SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Gibraltar Packing Group, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
4) Date Filed:
<PAGE>
[GIBRALTAR LETTERHEAD APPEARS HERE]
Fellow Shareholders,
In fiscal 1998, while the Company's Great Plains division continued with solid
growth in both sales and profits, the other divisions continued to show
weakness. In response, in the second fiscal quarter of 1998, we initiated a
series of cost cutting and reorganization measures to improve profitability.
This included putting the Company's Flashfold division under the management
control of Great Plains.
Subsequently, we announced that we were conducting a review of strategic options
to enhance shareholder value. An option to sell the Company was pursued but did
not promise to provide sufficient value to shareholders. The plan that was
adopted consists of the following objectives and actions:
o Refinance the Company. This was completed on July 31, 1998 and is
providing the financial flexibility to continue to take the steps
necessary to improve profits and to grow the Company.
o Leverage the Great Plains' successful operating model. Continue with the
consolidation of Great Plains and Flashfold and bring the Company's
Standard Packaging division under the control of Great Plains. The initial
steps have been taken and Dick Hinrichs, President of Great Plains was
appointed President and Chief Operating Officer of Gibraltar Packaging on
August 4, 1998.
o Focus on the Company's main strength, the folding carton businesses --
Great Plains, Flashfold and Standard -- and sell the Company's Niemand
Industries division. Niemand Industries, which is in tubular spiral-wound
paper packaging and contract packaging, is now on the market and we hope
to complete the sale by early calendar 1999.
o Close the Corporate Office in Westport, Connecticut and consolidate the
Company's administrative functions at the Great Plains' operation in
Hastings, Nebraska. This will be completed by the end of October 1998 with
significant cost savings.
Under the new structure, a series of profit improvement programs have been
started that we believe will provide benefits later in fiscal 1999. In addition,
with the folding carton divisions operating much more closely, the new
organization is improving our ability to meet the needs of large or national
customers.
We believe that this focus on our core expertise in folding cartons with closer
operational and marketing integration between the divisions will provide the
profit improvement we have been seeking.
Sincerely,
/s/ Walter E. Rose
Walter E. Rose
Chairman and Chief Executive Officer
<PAGE>
GIBRALTAR PACKAGING GROUP, INC.
2000 SUMMIT AVENUE
HASTINGS, NEBRASKA 68902
-----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 18, 1998
-----------------------------------------
TO THE STOCKHOLDERS OF GIBRALTAR PACKAGING GROUP, INC:
The Annual Meeting of the Stockholders of Gibraltar Packaging Group, Inc.,
a Delaware corporation (the "Company"), will be held at the Holiday Inn, 2205
Osborne Drive East, Hastings, Nebraska, on November 18, 1998, at
12:00 p.m., Central Time, for the following purposes:
1. To elect five directors to serve until the annual stockholders'
meeting in 1999 or until their successors have been elected and
qualified (Proposal 1);
2. To ratify and approve the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the 1999 fiscal year (Proposal 2);
and
3. To act upon such other business as may properly come before the
meeting or any adjournments thereof.
These items of business are more fully described in the Proxy Statement
accompanying this Notice.
Only stockholders of record at the close of business on October 19, 1998
are entitled to notice of and to vote at the Annual Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING OF
STOCKHOLDERS REGARDLESS OF WHETHER YOU PLAN TO ATTEND. THEREFORE, PLEASE MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. IF YOU ARE PRESENT AT THE
MEETING, AND WISH TO DO SO, YOU MAY REVOKE THE PROXY AND VOTE IN PERSON.
By Order of the Board of Directors
/s/ John W. Lloyd
JOHN W. LLOYD
SECRETARY
October 23, 1998
Hastings, Nebraska
<PAGE>
GIBRALTAR PACKAGING GROUP, INC.
