<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
ACX TECHNOLOGIES, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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[LOGO OF ACX TECHNOLOGIES]
- --------------------------------------------------------------------------------
ACX TECHNOLOGIES, INC.
4455 Table Mountain Drive,
Golden, Colorado 80403
(303) 215-4600
Notice of Annual Meeting of Shareholders
To Be Held May 9, 2000
The Annual Meeting of Shareholders of ACX Technologies, Inc. ("ACX" or the
"Company"), a Colorado corporation, will be held on May 9, 2000 at 10:30 a.m.
(local time) at the Arvada Center for the Arts and Humanities, 6901 Wadsworth
Boulevard, Arvada, Colorado, for the following purposes:
(i) to elect two directors for a three-year term;
(ii) to consider and vote upon a proposed amendment to the Articles of
Incorporation of the Company to change the Company's name to
"Graphic Packaging International Corporation";
(iii) to approve amendments to the Company's Executive Incentive Plan to
include return on invested capital in the financial measurements and
to update the eligible participants and maximum awards;
(iv) to approve an amendment to the Company's Equity Compensation Plan
For Non-Employee Directors to increase the number of shares of
Common Stock authorized for issuance to 150,000 shares; and
(v) to transact any other business that may properly come before the
meeting.
Shareholders of the Company of record at the close of business on March 22,
2000 are entitled to vote at the meeting and any adjournment of the meeting.
Whether you expect to attend the meeting in person, please mark, sign, date,
and return the accompanying proxy in the return envelope provided. No postage
is necessary if mailed in the United States. Any person giving a proxy has the
power to revoke it at any time, and shareholders who are present at the meeting
may withdraw their proxies and vote in person.
ALL SHAREHOLDERS ARE EXTENDED A CORDIAL INVITATION TO ATTEND THE SHAREHOLDERS'
MEETING.
By Order of the Board of Directors,
/s/ Jill B. W. Sisson
Jill B. W. Sisson, Secretary
March 30, 2000
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY, WHETHER OR NOT YOU
INTEND TO BE PRESENT AT THE ANNUAL MEETING.
<PAGE>
PROXY STATEMENT
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This Proxy Statement is being furnished to holders of Common Stock of ACX
Technologies, Inc. (the "Company") in connection with the solicitation of
proxies by the Board of Directors of the Company to be voted at the Annual
Meeting of Shareholders on May 9, 2000 (the "Meeting"), for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders. The Proxy
Statement and the accompanying Proxy card are first being mailed to
shareholders of the Company on or about March 30, 2000.
Time, Place and Purpose
The Meeting will be held at 10:30 a.m. (local time) on May 9, 2000 at the
Arvada Center for the Arts and Humanities, 6901 Wadsworth Boulevard, Arvada,
Colorado. At the meeting the Shareholders of the Company will be asked to
consider and vote upon the following proposals: (i) to elect two directors for
a three-year term; (ii) to consider and vote upon a proposed amendment to the
Articles of Incorporation of the Company to change the Company's name to
"Graphic Packaging International Corporation"; (iii) to consider and vote upon
proposed amendments to the Company's Executive Incentive Plan to include return
on invested capital in the financial measurements and to update eligible
participants and maximum awards; (iv) to consider and vote upon an amendment to
the Company's Equity Compensation Plan For Non-Employee Directors to increase
the number of shares of Common Stock authorized for issuance to 150,000 shares;
and (v) to transact any other business that may properly come before the
meeting.
Voting Procedure
If you return the signed proxy before the meeting, the shares will be
voted according to your directions. UNLESS YOU INDICATE OTHERWISE ON YOUR PROXY
CARD, THE SHARES WILL BE VOTED "FOR" ALL DIRECTOR NOMINEES LISTED UNDER
PROPOSAL 1 AND "FOR" PROPOSALS 2, 3 AND 4.
After giving a proxy, you may cancel it at any time before it is
exercised by (1) delivering written notice to the Company, (2) substituting a
new proxy executed at a later date, or (3) requesting, in person at the Annual
Meeting, that the proxy be returned.
