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.:
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(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 22, 1999,
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 22, 1999, 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 25, 1999 Joseph W. Reed
Secretary
1
GREIF BROS. CORPORATION
425 WINTER ROAD
DELAWARE, OHIO 43015
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 22, 1999
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 22, 1999 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 25, 1999.
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 22, 1999, 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 12,001,793 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, Robert C.
Macauley, David J. Olderman, William B. Sparks, Jr. and J
Maurice Struchen, 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, 47, 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 and Nominating Committees. He is also a director
for Bob Evans Farms, Inc., a restaurant and food products
company.
CHARLES R. CHANDLER, 63, has been a director since 1987. He
became Vice Chairman of the Company in 1996. Prior to 1996,
and for more than five years, Mr. Chandler had been the
President and Chief Operating Officer of Virginia Fibre
Corporation (now Greif Bros. Corporation of Virginia), a
subsidiary of the Company. He is a member of the Executive
Committee.
MICHAEL H. DEMPSEY, 42, 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, 82, has been a director since 1995. She is
an investor and member of the Compensation, Stock Option and
Nominating Committees. Mrs. Dempsey is the mother of Michael
H. Dempsey.
DANIEL J. GUNSETT, 50, 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, Stock Option and Nominating Committees.
3
ROBERT C. MACAULEY, 75, 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 (now Greif Bros. Corporation of
Virginia), a subsidiary of the Company. He is a member of the
Compensation Committee.
DAVID J. OLDERMAN, 63, 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 First Financial
Services, a financial services company.
WILLIAM B. SPARKS, JR., 57, 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.
J MAURICE STRUCHEN, 78, has been a director since 1993. He is
a retired former Chairman and Chief Executive Officer of
Society Corporation (now Key Corporation), a banking
corporation. He is a member of the Compensation, Stock Option
and Nominating Committees. He is also a director of Forest
City Enterprises, Inc., a land development company.
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 1998 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 1998 fiscal year.
The Board has established an Executive Committee, a
Compensation Committee, an Audit Committee, a Stock Option
Committee and a Nominating Committee.
The Executive Committee, whose current members are
Messrs. Gasser, Chandler, Dempsey and Sparks, has the same
authority, subject to certain limitations, as the Board during
intervals between meetings of the Board. The Executive
Committee held eight meetings during the 1998 fiscal year.
The Compensation Committee, whose current members are Mrs.
Dempsey and Messrs. Gunsett, Macauley and Struchen, 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 five meetings during the 1998
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 auditing controls and internal
auditing methods and procedures of the Company. The Audit
Committee held three meetings during the 1998 fiscal year. The
Stock Option Committee, whose current members are Mrs. Dempsey
and Messrs. Gunsett, Olderman and Struchen, 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 1998 fiscal year.
The Nominating Committee, whose current members are Mrs.
Dempsey and Messrs. Gasser, Gunsett and Struchen, is
responsible for nominating members to the Board and
committees. The Nominating Committee held one meeting to
consider and nominate the nine persons described in this Proxy
Statement.
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 2000 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 2000 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 2000 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 12, 1999, 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, Trustee Class B See (1) below 5,911,858 49.26%
782 W. Orange Road
Delaware, Ohio
Naomi C. Dempsey, Trustee Class B See (2) below 1,663,040 13.86%
Robert C. Macauley Class B Record and 1,150,000 9.58%
161 Cherry Street Beneficially
New Canaan, Conneticut
(1) Held by Naomi C. Dempsey as trustee of the Naomi C.
Dempsey Living Trust (5,431,858 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 12, 1999, 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 11,500 *
Charles R. Chandler 33,400 *
Michael H. Dempsey 6,000 *
Naomi C. Dempsey 29,840 (2) *
Michael J. Gasser 55,000 *
Daniel J. Gunsett 6,000 *
Robert C. Macauley -0- *
David J. Olderman 18,000 *
Joseph W. Reed -0- *
William B. Sparks, Jr. 34,086 *
J Maurice Struchen 6,000 *
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) 2.90%
Naomi C. Dempsey 7,574,898 (4) 63.12%
Michael J. Gasser 11,798 *
Daniel J. Gunsett 600 *
Robert C. Macauley 1,150,000 9.58%
David J. Olderman 34,674 *
Joseph W. Reed -0- *
William B. Sparks, Jr. 6,248 *
J Maurice Struchen 7,400 *
* 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 12, 1999, 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 - 11,500;
Mr. Chandler - 33,000; Mr. Dempsey - 6,000; Mrs. Dempsey - 6,000;
Mr. Gasser - 55,000; Mr. Gunsett - 6,000; Mr. Olderman - 6,000;
Mr. Sparks, Jr. - 33,000; and Mr. Struchen - 6,000.
(2) Held by Naomi C. Dempsey as trustee of the John C. Dempsey Trust (23,840
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 (145,000
shares) and Michael H. Dempsey as President of All Life Foundation
(73,500 shares).
