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:
/ / Preliminary Proxy Statement
/ / Confidential, for use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or
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:
____________________________________________
(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 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 Class B 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 28, 2000,
at 10:00 A.M., E.S.T., for the following purposes:
1. To elect nine directors to serve for a one-year
term; and
2. To transact such other business as may properly
come before the meeting or any adjournment or
adjournments thereof.
Only Stockholders of record of the Class B Common Stock
at the close of business on January 21, 2000, will be
entitled to notice of and to vote at this meeting.
Whether or not you plan to attend this meeting, we hope
that you 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.
January 27, 2000 Joseph W. Reed
Secretary
1
GREIF BROS. CORPORATION
425 WINTER ROAD
DELAWARE, OHIO 43015
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 28, 2000
To the Class B Stockholders of Greif Bros. Corporation:
This Proxy Statement is being furnished to the Class B
Stockholders of Greif Bros. Corporation, a Delaware corporation
(the "Company"), in connection with the solicitation by Management
of proxies that will be used at the Annual Meeting scheduled to be
held on February 28, 2000 at 10:00 A.M., E.S.T., at its 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 Class B Stockholders on or about January 27, 2000.
At the meeting, the Class B Stockholders will vote upon:
(1) the election of nine directors; and (2) such other business as
may properly come before the meeting or any and all adjournments.
Shares of the 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, the shares will be voted in favor of the nine nominees
described in this Proxy Statement. Any proxy may be revoked at any
time prior to its exercise by delivery to the Company of 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.
The close of business on January 21, 2000, 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 11,847,859 shares of Class B Common Stock.
Each share is entitled to one vote.
2
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Elect Nine Directors to Serve for a 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, Robert C. Macauley,
David J. Olderman and William B. Sparks, Jr., the nine persons
nominated by the Nominating Committee of the Board of Directors,
all of whom are currently directors of the Company and have served
continuously since their first election or appointment.
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 it for another nominee.
Directors' Biographies
MICHAEL J. GASSER, 48, 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, 64, has been a director since 1987. He has
been Vice Chairman of the Company since 1996. During 1999, Mr.
Chandler also became President of Soterra LLC, a subsidiary of the
Company. Prior to 1996, and for more than five years, Mr. Chandler
had been the President and Chief Operating Officer of Virginia
Fibre Corporation, a former subsidiary of the Company. He is a
member of the Executive Committee.
MICHAEL H. DEMPSEY, 43, 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 Audit and Executive Committees.
Mr. Dempsey is the son of Naomi C. Dempsey.
NAOMI C. DEMPSEY, 83, has been a director since 1995. She is an
investor and member of the Compensation, Nominating and Stock
Option Committees. Mrs. Dempsey is the mother of Michael H.
Dempsey.
3
DANIEL J. GUNSETT, 51, 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.
JOHN C. KANE, 60, has been a director since 1999. For more than
five years, he has been President and Chief Operating Officer of
Cardinal Health, Inc., a health-care services company. He is also a
director for Cardinal Health, Inc. and Connetics Corporation, a
biopharmaceutical company.
ROBERT C. MACAULEY, 76, has been a director since 1979. He is the
founder of AmeriCares Foundation. Prior to 1998, and for more than
five years, he had been the Chief Executive Officer of Virginia
Fibre Corporation, a former subsidiary of the Company. He is a
member of the Compensation Committee.
DAVID J. OLDERMAN, 64, has been a director since 1996. He is an
investor. Prior to 1997, and for more than five years, he had been
Chairman and Chief Executive Officer of Carret and Company, Inc.,
an investment counseling firm. He is a member of the Audit and
Stock Option Committees. He is also a director for Van Eck Global
Funds, a group of mutual funds, Laidig, Inc., an engineering
company and conveyor manufacturer, Chubb, a mutual fund, and Signal
Corporation, a financial services holding corporation.
WILLIAM B. SPARKS, JR., 58, has been a director since 1995. He has
been President and Chief Operating Officer of the Company since
1995. Prior to that time, and for more than five years, Mr. Sparks
was Chief Executive Officer of Down River International, Inc., a
former subsidiary of the Company. He is a member of the Executive
Committee.
Directors are elected by a plurality of the votes cast.
Stockholders may not cumulate their votes. The nine candidates
receiving the highest number of votes will be elected.
