[LOGO]
GIBRALTAR (R)
Packaging Group, Inc.
Fellow Shareholders,
We started fiscal year 2001 with high expectations for improvements in sales and
operating earnings in all quarters, and indeed, we achieved this in the first
two quarters of the year. Reflective of the downturn in the economy, sales
started to slow in the third quarter. Accordingly, sales and operating profits
declined in the second half of the year, leaving operating income from
continuing operations approximately equal for the year.
While disappointed that we were not able to achieve our original plan, we were
pleased with the continued progress we made during 2001 in reducing operating
costs, improving operating efficiency and quality, and integrating our sales and
marketing efforts across all three divisions. We also invested in new
technologies and equipment to enable the company to take advantage of
opportunities for new business in the future.
Our outlook for 2002, particularly in the aftermath of the tragic events of
September 11 and the grieving and uncertainty that it has created, is guarded
but optimistic that this strong country is pulling together, and our economy
will return to its long term history of growth and optimism.
While we are proceeding very cautiously in light of the current economic
environment, we will continue to reduce costs and improve the levels of quality
and service we offer to meet the rapidly changing needs of our customers and the
markets we serve.
We believe that our strategy of focusing on our core business of folding
cartons, improving internal operations and increasing sales has resulted in a
stronger foundation for future growth and profitability. This, combined with
prudent management of our assets, will result in continuing decreases in our
outstanding debt levels and increasing returns to our shareholders.
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 7, 2001
_________________________________________
TO THE STOCKHOLDERS OF GIBRALTAR PACKAGING GROUP, INC:
The Annual Meeting of the Stockholders of Gibraltar Packaging Group, Inc.,
a Delaware corporation (the "Company"), will be held at the Comfort Inn, 2903
Osborne Drive West, Hastings, Nebraska, on November 7, 2001, at 12:00 p.m.,
Central Time, for the following purposes:
1. To elect six directors to serve until the annual stockholders' meeting
in 2002 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 2002 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 10, 2001
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 3, 2001
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 2001 Annual Meeting of
Stockholders to be held on November 7, 2001, and at any adjournments thereof
(the "Annual Meeting"). The Annual Meeting will be held at 12:00 p.m., Central
Time, at the Comfort Inn, 2903 Osborne Drive West, Hastings, Nebraska. If the
accompanying proxy is properly executed and returned, the shares it represents
will be voted at the meeting in accordance with the directions noted on the
proxy or, if no direction is indicated, it will be voted in favor of the
proposals described in this Proxy Statement. In addition, the proxy confers
discretionary authority to the persons named in the proxy authorizing those
persons to vote, in their discretion, on any other matters properly presented at
the Annual Meeting. The Board of Directors is not currently aware of any other
matters to be considered. Any stockholder giving a proxy has the power to revoke
it by oral or written notice to the Secretary of the Company at any time before
it is voted.
The approximate date on which this Proxy Statement and the accompanying
proxy, together with the Company's annual report to stockholders on form 10-K
for the fiscal year ended June 30, 2001, will first be sent to stockholders is
October 3, 2001.
VOTING RIGHTS AND QUORUM
At the close of business on September 10, 2001, 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
Six directors are to be elected to the Company's Board of Directors at the
Annual Meeting. The Board of Directors has nominated and urges you to vote for
the election of the six nominees identified below who have been nominated to
serve as directors until the next annual meeting of stockholders or until their
successors are duly elected and qualified. The six nominees listed below are
members of the Company's present Board of Directors. Proxies solicited hereby
will be voted FOR all six nominees unless stockholders specify otherwise in
their proxies.
If, at the time of or prior to the Annual Meeting, any 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 six 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
---- --- --------------------------------- -----------------
David G. Chandler 43 Director 1992
Richard D. Hinrichs 57 Director and President & Chief Operating Officer 2000
John W. Lloyd 57 Director 1992
Walter E. Rose 58 Director and Chief Executive Officer 1986
Robert G. Shaw 61 Director 1992
John D. Strautnieks 64 Director 1986
David G. Chandler. Mr. Chandler has been employed by William Blair &
Company, L.L.C., an investment banking firm, since 1987, and has been a
principal since 1990. Mr. Chandler also serves as a director for a number of
privately held companies.
Richard D. Hinrichs. Mr. Hinrichs became President and Chief Operating
Officer of the Company in August 1998. Mr. Hinrichs served as Division
President -Great Plains Packaging since May 1992. He had previously served as
Vice President of Sales of Great Plains Packaging from February 1986 through May
1992 and has held various positions with the Company and its predecessors since
1963.
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. Mr. Lloyd is employed as Chief Financial Officer for Cert.Co, a provider
of security and risk management infrastructure solutions for B2B e-commerce. Mr.
