name and Business Address Principal Occupation Citizenship - ------------------------- -------------------- ----------- James M. O'Dwyer Chairman of the Board, Ireland Arthur Cox & Co. Arthur Cox & Co., Arthur Cox Building Solicitors Earlsfort Terrace, Dublin, 2, Ireland Anthony P.J. Smurfit Deputy Chief Executive, Ireland Smurfit Europe Smurfit Europe 2 rue Goethe 75116 Paris, France Ray Mac Sharry Company Director Ireland 46, Upper Mount Street, Dublin, 2, Ireland Martin Rafferty Chairman of the Board, Ireland United Drug plc United Drug plc Belgard Road, Tallaght, Dublin, 24, Ireland Patrick J. Wright President and Ireland Jefferson Smurfit Group plc Chief Operations Officer, Beech Hill, Jefferson Smurfit Group plc Clonskeagh, Dublin, 4, Ireland Albert Reynolds Member of Parliament, Ireland Dail Eireann Republic of Ireland Kildare Street, Dublin, 2, Ireland Gary McGann Chief Financial Officer, Ireland Jefferson Smurfit Group plc Jefferson Smurfit Group plc Beech Hill, Clonskeagh, Dublin, 4, Ireland Page 29 of 43 Pages Name and Business Address Principal Occupation Citizenship - ------------------------- -------------------- ----------- Mary Redmond Ireland; United 36, Wellington Road, Lawyer Kingdom Ballsbridge, Dublin, 4, Ireland James R. Thompson United States Winston & Strawn Chairman, 35 West Wacker Drive Winston & Strawn Chicago, IL 60601 Michael R.J. Pettigrew Ireland Jefferson Smurfit Group plc Group Secretary, Beech Hill, Jefferson Smurfit Group plc Clonskeagh, Dublin, 4, Ireland Page 30 of 43 Pages SCHEDULE II The following directors and officers of the Reporting Persons beneficially own, directly or indirectly, the shares of SSCC Common Stock so indicated. Shares of SSCC Common Name of Officer or Director Stock Beneficially Owned - --------------------------- ------------------------ Michael W.J. Smurfit 1,056,283^1 Dermot F. Smurfit 91,200^2 P. Alan Smurfit 385,000^3 Howard E. Kilroy 423,000^4 James B. Malloy 724,000^5 James R. Thompson 90 Anthony P.J. Smurfit 62,000^6 Patrick J. Moore 334,104^7 Charles A. Hinrichs 76,057^8 Derry L. Hobson 4,050 Craig A. Hunt 8,723^9 Richard P. Marra 10,111^10 - --------------------------- 1 Includes 1,026,000 options exercisable within 60 days. 2 Includes 91,200 options exercisable within 60 days. 3 Includes 234,500 shares pledged pursuant to bank loans and 151,000 options exercisable within 60 days. 4 Includes 423,000 options exercisable within 60 days. 5 Includes 724,000 options exercisable within 60 days. 6 Includes 50,000 shares owned by trust under which Mr. Smurfit does not have voting or investment power (which shares are pledged pursuant to bank loans) and 12,000 options exercisable within 60 days. 7 Includes 325,000 options exercisable within 60 days. 8 Includes 70,000 options exercisable within 60 days. 9 Includes 6,500 options exercisable within 60 days. 10 Includes 6,000 options exercisable within 60 days. Page 31 of 43 Pages EXHIBIT INDEX EXHIBIT DESCRIPTION PAGES ------- ----------- ----- 2.1 Agreement and Plan of Merger dated as of May 10, 1998 among Smurfit-Stone Container Corporation ("SSCC") (formerly known as Jefferson Smurfit Corporation ("JSC")), Stone Container Corporation ("Stone") and JSC Acquisition Corporation (incorporated by reference to Annex A to the Joint Proxy Statement/Prospectus contained in JSC's Registration Statement on Form S-4 (File No. 333-65431) dated October 8, 1998). 2.2 Stock Purchase Agreement dated as of May 10, 1998 among Smurfit International B.V. ("SIBV"), Jefferson Smurfit Group plc ("JSG"), Morgan Stanley Leveraged Equity Fund II, Inc. ("MSLEF"), the other shareholders of JSC party thereto and SSCC (incorporated by reference to Annex G to the Joint Proxy Statement/Prospectus contained in JSC's Registration Statement on Form S-4 (File No. 333-65431) dated October 8, 1998). 10.1 Voting Agreement dated as of May 10, 1998, as amended, among SIBV, MSLEF and Mr. Roger W. Stone (incorporated by reference to Exhibit 10(f) to JSC's Registration Statement on Form S-4 (File No. 333-65431) dated October 8, 1998). 10.2 Standstill Agreement dated as of May 10, 1998, as amended, among JSG, MSLEF and SSCC (incorporated by reference to Annex H to the Joint Proxy Statement/Prospectus contained in JSC's Registration Statement on Form S-4 (File No. 333-65431) dated October 8, 1998). 10.3 Registration Rights Agreement dated as of May 10, 1998 among MSLEF, SIBV, SSCC and the other parties identified on the signature pages thereto (incorporated by reference to Exhibit 10(e) to JSC's Registration Statement on Form S-4 (File No. 333-65431) dated October 8, 1998). 10.4 Agreement dated as of May 10, 1998 between SIBV 32 and MSLEF. 