UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
GIBRALTAR PACKAGING GROUP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
[LOGO]
GIBRALTAR(R)
PACKAGING GROUP, INC.
Fellow Shareholders,
Fiscal 2002 began with the expectation that the sluggish economy would begin to
rebound, however this was pushed back by the tragic events of September 11th.
Gibraltar was not immune to the ramifications of the continued economic
downturn, as operating results for fiscal 2002 came in lower than 2001 in the
first three quarters.
While disappointed that we were not able to achieve our original plan, we
aggressively pursued new customers during the year, and these efforts started to
show results in the fourth quarter, as sales increased by nearly $2 million over
the previous year. In addition, we have been consistently paying down large
portions of our debt, and have been able to capitalize on the reduction in
interest rates, further improving our position and our earnings.
We are optimistic about fiscal 2003 for Gibraltar. We expect to be able to
increase our sales levels over the previous year, while continuing our efforts
to reduce costs and improve efficiencies. By leveraging our current operating
structure, increased sales levels should have a significant impact on our
bottom-line.
We are also investing in new equipment with increased technical capabilities
that will continue to improve our production throughput, overall efficiency, and
the quality of the products we provide. These key initiatives will remain our
focal points for fiscal 2003, as we build upon our recent successes, and
improved financial position.
Sincerely,
/s/ Walter E. Rose
Walter E. Rose
Chairman and Chief Executive Officer
GIBRALTAR PACKAGING GROUP, INC.
2000 SUMMIT AVENUE
HASTINGS, NEBRASKA 68901
------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 12, 2002
------------------------------------------
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 Lochland
Country Club, 601 West Lochland Road, Hastings, Nebraska, on November 12, 2002,
at 12:00 p.m., Central Time, for the following purposes:
1. To elect five directors to serve until the annual stockholders'
meeting in 2003 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 2003 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 13,
2002 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 11, 2002
Hastings, Nebraska
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 2002 Annual
Meeting of Stockholders to be held on November 12, 2002, and at any adjournments
thereof (the "Annual Meeting"). The Annual Meeting will be held at 12:00 p.m.,
Central Time, at the Lochland Country Club, 601 West Lochland Road, Hastings,
Nebraska. If the accompanying proxy is properly executed and returned, the
shares it represents will be voted at the meeting in accordance with the
directions noted on the proxy or, if no direction is indicated, it will be voted
in favor of the proposals described in this Proxy Statement. In addition, the
proxy confers discretionary authority to the persons named in the proxy
authorizing those persons to vote, in their discretion, on any other matters
properly presented at the Annual Meeting. The Board of Directors is not
currently aware of any other matters to be considered. Any stockholder giving a
proxy has the power to revoke it by oral or written notice to the Secretary of
the Company at any time before it is voted.
The approximate date on which this Proxy Statement and the accompanying
proxy, together with the Company's annual report to stockholders on form 10-K
for the fiscal year ended June 29, 2002, will first be sent to stockholders is
October 11, 2002.
VOTING RIGHTS AND QUORUM
At the close of business on September 13, 2002, 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.
PROPOSAL NUMBER 1:
ELECTION OF DIRECTORS
Five directors are to be elected to the Company's Board of Directors at
the Annual Meeting. The Board of Directors has nominated and urges you to vote
for the election of the five nominees identified below who have been nominated
to serve as directors until the next annual meeting of stockholders or until
their successors are duly elected and qualified. The five nominees listed below
are members of the Company's present Board of Directors. Proxies solicited
hereby will be voted FOR all five nominees unless stockholders specify otherwise
in their proxies.
If, at the time of or prior to the Annual Meeting, any nominee is
unable or declines to serve, the discretionary authority provided in the proxy
may be used to vote for a substitute or substitutes designated by the Board of
Directors. The Board of Directors has no reason to believe that any substitute
nominee or nominees will be required.
NOMINEES FOR DIRECTOR
The five nominees for election as directors and certain additional
information with respect to each of them, are as follows:
YEAR FIRST BECAME
NAME AGE POSITION WITH THE COMPANY A DIRECTOR
---- --- ----------------------------------------- ----------
Richard D. Hinrichs 58 Director and President & Chief Operating Officer 2000
John W. Lloyd 58 Director 1992
Walter E. Rose 59 Director and Chief Executive Officer 1986
Robert G. Shaw 62 Director 1992
John D. Strautnieks 65 Director 1986
RICHARD D. HINRICHS. Mr. Hinrichs became President and Chief Operating
Officer of the Company in August 1998. Previously, Mr. Hinrichs has served as
Division President - Great Plains Packaging from May 1992 until August 1998. In
addition, he has also 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 presently serves as a consultant to the
Company since his resignation as Chief Financial Officer of the Company in
September 2000. He has also served as Executive Vice President and Chief
Financial Officer of Rostra Technologies, Inc. ("Rostra"), a manufacturer of
automotive electronic components, since 1993. Mr. Lloyd was previously employed
from September 2000 until February 2002 as Chief Financial Officer for Cert.Co,
a provider of security and risk management infrastructure solutions for B2B
e-commerce.
