Item 1. Business
Information on the nature, type of business and industry segments, contained on pages 22 and 23 in the Company's 1994 Annual Report to Shareholders, is incorporated in the Form 10-K Annual Report.*
Exceptions: (1) Lease expires March 31, 1997 (2) Lease expires March 30, 1995 (3) Lease expires January 31, 1998 (4) Lease expires June 30, 1995 (5) Lease expires March 31, 1999 (6) Lease expires December 31, 1994 (7) Lease expires May 31, 1995 (8) Lease expires May 31, 1998
Item 2.
Item 2. Properties (concluded)
(9) Lease expires September 7, 1997 (10) Lease expires December 31, 2000 (11) Lease expires December 31, 1996 (12) Lease expires March 31, 1998 (13) Lease expires November 30, 1995 (14) Lease expires April 30, 1997 (15) Lease expires October 31, 1995
The Company also owns in fee a substantial number of scattered timber tracts comprising approximately 319,000 acres in the states of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi and Virginia and the provinces of Nova Scotia, Ontario and Quebec in Canada.
Item 3.
Item 3. Legal Proceedings
The Company has no pending material legal proceedings.
From time to time, in the business in which the Company operates, various legal proceedings arise from either the Federal, State or Local levels involving environmental sites to which the Company has shipped directly or indirectly small amounts of toxic waste such as paint solvents, etc. The Company, to date, has been classified as a "de minimis" participant and, as such, has not been subject, in any instance, to material sanctions or sanctions greater than $100,000.
In addition, also from time to time, but infrequently, the Company has been cited for inadvertent violations of environmental regulations. Except for the following situation, none of these violations involve or are expected to involve sanctions of $100,000 or more.
Currently, the Company's only exposure which may exceed $100,000 relates to a pollution situation at its Strother Field plant in Winfield, Kansas. A feasibility study and a remedial plan proposed by the Kansas Department of Health and Environment has set forth estimated remedial costs which could expose the Company to approximately $3,000,000 in expense under the most extreme assumptions. If the Company ultimately is required to incur this expense, a significant portion would be paid over 10 years. The Kansas site involves underwater pollution and certain soil pollution was found to exist on the Company's property. The estimated costs of the remedy currently preferred by the Kansas Authority for the soil pollution on the Company's land represents approximately $2,000,000 of the estimated $3,000,000 in expense.
The final remedies have not been selected and the proposed plan is presently open for public comment. In an effort to reduce its exposure for soil pollution, the Company, believing the soil pollution has been unduly magnified and is not based upon sufficient exploratory data, has undertaken further engineering borings and analysis to attempt to define a more confined soil area subject to the proposed remediation.
Due to the uncertainty surrounding this instance, the Company believes that the range of potential liability cannot be reasonably estimated, accordingly no reserve has been recorded as of October 31, 1994.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
There have been no matters submitted to a vote of security holders.
PART II
Item 5.
Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters
The following information contained in the 1994 Annual Report to Shareholders is incorporated by reference in this Form 10-K Annual Report:*
Information concerning the principal market on which the Registrant's common stock is traded, high and low sales price of this stock for each quarterly period during the last two fiscal years and number of shareholders is contained on page 21 of the 1994 Annual Report to Shareholders.
The Company generally pays five dividends of varying amounts during its fiscal year computed on the basis described in Note 4, page 18 of the 1994 Annual Report to Shareholders. The annual dividends paid for the last three fiscal years are contained on page 15.
Item 6.
Item 6. Selected Financial Data
The 5-year selected financial data, contained on page 22 of the 1994 Annual Report to Shareholders, is incorporated in this Form 10-K Annual Report.*
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following information contained in the 1994 Annual Report to Shareholders is incorporated by reference in this Form 10-K Annual Report:*
Management's Discussion and Analysis of Liquidity and Capital Resources and Results of Operations - pages 24 and 25.
Item 8.
Item 8. Financial Statements and Supplementary Data
The following information contained in the 1994 Annual Report to Shareholders is incorporated by reference in this Form 10-K Annual Report:*
The consolidated financial statements and the report thereon of Price Waterhouse LLP dated November 30, 1994 - pages 14 through 20.
The selected quarterly financial data - page 21.