In the tabulating of votes, abstentions and broker non-votes
will be disregarded and have no effect on the outcome of the vote.
4
Board of Directors Committees and Meetings
The Board held six meetings during the 1999 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 1999
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 1999 fiscal year. The Compensation
Committee, whose current members are Mrs. Dempsey and Messrs.
Gunsett and Macauley, 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 three meetings during the
1999 fiscal year. The Audit Committee, whose current members are
Messrs. Dempsey, Gunsett and Olderman, is responsible for
recommending 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 and
procedures of the Company. The Audit Committee held four meetings
during the 1999 fiscal year. The Stock Option Committee, whose
current members are Mrs. Dempsey and Messrs. Gunsett 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 1999 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 seven
meetings during the 1999 fiscal year. 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 three meetings to
consider and nominate the nine persons described in this Proxy
Statement.
5
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 2001 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 2001 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 2001 Annual Meeting the person he
or she recommended.
6
Security Ownership of Certain
Beneficial Owners and Management
The following table sets forth certain information, as of
January 10, 2000, 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 5,905,904 49.76%
782 W. Orange Road
Delaware, Ohio
Naomi C. Dempsey, Trustee Class B See (2) below 1,663,040 14.01%
Robert C. Macauley Class B Record and 1,150,000 9.69%
161 Cherry Street Beneficially
New Canaan, Conneticut
(1) Held by Naomi C. Dempsey as trustee of the Naomi C. Dempsey
Living Trust (5,425,904 shares) and the John C. Dempsey
Trust (480,000 shares).
(2) Held by Naomi C. Dempsey as successor trustee of the Naomi
A. Coyle Trust.
The following table sets forth certain information, as of
January 10, 2000, 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 %
Ronald L. Brown 21,500 *
Charles R. Chandler 50,400 *
Michael H. Dempsey 8,000 *
Naomi C. Dempsey 24,740 (2) *
Michael J. Gasser 80,000 *
Daniel J. Gunsett 8,000 *
John C. Kane 5,000 *
Robert C. Macauley -0- *
David J. Olderman 20,000 *
Joseph W. Reed -0- *
William B. Sparks, Jr. 51,086 *
Karl Svendsen 500 *
7
Title and Percent of Class (1)
Name Class B %
Ronald L. Brown 700 *
Charles R. Chandler 4,000 *
Michael H. Dempsey 347,552 (3) 2.93%
Naomi C. Dempsey 7,568,944 (4) 63.77%
Michael J. Gasser 11,798 *
Daniel J. Gunsett 1,000 *
John C. Kane -0- *
Robert C. Macauley 1,150,000 9.69%
David J. Olderman 34,674 *
Joseph W. Reed -0- *
William B. Sparks, Jr. 6,248 *
Karl Svendsen 300 *
* Less than one percent.
(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 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 10, 2000, granted by the Company under the
1995 Incentive Stock Option Plan and the 1996 Directors'
Stock Option Plan, for the following directors and named
executive officers: Mr. Brown - 21,500; Mr. Chandler -
50,000; Mr. Dempsey - 8,000; Mrs. Dempsey - 8,000; Mr.
Gasser - 80,000; Mr. Gunsett - 8,000; Mr. Olderman - 8,000;
and Mr. Sparks, Jr. - 50,000.
(2) Held by Naomi C. Dempsey as trustee of the John C. Dempsey
Trust (16,740 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 Naomi C. Dempsey Charitable Lead
Annuity Trust (138,810 shares) and Michael H. Dempsey as
President of All Life Foundation (79,690 shares).
(4) Held by Naomi C. Dempsey as trustee of the Naomi C. Dempsey
Living Trust (5,425,904 shares), the John C. Dempsey Trust
(480,000 shares) and the Naomi A. Coyle Trust (1,663,040
shares).
The Class A Common Stock has no voting power, except when four
quarterly cumulative dividends upon the Class A Common Stock are
in arrears.