Who Can Vote and Votes Required
If you are a shareholder of record at the close of business on March 22,
2000, you will be entitled to receive notice of and to vote at the Meeting. At
the close of business on March 22, 2000, there were 28,777,284 shares of the
Company's $.01 par value common stock outstanding ("Common Stock"). Each share
of Common Stock is entitled to one vote. A majority of the outstanding shares
entitled to vote must be represented in person or by proxy at the meeting in
order to constitute a quorum for the transaction of business. Cumulative voting
is not allowed in the election of directors or for any other purposes.
With respect to the election of directors proposal, you may vote "FOR"
all nominees, you may withhold your vote for all nominees or you may withhold
your vote for a specific nominee. If you withhold authority to vote for a
director nominee in the election of directors, your vote will be excluded
entirely and will have no effect. With respect to all other proposals, you may
vote "FOR" or "AGAINST" the proposal, or "ABSTAIN" from voting on that
proposal.
If your shares are registered in the name of a broker or other "street
name" nominee, your votes will only be counted as to those matters actually
voted. If you do not provide voting instructions, they will not be counted
(commonly referred to as "broker non-votes"). Broker non-votes will be
1
<PAGE>
counted for purposes of determining the presence or absence of a quorum for the
transaction of business.
Solicitation Costs
The solicitation of your proxy will initially be conducted by mail;
however, further solicitations may be made by telephone or oral communication.
Officers, directors and employees of the Company may solicit proxies but will
not receive any special compensation. Also arrangements, including
reimbursement for expenses in forwarding proxy materials, will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward
proxy materials to beneficial owners of Common Stock. All of the expenses
involved in preparing, assembling and mailing this Proxy Statement and the
enclosed material will be paid for by the Company.
The Company
The Company was formed in August 1992 as a holding company for the
packaging, ceramics, aluminum and developmental businesses formerly owned by
Adolph Coors Company ("ACCo"). Effective December 27, 1992, ACCo distributed to
its shareholders all then outstanding shares of the Company's Common Stock (the
"ACX Spin-Off"). The principal subsidiary of ACCo is Coors Brewing Company
("Coors Brewing" or "CBC"). Unless the context indicates otherwise, the term
the "Company" or "ACX" is used in this Proxy Statement to include ACX
Technologies, Inc. and any of its subsidiaries including CoorsTek, Inc.,
(formerly known as Coors Porcelain Company) and its subsidiaries (collectively
referred to as "CoorsTek"), Graphic Packaging Corporation and its subsidiaries
(collectively referred to as "Graphic Packaging" or "GPC"), Golden Technologies
Company, Inc. and its subsidiaries (collectively referred to as "Golden
Technologies" or "GTC"), and Golden Aluminum Company and its subsidiaries
(collectively referred to as "Golden Aluminum" or "GAC").
In March 1997, the Company sold GAC to Crown Cork & Seal ("Crown") under
an agreement, later amended, which gave Crown the right to transfer GAC back to
the Company before September 1999. Crown transferred GAC back to the Company
effective August 23, 1999. The Company then sold the assets of GAC to Alcoa,
Inc. effective November 5, 1999.
In June 1999 the Board of the Company determined that a distribution of
all the outstanding Common Stock of CoorsTek to the owners of the Company's
Common Stock would enable the management of the Company's two remaining
principal lines of business--Graphic Packaging and CoorsTek--to operate and
develop these businesses more effectively. Thus, effective December 31, 1999
ACX distributed to its shareholders all the outstanding shares of the Common
Stock of CoorsTek (the "CoorsTek Spin-Off"). In connection with the
consummation of the CoorsTek Spin-Off, John K. Coors and Joseph Coors, Jr.
resigned their positions as officers and directors of ACX effective December
31, 1999. See "Certain Relationships and Related Transactions--Transactions
with CoorsTek."
During 1999, the Company sold or closed substantially all the businesses
of Golden Technologies.
As a result of the actions taken in 1999, the remaining core business of
ACX is the packaging business conducted through the Company's subsidiary,
Graphic Packaging.
PROPOSAL I--ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
The Board of Directors of the Company (the "Board") is divided into three
classes, designated Class I, Class II and Class III. Members of each class are
elected for a three-year term. Two Class III
2
<PAGE>
directors will be elected at the upcoming 2000 Annual Meeting, three Class I
directors at the 2001 Annual Meeting, and two Class II directors at the 2002
Annual Meeting. Each of the nominees is currently a director of the Company and
has agreed to serve on the Board if elected. There is presently one vacancy
among the Class II directors which the Company expects will be filled by the
Board some time after the 2000 Annual Meeting. If any of the nominees for the
Class III directors are unavailable for election, the proxies will be voted for
a substitute nominee(s) designated by the Board.
