<PAGE>
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
Bemis Company, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Bemis Company, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
BEMIS COMPANY, INC.
222 S. NINTH STREET,
SUITE 2300
MINNEAPOLIS, MINNESOTA
55402
TELEPHONE: (612)
376-3000
March 21, 1994
Dear Stockholders:
The Annual Meeting of Bemis Company will be held in the Main Ballroom at the
Minneapolis Club, 729 Second Avenue South, Minneapolis, Minnesota on Thursday,
May 5, 1994, at 9:00 a.m. You are cordially invited to attend. Although the
meeting itself is usually brief, there will be a report on 1993 and comments on
the upcoming year. There is also ample opportunity both before and after the
meeting to meet and talk informally with the directors and officers of the
Company. We hope you are able to attend. Whether or not you can make the
meeting, please take the time to vote your proxy.
On behalf of the Board of Directors and all Bemis employees, thank you for
your continued support of, and confidence in, the Bemis Company.
Sincerely,
John H. Roe
President and Chief Executive Officer
<PAGE>
BEMIS COMPANY, INC.
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD MAY 5, 1994
The Annual Meeting of Stockholders of Bemis Company, Inc. will be held in
the Main Ballroom, Minneapolis Club, 729 Second Avenue South, Minneapolis,
Minnesota, on Thursday, May 5, 1994, at 9:00 a.m., Central Daylight Savings
Time, for the following purposes:
1. To elect four directors for a term of three years.
2. To vote upon the proposed 1994 Stock Incentive Plan.
3. To vote upon ratification of the appointment of Price Waterhouse as
independent auditors of the Company.
4. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business March 18, 1994 will be
entitled to receive notice of and to vote at the meeting.
By Order of the Board of Directors
Scott W. Johnson, Secretary
March 21, 1994
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY
<PAGE>
BEMIS COMPANY, INC.
222 SOUTH NINTH STREET
SUITE 2300
MINNEAPOLIS, MINNESOTA 55402
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS -- MAY 5, 1994
SOLICITATION, EXECUTION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Bemis Company,
Inc. (the "Company") in connection with the Annual Meeting of Stockholders to be
held on Thursday, May 5, 1994. The shares represented by all properly executed
proxies received by the Company prior to the meeting and not revoked will be
voted in accordance with the instructions of the stockholder. A proxy may be
revoked by the person executing it at any time before it is voted by giving
written notice of revocation to the Secretary of the Company.
All costs of soliciting proxies will be borne by the Company, including
reimbursement of banks, brokerage firms, custodians, nominees and fiduciaries
for reasonable expenses incurred by them. Proxies may be solicited personally,
by mail, by telephone or by telegraph by directors, officers or other regular
employees of the Company without remuneration other than regular compensation.
The mailing address of the principal executive office of the Company is 222
South Ninth Street, Suite 2300, Minneapolis, Minnesota 55402. This proxy
statement and the form of proxy which is enclosed are being mailed to
stockholders commencing on or about March 21, 1994.
RECORD DATE, OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
Only stockholders of record at the close of business March 18, 1994 will be
entitled to vote at the meeting. On March 10, 1994, the Company had outstanding
51,211,326 shares of Common Stock. Each share entitles the stockholder of record
to one vote. In connection with the election of directors, stockholders may
exercise cumulative voting.
As set forth below, at the meeting stockholders will elect a class
consisting of four directors for a three-year term expiring in 1997. As provided
by Missouri law and the Company's By-Laws, under cumulative voting each
stockholder has the right in the election to cast as many votes as equal the
number of voting shares held, multiplied by the number of directors to be
elected at the meeting. A stockholder may cast all his or her votes for one
nominee in the class or distribute them among as many nominees in the class as
he or she chooses. The four nominees having the highest number of votes will be
elected as directors to serve a three-year term expiring in 1997.
Unless otherwise specified in the proxy, a proxy solicited by the Board of
Directors will be voted for the four nominees set forth herein, or votes will be
cumulated for any or all of the nominees, in such manner as the proxies, in
their discretion may determine. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to a vote of the stockholders. If a broker indicates on the proxy card
that it does not have discretionary authority to vote certain shares on a
particular matter, those shares will not be considered as voted for the purpose
of determining the approval of such matter.
1
<PAGE>
OWNERSHIP OF THE COMPANY'S SECURITIES
The only person known to the Company to beneficially own as of February 7,
1994 more than 5% of the outstanding Common Stock of the Company is set forth in
the following table. First Trust National Association, the Trustee of the Plan,
has shared voting and investment power as to all shares.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ------------------------------------------------- ------------------- -----------
<S> <C> <C>
Bemis Investment Incentive Plan 2,791,611 5.264%
222 South Ninth Street, Suite 2300
Minneapolis, MN 55402
</TABLE>
Set forth below is certain information regarding the beneficial ownership of
Common Stock of the Company as of February 7, 1994 by each director, each
executive officer of the Company named in the Summary Compensation Table on page
6 of this proxy statement and all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP(1)(2) OF CLASS
- ---------------------------------------- --------------- ---------
<S> <C> <C>
Edward W. Asplin 196,291 *
Winslow H. Buxton 6,000 *
E. Thomas Binger 52,064 *
Howard J. Curler 713,138(3) 1.3%
Jeffrey H. Curler 551,307(4) 1.0%
Benjamin R. Field 152,282 *
Robert A. Greenkorn 40,000 *
Scott W. Johnson 83,458 *
Loring W. Knoblauch 5,100 *
Edwin S. McBride 212,941 *
Nancy Parsons McDonald 344,133(5) *
Robert F. Mlnarik 235,188 *
Edward N. Perry 16,270 *
John H. Roe 1,339,118(6) 2.5%
Winston R. Wallin 42,000(7) *
Robert F. Zicarelli 40,000 *
All Directors and Executive Officers
as a Group (18 persons) 4,197,847 7.9%
<FN>
- ------------------------
(1) Except as otherwise indicated in the notes below, the listed beneficial
owner has sole voting and investment power with respect to such shares.
(2) Includes options to purchase shares of the Common Stock of the Company for
the persons indicated, as follows: Winslow H. Buxton (5,000 shares); Jeffrey
H. Curler (100,000 shares); Benjamin R. Field (30,000 shares); Scott W.
Johnson (40,000 shares); Loring W. Knoblauch (5,000 shares); Robert F.
Mlnarik(100,000 shares); John H. Roe (340,000 shares); Winston R. Wallin
(20,000 shares); and all directors and executive officers as a group
(700,000 shares). Also includes grants under the 1984 Bemis Stock Award Plan
made subject to restrictions which have not as yet lapsed as follows:
Jeffrey H. Curler (88,000 shares); Benjamin R. Field (30,000 shares); Scott
W. Johnson (20,000 shares); Robert F. Mlnarik
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
<FN>
(88,000 shares); John H. Roe (80,000 shares); and all directors and
executive officers as a group (366,000 shares). Also includes shares held by
the Trustee of the Bemis Investment Incentive Plan as follows: Howard J.
Curler (18,775 shares); Jeffrey H. Curler (9,562 shares); Benjamin R. Field
(9,063 shares); Scott W. Johnson (812 shares); Edwin S. McBride (15,320
shares); Robert F. Mlnarik (4,517 shares); John H. Roe (12,342 shares); and
all directors and executive officers as a group (79,142 shares).
(3) Includes 236,384 shares owned by Mr. Curler's wife in which he disclaims any
beneficial interest.
(4) Includes 115,600 shares in a trust of which Mr. Curler is a co-trustee.
(5) Includes 31,800 shares in a trust for Mrs. McDonald's children in which she
disclaims any beneficial interest and 172,911 shares in trusts in which she
has a beneficial interest.
(6) Includes 320,000 shares in a trust of which Mr. Roe is co-trustee, 88,178
shares owned by Mr. Roe's wife and 80,000 shares in a trust of which Mr.
Roe's wife is a co-trustee in which he disclaims any beneficial interest. It
does not include 7,092 shares in trusts for Mr. Roe's children in which he
disclaims any beneficial interest.
(7) Includes 8,000 shares in a Foundation of which Mr. Wallin is a co-trustee.
(*) Less than one percent (1%) of outstanding Common Stock of the Company.
</TABLE>
INFORMATION WITH RESPECT TO DIRECTORS
Directors are divided into three classes elected on a staggered basis for
terms of three years. The Company has nominated four persons to the class of
directors to be elected at the meeting. Persons elected will hold office for a
three-year term expiring in 1997 and will serve until their successors have been
duly elected and qualified.
DIRECTOR NOMINEES FOR TERMS EXPIRING IN 1997
HOWARD J. CURLER, 68 Director Since 1972
Mr. Curler is retired Chairman of the Company, a position he held from 1987 to
1992. From 1978 to 1990 he was also Chief Executive Officer. He is a member of
the Executive and Finance Committee and the Nominating Committee. Mr. Curler is
the father of Jeffrey H. Curler.
ROBERT A. GREENKORN, 65 Director Since 1984
Professor Greenkorn is Vice President for Research and Dean of the Graduate
School at Purdue University, positions he has held for more than the last five
years. He is a member of the Audit Committee, the Community Relations Committee
and the Nominating Committee.
ROBERT F. MLNARIK, 53 Director Since 1992
Mr. Mlnarik is Executive Vice President of the Company, a position he has held
since 1991. Since 1987 he has also served as President and Chief Executive
Officer of Morgan Adhesive Company, a subsidiary of the Company.