2000 Summit Avenue
Hastings, Nebraska 68902
---------------
PROXY STATEMENT
---------------
The accompanying proxy is solicited by the Board of Directors of Gibraltar
Packaging Group, Inc. (the "Company") for use at the 1998 Annual Meeting of
Stockholders to be held on November 18, 1998 and at any adjournments thereof
(the "Annual Meeting"). The Annual Meeting of Stockholders will be held at 12:00
p.m., Central Time, at the Holiday Inn, 2205 Osborne Drive East, Hastings,
Nebraska. If the accompanying proxy is properly executed and returned, the
shares it represents will be voted at the meeting in accordance with the
directions noted on the proxy or, if no direction is indicated, it will be voted
in favor of the proposals described in this Proxy Statement. In addition, the
proxy confers discretionary authority to the persons named in the proxy
authorizing those persons to vote, in their discretion, on any other matters
properly presented at the Annual Meeting. The Board of Directors is not
currently aware of any other matters to be considered. Any stockholder giving a
proxy has the power to revoke it by oral or written notice to the Secretary of
the Company at any time before it is voted.
The approximate date on which this Proxy Statement and the accompanying
proxy, together with the Company's annual report to stockholders on form 10-K
for the fiscal year ended June 27, 1998, will first be sent to stockholders is
October 23, 1998.
VOTING RIGHTS AND QUORUM
At the close of business on October 19, 1998, the record date for the
determination of stockholders of the Company entitled to receive notice of and
to vote at the Annual Meeting, 5,041,544 shares of the Company's common stock,
par value $0.01 per share (the "Common Stock"), were outstanding. Each share of
Common Stock is entitled to one vote upon each of the matters to be voted on at
the Annual Meeting. The presence, in person or by proxy (including abstentions
and "broker non-votes"), of at least a majority of the outstanding shares of
Common Stock is required for a quorum. A broker non-vote occurs when a broker
holding stock in "street name" indicates on the proxy that it does not have
discretionary authority to vote with respect to non-routine matters.
The affirmative vote of the holders of a plurality of the votes of the
shares of Common Stock present in person or represented by proxy at the Annual
Meeting is required for the election of directors. Ratification of Deloitte &
Touche LLP as the Company's independent public accountants requires the
affirmative vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting.
With respect to the election of directors, votes may be cast in favor or
withheld. Votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on the ratification of
Deloitte & Touche LLP as the Company's independent public accountants and will
be counted as shares that are present and entitled to vote for a proposal, but
will not be counted as votes in favor of such proposal. Accordingly, an
abstention from voting by a stockholder present in person or represented by
proxy at the Annual Meeting will have the same legal effect as a vote "against"
the ratification of Deloitte & Touche LLP as the Company's independent public
accountant even though the stockholder or interested parties analyzing the
results of the voting may interpret such vote differently. Broker non-votes are
not shares entitled to vote, will not be counted in the total number of votes,
and thus will have no effect on the outcome of voting.
<PAGE>
PROPOSAL NUMBER 1:
ELECTION OF DIRECTORS
Five directors are to be elected to the Company's Board of Directors at
the Annual Meeting. The Board of Directors has nominated and urges you to vote
for the election of the five nominees identified below who have been nominated
to serve as directors until the next annual meeting of stockholders or until
their successors are duly elected and qualified. Each of the nominees listed
below is a member of the Company's present Board of Directors. Proxies solicited
hereby will be voted FOR all five nominees unless stockholders specify otherwise
in their proxies.
If, at the time of or prior to the Annual Meeting, any of the nominees
should be unable or decline to serve, the discretionary authority provided in
the proxy may be used to vote for a substitute or substitutes designated by the
Board of Directors. The Board of Directors has no reason to believe that any
substitute nominee or nominees will be required.
NOMINEES FOR DIRECTOR
The five nominees for election as directors and certain additional
information with respect to each of them, are as follows:
<TABLE>
<CAPTION>
YEAR FIRST BECAME
NAME AGE POSITION WITH THE COMPANY A DIRECTOR
- ---- --- ------------------------- -----------------
<S> <C> <C> <C>
David G. Chandler 40 Director 1992
John W. Lloyd 54 Director, Chief Financial
Officer and Secretary 1992
Walter E. Rose 55 Director and Chief Executive Officer 1986
Robert G. Shaw 58 Director 1992
John D. Strautnieks 61 Director 1986
</TABLE>
DAVID G. CHANDLER. Mr. Chandler has been employed by William Blair &
Company, L.L.C., an investment banking firm, since 1987, and has been a
principal since 1990. Mr. Chandler was employed by Morgan Stanley & Co.
Incorporated from 1984 to 1987. Mr. Chandler serves as a director for a number
of privately held companies.