Lloyd has served as Executive Vice President and Chief Financial Officer of
Rostra Technologies, Inc. ("Rostra"), a manufacturer of automotive electronic
components, since 1993.
Walter E. Rose. Mr. Rose became Chief Executive Officer of the Company in
August 1995. Mr. Rose serves as President of Rostra, which he co-founded in
1982.
Robert G. Shaw. Mr. Shaw has been Chairman of the Board, President and
Chief Executive Officer of International Jensen, an equipment manufacturer
specializing in loud speaker drivers and related components for the audio
industry, since 1984.
John D. Strautnieks. Mr. Strautnieks serves as Chairman of the Board of
Rostra, which he co-founded in 1982.
2
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. The Board,
in its discretion and in accordance with such authority, has fixed its size to
six persons. No proxy will be voted for more than six persons.
Meetings of the Board of Directors and Committees
The Company's Board of Directors has an Audit Committee and a Compensation
Committee. The Audit Committee's functions include making recommendations
concerning the engagement of independent auditors, reviewing with the
independent auditors the planning and results of the auditing engagement,
approving professional services provided by the independent auditors and
reviewing the adequacy of the Company's internal accounting controls. The
current members of the Audit Committee are Messrs. Shaw and Strautnieks. The
Compensation Committee makes recommendations concerning compensation, including
incentive arrangements, for the Company's officers. The Compensation Committee
also administers the Company's 1992 Incentive Stock Option Plan, Director Stock
Option Plan, and 1998 Stock Appreciation Rights Plan. The current members of the
Compensation Committee are Messrs. Chandler and Shaw.
During fiscal 2001, the Board of Directors had two meetings. The Audit
Committee had three meetings, and the Compensation Committee had one meeting.
During fiscal 2001, each director participated in all board meetings and
meetings of committee(s) on which he served.
Director Compensation
Members of the Board of Directors are reimbursed for out-of-pocket expenses
incurred in attending Board of Directors and committee meetings. Messrs.
Chandler, Shaw, and Strautnieks receive $3,000 each quarter as director
compensation. 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 2001, 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 10, 2001,
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 17.4%
John W. Lloyd, Director (4)......................................................... 230,250 4.5%
Walter E. Rose, Director and Chief Executive Officer................................ 381,296 7.5%
Robert G. Shaw, Director (4)........................................................ 16,000 *
John D. Strautnieks, Director....................................................... 306,296 6.0%
Richard D. Hinrichs, Director and President & Chief Operating Officer (4)........... 264,092 5.2%
James W. Anderson, Vice President & General Manager, Flashfold Carton............... 430 *
Donald R. Soucy, Vice President & General Manager, Standard Packaging & Printing.... 0 *
Lyle O. Halstead, Vice President Finance - Operations............................... 2,011 *
Brett E. Moller, Vice President Finance - Corporate................................. 6,500 *
Mark A. Lessor, Vice President of Sales (4)......................................... 3,000 *
Directors and executive officers as a group (11 persons) (4)........................ 2,097,350 41.2%
_______________________
* Represents beneficial ownership of less than one percent of the outstanding
shares of Common Stock.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is c/o Gibraltar Packaging Group, Inc., 2000 Summit Avenue,
Hastings, Nebraska 68901.
(2) Based solely on information set forth in a Schedule 13D, dated December 11,
1996.
(3) 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.
(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 10, 2001: 11,000 for Mr. Lloyd, 11,000 for Mr. Shaw, 23,000 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 58 Chairman and Chief Executive Officer
Richard D. Hinrichs 57 President and Chief Operating Officer
Lyle O. Halstead 36 Vice President Finance - Operations
Brett E. Moller 39 Vice President Finance - Corporate
Mark A. Lessor 42 Vice President of Sales
James W. Anderson 40 Vice President & General Manager
Flashfold Carton Division
Donald R. Soucy 59 Vice President & General Manager
Standard Packaging & Printing Division
Information regarding the business experience of Messrs. Rose and Hinrichs
are set forth above under the heading "Proposal Number 1: Election of
Directors."
Lyle O. Halstead. Mr. Halstead became Vice President Finance - Operations
of the Company in September 2000. He had previously served as Vice President
Finance and Human Resources of the Great Plains Packaging Division since 1997.
In addition, he served as Division Controller for Great Plains Packaging from
April 1992 through December 1995. Before returning to the division in 1997, Mr.
Halstead held the position of Plant Controller for Lozier Corporation from
January 1996 to January 1997.
Brett E. Moller. Mr. Moller became Vice President Finance - Corporate of
the Company in September 2000. He previously served as Corporate Controller for
the Company since October 1998. Prior to his employment with the Company, Mr.