WINSLOW H. BUXTON, 54 Director Since 1993
Mr. Buxton is Chairman, President and Chief Executive Officer of Pentair, Inc. a
diversified manufacturing company whose principal products are in General
Industrial Equipment, Specialty Products and Paper Products. He has been
President and CEO since 1992 and Chairman since 1993. He was Chief Operating
Officer from 1990 to 1992 and Vice President--Paper Group from 1989 to 1990. He
has been a Director of Pentair since 1990. He is a member of the Compensation
and Nominating Committees.
3
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 1995
NANCY PARSONS McDONALD, 55 Director Since 1982
Mrs. McDonald is a director of Hillcrest Corporation, a position she has held
for more than the last five years. She is chair of the Community Relations
Committee and a member of the Audit Committee and the Nominating Committee.
ROBERT F. ZICARELLI, 70 Director Since 1984
Mr. Zicarelli retired in 1990 as Chairman and Chief Executive Officer of Norwest
Venture Capital Management, Inc., the management company for Norwest Growth
Fund, Inc. and certain of its venture affiliates. These companies are
subsidiaries of Norwest Corporation and affiliates of Norwest Bank Minnesota,
N.A. Mr. Zicarelli held this position for more than five years prior to his
retirement. He is also a director of National Computer Systems, Inc. Mr.
Zicarelli is Chairman of the Compensation Committee and a member of the
Executive and Finance Committee and the Nominating Committee.
WINSTON R. WALLIN, 68 Director Since 1986
Mr. Wallin is Chairman of the Board of Medtronic, Inc., a manufacturer of
cardiac pacemakers and other medical devices. He has held that position since
1986. Mr. Wallin served Medtronic as President from 1985 to 1989 and as Chief
Executive Officer from 1985 to 1991. He is also a director of SUPERVALU INC. and
Cargill, Inc. He is a member of the Compensation Committee, the Executive and
Finance Committee and the Nominating Committee.
JEFFREY H. CURLER, 43 Director Since 1992
Mr. Curler is Executive Vice President of the Company, a position he has held
since 1991. Since 1982 he has also served as President of Curwood Inc., a
subsidiary of the Company. Mr. Curler is the son of Howard J. Curler.
DIRECTORS WHOSE TERMS EXPIRE IN 1996
JOHN H. ROE, 54 Director Since 1978
Mr. Roe is President and Chief Executive Officer of the Company, a position he
has held since 1990. He was President and Chief Operating Officer from 1987 to
1990 and Executive Vice President from 1982 to 1987. He is also a director of
First Trust Company, Inc. He is Chairman of the Executive and Finance Committee.
EDWIN S. McBRIDE, 68 Director Since 1980
Mr. McBride retired as Executive Vice President of the Company in 1991. He had
held that position since 1987. He is a member of the Nominating Committee and
the Community Relations Committee.
EDWARD N. PERRY, 47 Director Since 1992
Mr. Perry has been engaged in the private practice of law in the Boston,
Massachusetts area since 1982. He has been a partner at Perkins, Smith & Cohen
since 1990. He is a member of the Audit Committee and the Nominating Committee.
LORING W. KNOBLAUCH, 52 Director Since 1993
Mr. Knoblauch is Vice President, Business Development International of
Honeywell, Inc., a provider of control components, products, systems and
services. He has held this position since 1992. From 1986 to 1992 he was
President of Honeywell Asia Pacific based in Hong Kong. He is a member of the
Compensation Committee and the Nominating Committee.
4
<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative total return to holders of the
Common Stock of the Company for the last five years with the cumulative total
return of the Standard & Poor's 500 Stock Index and an index of a group of peer
companies against whom the Company competes and against whose performance the
Company is often compared by financial analysts assuming the investment of $100
in each on January 1, 1989 and the reinvestment of all dividends when and as
paid. The total return to stockholders of those companies comprising the peer
group are weighted according to their stock market capitalization. The companies
in the peer group are: Avery Dennison Corporation; Ball Corporation; Crown Cork
& Seal Company, Inc.; James River Corporation; Sealed Air Corporation; Sealright
Co. Inc.; Sonoco Products Company; Stone Container Corporation; Union Camp
Corporation. Engraph Inc. was included in the 1992 performance graph but has
been excluded from the 1993 performance graph because it was acquired by Sonoco
Products Company during 1993. The Company is not included in the peer group.
BEMIS COMPANY, INC.
RELATIVE MARKET PERFORMANCE
TOTAL RETURN 1989 - 1993
<TABLE>
<CAPTION>
1-1 12-31 12-31 12-31 12-31 12-31
1989 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
Bemis Company 100 151 133 188 235 236
S&P 500 100 132 127 166 179 197
Peer Group 100 110 97 128 137 138
</TABLE>
5
<PAGE>
EXECUTIVE COMPENSATION
The following table shows compensation paid to the Company's Chief Executive
Officer and each of its four most highly compensated executive officers during
the last three years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
-----------------------
ANNUAL COMPENSATION RESTRICTED ALL OTHER
NAME AND ---------------------- STOCK STOCK COMPENSA-
PRINCIPAL POSITION YEAR SALARY BONUS(1) AWARDS(2) OPTIONS TION(3)
- ------------------------------------------ --------- ---------- ---------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C> <C>
John H. Roe 1993 $ 400,000 $ 187,200 -- -- $ 7,500
Chief Executive Officer 1992 350,000 247,100 -- -- 7,300
1991 350,000 218,500 -- -- 7,300
Robert F. Mlnarik 1993 250,000 97,500 -- -- 7,300
Executive Vice President 1992 200,000 117,700 -- -- 6,400
1991 200,000 104,000 -- -- 6,100
Jeffrey H. Curler 1993 250,000 97,500 -- -- 4,800
Executive Vice President 1992 200,000 117,700 -- -- 4,300
1991 200,000 104,000 -- -- 4,200
Scott W. Johnson 1993 195,000 65,400 -- -- 4,000
Senior Vice President 1992 165,000 83,500 -- -- 3,700
1991 165,000 73,800 -- -- 3,600
Benjamin R. Field 1993 195,000 65,400 -- -- 6,600
Senior Vice President 1992 160,000 75,300 -- -- 4,100
1991 160,000 66,600 $ 189,400 30,000 3,900
<FN>
- ------------------------
(1) Includes for the years indicated performance bonuses earned pursuant to the
Bemis Executive Incentive Plan. See "Report of Compensation Committee"
herein.
(2) Restricted Stock Award values are calculated by multiplying the number of
shares awarded times the closing market price on the date of the award.
Grantees receive the stock upon the expiration of the restriction (usually
six years). During the restricted period grantees receive payments equal to
the dividends which would have been paid if the underlying stock had
actually been distributed. As of December 31, 1993, the five named executive
officers held the following number of restricted shares of Common Stock of
the Company which at a closing market price of $23.625 per share had the
following total market value: John H. Roe 80,000 shares, $1,890,000; Robert
F. Mlnarik 88,000 shares, $2,079,000; Jeffrey H. Curler 88,000 shares,
$2,079,000; Scott W. Johnson 20,000 shares, $472,500; Benjamin R. Field
30,000 shares, $708,750. As of the same date, 99 grantees (including the
above five individuals) held 1,124,316 restricted shares with a total market
value of $26,561,965.
(3) All other compensation for all named executive officers consists of life
insurance premiums paid by the Company and the Company match on the Bemis
Investment Incentive Plan (401K) in the following respective amounts for
1993: John H. Roe $4,032 and $3,422; Robert F. Mlnarik $3,888 and $3,398;
Jeffrey H. Curler $1,377 and $3,398; Scott W. Johnson $806 and $3,199;
Benjamin R. Field $4,658 and $1,892.
</TABLE>
6
<PAGE>
The following table shows the total number of unexercised options and the
aggregate dollar value of in-the-money unexercised options held by the executive
officers named in the Summary Compensation Table as of December 31, 1993. No
options were granted to nor exercised by the named executive officers during
1993.
AGGREGATE YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF ALL UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS(1)
----------------------------- ---------------------------
PRESENTLY NOT PRESENTLY PRESENTLY NOT PRESENTLY
NAME EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- ------------------------- ------------ --------------- ------------ -------------
<S> <C> <C> <C> <C>
John H. Roe 340,000 -- $ 3,416,250 --
Robert F. Mlnarik 100,000 -- 868,750 --
Jeffrey H. Curler 100,000 -- 868,750 --
Scott W. Johnson 40,000 -- 347,500 --
Benjamin R. Field 15,000 15,000 73,594 $ 73,594
<FN>
- ------------------------
(1) Value of unexercised options is calculated by determining the difference
between the fair market value of the shares underlying the options at
December 31, 1993 ($23.625 per share) and the exercise price of the options.
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") of the Board of Directors is
responsible for establishing compensation policies for all executive officers,
including the five most highly compensated officers named in the accompanying
tables. The Committee establishes the total compensation for the executive
officers in light of these policies. The Committee is composed entirely of
non-employee directors.
The following report describes the Company's officer compensation program
and discusses the factors considered by the Committee in determining the
Compensation of the Company's Chief Executive Officer and the other executive
officers for 1993.