*Except as specifically indicated herein, no other data appearing in the Company's 1994 Annual Report to Shareholders is deemed to be filed as part of this Form 10-K Annual Report.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There has not been a change in the Company's principal independent auditors and there were no matters of disagreement on accounting and financial disclosure.
(A)John C. Dempsey (age 80) has been a full time officer of the Company for more than the last five years. In the current year, he retired from the Company, but retains the position of Chairman Emeritus of the Board of Directors.
(B)Allan Hull is and has been, for more than the past five years, a partner and practicing attorney with Hull and Hull, Legal Counsel, Cleveland, Ohio. See below for present positions with the Company.
(C)Robert C. Macauley (age 71) has been, for more than the past five years, the Chief Executive Officer of Virginia Fibre Corporation. He is a member of the Compensation Committee. He is also a director for W. R. Grace & Co.
(D)Charles R. Chandler (age 59) has been, for more than the past five years, the President and Chief Operating Officer of Virginia Fibre Corporation. He is a member of the Executive and Audit Committees.
(E)Paul H. DeCoster (age 61) has been, for more than the past five years, a partner in the law firm Jackson and Nash. He is a member of the Compensation and Audit Committees.
Item 10.
Item 10. Directors and Executive Officers of the Registrant (continued)
(F)J Maurice Struchen (age 74) has been, for more than the past five years, the retired former Chairman of the Board and Chief Executive Officer of Society Corporation. He is a member of the Compensation and Audit Committees. He is also a director for Society Corporation and Forest City Enterprises, Inc.
Mr. Gasser, for more than the past five years, has been a full-time officer of the Company (see below).
The following information relates to Executive Officers of the Company (elected annually):
Except as indicated below, each Executive Officer has served in his present capacity for at least five years.
Mr. Leonard W. Berkheimer was elected Vice President in 1990. During the last five years he has been General Manager of Fibre Drum Operations - East Coast Division.
Mr. Richard R. Caron was elected Vice President in 1990. During the last five years he has been General Sales Manager - National Accounts.
Mr. Dwight L. Dexter was elected Vice President in 1990. During the last five years he has been Sales Manager for National Accounts.
Mr. Richard E. Gerstner was elected Vice President in 1990. During the last five years he has served as General Manager - Steel Drum Operations - East Coast Division and continues to serve in this capacity.
Mr. James A. Hale was elected Vice President in 1990. During the last five years he has served as an industrial engineer for the East Coast Division.
Mr. James T. Robinson was elected Vice President in 1990. During the last five years he has been a Sales Manager for the East Coast Division and continues to serve in this capacity.
Mr. Harley G. Sasse was elected Vice President in 1990. During the last five years he has been General Sales Manager for the Norco and West Coast Divisions.
Mr. Robert G. Straley was elected Vice President in 1990. During the last five years he has served as General Manager for the East Coast Division.
Mr. Kenneth R. Swanson was elected Vice President in 1990. During the last five years he has been General Manager - Quality Excellence Program.
Item 10. Directors and Executive Officers of the Registrant (concluded)
Mr. John P. Conroy was elected Vice President in 1991. During 1994 Mr. Conroy was elected Secretary. Prior to 1994, he was Assistant Secretary. Mr. Conroy has been a member of the Administrative Committee since 1972.
Mr. Thomas A. Haire was elected Vice President in 1991. During the last five years he has been manager of the research facility located in Lindenhurst, New York and continues to serve in this capacity.
Mr. Anthony Lanza was elected Vice President in 1991. During the last five years he has been General Manager - Steel Drum Operations for the Seymour & Peck Division.
Mr. Gail T. Randich was elected Vice President in 1991. During the last five years he has served as Manager - Midwest Operations - Seymour & Peck Division. Mr. Randich continues to serve in this capacity.
Mr. Lawrence A. Ratcliffe was elected Vice President in 1991. During 1994, Mr. Ratcliffe became Director of Industrial Relations. Prior to 1994, he served as Assistant Director of Industrial Relations.
Mr. Jerry D. Kidd was elected Vice President in 1992. During the last five years he has served as division purchasing manager for the Norco Division. Mr. Kidd continues to serve in this capacity.
