SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
GREIF BROS. CORPORATION
------------------------------
(Name of Registrant as Specified in its Charter)
NOT APPLICABLE
--------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14(a)-6(i)(4)
and O-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 O-11:
-------------------------------------------------------------
(4) Proposed minimum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule O-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:__________________________________________________
GREIF BROS. CORPORATION
425 WINTER ROAD
DELAWARE, OHIO 43015
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
Greif Bros. Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of Greif
Bros. Corporation (the "Company") will be held at the principal executive
offices of the Company, 425 Winter Road, Delaware, Ohio 43015, on February 24,
2003, at 10:00 A.M., E.S.T., for the following purposes:
1. To elect nine directors to serve for a one-year term;
2. To consider and vote upon a proposal to change the Company's
corporate name from "Greif Bros. Corporation" to "Greif, Inc."
and to amend the Company's Amended and Restated Certificate of
Incorporation to effect the change in corporate name; and
3. To transact such other business as may properly come before the
meeting or any and all adjournments.
Only stockholders of record of the Class B Common Stock at the close of
business on January 9, 2003, will be entitled to vote at this meeting.
Whether or not you plan to attend this meeting, we hope that Class B
stockholders will sign the enclosed proxy and return it promptly in the enclosed
envelope. If you are able to attend the meeting and wish to vote in person, at
your request we will cancel your proxy.
/s/ Gary R. Martz
---------------------------
January 24, 2003 Gary R. Martz
Secretary
GREIF BROS. CORPORATION
425 WINTER ROAD
DELAWARE, OHIO 43015
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 24, 2003
To the Stockholders of Greif Bros. Corporation:
This Proxy Statement is being furnished to all of the stockholders of Greif
Bros. Corporation, a Delaware corporation (the "Company"), in connection with
the Company's Annual Meeting of Stockholders scheduled to be held on February
24, 2003, at 10:00 A.M., E.S.T., at the Company's principal executive offices,
425 Winter Road, Delaware, Ohio 43015. It is anticipated that this Proxy
Statement and form of proxy will first be sent to the stockholders on or about
January 24, 2003.
PROXIES AND VOTING
This Proxy Statement is being furnished to Class B stockholders of the
Company, the only class of stockholders entitled to vote at the Annual Meeting,
in connection with the solicitation by management of proxies that will be used
at the Annual Meeting. Class A stockholders are not entitled to vote at the
Annual Meeting, and therefore, this Proxy Statement is being furnished to Class
A stockholders for informational purposes only, and no proxy is being solicited
from them.
At the Annual Meeting, the Class B stockholders will vote upon: (1) the
election of nine directors; (2) a proposal to approve the Company's corporate
name change from "Greif Bros. Corporation" to "Greif, Inc." and to amend the
Company's Amended and Restated Certificate of Incorporation to effect the change
in corporate name; and (3) such other business as may properly come before the
meeting or any and all adjournments.
Class B stockholders do not have the right to cumulate their votes in the
election of directors, and the nine nominees receiving the highest number of
votes will be elected as directors. The vote required for the approval of the
Company's corporate name change from "Greif Bros. Corporation" to "Greif, Inc."
and to amend the Company's Amended and Restated Certificate of Incorporation to
effect the change in corporate name is the favorable vote of a majority of the
outstanding shares of the Class B Common Stock entitled to vote at the Annual
Meeting.
Shares of Class B Common Stock represented by properly executed proxies
will be voted at the Annual Meeting in accordance with the choices indicated on
the proxy. If no choices are indicated on a proxy, the shares represented by
that proxy will be voted in favor of the nine nominees described in this Proxy
Statement and to approve the proposal
1
regarding the Company's corporate name change from "Greif Bros. Corporation" to
"Greif, Inc." and to amend the Company's Amended and Restated Certificate of
Incorporation to effect the change in corporate name. Any proxy may be revoked
at any time prior to its exercise by delivering to the Company a subsequently
dated proxy or by giving notice of revocation to the Company in writing or in
open meeting. A Class B stockholder's presence at the Annual Meeting does not by
itself revoke the proxy.
Abstentions will be considered as shares of Class B Common Stock present
and entitled to vote at the Annual Meeting and will be counted for purposes of
determining whether a quorum is present. Abstentions will not be counted in
determining the votes cast for the election of directors and will not have a
positive or negative effect on the outcome of the election. Because the proposal
to approve the Company's corporate name change from "Greif Bros. Corporation" to
"Greif, Inc." and to amend the Company's Amended and Restated Certificate of
Incorporation to effect the change in corporate name requires the favorable vote
of a majority of the outstanding shares of Class B Common Stock entitled to vote
at the Annual Meeting, abstentions will have the same effect as a vote against
this proposal.
If your Class B Common Stock is held in street name, you will need to
instruct your broker regarding how to vote your Class B Common Stock. If you do
not provide your broker with voting instructions regarding the election of
directors, your broker will nevertheless have the discretion to vote your shares
of Class B Common Stock for the election of directors. There are certain other
matters, however, over which your broker does not have discretion to vote your
Class B Common Stock without your instructions -- these situations are referred
to as "broker non-votes." The proposal regarding the Company's corporate name
change from "Greif Bros. Corporation" to "Greif, Inc." and to amend the
Company's Amended and Restated Certificate of Incorporation to effect the change
in corporate name falls into this category. If you do not provide your broker
with voting instructions on this proposal, your shares of Class B Common Stock
will not be voted on this proposal. Because broker non-votes will be considered
as shares of Class B Common Stock present and entitled to vote for this
proposal, broker non-votes will have the same effect as votes against this
proposal.
The close of business on January 9, 2003, has been fixed as the record date
for the determination of Class B stockholders entitled to notice of and to vote
at the Annual Meeting and any adjournment thereof. On the record date, there
were outstanding and entitled to vote 11,757,859 shares of Class B Common Stock.
Each share is entitled to one vote.
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PROPOSAL NO. 1 - ELECTION OF NINE DIRECTORS FOR ONE-YEAR TERM
The number of directors currently is fixed at nine, with each director
serving for a one-year term. At the Annual Meeting, shares of the Class B Common
Stock represented by the proxies, unless otherwise specified, will be voted to
elect as directors Michael J. Gasser, Charles R. Chandler, Michael H. Dempsey,
Naomi C. Dempsey, Daniel J. Gunsett, John C. Kane, Patrick J. Norton, David J.
Olderman and William B. Sparks, Jr., the nine persons nominated by the
Nominating Committee of the Board of Directors, all of whom, except for Mr.
Norton, are currently directors of the Company and have served continuously
since their first election or appointment. Each of the nominees has consented to
being named in the Proxy Statement and to serve if elected.
If any nominee is unable to accept the office of director, or will not
serve, which is not anticipated, the persons named in the proxy will not have
authority to vote for another nominee.
