<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Outlook Group Corp.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Outlook Group Corp.
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
ON OCTOBER 19, 2000
To the Shareholders of Outlook Group Corp.:
We will hold the annual meeting of shareholders of Outlook Group Corp.
(the "Company") at the Park Plaza Valley Inn, 123 East Wisconsin Avenue, Neenah,
Wisconsin on Thursday, October 19, 2000 at 2:00 p.m. CDT, for the following
purposes:
(1) To elect three directors for three-year terms expiring in the
year 2003; and
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Shareholders of record at the close of business on August 25, 2000 are
entitled to vote at this meeting or any adjournment of the meeting.
By Order of the Board of Directors
/s/ Paul M. Drewek
Paul M. Drewek, Secretary
September 15, 2000
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, PLEASE MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING, WHETHER YOUR
HOLDINGS ARE LARGE OR SMALL. IF YOU DO ATTEND THE MEETING, OR FOR ANY OTHER
REASON DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS
VOTED.
<PAGE> 3
OUTLOOK GROUP CORP.
1180 AMERICAN DRIVE
NEENAH, WISCONSIN 54956
TELEPHONE (920) 722-2333
* * * * * * * * * * * * * *
GENERAL
The enclosed proxy is solicited by the Board of Directors of Outlook
Group Corp. for use at its annual meeting of shareholders on October 19, 2000.
All properly executed proxies will be voted at the meeting in accordance with
their terms. A proxy may be revoked at any time before it is voted, either by
written notice filed with the Secretary of the Company or the acting secretary
of the meeting or by oral notice to the presiding officer. The presence at the
meeting of a shareholder who has filed a proxy shall not of itself constitute a
revocation.
Each shareholder of record at the close of business on August 25, 2000
will be entitled to one vote for each share registered in the shareholder's
name. At that date there were 3,880,569 outstanding shares of the Company's
Common Stock, $.01 par value (the "Common Stock"), the only class of stock of
which shares are outstanding. A majority of the votes entitled to be cast on a
matter, represented in person or by proxy, constitutes a quorum for action on
that matter. Abstentions and shares which are the subject of broker non-votes
will be counted for the purpose of determining whether a quorum exists at the
meeting. Shares represented at a meeting for any purpose are counted in the
quorum for all matters to be considered at the meeting. The voted proxies will
be tabulated by the persons appointed as inspectors of election.
Directors are elected by a plurality of the votes cast by the holders
of the Company's Common Stock entitled to vote in the election at a meeting at
which a quorum is present. "Plurality" means that the individuals who receive
the highest number of votes are elected as directors in a particular class, up
to the maximum number of directors in that class to be chosen at the meeting.
Any votes attempted to be cast "against" a candidate are not given legal effect
and are not counted as votes cast in an election of directors. Therefore, any
shares which are not voted (whether by withheld authority, broker non-vote or
otherwise) have no effect in the election of directors except to the extent that
the failure to vote for any individual results in another individual receiving a
larger number of votes.
The Company will bear the expense of printing and mailing proxy
material, including forwarding expense to beneficial owners of stock held in the
name of another. No solicitation other than by mail is contemplated, except that
Company officers or employees may solicit the return of proxies from certain
shareholders by telephone.
If you are a participant in the Employee Stock Fund of the Company's
401(k) Savings Plan (the "Savings Plan"), the shares of Company Common Stock
held in your account will be voted as designated on the blue proxy card, which
will be provided separately, relating to shares held through the Savings Plan.
Savings Plan shares not voted by employees will be voted as directed by the
persons administering the Savings Plan, as provided in the Savings Plan.
This proxy material is being mailed to shareholders commencing on or
about September 15, 2000. The Annual Report to Shareholders of the Company
covering the fiscal year ended May 31, 2000, including financial statements,
accompanies this proxy statement.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Common Stock of the Company, as of August 25, 2000, by each
director, nominee for director and named executive officer, by all directors and
executive officers of the Company as a group, and by each person known to the
Company to beneficially own more than 5% of the Company's Common Stock. Except
as otherwise indicated in the footnotes to the table, such persons have sole
voting and investment power as to the shares reported as beneficially owned.