Mr. Jeffrey C. Wood was elected Vice President in 1992. Prior to that time he has served as a divisional fleet manager for the East Coast Division. Mr. Wood now performs this service in a corporate capacity. In 1994, Mr. Wood was elected to the Administrative Committee.
Mrs. Sally W. Messner was elected Vice President in 1993. During the last five years she has served as tax manager for the Corporation. She continues to serve in this capacity.
Mr. John S. Ries was elected Vice President in 1994. During the last five years he has been the Division Controller for the Norco and West Coast Divisions and continues to serve in this capacity.
For many years, the Board of Directors has voted bonuses to employees, acting within its complete discretion, based upon the progress of the Company, and upon the contributions of the particular employees to that progress, and upon individual merit, which determines, in the action of the Board, the bonus a specific employee may receive, if any.
Mr. Robert C. Macauley, Chairman and Chief Executive Officer of Virginia Fibre Corporation, on August 1, 1986, entered into an employment agreement with Virginia Fibre Corporation, principally providing for (a) the employment of Mr. Macauley as Chairman and Chief Executive Officer for a term of 10 years, (b) the agreement of Mr. Macauley to devote his time, attention, skill and effort to the performance of his duties as an officer and employee of Virginia Fibre Corporation, and (c) the fixing of minimum basic salary during such period of
Item 11.
Item 11. Executive Compensation (continued)
employment at $175,000 per year. During the 1992 fiscal year, the employment contract with Mr. Macauley was amended to increase the original term to 18 years and to increase the minimum basic salary during the remainder of the employment period to $275,000 per year.
Mr. Charles R. Chandler, President and Chief Operating Officer of Virginia Fibre Corporation, on August 1, 1986, entered into an employment agreement with Virginia Fibre Corporation, principally providing for (a) the employment of Mr. Chandler as President and Chief Operating Officer for a term of 15 years, (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 Virginia Fibre Corporation, and (c) the fixing of minimum basic salary during such period of employment at $150,000 per year. During the 1988 fiscal year the employment contract of Mr. Chandler was amended to increase the minimum basic salary during the remainder of the employment period to $275,000 per year. During the 1992 fiscal year, the employment contract with Mr. Chandler was amended to give Mr. Chandler the right to extend his employment beyond the original term for up to 5 additional years.
Effective during fiscal 1993, 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 $19,200 per year plus $500 for each audit and compensation meeting that they attend.
Supplemental to the pension benefits, Virginia Fibre Corporation has deferred compensation contracts with Robert C. Macauley and Charles R. Chandler. These contracts are designed to supplement the Company's defined benefit pension plan only if the executive retires under such pension plan at or after age 65, or if the executive becomes permanently disabled before attaining age 65. No benefit is paid to the executive under this contract if death preceeds retirement. The deferred compensation is payable to the executive or his spouse for a total period of 15 years.
Under the above Deferred Compensation Contracts, the annual amounts payable to the executive or his surviving spouse are diminished by the amounts receivable under the Virginia Fibre Corporation's defined benefit pension plan. Mr. Macauley's estimated accrued benefit from the Deferred Compensation Contract is $78,608 per year for 10 years and $52,405 per year for an additional 5 years. Mr. Chandler's estimated accrued benefit from the Deferred Compensation Contract is $184,061 per year for 10 years and $122,707 per year for an additional 5 years.
The dollar amount in the all other category is the compensation attributable to the 1991 Virginia Fibre Corporation stock option plan to certain key Virginia Fibre Corporation employees. This amount is the difference between the option price and the value attributable to the stock based upon the performance of Virginia Fibre Corporation.
In 1991, the shareholders of Virginia Fibre Corporation approved non- incentive (as defined in the Internal Revenue Code) stock options to Mr. Robert C. Macauley to purchase up to 135,000 shares of common stock of Virginia Fibre Corporation at a price of $31.26 per share. The options are exercisable for a period of 15 years from the date of the option.
Item 11. Executive Compensation (continued)
In addition to the above, Mr. Macauley and Mr. Charles R. Chandler were issued incentive stock options to purchase shares of Virginia Fibre Corporation stock. Mr. Macauley has the option to purchase up to 15,000 shares of Virginia Fibre Corporation stock at an option price, $35.00, which is not less than 110% of the fair market value of such stock at the time the option is granted.