JOHN W. LLOYD. Mr. Lloyd became Chief Financial Officer of the Company in
February 1996. Mr. Lloyd has served as Executive Vice President and Chief
Financial Officer of Rostra Technologies, Inc. ("Rostra"), a manufacturer of
automotive electronic components, since 1993. He was a business consultant from
1990 to 1993. From 1989 to 1990, Mr. Lloyd was Senior Vice President for Gulf
Resources & Chemical Corporation, a natural-resource company. From 1984 to
1989, he was Vice President of Finance and Corporate Development for the BOC
Group, Inc., an industrial gases and health care group.
WALTER E. ROSE. Mr. Rose became Chief Executive Officer of the Company in
August 1995. Mr. Rose serves as President of Rostra, which he co-founded in
1982. From 1979 to 1982, he was Executive Vice President of Thomas Tilling,
Inc., a company engaged in the manufacture and distribution of various
industrial and commercial products. From 1965 to 1979, he was employed by ITT
Rayonier, the forest products subsidiary of ITT.
ROBERT G. SHAW. Mr. Shaw has been Chairman of the Board, President and
Chief Executive Officer of International Jensen, an equipment manufacturer
specializing in loud speaker drivers and related components for the audio
industry, since 1984. Before joining International Jensen, Mr. Shaw served as a
principal with A.T. Kearney, Inc., an international management consulting firm.
From 1973 through 1977, he served as a political appointee with the federal
government, first as deputy special assistant to the President of the United
States, and later as deputy director of the Bureau of International Commerce.
JOHN D. STRAUTNIEKS. Mr. Strautnieks serves as Chairman of Rostra, which
he co-founded in 1982. From 1981 to 1982, he was President of Clecon, Inc., a
manufacturer and distributor of building materials. From 1977 to 1981, he was
Vice President-Marketing/Sales of Bundy Corporation, an industrial products
manufacturing company, and from 1975 to 1977, he served as President of Bundy of
Canada.
2
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH OF THE NOMINEES NAMED ABOVE.
All directors hold office until the next annual meeting of the
stockholders of the Company or until their successors have been duly elected and
qualified. The Company's officers are elected annually by, and serve at the
pleasure of, the Board of Directors, subject to the terms of any employment
agreements.
The Company's Certificate of Incorporation and Bylaws provide that the
number of directors on the Board shall be fixed from time to time by the Board
of Directors but shall not be less than two nor more than 15 persons. The Board
in its discretion and in accordance with such authority has fixed its size at
five members. No proxy will be voted for a greater number of persons than the
number of nominees named herein.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors has an Audit Committee and a Compensation
Committee. The Audit Committee's functions include making recommendations
concerning the engagement of independent auditors, reviewing with the
independent auditors the planning and results of the auditing engagement,
approving professional services provided by the independent auditors and
reviewing the adequacy of the Company's internal accounting controls. The
current members of the Audit Committee are Messrs. Shaw and Strautnieks. The
Compensation Committee makes recommendations concerning compensation, including
incentive arrangements, for the Company's officers. The Compensation Committee
also administers the Company's 1992 Incentive Stock Option Plan, Director Stock
Option Plan, 1994 Long-Term Incentive Plan and 1996 Non-Qualified Stock Option
Plan. The current members of the Compensation Committee are Messrs. Chandler and
Shaw.
During fiscal 1998, the Board of Directors had three meetings, and took
certain actions by unanimous written consent in lieu of meetings. The Audit
Committee and the Compensation Committee each had one meeting, and took certain
actions by unanimous written consent in lieu of meetings. During fiscal 1998, no
director of the Company attended fewer than 75% of the number of board meetings
and meetings of the committee(s) on which he served.
DIRECTOR COMPENSATION
Members of the Board of Directors are reimbursed for out-of-pocket
expenses incurred in attending Board of Directors' and committee meetings.
Messrs. Chandler, Shaw and Strautnieks receive $3,000 each quarter as Director
Compensation. No additional compensation is paid for Committee meetings. In
addition, each director who is not an employee of the Company or of a subsidiary
or affiliate of the Company is eligible to receive stock options under the
Company's Director Stock Option Plan. During fiscal 1998, no options to purchase
shares of Common Stock were awarded under the Director Stock Option Plan.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The table on the following page sets forth, as of July 28, 1998, certain
information with respect to the shares of Common Stock beneficially owned by (i)
each person known by the Company to own beneficially five percent or more of the
Common Stock, (ii) each director and director nominee of the Company, (iii) each
of the five most highly compensated executive officers of the Company during its
most recent fiscal year and (iv) all directors and executive officers of the
Company as a group. Except as indicated below, each of the persons listed in the
table has sole voting and investment power with respect to the shares listed.