<TABLE>
<CAPTION>
NAME AND NATURE NUMBER OF PERCENT
OF BENEFICIAL OWNERSHIP (1) SHARES OF CLASS
--------------------------- ------ --------
<S> <C> <C>
Joseph J. Baksha................................ 82,688 2.2%
Harold J. Bergman............................... 6,333 *
Jeffry H. Collier(2)(3)......................... 37,807 1.0%
Paul M. Drewek(3)............................... 21,500 *
James L. Dillon................................. 15,083 *
Richard C. Fischer.............................. 24,533 *
Pat Richter..................................... 5,483 *
A. John Wiley, Jr.(2)........................... 85,521 2.2%
All directors and executive officers as
a group (8 persons)(2)(3)................... 278,945 7.0%
Ronnie Shemesh (4).............................. 326,915 8.4%
Dimensional Fund Advisors Inc. (5).............. 237,400 6.1%
Heartland Advisors, Inc. (6).................... 1,091,000 28.1%
</TABLE>
-------------------
*Less than 1%.
(1) Includes the following shares issuable under stock options: Mr. Baksha
- 42,500; Mr. Collier - 20,000; Mr. Drewek - 20,000; Messrs. Bergman,
Dillon, Fischer, Richter and Wiley - 5,333 each; all directors and
executive officers as a group-109,165.
(2) Voting and/or dispositive power is shared with respect to the indicated
number of shares: Mr. Wiley--1,165; all directors and executive
officers as a group--4,165. See also footnote (3).
(3) As of August 25, 2000, 75,933 shares of Common Stock were held in the
Savings Plan. Employees have the right to designate the vote of shares
of Common Stock allocated to their accounts. Shares allocated to named
participants' accounts as of June 30, 2000 (the date of the last
allocation) are included. No shares were unallocated on that date.
(4) According to a report on Schedule 13D/A dated August 10, 2000 by Mr.
Shemesh, he has sole voting and dispositive power as these shares. Mr.
Shemesh's business address is 78 Fernbrook Street, Yonkers, New York
10705. See "Certain Transactions" for information about pending
litigation between affiliates of Mr. Shemesh and the Company and
amounts due from those affiliates to the Company.
(5) According to a report on Form 13G dated February 4, 2000, Dimensional
Fund Advisors Inc. ("Dimensional") held sole voting and dispositive
power as to 237,400 shares of Common Stock at December 31, 1999.
Dimensional is an investment adviser under the Investment Advisers Act
of 1940 (the "Advisers Act"). The business address of Dimensional is
1299 Ocean Avenue, Santa Monica, California 90401.
(6) According to a report on Schedule 13G/A dated January 27, 2000,
Heartland Advisors, Inc. ("Heartland") had sole dispositive power as to
1,091,000 shares of Common Stock, and sole voting power as to 623,500
of those shares, as of December 31, 1999. Heartland is an investment
adviser registered under the Advisers Act. The business address of
Heartland is 790 North Milwaukee Street, Milwaukee, Wisconsin 53202.
-2-
<PAGE> 5
The above beneficial ownership information is based on information
furnished by the specified persons and is determined in accordance with Rule
13d-3, as required for purposes of this Proxy Statement. It is not necessarily
to be construed as an admission of beneficial ownership for other purposes.
ELECTION OF DIRECTORS
The Company's Articles and Bylaws provide for a Board of between seven
and eleven directors, and for classification of the Board of Directors into
three separate classes. The Board of Directors has set the number of directors
at seven. At each annual meeting of shareholders, the number of directors equal
to the number constituting the class whose term expires at such meeting is
elected to hold office until the third succeeding annual meeting or until their
successors have been elected.
The class of directors whose terms expire at the 2000 annual meeting
(three of the seven directors) are nominated for election at the 2000 annual
meeting to serve for terms expiring at the 2003 annual meeting. The remaining
five directors were elected by the shareholders at the 1998 or 1999 annual
meetings for terms expiring in 2001 or 2002, as shown in the following table.
Proxies received by management will be voted FOR the election of the
three nominees named unless otherwise specified. If any such nominee is unable
to serve (which is not anticipated), proxies may be voted for another person
designated by the Board of Directors.