Directors' Biographies
MICHAEL J. GASSER, 51, has been a director since 1991. He has been Chairman of
the Board of Directors and Chief Executive Officer of the Company since 1994. He
has been an executive officer of the Company since 1988. He is a member of the
Executive, Nominating and Stock Repurchase Committees. He is also a director for
Bob Evans Farms, Inc., a restaurant and food products company.
CHARLES R. CHANDLER, 67, has been a director since 1987. He is an investor. He
was Vice Chairman of the Company for more than five years until his retirement
in September 2002. From 1999 through September 2002, Mr. Chandler also served as
President of Soterra LLC, a subsidiary of the Company. He is a member of the
Executive Committee.
MICHAEL H. DEMPSEY, 46, has been a director since 1996. He is an investor. Prior
to 1997, and for more than five years, he had been the President of Kuschall of
America, a wheelchair manufacturing company. He is a member of the Compensation,
Executive and Stock Option Committees. Mr. Dempsey is the son of Naomi C.
Dempsey.
NAOMI C. DEMPSEY, 86, has been a director since 1995. She is an investor and
member of the Nominating Committee. Mrs. Dempsey is the mother of Michael H.
Dempsey.
DANIEL J. GUNSETT, 54, has been a director since 1996. For more than five years,
he has been a partner with the law firm of Baker & Hostetler LLP. He is a member
of the Audit, Compensation, Executive, Nominating, Stock Option and Stock
Repurchase Committees.
3
JOHN C. KANE, 63, has been a director since 1999. He is an investor. Prior to
2001, and for more than five years, he was President and Chief Operating Officer
of Cardinal Health, Inc., a health-care services company, and was a director for
Cardinal Health, Inc. He is a member of the Audit, Compensation and Stock Option
Committees. He is also a director of Connetics Corporation, a biopharmaceutical
company.
PATRICK J. NORTON, 52, is a nominee as a director. Mr. Norton retired as
Executive Vice President and Chief Financial Officer of The Scotts Company, a
consumer lawn and garden products company, in January 2003. Mr. Norton served as
Chief Financial Officer of The Scotts Company from February 2000 until his
retirement. From 1983 until its acquisition by ServiceMaster, Inc. in February
1997, Mr. Norton was the President, Chief Executive Officer and a director of
Barefoot Inc., the lawn care company. Mr. Norton also serves as a director of
The Scotts Company.
DAVID J. OLDERMAN, 67, has been a director since 1996. He is an investor. Prior
to 1997, and for more than five years, he had been Chairman, owner and Chief
Executive Officer of Carret and Company, Inc., an investment consulting firm. He
is a member of the Audit, Compensation and Stock Option Committees.
WILLIAM B. SPARKS, JR., 61, has been a director since 1995. He has been
President and Chief Operating Officer of the Company for more than five years.
He is a member of the Executive Committee.
In the tabulating of votes, abstentions and broker non-votes will be
disregarded and will have no effect on the outcome of the vote.
4
PROPOSAL NO.2 - APPROVAL OF THE CHANGE OF THE COMPANY'S CORPORATE NAME FROM
"GREIF BROS. CORPORATION" TO "GREIF, INC." AND TO AMEND THE
COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO
EFFECT THE CHANGE IN CORPORATE NAME
At the Annual Meeting, the Class B stockholders will be requested to
consider and act upon a proposal to approve the change of the Company's
corporate name from "Greif Bros. Corporation" to "Greif, Inc." and to amend the
Company's Amended and Restated Certificate of Incorporation to effect the change
in corporate name (the "Amendment").
DESCRIPTION OF THE AMENDMENT
On December 10, 2002, the Board of Directors adopted a resolution to change
the corporate name of the Company from "Greif Bros. Corporation" to "Greif,
Inc." and, subject to approval of the Class B stockholders, to amend the
Company's Amended and Restated Certificate of Incorporation to effect the change
in corporate name. The resolution also provided that the Amendment be proposed
to the stockholders entitled to vote thereon for consideration at the Annual
Meeting of Stockholders on February 24, 2003, all in accordance with Section 242
of the Delaware General Corporation Law.
The Amendment is consistent with recent adoption of the "Greif" name around
the world by the Company's subsidiaries and the launch of the Company's new
corporate identity. The Amendment and the new identity are all part of the
Company's recent transformation, growing from a U.S. regional industrial
packaging supplier to a world leader in industrial packaging.
The form of the Amendment is attached as Exhibit A.
REASONS FOR STOCKHOLDER APPROVAL
Section 242 of the Delaware General Corporation Law requires that Delaware
corporations, such as the Company, obtain stockholder approval of an amendment
to the certificate of incorporation. In order to change the corporate name of
the Company, it is necessary to amend the Company's Amended and Restated
Certificate of Incorporation.
It should be noted that at any time prior to the effectiveness of the
filing of a Certificate of Amendment effecting the Amendment, and
notwithstanding authorization by the stockholders of the Amendment, the Board of
Directors may abandon the Amendment without further action by the stockholders
of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT.
5
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Board held four meetings during the 2002 fiscal year. Each director
attended at least 75% of the meetings held by the Board and committees on which
he or she served during the 2002 fiscal year.
The Board has established an Executive Committee, a Compensation Committee,
an Audit Committee, a Stock Option Committee, a Stock Repurchase Committee and a
Nominating Committee.
The Executive Committee, whose current members are Messrs. Gasser,
Chandler, Dempsey, Gunsett and Sparks, has the same authority, subject to
certain limitations, as the Board during intervals between meetings of the
Board. The Executive Committee held seven meetings during the 2002 fiscal year.
The Compensation Committee, whose current members are Messrs. Dempsey,
Gunsett, Kane and Olderman, is responsible for evaluating the compensation,
fringe benefits and perquisites provided to the Company's officers and adopting
compensation policies applicable to the Company's executive officers, including
the specific relationship, if any, of corporate performance to executive
compensation and the factors and criteria upon which the compensation of the
Company's Chief Executive Officer should be based. The Compensation Committee
held two meetings during the 2002 fiscal year.
The Audit Committee, whose current members are Messrs. Gunsett, Kane and
Olderman, is responsible for the appointment of the Company's auditors to the
Board, reviewing with such auditors the scope and results of their audit,
reviewing the Company's accounting functions, operations and management, and
considering the adequacy and effectiveness of the internal accounting controls
and internal auditing methods, policies and procedures of the Company. The Audit
Committee held four meetings during the 2002 fiscal year.
The Stock Option Committee, whose current members are Messrs. Dempsey,
Gunsett, Kane and Olderman, is responsible for administering the Company's
Incentive Stock Option Plan which provides for the granting of options for
shares of the Company's Class A Common Stock to key employees. The Stock Option
Committee held one meeting during the 2002 fiscal year.