PHILOSOPHY
The Company seeks to attract, retain and motivate a top quality,
experienced, performance-oriented senior management team. The officer
compensation program is designed to help in meeting this important objective.
The guiding principles of the Company's officer compensation program are:
- Create a strong and direct link between officer compensation and the
Company's financial and stock performance.
- Provide a fair and competitive base salary, with a bonus opportunity tied
to the Company's annual financial performance. Annual bonus awards vary
significantly in relation to changes in financial performance and
compensate the officers, as a group, with premium pay for superior
financial results, and below average pay for below average financial
results. Bonus awards, at target levels of performance, are competitive.
- Create a significant and meaningful long term incentive tied to the
Company's long term growth, financial success, and return to shareholders.
Incentives will vest over a sufficiently long period of time to retain
management and encourage long range planning.
7
<PAGE>
The Committee reviews the compensation of executive officers annually,
although adjustments to salaries or incentive compensation usually occur less
frequently. The Committee uses an outside compensation consultant and has
reviewed competitive survey data on executive pay levels and practices.
PROGRAM COMPONENTS
The officer compensation program is composed of base salary, annual bonus
(the Bemis Executive Incentive Plan) and long term stock based incentive
compensation. The Committee uses the services of the firm of Towers Perrin as
consultants on executive compensation. Towers Perrin prepared competitive
information on executive base salaries, bonuses and long term compensation
programs which the Committee used in evaluating and comparing the Company's
officer compensation program. The comparison companies were not the same as the
peer index companies used in the performance graph on page 5. The Committee felt
that the great discrepancy in sales volume among the peer index companies
($200,000,000 to $5,200,000,000 in 1992) made an executive compensation
comparison using those companies inappropriate.
Base salaries are targeted at the mid-range of competitive practice for
comparable positions at comparably-sized companies. Salaries paid to officers
during 1993 were consistent with such targets. Salaries for officers are
reviewed annually although adjustments to salaries generally occur every two
years. Adjustments are based on individual performance, changes in duties and
responsibilities, promotions and general movement in executive salaries.
Annual bonus compensation opportunities for the officer group are also set
at the mid-range of competitive practice as discussed above. Individual bonuses
at expected levels of performance range from 40% to 60% of salary for members of
the officer group. The formula is designed to provide incentives for continuous
improvements in the Company's reported earnings per share by utilizing a
multiplier incentive for superior performance and conversely a multiplier
disincentive for below expected performance. The starting point for measuring
performance is the Company's previous year's earnings per share plus an
inflation factor (measured by the change in the Consumer Price Index). To the
extent that the Company's current earnings exceed or fall short of the starting
point, officer's bonus percentages (40% to 60%) are multiplied by a number
greater or less than the percentage by which performance exceeds (or falls
short) of the target level of performance. Utilizing this formula, superior
performance can and has, in prior years, resulted in premium bonus awards. As
discussed under Chief Executive Officer Compensation below, the Company's 1993
earnings per share trailed those of 1992 thus, notwithstanding special
circumstances also discussed below, bonuses for 1993 paid in January 1994 fell
below the expected performance range. The Committee reserves the right to modify
the bonus formula to accommodate unusual operating or financial events which
would produce bonus calculations not aligned to the actual performance of the
Company. The Committee did so in 1993 and intends to do so in 1994 (see Chief
Executive Officer Compensation below).
The Company's long term incentive compensation program consists of stock
options and restricted stock grants. Non-qualified stock options are granted
periodically to officers and a small number of other key executives. Stock
options are exercisable at the fair market value on the date of the grant.
Four-year vesting is the Company's usual practice. Options may be exercised for
ten years from date of grant. No options were granted to officers in 1993. Only
one named executive officer received an option in 1991, and no officer has
received an option since then.
Restricted stock grants are periodically made to officers and other key
executives and managers. The restricted stock grants carry restrictions that
normally lapse six or seven years after the grant. If the Company meets or
exceeds pre-stated earnings per share growth goals (15% per year), the grants
may be earned up to two years early (within 4-5 years for a six-year grant, and
within 5-6 years for a seven-year grant). Only one named executive officer
received a restricted stock grant in 1991 and no officer has received a
restricted stock grant since then.
8
<PAGE>
The Committee has discussed the potential impact of the Omnibus Budget
Reconciliation Act of 1993 (OBRA) particularly the $1,000,000 cap on
deductibility of executive compensation. The Company's cash compensation program
(base salary plus bonus) is set at levels unlikely to reach or exceed the limit
for any of the Company's executive officers. All long term incentive
compensation was granted prior to enactment of OBRA and thus options, when
exercised, and stock awards, when restrictions lapse, will not be subject to the
limitation on corporate deductibility. It is expected that all future grants of
long term compensation will also be exempt from the cap because shareholder
approval is being sought at the meeting for the Company's 1994 Stock Incentive
Plan as discussed below. Under present rules, such approval would assure
deductibility of future long term incentive compensation awards. Accordingly,
the Committee has determined it is not necessary at this time to modify any of
the Company's compensation programs because of OBRA.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Roe's base salary was increased by $50,000 at the beginning of 1993 to
$400,000. He last received a salary increase of $50,000 effective January 1,
1991. Mr. Roe received a bonus of $187,200 on January 31, 1994 for performance
related to 1993. The bonus, if calculated in accordance with the earnings per
share growth formula set forth above, would have produced a lower bonus because
actual earnings per share in 1993 of $0.86 were 22% lower than 1992 earnings per
share of $1.10.
The Committee did not utilize the formula discussed above for Mr. Roe or the
other named executive officers because of the impact on 1993 earnings of
management's decision (with which the Board concurred) to take a twenty-five
cent ($0.25) per share restructuring charge in the third quarter of 1993. The
charge was taken to rationalize and streamline operations and create a platform
for enhanced earnings in the future. The decision, although adverse to 1993
earnings, is in the best long range interests of the Company and its
shareholders. The Company last took a similar restructuring charge in 1970.
Accordingly, the Committee did not feel that Mr. Roe nor the rest of the officer
group should be penalized to the full extent provided by the formula for this
decision. Therefore, the Committee decided to eliminate the multiplier effect
and to calculate this year's bonus for Mr. Roe and the other officers under the
following formula: 1993 earnings per share divided by 1992 earnings per share.
This resulted in Mr. Roe receiving a bonus equal to 78% of the bonus he would
have received at the expected performance level. The Committee feels that the
compensation to Mr. Roe and the other officers was appropriate for their
performance in 1993. Likewise, for 1994, the Committee does not feel that the
officers should benefit from the lower earnings per share resulting from the
twenty-five cent ($0.25) charge in 1993. Therefore, they will add $0.25 back to
the 1993 earnings thus establishing $1.11 per share as the 1993 base against
which 1994 earnings per share will be compared.
OTHER NAMED EXECUTIVE OFFICERS
Like Mr. Roe, all four other named executive officers had salary adjustments
on January 1, 1993 and all four last received a salary increase January 1, 1991.
Bonus awards for 1993 were determined on the same basis as described for Mr. Roe
and constituted 78% of the amount which would have been paid at the target level
of performance. Also, like Mr. Roe, none of the other four named executive
officers received restricted stock grants nor stock options during fiscal 1993.
THE COMPENSATION COMMITTEE
Robert F. Zicarelli, Chairman
Winslow H. Buxton
Loring W. Knoblauch
Winston R. Wallin
9
<PAGE>
BEMIS RETIREMENT PLAN
The Bemis Retirement Plan is a noncontributory defined benefit plan with a
social security offset which provides benefits determined primarily by final
average salary and years of service. The following table shows estimated annual
retirement benefits which would be payable at age 65 as a straight life annuity.
If an employee's benefits are reduced pursuant to Internal Revenue Code
limitations, the Bemis Company, Inc. Supplemental Retirement Plan provides that
the Company will make a direct payment to that individual in a lump sum amount
equal to the amount of the reduction. The benefits shown in the table below
include these additional payments and do not reflect the statutory limitations.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE AT NORMAL RETIREMENT
DATE
FINAL AVERAGE -------------------------------------------------
SALARY 15 20 25 30 AND ABOVE
- -------------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
$ 150,000 $ 34,100 $ 45,500 $ 56,900 $ 68,200
200,000 46,600 62,200 77,700 93,300
300,000 71,600 95,500 119,400 143,200
400,000 96,600 128,800 161,000 193,200
500,000 121,600 162,200 202,700 243,200
600,000 146,600 195,500 244,400 293,200
700,000 171,600 228,800 286,000 343,200
800,000 196,600 262,200 327,700 393,200
900,000 221,600 295,500 369,400 443,200
1,000,000 246,600 328,800 411,000 493,200
</TABLE>
Compensation covered by the Plan for purposes of calculating final average
salary includes salary and bonus amounts stated on the Summary Compensation
Table. The estimated credited years of service for each of the named executive
officers are as follows: John H. Roe 29 years; Robert F. Mlnarik 17 years;
Jeffrey H. Curler 19 years; Scott W. Johnson 13 years; Benjamin R. Field 30
years.
CERTAIN RELATIONSHIPS AND CERTAIN TRANSACTIONS
During 1993, the Company's subsidiaries Curwood, Inc., and Milprint, Inc.,
purchased at market competitive prices approximately $3,556,000 of cores,
pallets and miscellaneous packaging supplies from Centracor, Inc. Centracor also
acts as a distributor for Curwood and in 1993 purchased $144,000 of product from
Curwood. Centracor is owned by Michael Curler, son of Howard J. Curler and
brother of Jeffrey H. Curler.