<TABLE>
<CAPTION>
Principal Occupation Director
Name and Age and Business Experience Since
------------ ----------------------- -----
<S> <C> <C>
NOMINEES (FOR TERMS EXPIRING IN 2003)
Jeffry H. Collier, 47 (3) Vice President and General Manager of the 1993
Graphics division of the Company since 1996
and Executive Vice President of the Company
since 1994
Pat Richter, 59 (1)(2)(4) Director of Athletics, University of 1995
Wisconsin Madison
A. John Wiley, Jr., 58 (3) President of Elipticon Wood Products, Inc. 1978
(manufacturer); also president of Great
American Backyards L.L.C. since 1996 and The
Playground Connection L.L.C. since 1998
CONTINUING DIRECTORS (TERMS EXPIRE IN 2001)
James L. Dillon, 56 (1)(2) Accountant practicing with the firm Dillon, 1978
Endries, Otto & Calmes LLC
Joseph J. Baksha, 48 (3) President and Chief Operating Officer of the 1998
Company since 1996; Vice President and
President of Outlook Packaging in 1996;
previously Executive Vice President and COO
of Washburn International (manufacturer and
distributor)
</TABLE>
-3-
<PAGE> 6
<TABLE>
<S> <C> <C>
CONTINUING DIRECTORS (TERMS EXPIRING IN 2002)
Harold J. Bergman, 64 (1)(2) Retired in 1999; previously President and 1994
Chief Executive Officer of Riverside Paper
Corp. (specialty paper manufacturer and
converter)
Richard C. Fischer, 61 (1)(3) Chairman and Chief Executive Officer of the 1995
Company since December 1997; also an
investment banker with Marquette Capital
Partners since 2000, B.C. Ziegler and Company
in 1999, Fischer & Associates LLC from 1996
to 1999, and Robert W. Baird & Co.
Incorporated prior thereto
</TABLE>
---------------------
(1) Member of the Audit Committee of which Mr. Dillon is chairman. This
Committee, which held one meeting during fiscal 2000, reviews the
functions and findings of the Company's independent public accountants
and makes recommendations to the Board of Directors with respect
thereto.
(2) Member of the Compensation Committee, of which Mr. Richter is chairman.
This Committee, which held two meetings in fiscal 2000, reviews and
makes recommendations to the Board of Directors regarding overall
compensation policy and salaries, bonuses and benefits to officers and
other key employees and awards stock options under the Company's stock
option plans.
(3) Member of the Nominating Committee, of which Mr. Fischer is chairman.
This committee, which held no meetings in fiscal 2000, reviews
potential candidates for, and makes recommendations to the Board of
Directors regarding, additional members of the Board of Directors.
Persons wishing to suggest names for consideration for nomination to
the Board may forward them to the Nominating Committee, in care of the
Company.
(4) Mr. Richter is also a director of Anchor BanCorp Wisconsin Inc., a
publicly held savings bank holding company, and Northland Cranberries,
Inc., a publicly held grower and marketer of cranberries and related
products.
The Board of Directors held eight meetings during fiscal 2000. During
fiscal 2000, each director of the Company attended at least 75% of the total
number of meetings of the Board and of all committees of the Board on which such
director served, except for Mr. Richter.
Directors' Fees. For fiscal 2001, directors who are not employees of
the Company will receive a fee of $6,000 per year, $500 for each meeting of the
Board of Directors attended and $300 ($400 in the case of the committee
chairman) for each Board committee meeting attended. Messrs. Baksha and Collier
are currently employees of the Company and do not receive fees. For fiscal 2000,
fees were $3,600 per year, $300 for each meeting, and $100 ($150) for each
committee meeting.
In addition, directors are eligible for participation in the 1999 Plan,
which arrangement was been proposed in lieu of an increase in fiscal 2000 in
cash board fees. Each non-employee director was awarded an option on October 21,
1999 for 7,000 shares, at $4.625 per share. Those options vest one third
annually, on the anniversary date of grant, and expire ten years after grant.
-4-
<PAGE> 7
Fischer Arrangements. Mr. Fischer, although designated the Chief
Executive Officer of the Company, is not an employee of the Company. Rather, he
is compensated for his duties in that position as an independent contractor. The
Company's arrangements with Mr. Fischer provide that he will receive $125 per
hour for services as Chief Executive Officer, up to a maximum of 100 hours per
month. Mr. Fischer is not entitled to receive employee benefits in this
position. Amounts paid to Mr. Fischer under this arrangement appear in the cash
compensation table.