99.1 Joint Filing Agreement, dated as of November 18, 42 1998 by and among Smurfit Packaging Corporation, Smurfit International B.V., and Jefferson Smurfit Group plc. EX-10 2 EXHIBIT 10.4 -- FIRST REFUSAL AGREEMENT Page 32 of 43 Pages Exhibit 10.4 AGREEMENT AGREEMENT dated as of May 10, 1998 between Smurfit International B.V., a corporation organized under the laws of the Netherlands ("SIBV"), and Morgan Stanley Leveraged Equity Fund II, Inc., a Delaware corporation ("MSLEF"). W I T N E S S E T H WHEREAS, SIBV and MSLEF are stockholders of Jefferson Smurfit Corporation ("JSC"); and WHEREAS, MSLEF and SIBV are parties to a Stock Purchase Agreement dated as of the date hereof (the "Stock Purchase Agreement") among SIBV, Jefferson Smurfit Group plc ("JSG"), MSLEF, JSC and certain other JSC stockholders, pursuant to which SIBV has agreed to purchase from MSLEF and certain other JSC stockholders, and MSLEF and certain other JSC stockholders have agreed to sell to SIBV, shares of common stock, par value $0.01 per share, of JSC (the "Common Stock"), upon the terms and subject to the conditions set forth therein; and WHEREAS, in connection with the stock purchase pursuant to the Stock Purchase Agreement, MSLEF has agreed to give SIBV a right of first refusal, exercisable only under certain circumstances, on the shares of Common Stock that it beneficially owns after the closing of the Stock Purchase Agreement. The parties hereto agree as follows: ARTICLE 1 Definitions Section 1.1. Definitions. (A) The following terms, as used herein, have the following meanings: "Business Day" means any day other than a Saturday, a Sunday, or a bank holiday in the United States or Ireland. "1933 Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "1934 Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Person" means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. Page 33 of 43 Pages "Transfer" shall mean sell, assign, transfer, exchange or otherwise dispose of an interest in shares of Common Stock. Each of the following terms is defined in the Section set forth opposite such term: Term Section ---- ------- Common Stock................................. recitals Encumbrances................................. 3.01 JSC.......................................... recitals JSG.......................................... recitals MSLEF........................................ preamble Offer........................................ 4.01 Related Group................................ 4.01 SIBV......................................... preamble Stock Purchase Agreement..................... preamble Stockholders' Agreement ..................... 3.01 ARTICLE 2 Representations and Warranties of SIBV SIBV represents and warrants to MSLEF as of the date of effectiveness of this Agreement pursuant to Section 7.6 that: Section 2.1. Organization. SIBV is a corporation duly organized and validly existing under the laws of the Netherlands. Section 2.2. Authority. SIBV has all corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by SIBV of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of SIBV. No other action on the part of SIBV or its stockholders is necessary to authorize the execution and delivery of this Agreement by SIBV or the performance by SIBV of its obligations hereunder. This Agreement has been duly executed and delivered by SIBV and constitutes a legal, valid and binding agreement of SIBV, enforceable against SIBV in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors' rights generally and subject to general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). Section 2.3. No Violation. The execution and delivery of this Agreement by SIBV, and the performance by SIBV of its obligations hereunder and the consummation of the transactions contemplated hereby, will not: (a) violate any provision of law, rule, regulation, order, writ, judgment, injunction, decree, determination or award applicable to SIBV, (b) require the consent, waiver, approval, license or authorization or any filing by SIBV with any governmental authority Page 34 of 43 Pages (other than any filings by SIBV that may be required under the 1934 Act) or (c) violate, result (with or without notice or the passage of time, or both) in a breach of or give rise to the right to accelerate, terminate or cancel any obligation under or constitute (with or without notice or the passage of time, or both) a default under, any of the terms or provisions of any charter or other governing document, bylaw, agreement, note, indenture, mortgage, contract, order, judgment, ordinance, regulation or decree to which SIBV is subject or by which SIBV is bound and which