During 1993, the Company's subsidiaries Curwood, Inc. and Mankato
Corporation purchased at market competitive prices approximately $9,971,000 of
rigid film, miscellaneous packaging supplies and laminator and rewinder time
from Pacur, Inc. a subsidiary of Bowater P.L.C. Ron Johnson, son-in-law of
Howard J. Curler and brother-in-law of Jeffrey H. Curler, is President of Pacur.
During 1993, the Company's Packaging Machinery and Distributor Products
Divisions purchased at market competitive prices approximately $361,000 of parts
or assemblies from Quality Tool, Inc. which is owned by Bill Roe, brother of
John H. Roe.
At the request of the Audit Committee, consisting entirely of outside
directors, Price Waterhouse conducted a review of the above transactions. Based
on Price Waterhouse's report, the Audit Committee determined that these
transactions were at least as fair to the Company as if they had been
consummated with non-related parties.
10
<PAGE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
COMPENSATION OF DIRECTORS
Effective April 1, 1993, each director who was not an officer of the Company
was paid an annual fee of $30,000. The chairpersons of the Committees of the
Board received an additional $2,500. Prior to April 1, 1993 annual fees were
$25,000 and $27,500, respectively. Directors who are not officers of the Company
and who have not been officers of the Company receive an option to purchase
5,000 shares of Common Stock of the Company at the time they become directors.
Each such option is for ten years and is exercisable at the market price on the
date of grant. Because of restrictions in the 1987 Stock Option Plan and its
predecessors, neither Ms. McDonald nor Mr. Perry has received these options.
Under the provisions of the 1994 Stock Incentive Plan discussed below, both Ms.
McDonald and Mr. Perry will receive options upon stockholder approval of the
Plan. Directors who are officers of the Company receive no compensation for
service on the Board of Directors.
The Board of Directors held four meetings during the year ended December 31,
1993. All directors attended at least 75% of board meetings and meetings of
committees on which they served. The Board of Directors has an Executive and
Finance Committee, an Audit Committee, a Community Relations Committee, a
Compensation Committee and a Nominating Committee.
The Executive and Finance Committee did not meet in 1993. It has such powers
as are delegated to it by the full Board and in addition reviews finance matters
and makes recommendations thereon to the Board.
The Audit Committee held two meetings in 1993. It reviews the scope and
procedures used in auditing the Company's books and reviews the Company's
financial statements with management, the internal audit staff and independent
auditors. It also recommends the engagement of independent auditors to the
Board.
The Community Relations Committee held one meeting in 1993. It oversees the
activities of the Bemis Foundation, including the appropriate level of corporate
giving to the Foundation, and the governance of, and dispositions by, the
Foundation, and makes recommendations thereon to the Board.
The Compensation Committee held two meetings in 1993. It approves the
compensation of the principal officers and also reviews management's
recommendations on officer and key employee compensation, company-wide
compensation structure, benefit plans and benefit awards.
The Nominating Committee held four meetings in 1993. It recommends nominees
for election to the Board of Directors, reviews the performance of the highest
ranking officer and other senior officers and recommends to the full Board a
successor should the position of highest ranking officer become vacant. The
Nominating Committee will consider names of nominees to the Board submitted by
stockholders in writing addressed to the attention of the Nominating Committee
at the executive offices of the Company in Minneapolis, Minnesota.
PROPOSAL TO APPROVE 1994 STOCK INCENTIVE PLAN
INTRODUCTION
The Board of Directors recommends approval of the 1994 Stock Incentive Plan
in the form attached as Exhibit A.
The Directors believe that the Company and its stockholders have benefited
substantially over the years from the use of stock options and restricted stock
awards as effective means to secure, motivate and retain competent key
personnel. Such plans, beginning with the first plan in 1970, have been
significant factors in the success and growth of the Company. The 1970 and 1978
Stock Option Plans have expired. The 1987
11
<PAGE>
Stock Option Plan, reserving an aggregate of 2,400,000 (after subsequent splits)
shares of Common Stock for issuance to key employees, is expected to have, as of
the date of the Meeting, 518,618 shares remaining available for option grants or
for awards under the 1984 Bemis Stock Award Plan which expires in 1994.
Because of the expiration of the 1984 Bemis Stock Award Plan in 1994,
changes in the tax laws relating to the deductibility by the Company of certain
types of benefits under the Omnibus Budget Reconciliation Act of 1993 (OBRA) and
the expiration of the 1987 Stock Option Plan in 1997, and believing that a new
plan is both necessary and appropriate for the Company to continue offering
stock incentives in the form of both stock options and performance units or
similar stock based incentive programs to key employees, the Board of Directors
adopted the 1994 Stock Incentive Plan (the "Plan") on February 3, 1994, subject
to approval by the stockholders. The Plan reserves for issuance a total of
2,000,000 shares of Common Stock, but will also have available the 518,618
shares not used under the 1987 Stock Option Plan and the 1984 Bemis Stock Award
Plan. Options and Restricted Stock Awards may be granted under the 1987 Stock
Option Plan and the 1984 Bemis Stock Award Plan until those plans expire,
however, any shares so used will not be available for issuance under the Plan.
The Plan will be administered by the Compensation Committee of the Board of
Directors (the "Committee"). The principal features of the Plan are summarized
below.
SUMMARY OF THE PLAN
ADMINISTRATION. The Committee will consist of not less than three directors
who are not employees of the Company. Members of the Committee will not be
eligible to participate in the Plan other than to receive the one time grant of
an option to purchase 5,000 shares of the Common Stock of the Company. All
members of the Committee have received such options and thus are not eligible
for any further awards under the Plan. The Committee will decide to whom and
when to make grants, the number of shares to be covered by the grants and any
special terms and provisions relating to the exercise of the stock options or to
the performance units (see discussion of Stock Options and Performance Units
below). The Committee may at any time adopt such resolutions, rules and
regulations for the Plan and interpret the Plan as it deems advisable. It may
amend or terminate the Plan and change its terms and conditions as it deems
appropriate; provided, however, that no such amendment may (a) increase the
maximum number of shares subject to the Plan, except for adjustment to reflect
stock dividends or other recapitalization affecting the number or kind of
outstanding shares; (b) extend the termination date of the Plan; or (c) change
the class of employees eligible to receive stock options or Performance Units,
under the Plan.
STOCK OPTIONS. Under the Plan, stock options (incentive and/or
non-statutory stock options under the Internal Revenue Code) to purchase Common
Stock of the Company, ("Options") may be granted to officers and certain key
employees of the Company or any of its subsidiaries. Stock appreciation rights
are not included under the Plan. No more than fifteen percent (15%) of the
authorized shares may be granted as Options to any one individual during the
life of the Plan. The individuals or the number of key employees who will be
selected to participate in the Plan are not identifiable at this time. If the
Plan had been in effect during 1993, no benefits would have been received from
the Plan by Company employees, including the executive officers named in the
Summary Compensation Table on page 6 of this proxy statement, because sufficient
shares remained authorized for issuance under the 1987 Stock Option Plan. The
only options granted in 1993 under the 1987 Stock Option Plan were grants of
options to purchase 5,000 shares each to Winslow H. Buxton and Loring W.
Knoblauch when they became directors.
Generally, each Option will run for ten years from the date of grant.
Vesting and other matters relating to the administration of the Plan are under
the control of the Committee. The Option exercise price shall not be less than
one hundred percent (100%) of the fair market value of the Common Stock of the
Company on the date of grant. The exercise price may be paid in cash or, subject
to the discretion of the Committee, in
12
<PAGE>
Common Stock which the optionee owns. The exercise price under each Option will
not change during the life of the Option regardless of changes in the market
value of the Common Stock (subject only to adjustment as provided in the Plan
for events such as stock splits or stock dividends). As of March 11, 1994, the
fair market value, as defined, of the Common Stock was $22.00 per share. No
Options may be granted after February 3, 2004.
Each non-employee director shall receive an Option under the Plan to
purchase 5,000 shares upon first becoming a member of the Board. The Company has
provided a similar incentive to non-employee directors since 1984, however, for
reasons no longer relevant, prior plans prevented the grant of options to non-
employee directors if they held more than a small number of shares at the time
they were elected. This restriction has been eliminated in the Plan and Options
will be granted to non-employee Directors previously excluded. If the Plan is
adopted, Ms. McDonald and Mr. Perry will each be granted an option to purchase
5,000 shares of Common Stock of the Company.
PERFORMANCE UNITS. The Plan permits grants of performance units similar to
those employed under the 1984 Stock Award Plan. Specifically, a Performance Unit
represents the right to receive a payment from the Company in the form of stock,
cash or a combination of both upon the achievement of established performance
goals. The Committee has the authority to set the conditions to be met for
payment of the Performance Units to occur.
The Plan also provides for the granting of Performance Units to senior
executive employees which would be considered "qualified performance based
compensation" for purposes of the regulations issued under Internal Revenue Code
Section 162(m). Such awards would customarily be made to employees whose
compensation above certain dollar levels would otherwise not be deductible to
the Company. The number of Performance Units granted to any one employee in any
performance period may not exceed five percent (5%) of the maximum number of
shares available for issuance under the Plan. All such grants will be subject to
a performance goal based on increases in earnings per share and revenue growth
of the Company with specific targets established by the Committee. All awards
will have a minimum performance level beneath which the awards are forfeited and
all awards shall be for a six year period.