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
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 appointed 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.
Gibraltar's Board of Directors previously consisted of six members. In order to
pursue other interests, David G. Chandler has voluntarily declined to run for
re-election to the Company's Board of Directors. As a result, the Board, in its
discretion and in accordance with such authority, has fixed its size at five
persons. No proxy will be voted for more than five persons.
Mr. Chandler is also a current member of the Company's Compensation and
Audit Committees. His absence on these committees will be addressed following
the expiration of his term on the Board of Directors.
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. Chandler, 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, and 1998 Stock Appreciation Rights
Plan. The current members of the Compensation Committee are Messrs. Chandler and
Shaw.
During fiscal 2002, the Board of Directors had four meetings, the Audit
Committee had five meetings, and the Compensation Committee had one meeting.
During fiscal 2002, each incumbent 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. Mr. Lloyd receives $2,000 a month as compensation for serving as a
consultant and director of the Company. 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
2002, 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 13, 2002,
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
BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP CLASS
------------------------------------ ---------------- ----------
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)........................................................ 887,475 17.5%
John W. Lloyd, Director (4)............................................................ 252,148 4.9%
Walter E. Rose, Director and Chief Executive Officer................................... 438,996 8.6%
Robert G. Shaw, Director (4)........................................................... 13,000 *
John D. Strautnieks, Director.......................................................... 306,296 6.0%
Richard D. Hinrichs, Director and President & Chief Operating Officer (4).............. 251,092 4.9%
James W. Anderson, Vice President & General Manager, Standard Packaging & Printing..... 430 *
Lyle O. Halstead, Vice President Finance & General Manager, Flashfold Carton........... 2,011 *
Brett E. Moller, Vice President Finance................................................ 6,500 *
Mark A. Lessor, Vice President Sales (4)............................................... 3,000 *
Directors and executive officers as a group (10 persons) (4)........................... 2,160,948 42.6%
-----------------------
* 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) 863,275 of these shares 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. The remaining 24,200 shares are
directly owned by Mr. Chandler. Mr. Chandler has voluntarily declined to
run for re-election to the Company's Board of Directors in order to pursue
other interests.
(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 13, 2002: 8,000 for Mr. Lloyd, 8,000 for Mr. Shaw, 10,000 for Mr.
Hinrichs, and 3,000 for Mr. Lessor.
4
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 59 Chairman and Chief Executive Officer
Richard D. Hinrichs 58 President and Chief Operating Officer
Mark A. Lessor 43 Vice President Sales
Brett E. Moller 40 Vice President Finance
Lyle O. Halstead 37 Vice President & General Manager
Flashfold Carton Division
James W. Anderson 41 Vice President & General Manager
Standard Packaging & Printing Division
Information regarding the business experience of Messrs. Rose and Hinrichs
is set forth above under the heading "Proposal Number 1: Election of Directors."
MARK A. LESSOR. Mr. Lessor became Vice President Sales of the Company
in March 2001. Prior to this appointment, Mr. Lessor previously served as Great
Plains Packaging's Vice President of Sales since 1997, and added sales
management responsibilities for Flashfold Carton, another division of the
Company, to his duties in 1998. He has held various other positions with Great
Plains Packaging including, Sales Manager, Product Manager, and Sales
Representative since his employment with the Company and its predecessors in
1981.
BRETT E. MOLLER. Mr. Moller became Vice President Finance of the Company in
June 2002. Previously, he served as Vice President Finance - Corporate since
September 2000, and as Corporate Controller for the Company since October 1998.
Prior to his employment with the Company, Mr. Moller was a shareholder in
Richardson & Associates, P.C., a CPA firm.
LYLE O. HALSTEAD. Mr. Halstead became Vice President & General Manager
of the Company's Flashfold Carton Division in June 2002. He had previously
served as Vice President Finance - Operations of the Company since September
2000. In addition, he served as Vice President Finance and Human Resources of
the Great Plains division since 1997, as well 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.