Mr. Chandler has the option to purchase up to 22,050 shares of Virginia Fibre Corporation stock at a price of $31.26 per share.
No options were exercised during 1994, 1993 or 1992 by Mr. Macauley or Mr. Chandler.
The registrant's pension plan is a defined benefit pension plan with benefits based upon the average of the ten consecutive highest-paying years of salary compensation (excluding bonuses) 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, Virginia Fibre Corporation, are calculated at 1% per year based upon the average of the five highest out of the last ten years of salary compensation.
Item 11. Executive Compensation (continued)
None of the pension benefits described in this item are subject to offset because of the receipt of Social Security benefits or otherwise.
The annual compensation for Mr. Macauley and Mr. Chandler is reviewed annually by the compensation committee of the Board of Directors of Virginia Fibre Corporation, made up of primarily outside members of that Board and is based primarily on the performance of Virginia Fibre Corporation.
The annual compensation for Michael J. Gasser, Chairman of the Board and Chief Executive Officer of the Registrant, is reviewed annually by the Compensation Committee of the Board of Directors. Mr. Gasser's salary is based primarily on the performance of Greif Bros. Corporation.
The Compensation Committee, made up primarily of outside directors, reviews the total compensation paid to Mr. Gasser and other executive officers.
Members of the Compensation Committee are:
Paul H. DeCoster Robert C. Macauley J Maurice Struchen
Item 11. Executive Compensation (concluded)
The following graph compares the Registrant'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.
In addition to the above referenced shares, Messrs. Gasser, Hull and Baker serve as Trustees of the Greif Bros. Corporation Employees' Retirement Income Plan, which holds 61,876 shares of Class A Common Stock and 38,440 shares of Class B Common Stock. The Trustees, accordingly, share voting power in these 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.
Each class of the following equity securities are owned or controlled by management (i.e. all Directors and Officers) as of December 12, 1994:
Item 13.
Item 13. Certain Relationships and Related Transactions
The law firm of Hull & Hull received $301,990 in fees for legal services to the Corporation plus reimbursement of out-of-pocket expenses of $32,619. Mr. Allan Hull, attorney-at-law, is Vice President, General Counsel, member of the Executive Committee and a Director of Greif Bros. Corporation and a partner in the firm of Hull & Hull.
Item 13. Certain Relationships and Related Transactions (concluded)
A subsidiary of the Company annually contributes money to a world-wide relief organization. The founder and chairman of this non-profit organization is also the founder and chairman of the subsidiary company and is a director of the Registrant. During 1994 the subsidiary company contributed approximately $1,200,000 to this organization.
The information concerning the indebtedness of Officers and Directors is included in Schedule II, pages 26 through 30, in this Form 10-K Annual Report.
* Incorporated by reference from the indicated pages of the 1994 Annual Report to Shareholders.
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (concluded)
(2)Financial Statement Schedules:
Report of Independent Accountants on Financial Statement Schedules
Marketable Securities - Other Security Investments (Schedule I)
Amounts Receivable from Related Parties and Underwriters, Promoters and Employees Other Than Related Parties (Schedule II)
Consolidated Properties, Plants and Equipment (Schedule V)
Consolidated Accumulated Depreciation, Depletion and Amortization of Properties, Plants and Equipment (Schedule VI)
Consolidated Valuation and Qualifying Accounts and Reserves (Schedule VIII)
Consolidated Supplementary Income Statement Information (Schedule X)
(3)Exhibits:
No.
(13.) 1994 Annual Report to Shareholders
(21.) Subsidiaries of the Registrant
(b)Reports on Form 8-K
(1)No reports on Form 8-K have been filed during the last quarter of fiscal 1994.
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
The individual financial statements of the Registrant have been omitted since the Registrant is primarily an operating company and all subsidiaries included in the consolidated financial statements, in the aggregate, do not have minority equity interests and/or indebtedness to any person other than the Registrant or its consolidated subsidiaries in amounts which exceed 5% of total consolidated assets at October 31, 1994, excepting indebtedness incurred in the ordinary course of business which is not in default.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GREIF BROS. CORPORATION (Registrant)
Date January 18, 1995 By
John K. Dieker Assistant Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Michael J. Gasser Charles R. Chandler Chairman of the Board of Directors Member of the Board of Directors
Paul H. DeCoster Allan Hull Member of the Board of Directors Member of the Board of Directors
Robert C. Macauley J Maurice Struchen Member of the Board of Directors Member of the Board of Directors
Each of the above signatures is affixed as of January 18, 1995.