EFFECT OF TERMINATION OF EMPLOYMENT. If a participant's employment or other
service with the Company is terminated by reason of death, disability or
retirement (whether early or normal), each Option held by such participant
immediately becomes fully exercisable and remains exercisable for two years
after such termination. Upon termination of employment due to death or
disability, all Performance Units held by such participant will vest. Upon
termination of employment due to "normal retirement" (as defined in the Plan), a
certain number of the Performance Units held by such participant will be
forfeited based upon the number of months remaining in the performance period
and the remaining Performance Units will remain outstanding until the end of the
performance period, at which time the Compensation Committee will evaluate the
extent to which the performance criteria have been met. Upon termination of
employment due to "early retirement" (as defined in the Plan), all Performance
Units held by such participant will be forfeited, subject to certain Committee
discretion. If a participant's employment terminates for any other reason, (i)
Options that are then exercisable will continue to be exercisable for a period
of three months after such termination (unless termination is for cause), and
(ii) all Performance Units held by the participant will be forfeited.
CHANGE OF CONTROL. In the event a "change of control" (as defined in the
Plan) of the Company occurs, then, if approved by the Committee, (i) all
outstanding Options other than Options granted to non-employee Directors, will
become immediately exercisable in full and will remain exercisable for the
remainder of their terms, and (ii) all outstanding Performance Units will vest
and/or continue to vest in the
13
<PAGE>
manner determined by the Committee and set forth in the agreement evidencing
such Performance Units. The Committee may determine that some or all
participants holding Options will receive cash in an amount equal to the excess
of the fair market value immediately prior to the effective date of such change
in control over the exercise price per share of the Options.
FEDERAL TAX CONSEQUENCES
The following description of federal income tax consequences is general and
does not address specific tax consequences applicable to an individual
participant who receives an Option or Performance Unit under the Plan. The
Company has been advised by counsel that an optionee will not realize income
upon the granting of an Option under the Plan, nor would the Company be entitled
to a deduction at such time.
There generally will be no realization of income by the optionee upon the
exercise of an incentive stock option (if exercised no later than three months
after any termination of employment). If the optionee does not sell the
incentive stock option Common Stock within two years after the date of grant nor
within one year after the exercise date, any gain or loss on a sale will be
treated as long term, and the Company will not be entitled to any deduction on
account of the issuance of Common Stock or the grant of the incentive stock
option.
Upon the exercise of a non-statutory stock option, the optionee will
recognize ordinary income subject to withholding in the amount of the excess of
the fair market value of the Company's Common Stock on the day of exercise over
the stock option exercise price. The tax basis of any non-statutory stock option
share of Common Stock received will be the fair market value of such shares on
the date the stock option is exercised.
STOCK OPTIONS UNDER THE PLAN
Upon stockholder approval of the Plan, certain non-employee directors of the
Company will automatically receive Options under the Plan as summarized below.
NEW PLAN BENEFITS
1994 STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE NUMBER OF OPTIONS
- --------------------------------------------------------------------------- --------------------- --------------------
<S> <C> <C>
Non-Executive Director Group............................................... 0(1) 10,000(2)
<FN>
- ------------------------
(1) Options granted to non-employee directors of the Company under the Plan must
have an exercise price equal to the fair market value of one share of the
Common Stock on the date of grant. Accordingly, a dollar value for such
Options will only be determinable at such time as the fair market value of
the Common Stock exceeds the fair market value on the date of the grant.
(2) Pursuant to the terms of the Plan, each non-employee director of the
Company, other than those directors who received options under the Company's
1978 Nonqualified Stock Option Plan or 1987 Stock Option Plan, is entitled
to receive a non-statutory Option to purchase 5,000 shares of Common Stock
on the date the Plan is approved by the Company's stockholders.
</TABLE>
Other than as set forth above, neither the number nor types of future Plan
awards to be received by or allocated to particular participants or groups of
participants is presently determinable.
14
<PAGE>
STOCKHOLDER APPROVAL
The Plan will be approved if the votes cast favoring the Plan exceed the
votes cast opposing approval of the Plan. Abstentions and broker non-votes are
considered neither a vote "for" nor "against".
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE PROPOSAL TO APPROVE THE 1994 STOCK INCENTIVE PLAN.
------------------------
APPOINTMENT OF AUDITORS
A further purpose of the Meeting is to vote upon the ratification of
appointment of independent auditors for the year ending December 31, 1994. While
neither Missouri law, the Company's Articles of Incorporation nor the Company's
By-Laws require submission to the stockholders of the question of appointment of
auditors, it has been the policy of the Company's Board of Directors since 1968
to submit the matter for stockholder consideration in recognition that the basic
responsibility of the auditors is to the stockholders and the investing public.
Therefore, the Audit Committee of the Board of Directors recommends stockholder
ratification of the appointment of Price Waterhouse, which has served as
independent public auditor for the Company for more than sixty years. If the
stockholders do not ratify this appointment, other certified public accountants
will be considered by the Audit Committee. A representative of Price Waterhouse
will be present at the meeting, with the opportunity to make a statement and to
respond to questions.
Proxies solicited by the Board of Directors will be voted for ratification
of the appointment of Price Waterhouse unless stockholders specify otherwise in
their proxies.
STOCKHOLDER SUBMISSIONS
All stockholder proposals to be presented at the next annual meeting of the
stockholders to be held in 1995 and to be included in the proxy statement and
form of proxy relating thereto must be received by the Company not later than
December 1, 1994.
The Board of Directors is not aware of any other matters to be presented to
the meeting. However, if any matter other than those referred to above should
come before the meeting, it is the intention of the persons named in the
enclosed proxy to vote such proxy in accordance with their best judgment.
By Order of the Board of Directors
Scott W. Johnson, Secretary
15
<PAGE>
BEMIS COMPANY, INC. THIS PROXY IS SOLICITED ON
222 S. NINTH STREET, SUITE BEHALF OF THE BOARD OF DIRECTORS
2300 The undersigned hereby appoints John H. Roe
MINNEAPOLIS, MINNESOTA and Scott W. Johnson, as Proxies, each with
55402 PROXY the power to appoint his substitute and
- --------------------------- hereby authorizes them to represent and to
vote, and in their discretion to cumulate
votes for any or all of the nominees for
election as directors (other than for any
nominees as to whom authority to vote is
withheld), as designated below, all the
shares of stock of Bemis Company, Inc. held
of record by the undersigned on March 18,
1994, at the Annual Meeting of Stockholders
to be held on May 5, 1994.
1. To elect four / / FOR all nominees / / WITHHOLD AUTHORITY
directors for a term listed below to vote for all
of three years. (EXCEPT AS MARKED TO nominees listed below
THE CONTRARY BELOW)
Winslow H. Buxton, Howard J. Curler, Robert A. Greenkorn, Robert F. Mlnarik
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. To vote upon the Proposed 1994 Stock Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. To vote upon ratification of the appointment of Price Waterhouse as
independent auditors of the Company.
/ / FOR / / AGAINST / / ABSTAIN
(continued on reverse side)
<PAGE>
4. To transact such other business as may properly come before the meeting.
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Only stockholders of record at the close of business March 18, 1994 will be
entitled to receive notice of and to vote at the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES AND FOR PROPOSAL 2.
Please sign exactly as name appears on the
proxy. When shares are held by joint tenants,
both should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign corporate name in
full by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
DATED: --------------------------------,
1994
---------------------------------------------
Signature
---------------------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
EXHIBIT 99
BEMIS COMPANY, INC.
1994 STOCK INCENTIVE PLAN
1. PURPOSE OF PLAN.
The purpose of the Bemis Company, Inc. 1994 Stock Incentive Plan (the
"Plan") is to advance the interests of Bemis Company, Inc. (the "Company") and
its shareholders by enabling the Company and its Subsidiaries to attract and
retain persons of ability to perform services for the Company and its
Subsidiaries by providing an incentive to such individuals through equity
participation in the Company and by rewarding such individuals who contribute to
the achievement by the Company of its economic objectives and thus the
enhancement of shareholder value.
2. DEFINITIONS.
The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:
2.1 "BOARD" means the Board of Directors of the Company.
2.2 "BROKER EXERCISE NOTICE" means a written notice pursuant to which a
Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.
2.3 "CHANGE IN CONTROL" means an event described in Section 10.1 of the
Plan.
2.4 "CODE" means the Internal Revenue Code of 1986, as amended.
2.5 "COMMITTEE" means the group of individuals administering the Plan, as
provided in Section 3 of the Plan.
2.6 "COMMON STOCK" means the common stock of the Company, par value $.10
per share, or the number and kind of shares of stock or other securities into
which such Common Stock may be changed in accordance with Section 4.3 of the
Plan.
2.7 "DIRECTOR OPTION" means a Non-Statutory Stock Option granted to an
Eligible Director pursuant to Section 6.2.
2.8 "DISABILITY" means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to the
long-term disability plan of the Company or Subsidiary then covering the
Participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of Section
22(e)(3) of the Code.
2.9 "EARLY RETIREMENT" of an Eligible Employee means early retirement under
the Bemis Retirement Plan as in effect from time to time.