Proxies are solicited in favor of the nominees for the Class III
directors named below with the term of office of each to continue until the
2003 annual shareholders' meeting. The persons named in the accompanying proxy
will vote for the election of the two nominees, unless the authority to vote is
withheld. The two nominees with the highest number of votes cast in favor of
their election will be elected to the Board.
The following lists the two nominees for election as directors of the
Company and the four directors of the Company whose term of office will
continue after the Meeting, including the age of each person, the position with
the Company or principal occupation of each person, certain other directorships
held and the year each person became a director of the Company.
<TABLE>
<CAPTION>
Principal Occupation or Employment Director
and Directorships Age Since
---------------------------------- --- --------
<S> <C> <C>
NOMINEES FOR ELECTION AS CLASS III DIRECTORS
JOHN D. BECKETT 61 1993
President of the R. W. Beckett Corporation, a manufacturer of
components for oil and gas heating, since 1965.
WILLIAM K. COORS 83 1992
Chairman of the Company since its formation in August 1992;
Chairman of ACCo since 1989; President of ACCo since 1989;
Chairman of Coors Brewing; also a director of ACCo since 1940.
Vote Required and Board of Directors' Recommendation
The two nominees for director having the highest number of votes cast in
favor of their election will be elected to the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" EACH OF THE NOMINEES LISTED ABOVE
CLASS I DIRECTORS WHOSE TERMS EXPIRE AT THE 2001 ANNUAL MEETING
JEFFREY H. COORS 55 1992
President of the Company since its formation in August 1992;
President of Graphic Packaging from June 1997 and Chairman of
Graphic Packaging since 1985; Executive Vice President of ACCo
from 1991 to 1992; President of Coors Technology Companies from
1989 to 1992; President of ACCo from 1985 to 1989.
JOHN H. MULLIN, III 58 1992
Chairman of Ridgeway Farm since 1989, a limited liability company
engaged in timber activities and farming; Director of ACCo from
1989 to 1992; also a director of Alex Brown Realty, Inc., The
Liberty Corporation, Carolina Power & Light, Inc. and a trustee
of The Putnam Funds.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation or Employment Director
and Directorships Age Since
---------------------------------- --- --------
<S> <C> <C>
JAMES K. PETERSON 65 1997
President of The Peterson Group, an investment firm, since 1990;
Chief Executive Officer and a Director of Graphic Packaging
Corporation from 1982 to 1989; Chief Operating Officer and a
director of Ludlow Corporation from 1980 to 1982; employed by
Continental Can Company from 1971 to 1980, most recent position
was Vice President.
CLASS II DIRECTOR WHOSE TERM EXPIRES AT THE 2002 ANNUAL MEETING
JOHN HOYT STOOKEY 69 1993
Chairman of Suburban Propane since March 1996; Non-executive
Chairman of Quantum Chemical Company, a subsidiary of Hanson PLC,
from 1993 to March 1996; President and Chairman of Quantum
Chemical Corporation from 1985 to 1993; also a trustee of United
States Trust Company of New York and a director of Suburban
Propane Partners, The Clark Foundation and The Robert Sterling
Clark Foundation.
</TABLE>
BOARD OF DIRECTORS AND BOARD COMMITTEES
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The Board of Directors held four regular meetings and five special
meetings during 1999. In addition, the Board took action two times by unanimous
written consent. Each director attended at least 75 percent of the total number
of meetings of the Board and the committees on which he served.
Joseph Coors was a member of the Board until August 1996 when he retired
and was named Director Emeritus by the Board. As Director Emeritus, Mr. Coors
provides advice and consulting services to the Board. For these services, he
participates in the Company's Equity Compensation Plan for Non-Employee
Directors and receives an annual retainer, which is described below. However,
he is not a voting member of the Board and is not counted for quorum purposes.
John K. Coors and Joseph Coors, Jr. resigned as members of the Board
effective December 31, 1999 in connection with the CoorsTek Spin-Off.
