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 Packaging 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>
[GRAPHIC]
(LOGO APPEARS HERE)
GIBRALTAR(TM)
PACKAGING GROUP, INC
Fellow Shareholders,
In fiscal 1999, we took a number of steps to change the shape of the company and
improve its long term prospects. The plan that we adopted was to leverage our
successful Great Plains model by consolidating all three of the folding carton
operations under Dick Hinrichs, who was appointed President and Chief Operating
Officer of Gibraltar, and to sell both Niemand Industries and GB Labels. The
management changes were accomplished, GB Labels has been sold, the spiral wound
container portion of Niemand has been sold, and we are in advanced negotiations
to sell the remaining contract packaging and fill segment of Niemand.
o Our Great Plains division continues to show solid increases in sales and
profits, and the Great Plains management team has been increasingly
involved in improving the performance of the other divisions.
o Our Flashfold division continued to show weakness during much of the year.
However, with the work carried out to improve quality and costs, by
year-end this division had started to show some improvement.
o Our Standard Packaging division has shown considerable progress during the
year in improving both quality and costs. While progress was slower than
anticipated, we are now seeing significant improvements in performance that
will contribute to a better fiscal 2000.
By taking advantage of available capacity throughout the three folding carton
divisions, we continue to believe that the restructured organization is
improving our ability to increase sales and to meet the needs of large or
national customers. With the sale of two troubled divisions, and the focus we
have brought to our core expertise in folding cartons, we believe that the
closer operational and marketing integration among the remaining folding carton
divisions will provide the improvement in profit and return to all our
shareholders for which we have been striving.
Sincerely,
/s/ Walter E. Rose
- ------------------
Walter E. Rose
Chairman and Chief Executive Officer
<PAGE>
GIBRALTAR PACKAGING GROUP, INC.
2000 SUMMIT AVENUE
HASTINGS, NEBRASKA 68901
---------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 10, 1999
---------------------------------------------
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 10, 1999, at 12:00
p.m., Central Time, for the following purposes:
1. To elect five directors to serve until the annual stockholders'
meeting in 2000 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 2000 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 September 30,
1999 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/ J.W. LLOYD
--------------
JOHN W. LLOYD
SECRETARY
October 15, 1999
Hastings, Nebraska
<PAGE>
GIBRALTAR PACKAGING GROUP, INC.
2000 Summit Avenue
Hastings, Nebraska 68901
-------------------
PROXY STATEMENT
-------------------
The accompanying proxy is solicited by the Board of Directors of
Gibraltar Packaging Group, Inc. (the "Company") for use at the 1999 Annual
Meeting of Stockholders to be held on November 10, 1999 and at any adjournments
thereof (the "Annual Meeting"). The Annual Meeting 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 July 3, 1999, will first be sent to stockholders is
October 15, 1999.
VOTING RIGHTS AND QUORUM
At the close of business on September 30, 1999, 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
is unable or declines 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 41 Director 1992
John W. Lloyd 55 Director and Chief Financial Officer 1992
Walter E. Rose 56 Director and Chief Executive Officer 1986
Robert G. Shaw 59 Director 1992
John D. Strautnieks 62 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 also 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.
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.
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.
JOHN D. STRAUTNIEKS. Mr. Strautnieks serves as Chairman of the Board of
Rostra, which he co-founded in 1982.
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. See "Executive Compensation and Other Information - Employment
Contracts, Termination of Employment and Change-in-Control Arrangements."
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 more than five persons.
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 1998 Stock Appreciation Rights
Plan. The current members of the Compensation Committee are Messrs. Chandler and
Shaw.
During fiscal 1999, the Board of Directors had five meetings. The Audit
Committee and the Compensation Committee each had one meeting. During fiscal
1999, 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 1999, 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 August 3, 1999,
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 four 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
Agro Industrial and Trading Holding B.V.
<S> <C> <C> <C> <C>
18 Lindenstraat, 7411 NV Deventer, Netherlands (2).......................... 317,400 6.3%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401 (3) .......... 303,100 6.0%
William Blair Leveraged Capital Fund, L.P.
222 West Adams Street, Chicago, Illinois 60606.............................. 863,275 17.0%
David G. Chandler, Director (4)................................................ 863,275 17.0%
John W. Lloyd, Director and Chief Financial Officer (5)........................ 165,250 3.3%
Walter E. Rose, Director and Chief Executive Officer .......................... 318,996 6.3%
Robert G. Shaw, Director (5)................................................... 16,000 *
John D. Strautnieks, Director.................................................. 306,296 6.0%
Richard D. Hinrichs, President (5)............................................. 164,592 3.2%
Merrell A. Ketchum, Division President (5)..................................... 1,500 *
Directors and executive officers as a group (7 persons) (5).................... 1,835,909 36.2%
- -----------------------
* 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 68901.