Bergman Arrangements. Mr. Bergman is performing consulting services for
the Company on an occasional, as-needed basis. He is compensated on an hourly
basis at $100 per hour. During fiscal 2000, Mr. Bergman received $5,950 for
these services.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total
compensation in fiscal year 2000 and in the two prior fiscal years of (i) each
person who served as Chief Executive Officer and (ii) the only other executive
officers who received total annual salary and bonus in excess of $100,000 during
the last fiscal year for services in all capacities to the Company and its
subsidiaries.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
---------------------- ------------
AWARDS
------
NAME AND PRINCIPAL FISCAL OPTIONS/SARS ALL OTHER
POSITION YEAR SALARY ($) BONUS($)(2) #(3) COMPENSATION($)(4)
------------------ ---- ---------- ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Richard C. Fischer, 2000 $61,250 -0- 7,000 -0-
Chairman and CEO (5) 1999 85,250 -0- -0- -0-
1998 43,375 -0- -0- -0-
Joseph J. Baksha, 2000 $225,000 $91,107 47,500 $3,655
President and COO 1999 200,000 30,875 10,000 3,884
1998 166,346 89,832 -0- 5,797
Jeffry H. Collier, 2000 $129,000 $31,456 20,000 $4,487
Executive Vice President 1999 120,000 39,098 4,000 2,995
1998 115,000 5,687 -0- 2,998
Paul M. Drewek 2000 $105,000 $40,000 10,000 $1,389
Chief Financial Officer (6) 1999 161,596 35,000 20,000 -0-
</TABLE>
------------------
(1) While the named individuals received perquisites or other personal
benefits in the years shown, in accordance with SEC regulations, the
value of these benefits are not shown since they did not exceed, in the
aggregate, the lesser of $50,000 or 10% of the individual's salary and
bonus in any year.
(2) Annual bonus amounts, if any, are earned and accrued during the fiscal
years indicated but paid in the following fiscal year.
(3) Represents number of shares for which options were granted under the
Company's 1999 Stock Option Plan. No SARs have been granted.
(4) Reflects the Company's contributions to the executive officer's account
in the Savings Plan.
(5) See "Election of Directors - Fischer Arrangements" for further
information on Mr. Fischer's compensation arrangements.
-5-
<PAGE> 8
(6) Mr. Drewek became Chief Financial Officer in November 1998, after
having served as interim Chief Financial Officer from May to November.
Prior to November 1998, Mr. Drewek was an independent contractor,
rather than a Company employee. Includes amounts paid in fiscal 1999 to
Mr. Drewek as an independent contractor. During the period when Mr.
Drewek was an independent contractor, he was paid consulting fees at a
higher rate than his salary as an employee because he was not eligible
for employee benefits and was responsible for self-employment taxes.
OPTIONS OUTSTANDING AT YEAR END
The following table sets forth information with respect to the
executive officers named in the Summary Compensation Table concerning the number
and value of options outstanding at May 31, 2000.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED IN THE
UNEXERCISED OPTIONS MONEY OPTIONS
SHARES AT FY END (1) AT FY END(1)(2)
ACQUIRED ON VALUE ------------- ---------------
NAME EXERCISE REALIZED EXERCISABLE(#)/UNEXERCISABLE EXERCISABLE($)/UNEXERCISABLE
---- -------- -------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Richard C. Fischer -0- -0- 3,000/7,000 $4,688/$9,188
Joseph J. Baksha 10,000 $4,063 42,500/25,000 $45,156/-0-
Jeffry H. Collier -0- -0- 20,000/10,000 $25,753/-0-
Paul M. Drewek -0- -0- 20,000/10,000 $31,250/-0-
</TABLE>
------------------
(1) No SARs have been granted.
(2) Based upon the $5.50 closing price of Company Common Stock on May 31,
2000, the last trading day before fiscal year end.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information about options granted to the
executive officers named in the Summary Compensation Table during fiscal 2000.
<TABLE>
<CAPTION>
Individual Grants(1)
--------------------------------------------------------------------
Potential
Realized Value at
Number of % of Assumed Annual
Securities Total Options Rates of Stock Price
Underlying Granted Appreciation
Options to Employees Exercise or for Option Term (2)
Granted in Fiscal Base Price Expiration -------------------
Name (#) Year ($/sh) Date 5% 10%
---- ---------- ------------- ----------- ---------- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Richard C. Fischer 7,000 (3) $4.625 10-21-09 $ 18,434 $ 46,717
Joseph J. Baksha 25,000 21.4% $5.8125 5-17-10 $ 91,386 $ 231,591
Joseph J. Baksha 22,500 19.3% $4.1875 8-18-04 $ 26,031 $ 57,521
Jeffry H. Collier 10,000 8.6% $5.8125 5-17-10 $ 36,555 $ 92,636
Jeffry H. Collier 10,000 8.6% $4.1875 8-18-04 $ 11,569 $ 25,565
Paul M. Drewek 10,000 8.6% $5.8125 5-17-10 $ 36,555 $ 92,636
</TABLE>
(1) All grants reflect stock options under the 1999 Option Plan.