A-1
<PAGE>
2.10 "ELIGIBLE DIRECTOR" means each director of the Company who is not an
employee; provided, however, that "Eligible Director" does not include any such
director who received Director Options under the Company's 1978 Non-Qualified
Stock Option Plan or the Company's 1987 Stock Option Plan.
2.11 "ELIGIBLE EMPLOYEE" means each salaried employee in a management or
supervisory position (including, without limitation, officers and directors who
are also employees) with the Company or any Subsidiary.
2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
2.13 "FAIR MARKET VALUE" of a share of Common Stock as of a particular day
means the mean between the high and low prices for a share of the Company's
Common Stock on the New York Stock Exchange on such day, or if no sale has been
made on such exchange on such day, on the last preceding day on which any such
sale shall have been made.
2.14 "INCENTIVE AWARD" means an Option or Performance Unit granted pursuant
to the Plan.
2.15 "INCENTIVE STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Employee pursuant to Section 6.1 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.
2.16 "NON-STATUTORY STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not
qualify as an Incentive Stock Option.
2.17 "NORMAL RETIREMENT" of an Eligible Employee means normal retirement
under the Bemis Retirement Plan as in effect from time to time.
2.18 "OPTION" means an Incentive Stock Option or a Non-Statutory Stock
Option.
2.19 "PARTICIPANT" means an Eligible Employee or Eligible Director who
receives one or more Incentive Awards under the Plan.
2.20 "PERFORMANCE UNIT" means a right granted to an Eligible Employee
pursuant to Section 7 of the Plan to receive a payment from the Company, in the
form of stock, cash or a combination of both, upon the achievement of
established performance goals.
2.21 "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that are
already owned by the Participant or, with respect to any Incentive Award, that
are to be issued upon the grant, exercise or vesting of such Incentive Award.
2.22 "SECURITIES ACT" means the Securities Act of 1933, as amended.
2.23 "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.
2.24 "TAX DATE" means the date any withholding tax obligation arises under
the Code for a Participant with respect to an Incentive Award.
3. PLAN ADMINISTRATION.
3.1 THE COMMITTEE. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, the Plan will be
administered by a committee (the "Committee") consisting solely of not less than
two members of the Board who are "disinterested persons" within the meaning of
Rule
A-2
<PAGE>
16b-3 under the Exchange Act. To the extent consistent with corporate law, the
Committee may delegate to any officers of the Company the duties, power and
authority of the Committee under the Plan pursuant to such conditions or
limitations as the Committee may establish; provided, however, that only the
Committee may exercise such duties, power and authority with respect to Eligible
Recipients who are subject to Section 16 of the Exchange Act. Each
determination, interpretation or other action made or taken by the Committee
pursuant to the provisions of the Plan will be conclusive and binding for all
purposes and on all persons, and no member or the Committee will be liable for
any action or determination made in good faith with respect to the Plan or any
Incentive Award granted under the Plan.
3.2 AUTHORITY OF THE COMMITTEE.
(a) In accordance with and subject to the provisions of the Plan, the
Committee will have the authority to determine all provisions of Incentive
Awards as the Committee may deem necessary or desirable and as consistent
with the terms of the Plan, including, without limitation, the following:
(i) the Eligible Employees to be selected as Participants; (ii) the nature
and extent of the Incentive Awards to be made to each Participant (including
the number of shares of Common Stock to be subject to each Incentive Award,
any exercise price, the manner in which Incentive Awards will vest or become
exercisable and whether Incentive Awards will be granted in tandem with
other Incentive Awards) and the form of written agreement, if any,
evidencing such Incentive Award; (iii) the time or times when Incentive
Awards will be granted; (iv) the duration of each Incentive Award; and (v)
the restrictions and other conditions to which the payment or vesting of
Incentive Awards may be subject. In addition, the Committee will have the
authority under the Plan in its sole discretion to pay the economic value of
any Incentive Award in the form of cash, Common Stock or any combination of
both.
(b) The Committee will have the authority under the Plan to amend or
modify the terms of any outstanding Incentive Award in any manner,
including, without limitation, the authority to modify the number of shares
or other terms and conditions of an Incentive Award, extend the term of an
Incentive Award, accept the surrender of any outstanding Incentive Award or,
to the extent not previously exercised or vested, authorize the grant of new
Incentive Awards in substitution for surrendered Incentive Awards; provided,
however that the amended or modified terms are permitted by the Plan as then
in effect and that any Participant adversely affected by such amended or
modified terms has consented to such amendment or modification. No amendment
or modification to an Incentive Award, however, whether pursuant to this
Section 3.2 or any other provisions of the Plan, will be deemed to be a
regrant or such Incentive Award for purposes of this Plan.
(c) In the event of (i) any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, extraordinary dividend or
divestiture (including a spin-off) or any other change in corporate
structure or shares, (ii) any purchase, acquisition, sale or disposition of
a significant amount of assets or a significant business, (iii) any change
in accounting principles or practices, or (iv) any other similar change, in
each case with respect to the Company or any other entity whose performance
is relevant to the grant or vesting of an Incentive Award, the Committee
(or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) may,
without the consent of any affected Participant, amend or modify the vesting
criteria of any outstanding Incentive Award that is based in whole or in
part on the financial performance of the Company (or any Subsidiary or
division thereof) or such other entity so as equitably to reflect such
event, with the desired result that the criteria for evaluating such
financial performance of the Company or such other entity will be
substantially the
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same (in the sole discretion of the Committee or the board of directors of
the surviving corporation) following such event as prior to such event;
provided, however, that the amended or modified terms are permitted by the
Plan as then in effect.
(d) The Committee's authority in (a), (b) and (c) of this Section does
not extend to Director Options. Such options are subject to the specific
terms of the Plan with regard thereto, and are not subject to Committee
discretion. However, the Committee may adjust Director Options as provided
in Section 4.3.
4. SHARES AVAILABLE FOR ISSUANCE.
4.1 MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to adjustment as provided
in Section 4.3 of the Plan, the maximum number of shares of Common Stock that
will be available for issuance under the Plan will be 2,000,000 shares of Common
Stock in addition to any shares of Common Stock which, as of the date the Plan
is approved by the shareholders of the Company, are reserved for issuance under
either the Company's 1987 Stock Option Plan or 1984 Stock Award Plan and which
are not thereafter issued.
4.2 ACCOUNTING FOR INCENTIVE AWARDS. Shares of Common Stock that are issued
under the Plan or that are subject to outstanding Incentive Awards will be
applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. Any shares of Common Stock that are
subject to an Incentive Award that lapses, expires, is forfeited or for any
reason is terminated unexercised or unvested and any shares of Common Stock that
are subject to an Incentive Award that is settled or paid in cash or any form
other than shares of Common Stock will automatically again become available for
issuance under the Plan. However, shares withheld for the purpose of paying
applicable withholding taxes will not again become available for issuance under
the Plan.
4.3 ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
change in the corporate structure or shares of the Company, the Committee (or,
if the Company is not the surviving corporation in any such transaction, the
board of directors of the surviving corporation) will make the appropriate
adjustment (which determination will be conclusive) as to the number and kind of
securities available for issuance under the Plan and, in order to prevent
dilution or enlargement of the rights of the Participants, the number, kind and,
where applicable, exercise price of securities subject to outstanding Incentive
Awards.
5. PARTICIPATION.
Participants in the Plan will be those Eligible Employees who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries. Eligible Employees may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee in its sole discretion. Incentive
Awards will be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date will be the date of any related
agreement with the Participant.
Eligible Directors who receive Director Options also are Participants, but
are not eligible to receive Incentive Awards other than Director Options.
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6. OPTIONS.
6.1 GRANTS TO ELIGIBLE EMPLOYEES. An Eligible Employee may be granted one
or more Options under the Plan, and such Options will be subject to such terms
and conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. The Committee may designate
whether an Option is to be considered an Incentive Stock Option or a
Non-Statutory Stock Option. The aggregate number of shares on which Options may
be granted to any one Eligible Employee during the duration of the Plan may not
exceed 15% of the total shares of Common Stock available for issuance under the
Plan. If an Option granted to an Employee is cancelled, said Option will
nevertheless be included in applying said 15% limit. If an outstanding Option is
amended to reduce the exercise price, and the amendment is not made pursuant to
Section 4.3, the transaction shall be treated as a cancellation of the original
Option and the grant of a new Option, and both the original Option and the new
Option will be included in applying the 15% limit.
6.2 GRANTS TO ELIGIBLE DIRECTORS. Each Eligible Director elected to the
Board prior to 1994 shall be granted Director Options for the purchase of 5,000
shares of Common Stock effective as of the date of the Company's 1994 annual
meeting of shareholders. Each Eligible Director elected to the Board in 1994 or
later shall be granted Director Options for the purchase of 5,000 shares of
Common Stock effective upon his or her election to the Board. However, no
director who received Director Options under the Company's 1978 Nonqualified
Stock Option Plan or 1987 Stock Option Plan shall be eligible to receive a
Director Option under this Plan. Director Options may be issued only once to an
Eligible Director and in no event may such options when granted exceed 5,000
shares of Common Stock. The 5,000 share amount referred to in this subparagraph
is not subject to adjustment under Section 4.3, but once a Director Option is
granted to a director it will be subject to subsequent adjustments under Section
4.3
6.3 EXERCISE PRICE. The per share price to be paid by a Participant upon
exercise of an Option granted to an Eligible Employee will be determined by the
Committee in its discretion at the time of the Option grant but will not be less
than 100% of the Fair Market Value of one share of Common Stock on the date of
grant. The per share price to be paid by a Participant upon exercise of a
Director Option granted to an Eligible Director will be 100% of the Fair Market
Value of one share of Common Stock on the date of grant.