Moller was a shareholder in Richardson & Associates, P.C., a CPA firm.
Mark A. Lessor. Mr. Lessor became Vice President of 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.
James W. Anderson. Mr. Anderson became Vice President & General Manager of
the Company's Flashfold Carton Division in January 2000. Mr. Anderson served as
Operations Manager for the division since July 1998 and held other various
positions within the division since September 1997. Prior to his employment
with the Company's Flashfold Carton division he was employed by International
Cup Corporation from April 1996 to September 1997, and in prior years held
various positions with International Paper.
Donald R. Soucy. Mr. Soucy has served as Vice President and General
Manager of the Company's Standard Packaging & Printing Division since January
2000. Prior to his employment, the Company retained Mr. Soucy as a consultant,
through DR Soucy & Associates, from June 1999 to December 1999. Mr. Soucy was
previously employed as Plant Manager for International Jensen, Inc., from 1986
to 1999.
5
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.
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
2001.
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 2001.
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 2001. 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
------------
Securities
Fiscal Annual Compensation Underlying All Other
-------------------
Name and Principal Position Year Salary($) Bonus($)(1) Options/SARs(#) Compensation($)(2)
--------------------------- ----- --------- ----------- --------------- ------------------
Walter E. Rose (3) 2001 0 0 0 0
Chief Executive Officer 2000 0 0 0 0
1999 0 0 0 0
Richard D. Hinrichs 2001 221,563 53,000 0 1,821
President and Chief Operating Officer 2000 215,109 63,000 0 1,707
1999 203,157 43,000 150,000(4) 1,449
Mark A. Lessor 2001 105,139 20,000 0 1,273
Vice President of Sales 2000 95,400 22,000 0 1,145
1999 91,731 19,000 0 927
James W. Anderson 2001 104,760 16,000 0 1,080
Vice President & General Manager 2000 103,523 12,000 0 1,035
Flashfold Carton Division 1999 96,148 0 0 780
Donald R. Soucy 2001 118,560 8,000 0 1,357
Vice President & General Manager 2000 111,200(5) 10,000 0 0
Standard Packaging & Printing Division 1999 2,400(5) 0 0 0
(1) Bonuses reflect amounts earned and accrued during each fiscal year, but
paid in the subsequent fiscal year.
(2) Represents Company contributions to the Company's 401(k) profit sharing
plan. During each of the three years ended June 30, 2001, July 1, 2000, and
July 3, 1999, perquisites for each individual named in the Summary
Compensation Table aggregated less than 10% of the total annual salary and
bonus reported for such individual in the Summary Compensation Table, or
$50,000, if lower. Accordingly, no such amounts are included in the Summary
Compensation Table.
(3) Upon the appointment of a new Chief Operating Officer of the Company in
October 1997, Mr. Rose's active involvement with the Company was reduced.
Mr. Rose no longer receives a base salary from the Company.
(4) In fiscal 1999 Mr. Hinrichs was granted 150,000 SARs under the 1998 Stock
Appreciation Rights Plan. The SARs are valued at $2.25 for each of 75,000
SARs and $3.00 for each of 75,000 SARs of the 150,000 awarded to Mr.
Hinrichs. The SARs for Mr. Hinrichs vest at 20% on January 15, 1999 and
20% on each of June 26, 1999, June 24, 2000, June 30, 2001, and June 29,
2002. On June 30, 2003, the Company will pay to Mr. Hinrichs an amount
equal to the market value of the Common Stock on that date multiplied by
the number of vested SARs less their initial values of $2.25 and $3.00.
(5) Compensation for Mr. Soucy represents consulting fees totaling $53,600 for
the first six months of fiscal 2000 and salary totaling $57,600 for the
remaining portion of the fiscal year. Fiscal 1999 compensation for Mr.
Soucy represents $2,400 in consulting fees for services provided by Mr.
Soucy in June 1999.
7
Stock Options and Stock Appreciation Rights Granted in Fiscal 2001
The Company did not grant any stock options or SARs in fiscal 2001.
Stock Option and SAR Values at Fiscal Year-End
The following table summarizes information concerning the value of
unexercised options held as of June 30, 2001, by the executive officers named in
the Summary Compensation Table. No stock options were exercised by these
officers in fiscal 2001.
FISCAL YEAR-END OPTION VALUES
Number of Shares
Underlying Unexercised Value of In-the-Money
Options Held at Options at
June 30, 2001(#) June 30, 2001($)(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 30, 2001 was $1.28 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 $1.28.
(2) All options for Mr. Hinrichs and Mr. Lessor were granted under the
Company's 1992 Incentive Stock Option Plan.