-6-
<PAGE> 9
(2) Assumes the stated appreciation from the date of grant.
(3) Mr. Fischer is not an employee of the Company. He was granted options
as part of a grant to non-employee directors, and received the same
number as each of the other non-employee directors.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
As of June 1, 1999, the Company entered into an employment agreement
with Joseph J. Baksha, President and Chief Operating Officer of the Company, for
a term of two years, renewable June 1, 2001. It followed a prior two year
agreement entered into in 1997. Under the 1999 employment agreement, Mr. Baksha
will have earned an annual salary of $225,000 in fiscal 2000, and will earn the
same salary in fiscal 2001, and can earn an incentive equal to a five percent of
earnings for interest and taxes which exceed $2,500,000 per year. (The incentive
is capped at 75% of Mr. Baksha's annual salary.) Prior to a change in control,
Mr. Baksha's employment agreement may be terminated by either party, at any
time, with or without cause or reason, upon 30 days written notice. The
employment agreement also imposes certain non-competition and confidentiality
obligations on Mr. Baksha. In the event the employment agreement is terminated
by the Company other than for cause (as defined in the agreement), Mr. Baksha
would be entitled to receive his annual salary for the year following his
termination plus any bonus earned through the last day of active employment. If
there is a change of control of the Company and Mr. Baksha is terminated without
cause, Mr. Baksha's employment status changes (as specified in the agreement) or
Mr. Baksha's employment agreement is not renewed (as specified in the
agreement), Mr. Baksha shall be entitled to receive his annual salary for the
two years following an event as set forth above plus any bonus earned through
the last day of active employment. Mr. Baksha is subject to a covenant not to
compete and confidentiality provisions for the duration of this employment and
for six months following termination of his employment with the Company.
Messrs. Collier and Drewek also have change in control arrangements. In
the event of a change in control in the Company, in the event there is not an
ongoing arrangement for continued employment, and assuming no termination for
cause, each of Messrs. Collier and Drewek would be entitled to receive
twelve-months salary (and accrued bonus) as a severance benefit, in addition to
continuation of benefits for the twelve month period.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The general compensation policies of the Company and its subsidiaries
are set by the Compensation Committee of the Board of Directors. During fiscal
2000, this Committee was composed of three independent non-employee directors.
Compensation decisions with respect to the Company's Chief Executive Officer and
its President are made primarily by the Committee; compensation decisions as to
all other officers of the Company, including its subsidiaries, are recommended
by the Chief Executive Officer and then approved by the Committee. All
compensation programs, such as the Savings Plan and the stock option plans, are
either originated or approved by the Committee.
It is the policy of the Company to fairly compensate individuals for
their contributions to the Company's business, being mindful of the ability of
the Company to fund such compensation plans or programs and the need to provide
fair value to the Company's shareholders. To be effective in attracting and
retaining competent individuals, compensation packages must balance short-term
and long-term considerations, as well as provide incentives to individuals based
upon the performance of the Company and be competitive with other companies. In
recent years, the objective of fairly compensating executive officers has been
evaluated in the context of the divestiture of certain operations and improving
financial results. In view of these changes, the Compensation Committee has
tended to review historical performance, rather than to set compensation on a
prospective basis.
The Compensation Committee reviews numerous factors in determining the
compensation of the Chief Executive Officer including Company performance and
salaries at other area companies. Upon Mr. Fischer's assumption of the position
of Chief Executive Officer, the Committee, as ratified by the Board of
Directors, determined
-7-
<PAGE> 10
that compensation of Mr. Fischer as an independent contractor would be
appropriate to reflect his then-interim status. It was determined that
compensation based upon number of hours actually worked would be appropriate to
reflect the nature of the role being played by Mr. Fischer. Mr. Fischer's hourly
rate was determined by reference to the prior CEO's salary prior to his
resignation. The Committee considered the arrangement appropriate to continue
after Mr. Fischer's "interim" status was dropped in 1998. Mr. Fischer is not
entitled to receive bonus payments, although he was awarded stock options during
fiscal 2000, in the same manner and amount as the Company's other non-employee
directors.
