[GIBRALTAR LOGO APPEARS HERE]
GIBRALTAR
Packaging Group, Inc.
Fellow Shareholders,
In fiscal 2000, we achieved our goal of returning the Company to consistent
profitability in all four fiscal quarters. This was a result of the strategy we
implemented in 1999 to focus the Company on its core business of folding cartons
and integrate the management of the three remaining divisions. During the fiscal
year, Gibraltar made significant strides in improving operational efficiency,
quality, and profitability at both its Flashfold and Standard Packaging
divisions while it maintained the high level of performance at the Great Plains
division. In the current fiscal year, we plan to:
o Continue to focus our efforts on our core business of folding cartons, as well
as the associated flexible, litho-laminated, and corrugated product lines.
o Continue to develop operational and marketing integration among the divisions.
o Continue to improve levels of quality and service to meet the rapidly changing
markets we serve.
We believe that these continuing steps should allow us to increase operating
profitability through increased sales of higher, value-added products and better
utilization of overall capacity, and that this, combined with prudent management
of our assets, will result in an increasing return to our shareholders.
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 9, 2000
----------------------------------------
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 Comfort Inn,
2903 Osborne Drive West, Hastings, Nebraska, on November 9, 2000, at 12:00 p.m.,
Central Time, for the following purposes:
1. To elect six directors to serve until the annual stockholders'
meeting in 2001 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 2001 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 12,
2000 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/ Brett E. Moller
-----------------------------------
BRETT E. MOLLER
Secretary
October 6, 2000
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 2000 Annual
Meeting of Stockholders to be held on November 9, 2000, and at any adjournments
thereof (the "Annual Meeting"). The Annual Meeting will be held at 12:00 p.m.,
Central Time, at the Comfort Inn, 2903 Osborne Drive West, 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 1, 2000, will first be sent to stockholders is
October 6, 2000.
VOTING RIGHTS AND QUORUM
At the close of business on September 12, 2000, 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
Six 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 six 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. Five of the nominees listed below are
members of the Company's present Board of Directors. On May 10, 2000, the Board
of Directors increased the number of directorships from five to six, and has
nominated Mr. Richard Hinrichs, President & Chief Operating Officer of the
Company, for election to the Board. Proxies solicited hereby will be voted FOR
all six 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 six 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 42 Director 1992
Richard D. Hinrichs 56 President & Chief Operating Officer Nominee
John W. Lloyd 56 Director and Former Chief Financial Officer 1992
Walter E. Rose 57 Director and Chief Executive Officer 1986
Robert G. Shaw 60 Director 1992
John D. Strautnieks 63 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.
Richard D. Hinrichs. Mr. Hinrichs became President & 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.
John W. Lloyd. Mr. Lloyd served as Chief Financial Officer of the
Company from February 1996 until his resignation in September 2000. Mr. Lloyd
continues to serve as a consultant to the Company. 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 voted to expand its
size to six persons, pending the upcoming annual shareholders meeting. No proxy
will be voted for more than six 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 2000, the Board of Directors had three meetings. The
Audit Committee and the Compensation Committee each had one meeting. During
fiscal 2000, each director participated in all board meetings and meetings of
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 2000, 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 September 12, 2000,
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 Stock
--------------------------------------- --------- -----
<S> <C> <C>
Agro Industrial and Trading Holding B.V.
18 Lindenstraat, 7411 NV Deventer, Netherlands (2).......................... 317,400 6.2%
William Blair Leveraged Capital Fund, L.P.
222 West Adams Street, Chicago, Illinois 60606.............................. 863,275 17.0%
David G. Chandler, Director (3)................................................ 863,275 17.0%
John W. Lloyd, Director and Former Chief Financial Officer (4)................. 230,250 4.5%
Walter E. Rose, Director and Chief Executive Officer .......................... 381,296 7.5%
Robert G. Shaw, Director (4)................................................... 16,000 *
John D. Strautnieks, Director.................................................. 306,296 6.0%
Richard D. Hinrichs, President & Chief Operating Officer (4)................... 264,092 5.2%
James W. Anderson, Vice President & General Manager, Flashfold Carton.......... 430 *
Donald R. Soucy, Vice President & General Manager, Standard Packaging & Printing 0 *
Lyle O. Halstead, Vice President Finance - Operations.......................... 11 *
Brett E. Moller, Vice President Finance - Corporate............................ 0 *
Directors and executive officers as a group (10 persons) (4)................... 2,061,650 40.5%
-----------------------
* 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) 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.