The following table includes information concerning the value of SARs held
as of June 30, 2001, by the executive officers named in the Summary Compensation
Table. No SARs granted to these officers reached maturity in fiscal 2001.
FISCAL YEAR-END SAR VALUES
Present Value
Number of SARs Outstanding at of SARs Outstanding at
June 30, 2001(#) June 30, 2001($)(1)
----------------------------- ----------------------
Name Vested Unvested Vested Unvested
---- ---------- --------------- ---------- ----------
Richard D. Hinrichs(2)............ 120,000 30,000 0 0
(1) Computed based on the difference between aggregate fair market value and
aggregate initial value. The market value of the Company's Common Stock on
June 30, 2001 was $1.28 based on the closing price on the NASDAQ National
Market System on that date. Mr. Hinrichs' SARs have initial values in
excess of $1.28.
(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, 1996 and ending June 30, 2001. The graph assumes that the
value of the investment in the Company's Common Stock and each index was $100 at
June 30, 1996 and that all dividends were reinvested. The members of the peer
group were determined by the Company, and consist of: Bemis Inc., Liqui-Box
Corp., Outlook Group Corp., and Sonoco Products Co.
COMPARISON OF 5 YEAR CUMULATIVE RETURN
AMONG GIBRALTAR PACKAGING GROUP, INC.,
NASDAQ MARKET INDEX, AND PEER GROUP INDEX
[CHART APPEARS HERE]
Gibraltar Peer Group NASDAQ
6/30/1996 100 100 100
6/30/1997 54.5 120.23 121.57
6/30/1998 40.95 122.01 160.12
6/30/1999 12.51 140.26 230.53
6/30/2000 14.17 120.13 340.58
6/30/2001 23.21 133.95 185.59
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.
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 30, 2001, all Section 16(a) filing requirements applicable to its
officers, directors, and ten percent stockholders were made.
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. The Company is not required
to adopt a written charter for the Audit Committee, but intends to adopt a
formal charter during fiscal 2002.
During fiscal 2001, the Committee met three 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 30, 2001 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 30, 2001, 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 shareholders at the Annual
Meeting.
Audit Committee
Robert G. Shaw, Chairman
John D. Strautnieks
Principal Accounting Firm Fees
The following table lists the aggregate fees billed to the Company for the
fiscal year ended June 30, 2001, by the Company's principal accounting firm,
Deloitte & Touche LLP.
Audit Fees $102,800
Financial Information Systems Design and Implementation Fees $ -
All Other Fees $ 98,064
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 29, 2002, 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 5, 2002, if the
proposal is to be considered for inclusion in the Company's proxy statement
relating to such meeting.
A shareholder may also present a proposal directly to the Company's
shareholders at the 2002 Annual Meeting. However, if the Company does not
receive notice of the shareholder proposal prior to the close of business on
August 19, 2002, SEC rules permit management to vote proxies in their discretion
on the proposed matter. If the Company receives notice of the shareholder
proposal on or before the close of business on August 19, 2002, management can
only vote proxies in their discretion if they advise stockholders in the
Company's 2002 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 3, 2001
Hastings, Nebraska
12
P R O X Y GIBRALTAR PACKAGING GROUP, INC. P R O X Y
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints WALTER E. ROSE, 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 Comfort Inn, 2903 Osborne
Drive West, Hastings Nebraska, on the 7th day of November 2001 at 12:00 p.m.,
Central Time, and any adjournment(s) thereof, with all powers the undersigned
would possess if personally present and to vote thereat, as provided below, the
number of shares the undersigned would be entitled to vote if personally
present. Please mark an X in the appropriate boxes below. The Board recommends
that you vote FOR all nominees and to ratify the appointment of Deloitte &
Touche LLP.
PROPOSAL 1: ELECTION OF DIRECTORS [_] FOR all nominees listed below [_] WITHHOLD AUTHORITY to vote
Except as marked to the contrary for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual, strike a
line through the nominee's name in the list below.)
David G. Chandler John W. Lloyd Richard D. Hinrichs
Walter E. Rose Robert G. Shaw John D. Strautnieks
PROPOSAL 2: TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP [_] FOR [_] AGAINST [_] ABSTAIN
AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE
2002 FISCAL YEAR
In accordance with their discretion, said attorneys and proxies are authorized
to vote upon such other business as may properly come before the meeting or any
adjournments thereof.
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 3, 2001.
____________________________________________
Signature(s)
____________________________________________
Dated ________________________________, 2001
(Please sign exactly as your name appears
hereon. When signing as attorney, executor,
administrator, trustee, guardian, etc., give
full title as such. For joint accounts, each
joint owner should sign.)
PLEASE MARK, SIGN, DATE, AND RETURN THE
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.