The Company has also established the 1999 Option Plan, as a successor
plan to the 1990 Stock Option Plan and an additional incentive to its officers
and key employees, including the Chief Executive Officer. New stock options may
no longer be granted under the prior plan, although stock options under it will
remain outstanding until they expire. The Committee believes that such a plan
provides participants with an incentive, extending beyond the current fiscal
year, to increase the overall value of the Company, by providing them with a
greater stake in the increasing value of the Company's Common Stock on a
longer-term basis. The option plans are designed to complement the incentive
provided by the annual cash bonus. The Committee granted options for 84,500
shares to executive officers, including the CEO, in fiscal 2000, compared to
34,000 in fiscal 1999. The Committee believed that increased options were
appropriate in view of the continuing improvements in corporate results.
The factors considered to determine compensation of the other executive
officers in 2000 were essentially the same (other than part-time status) as
those considered with respect to the Chief Executive Officer. In particular, the
increase in Mr. Baksha's bonus results from the Company's improved performance,
which is a key component in his bonus structure. Bonuses for other executive
officers are dependent upon the level of the Company's pre-tax earnings and
individual achievement. Individual awards would be recommended by the Chief
Executive Officer based upon individual and team contributions, accomplishment
of any pre-established goals and such other factors as the Chief Executive
Officer may consider appropriate. The Committee believes that these arrangements
establish objective criteria for determining whether management bonuses are
appropriate yet provides flexibility in allowing the Chief Executive Officer to
recommend particular designations of awards based upon all of the factors. Also,
see above for a discussion of Mr. Baksha's employment agreement and other
officers' change in control arrangements.
The Committee believes it is highly unlikely that the compensation of
any executive officer will exceed $1 million in any fiscal year, and therefore
has not taken any action with respect to the provisions of Section 162 of the
Internal Revenue Code which limit the deductibility of compensation to certain
executives of over $1 million in any fiscal year. However, the Committee
believes that any compensation income pursuant to the Company's option plans
would not be subject to that limitation due to their approval by shareholders.
Members of the Compensation Committee:
Pat Richter, Chairman James L. Dillon
Harold J. Bergman
-8-
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the cumulative total return on Company
Common Stock with The Nasdaq Stock Market Index for U.S. Companies and indices
of "peer" commercial printing companies created by the Company. The "peer"
indices reflects the performance, weighted by period beginning market
capitalization, of the common stocks of the following companies: Laser Master
International; Littlefield, Adams & Co.; Multi-Color Corp.; Northstar Computer
Forms; Paxar Corporation; Shorewood Packaging Corporation; and Topps Inc. These
companies are relatively small publicly-held graphics services companies and
were chosen in consultation with the Company's investment adviser. Shorewood and
Northstar were both acquired in early 2000. Although they were no longer
publicly held, in preparing the chart, we have included them at acquisition
prices in March and April 2000, respectively (the "old" peer group), and also
prepared a graph separately showing the peer group without those two companies
(the "new" peer group). Next year's performance graph will be prepared using the
"new" peer group without these two companies.
The values on the graph show the relative performance of an investment
of $100 made on May 31, 1995, in Company Common Stock and each of the indices.
In the case of the NASDAQ and "peer" indices, the values reflect reinvestment of
dividends.
<TABLE>
<CAPTION>
OUTLOOK GROUP NASDAQ US STOCKS PEER GROUP (OLD) PEER GROUP (NEW)
------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1995 100 100 100 100
1996 61 145 115 120
1997 50 164 131 130
1998 65 208 117 107
1999 42 294 123 105
2000 61 402 158 133
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OGC 100 61 50 65 42 61
-------------------------------------------------------------------------------------------------------
NASDAQ/US 100 145 164 208 294 402
-------------------------------------------------------------------------------------------------------
Peer Group (old) 100 115 131 117 123 158
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Peer Group (new) 100 120 130 107 105 133
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</TABLE>
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CERTAIN TRANSACTIONS
It is the policy of the Company that all material transactions between
the Company, its officers, directors or principal shareholders, or affiliates of
any of them, shall be on terms no less favorable to the Company than those which
could have been obtained if the transaction had been with unaffiliated third
parties on an arm's length basis, and such transactions will be approved by a
majority of the members of the Audit Committee of the Board of Directors, or a
majority of the directors who are independent and not financially interested in
the transaction.