6.4 EXERCISABILITY AND DURATION. An Option will become exercisable at such
times and in such installments as may be determined by the Committee in its sole
discretion at the time of grant; provided, however, that no Option may be
exercisable after 10 years from its date of grant. However, each Director Option
will be exercisable for 10 years from the date of grant, subject to Section 8.7.
6.5 PAYMENT OF EXERCISE PRICE. The total purchase price of the shares to be
purchased upon exercise of an Option will be paid entirely in cash (including
check, bank draft or money order); provided, however, that the Committee, in its
sole discretion and upon terms and conditions established by the Committee, may
allow such payments to be made, in whole or in part, by tender of a Broker
Exercise Notice, Previously Acquired Shares or by a combination of such methods.
6.6 MANNER OF EXERCISE. An Option may be exercised by a Participant in
whole or in part from time to time, subject to the conditions contained in the
Plan and in the agreement evidencing such Option, by delivery in person, by
facsimile or electronic transmission or through the mail of written notice of
exercise to the Company (Attention: Secretary) at its principal executive office
in Minneapolis, Minnesota and by paying in full the total exercise price for the
shares of Common Stock to be purchased in accordance with Section 6.5 of the
Plan.
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7. PERFORMANCE UNITS.
7.1 PERFORMANCE UNITS NOT QUALIFYING UNDER CODE SECTION 162(M). An Eligible
Employee may be granted one or more Performance Units under the Plan, and such
Performance Units will be subject to such terms and conditions, consistent with
the other provisions of the Plan, as may be determined by the Committee in its
sole discretion. The Committee may impose such restrictions or conditions, not
inconsistent with the provisions of the Plan, to the vesting of such Performance
Units as it deems appropriate, including, without limitation, that the
Participant remain in the continuous employ of the Company or any Subsidiary for
a certain period or that the Participant or the Company (or any Subsidiary or
division thereof) satisfy certain performance goals or criteria. The Committee
will have the sole discretion either to determine the form in which payment of
the economic value of vested Performance Units will be made to the Participant
(i.e., cash, Common Stock or any combination thereof) or to consent to or
disapprove the election by the Participant of the form of such payment.
7.2 PERFORMANCE UNITS QUALIFYING UNDER CODE SECTION 162(M). The Committee
may grant Performance Units to an Eligible Employee on a basis such that these
Units will be considered "qualified performance based compensation" for purposes
of the regulations issued under Code Section 162(m). Any such Units are subject
to the following requirements:
(a) The Committee will determine the number of Units granted to the
Eligible Employee. The number of Units granted to any one Eligible Employee
with respect to any one performance period may not exceed 5% of the maximum
number of shares of Common Stock available under Section 4.1 for issuance
during the duration of the Plan.
(b) The Units will be subject to a performance goal based on increase in
earnings per share and revenue growth of the Company.
(c) Specific targets relating to the performance goal will be
established by the Committee prior to the period of service during which the
Performance Units will be earned. These targets must be stated in terms of a
minimum performance level below which the entire award will be forfeited, a
maximum performance level at or above which the full award will be paid, and
intermediate targets which will result in partial payment of the award. The
formula will be specified in sufficient detail so that a third party having
knowledge of the relevant performance results could calculate the amount to
be paid pursuant to the award.
(d) The performance period for any such award shall be six years.
(e) Following the close of the performance period, the Committee will
determine and certify the extent to which the performance criteria have been
met and will arrange for payment to the Participant of any amounts earned.
Payment of earned Performance Units will be made in shares of Common Stock
at the rate of one share per Performance Unit; provided, however, that the
number of shares distributed to the Participant may be reduced as provided
in Section 9 to cover withholding taxes.
(f) After the beginning of the performance period for any such award,
the terms of such award may not be modified in any way that would increase
the compensation payable upon attainment of the performance goal.
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8. EFFECT OF TERMINATION OF EMPLOYMENT.
8.1 TERMINATION DUE TO DEATH OR DISABILITY. If a Participant's employment
with the Company and all Subsidiaries is terminated by reason of death or
Disability:
(a) All Outstanding Options then held by the Participant will become
immediately exercisable in full and will remain exercisable for a period of
two years after such termination (but in no event after the expiration date
of any such Option);
(b) All Performance Units then held by the Participant will vest. The
Company will transfer to the Participant (or to the beneficiary, legal
representative, heir, or legatee of a deceased Participant) a number of
shares of Common Stock equal to the number of the Participant's vested
Performance Units, reduced as provided under Section 9 to cover any
applicable withholding taxes. Said transfer shall occur as of a date or
dates determined by the Committee which shall not be later than one year
after the Participant's death or Disability. In the case of Performance
Units awarded under Section 7.1 and payable in cash, a cash payment will be
made in lieu of shares.
8.2 TERMINATION DUE TO NORMAL RETIREMENT. If a Participant's employment
with the Company and all Subsidiaries is terminated by reason of his Normal
Retirement:
(a) All outstanding Options then held by the Participant will become
immediately exercisable in full and will remain exercisable for a period of
two years after such termination (but in no event after the expiration date
of any such Option);
(b) The Participant will immediately forfeit a portion of his
outstanding Performance Units, said portion to be determined by multiplying
(1) times (2):
(1) The number of outstanding Performance Units.
(2) A fraction, (i) the numerator of which is the number of full
months remaining in the performance period beginning with the month
following the month in which the Participant's Normal Retirement occurs,
and (ii) the denominator of which is the full number of months in the
performance period.
The remaining Performance Units will not be immediately forfeited, but
will remain outstanding until the end of the performance period, whereupon
the Committee will determine and certify the extent to which the applicable
performance criteria have been met and will arrange for payment to the
Participant of any amounts earned.
8.3 TERMINATION DUE TO EARLY RETIREMENT. If a Participant's employment with
the Company and all Subsidiaries is terminated by reason of his Early
Retirement:
(a) All outstanding Options then held by the Participant will become
immediately exercisable in full and will remain exercisable for a period of
two years after such termination (but in no event after the expiration date
of any such Option);
(b) All Performance Units then outstanding will be forfeited, and no
payment will be made with respect thereto. However, the Committee may, in
its sole discretion, provide for payment with respect to all or any portion
of the outstanding Performance Units granted under Section 7.1. Such payment
may occur at any point from the time of Early Retirement until the end of
the period of restriction, to be determined at the sole discretion of the
Committee. The Committee's decision with respect to such
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payments will not be binding or precedential with regard to subsequent Early
Retirements by other Participants. Performance Units granted under Section
7.2 will always be forfeited upon Early Retirement and are not subject to
discretionary payment.
8.4 TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY, NORMAL RETIREMENT
OR EARLY RETIREMENT.
(a) In the event a Participant's employment is terminated with the
Company and all Subsidiaries for any reason other than death, Disability,
Normal Retirement or Early Retirement, or a Participant is in the employ of
a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company
(unless the Participant continues in the employ or service of the Company or
another Subsidiary), all rights of the Participant under the Plan and any
agreements evidencing an Incentive Award will immediately terminate without
notice of any kind, and no Options then held by the Participant will
thereafter be exercisable, and all Performance Units then held by the
Participant will be forfeited, and no payment will be made with respect to
such Units. However, if such termination is due to any reason other than
termination by the Company or any Subsidiary for "cause," all outstanding
Options then held by such Participant will remain exercisable to the extent
exercisable as of such termination for a period of three months after such
termination (but in no event after the expiration date of any such Option).
(b) For purposes of this Section 8.4, "cause" (as determined by the
Committee) will be as defined in any employment or other agreement or policy
applicable to the Participant or, if no such agreement or policy exists,
will mean (i) dishonesty, fraud, misrepresentation, embezzlement or
deliberate injury or attempted injury, in each case related to the Company
or any Subsidiary, (ii) any unlawful or criminal activity of a serious
nature, (iii) any intentional and deliberate breach of a duty or duties
that, individually or in the aggregate, are material in relation to the
Participant's overall duties, or (iv) any material breach of any employment,
service, confidentiality or noncompete agreement entered into with the
Company or any Subsidiary.
8.5 BREACH OF CONFIDENTIALITY OR NONCOMPETE AGREEMENTS. Notwithstanding
anything in the Plan to the contrary, in the event that a Participant materially
breaches the terms of any confidentiality or noncompete agreement entered into
with the Company or any Subsidiary, whether such breach occurs before or after
termination of such Participant's employment with the Company or any Subsidiary,
the Committee in its sole discretion may immediately terminate all rights of the
Participant under the Plan and any agreements evidencing an Incentive Award then
held by the Participant without notice of any kind.
8.6 DATE OF TERMINATION OF EMPLOYMENT. Unless the Committee otherwise
determines in its sole discretion, a Participant's employment will, for purposes
of the Plan, be deemed to have terminated on the date recorded on the personnel
or other records of the Company or the Subsidiary for which the Participant
provides employment, as determined by the Committee in its sole discretion based
upon such records.