The Stock Repurchase Committee, whose current members are Messrs. Gasser
and Gunsett, is responsible for administering the Company's Stock Repurchase
Program. The Stock Repurchase Committee held one meeting during the 2002 fiscal
year.
6
The Nominating Committee, whose current members are Mrs. Dempsey and
Messrs. Gasser and Gunsett, is responsible for nominating members to the Board
and committees. The Nominating Committee held one meeting to consider and
nominate the nine persons described in this Proxy Statement.
The Nominating Committee will consider for nomination as directors of the
Company persons recommended by the stockholders of the Company. In order to
recommend a person for the 2004 Annual Meeting, a stockholder must deliver a
written recommendation to the Secretary of the Company on or prior to 120 days
in advance of the first anniversary of the date of this Proxy Statement (the
"Notice Date"). In order to be considered by the Nominating Committee, the
written recommendation must contain the following information: (a) the name and
address, as they appear on the Company's books, of the stockholder making the
recommendation; (b) the class and number of shares of capital stock of the
Company beneficially owned by such stockholder; (c) the name and address of the
person recommended as a nominee and a brief description of the background,
experience and qualifications of such person which will assist the Nominating
Committee in evaluating such person as a potential director of the Company; and
(d) any material interest of such stockholder or such nominee in the business to
be presented at the 2004 Annual Meeting. After the Notice Date, the Nominating
Committee will meet and consider all persons recommended by stockholders as
nominees for directors. Within 30 days after the Notice Date, the Secretary of
the Company will notify in writing the stockholder recommending the nominee
whether or not the Nominating Committee intends to nominate for election as a
director at the 2004 Annual Meeting the person he or she recommended.
7
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of January 9, 2003,
with respect to the only persons known by the Company to be the beneficial
owners of 5% or more of the Class B Common Stock, the Company's only class of
voting securities:
Class of Type of Number of Percent
Name and Address Stock Ownership Shares of Class
---------------- ------- --------- --------- --------
Naomi C. Dempsey Class B See (1) below 5,425,904 46.15%
782 W. Orange Road
Delaware, Ohio
Naomi A. Coyle Trust Class B See (2) below 1,663,040 14.14%
c/o Michael H. Dempsey, Trustee
2240 Encinitas Boulevard
Suite D-403
Encinitas, California
Michael H. Dempsey Class B See (3) below 2,292,067 19.49%
2240 Encinitas Boulevard
Suite D-403
Encinitas, California
Robert C. Macauley Class B Record and 1,130,000 9.61%
161 Cherry Street Beneficially
New Canaan, Conneticut
(1) Held by Naomi C. Dempsey as trustee of the Naomi C. Dempsey Living Trust.
(2) Held of record and beneficially by the Naomi A. Coyle Trust. Michael H.
Dempsey is the trustee of this Trust. See (3) below.
(3) Held by Michael H. Dempsey (129,052 shares), Michael H. Dempsey as trustee
of the John C. Dempsey Trust (378,500 shares), the Naomi A. Coyle Trust
(1,663,040 shares) and the Naomi C. Dempsey Charitable Lead Annuity Trust
(121,475 shares).
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The following table sets forth certain information, as of January 9, 2003,
with respect to the Class A Common Stock and Class B Common Stock (the only
equity securities of the Company) beneficially owned, directly or indirectly, by
each director and each executive officer named in the summary compensation
table:
Title and Percent of Class (1)
--------------------------
Name Class A %
---- ------- -----
Charles R. Chandler 97,900 *
Michael H. Dempsey 19,240 (2) *
Naomi C. Dempsey 14,000 *
Michael J. Gasser 158,100 1.50%
Daniel J. Gunsett 14,000 *
Donald S. Huml 500 *
John C. Kane 11,000 *
John S. Lilak 22,500 *
Robert C. Macauley -0- *
Gary R. Martz -0- *
David J. Olderman 15,000 *
William B. Sparks, Jr. 99,086 *
Title and Percent of Class (1)
--------------------------
Name Class B %
---- ------- -----
Charles R. Chandler 4,000 *
Michael H. Dempsey 2,292,067 (3) 19.49%
Naomi C. Dempsey 5,425,904 (4) 46.15%
Michael J. Gasser 11,898 *
Daniel J. Gunsett 1,000 *
Donald S. Huml -0- *
John C. Kane -0- *
John S. Lilak -0- *
Robert C. Macauley 1,130,000 9.61%
Gary R. Martz 300 *
David J. Olderman 43,074 *
William B. Sparks, Jr. 6,248 *
* Less than one percent.
9
(1) Except as otherwise indicated below, the persons named in the table (and
their spouses, if applicable) have sole voting and investment power with
respect to all shares of Class A Common Stock or Class B Common Stock, as
the case may be, owned by them. This table includes shares for Class A
Common Stock subject to currently exercisable options, or options
exercisable within 60 days of January 9, 2003, granted by the Company under
the Incentive Stock Option Plan and the 1996 Directors' Stock Option Plan,
for the following directors and named executive officers: Mr. Chandler -
97,000; Mr. Dempsey - 14,000; Mrs. Dempsey - 14,000; Mr. Gasser - 158,000;
Mr. Gunsett - 14,000; Mr. Kane - 6,000; Mr. Lilak - 18,500; Mr. Olderman -
14,000 and Mr. Sparks - 98,000.
(2) Held by Michael H. Dempsey as trustee of the John C. Dempsey Trust (5,240
shares) plus the exercisable options discussed in (1) above.
(3) Held by Michael H. Dempsey (129,052 shares), Michael H. Dempsey as trustee
of the John C. Dempsey Trust (378,500 shares), the Naomi A. Coyle Trust
(1,663,040 shares) and the Naomi C. Dempsey Charitable Lead Annuity Trust
(121,475 shares).
(4) Held by Naomi C. Dempsey as trustee of the Naomi C. Dempsey Living Trust.
The Class A Common Stock has no voting power, except when four quarterly
cumulative dividends upon the Class A Common Stock are in arrears.
The following table sets forth the equity securities owned or controlled by
all directors and executive officers as a group (19 persons) as of January 9,
2003:
Title of Amount Percent
class of stock beneficially owned of class
-------------- ------------------ --------
Class A Common Stock (1) 491,976 4.66%
Class B Common Stock 8,914,791 75.82%
(1) Shares represent the number of shares beneficially owned, directly or
indirectly, by each director and executive officer as of January 9, 2003.
The number includes shares subject to currently exercisable options or
options exercisable within 60 days of January 9, 2003, granted by the
Company under the Incentive Stock Option Plan and the 1996 Directors' Stock
Option Plan, for the directors and executive officers as a group - 473,950
shares.