8
The following sets forth the equity securities owned or
controlled by all directors and executive officers as a group (32
persons) as of January 10, 2000:
Title of Amount Percent
class of stock beneficially owned of class
Class A Common Stock (1) 383,104 3.62%
Class B Common Stock 9,305,266 78.41%
(1) Shares represent the number of shares beneficially owned,
directly or indirectly, by each director and executive
officer as of January 10, 2000. The number includes shares
subject to currently exercisable options or options
exercisable within 60 days of January 10, 2000, granted by
the Company under the 1995 Incentive Stock Option Plan and
the 1996 Directors' Stock Option Plan, for the directors
and executive officers as a group - 342,728.
9
Executive Compensation
The following table sets forth the compensation for the
three years ended October 31, 1999 for the Company's Chief
Executive Officer and the Company's four other most highly
compensated executive officers:
Number of
Stock
Deferred All Options
Name & Position Year Salary Bonus Compensation Other Granted
Michael J. Gasser 1999 $486,667 $171,378 $ 4,513 25,000
Chairman
Chief Executive 1998 $463,338 $182,595 $ 3,440 25,000
Officer
1997 $415,524 $112,000 $ 3,043 25,000
Ronald L. Brown 1999 $196,336 $ 49,401 $ 2,390 4,000
Vice President, Sales
and Marketing 1998 $189,996 $ 59,052 $ 940 5,000
1997 $146,947 $ 45,000 $ 15,000 10,000
Charles R. Chandler 1999 $470,174 $165,623 $325,757 $ 14,034 16,000
Vice Chairman
President of Soterra 1998 $452,018 $176,769 $300,458 $ 54,903 15,000
LLC (subsidiary
company) 1997 $434,966 $ 80,864 $277,431 $ 2,994 17,000
Joseph W. Reed * 1999 $235,802 $ 83,063 $ 2,415 5,000
Chief Financial
Officer and Secretary 1998 $226,827 $ 88,653 $ 940 11,000
1997 $ 45,833 $ 5,000 $ 196 10,000
William B. Sparks, Jr. 1999 $361,834 $127,470 $ 6,300 16,000
Director
President and Chief 1998 $345,004 $135,977 $ 2,690 15,000
Operating Officer
1997 $311,992 $ 84,000 $ 3,305 17,000
Karl Svendsen ** 1999 $196,336 $ 49,401 $102,893 4,000
Vice President,
Manufacturing, 1998 $126,667 $ -- $ 15,833 10,000
Industrial Shipping
Containers
* Mr. Reed was hired as Chief Financial Officer and Secretary
in August 1997. Prior to that time, he was not an employee of the
Company.
** Mr. Svendsen was elected Vice President, Manufacturing, Industrial
Shipping Containers, subsequent to the acquisition of the industrial
container business from Sonoco Products Company on March 30, 1998.
10
Mr. Michael J. Gasser, Chairman and Chief Executive Officer,
on November 1, 1995, entered into an employment agreement with
Greif Bros. Corporation principally providing for (a) the
employment of Mr. Gasser as Chairman and Chief Executive Officer
for a term of 15 years; (b) the right of Mr. Gasser to extend his
employment on a year-to-year basis until he reaches the age of
65; (c) the agreement of Mr. Gasser to devote all of his time,
attention, skill and effort to the performance of his duties as
an officer and employee of Greif Bros. Corporation; and (d) the
fixing of the minimum basic salary during such period of
employment to the current year's salary plus any additional
raises authorized by the Board of Directors within two fiscal
years following October 31, 1995. Subsequent to 1997, the
minimum basic salary will be fixed at $470,000 per year.
Mr. Charles R. Chandler, Vice Chairman, on August 1, 1986,
and amended in 1988, 1992 and 1996, entered into an employment
agreement, principally providing for: (a) the employment of Mr.
Chandler as Vice Chairman until 2000 (b) the agreement of Mr.
Chandler to devote all of his time, attention, skill and effort
to the performance of his duties as an officer and employee of
Greif Bros. Corporation; and (c) the fixing of minimum basic
salary during such period of employment at $424,356 per year. The
employment contract with Mr. Chandler gives him the right to
extend his employment beyond the original term up to five
additional years.
Mr. Joseph W. Reed, Chief Financial Officer and Secretary,
on August 18, 1997, entered into an employment agreement with
Greif Bros. Corporation, principally providing for: (a) the
employment of Mr. Reed as Chief Financial Officer and Secretary
for a term of three years; (b) the agreement of Mr. Reed to
devote all of his time, attention, skill and effort to the
performance of his duties as an officer and employee of Greif
Bros. Corporation; and (c) the fixing of the minimum basic salary
during such period of employment at $220,000 per year.