8.7 EXPIRATION OF DIRECTOR OPTIONS. Section 8.1 through 8.6 are not
applicable to Director Options. An Eligible Director who ceases to be a director
of the Company may exercise any outstanding Director Options within 12 months
after ceasing to be a director (but in no event after the expiration date of
such option).
9. PAYMENT OF WITHHOLDING TAXES.
9.1 GENERAL RULES. The Company is entitled to (a) withhold and deduct from
future wages of the Participant (or from other amounts that may be due and owing
to the Participant from the Company or a Subsidiary), or make other arrangements
for the collection of, all legally required amounts necessary to satisfy any and
all federal, state and local withholding and employment-related tax requirements
attributable
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to an Incentive Award, including, without limitation, the grant, exercise or
vesting of, or payment of dividends with respect to, an Incentive Award or a
disqualifying disposition of stock received upon exercise of an Incentive Stock
Option, or (b) require the Participant promptly to remit the amount of such
withholding to the Company before taking any action, including issuing any
shares of Common Stock, with respect to an Incentive Award.
9.2 SPECIAL RULES. The Committee may, in its sole discretion and upon terms
and conditions established by the Committee, permit or require a Participant to
satisfy, in whole or in part, any withholding or employment-related tax
obligation described in Section 9.1 of the Plan by electing to tender Previously
Acquired Shares (including but not limited to the Shares the acquisition of
which triggered the tax obligation) or a Broker Exercise Notice, or by a
combination of such methods.
10. CHANGE IN CONTROL.
10.1 CHANGE IN CONTROL. For purposes of this Section 10.1, a "Change in
Control" of the Company will mean the following:
(a) the sale, lease, exchange or other transfer, directly or indirectly,
of substantially all of the assets of the Company (in one transaction or in
a series of related transactions) to a person or entity that is not
controlled by the Company,
(b) the approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;
(c) a merger or consolidation to which the Company is a party if the
shareholders of the Company immediately prior to effective date of such
merger or consolidation have "beneficial ownership" ( as defined in Rule
13d-3 under the Exchange Act), immediately following the effective date of
such merger or consolidation, of securities of the surviving corporation
representing (i) more than 50%, but not more than 80%, of the combined
voting power of the surviving corporation's then outstanding securities
ordinarily having the right to vote at elections of directors, unless such
merger or consolidation has been approved in advance by the Incumbent
Directors (as defined in Section 11.2 below), or (ii) 50% or less of the
combined voting power of the surviving corporation's then outstanding
securities ordinarily having the right to vote at elections of directors
(regardless of any approval by the Incumbent Directors);
(d) any person becomes after the effective date of the Plan the
"beneficial owner"(as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of (A) 20% or more, but not 50% or more, of the
combined voting power of the Company's outstanding securities ordinarily
having the right to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by the Incumbent
Directors, or (B) 50% or more of the combined voting power of the Company's
outstanding securities ordinary having the right to vote at elections of
directors (regardless of any approval by the Incumbent Directors);
(e) the Incumbent Directors cease for any reason to constitute at least
a majority of the Board; or
(f) a change in control of the Company of a nature that would be
required to be reported pursuant to Section 13 or 15(d) of the Exchange Act,
whether or not the Company is then subject to such reporting requirements.
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10.2 INCUMBENT DIRECTORS. For purposes of this Section 10, "Incumbent
Directors" of the Company will mean any individuals who are members of the Board
on the effective date of the Plan and any individual who subsequently becomes a
member of the Board whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
comprising the Board on the effective date of the Plan (either by specific vote
or by approval of the Company's proxy statement in which such individual is
named as a nominee for director without objection to such nomination).
10.3 ACCELERATION OF VESTING. Without limiting the authority of the
Committee under Section 3.2 of the Plan, if a Change in Control of the Company
occurs, then, if approved by the Committee in its sole discretion either in an
agreement evidencing an Incentive Award at the time of grant or at any time
after the grant of an Incentive Award, (a) all Options (other than Director
Options) will become immediately exercisable in full and will remain exercisable
for the remainder of their terms, regardless of whether the Participants to whom
such Options have been granted remain in the employ or service of the Company or
any Subsidiary; and (b) all Performance Units then held by the Participant will
vest and/or continue to vest in the manner determined by the Committee and set
forth in the agreement evidencing such Performance Units.
10.4 CASH PAYMENT FOR OPTIONS. If a Change in Control of the Company
occurs, then the Committee, if approved by the Committee in its sole discretion
either in an agreement evidencing an Incentive Award at the time of grant or at
any time after the grant of an Incentive Award, and without the consent of any
Participant effected thereby, may determine that some or all Participants
holding outstanding Options will receive, with respect to some or all of the
shares of Common Stock subject to such Options, as of the effective date of any
such Change in Control of the Company, cash in an amount equal to the excess of
the Fair Market Value of such shares immediately prior to the effective date of
such Change in Control of the Company over the exercise price per share of such
Options.
10.5 LIMITATION ON CHANGE IN CONTROL PAYMENTS. Notwithstanding anything in
Section 10.3 or 10.4 of the Plan to the contrary, if, with respect to a
Participant, the acceleration of the vesting of an Incentive Award as provided
in Section 10.3 or the payment of cash in exchange for all or part of an
Incentive Award as provided in Section 10.4 (which acceleration or payment could
be deemed a "payment" within the meaning of Section 280G(b)(2) of the Code),
together with any other payments which such Participant has the right to receive
from the Company or any corporation that is a member of an "affiliated group"
(as defined in Section 1504(a) of the Code without regard to Section 1504(b) of
the Code) of which the Company is member, would constitute a "parachute payment"
(as defined in Section 280G(b)(2) of the Code), then the payments to such
Participant pursuant to Section 10.3 or 10.4 will be reduced to the largest
amount as will result in no portion of such payments being subject to the excise
tax imposed by Section 4999 of the Code; provided, however, that if such
Participant is subject to a separate agreement with the Company or a Subsidiary
which specifically provides that payments attributable to one or more forms of
employee stock incentives or to payments made in lieu of employee stock
incentives will not reduce any other payments under such agreement, even if it
would constitute an excess parachute payment, then the limitations of this
Section 10.5 will, to that extent, not apply.
11. RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.
11.1 EMPLOYMENT. Nothing in the Plan will interfere with or limit in any
way the right of the Company or any Subsidiary to terminate the employment of
any Eligible Employee or Participant any time, nor confer upon any Eligible
Employee or Participant any right to continue in the employ of the Company or
any Subsidiary.
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11.2 RIGHTS AS A SHAREHOLDER. As a holder of Incentive Awards (other than
Restricted Stock Awards), a Participant will have no rights as a shareholder
unless and until such Incentive Awards are exercised for, or paid in the form
of, shares of Common Stock and the Participant becomes the holder of record of
such shares. Except as otherwise provided in the Plan, no adjustment will be
made for dividends or distributions with respect to such Incentive Awards as to
which there is a record date preceding the date the Participant becomes the
holder of record of such shares, except as the Committee may determine in its
discretion.
11.3 RESTRICTIONS ON TRANSFER. Except pursuant to testamentary will or the
laws of descent and distribution or as otherwise expressly permitted by the
Plan, no right or interest of any Participant in an Incentive Award prior to the
exercise or vesting of such Incentive Award will be assignable or transferable,
or subjected to any lien, during the lifetime of the Participant, either
voluntarily or involuntarily, directly or indirectly, by operation of law or
otherwise. A Participant will, however, be entitled to designate a beneficiary
to receive an Incentive Award upon such Participant's death, and in the event of
a Participant's death, payment of any amounts due under the Plan will be made
to, and exercise of any Options (to the extent permitted pursuant to Section 8
of the Plan) may be made by, the Participant's legal representatives, heirs and
legatees.
11.4 NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is intended
to modify or rescind any previously approved compensation plans or programs of
the Company or create any limitations on the power or authority of the Board to
adopt such additional or other compensation arrangements as the Board may deem
necessary or desirable.
12. SECURITIES LAW AND OTHER RESTRICTIONS.
Notwithstanding any other provision of the Plan or any agreements entered
into pursuant to the Plan, the Company will not be required to issue any shares
of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state securities laws or an exemption from such registration under
the Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.
13. PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Board may
deem advisable in order that Incentive Awards under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Board may
deem to be in the best interests of the Company; provided, however, that no
amendments to the Plan will be effective without approval of the stockholders of
the Company if stockholder approval of the amendment is then required pursuant
to Rule 16b-3 under the Exchange Act, Section 422 of the Code or the rules of
the New York Stock Exchange. No termination, suspension or amendment of the Plan
may adversely affect any outstanding Incentive Award without the consent of the
affected Participant; provided, however, that this sentence will not impair the
right of the Committee to take whatever action it deems appropriate under
Section 4.3 and 10 of the Plan.
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14. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan is effective as of February 3, 1994, the date it was adopted by the
Board. The Plan will terminate at midnight on February 3, 2004, and may be
terminated prior to such time to by Board action, and no Incentive Award will be
granted after such termination. Incentive Awards outstanding upon termination of
the Plan may continue to be exercised, or become free of restrictions, in
accordance with their terms.
15. MISCELLANEOUS
15.1 GOVERNING LAW. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Missouri.
15.2 SUCCESSORS AND ASSIGNS. The Plan will be binding upon and inure to the
benefit of the successors and permitted assigns of the Company and the
Participants.
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