For purposes of the following table, each person's "beneficial ownership" of
Common Stock has been determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 13d-3
promulgated thereunder. Information with respect to beneficial ownership is
based upon information furnished by such persons or contained in filings made
with the Securities and Exchange Commission ("SEC").
3
<PAGE>
<TABLE>
<CAPTION>
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP CLASS
- --------------------------------------- ----------- ----------
<S> <C> <C>
Agro Industrial and Trading Holding B.V.
18 Lindenstraat, 7411 NV Deventer, Netherlands (2)........... 317,400 6.3%
Chase Venture Capital Associates, L.P. (formerly known
as Chemical Venture Capital Associates, A California
Limited Partnership) 380 Madison Avenue, 12th Floor,
New York, New York 10017 (3)............................... 274,739 5.4%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor, Santa Monica, California
90401 (4)................................................... 302,700 6.0%
William Blair Leveraged Capital Fund, L.P.
222 West Adams Street, Chicago, Illinois 60606.............. 863,275 17.1%
Deke C. Abbott, Jr., Chief Operating Officer................... 88,254 1.8%
David G. Chandler, Director (5)................................ 863,275 17.1%
John W. Lloyd, Director and Chief Financial Officer (6)........ 43,500 *
Walter E. Rose, Director and Chief Executive Officer (6)....... 331,296 6.5%
Robert G. Shaw, Director (6)................................... 11,000 *
John D. Strautnieks, Director................................. 306,296 6.1%
Richard D. Hinrichs, President (6)............................ 47,542 *
Directors and executive officers as a group (9 persons) (6)... 1,691,163 33.0%
</TABLE>
- -----------------------
* Represents beneficial ownership of less than one percent of the outstanding
shares of Common Stock.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is c/o Gibraltar Packaging Group, Inc., 2000 Summit Avenue,
Hastings, Nebraska 68902.
(2) Based solely on information set forth in a Schedule 13D, dated December 11,
1996.
(3) Based solely on information set forth in a Schedule 13D, dated January 1,
1998.
(4) Based solely on information set forth in a Schedule 13G, dated February 9,
1997.
(5) Mr. Chandler may be deemed to beneficially own the 863,275 shares of Common
Stock held by William Blair Leveraged Capital Fund, L.P., (the "WB Fund")
due to his status as a principal of William Blair & Company, L.L.C., which
is the general partner of William Blair Leveraged Capital Management, L.P.,
the general partner of the WB Fund.
(6) Includes the following shares issuable upon the exercise of outstanding
stock options granted by the Company that are exercisable within 60 days of
July 28, 1998: 31,000 for Mr. Lloyd, 25,000 for Mr. Rose, 11,000 for Mr.
Shaw and 23,000 for Mr. Hinrichs.
4
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE OFFICERS
Set forth below is certain information concerning the executive officers of
the Company, including the business experience of each during the past five
years.
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
Richard D. Hinrichs 53 President and Chief Operating Officer
John F. Justice 47 Division President
John W. Lloyd 53 Chief Financial Officer
Walter E. Rose 54 Chief Executive Officer
Information regarding the business experience of Messrs. Rose and
Lloyd is set forth above under the heading "Proposal Number 1: Election of
Directors."
RICHARD D. HINRICHS. Mr. Hinrichs became President and Chief
Operating Officer of the Company in August 1998. Mr. Hinrichs served as
Division President - Great Plains Packaging in May 1992. He had previously
served as Vice President of Sales of Great Plains Packaging from February
1986 through May 1992 and has held various positions with the Company and
its predecessors since 1963.
JOHN F. JUSTICE. Mr. Justice was promoted to Division President in
February 1997, and originally joined Niemand as Division Controller and Director
of Administrative Services in January 1996. From 1993 through 1996 Mr. Justice
held senior management positions with Prestolite Electric, an electro-mechanical
products manufacturer. From 1988 through 1993 he was employed with Partek North
America, Inc., a building products manufacturer.