(4) Held by Naomi C. Dempsey as trustee of the Naomi C. Dempsey Living Trust
(5,431,858 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 (30 persons) as of January 12, 1999:
Title of Amount Percent
class of stock beneficially owned of class
Class A Common Stock (1) 292,354 2.60%
Class B Common Stock 9,323,000 77.68%
(1) Shares represent the number of shares beneficially owned, directly or
indirectly, by each director and executive officer as of January 12,
1999. The number includes shares subject to currently exercisable
options or options exercisable within 60 days of January 12, 1999, 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 - 251,678.
9
Executive Compensation
The following table sets forth the compensation for the
three years ended October 31, 1998 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 1998 $463,338 $182,595 $ 3,440 25,000
Chairman
Chief Executive 1997 $415,524 $112,000 $ 3,043 25,000
Officer
1996 $314,658 $160,000 $ 2,951 25,000
Ronald L. Brown 1998 $189,996 $ 59,052 $ 940 5,000
Vice President,
Sales and Marketing 1997 $146,947 $ 45,000 $ 15,000 10,000
1996 $129,996 $ 44,688 $ 7,500 6,500
Charles R. Chandler 1998 $452,018 $176,769 $300,458 $ 54,903 15,000
Director
Vice Chairman 1997 $434,966 $ 80,864 $277,431 $ 2,994 17,000
1996 $424,356 $ 70,164 $256,169 $251,745 23,000
Joseph W. Reed 1998 $226,827 $ 88,653 $ 940 11,000
Chief Financial
Officer and *1997 $ 45,833 $ 5,000 $ 196 10,000
Secretary
William B. Sparks, Jr.1998 $345,004 $135,977 $ 2,690 15,000
Director
President and Chief 1997 $311,992 $ 84,000 $ 3,305 17,000
Operating Officer
1996 $257,886 $120,000 $ 9,994 13,000
* 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.
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 2001; (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 1998, 12,000 options were granted to
outside directors with option prices of $36.53 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, Greif Bros. Corporation of Virginia
has a deferred compensation contract with Charles R.Chandler. This contract
is designed to supplement the Company'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. Corporation
of Virginia. Mr. Chandler's estimated accrued benefit from the Deferred
Compensation Contract is $253,776 per year for 10 years and $169,184 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
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
for 1998 and 1997 relates to the reimbursement for moving expenses, Company
match for the 401(k) plan and premiums paid for life insurance. In 1996,
the dollar amount in the all other category is compensation attributable to the
1991 Greif Bros. Corporation of Virginia stock option plan to certain key
Greif Bros. Corporation of Virginia employees. This amount is the difference
between the option price and the value attributable to the stock based upon
the performance of Greif Bros. Corporation of Virginia for years prior to
1996. All outstanding options were redeemed by Greif Bros. Corporation of
Virginia during 1996 and the amount represents the difference between the
redemption price and the cumulative compensation accrued as of October 31,
1995.
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. In addition, there are contributions made by Down River
International, Inc., a former subsidiary company, to a Profit Sharing Trust
prior to 1997.
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, 1998, to each of the named executive officers:
OPTION GRANTS TABLE
Potential Net Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term
% 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% $31.75 9/2/08 $499,185 $1,265,033
R.L. Brown 5,000 2% $31.75 9/2/08 $ 99,837 $ 253,007
C.R. Chandler 15,000 7% $31.75 9/2/08 $299,511 $ 759,020
J.W. Reed 11,000 5% $31.75 9/2/08 $219,641 $ 556,615
W.B. Sparks, Jr.15,000 7% $31.75 9/2/08 $299,511 $ 759,020
(1) The options are exercisable on September 2, 2000.
(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, 1998, 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 cised 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- 55,000 50,000 $233,675 $ 56,250
R.L. Brown -0- $ -0- 11,500 15,000 $ 44,488 $ 21,250
C.R. Chandler -0- $ -0- 33,000 32,000 $112,725 $ 37,750
J.W. Reed -0- $ -0- -0- 21,000 $ -0- $ 22,750
W.B. Sparks, Jr. -0- $ -0- 33,000 32,000 $147,075 $ 37,750
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 registrant'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 registrant and its
subsidiary, Greif Bros. Corporation of Virginia, for each of the named
executive officers:
Name of individual Credited Renumeration used Estimated annual
or number of years of for calculation of benefit under
persons in group service annual benefit retirement plan
M.J. Gasser 19 $549,372 $35,467
R.L. Brown 1 $204,997 $ 1,867
C.R. Chandler * 26 $219,224 $56,998
J.W. Reed 1 $315,480 $ 1,867
W.B. Sparks, Jr. 4 $418,286 $ 7,467
* Defined benefit pension plan of Greif Bros. Corporation of Virginia.
The registrant'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.
The annual retirement benefits under the defined benefit pension plan of
the registrant's subsidiary, Greif Bros. Corporation of Virginia, 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 1998 all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
stockholders were complied with by such persons, except that Bruce J. Miller,
who became an officer of the Company in 1998, did not timely file a Form 3 for
stock options granted under the Company's Incentive Stock Option Plan.