Mr. William B. Sparks, Jr., President and Chief Operating
Officer, on November 1, 1995 entered into an employment agreement
with Greif Bros. Corporation, principally providing for: (a) the
employment of Mr. Sparks as President and Chief Operating Officer
for a term of 11 years; (b) the agreement of Mr. Sparks to devote
all of his time, attention, skill and effort to the performance
of his duties as an officer and employee of Greif Bros.
Corporation; and (c) the fixing of the minimum basic salary
during such period of employment to the current year's salary
plus any additional raises authorized by the Board of Directors
within two fiscal years following October 31, 1995. Subsequent
to 1997, the minimum basic salary will be fixed at $350,000 per
year.
11
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 $20,000 per year
plus $1,500 for each Board or committee meeting that they attend.
Committee chairs also receive an additional $1,000 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 which options may be
granted shall not exceed 100,000 shares. 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 1999, 10,000 options were granted to
outside directors with option prices of $26.81 per share. Options
expire ten years after date of grant.
The Compensation Committee of the Board of Directors voted
bonuses to employees, based upon the progress of the Company, and
upon the contributions of the particular employees to that
progress, and upon individual merit.
Supplementing the pension benefits, there is a deferred
compensation contract with Charles R. Chandler. This contract is
designed to supplement the Greif Bros. Riverville Mill's defined
benefit pension plan only if the executive retires under such
pension plan at or after age 65. No benefit is paid to the
executive under this contract if death precedes retirement. The
deferred compensation is payable to the executive or his spouse
for a total period of 15 years.
Under the above Deferred Compensation Contract, the annual
amounts payable to the executive or his surviving spouse are
diminished by the amounts receivable under the defined benefit
pension plan of Greif Bros. Riverville Mill. Mr. Chandler's
estimated accrued benefit from the Deferred Compensation Contract
is $296,103 per year for 10 years and $197,402 per year for an
additional five years.
12
With respect to Mr. Gasser, the dollar amount in the all
other category relates to the Company match for the 401(k) plan
and premiums paid for life insurance.
With respect to Mr. Brown, the dollar amount in the all
other category for 1999 and 1998 relates to premiums paid for
life insurance. Prior to 1998, the amount relates to
contributions made by Down River International, Inc., a former
subsidiary company, to a Profit Sharing Trust.
With respect to Mr. Chandler, the dollar amount in the all
other category relates to the reimbursement for moving expenses,
Company match for the 401(k) plan and premiums paid for life
insurance.
With respect to Mr. Reed, the dollar amount in the all other
category relates to premiums paid for life insurance.
With respect to Mr. 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.
With respect to Mr. Svendsen, the dollar amount in the all
other category relates to the reimbursement for moving expenses,
Company match for the 401(k) plan and premiums paid for life
insurance.
During 1995, the Company adopted an Incentive Stock Option
Plan which provides the granting of incentive stock options to
key employees and non-statutory options for non-employees. The
aggregate number of shares of the Company's Class A Common Stock
which options may be granted shall not exceed 1,000,000 shares.
Under the terms of the Incentive Stock Option Plan, options are
granted at exercise prices equal to the market value on the date
the options are granted and become exercisable after two years
from the date of grant. Options expire ten years after date of
grant.
13
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, 1999, to each of the
named executive officers:
OPTION GRANTS TABLE
Potential Net
Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
Percent of
Total
Options
Granted to
Number of Employees Exercise
Options in Fiscal Price Per Date
Name Granted (1) Year Share Expires 5%(2) 10%(2)
M.J. Gasser 25,000 11% $24.25 9/1/09 $381,250 $966,250
R.L. Brown 4,000 2% $24.25 9/1/09 $ 61,000 $154,600
C.R. Chandler 16,000 7% $24.25 9/1/09 $244,000 $618,400
J.W. Reed 5,000 2% $24.25 9/1/09 $ 76,250 $193,250
W.B. Sparks, Jr. 16,000 7% $24.25 9/1/09 $244,000 $618,400
K. Svendsen 4,000 2% $24.25 9/1/09 $ 61,000 $154,600
(1) The options are exercisable on September 1, 2001.