5
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors of the Company
currently consists of Messrs. Chandler and Shaw, neither of whom are officers or
employees of the Company. The Committee is responsible for evaluating and
establishing the level of executive compensation and administering the Company's
stock option plans.
It is the philosophy of the Company and the Compensation Committee that in
order to achieve continual growth and financial success, the Company must be
able to attract and retain qualified executives. The Company's executive
compensation programs are designed to attract and retain executives capable of
leading the Company to meet its business objectives and to motivate them to
enhance long-term stockholder value. The Compensation Committee regularly
reviews the Company's compensation programs to insure that salary levels and
incentive opportunities are competitive and reflect the performance of the
Company. The Company's compensation package for its executive officers consists
primarily of a cash salary, a cash incentive bonus and stock option grants.
Base salary levels are largely determined through comparisons with
industrial companies of similar size, complexity and performance. The
determination of the comparable companies was based upon choices made by the
Compensation Committee and the Board of Directors. Actual salaries are based on
individual performance contributions within a competitive salary range for each
position that is established through job evaluation and market comparisons. Mr.
Rose receives his compensation from Rostra, and the Company pays management fees
as reimbursement to Rostra for the services he provides. In fiscal 1998, the
Company paid Rostra $88,200 in management fees for Mr. Rose's services, which
represents compensation for the first four months of the fiscal year. Upon the
appointment of a new Chief Operating Officer of the Company in October 1997, Mr.
Rose's active involvement was reduced. Rostra has received no reimbursements for
Mr. Rose's time for the remaining eight months of the fiscal year.
The Company's executives participate in the Company's bonus plan. The
Company uses annual bonuses to motivate its executive officers and reward
individuals for their initiative and outstanding performance. Bonuses are
determined annually based upon achievement of performance-oriented indicators,
which include improvement in sales and net income, the control of working
capital and cash flow, and the achievement of specified operating objectives;
the achievement of which favorably impact the Company's overall financial
performance. Based on the aforementioned criteria, Mr. Rose received no bonus
for fiscal 1998.
The Compensation Committee believes that by providing the executives who
have substantial responsibility for the management and growth of the Company
with an opportunity to increase their ownership of Common Stock of the Company,
the best interest of stockholders and executives will be closely aligned.
Therefore, executives are eligible to receive stock options from time to time,
giving them the right to purchase Common Stock of the Company. While various
factors such as the potential of the recipient, prior grants and the performance
of the Company are considered in selecting the recipients and determining the
size of the grant, the Company does not adhere to any firmly established
formulas or schedules for the issuance of options, and options are awarded when
considered appropriate. No stock options were awarded in fiscal 1998.
The foregoing report is given by the following members of the Compensation
Committee:
David G. Chandler
Robert G. Shaw
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Chandler and Shaw.
No member of the Compensation Committee was an officer, or employee of the
Company, or any of its subsidiaries, during fiscal 1998. Messrs. Rose and
Lloyd serve on the Board of Directors of Rostra, which board makes all
compensation related decisions for that company. Mr. Strautnieks, the
Chairman of Rostra, is a director of the Company.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes certain information regarding aggregate
cash compensation, stock option awards and other compensation earned by the
Company's Chief Executive Officer and each of the four other most highly
compensated executive officers of the Company during the Company's last three
fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
FISCAL --------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS(#) COMPENSATION($)(2)
- --------------------------- ---- --------- ---------- --------- ------------------
<S> <C> <C> <C> <C> <C>
Walter E. Rose (3) 1998(4) 88,200 0 0 0
Chief Executive Officer 1997 241,300 24,000 125,000 0
1996(5) 188,958 36,000 0 0
John W. Lloyd (3) 1998 213,600 0 0 0
Chief Financial Officer 1997 194,900 20,000 100,000 0
1996(6) 54,022 15,000 0 0
Richard D. Hinrichs 1998 154,675 34,000 0 2,872
Division President 1997 145,000 28,000 0 1,581
1996 135,091 32,000 0 1,550
James A. Stajkowski 1998 147,000 0 0 7,826
Division President 1997 130,000 11,700 0 46,107(7)
1996(8) 48,750 8,000 0 11,158(9)
Deke C. Abbott, Jr. 1998(10) 136,138 0 0 69,000
Chief Operating Officer 1997 162,138 0 0 1,621
1996(11) 159,500 33,000 0 45,261
</TABLE>
(1) Bonuses reflect amounts earned and accrued during each fiscal year, but paid
in the subsequent fiscal year.