JAMES W. ANDERSON. Mr. Anderson became Vice President & General Manager of
the Company's Standard Packaging & Printing Division in June 2002. Previously,
Mr. Anderson served as Vice President & General Manager of the Company's
Flashfold Carton Division since January 2000. Mr. Anderson held other various
positions within the division since September 1997.
5
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 can
consist 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. Mr.
Rose receives his compensation from Rostra, and the Company pays Rostra a
management fee for Mr. Rose's services. Upon the appointment of a new Chief
Operating Officer of the Company in October 1997, Mr. Rose's active involvement
was reduced. Mr. Rose no longer receives a base salary from the Company.
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
2002.
The Committee believes that granting stock appreciation rights
("SARs"), like stock options, can increase stockholder value by aligning the
interests of the SAR's 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 2002.
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 2002. Messrs. Rose and Strautnieks serve on
the Board of Directors of Rostra, which board makes all compensation-related
decisions for that company.
6
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.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
FISCAL ------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) OPTIONS/SARS(#) COMPENSATION($)(2)
--------------------------- ---- --------- ----------- --------------- ------------------
Walter E. Rose 2002 0 50,000(3) 0 0
Chief Executive Officer 2001 0 50,000(4) 0 0
2000 0 50,000(4) 0 0
Richard D. Hinrichs 2002 230,428 49,000 0 1,705
President and Chief Operating Officer 2001 221,563 53,000 0 1,821
2000 215,109 63,000 0 1,707
Mark A. Lessor 2002 122,634 19,000 0 1,424
Vice President of Sales 2001 105,139 20,000 0 1,273
2000 95,400 22,000 0 1,145
James W. Anderson 2002 129,387 15,000 0 1,106
Vice President & General Manager 2001 104,760 16,000 0 1,080
Standard Packaging & Printing Division 2000 103,523 12,000 0 1,035
Lyle O. Halstead 2002 103,777 15,000 0 1,182
Vice President & General Manager 2001 94,200 16,000 0 442
Flashfold Carton Division 2000 88,813 18,000 0 1,049
(1) Bonuses reflect amounts earned and accrued during each fiscal year, but
paid in a subsequent fiscal year.
(2) Represents Company contributions to the Company's 401(k) profit sharing
plan. During each of the three years ended June 29, 2002, June 30, 2001,
and July 1, 2000, 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.
Accordingly, no such amounts are included in the Summary Compensation
Table.
(3) The amount listed represents fees owed to Rostra for services provided by
Mr. Rose as the Company's Chief Executive Officer in fiscal 2002. The
amount listed was accrued in fiscal 2002 and will be paid in fiscal 2003.
(4) For fiscals 2001 and 2000, the amounts listed represent fees paid to Rostra
for services provided by Mr. Rose as the Company's Chief Executive Officer.
These amounts were accrued in fiscals 2001 and 2000; however, payment was
contingent upon the Company achieving sustained profitability. These
amounts were subsequently paid in fiscal 2002.
7
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS GRANTED IN FISCAL 2002
The Company did not grant any stock options or SARs in fiscal 2002.
STOCK OPTION AND SAR VALUES AT FISCAL YEAR-END
The following table summarizes information concerning the value of
unexercised options held as of June 29, 2002, by the executive officers named in
the Summary Compensation Table. No stock options were exercised by these
officers in fiscal 2002.
FISCAL YEAR-END OPTION VALUES
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS HELD AT OPTIONS AT
JUNE 29, 2002 JUNE 29, 2002 (1)
---------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Richard D. Hinrichs (2)............... 23,000 0 0 0
Mark A. Lessor (2).................... 3,000 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
June 29, 2002 was $1.40 based on the closing price on the NASDAQ National
Market System on that date. All of the options held by Messrs. Hinrichs and
Lessor have exercise prices in excess of $1.40.
(2) All options for Mr. Hinrichs and Mr. Lessor were granted under the
Company's 1992 Incentive Stock Option Plan.
The following table includes information concerning the value of SARs
held as of June 29, 2002, by the executive officers named in the Summary
Compensation Table. No SARs granted to these officers reached maturity in fiscal
2002.
FISCAL YEAR-END SAR VALUES
NUMBER OF PRESENT VALUE
SARs OUTSTANDING AT OF SARs OUTSTANDING AT
JUNE 29, 2002 JUNE 29, 2002 (1)
------------------------ -----------------------
NAME VESTED UNVESTED VESTED UNVESTED
---- ------ -------- ------ --------
Richard D. Hinrichs (2).................. 150,000 0 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
June 29, 2002 was $1.40 based on the closing price on the NASDAQ National
Market System on that date. Mr. Hinrichs' SARs have initial values in
excess of $1.40.