(2) 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.
14
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, 1999, 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
Number of Unexer- Value of In-The-
Shares Value cerised Options Held Money Options Held
Acquired Realized at Year-End at Year-End
on Upon Exer- Unexer- Exer- Unexer-
Exercise Exercise cisable cisable cisable cisable
M.J. Gasser -0- $-0- 80,000 50,000 $69,300 $106,250
R.L. Brown -0- $-0- 21,500 9,000 $11,550 $ 17,000
C.R. Chandler -0- $-0- 50,000 31,000 $23,100 $ 68,000
J.W. Reed -0- $-0- 10,000 16,000 $ -0- $ 21,250
W.B. Sparks, Jr. -0- $-0- 50,000 31,000 $46,200 $ 68,000
K. Svendsen -0- $-0- -0- 14,000 $ -0- $ 17,000
The following table illustrates the amount of annual pension
benefits for eligible employees upon retirement on the specified
remuneration and years of service classifications under the
Company's defined benefit pension plan:
DEFINED BENEFIT PENSION TABLE
Annual Benefit for Years of Service
Remuneration 15 20 25 30
$450,000 $28,000 $37,333 $46,667 $56,000
$350,000 $28,000 $37,333 $46,667 $56,000
$250,000 $28,000 $37,333 $46,667 $56,000
$150,000 $26,250 $35,000 $43,750 $52,500
15
The following table sets forth certain information with
respect to the benefits under the defined benefit pension plans
of the Company and Greif Bros. Riverville Mill for each of the
named executive officers:
Estimated Estimated
annual annual
Remuneration benefit benefit under
Name of individual Credited used for under supplemental
or number of years of calculation of retirement retirement
persons in group service annual benefit plan benefit agreement
M.J. Gasser 20 $583,200 $37,333 $98,747
R.L. Brown 2 $225,367 $ 3,733 $ 1,526
C.R. Chandler * 27 $219,224 $59,190 $ -0-
J.W. Reed 2 $317,173 $ 3,733 $ -0-
W.B. Sparks, Jr. 5 $437,198 $ 9,333 $16,170
K. Svendsen 1 $245,738 $ 1,867 $ -0-
* Defined benefit pension plan of Greif Bros. Riverville Mill.
The Company's pension plan is a defined benefit pension plan
with benefits based upon the average of the three consecutive
highest-paying years of salary and bonus and upon years of credited
service up to 30 years. Supplementing the pension benefits of the
Company pension plan, a supplemental retirement benefit agreement
has been entered into with a select group of management and highly
compensated employees to replace any benefits that the executive
would otherwise receive if not for limitations imposed by the
Internal Revenue Code of 1986.
The annual retirement benefits under the defined benefit
pension plan of Greif Bros. Riverville Mill, are calculated at 1%
per year based upon the average of the five highest out of the last
ten years of salary compensation.
None of the pension benefits described in this item are
subject to offset because of the receipt of Social Security
benefits or otherwise.
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 1999 all Section 16(a) filing requirements applicable
to its officers, directors and greater than 10% Stockholders were
16
complied with by such persons, except that: Michael J. Barilla and
John S. Lilak, who became officers of the Company in 1999, did not
timely file a Form 3 for stock options granted under the Company's
Incentive Stock Option Plan and held by them at the time they
became officers; Michael M. Bixby, who has been an officer of the
Company since 1980, did not timely file a Form 4 for stock
purchased prior to 1999 or a Form 4 for stock sold during 1999; and
Karl Svendsen, who has been an officer of the Company since 1998,
did not timely file a Form 4 for stock purchased during 1999.
Compensation Committee Interlocks and Insider Participation
Robert C. Macauley, Naomi C. Dempsey and Daniel J. Gunsett
served as members of the Company's Compensation Committee for the
1999 fiscal year. During fiscal year 1999, the Company retained the
law firm of Baker & Hostetler LLP to perform legal services on its
behalf, and it anticipates retaining such firm in 2000. Mr. Gunsett
is a partner of Baker & Hostetler LLP.
No executive officer of the Company served during the 1999
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 1999 as reflected in the Summary
Compensation Table set forth above.
Compensation Policy; Committee Responsibilities
The Company's compensation policy is 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.
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 pretax income thresholds.