(2) Unless otherwise indicated, represents Company contributions to the
Company's 401(k) profit sharing plan. During each of the three years ended
June 27, 1998, June 28, 1997 and June 29, 1996, perquisites for each
individual named in the Summary Compensation Table (other than Mr.
Stajkowski and Mr. Abbott) aggregated less than 10% of the total annual
salary and bonus reported for such individual in the Summary Compensation
Table, or $50,000, if lower. Accordingly, no such amounts are included in
the Summary Compensation Table.
(3) Compensation for Messrs. Rose and Lloyd represent management fees paid to
Rostra for services provided by Mr. Rose as the Company's Chief Executive
Officer and Mr. Lloyd as the Company's Chief Financial Officer. For a
discussion of the fees paid to Rostra, see "Certain Transactions".
(4) The management fees paid to Rostra, represent compensation for services
provided by Mr. Rose for the first four months of the fiscal year. For
further discussion regarding these fees, see the "Report of the
Compensation Committee of the Board of Directors".
(5) Mr. Rose became Chief Executive Officer in August 1995. Accordingly, the
compensation listed for him in fiscal 1996 includes only the compensation
paid by the Company since that date.
(6) Mr. Lloyd became Chief Financial Officer in February 1996. Accordingly, the
compensation listed for him in fiscal 1996 includes only the compensation
paid by the Company since that date.
(7) Includes $1,300 of Company contributions to the 401(k) plan, $22,927 of
relocation expenses, $17,676 of reimbursement of income taxes and $4,204
for a company car.
(8) Mr. Stajkowski became an executive officer in February 1996. Accordingly,
the compensation listed for him in fiscal 1996 includes only the
compensation paid by the Company since that date.
(9) Includes $325 of Company contributions to the 401(k) plan and $10,833
relocation incentive bonus.
(10) Mr. Abbott returned to the company on an interim assignment from October
1997 until July 1998. The $136,138 reported as salary reflects his
compensation for that period. The $69,000 reported under other compensation
represents severance payments as defined in his employment agreement, see
"Employment Contracts, Termination of Employment and Change-in-Control
Arrangements".
(11) Mr. Abbott was Chief Executive Officer of the Company from March 1992 until
August 1995.
(12) Includes $28,312 of temporary living expenses, $4,585 of country club dues,
$1,395 of Company contributions to 401(k) and $10,969 of reimbursement of
income taxes.
7
<PAGE>
STOCK OPTIONS
No stock options were granted in fiscal 1998 under the Company's 1992
Incentive Stock Option Plan or the 1996 Non-Qualified Stock Option Plan.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning the value of
unexercised options held as of June 30, 1998, by the executive officers named in
the Summary Compensation Table. No stock options were exercised by these
officers in fiscal 1998.
<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT OPTIONS AT
JUNE 30, 1998(#) JUNE 30, 1998($)(1)
------------------------------ -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Walter E. Rose(2)............. 25,000 100,000 (43,750) (175,000)
John W. Lloyd(2).............. 20,000 80,000 (35,000) (140,000)
Richard D. Hinrichs(3)........ 23,000 0 (114,250) (0)
</TABLE>
(1) Computed based on the difference between aggregate fair market value and
aggregate exercise price. The market value of the Company's Common Stock on
June 30, 1998 was $2.25 based on the closing price on the NASDAQ National
Market System on such date.
(2) Each option for Messrs. Rose and Lloyd were granted under the Company's
1996 Non-Qualified Stock Option Plan.
(3) Each option for Mr. Hinrichs was granted under the Company's 1992 Incentive
Stock Option Plan.
8
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
Common Stock to the NASDAQ Market Index and a peer group index for the period
beginning June 30, 1993 and ending June 30, 1998. The graph assumes that the
value of the investment in the Company's Common Stock and each index was $100 at
June 30, 1993 and that all dividends were reinvested. The members of the peer
group were determined by the Company, and consist of: Bemis Inc., Liqui-Box
Corp., Outlook Group Corp., Shorewood Packaging Corp. and Sonoco Products Co.