(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 13G, dated December 31,
1998.
(4) All of these shares of Common Stock are held by William Blair Leveraged
Capital Fund, L.P. (the "WB Fund"), which Mr. Chandler may be deemed to
beneficially own 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.
(5) Includes the following shares issuable upon the exercise of outstanding
stock options granted by the Company that are exercisable within 60 days
of August 3, 1999: 11,000 for Mr. Lloyd, 11,000 for Mr. Shaw, 23,000 for
Mr. Hinrichs and 1,500 for Mr. Ketchum.
</TABLE>
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.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Walter E. Rose 56 Chief Executive Officer
Richard D. Hinrichs 55 President and Chief Operating Officer
John W. Lloyd 55 Chief Financial Officer
Merrell A. Ketchum 39 Division President
</TABLE>
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 since 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.
MERRELL A. KETCHUM. Mr. Ketchum became Division President of the
Company's Niemand Industries division in January 1999. He had previously served
as Vice President of Manufacturing and Engineering of Niemand Industries from
April 1994 to January 1999. From January 1987 through April 1994 Mr. Ketchum
held various positions with Sony Magnetic Products, Inc., including Manager of
Product Design.
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 and stock appreciation rights 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, stock option grants and
stock appreciation rights.
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. Upon
the appointment of a new Chief Operating Officer of the Company in October 1997,
Mr. Rose's active involvement was reduced. Mr. Rose receives his compensation
from Rostra, and previously the Company paid Rostra a management fee for Mr.
Rose's services. As a result of Mr. Rose's reduction of active involvement in
the operations of the Company, Rostra received no reimbursements for Mr. Rose's
time in fiscal 1999.
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
that favorably impact the Company's overall financial performance. Based on the
overall financial performance of the Company, Mr. Rose agreed to forego a bonus
in fiscal 1999.
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 1999.
In November 1998 the Compensation Committee approved the adoption of
the 1998 Stock Appreciation Rights Plan. The Committee believes that granting
stock appreciation rights ("SARs"), like stock options, can increase stockholder
value by aligning the interests of the SARs recipient with the Company's
stockholders. Once the SARs reach maturity, they will provide cash incentives to
key executives only if the then current value of the Common Stock has reached
predetermined levels. In fiscal 1999 a total of 300,000 SARs were granted to key
executives.
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 1999. 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, stock appreciation rights and other
compensation earned by the Company's Chief Executive Officer and each of the
three other most highly compensated executive officers of the Company during the
Company's last three fiscal years. No other executive officer earned more than
$100,000 in total annual compensation during fiscal 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Securities
Fiscal Annual Compensation Underlying All Other
---------------------------
NAME AND PRINCIPAL POSITION Year Salary($) BonuS($)(1) Options/SARs(#) Compensation($)(2)
- --------------------------- ---- --------- ----------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Walter E. Rose (3) 1999(4) 0 0 0 0
Chief Executive Officer 1998(5) 88,200 0 125,000(6) 0
1997 241,300 24,000 0 0
Richard D. Hinrichs 1999 203,157 -- (7) 150,000(8) 1,449
President and Chief Operating 1998 157,547 42,112 0 1,578
Officer 1997 147,788 28,000 0 1,581
John W. Lloyd (9) 1999 203,171 -- (7) 150,000(8) 0
Chief Financial Officer 1998 198,600 0 100,000(6) 0
1997 194,900 20,000 0 0
Merrell A. Ketchum 1999 109,355 -- (7) 0 1,094
Division President 1998 105,284 0 0 967
1997 83,193 14,000 0 832
</TABLE>
(1) Bonuses reflect amounts earned and accrued during each fiscal year, but
paid in the subsequent fiscal year.
(2) Represents Company contributions to the Company's 401(k) profit sharing
plan. During each of the three years ended July 3, 1999, June 27, 1998 and
June 28, 1997, perquisites for each individual named in the Summary
Compensation Table 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 Mr. Rose represents management fees paid to Rostra for
services provided by Mr. Rose as the Company's Chief Executive Officer. For
a discussion of the fees paid to Rostra, see "Certain Transactions".
(4) Mr. Rose receives his compensation from Rostra. For further discussion, see
the "Report of the Compensation Committee of the Board of Directors".
(5) 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".