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The Board has established four standing committees: Audit, Compensation,
Executive and Director. During 1999, membership of the Committees was as
follows:
<TABLE>
<CAPTION>
Board Member Board Audit Compensation Executive Director
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
W. K. Coors X* X*
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J. D. Beckett X X X
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R. P. Godwin X X*
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J. K. Coors** X
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J. H. Mullin, III X X*
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J. Coors, Jr.** X X
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J. A. Peterson X X
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J. H. Coors X X X
-----------------------------------------------------------------------
J. H. Stookey X X X*
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Meetings Held in 1999*** 9 4 4 4 0
</TABLE>
* Chairman
** No longer a director of the Company
*** Does not include two actions by unanimous consent
Audit Committee (all members are non-employee directors)
. Reviews the scope and results of the audit of the Company by the
Company's independent accountants;
. Recommends the appointment of the Company's independent accountants;
. Reviews the adequacy of the Company's systems of internal control and
accounting policies and procedures, including compliance with the
Company's ethics policy;
. Directs and supervises investigations into matters within the scope of
its duties.
Compensation Committee (all members are non-employee directors)
. Reviews and recommends to the Board compensation of management
personnel;
. Reviews and approves executive incentive and benefit plans.
Executive Committee (1 member is a non-employee director and 2 are employee
directors)
. Exercises all of the authority of the Board when the Board is not in
session except as provided in the Company's Articles, Bylaws and
applicable law.
Directors' Committee (2 members are non-employee directors and 1 member is an
employee director)
. Considers and recommends nominees for election as directors;
. Reviews and evaluates the performance of the Board.
. The committee will consider nominees recommended by shareholders;
shareholders who wish to recommend director candidates to the Director
Committee should provide the Secretary of the Company with the
candidate's name, biographical data and qualifications.
Compensation of Directors
The employee director does not receive additional compensation for
serving as a director of the Company. Each non-employee director and the
Director Emeritus of the Company receive an annual retainer of $35,000, 20
percent of which is paid in shares of Common Stock. The balance of the retainer
is paid in cash unless the non-employee director or the Director Emeritus
elects to take all or a portion of it in Common Stock. All shares of Common
Stock received by non-employee directors and
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<PAGE>
the Director Emeritus are subject to forfeiture until completion of the annual
term which ends on the date of the annual shareholders' meeting following
receipt of the shares.
In addition, each non-employee director receives a grant of 2,000 non-
qualified stock options at the beginning of his three-year term as director.
The options, with an exercise price equal to 100% of market value on the date
of grant, vest in equal increments over the three-year period and expire, if
unexercised, six years from the date they vest.
No additional amounts are paid to directors for committee meetings.
Directors and the Director Emeritus are reimbursed for expenses incurred while
attending Board or committee meetings and in connection with any other Company
business. In addition, the Company purchases accidental death and dismemberment
insurance for the non-employee directors and the Director Emeritus.
Family Relationships
Jeffrey H. Coors, John K. Coors and Joseph Coors, Jr. are brothers, and
are sons of Joseph Coors and nephews of William K. Coors.
PROPOSAL 2--NAME CHANGE AMENDMENT TO THE ARTICLES OF INCORPORATION
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The Board of Directors has unanimously approved and recommended that the
shareholders consider and approve an amendment to Article One of the Articles
of Incorporation of the Company (the "Articles"), which would change the name
of the Company from "ACX Technologies, Inc." to "Graphic Packaging
International Corporation." A copy of the Articles of Amendment to the Articles
of Incorporation for this amendment is annexed to this Proxy Statement as
Exhibit A. To be adopted, this proposal requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to
vote thereon at the Meeting.
The Board of Directors of the Company believes that it is in the best
interests of the Company and its shareholders to amend the Articles to give
effect to the proposed amendment. As a result of the CoorsTek Spin-Off the
remaining core business of the Company is the packaging business conducted
through the Company's wholly owned subsidiary, Graphic Packaging. The Board of
Directors considers the proposed name change desirable because it would more
accurately reflect the business conducted by the Company.
Vote Required and Board of Directors' Recommendation
Approval requires the affirmative vote of a majority of the outstanding
shares of Common Stock entitled to vote at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE FOR THE NAME CHANGE PROPOSAL.