10
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the three years ended
October 31, 2002 for the Company's Chief Executive Officer, the Company's four
other most highly compensated executive officers and one additional executive
officer that retired during 2002:
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------- ----------------------
Number of
Restricted Stock
All LTIP Stock Options
Name & Position Year Salary Bonus (1) Other (2) Payouts (3) Awards (3) Granted
--------------- ---- ------ --------- --------- ----------- ---------- -------
Michael J. Gasser 2002 $638,341 $274,629 $ 3,435 $186,400 $46,600 35,000
Chairman and
Chief Executive 2001 $568,351 $301,600 $ 2,970 $ -0- $ -0- 35,000
Officer
2000 $510,090 $298,403 $ 3,000 $ -0- $ -0- 28,000
William B. Sparks, Jr. 2002 $461,688 $168,034 $ 2,872 $114,400 $28,600 20,000
Director,
President and Chief 2001 $413,191 $184,801 $ 3,679 $ -0- $ -0- 20,000
Operating Officer
2000 $379,132 $187,671 $ 4,134 $ -0- $ -0- 17,000
Donald S. Huml (4) 2002 $198,000 $216,750 $ 32,860 $ 90,400 $22,600 35,000
Chief Financial
Officer
John S. Lilak 2002 $304,992 $100,747 $ 4,335 $ 68,800 $17,200 15,000
Executive Vice
President, Paper, 2001 $274,342 $112,000 $ 3,750 $ -0- $ -0- 12,500
Packaging & Services,
and President of 2000 $246,045 $110,720 $162,576 $ -0- $ -0- 12,500
Soterra LLC
(subsidiary company)
Charles R. Chandler (5) 2002 $300,305 $ 98,319 $210,628 $ 71,200 $17,800 -0-
Retired Vice Chairman
and Retired President 2001 $346,037 $126,689 $198,894 $ -0- $ -0- -0-
of Soterra LLC
(subsidiary company) 2000 $492,609 $221,675 $318,665 $ -0- $ -0- 16,000
Gary R. Martz (6) 2002 $250,000 $ 97,500 $ 45,705 $ 69,600 $17,400 30,000
Senior Vice President,
General Counsel and
Secretary
11
(1) For 2002, cash bonuses are paid pursuant to the Company's Performance-Based
Incentive Compensation Plan (the "Performance-Based Plan") described below
(see "Incentive Compensation Plans"). For 2001 and 2000, cash bonuses were
paid pursuant to a discretionary bonus plan implemented by the Compensation
Committee of the Board of Directors which linked the payment of bonuses to
the achievement of predetermined return on asset thresholds.
(2) With respect to Messrs. Gasser, Lilak and Sparks, the dollar amount in the
all other category relates to the Company match for the 401(k) plan and
premiums paid for life insurance. In addition, Mr. Lilak had relocation
expenses of $158,509 in 2000.
With respect to Messrs. Huml and Martz, the dollar amount in the all other
category relates to payments for relocation expenses and premiums paid for
life insurance. For Mr. Huml, relocation expenses were $32,500, and for Mr.
Martz, relocation expenses were $45,000.
With respect to Mr. Chandler, the dollar amount in the all other category
relates to the Company match for the 401(k) plan, premiums paid for life
insurance and deferred compensation under a deferred compensation contract
entered into in June 1992. This contract will supplement Mr. Chandler's
retirement benefits under the Greif Bros. Riverville Mill's defined benefit
pension plan (the "Riverville Mill Plan"). The annual amounts payable to
Mr. Chandler or his surviving spouse under this contract are diminished by
the amounts he receives under the Riverville Mill Plan. Mr. Chandler's
estimated accrued benefits under this contract is currently $342,308 per
year for 10 years and $228,205 per year for an additional five years.
Deferred compensation amounts were $207,902, $193,554 and $312,121 for the
years 2002, 2001 and 2000, respectively.
(3) Long-term incentive plan ("LTIP") payouts were paid pursuant to the
Company's Long-Term Incentive Plan (the "Incentive Plan") described below
(see "Incentive Compensation Plans"). In accordance with the terms of the
Incentive Plan, these LTIP payouts were paid 80% in cash and 20% in
restricted shares of the Company's Class A Common Stock.
(4) Mr. Huml was hired as Chief Financial Officer in April 2002. Prior to that
time, he was not an employee of the Company.
(5) Mr. Chandler retired in September 2002.
(6) Mr. Martz was hired as Senior Vice President and General Counsel in January
2002. Prior to that time, he was not an employee of the Company. He was
elected Secretary of the Company in June 2002.
12
Employment Agreement
Mr. Gasser has an employment agreement generally providing for the
following: his employment as Chairman and Chief Executive Officer until 2010;
his right to extend his employment on a year-to-year basis until he reaches the
age of 65; his agreement to devote all of his time, attention, skill and effort
to the performance of his duties as an officer and employee of our company; and
the fixing of his minimum basic salary. The minimum basic salary is currently
fixed at $470,000 per year.
Mr. Sparks has an employment agreement generally providing for the following:
his employment as President and Chief Operating Officer until 2006; his
agreement to devote all of his time, attention, skill and effort to the
performance of his duties as an officer and employee of the Company; and the
fixing of the minimum basic salary. The minimum basic salary is currently fixed
at $350,000 per year.
Incentive Compensation Plans
The Company's Performance-Based Plan is intended to provide incentive
compensation that is linked to the profitability of the Company's businesses.
The Performance-Based Plan is administered by the Special Subcommittee on
Incentive Compensation of the Board (the "Subcommittee"). Among other things,
the Subcommittee selects participants in the Performance-Based Plan from among
the Company's executive employees at the Chairman's office level and determines
the performance goals, target amounts and other terms and conditions of awards
under the Performance-Based Plan. Awards under the Performance-Based Plan
consist of cash amounts payable upon the achievement, during a specified
performance period, of specified objective performance goals. At the beginning
of a performance period for a given award, the Subcommittee establishes the
performance goal(s) and the target amount of the award, which will be earned if
the performance goal(s) are achieved in full, together with any lesser amount
that will be earned if the performance goal(s) are only partially achieved.
After the end of the performance period, the Subcommittee certifies the extent
to which the performance goals are achieved and determines the amount of the
award that is payable. The performance goals for awards are based upon the
achievement of targeted measures of return on assets (and/or such other
objective business criteria as the stockholders may approve from time to time)
by the Company and/or one or more operating groups of the Company. The maximum
award that may be paid to any participant for any performance period is $1.5
million times the number of twelve-month periods contained within the
performance period.
The Company's Incentive Plan is intended to focus management on the key
measures that drive superior performance. Incentive compensation awards to
participants are paid 80% in cash and 20% in restricted shares of the Company's
Class A and/or Class B Common Stock. The Incentive Plan is administered by the
Subcommittee. Employees of the Company who are
13
designated by the Subcommittee as "key employees" are eligible to participate
and receive awards under the Incentive Plan. Prior to the beginning of each
performance period, the Subcommittee selects and establishes performance goals
for that performance period which, if met, will entitle participants to the
payment of the incentive compensation award. The performance goals are based on
targeted levels of increases in earnings per share and "free cash flow" or such
other measures of performance success as the Subcommittee may determine. The
Subcommittee may establish a range of performance goals which correspond to, and
will entitle participants to receive, various levels of award opportunities
based on percentage multiples of the "target incentive award," which is the
incentive compensation amount to be paid to participants when the performance
criteria designated as the "100% award level" is met. In addition, each range
may include levels of performance above and below the 100% performance level,
ranging from a minimum of 0% to a maximum of 200% of the target incentive award.