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of Greif Bros. Corporation
Our audits of the consolidated financial statements referred to in our report dated November 30, 1994 appearing on page 20 of the 1994 Annual Report to Shareholders of Greif Bros. Corporation, (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14 (a) (2) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP
Columbus, Ohio November 30, 1994
SCHEDULE II (continued)
Lloyd D. Baker is a Vice President of Greif Bros. Corporation. The loan is secured by a first mortgage on a house and lot in Delaware, Ohio and 2,000 shares of the Company's Class B Common Stock. Interest is payable at 3% per annum.
Michael M. Bixby is a Vice President of Greif Bros. Corporation. The loan is secured by a house and lot in Minnesota and interest is payable at 3% per annum.
Edward M. Bobula was a Vice President of Greif Bros. Corporation. The loan was secured by 10,000 shares of the Company's Class B Common Stock and interest was payable at 3% per annum.
Glenn D. Bramlett is a Director of Down River International, Inc. The loan is secured by 17,650 shares of the Company's Class B Common Stock and interest is payable at 10% per annum on $250,000 and 3% on the remaining $40,000.
Dwight L. Dexter is a Vice President of Greif Bros. Corporation. The loan is secured by a house and lot in Ohio and interest is payable at 3% per annum.
Kevin L. Drummond is Controller of Michigan Packaging Company. The loan is secured by a house and lot in Michigan and interest is payable at 3% per annum.
Sandra L. Fisher is an insurance administrator of Greif Bros. Corporation. The loan is secured by a house and lot in Ohio and interest is payable at 7% 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 a Vice President of Greif Bros. Corporation. The loan is secured by a house and lot in Illinois and interest is payable at 3% per annum.
James A. Hale is a Vice President of Greif Bros. Corporation. The loan is secured by a house and lot in Alabama and interest is payable at 3% per annum.
Philip R. Metzger is Assistant Controller and Assistant Treasurer of Greif Bros. Corporation. The loan is secured by a house and lot in Ohio and interest is payable at 3% per annum.
Howard S. Miller is a Director of Michigan Packaging Company. The loan is secured by 4,000 shares of the Company's Class B Common Stock and interest is payable at 7.79% per annum.
Thomas V. Parker is a plant manager of Greif Bros. Corporation. The loan was secured by a house and lot in Ohio and interest was payable at 3% per annum.
SCHEDULE II (concluded)
Gerald L. Payne is a plant manager of Greif Bros. Corporation. The loan is secured by a house and lot in Illinois and interest is payable at 3% per annum.
Todd W. Prasher is a division controller of Greif Bros. Corporation. The loan is secured by a house and lot in Ohio and interest is payable at 3% per annum.
Lawrence A. Ratcliffe is a Vice President of Greif Bros. Corporation. The loan is secured by a house and lot in Ohio and interest is payable at 3% per annum.
John Saldate is a plant manager of Greif Bros. Corporation. The loan is secured by a house and lot in California and interest is payable at 3% per annum.
William R. Shew is President of Greif Board Corporation. The loan is secured by 22,500 shares of Greif Bros. Corporation Class B common stock. Interest is payable at the prime rate, as determined, and payable semi- annually on April 30th and October 31st of each year.
William B. Sparks is Chairman of the Board of Down River International, Inc. The loan is secured by 3,124 shares of the Company's Class B Common Stock and 500 shares of the Company's Class A Common Stock. Interest is payable at 3% per annum.
Ralph V. Stoner, Jr. is President of Michigan Packaging Company. The loan is secured by a house and lot in North Carolina and interest is payable at 3% per annum.
J. William Weller was Assistant Tax Manager of Greif Bros. Corporation. The loan was secured by a house and lot in Ohio and interest was payable at 3% per annum.
Jeffrey C. Wood is a Vice President of Greif Bros. Corporation. The loan is secured by a house and lot in Ohio and interest is payable at 3% per annum.