Investors: Timothy McKenna, 312-580-4637/314-746-1254
Media: Tom Lange, 314-746-1236
Smurfit-Stone Subsidiary Announces Settlement of Litigation with Holders of Series E Preferred Stock and Appointment of New Directors
CHICAGO, March 9, 1999 Stone Container Corporation, a subsidiary of Smurfit-Stone Container Corporation (Nasdaq: SSCC), announced that it has reached a settlement of the litigation brought on behalf of the holders of Series E Preferred Stock of Stone Container Corporation. As previously disclosed, the litigation includes a direct action against Stone by two holders of Series E Preferred Stock and a class action filed on behalf of all holders of Series E Preferred Stock against Stone and all of its directors. These actions have been consolidated in Delaware Chancery Court and now also include Smurfit-Stone as a defendant.
The settlement, which remains subject to court approval, provides, among other things, for the appointment of two nominees of the plaintiffs to the Board of Directors of Stone Container Corporation effective as of March 8, 1999. The new directors are David Gale, President of Delta Dividend Group, Inc., and Mark Weissman, Manager of Corporate Bond Trading of Mariner Investment Group, Inc. Mr. Gale and Mr. Weissman will not serve as directors of Smurfit-Stone or any of its subsidiaries other than Stone.
A majority of the members of the Board of Directors of the Stone Container Corporation subsidiary will continue to be nominated by Smurfit-Stone. The holders of the Series E Preferred Stock will continue to have the right to elect two directors to Stone's Board of Directors for as long as the dividends on the Series E Preferred Stock remain more than six quarters in arrears. Stone is presently unable to pay dividends on the Series E Preferred Stock as a result of covenants in the indentures governing certain of its senior indebtedness. The first election of directors by the holders of Series E Preferred Stock will occur at a meeting of stockholders that has been scheduled for May 17 in Chicago.
It is further expected that each of Mr. Gale and Mr. Weissman will stand for re-election as the two directors to be elected by such holders.
Smurfit-Stone Container Corporation was formed on November 18, 1998 by the merger of a subsidiary of Jefferson Smurfit Corporation and Stone Container Corporation. As a result of the transaction, Stone Container Corporation became a subsidiary of Smurfit-Stone Container Corporation.
Smurfit-Stone is the industry's leading manufacturer of paperboard and paper-based packaging, including corrugated containers, folding cartons, and industrial bags. It is the largest producer of containerboard and kraft paper, and the largest collector, marketer, and exporter of recovered fiber. The company operates more than 300 facilities worldwide.
This document contains certain forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934, as amended, about Smurfit-Stone Container Corporation. Although the company believes that, in making any such statements, its expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. When used in this document, the words "anticipates," "believes," "expects," "intends," and similar expressions as they relate to Smurfit-Stone Container Corporation or its management are intended to identify such forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Important factors that could cause actual results to differ materially from those in forward-looking statements, certain of which are beyond the control of Smurfit-Stone Container Corporation, include: the impact of general economic conditions in the U.S. and Canada and in other countries in which Smurfit-Stone Container Corporation and its subsidiaries currently do business (including Asia, Europe and Latin and South America); industry conditions, including competition and product and raw material prices; fluctuations in exchange rates and currency values; capital expenditure requirements; legislative or regulatory requirements, particularly concerning environmental matters; interest rates; access to capital markets; the timing of and value received in connection with asset divestitures; and obtaining required approvals, if any, of debt holders. The actual results, performance or achievement by Smurfit-Stone Container Corporation could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations and financial condition of Smurfit-Stone Container Corporation.