PROPOSAL 3--APPROVE AMENDMENTS TO EXECUTIVE INCENTIVE PLAN
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The Company is seeking shareholder approval of amendments to the
Company's Executive Incentive Plan (the "Incentive Plan"). The Board of
Directors approved, subject to shareholder approval, the following amendments
to the Plan: (i) to modify the eligible participants in the Plan to more
accurately reflect the Company's structure and principal business by including
executive officers,
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division presidents, and senior vice-president of sales; (ii) to modify the
financial goals which may be considered by the Committee to include return on
invested capital (which is defined as the divisional net income divided by a
five quarter average of invested capital); and (iii) to specify the officers
eligible for stated levels of maximum awards.
The Incentive Plan is designed to reward participants for the achievement
of performance goals set by the Compensation Committee. The Board of Directors
believes that compensation tied to the financial performance of the Company
provides a strong link between shareholder value and executive pay. The
amendments to the Incentive Plan are being submitted for shareholder approval
in order to comply with the requirements of Section 162(m) of the Internal
Revenue Code regarding performance-based compensation, so that amounts paid
under the Plan are tax deductible to the Company. A summary of the features of
the Incentive Plan appears below which is qualified in its entirety by
reference to the terms of the Incentive Plan, a copy of which, as amended, may
be obtained upon written request to the Company's Secretary.
Participation. Participants in the Incentive Plan are executive officers,
division presidents and senior vice-president of sales (11 persons).
Administration. The Incentive Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee") which consists entirely
of outside directors. The Committee has the authority to determine performance
goals, to establish terms and conditions of the various compensation incentives
granted under the Incentive Plan, and to reduce an incentive award to adjust
for an unintended benefit.
Awards. The Incentive Plan provides for payment of cash bonuses and
annual grants of non-qualified stock options, the right to purchase shares of
the Company's Common Stock. Cash bonuses are awarded based on the achievement
of financial goals established by the Committee at the beginning of the fiscal
year. These financial goals may be one or more of the following: operating
income, earnings before interest and taxes, return on net assets employed,
return on equity, return on capital, return on invested capital, earnings per
share and/or cash flow of Company or its divisions. Bonus awards as a percent
of annual salary are the same for all participants. If the financial goal is
met, participants receive a "target" bonus of 50 percent of annual salary. The
Committee also establishes a threshold level below which no bonus is earned and
a performance level above target at which 100 percent of salary may be earned.
Potential awards are uncapped and may exceed 100 percent of salary; however,
the awards may not exceed certain maximums set to meet the Internal Revenue
Code's Section 162(m) limitation. These maximum amounts are $1.5 million for
the President of the Company and $1.0 million for all other eligible
participants. If a bonus is earned which is greater than 100 percent of salary,
the portion above 100 percent is paid in cash except in those cases where the
participant has not met the Company's stock ownership guidelines, in which case
it is paid in Common Stock.
Stock options under the Incentive Plan are granted in conjunction with
the Company's Equity Incentive Plan and are subject to all of the terms and
conditions of the Equity Incentive Plan. The options are exercisable for a
period of time as determined by the Committee; however, no options may be
exercised for at least six months after the date of grant. The exercise price
of each option granted is the fair market value of the Company's stock at the
time of grant. The option price may be paid in cash, by surrendering shares
owned for more than six months or through irrevocable instructions to a broker
to deduct the exercise price from the proceeds of the sale.
Determination of Award Payouts. The Committee established performance
goals under the Incentive Plan at the beginning of 2000. Cash bonus awards are
based on the achievement of these pre-established performance goals including,
under the Plan as proposed to be modified, return on invested capital. The
actual amounts to be paid cannot be determined until the end of the year
because they are
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<PAGE>
dependent on the Company's financial performance during the fiscal year. The
amount of cash bonuses which would have been paid in 1999 under the modified
Plan cannot be determined because of the number of acquisitions and
dispositions during the year. Bonuses paid in 1999 under the existing Plan are
included in Executive Compensation-Summary Compensation Table, below.
Stock option grants under the Incentive Plan to directors and executive
officers, including the officers named in the Summary Compensation Table below,
are subject to the discretion of the Committee. As of the date of this proxy
statement, there has been no determination by the Committee with respect to
future awards under the Incentive Plan to any executive officer of the Company.
Accordingly, future awards are not determinable. The table under "Executive
Compensation--Option/SAR Grants in Last Fiscal Year" provides information with
respect to the grant of options during fiscal 1999 to the Company's chief
executive officers and the other executives officers named in the Summary
Compensation Table below.