would have an adverse effect on the ability of SIBV to perform its obligations under this Agreement. Section 2.4. Securities Act Representation. SIBV will not purchase any shares of Common Stock with a view to a distribution or resale of any of such Shares in violation of any applicable securities laws. SIBV understands that the shares of Common Stock constitute restricted securities, are not registered under the 1933 Act or any state securities laws, and the certificates representing such shares of Common Stock will bear a legend to that effect. SIBV agrees that it shall not sell any of such shares of Common Stock in violation of the 1933 Act. SIBV represents that it is a sophisticated investor and is able to bear the risk of an investment in JSC. ARTICLE 3 Representations and Warranties of MSLEF MSLEF represents and warrants to SIBV as of the date of effectiveness of this Agreement pursuant to Section 7.6 that: Section 3.1. Title to Shares. MSLEF has good and valid title to the shares of Common Stock that it owns, free and clear of any security interests, liens, claims, pledges, encumbrances or other rights or claims of any other Person of any kind or any preemptive rights (collectively, "Encumbrances"), except as may exist under the Stockholders' Agreement (the "Stockholders' Agreement") dated as of May 3, 1994 and amended as of January 13, 1997 or the related Registration Rights Agreement dated as of the same date. At the closing of any purchase and sale hereunder, SIBV will acquire all of MSLEF's right, title and interest in and to the shares of Common Stock subject to such purchase and sale and will receive good and valid title to such shares of Common Stock free and clear of any and all Encumbrances. As of the date hereof, MSLEF beneficially owns the shares of Common Stock set forth on Schedule I hereto. Section 3.2. Organization. MSLEF is a corporation duly incorporated or formed, validly existing and in good standing under the laws of jurisdiction of its incorporation. Section 3.3. Authority. MSLEF has all corporate power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated on its part hereby. The execution, delivery and performance by MSLEF of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action Page 35 of 43 Pages on the part of MSLEF. No other action on the part of MSLEF or its stockholders or partners, as the case may be, is necessary to authorize the execution and delivery of this Agreement by MSLEF orthe performance by MSLEF of its obligations hereunder. This Agreement has been duly executed and delivered by MSLEF and constitutes a legal, valid and binding agreement of MSLEF, enforceable against MSLEF in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting creditors' rights generally and subject to general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). Section 3.4. No Violation. The execution and delivery of this Agreement by MSLEF, and the performance by MSLEF of its obligations hereunder and the consummation of the transactions contemplated hereby, will not: (a) violate any provision of law, rule, regulation, order, writ, judgment, injunction, decree, determination or award applicable to MSLEF, (b) require the consent, waiver, approval, license or authorization or any filing by MSLEF with any governmental authority, (c) violate, result (with or without notice or the passage of time, or both) in a breach of or give rise to the right to accelerate, terminate or cancel any obligation under or constitute (with or without notice or the passage of time, or both) a default under, any of the terms or provisions of any charter or other governing document, bylaw, agreement, note, indenture, mortgage, contract, order, judgment, ordinance, regulation or decree to which MSLEF is subject or by which MSLEF is bound and which would have an adverse effect on the ability of MSLEF to perform its obligations under this Agreement or (d) result in the creation or imposition of any tax or encumbrance on the shares of Common Stock, except for transfer taxes, if any. ARTICLE 4 Right of First Refusal Section 4.1. Right of First Refusal. (a) Except as provided in this Section 4.1, MSLEF agrees that it will not effect a Transfer to any Person or member of a group (as such term is defined in Rule l3d-5 promulgated under the 1934 Act) (such Person or group, a "Related Group") of any shares of Common Stock that it beneficially owns if after reasonable inquiry MSLEF believes that the number of shares of Common Stock being Transferred to such Related Group by MSLEF would, when taken together with all other shares of Common Stock then beneficially owned by such Related Group, amount to