(2) All SARs for Mr. Hinrichs were granted under the Company's 1998 Stock
Appreciation Rights Plan.
8
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, 1997 and ending June 30, 2002. The graph assumes that
the value of the investment in the Company's Common Stock and each index was
$100 at June 30, 1997 and that all dividends were reinvested. The members of the
peer group were determined by the Company, and consist of: Bemis Inc., 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
[PLOT POINTS CHART]
TOTAL RETURN TO STOCKHOLDERS
(Assumes $100 investment on 6/30/97
-------------------------------------------------------------------------------------------------------
Total Return Analysis
6/30/1997 6/30/1998 6/30/1999 6/30/2000 6/30/2001 6/30/2002
-------------------------------------------------------------------------------------------------------
Gibraltar Packaging Group, Inc. $ 100.00 $ 75.14 $ 22.95 $ 26.00 $ 42.59 $ 46.58
-------------------------------------------------------------------------------------------------------
Peer Group $ 100.00 $ 101.48 $ 116.66 $ 99.92 $ 111.41 $ 132.38
-------------------------------------------------------------------------------------------------------
Nasdaq Composite $ 100.00 $ 131.71 $ 189.63 $ 288.15 $ 152.66 $ 103.36
-------------------------------------------------------------------------------------------------------
Note: Liqui-Box Corp. was not included in 2002. It was acquired by Dupont Canada
(and wholly-owned subsidiary, Enhance Packaging Technologies, Inc.) in May 2002.
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
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. Hinrichs' 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 agreement with Mr. Lloyd on September 1,
2000, based upon his resignation as Chief Financial Officer of the Company,
effective September 5, 2000. This agreement supercedes all previous employment
agreements between Mr. Lloyd and the Company. 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.
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. Officers, directors, and greater than ten percent
stockholders are required by SEC regulation to furnish the Company with copies
of all such forms that they file.
To the Company's knowledge, based solely on the Company's review of the
copies of such reports received by the Company, and on written representations
by certain reporting persons, the Company believes that during the fiscal year
ended June 29, 2002, all Section 16(a) filing requirements applicable to its
officers, directors, and ten percent stockholders were made.
CERTAIN TRANSACTIONS
Walter Rose, the Company's CEO, holds an equity interest in Rostra.
During fiscal 2002, the Company paid $100,000 to Rostra in management fees for
services provided by Mr. Rose in fiscal years 2000 and 2001. At June 29, 2002,
the Company owed Rostra $50,000 in management fees for services provided by Mr.
Rose during fiscal 2002.
10
AUDIT COMMITTEE REPORT
The Company's Audit Committee assists the Board in fulfilling its
responsibilities of overseeing the quality and integrity of the Company's
accounting, auditing, and financial reporting practices. The Audit Committee
members satisfy the regulations of the National Association of Securities
Dealers ("NASD") requiring that all audit committee members be "independent
directors" as defined in the NASD listing standards. While the Company is not
required to adopt a written charter for the Audit Committee, it nevertheless
decided to adopt a formal charter during fiscal 2002.
During fiscal 2002, the Committee met five times, and discussed the
interim financial information contained in each quarterly earnings announcement
with management and independent auditors prior to public release. In connection
with the Company's June 29, 2002 audited financial statements, the Audit
Committee reviewed and discussed the financial statements with management. The
Audit Committee also discussed with the Company's independent public accountants
the matters required by Statement on Auditing Standards ("SAS") No. 61,
"Communication with Audit Committees," as amended by SAS No. 90.
In discharging its oversight responsibility as to the audit process,
the Audit Committee obtained from Deloitte & Touche LLP, the Company's
independent public accountants, a formal written statement describing all
relationships between the independent public accountants and the Company that
might bear on the auditor's independence consistent with the Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," and discussed with the auditors any relationships that may impact
their objectivity and independence. In considering the auditor's independence,
the Audit Committee also considered whether the non-audit services performed by
the auditors on the Company's behalf were compatible with maintaining the
independence of the auditors. Based on this review, the Audit Committee believes
appropriate independence is maintained.
Based on the Audit Committee's review and discussions with management
and the Company's independent public accountants, the Audit Committee
recommended to the Board that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the fiscal year ended June 29,
2002, for filing with the SEC. The Audit Committee also recommended the
reappointment of the independent public accountants and the Board concurred in
this recommendation, subject to the ratification of the appointment by the
stockholders at the Annual Meeting.