The Subcommittee may also establish minimum levels of performance goal
achievement below which no awards are paid to any participant. After the
performance goals are established, the Subcommittee aligns the achievement of
the performance goals with the award opportunities, such that the level of
achievement of the pre-established performance goals at the end of the
performance period determines the "final awards" (i.e., the actual incentive
compensation earned during the performance period by the participant). After
establishing the performance criteria, the Subcommittee establishes the award
opportunities for the participants which correspond to various levels of
achievement of the pre-established performance criteria. The established award
opportunities vary in relation to the job classification of each participant. At
the end of each performance period, the Subcommittee certifies the extent to
which the performance criteria were met during the performance period and
determines the final awards for the participants.
LONG-TERM INCENTIVE PLANS
Number Performance
of or Other
Shares, Period
Units or Until Estimated Future Payouts under
Other Maturation Non-Stock Price-Based Plans
---------------------------------------------------
Name Rights or Payout Threshold Target Maximum
---- ------ --------- --------- ------ -------
M.J. Gasser (1) (2) $423,000 $845,000 $1,690,000
W.B. Sparks, Jr. (1) (2) $259,000 $259,000 $1,034,000
D.S Huml (1) (2) $195,000 $390,000 $ 780,000
J.S. Lilak (1) (2) $155,000 $310,000 $ 620,000
C.R. Chandler (1) (2) $ 72,000 $144,000 $ 288,000
G.R. Martz (1) (2) $150,000 $300,000 $ 600,000
(1) Each of the named executive officers was selected by the Subcommittee
to participate in the Incentive Plan.
14
(2) The Incentive Plan measures the Company's performance over the
specified performance periods. The performance periods related to the
estimated future payouts are the periods May 1, 2001 through October
31, 2003 and November 1, 2001 through October 31, 2004. Awards for Mr.
Chandler will be prorated for the period in which he was an employee.
The figures in the table are based on salaries as of December 31,
2002.
Stock Option Plans
The Company's 2001 Management Equity Incentive and Compensation Plan (the
"2001 Plan") provides for the awarding of incentive and nonqualified stock
options and restricted and performance shares of Class A Common Stock to key
employees. The maximum number of shares that may be issued each year is
determined by a formula that takes into consideration the total number of shares
outstanding and is also subject to certain limits. In addition, the maximum
number of shares that that may be issued under the 2001 Plan during its term for
incentive stock options is 2,500,000 shares.
Prior to the adoption of the 2001 Plan, the Company granted stock options
under the Company's Incentive Stock Option Plan (the "Incentive Plan"). The
Incentive Plan provides for the discretionary granting of incentive stock
options to key employees and nonstatutory options for non-employees for shares
of the Company's Class A Common Stock. The maximum number of shares that could
be issued under the Incentive Plan was 1,000,000 shares.
15
The following table sets forth certain information with respect to options
to purchase Class A Common Stock granted during the fiscal year ended October
31, 2002, under the 2001 Plan to each of the named executive officers:
OPTION GRANTS TABLE
Potential Net
Realizable Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term
------------------------------------------------------ -----------------------
Percent of
Total
Options
Granted to
Number of Employees Exercise
Options in Fiscal Price Per Date
Name Granted Year Share Expires 5%(4) 10%(4)
---- -------- ---------- --------- ------- ----- ------
M.J. Gasser 35,000 (1) 7% $26.20 9/5/12 $576,696 $1,461,426
W.B. Sparks, Jr. 20,000 (1) 4% $26.20 9/5/12 $329,541 $ 835,121
D.S Huml: 20,000 (2) 4% $33.98 4/29/12 $427,397 $1,083,107
15,000 (1) 3% $26.20 9/5/12 $247,156 $ 626,341
J.S. Lilak 15,000 (1) 3% $26.20 9/5/12 $247,156 $ 626,341
C.R. Chandler -0- 0% NA NA NA NA
G.R. Martz: 15,000 (3) 3% $32.95 1/7/12 $310,831 $ 787,707
15,000 (1) 3% $26.20 9/5/12 $247,156 $ 626,341
(1) The options are exercisable on September 5, 2004.
(2) The options are exercisable on April 29, 2004.
(3) The options are exercisable on January 7, 2004.
(4) The values shown are based on the indicated assumed rates of
appreciation compounded annually. Actual gains realized, if any, are
based on the performance of the Class A Common Stock. There is no
assurance that the values shown will be achieved.
16
The following table sets forth certain information with the respect to the
exercise of options to purchase Class A Common Stock during the fiscal year
ended October 31, 2002, and the unexercised options held and the value thereof
at that date, by each of the named executive officers:
AGGREGATE OPTION EXERCISES AND FISCAL
YEAR-END OPTION VALUES TABLE
Shares Value Number of Unexercised Value of In-The-Money
Acquired Realized Options Held at Year-End Options Held at Year-End
on Upon -------------------------- --------------------------
Name Exercise Exercise Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
M.J. Gasser -0- $ -0- 158,000 70,000 $28,500 $ -0-
W.B. Sparks, Jr. -0- $ -0- 98,000 40,000 $18,240 $ -0-
D.S Huml -0- $ -0- -0- 35,000 $ -0- $ -0-
J.S. Lilak 4,000 $25,200 18,500 27,500 $ 6,840 $ -0-
C.R. Chandler -0- $ -0- 97,000 -0- $18,240 $ -0-
G.R. Martz -0- $ -0- -0- 30,000 $ -0- $ -0-
Retirement Plans
The following table sets forth the estimated annual benefits under the
Company's Employees' Retirement Income Plan ("Salaried Plan") and Supplemental
Employee Retirement Plan ("SERP") to an eligible employee who qualifies for
normal retirement with the specified three-year average compensation and
continuous service:
DEFINED BENEFIT PENSION PLAN TABLE
Annual Benefit for Years of Service
---------------------------------------------------
3-Year Average
Annual
Compensation 15 20 25 30
------------ -- -- -- --
$300,000 $ 52,500 $ 70,000 $ 87,500 $105,000
$600,000 $105,000 $140,000 $175,000 $210,000
$900,000 $157,500 $210,000 $262,500 $350,000
The annual benefit at normal retirement (age 65) under the Salaried Plan is
equal to 35% times the employee's three-year average compensation for an
employee with 30 years of continuous service. Pursuant to Section 401(a)(17) of
the Internal Revenue Code, annual compensation in excess of $200,000 cannot be
taken into account in determining the Salaried Plan benefits.