more than five percent of the then outstanding shares of Common Stock. (b) Prior to the acceptance of any offer made by a Related Group (each such offer, an "Offer") to purchase any of the shares of Common Stock that it beneficially owns, MSLEF will give SIBV two Business Days' notice of such proposed Transfer which notice shall state all of the material terms and conditions of the Offer other than the identity of the Related Group. Delivery of any such notice to SIBV will constitute an offer by MSLEF to sell the shares of Page 36 of 43 Pages Common Stock subject to the Offer to SIBV on the same terms and subject to the same conditions as the Offer. (c) Prior to the expiration of the three Business Day period referred to in subsection (b), SIBV will notify MSLEF whether it will accept MSLEF's offer to sell to SIBV the shares of Common Stock subject to the Offer; provided that SIBV may only exercise its right of first refusal with respect to all shares of Common Stock subject to the Offer unless such exercise would result in a breach by SIBV of its obligations under the Standstill Agreement dated as of even date herewith among JSG, JSC and MSLEF in which event SIBV may exercise its right of first refusal but only to the fullest extent possible without breaching such Agreement; provided, further, that MSLEF shall be free to Transfer to the Related Group without restriction under this Agreement any shares of Common Stock subject to the Offer that SIBV would have been required to purchase upon exercise of its right of first refusal pursuant to the preceding proviso but for the limitation contained in such proviso. Failure of SIBV to so notify MSLEF during such period shall be deemed a decision not to purchase any of such shares of Common Stock. (d) If SIBV fails to exercise its option to purchase shares of Common Stock subject to the Offer, MSLEF shall be free to sell such shares of Common Stock (or any portion thereof) to the Related Group without restriction under this Agreement; provided that such sale is consummated within sixty days thereafter at a per share price equal to or greater than the price, and upon the same terms and conditions, as set forth in the notice delivered pursuant to subsection (b) of this Section 4.1. If such sale is not so consummated within such sixty-day period, such shares of Common Stock shall again be subject to SIBV's rights as set forth in this Section 4.1. (e) The election by SIBV to purchase shares of Common Stock subject to the Offer shall result in the creation of a binding, irrevocable agreement on the part of SIBV to purchase such shares and on the part of MSLEF to sell such shares to SIBV, and the parties hereto shall consummate such purchase and sale within three business days of the date on which SIBV notifies MSLEF of its intent to exercise its right of first refusal, although no party shall be required to consummate the transaction if such consummation would violate applicable law. If the closing of such purchase and sale does not occur before the expiration of the three Business Day period referred to in this subsection, MSLEF shall be free to sell the shares of Common Stock (or any portion thereof) subject to the Offer to the Related Group or any one or more parties, within the succeeding 60 days, without restriction under this Agreement at any price and upon any terms and conditions. If such sale is not so consummated within such sixty-day period, such shares of Common Stock shall again be subject to SIBV's rights as set forth in this Section 4.1. (f) The provisions of this Section 4.1 shall be inapplicable (i) to sales of shares of Common Stock by MSLEF in underwritten public offerings effected pursuant to the Registration Rights Agreement dated of even date herewith among JSC, SIBV, MSLEF and certain other JSC stockholders, (ii) to any sales of shares of Common Stock effected by MSLEF in the open Page 37 of 43 Pages market pursuant to Rule 144 under the 1933 Act or (iii) to any distribution of shares by The Morgan Stanley Leveraged Equity Fund II, L.P. to its limited partners. ARTICLE 5 Survival Section 5.1. Survival. The representations, warranties, covenants and agreements of the parties contained in this Agreement shall survive for the applicable statute of limitations period, notwithstanding any investigation by or on behalf of any party before or after. ARTICLE 6 Termination Section 6.1. Termination. This Agreement may be terminated at any time by mutual written agreement of SIBV and MSLEF. This Agreement shall automatically terminate if the Stock Purchase Agreement is terminated. Section 6.2. Effect of Termination. If this Agreement is terminated pursuant to Section 6.1, all further obligations of the parties hereto under this Agreement shall terminate without further liability or obligation of any party to any other party, including liability for damages, except that no such termination shall relieve any party hereto from liability for breach of this Agreement. ARTICLE 7 Miscellaneous Section 7.1. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given, if to SIBV, to: Smurfit International B.V. Strawinskylaan 2001 Amsterdam 1077ZZ, The Netherlands Attention: Rokin Corporate Services, B.V. Fax: 31-20-546-0717 Page 38 of 43 Pages with a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Steven A. Rosenblum, Esq. Fax: (212) 403-2000 William Fry Fitzwilton House, Wilton Place, Dublin 2, Ireland Attention: Houghton Fry, Esq. Fax: 353-1-639-5333 if to MSLEF, to: Morgan Stanley Leveraged Equity Fund II, Inc. 1221 Avenue of the Americas New York, New York 10020 Attention: Alan E. Goldberg Fax: (212)762-6466 with a copy to: Morgan Stanley Capital Partners 1221 Avenue of the Americas New York, New York 10020 Attention: Peter R. Vogelsang, Esq. Fax: (212) 762-6466 All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Section 7.2. Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such cost or expense; provided that SIBV and MSLEF will share equally any transfer taxes payable in the United States in connection with any purchase and sale of the shares of Common Stock hereunder. Section 7.3. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior Page 39 of 43 Pages agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. Section 7.4. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, except that SIBV may transfer or assign, in whole or from time to time in part, to any one or more of its direct or indirect subsidiaries, the right to purchase all or a portion of the shares of Common Stock beneficially owned by MSLEF, on the terms and subject to the conditions specified herein, but no such transfer or assignment will relieve SIBV of its obligations hereunder. Section 7.5. Amendments and Waivers. (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by SIBV and MSLEF, or in the case of a waiver, by the party against whose rights the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Section 7.6. Effectiveness. Other than Section 6.1 and this Section 7.6, which are effective on the date hereof, the provisions of this Agreement will become effective only upon the closing of the stock purchase contemplated by the Stock Purchase Agreement. Section 7.7. Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York, without regard to the conflicts of law rules of the State of New York. Section 7.8. WAIVER OF JURY TRIAL, ETC. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE PARTIES AGREE, SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT, TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF, AND TO WAIVE ANY OBJECTION AS TO VENUE IN, THE FEDERAL OR STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. SERVICE OF PROCESS IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE EFFECTIVE IF DELIVERED OR SENT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7.1 HEREOF. Section 7.9. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Subject to Section 7.6, this Agreement shall become Page 40 of 43 Pages effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Section 7.10. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. Page 41 of 43 Pages IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. MORGAN STANLEY LEVERAGED EQUITY FUND II, INC. By: /s/ Alan E. Goldberg --------------------------- Name: Alan E. Goldberg Title: Managing Director SMURFIT INTERNATIONAL B.V. By: /s/ Houghton Fry --------------------------- Name: Houghton Fry Title: Attorney-in-Fact Page 42 of 43 Pages SCHEDULE I MSLEF's Beneficial Ownership of Shares of Common Stock 31,574,540 EX-99 3 EXHIBIT 99.1 -- JOINT FILING AGREEMENT Page 43 of 43 Pages EXHIBIT 99.1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, par value $0.01 per share of Smurfit-Stone Container Corporation, a Delaware corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the 24th day of November 1998. SMURFIT PACKAGING CORPORATION By: /s/ Charles A. Hinrichs ----------------------------------- Name: Charles A. Hinrichs Title: Vice President and Treasurer SMURFIT INTERNATIONAL B.V. By: /s/ Michael O'Riordan ----------------------------------- Name: Michael O'Riordan Title: Managing Director JEFFERSON SMURFIT GROUP PLC By: /s/ Michael R.J. Pettigrew ----------------------------------- Name: Michael R.J. Pettigrew Title: Secretary Date: November 24, 1998 -----END PRIVACY-ENHANCED MESSAGE-----