Audit Committee
Robert G. Shaw, Chairman
David G. Chandler
John D. Strautnieks
PRINCIPAL ACCOUNTING FIRM FEES
The following table lists the aggregate fees billed to the Company for
the fiscal year ended June 29, 2002, by the Company's principal accounting firm,
Deloitte & Touche LLP.
Audit Fees $105,100
Financial Information Systems Design and Implementation Fees $ --
All Other Fees $ 77,400
11
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 28, 2003, 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 June 13,
2003, if the proposal is to be considered for inclusion in the Company's proxy
statement relating to next year's meeting.
A shareholder may also present a proposal directly to the Company's
stockholders at the 2003 Annual Meeting. However, if the Company does not
receive notice of the stockholder proposal prior to the close of business on
August 27, 2003, SEC rules permit management to vote proxies in their discretion
on the proposed matter. If the Company receives notice of the stockholder
proposal on or before the close of business on August 27, 2003, management can
only vote proxies in their discretion if they advise stockholders in the
Company's 2003 proxy statement about the nature of the proposed matter and how
management intends to vote on the matter.
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 E-MAILING INVESTORRELATIONS@GPPKG.COM OR BY WRITTEN REQUEST TO
INVESTOR RELATIONS, GIBRALTAR PACKAGING GROUP, INC., 2000 SUMMIT AVENUE,
HASTINGS, NEBRASKA 68901. THESE REPORTS CAN ALSO BE OBTAINED ON OUR WEBSITE AT
WWW.GIBRALTARPACKAGINGGROUP.COM.
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
CHIEF EXECUTIVE OFFICER
October 11, 2002
Hastings, Nebraska
12
GIBRALTAR PACKAGING GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, NOVEMBER 12, 2002
12:00 P.M. CENTRAL TIME
LOCHLAND COUNTRY CLUB
601 WEST LOCHLAND ROAD
HASTINGS, NEBRASKA
[LOGO] GIBRALTAR PACKAGING GROUP, INC.
2000 SUMMIT AVENUE
HASTINGS, NEBRASKA 68901 PROXY
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
OF STOCKHOLDERS ON NOVEMBER 12, 2002.
The undersigned hereby constitutes and appoints WALTER E. ROSE, BRETT E. MOLLER,
and each or either of them, lawful attorneys and proxies of the undersigned,
with full power of substitution, for and in the name, place and stead of the
undersigned, to attend the Annual Meeting of Stockholders of Gibraltar Packaging
Group, Inc. (herein the "Company") to be held at the Lochland Country Club, 601
West Lochland Road, Hastings, Nebraska, on the 12th day of November 2002 at
12:00 p.m., Central Time, and any adjournment(s) thereof, with all powers the
undersigned would possess if personally present and to vote thereat, as provided
on the reverse side, the number of shares the undersigned would be entitled to
vote if personally present.
In accordance with their discretion, said attorneys and proxies are authorized
to vote upon such other business as may properly come before the meeting or any
adjournments thereof.
THE BOARD RECOMMENDS THAT YOU VOTE FOR ALL NOMINEES AND TO RATIFY THE
APPOINTMENT OF DELOITTE & TOUCHE LLP.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
SEE REVERSE FOR VOTING INSTRUCTIONS.
[ARROW] PLEASE DETACH HERE [ARROW]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. Election of directors: 01 Richard D. Hinrichs 04 Robert G. Shaw [ ] Vote FOR [ ] Vote WITHHELD
02 John W. Lloyd 05 John D. Strautnieks all nominees from all nominees
03 Walter E. Rose (except as marked)
_______________________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, | |
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) |_______________________________________________|
2. To ratify the appointment of Deloitte & Touche LLP as the
independent auditors of the Company for the 2003 fiscal year. [ ] For [ ] Against [ ] Abstain
Every properly signed proxy will be voted in accordance with the specification made thereon. IF NOT OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. All prior proxies are hereby revoked.
This proxy will be voted in accordance with the discretion of the proxies or proxy on any other business. Receipt is hereby
acknowledged of the Notice of Annual Meeting and Proxy Statement of the Company dated October 11, 2002.
Address Change? Mark Box [ ]
Indicate changes below: Date _______________________________________
_______________________________________________
| |
| |
|_______________________________________________|
Signature(s) in Box
(Please sign exactly as your name appears
hereon. When signing as attorney, executor,
administrator, trustee, guardian, etc., give
full title as such. For joint accounts, each
joint owner should sign.)