The SERP provides benefits for a select group of management employees and
replaces a portion of the benefits that would have been excluded due to the
compensation limits in the Salaried Plan. The formula in the SERP is the same as
the Salaried Plan with compensation
17
equal to base salary plus bonus with the bonus limited. Below is a chart with
credited years of service and compensation included for the named executive
officers that participate in both the Salaried Plan and the SERP:
Name of individual Credited Compensation used Estimated annual
or number of years for calculation of benefit under
persons in group of service annual benefit retirement plans
------------------ ---------- ------------------ ----------------
M.J. Gasser 23 $863,805 $231,787
W.B. Sparks, Jr. 8 $598,172 $ 55,829
J.S. Lilak 3 $382,949 $ 13,403
Mr. Huml and Mr. Martz were not participants in the Salaried Plan at
October 31,2002, since they have not been employed one year at that time.
Mr. Chandler is not covered by the SERP, but had special agreements that
provided defined benefits of $50,820 (see footnote 2 to Summary Compensation
Table). Mr. Chandler retired from the Company in September 2002.
None of the pension benefits described in this item are subject to offset
because of the receipt of Social Security benefits or otherwise.
DIRECTOR COMPENSATION ARRANGEMENTS
No Directors' fees are paid to Directors who are full-time employees of the
Company or its subsidiary companies. Directors who are not employees of the
Company receive $30,000 per year, plus $1,500 for each Board meeting and $1,250
for each committee meeting that they attend. Committee chairs also receive an
additional $6,000 per year. Directors may defer all or a portion of their fees
pursuant to a deferred compensation plan.
During 1996, a Directors' Stock Option Plan was adopted which provides for
the granting of stock options to directors who are not employees of the Company.
The aggregate number of shares of the Company's Class A Common Stock for which
options may be granted shall not exceed 100,000. Beginning in 1997, each outside
director was granted an annual option to purchase 2,000 shares immediately
following each Annual Meeting of Stockholders. Each eligible director also
received a one-time grant in 1996 to purchase 2,000 shares. Under the terms of
the Directors' Stock Option Plan, options are granted at exercise prices equal
to the market value on the date the options are granted and become exercisable
immediately. In 2002, 10,000 options were granted to outside directors with
option prices of $33.95 per share (10,000 options at $27.38 in 2001 and 10,000
options at $29.88 in 2000). Options expire ten years after the date of grant.
18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons owning more than 10% of a registered class
of the Company's equity securities, to file reports of ownership with the
Securities and Exchange Commission. Officers, directors and greater than 10%
stockholders are required by the Securities and Exchange Commission's
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms furnished to the
Company, the Company believes that during its 2002 fiscal year all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
stockholders were complied with by such persons, except that Naomi C. Dempsey, a
director of the Company, did not timely file one Form 4 in her capacity as the
trustee of the John C. Dempsey Trust with respect to one transaction which
occurred during the 2002 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
John C. Kane, David J. Olderman, Michael H. Dempsey and Daniel J. Gunsett
served as members of the Company's Compensation Committee for the 2002 fiscal
year. During fiscal year 2002, the Company retained the law firm of Baker &
Hostetler LLP to perform legal services on its behalf, and it anticipates
retaining such firm in 2003. Mr. Gunsett is a partner of Baker & Hostetler LLP.
No executive officer of the Company served during the 2002 fiscal year as a
member of a Compensation Committee or as a director of any entity of which any
of the Company's directors served as an executive officer.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is the report of the Company's Compensation Committee, whose
members are identified below, with respect to compensation reported for 2002 as
reflected in the Summary Compensation Table set forth above.
Compensation Policy; Committee Responsibilities
The Company's compensation policy is designed to align compensation with
business objectives and performance to enable the Company to attract, retain and
reward individuals who contribute to the long-term success of the Company. The
Company believes in a consistent policy for all individuals.
The Company realizes that to accomplish its objectives it needs to pay
competitive compensation. The Compensation Committee reviews competitive
positions in the market to periodically confirm the competitive nature of the
compensation for the Chief Executive Officer and the Company's five highest paid
individuals.
19
The Compensation Committee believes that a varying portion of compensation
must be linked to the Company's performance. In that regard, the Company has
implemented a discretionary bonus plan which links the payment of cash bonuses
to the achievement of certain predetermined return on assets thresholds.
The Company believes that an alignment of stockholder value with employees'
compensation is of utmost importance. The Company has addressed this concern by
implementing an incentive stock option plan which is administered by the members
of the Stock Option Committee.
The Compensation Committee's responsibilities include the following:
.. Review the compensation of the Chief Executive Officer and the Company's five
highest paid individuals to ensure that their compensation is consistent with
the above policy.
.. Review the operation of the discretionary bonus plan.
.. Review the grant of stock options.
.. Recommend the action to resolve compensation, discretionary bonus and stock
option issues to the full Board of Directors.
Compensation of the Chief Executive Officer
In December 2002, the Compensation Committee met to review the 2002
performance of Michael J. Gasser, the Company's Chairman of the Board and Chief
Executive Officer. Consistent with the Company's compensation policies, Mr.
Gasser's compensation package consists of three components, salary, cash bonus
and stock options. The Compensation Committee believes that a portion of Mr.
Gasser's compensation package should be at-risk, and that this is accomplished
through the grant of incentive stock options and the award of a cash bonus
pursuant to the Company's incentive bonus plan. The Compensation Committee also
attempts to establish a compensation package that appropriately balances risk
and reward. Finally, the Compensation Committee attempts to establish a
compensation package that is comprised of both a subjective component, such as
the grant of incentive stock options, and an objective component, such as an
award under the incentive bonus plan which is based upon the return on assets
performance of the Company with threshold levels.
In evaluating the performance of Mr. Gasser with respect to each of the
categories of his compensation, the Compensation Committee specifically
discussed and recognized the following factors: his leadership, his vision for
the future of the Company, his dedication and focus on the short-term and
long-term interests of the Company and its stockholders, and his
professionalism, integrity and competence; and his demonstrated dedication and
high performance in leadership, guidance and strategic planning for the Company,
its Board of Directors and its executives. None of the factors were given
specific relative weight.
20
Based upon its evaluation of the foregoing factors, the Compensation
Committee increased Mr. Gasser's base salary to $700,000 for calendar year 2003
from $650,000 for calendar year 2002. In addition, the Compensation Committee,
in its discretion, determined that, although the Company did not meet the
threshold for incentive bonuses for fiscal year 2002, the executives subject to
the plan should be granted a bonus of 65% of the target bonus and that Mr.
Gasser qualified for an incentive bonus of 65% of the 100% level bonus of
$422,500 for his position and recommended that he receive a bonus of $274,625.