(6) In fiscal 1998 Messrs. Rose and Lloyd were granted stock options under the
1996 Non-Qualified Stock Option Plan. Effective November 30, 1998 the plan
was terminated and the stock options were cancelled. For further
discussion, see "Stock Options and Stock Appreciation Rights Granted in
Fiscal 1999".
(7) The Compensation Committee has not yet determined the bonuses applicable to
fiscal 1999.
(8) In fiscal 1999 Messrs. Hinrichs and Lloyd were each granted 150,000 SARs
under the 1998 Stock Appreciation Rights Plan. The SARs are valued at
$2.25 for each of 75,000 SARs and $3.00 for each of 75,000 SARs of the
150,000 awarded to Mr. Hinrichs and Mr. Lloyd. The SARs for both Mr.
Hinrichs and Mr. Lloyd vest at 20% on January 15, 1999 and 20% on each of
June 26, 1999, June 24, 2000, June 30, 2001 and June 29, 2002. On June 30,
2003, the Company will pay to Messrs. Hinrichs and Lloyd an amount equal to
the market value of the Common Stock on that date multiplied by the number
of vested SARs less their initial values of $2.25 and $3.00.
(9) Compensation for Mr. Lloyd prior to January 1, 1999 represents management
fees paid to Rostra for services provided by Mr. Lloyd as the Company's
Chief Financial Officer. Effective January 1, 1999 Mr. Lloyd's salary was
paid by the Company. Of the $203,171 salary received by Mr. Lloyd in fiscal
1999, $102,801 represents management fees paid by the Company to Rostra and
$100,370 represents salary paid to Mr. Lloyd by the Company. For a
discussion of the fees paid to Rostra, see "Certain Transactions".
7
<PAGE>
Stock Options And StocK Appreciation Rights Granted In Fiscal 1999
No stock options were granted in fiscal 1999 under the Company's stock
option plans. Effective November 30, 1998, the Company's 1996 Non-Qualified
Stock Option Plan was terminated based on the adoption of the 1998 Stock
Appreciation Rights Plan. In fiscal 1999, 300,000 SARs were granted to certain
officers of the Company under the plan. For further discussion regarding the
1998 Stock Appreciation Rights Plan, see the "Report of the Compensation
Committee of the Board of Directors".
The following table sets forth information concerning the number of
SARs granted within the last fiscal year and the potential realized values at
maturity.
SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realized Value At
Individual Grants Assumed Annual
Rates Of Stock Price
% Of Total Appreciation
Number Of SARs Granted for Option Term (1)
SARs To Employees Base Price Maturity
Name Granted (#) In Fiscal Year ($/SAR) Date 5%($) 10%($)
- ---- ----------- -------------- ------- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Lloyd.............. 75,000 25% $2.25 06/30/03 $ 0 $ 0
75,000 25% $3.00 06/30/03 $ 0 $ 0
Richard D. Hinrichs....... 75,000 25% $2.25 06/30/03 $ 0 $ 0
75,000 25% $3.00 06/30/03 $ 0 $ 0
</TABLE>
(1) The market value of the Company's Common Stock on January 15, 1999, the
grant date, was $1.25 based on the closing price on the NASDAQ National
Market System on that date, consequently the base price would not be
reached and there would be no cash benefit at maturity.
Stock Option and SAR Values at Fiscal Year-End
The following table sets forth information concerning the value of
unexercised options held as of July 3, 1999, by the executive officers named in
the Summary Compensation Table. No stock options were exercised by these
officers in fiscal 1999.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number Of Securities
Underlying Unexercised Value Of Unexercised
Options Held at Options at
July 3, 1999(#) July 3, 1999($)(1)
---------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
John W. Lloyd(2)............................ 11,000 0 ($79,439) 0
Richard D. Hinrichs(3)...................... 23,000 0 ($150,188) 0
Merrell A. Ketchum(3)....................... 1,500 0 ($12,469) 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 July 3, 1999 was $0.6875 based on the closing price on the NASDAQ
National Market System on that date.
(2) All options for Mr. Lloyd were granted under the Company's Director Stock
Option Plan.
(3) All options for Messrs. Hinrichs and Ketchum were granted under the
Company's 1992 Incentive Stock Option Plan.
8
<PAGE>
Stock Option and SAR Values at Fiscal Year-End (Continued)
The following table sets forth information concerning the value of SARs
held as of July 3, 1999, by the executive officers named in the Summary
Compensation Table. No SARs granted to these officers reached maturity in fiscal
1999.