(4) Includes the following shares issuable upon the exercise of outstanding stock options granted by the Company that
are exercisable within 60 days of September 12, 2000: 11,000 for Mr. Lloyd, 11,000 for Mr. Shaw, and 23,000
for Mr. Hinrichs.
</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.
Name Age Position with the Company
---- --- -------------------------
Walter E. Rose 57 Chairman and Chief Executive Officer
Richard D. Hinrichs 56 President & Chief Operating Officer
John W. Lloyd 56 Former Chief Financial Officer
Lyle O. Halstead 35 Vice President Finance - Operations
Brett E. Moller 38 Vice President Finance - Corporate
James W. Anderson 39 Vice President & General Manager
Flashfold Carton Division
Donald R. Soucy 58 Vice President & General Manager
Standard Packaging & Printing Division
Information regarding the business experience of Messrs. Rose,
Hinrichs, and Lloyd are set forth above under the heading "Proposal Number 1:
Election of Directors."
Lyle O. Halstead. Mr. Halstead became Vice President Finance -
Operations of the Company in September 2000. He had previously served as Vice
President Finance and Human Resources of the Great Plains Packaging division
since 1997. In addition, he served as Division Controller for Great Plains
Packaging from April 1992 through December 1995. Before returning to the
division in 1997, Mr. Halstead held the position of Plant Controller for Lozier
Corporation from January 1996 to January 1997.
Brett E. Moller. Mr. Moller became Vice President Finance - Corporate
of the Company in September 2000. He previously served as Corporate Controller
for the Company since October 1998. Prior to his employment with the Company,
Mr. Moller was a partner in Richardson & Associates, P.C., a CPA firm.
James W. Anderson. Mr. Anderson became Vice President & General Manager
of the Company's Flashfold Carton Division in January 2000. Mr. Anderson served
as Operations Manager for the division since July 1998 and held other various
positions within the division since September 1997. Prior to his employment with
the Company's Flashfold Carton division he was employed by International Cup
Corporation from April 1996 to September 1997. Prior to 1996 he held various
positions with International Paper, including Plant Superintendent.
Donald R. Soucy. Mr. Soucy has served as Vice President & General
Manager of the Company's Standard Packaging & Printing Division since January
2000. Prior to his employment, the Company retained Mr. Soucy as a consultant,
through DR Soucy & Associates, from June 1999 to December 1999. Mr. Soucy was
previously employed as Plant Manager for International Jensen, Inc., from 1986
to 1999.
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 year 2000. No bonus has been paid to Mr. Rose for fiscal 2000.
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.
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
2000.
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 SAR 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. No SARs were granted in fiscal 2000.
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 2000. Messrs. Rose and Strautnieks
serve on the Board of Directors of Rostra, which board makes all compensation
related decisions for that 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
four other most highly compensated executive officers of the Company during the
Company's last three fiscal years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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>
Walter E. Rose (3) 2000(4) 0 0 0 0
Chief Executive Officer 1999(4) 0 0 0 0
1998(5) 88,200 0 125,000(6) 0
Richard D. Hinrichs 2000 215,109 63,000 0 1,707
President & Chief Operating Officer 1999 203,157 43,000 150,000(7) 1,449
1998 157,547 42,112 0 1,578
John W. Lloyd (8) 2000 210,776 40, 000 0 0
Former Chief Financial Officer 1999 203,171 35,000 150,000(7) 0
1998 198,600 0 100,000(6) 0
James W. Anderson 2000 103,523 12,000 0 1,035
Vice President & General Manager 1999 96,148 0 0 780
Flashfold Carton 1998 58,523 6,500 0 0
Donald R. Soucy 2000 111,200(9) 10,000 0 0
Vice President & General Manager 1999 2,400(9) 0 0 0
Standard Packaging & Printing 1998 0 0 0 0
(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.
(7) 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.
(8) 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." The salary received by Mr. Lloyd in fiscal 2000 was paid by the Company.
(9) Compensation for Mr. Soucy represents consulting fees totaling $53,600 for the first six months of fiscal 2000 and salary
totaling $58,600 for the remaining portion of the fiscal year. Fiscal 1999 compensation for Mr. Soucy represents $2,400 in
consulting fees for services provided by Mr. Soucy in June 1999.
</TABLE>
7
<PAGE>
Stock Options and Stock Appreciation Rights Granted in Fiscal 2000
The Company did not grant any stock options or SARs in fiscal 2000.