In September 2002, incentive stock options were granted to Mr. Gasser and
other employees at the then market price for Class A Common Stock. Mr. Gasser
was granted options to purchase 35,000 shares of Class A Common Stock, which
options were granted primarily as incentive for future performance. The basis
for granting stock options to Mr. Gasser and other employees included his
continued leadership, vision for the future of the Company, guidance in
unification of Company goals and assimilation and reorganization of Company
acquisitions.
John C. Kane, Committee Chairman
David J. Olderman
Michael H. Dempsey
Daniel J. Gunsett
21
PERFORMANCE GRAPH
The following graph compares the Company's stock performance to that of the
Standard and Poor's 500 Index and the Company's industry group (Peer Index). The
graph does not purport to represent the value of the Company.
GBC S&P 500 New Peer Old Peer
Stock Index Index Index
--------------------------------------------------
10/31/97 $ 100 $ 100 $ 100 $ 100
10/31/98 $ 96 $ 120 $ 99 $ 90
10/31/99 $ 87 $ 149 $ 80 $ 108
10/31/00 $ 99 $ 156 $ 56 $ 73
10/31/01 $ 79 $ 116 $ 59 $ 84
10/31/02 $ 82 $ 97 $ 55 $ 66
The New Peer Index is comprised of the Containers and Packaging Index as
shown on the Standard & Poor's Global Data Web site. The Old Peer Index is
comprised of the Containers and Packaging Index and also included the Paper and
Forest Products Index. The Company is changing to the New Peer Index because it
believes this index will more closely reflect the current composition of the
Company.
22
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is responsible to monitor and review the Company's
financial reporting process on behalf of the Board of Directors. Management has
the primary responsibility for the financial statements and the reporting
process, including the systems of internal controls and preparation of the
consolidated financial statements in accordance with accounting principles
generally accepted in the United States. In fulfilling its responsibilities, the
Audit Committee reviewed the audited financial statements in the Annual Report
on Form 10-K for the Company's 2002 fiscal year with management, including a
discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with accounting principles generally accepted in the United
States, their judgments as to the quality, not just the acceptability, of the
Company's accounting principles and such other matters as are required to be
discussed with the Audit Committee under auditing standards generally accepted
in the United States. In addition, the Audit Committee discussed with the
independent auditors the auditors' independence from management and the Company,
including the matters in the written disclosures required by the Independence
Standards Board and considered the compatibility of nonaudit services with the
auditors' independence.
The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, with and without
management present, and separately with management to discuss the results of
their examinations, their evaluations of the Company's internal controls, and
the overall quality of the Company's financial reporting. The Committee held
four meetings during the 2002 fiscal year, and each member of the Audit
Committee attended at least 75% of the meetings.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the 2002 fiscal year for filing with the Securities and Exchange
Commission. The Committee approved the selection of the Company's independent
auditors for the 2003 fiscal year.
As discussed above, the Audit Committee is responsible to monitor and
review the Company's financial reporting process on behalf of the Board of
Directors. It is not the duty or responsibility of the Audit Committee to
conduct auditing or accounting reviews or procedures. Members of the Audit
Committee are not employees of the Company, and some members may not be
accountants or auditors by profession or experts in
23
the fields of accounting or auditing. Therefore, the Audit Committee has relied,
without independent verification, on management's representation that the
financial statements have been prepared with integrity and objectivity and in
conformity with accounting principles generally accepted in the United States
and on the representations of the independent auditors included in their report
on the Company's financial statements. The Audit Committee's review does not
provide its members with an independent basis to determine that management has
maintained appropriate accounting and financial reporting principles or
policies, or appropriate internal controls and procedures designed to assure
compliance with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee's considerations and discussions with
management and the independent auditors do not assure that the Company's
financial statements are presented in accordance with accounting principles
generally accepted in the United States, that the audit of the Company's
financial statements has been carried out in accordance with auditing standards
generally accepted in the United States, or that the Company's independent
accountants are in fact "independent."
The Company's Board of Directors has adopted a written charter for the
Audit Committee. All of the members of the Audit Committee are independent
directors as defined by the currently effective rules and regulations of the New
York Stock Exchange.
Daniel J. Gunsett, Committee Chairman
John C. Kane
David J. Olderman
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP served as the independent public accountants of the
Company for the fiscal year ended October 31, 2002. It is currently expected
that a representative of Ernst & Young LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if such representative so
desires and will be available to respond to appropriate questions from
stockholders. Ernst & Young LLP has been retained as the Company's independent
public accountants for its 2003 fiscal year.
Aggregate fees billed to the Company for the year ending October 31, 2002,
by Ernst & Young LLP were as follows:
Audit Fees ............................. $ 886,000
Financial Information Systems Design and
Implementation Fees .................... $ -0-
All Other Fees ......................... $1,885,000(1)(2)
(1) Includes fees for audit related services of $998,000 and tax consultation
and compliance of $887,000. Audit related services generally include fees
for pension and statutory audits, accounting consultations and filings with
the Securities and Exchange Commission.
24
(2) The Audit Committee has considered whether the provision of these
services is compatible with maintaining the principal accountant's
independence.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal year 2002, the Company retained the law firm of Baker &
Hostetler LLP to perform legal services on its behalf. Daniel J. Gunsett, a
partner in that firm, is a member of the Audit, Compensation, Executive,
Nominating, Stock Option and Stock Repurchase Committees and a director of the
Company. The Company anticipates retaining Baker & Hostetler LLP in 2003. The
Company believes that this relationship does not violate the New York Stock
Exchange independent director and audit committee requirements.
In February 1999, the Company's Board of Directors authorized a stock
repurchase program which provides for both open-market and privately negotiated
stock repurchases of the Company's Class A and Class B Common Stock. In
accordance with this program, during fiscal year 2002, the Company repurchased
60,000 shares of Class B Common Stock at a total purchase price of $1,906,350
from the John C. Dempsey Trust. Michael H. Dempsey, a director of the Company,
is the trustee and a beneficiary of this trust (Naomi C. Dempsey, a director of
the Company, was also a trustee of this trust for a portion of fiscal year
2002). The purchase prices for these repurchases were determined by a formula
based upon the average of the high and low sale prices for the shares of Class B
Common Stock on the stock market for which such shares were traded during the 30
calendar days immediately preceding the date of each respective sale.
Prior to the enactment of the Sarbanes-Oxley Act of 2002, from time to time
the Company made loans to employees, including executive officers of the
Company. The following table summarizes the activity related to loans to
executive officers of the Company during the period from November 1, 2001 to
October 31, 2002:
Balance at Balance at
Beginning Amount End of
Name of Debtor of Period New Loans Collected Period
-------------- ---------- --------- --------- ----------
Charles R. Chandler (1) $290,634 $ - $ 290,634 $ -
Michael J. Gasser (2) 99,638 - 99,638 -
Donald S. Huml (3) - 306,136 306,136 -
Sharon R. Maxwell (4) 89,168 - 89,168 -
William B. Sparks, Jr. (5) 323,424 - 323,424 -
-------- -------- ---------- ----
$802,864 $306,136 $1,109,000 $-0-
======== ======== ========== ====
(1) Charles R. Chandler is the retired Vice Chairman of the Company and
retired President of Soterra LLC. The loan was secured by a first mortgage on a
house and lot in Ohio and interest was payable at 5% per annum.