COMPARISON OF 5 YEAR CUMULATIVE RETURN
AMONG GIBRALTAR PACKAGING GROUP, INC., NASDAQ
MARKET INDEX AND PEER GROUP INDEX
Plot points appear below.
CUSTOMER PLEASE FILL IN.
Gibraltar Peer NASDAQ
--------- ---- ------
1993 100.0 100.0 100.0
1994 72.7 102.5 101.0
1995 68.9 104.4 134.8
1996 66.7 111.0 173.0
1997 36.4 133.5 210.4
1998 27.3 135.4 277.6
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
above. The Company will not make or endorse any predictions as to future stock
performance.
9
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company entered into an employment agreement with Mr. Abbott dated
February 10, 1992. The compensation payable to Mr. Abbott under the terms of the
employment agreement included an annual base salary of $200,000 and a cash bonus
of up to 40% of Mr. Abbott's base salary. The agreement also provides that if
terminated without just cause, Mr. Abbott would be entitled to receive severance
pay for the nine-month period from termination equal to his monthly base salary
at the time of termination. When Mr. Abbott left the Company in July 1997 his
employment agreement was amended to increase his severance to an amount equal to
twelve months base salary. These payments are to be made in equal installments
over a 36 month period. In October 1997, Mr. Abbott was asked to rejoin the
Company, on an interim basis, as Chief Operating Officer with a monthly salary
of $16,666.67 ($200,000 annually). This agreement is separate from and in
addition to his right to receive severance pay under his existing employment
agreement. Mr. Abbott's interim employment ended on July 31, 1998 when Mr.
Hinrichs was appointed President and Chief Operating Officer of the Company.
The Company entered into an employment agreement with Mr. Hinrichs, dated
December 1, 1992. The agreement provided that Mr. Hinrichs would receive an
annual base salary of $122,100 and be entitled to receive a bonus of up to 40%
of his base salary. Mr. Hinrichs' annual base salary in fiscal 1998 was
$154,675. In addition, the agreement provides that if terminated without just
cause, Mr. Hinrichs would be entitled to receive severance pay for the
nine-month period from termination equal to his monthly base salary at the time
of termination. The employment agreement may be terminated by either party with
advance written notice to the other party. Effective January 1, 1998, Mr.
Hinrichs' employment agreement was amended to increase his annual base salary to
$160,000 and increase the severance period to twelve months. All other terms and
conditions remain unchanged.
The Company entered into an employment agreement with Mr. Stajkowski dated
October 2, 1996. The agreement provided that Mr. Stajkowski would receive an
annual base salary of $130,000 per year and shall be entitled to receive a bonus
of up to 30% of his base salary. Mr. Stajkowski left the company in June 1998 to
pursue other opportunities.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than ten percent of the Company's Common
Stock, to file initial reports of ownership and reports of changes in ownership
of Common Stock with the SEC and the NASDAQ Stock Market. Officers, directors
and greater than ten percent stockholders are required by SEC regulation to
furnish the Company with copies of all such forms that they file.
To the Company's knowledge, based solely on the Company's review of the
copies of such reports received by the Company, and on written representations
by certain reporting persons, the Company believes that during the fiscal year
ended June 27, 1998, all Section 16(a) filing requirements applicable to its
officers, directors and ten percent stockholders were complied with.
CERTAIN TRANSACTIONS
Messrs. Rose and Lloyd serve on the Board of Directors of, and hold
an equity interest in Rostra. Mr. Strautnieks, the Chairman of Rostra, is
a director of the Company. During fiscal 1998 the Company paid $452,433
to Rostra in management fees. Rostra has permitted Messrs. Rose and Lloyd
to serve as the Company's Chief Executive Officer and Chief Financial
Officer, respectively. The Company pays management fees as reimbursement
to Rostra for the services provided by Messrs. Rose and Lloyd. As of June
27, 1998, the Company owed Rostra $66,029 for such fees.
10
<PAGE>
PROPOSAL NUMBER 2:
APPROVAL OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed the firm of Deloitte &
Touche LLP as the Company's independent public accountants for the fiscal year
ending July 3, 1999, subject to ratification by the Company's stockholders.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting of Stockholders and will have an opportunity to make a statement,
if they desire to do so, and to respond to appropriate questions from those
attending the meeting. Deloitte & Touche LLP has served as auditors for the
Company since 1986.