17
The Company believes that an alignment of shareholder 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 1999, the Compensation Committee met to review
the 1999 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.
In establishing the level of Mr. Gasser's 2000 salary, the
Compensation Committee reviewed executive compensation survey
materials and other available information on compensation of other
similarly situated executives in order to establish an appropriate
salary level. 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 pretax income performance of the
Company with threshold levels.
18
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, professionalism, integrity and competence;
the Company enjoying its second highest net income in its history
in fiscal year 1999; 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.
Based upon its evaluation of the foregoing factors, and its
review of executive compensation surveys and other relevant
information, the Compensation Committee increased Mr. Gasser's base
salary to $510,090 for calendar year 2000 from $490,000 for
calendar year 1999. In addition, the Compensation Committee
determined that the Company had met the threshold for incentive
bonuses for fiscal year 1999, and that Mr. Gasser qualified for an
incentive bonus of 70% of the 100% level bonus of $245,000 for his
position and recommended that he receive a bonus of $171,378.
In September 1999, 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 25,000
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.
Robert C. Macauley, Committee Chairman
Naomi C. Dempsey
Daniel J. Gunsett
19
The following graph compares the Company's stock performance
to that of the Standard and Poor's 500 Index and its industry group
(Peer Index). This graph, in the opinion of management, would not
be free from the claim that it fails to fully and accurately
represent the true value of the Company.
[STOCK PERFORMANCE CHART]
Year GBC Stock S&P 500 Index Peer Index
1994 100 100 100
1995 117 123 105
1996 129 149 111
1997 160 194 123
1998 153 230 100
1999 140 289 135
The Peer Index is comprised of the paper containers index and paper
and forest products index as shown in the Standard & Poor's
Statistical Services Guide.
20
Certain Relationships and Related Transactions
During fiscal year 1999, 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 2000. The Company
believes that this relationship does not violate the NASDAQ
Independent Director and Audit Committee Requirements.
Loans have been made by the Company to certain employees,
including certain directors and executive officers of the Company.
The following is a summary of these loans for the fiscal year ended
October 31, 1999:
Balance at Balance at
Beginning Amount End of
Name of Debtor of Period Proceeds Collected Period
Michael M. Bixby $ 119,318 $265,000 $125,479 $ 258,839
Ronald L. Brown 508,119 -0- 16,164 491,955
Charles R. Chandler 422,382 -0- 99,867 322,515
John K. Dieker 148,231 -0- 148,231 -0-
Michael J. Gasser 159,996 -0- 19,906 140,090
C.J. Guilbeau 246,312 -0- 3,877 242,435
Sharon R. Maxwell 97,288 -0- 2,513 94,775
Philip R. Metzger 115,641 -0- 10,071 105,570
Bruce J. Miller 391,160 -0- 6,157 385,003
Mark J. Mooney 255,460 -0- 8,853 246,607
William R. Mordecai 284,291 -0- 4,633 279,658
Kent P. Snead 462,000 -0- 97,519 364,481
William B. Sparks, Jr. 385,080 -0- 19,420 365,660
Carl G. Wright 104,999 -0- 6,026 98,973
$3,700,277 $265,000 $568,716 $3,396,561
Michael M. Bixby is Vice President, Strategic Accounts,
Industrial Shipping Containers, of Greif Bros. Corporation. The
loan is secured by a first mortgage on a house and a lot in Ohio
and interest is payable at 3% per annum.
Ronald L. Brown is Vice President, Sales and Marketing,
Industrial Shipping Containers, of Greif Bros. Corporation. The
loan is secured by a first mortgage on a house and lot in Ohio
and interest is payable at 5% per annum.
Charles R. Chandler is Vice Chairman of Greif Bros.
Corporation and President of Soterra LLC. The loan is secured by
a first mortgage on a house and lot in Ohio and interest is
payable at 5% per annum.
21
John K. Dieker is Corporate Controller of Greif Bros.
Corporation. 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.
Michael J. Gasser is Chairman and Chief Executive Officer of
Greif Bros. Corporation. The loan is 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 is payable at 3% per annum.
C.J. Guilbeau is Vice President and Associate Director of
Manufacturing, Industrial Shipping Containers, of Greif
Bros.Corporation. The loan is secured by a first mortgage on a
house and lot in Ohio and interest is payable at 5% per annum.