<TABLE>
<CAPTION>
Fiscal Year-End SAR Values
Present Value
Number Of SARs Granted At OF SARs Granted At
July 3, 1999(#) July 3, 1999($)(1)
---------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
John W. Lloyd(2)............................ 0 150,000 0 ($290,626)
Richard D. Hinrichs(2)...................... 0 150,000 0 ($290,626)
</TABLE>
(1) Computed based on the difference between aggregate fair market value and
aggregate initial value. The market value of the Company's Common Stock on
July 3, 1999 was $0.6875 based on the closing price on the NASDAQ National
Market System on that date.
(2) All SARs for Messrs. Hinrichs and Lloyd were granted under the Company's
1998 Stock Appreciation Rights Plan.
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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, 1994 and ending June 30, 1999. The graph assumes that
the value of the investment in the Company's Common Stock and each index was
$100 at June 30, 1994 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. and Sonoco Products Co.
COMPARISON OF 5 YEAR CUMULATIVE RETURN
AMONG GIBRALTAR PACKAGING GROUP, INC., NASDAQ
MARKET INDEX AND PEER GROUP INDEX
{GRAPHIC APPEARS HERE WITH THE FOLLOWING PLOT POINTS}
RAW DATA INDEXED DATA
----------------------------------- ----------------------------
GIBRALTER PEER NASD US GIBRALTAR PEER NASDAQ
Jun-94 6.0000 20.9298 6 230.9210 Jun 94 100.0 100.0 100.0
Jun-95 5.6880 21.3250 5 306.2700 Jun 95 94.8 101.9 132.6
Jun-96 5.5000 22.6694 4 390.8370 Jun 96 91.7 108.3 169.3
Jun-97 3.0000 27.2626 3 474.8440 Jun 97 50.0 130.3 205.6
Jun-98 2.2500 27.6500 2 619.8830 Jun 98 37.5 132.1 268.4
Jun-99 0.6875 31.7969 1 872.3860 Jun 99 11.5 151.9 377.8
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 or that its performance will change in the future. The Company will not
make or endorse any predictions as to future stock performance.
10
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Employment Contracts,Termination of Employment and Change-In-Control
Arrangements
The Company entered into an employment agreement with Mr. Hinrichs,
dated January 15, 1999, which supercedes all prior employment agreements between
Mr. Hinrichs and the Company. The agreement provides that Mr. Hinrichs would
receive an annual base salary of not less than $201,000 and be entitled to
receive a bonus not to exceed 40% of his base salary each fiscal year. The
employment agreement also provides Mr. Hinrichs with the right to participate in
the 1998 Stock Appreciation Rights Plan, see "Report of the Compensation
Committee of the Board of Directors". In addition, the agreement provides that
if the Company terminates Mr. Hinrich's employment without just cause, or in the
event of a change-in-control (as defined in the agreement), Mr. Hinrichs would
be entitled to receive severance pay, for the one-year period from termination,
equal to his annual base salary at the time of termination.
The Company entered into an employment agreement with Mr. Lloyd, dated
January 15, 1999, which provides that Mr. Lloyd would receive an annual base
salary of not less than $200,739 and be entitled to receive a bonus not to
exceed 40% of his base salary each fiscal year. The employment agreement also
provides Mr. Lloyd with the right to participate in the 1998 Stock Appreciation
Rights Plan, see "Report of the Compensation Committee of the Board of
Directors". In addition, the agreement provides that if the Company terminates
Mr. Lloyd's employment without just cause, or in the event of a
change-in-control (as defined in the agreement), Mr. Lloyd would be entitled to
receive severance pay, for the one-year period from termination, equal to his
annual base salary at the time of termination.
The Company entered into an agreement with Mr. Ketchum dated November
18, 1997. The agreement provides that if the Company terminates Mr. Ketchum's
employment without just cause he would be entitled to receive severance pay for
the four-month period from termination equal to his monthly base salary at the
time of termination.
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 July 3, 1999, 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 1999, the Company paid $158,000 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 has, in the past, paid management fees as reimbursement to Rostra for
the services provided by Messrs. Rose and Lloyd. Effective October 1997, the
Company ceased paying management fees to Rostra for Mr. Rose, and effective
January 1999, the Company ceased paying management fees to Rostra for Mr. Lloyd.
As of July 3, 1999 no fees were owed by the Company to Rostra.
11
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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 1, 2000, 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 25,
2000, 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 68901.
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 $400 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 15, 1999
Hastings, Nebraska
12
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
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 10th day of November 1999 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.
[ ]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
2000 FISCAL YEAR
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.
</TABLE>
<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 15, 1999.
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.