Baksha Loan. In his 1997 employment agreement, the Company agreed to
make a loan to Mr. Baksha up to $100,000 to purchase Common Stock. The term of
the loan would be five years at the same rate of interest charged the Company
pursuant to its line-of-credit at the time of such loan. A loan was made to Mr.
Baksha in July 1998, at an interest rate of 8% per annum. The loan is due in
July 2003. The maximum amount outstanding under the loan during fiscal 2000 was
$100,000, which also was the amount outstanding at fiscal year end.
Shemesh Litigation and Indebtedness. Ronnie Shemesh has recently become
a greater-than-5% shareholder of the Company. Barrier Films Corporation-New York
("Barrier-NY") and Barrier Films Corporation ("BFC") are corporations which are
controlled by Mr. Shemesh. The following paragraphs discuss litigation which is
pending between those entities and the Company and its subsidiaries, and amounts
due to the Company by those entities (which form a part of the dispute).
The Company is a defendant in Barrier-NY versus the Company and Joseph
Baksha, pending in the federal courts in New York. The litigation was filed in
1999. This suit alleges various causes of action which arise out of the
acquisition of BFC by Barrier-NY from the Company in May 1997. Barrier's
complaint, as amended, has multiple counts, with overlapping claims that can be
summarized as: (a) various allegations and causes of action arising from the
alleged failure of the Company to comply with closing obligations relating to
consents by former BFC officers under their employment agreement; (b) alleged
tortuous interference with Barrier-NY's client relationship with a client of BFC
prior to the transaction; (c) various claims that he Company failed to comply
with its obligations under a related Rebate and Supply Agreement; (d)
allegations that the Company either misappropriated or disclosed certain
confidential BFC information, and (e) a request for a judgment declaring the
1997 promissory note executed by Barrier-NY in the BFC acquisition
unenforceable, null and void. Because the complaint presents overlapping claims,
and requests multiple awards of damages for the same underlying facts,
determining the actual amount at issue is uncertain; however, all of the claims
made total $27.65 million, plus elimination of the note, plus requests for costs
and punitive damages, without any attempt to adjust the claims for multiple
requests resulting from overlapping causes of action.
The Company has answered denying liability and has counterclaimed for
more than $2.8 million, plus costs and other damages, as a result of
Barrier-NY's failure to make payments due to the Company under a promissory note
and the Purchase and Sale Agreement in connection with the sale of BFC. At May
31, 2000, under the note and the Purchase and Sale Agreement, an aggregate of
approximately $2.8 million (plus costs and expenses of collection) was due to
the Company by Mr. Shemesh's affiliates; unpaid amounts are subject to interest
going forward at 12% per annum. The litigation remains at an early stage, and
discovery is still at early stages. However, the Company has served Barrier-NY
with a motion for judgment dismissing 15 of the 19 causes of action in
Barrier-NY's amended complaint and for a judgment of liability on the Company's
counterclaim. The Company has also served a motion that whatever remains of the
litigation be transferred to the federal courts in Wisconsin, based on improper
venue in New York. The court has not yet taken action on the motions. The
Company believes that Barrier-NY's claims are without merit, and intends to
defend the matter, and to pursue its counterclaim vigorously and aggressively
In a separate matter, Outlook Packaging, Inc., a wholly-owned
subsidiary of the Company, has commenced an action against BFC in the federal
courts in Wisconsin in early 2000. In this suit, which seeks monetary damages,
Outlook Packaging alleges misrepresentation, tortuous interference and breach of
warranty against BFC, based upon certain films produced by BFC for Outlook
Packaging. BFC has answered the complaint making counterclaims against Outlook
Packaging that mirror Barrier-NY's claims in the litigation discussed above, and
filed a motion (which was
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<PAGE> 13
granted in early September) requesting that the Wisconsin case be consolidated
with the case Barrier-NY filed in New York. Discovery is in its early stages in
this matter. Outlook Packaging believes that BFC's counterclaims are without
merit, and intends to defend the matter, and to pursue its claim vigorously and
aggressively.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers, directors and greater
than 10% shareholders (collectively, "insiders") are required by SEC regulation
to furnish the Company with copies of all Section 16(a) forms they file.