Sharon R. Maxwell is Assistant Secretary of Greif Bros.
Corporation. The loan is secured by a first mortgage on a house
and lot in Ohio and interest is payable at 7-1/4% per annum.
Philip R. Metzger is Treasurer of Greif Bros. Corporation.
The loan is secured by a first mortgage on a house and lot in
Ohio and a portion of the interest is payable at 3% per annum and
a portion at 7-1/4% per annum.
Bruce J. Miller is Vice President, Sales and Marketing,
Specialty Operations, Containerboard & Corrugated Products, of
Greif Bros. Corporation. The loan is secured by a first mortgage
on a house and lot in Ohio and interest is payable at 5% per
annum.
Mark J. Mooney is Vice President, Packaging Services,
Industrial Shipping Containers, of Greif Bros. Corporation. The
loan is secured by a first mortgage on a house and lot in Ohio
and interest is payable at 5% per annum.
William R. Mordecai is Vice President, Sales and Marketing,
Containerboard and Paper, Containerboard & Corrugated Products,
of Greif Bros. Corporation. The loan is secured by a first
mortgage on a house and lot in Ohio and interest is payable at 5%
per annum.
Kent P. Snead is Corporate Director of Strategic Projects of
Greif Bros. Corporation. The loan is secured by a first mortgage
on a house and lot in Ohio and interest is payable at 3% per
annum.
William B. Sparks, Jr. is President and Chief Operating
Officer of Greif Bros. Corporation. The loan is 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 is payable at 3%
per annum. An additional loan is secured by a first mortgage on
a house and lot in Ohio with interest payable at 5% per annum.
22
Carl G. Wright is Vice President, Manufacturing, and General
Manager, Corrugator Operations, Containerboard & Corrugated
Products, of Greif Bros. Corporation. The loan is secured by a
first mortgage on a house and lot in West Virginia and a portion
of the interest is payable at 3% per annum and a portion at 5%
per annum.
Independent Public Accountants
Ernst & Young LLP served as the independent public
accountants of the Company for the fiscal year ended October 31,
1999. 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 have been
retained as the Company's independent public accountants for its
current fiscal year.
On February 1, 1999, the Company informed
PricewaterhouseCoopers LLP, the Company's independent public
accounting firm prior to its engagement of Ernst & Young LLP,
that an audit proposal would not be sought from that firm and
that it was being dismissed as the Company's independent public
accountants. For the two fiscal years ended October 31, 1998,
the report of PricewaterhouseCoopers LLP on the Company's
consolidated financial statements did not contain an adverse
opinion or a disclaimer of opinion, nor was any such report
qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change accountants was
approved by the Audit Committee of the Company's Board of
Directors. During the Company's two fiscal years ended October
31, 1998 and through February 1, 1999, there were no
disagreements between PricewaterhouseCoopers LLP and the Company
regarding any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure
which, if not resolved to the satisfaction of the former
accountant, would have caused it to make reference thereto in
its report on the financial statements for such years.
23
Stockholders Proposals
Proposals of Stockholders intended to be presented at the
2001 Annual Meeting of Stockholders (expected to be held in
February 2001) 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 2001 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 2001 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 2001 Annual Meeting.
Proxies Solicited by Management;
Proxies Revocable; Cost of Solicitation to be
Borne by Company
The proxy enclosed with this Proxy Statement is solicited
by and on behalf of the Management of Greif Bros. Corporation. A
person giving the proxy has the power to revoke it.
The expense for soliciting proxies for this Annual Meeting
of Stockholders is to be paid by the treasurer out of the funds
of 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 therefore other than their regular
salaries.
No Other Matters to be Submitted at the Annual Meeting
The Management knows of no matters to be presented at the
aforesaid 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.
January 27, 2000 Joseph W. Reed
Secretary
GREIF BROS. CORPORATION
CLASS B PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS
CALLED FOR FEBRUARY 28, 2000
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 27, 2000,
hereby appoints Michael J. Gasser, Charles R. Chandler, Michael H. Dempsey,
Naomi C. Dempsey, Daniel J. Gunsett, John C. Kane, Robert C. Macauley, 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 28, 2000, 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
Robert C. Macauley 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. 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, 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_______________, 2000 _____________________________
_____________________________
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.