16
Compensation Committee Interlocks and Insider Participation
Robert C. Macauley, Naomi C. Dempsey, Daniel J. Gunsett and J Maurice
Struchen served as members of the Company's Compensation Committee for the 1998
fiscal year. During fiscal year 1998, the Company retained the law firm of Baker
& Hostetler LLP to perform legal services on its behalf, and it anticipates
retaining such firm in 1999. Mr. Gunsett is a partner of Baker & Hostetler LLP.
No executive officer of the Company served during the 1998 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 1998
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.
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.
17
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 1998, the Compensation Committee met to review the 1998
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 1999 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 fourth
highest net income in its history in fiscal year 1998 (second highest year
for net income if the restructuring charge is added back); his guidence of the
Company through two major business transactions favorable to the Company:
acquisition of Sonoco Product Company's Industrial Container Division and
establishment of a joint venture named CorrChoice Inc. with Ohio Packaging
Corporation in the containerboard business, which are expected to contribute
significantly to the profitablility of the Company; 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 $490,000 for calendar year
1999 from $470,000 for calendar year 1998. In addition, the Compensation
Committee determined that the Company had met the threshold for incentive
bonuses for fiscal year 1998, and that Mr. Gasser qualified for an incentive
bonus of 77.7% of the 100% level bonus of $235,000 for his position and
recommended that he receive a bonus of $182,595.
In September 1998, 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
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
J Maurice Struchen
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
1993 100 100 100
1994 114 101 123
1995 132 124 129
1996 146 151 136
1997 180 196 151
1998 172 232 124
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 1998, 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, Stock Option
and Nominating Committees and a director of the Company. The Company
anticipates retaining Baker & Hostetler LLP in 1999.
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,
1998:
Balance at Balance at
Beginning Amount End of
Name of Debtor of Period Proceeds Collected Period
Lloyd D. Baker $ 68,488 $ -0- $ 25,642 $ 42,846
Michael M. Bixby 203,000 119,318 203,000 119,318
Ronald L. Brown 521,250 -0- 13,131 508,119
Charles R. Chandler 487,382 -0- 65,000 422,382
John K. Dieker 152,034 -0- 3,803 148,231
Michael J. Gasser 179,697 -0- 19,701 159,996
C.J. Guilbeau 474,537 -0- 228,225 246,312
Sharon R. Maxwell 99,626 -0- 2,338 97,288
Philip R. Metzger 125,276 -0- 9,635 115,641
Bruce J. Miller 416,264 -0- 25,104 391,160
Mark J. Mooney 258,840 -0- 3,380 255,460
William R. Mordecai 288,660 -0- 4,369 284,291
Jerome B. Nolder, Jr. 76,000 537,537 8,903 604,634
Kent P. Snead 462,000 -0- -0- 462,000
William B. Sparks, Jr. 394,040 -0- 8,960 385,080
$4,207,094 $656,855 $621,191 $4,242,758
Lloyd D. Baker is President of Soterra, Incorporated. The loans are secured
by 2,000 shares of the Company's Class Stock and by a first mortgage on a house
in Ohio. Interest is payable at 3% per annum.
Michael M. Bixby is Vice President, Strategic Accounts, 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, 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.
21
Charles R. Chandler is Vice Chairman 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.
John K. Dieker is Corporate Controller 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.
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 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, Corrugated Products
and Services, 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, 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, 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.
Jerome B. Nolder, Jr. is Vice President, Manufacturing, Corrugated Products
and Services, of Greif Bros. Corporation. The loan is secured by 200 shares
of the Company's Class B Common Stock and the assignment of his company-
sponsored life insurance. Interest is payable at 7-1/4% 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
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.
Independent Public Accountants
PricewaterhouseCoopers LLP served as the independent public accountants of
the Company for the fiscal year ended October 31, 1998. It is currently
expected that a representative of PricewaterhouseCoopers 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.
The Audit Committee has not recommended an independent public accountant to
the Board of Directors to be selected as the Company's independent accountants
for the current fiscal year. Such recommendation and subsequent selection
will be done based upon the results of audit proposals requested and received by
the Company for the fiscal year ending October 31, 1999. At this time, it has
not been determined which independent accounting firms, including
PricewaterhouseCoopers LLP, will be requested to submit an audit proposal to
the Company.
23
Stockholders Proposals
Proposals to Stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders (expected to be held in February 2000) 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 2000
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 date of
this Proxy Statement or the persons named in the form of proxy for the 2000
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 2000 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 25, 1999 Joseph W. Reed
Secretary
GREIF BROS. CORPORATION
CLASS B PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS
CALLED FOR FEBRUARY 22, 1999
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 25, 1999,
hereby appoints Michael J. Gasser, Charles R. Chandler, Michael H. Dempsey,
Naomi C. Dempsey, Daniel J. Gunsett, Robert C. Macauley, David J. Olderman,
William B. Sparks, Jr. and J Maurice Struchen, 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 22, 1999, 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 Robert C. Macauley
David J. Olderman William B. Sparks, Jr. J Maurice Struchen
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 , 1999
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.