Stock Option and SAR Values at Fiscal Year-End
The following table summarizes information concerning the value of
unexercised options held as of July 1, 2000, by the executive officers named in
the Summary Compensation Table. No stock options were exercised by these
officers in fiscal 2000.
FISCAL YEAR-END OPTION VALUES
Number of Shares
Underlying Unexercised Value of In-the-Money
Options Held at Options at
July 1, 2000(#) July 1, 2000($)(1)
--------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
John W. Lloyd(2).......... 11,000 0 0 0
Richard D. Hinrichs(3).... 23,000 0 0 0
(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 1, 2000, was $0.781 based on the closing price on the NASDAQ
National Market System on that date.
(2) All options for Mr. Lloyd were granted under the Company's Director Stock
Option Plan.
(3) All options for Mr. Hinrichs were granted under the Company's 1992
Incentive Stock Option Plan.
The following table includes information concerning the value of SARs
held as of July 1, 2000, by the executive officers named in the Summary
Compensation Table. No SARs granted to these officers reached maturity in fiscal
2000.
FISCAL YEAR-END SAR VALUES
Present Value
Number of SARs Outstanding at of SARs Outstanding at
July 1, 2000(#) July 1, 2000($)(1)
---------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
John W. Lloyd(2).......... 0 150,000 0 0
Richard D. Hinrichs(2).... 0 150,000 0 0
(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 1, 2000 was $0.781 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.
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, 1995, and ending June 30, 2000. The graph assumes that
the value of the investment in the Company's Common Stock and each index was
$100 at June 30, 1995, 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
[LINE CHART APPEARS BELOW WITH THE FOLLOWING PLOT POINTS:]
Indexed Data
--------------------------------
GIBRALTAR PEER NASDAQ
Jun 95 100.0 100.0 100.0
Jun 96 96.7 106.3 128.4
Jun 97 52.7 127.8 156.1
Jun 98 39.6 129.7 205.6
Jun 99 12.1 149.1 296.0
Jun 00 13.7 127.7 437.3
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.
9
<PAGE>
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 outlined his annual base salary, bonus structure,
participation in the 1998 Stock Appreciation Rights Plan, and severance plans.
Revisions to this agreement were made on January 23, 2000, and May 1, 2000, to
account for Mr. Lloyd's reduced hours as Chief Financial Officer of the Company.
These modifications provided Mr. Lloyd with a salary based on a reduction in
required work hours, compensation for hours over the said requirement, and
continued participation in the 1998 Stock Appreciation Rights Plan. Mr. Lloyd
entered into a subsequent agreement on September 1, 2000, based upon his
resignation as Chief Financial Officer of the Company, effective September 5,
2000. This agreement supercedes any prior employment agreements and entitles Mr.
Lloyd to $55,035 in compensation and termination pay. As a part of this
agreement, Mr. Lloyd will serve as a consultant to the Company and will be paid
a retainer of $2,000 per month so long as he remains a consultant and director
to the Company. The agreement also states that so long as Mr. Lloyd remains
employed as a consultant for the Company, he will retain his rights under the
1998 Stock Appreciation Rights Plan.
The Company entered into an agreement with Mr. Anderson dated December
18, 1997. The agreement provides that if the Company terminates Mr. Anderson'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 the termination. The agreement also states that the Company will
continue Mr. Anderson's medical insurance coverage at the Company's expense, and
thereafter such coverage may be continued at Mr. Anderson's expense.
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 1, 2000, all Section 16(a) filings applicable to its officers,
directors, and ten percent stockholders were made.
CERTAIN TRANSACTIONS
Messrs. Rose and Strautnieks serve on the Board of Directors of, and
hold an equity interest in Rostra, and also serve on the Company's Board of
Directors. The Company has, in the past, paid management fees as reimbursement
to Rostra for the services provided by Messrs. Rose and Lloyd as Chief Executive
Officer and Chief Financial Officer, respectively. 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 1, 2000 no fees were owed by the Company to Rostra.
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 June 30, 2001, 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. 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 20,
2001, 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. In addition
to solicitation by mail, certain directors, officers, and regular employees of
the Company may solicit proxies by fax, telephone, and personal interview.
By Order of the Board of Directors
/s/ Walter E. Rose
------------------------------------
WALTER E. ROSE
Chairman and Chief Executive Officer
October 6, 2000
Hastings, Nebraska