25
(2) Michael J. Gasser is the Chairman and Chief Executive Officer of the
Company. The loan was secured by 5,599 shares of the Company's Class B Common
Stock and a first mortgage on a house and lot in Ohio. Interest was payable at
3% per annum.
(3) Donald S. Huml is the Chief Financial Officer of the Company. Under the
then-existing benefits of the relocation program, Mr. Huml received a short-term
advance on June 27, 2002, in the amount of $306,136 for the purchase of a house
in connection with his joining the Company.
(4) Sharon R. Maxwell is Assistant Secretary of the Company. The loan was
secured by a first mortgage on a house and lot in Ohio and interest was payable
at 7-1/4% per annum.
(5) William B. Sparks, Jr. is the President and Chief Operating Officer of
the Company. The loan was secured by 6,248 shares of the Company's Class B
Common Stock and 1,000 shares of the Company's Class A Common Stock. Interest
was payable at 3% per annum. An additional loan was secured by a first mortgage
on a house and lot in Ohio with interest payable at 5% per annum.
In accordance with the Sarbanes-Oxley Act of 2002, credit will no longer be
extended, maintained or arranged in the form of a personal loan to or for any of
the directors or executive officers of the Company.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2004 Annual
Meeting of Stockholders (expected to be held in February 2004) must be received
by the Company for inclusion in the Proxy Statement and form of proxy on or
prior to 120 days in advance of the first anniversary of the date of this Proxy
Statement. If a stockholder intends to present a proposal at the 2004 Annual
Meeting, but does not seek to include such proposal in the Company's Proxy
Statement and form of proxy, such proposal must be received by the Company on or
prior to 45 days in advance of the first anniversary of the date of this Proxy
Statement or the persons named in the form of proxy for the 2004 Annual Meeting
will be entitled to use their discretionary voting authority should such
proposal then be raised at such meeting, without any discussion of the matter in
the Company's Proxy Statement or form of proxy. Furthermore, stockholders must
follow the procedures set forth in Article I, Section 8, of the Company's
Amended and Restated By-Laws in order to present proposals at the 2004 Annual
Meeting.
OTHER MATTERS
The proxy enclosed with this Proxy Statement is solicited from Class B
stockholders by and on behalf of the Management of the Company. A person giving
the proxy has the power to revoke it.
26
The expense for soliciting proxies for this Annual Meeting of Stockholders
is to be paid by the Company. Solicitations of proxies also may be made by
personal calls upon or telephone or telegraphic communications with
stockholders, or their representatives, by not more than five officers or
regular employees of the Company who will receive no compensation for doing so
other than their regular salaries.
The Management knows of no matters to be presented at the Annual Meeting
other than the above proposals. However, if any other matters properly come
before the Annual Meeting, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy in accordance with their judgment
on such matters.
/s/ Gary R. Martz
---------------------------
January 24, 2003 Gary R. Martz
Secretary
27
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GREIF BROS. CORPORATION
(Name Change to Greif, Inc.)
Greif Bros. Corporation (the "Company"), a corporation organized and
existing under the General Corporation Law of Delaware (the "GCL"), hereby
certifies as follows: (a) the resolution set forth below was duly adopted by the
Board of Directors of the Company pursuant to Section 242 of the GCL at a
meeting duly called and held on December 10, 2002; and (b) such resolution was
duly adopted by the holders of a majority of the Company's outstanding stock
entitled to vote thereon pursuant to Section 242 of the GCL at a meeting of the
stockholders of the Company duly called and held on February 24, 2003, pursuant
to Section 222 of the GCL. The resolution is as follows:
Corporate Name Change
"RESOLVED, that Article FIRST of the Company's Amended and Restated
Certificate of Incorporation be amended in its entirety and replaced
by the following:
FIRST: The name of this Corporation is Greif, Inc."
This certificate has been signed by Michael J. Gasser, the Chairman and
Chief Executive Officer of the Company, on ____________, 2003.
Michael J. Gasser, Chairman
and Chief Executive Officer
28
GREIF BROS. CORPORATION
CLASS B PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS
CALLED FOR FEBRUARY 24, 2003
This Proxy is Solicited on Behalf of Management
The undersigned, being the record holder of Class B Common Stock and
having received the Notice of Meeting and Proxy Statement dated January 24,
2003, hereby appoints Michael J. Gasser, Charles R. Chandler, Michael H.
Dempsey, Naomi C. Dempsey, Daniel J. Gunsett, John C. Kane, David J. Olderman
and William B. Sparks, Jr. , and each or any of them as proxies, with full power
of substitution, to represent the undersigned and to vote all shares of Class B
Common Stock of Greif Bros. Corporation, which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Corporation to be held at 425
Winter Road, Delaware, Ohio 43015, at 10:00 o'clock A.M., E.S.T., on February
24, 2003, and at any adjournment thereof; as follows:
1. FOR [_] OR AGAINST [_] THE ELECTION OF ALL NOMINEES LISTED BELOW
(except as marked to the contrary below):
Michael J. Gasser Charles R. Chandler Michael H. Dempsey
Naomi C. Dempsey Daniel J. Gunsett John C. Kane
[insert new nominee] David J. Olderman William B. Sparks, Jr.
Instruction: To withhold authority to vote for any individual nominee,
strike a line through his or her name.
2. Proposal to approve the Company's corporate name change from "Greif Bros.
Corporation" to "Greif, Inc." and to amend the Company's Amended and
Restated Certificate of Incorporation to effect the change in corporate
name.
FOR [_] AGAINST [_] ABSTAIN [_]
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT
THEREOF.
The Shares represented by this Proxy will be voted upon the proposals
listed above in accordance with the instructions given by the undersigned, but
if no instructions are given, this Proxy will be voted to elect all of the
nominees for directors as set forth in Item 1, above, to approve the Company's
corporate name change from "Greif Bros. Corporation" to "Greif, Inc." and to
amend the Company's Amended and Restated Certificate of Incorporation to effect
the change in corporate name as set forth in Item 2, above, and in the
discretion of the proxies on any other matter which properly comes before the
Annual Meeting.
Record Holder Number of Class B Shares Held
Dated ________________, 2003 ___________________________
___________________________
Please date and sign proxy exactly as your name appears above, joint owners
should each sign personally. Trustees and others signing in a representative
capacity should indicate the capacity in which they sign.