For ratification, this proposal will require the affirmative vote of the
holders of a majority of the shares of Common Stock represented at the meeting
in person or by proxy. If the resolution is rejected, or if Deloitte & Touche
LLP declines to act or becomes incapable of action, or if its employment is
discontinued, the Board of Directors will appoint other independent accountants
whose continued employment after the following Annual Meeting of Stockholders
will be subject to ratification by stockholders. The enclosed proxy will be
voted for ratification of Deloitte & Touche LLP unless the proxy holders are
otherwise instructed.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF DELOITTE & TOUCHE LLP'S APPOINTMENT.
PROPOSALS OF STOCKHOLDERS
Any proposal of a stockholder intended to be presented at the next annual
meeting must be in the form required by the Company's By-laws and received at
the Company's principal executive offices no later than August 16, 1999, if the
proposal is to be considered for inclusion in the Company's proxy statement
relating to such meeting.
FINANCIAL INFORMATION
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING ANY
FINANCIAL STATEMENTS AND SCHEDULES AND EXHIBITS THERETO, MAY BE OBTAINED WITHOUT
CHARGE BY WRITTEN REQUEST TO INVESTOR RELATIONS, GIBRALTAR PACKAGING GROUP,
INC., 2000 SUMMIT AVENUE, HASTINGS, NEBRASKA 68902.
OTHER MATTERS
The Company will bear the cost of preparing and mailing proxy materials as
well as the cost of solicitation of proxies. The Company will reimburse banks,
brokerage firms, custodians, nominees and fiduciaries for their expenses in
sending proxy materials to the beneficial owners of Common Stock. The Company
has retained Norwest Bank Minnesota, N.A. ("Norwest") to assist in the
solicitation of proxies. A $950 average monthly fee, together with Norwest's
out-of-pocket expenses, is paid to Norwest to act as the Company's transfer
agent. In addition to solicitation by mail, certain directors, officers and
regular employees of the Company and Norwest may solicit proxies by fax, telex,
telephone and personal interview.
By Order of the Board of Directors
/s/ Walter E. Rose
WALTER E. ROSE
CHIEF EXECUTIVE OFFICER
October 23, 1998
Hastings, Nebraska
11
<PAGE>
*********************************APPENDIX****************************
P R O X Y GIBRALTAR PACKAGING GROUP, INC. P R O X Y
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints WALTER E. ROSE, JOHN W. LLOYD,
and each or either of them, lawful attorneys and proxies of the undersigned,
with full power of substitution, for and in the name, place and stead of the
undersigned, to attend the Annual Meeting of Stockholders of Gibraltar Packaging
Group, Inc. (herein the "Company") to be held at the Holiday Inn, 2205 Osborne
Drive East, Hastings Nebraska, on the 18th day of November 1998 at 12:00 p.m.,
Central Time, and any adjournment(s) thereof, with all powers the undersigned
would possess if personally present and to vote thereat, as provided below, the
number of shares the undersigned would be entitled to vote if personally
present.
<TABLE>
<CAPTION>
<S> <C> <C>
[ ] PROPOSAL 1: ELECTION OF DIRECTORS FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY TO VOTE
EXCEPT AS MARKED TO THE CONTRARY FOR ALL NOMINEES LISTED BELOW
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
David G. Chandler John W. Lloyd Walter E. Rose
Robert G. Shaw John D. Strautnieks
[ ] PROPOSAL 2: TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP FOR AGAINST ABSTAIN
AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE
1999 FISCAL YEAR
</TABLE>
In accordance with their discretion, said attorneys and proxies are authorized
to vote upon such other business as may properly come before the meeting or any
adjournments thereof.
<PAGE>
Every properly signed proxy will be voted in accordance with the specification
made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2. All prior proxies are hereby revoked.
This proxy will be voted in accordance with the discretion of the proxies or
proxy on any other business. Receipt is hereby acknowledged of the Notice of
Annual Meeting and Proxy Statement of the Company dated October 23, 1998.
Signature(s)
Dated ______________________________, 1998
(Please sign exactly as your name appears
hereon. When signing as attorney, executor,
administrator, trustee, guardian, etc., give
full title as such. For joint accounts, each
joint owner should sign.)
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