All publicly held companies are required to disclose the names of any
persons who fail to make any such filing on a timely basis and the number of
delinquent filings and transactions, based solely on a review of the copies of
the Section 16(a) forms furnished to the Company, or written representations
that no such forms were required. On that basis, the Company believes that
during fiscal 2000 the Company's insiders have complied with all Section 16(a)
filing requirements applicable to them, except that Mr. Collier made one late
filing reporting two sales by his children, and Mr. Dillon made one late filing
reporting one sale.
AUDITORS
During fiscal 2000, the Board of Directors, upon the recommendation of
the Audit Committee, appointed the firm of PricewaterhouseCoopers LLP as
independent public accountants to audit the books and accounts of the Company
for fiscal 2000. PricewaterhouseCoopers LLP has acted as the Company's
independent public accountants since fiscal 1993, and the Board of Directors
expects to appoint that firm to audit the books and accounts of the Company for
fiscal 2001. Representatives of PricewaterhouseCoopers LLP are expected to be
present at the annual meeting to respond to appropriate questions and to make a
statement if they so desire.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than May
18, 2001 in order to be considered for inclusion in next year's annual meeting
proxy material.
Under Securities and Exchange Commission rules relating to the
discretionary voting of proxies at shareholder meetings, if a proponent of a
matter for shareholder consideration (other than a shareholder proposal)
notifies the Company at least 45 days prior to the month and day of mailing the
prior year's proxy statement, then management proxies are allowed to use their
discretionary voting authority if a proposal is raised at the annual meeting,
without any discussion of the matter in the proxy statement. Thus, such matters
must be received by the Company by August 2, 2001 in the case of the Company's
2001annual meeting of shareholders. No notices were received relating to the
2000 annual meeting.
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<PAGE> 14
OTHER MATTERS
Although the Board of Directors is not aware of any other matters which
may come before the meeting, if any such matter should be presented, the persons
named in the accompanying proxy intend to vote such proxy in accordance with
their best judgment.
By Order of the Board of Directors
/s/ Paul M. Drewek
Paul M. Drewek, Secretary
September 15, 2000
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED MAY
31, 2000, WILL BE PROVIDED WITHOUT CHARGE TO EACH RECORD OR BENEFICIAL OWNER OF
THE COMPANY'S COMMON STOCK, AS OF THE RECORD DATE FOR THE ANNUAL MEETING, UPON
THE WRITTEN REQUEST DIRECTED TO: CHIEF FINANCIAL OFFICER, OUTLOOK GROUP CORP.,
1180 AMERICAN DRIVE, NEENAH, WISCONSIN 54956.
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<PAGE> 15
2000 ANNUAL MEETING OF SHAREHOLDERS OF OUTLOOK GROUP CORP.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard C. Fischer, Joseph J. Baksha and Paul M.
Drewek, and each of them, proxies, each with full power of substitution, to
represent and to vote all shares of stock the undersigned is entitled to vote at
the Annual Meeting of Shareholders of Outlook Group Corp. to be held at the Park
Plaza Valley Inn, 123 East Wisconsin Avenue, Neenah, Wisconsin, on Thursday,
October 19, 2000, at 2:00 p.m. CDT, and at any adjournment thereof, hereby
revoking any and all proxies heretofore given.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
OUTLOOK GROUP CORP. 2000 ANNUAL MEETING
1. ELECTION OF DIRECTORS
(for terms expiring in 2003) 1 - Jeffry H. Collier 2 - Pat Richter
3 - A. John Wiley, Jr.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed to the left (except to vote for all nominees
as specified below). listed to the left.
(Instructions: To withhold authority to vote for any indicated nominee,
write the number of the nominee(s) in the box provided to the right. [ ]
2. In their discretion on such other matters as may properly come before the
meeting or any adjournment thereof;
all as set out in the Notice and Proxy Statement relating to the meeting,
receipt of which are hereby acknowledged.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
FOR the persons named in Proposal 1.
Dated: , 2000 NO. OF SHARES:
------------------
Check appropriate box. -----------------------------------
Indicate changes below:
Address change? [ ] Name change? [ ] -----------------------------------
Signature(s) in box
[ ] Please check box if you plan to Please sign exactly as name appears
attend in person. hereon. If stock is owned by more
than one person, all owners should
sign. Persons signing as executors,
administrators, trustees or in
similar capacities should so
indicate. If a corporation, please
sign in full corporate name by the
president or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