Amendment. The Committee may amend the Incentive Plan without shareholder
approval where it is not required to satisfy any statutory or regulatory
requirements.
Change of Control. In the event of a change of control, as defined under
the Incentive Plan, prorated cash bonuses will normally be calculated and paid,
if any are earned. Also, outstanding stock option awards which have not yet
vested will immediately vest and become exercisable.
Federal Income Tax Consequences. The grant of a non-qualified stock
option is not taxable to the recipient. If the option is exercised, the
optionee will recognize income equal to the difference between the fair market
value at the time of exercise and the exercise price. At the time of exercise,
the Company takes a deduction for an amount equal to the income recognized by
the optionee.
Vote Required and Board of Directors' Recommendation
Approval requires the affirmative vote of a majority of the shares of
Common Stock present or represented and voting at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THIS PROPOSAL.
PROPOSAL 4--APPROVE AMENDMENT TO EQUITY COMPENSATION PLAN FOR NON-EMPLOYEE
DIRECTORS
- --------------------------------------------------------------------------------
The Company is seeking shareholder approval of an amendment to the
Company's Equity Compensation Plan for Non-Employee Directors (the "Directors'
Plan") to increase the number of shares of Common Stock authorized for issuance
thereunder from 50,000 shares to 150,000 shares.
The Company originally adopted this Plan in 1992 to encourage directors
to own Company Common Stock in order to align their interests more closely with
the shareholders.
Each Non-Employee Director of the Company currently receives 20 percent
of the annual director retainer in the form of an annual grant of restricted
shares of Common Stock (the "Minimum Grant"), and each Non-Employee Director
may make an annual election to receive any or all of the balance of the annual
retainer in the form of restricted shares of Common Stock (the "Elective
Grant"), subject to forfeiture provisions and certain restrictions. The total
number of shares included in the Minimum Grant and the Elective Grant are
determined by dividing the amount of the retainer that is to be paid in Common
Stock by the fair market value on the date of grant. The annual director
retainer is currently $35,000.
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In light of the number of shares previously issued under the Plan as a
result of the Directors' Minimum Grants and Elective Grants since inception of
the Plan in 1992 and the adjustment in the market price of the Common Stock
following the Spin-Off, the Company would not have available sufficient shares
to permit all Non-Employee Directors to receive the Minimum Grant and any
Elective Grant without increasing the number of shares of Common Stock
authorized for issuance under the Directors' Plan during fiscal year 2000. As a
result, the Board approved the increase in the number of shares of Common Stock
authorized for issuance, subject to shareholder approval.
The foregoing description of the proposed amendment to the Directors'
Plan is not a complete summary and is qualified in its entirety by reference to
the terms of the Directors' Plan, a copy of which, as proposed to be amended,
may be obtained upon written request to the Company's Secretary.
Vote Required and Board of Directors' Recommendation
Approval requires the affirmative vote of a majority of the shares of
Common Stock present or represented and voting at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THIS PROPOSAL.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- --------------------------------------------------------------------------------
The following table lists beneficial ownership of Common Stock as of
March 22, 2000 by owners of more than five percent of the Common Stock, each
director and executive officer, and all directors and executive officers as a
group:
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
Address Amount and Nature Percent
Name for 5% Owners of Beneficial Ownership (1) of Class
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Adolph Coors, Adolph Coors Company 2,800,000 9.7%
Jr. Trust Golden, Colorado 80401
(William K.
Coors, Jeffrey
H. Coors, J.
Brad Coors,
Joseph Coors,
and Peter H.
Coors, co-
trustees with
shared voting
and investment
power)
Grover C. Coors Adolph Coors Company 2,727,016 9.5%
Trust Golden, Colorado 80401
(William K.
Coors, Jeffrey
H. Coors, John
K. Coors,
Joseph Coors,
and Joseph
Coors, Jr.,
co-trustees
with shared
voting and
investment
power)
May Kistler Adolph Coors Company 1,726,652 6.0%
Coors Trust Golden, Colorado 80401
(William K.
Coors, Jeffrey
H. Coors,
Joseph Coors,
Joseph Coors,
Jr. and Peter
H. Coors, co-
trustees with
shared voting
and investment
power)
Jeffrey H. ACX Technologies, Inc. 3,029,176 10.5%
Coors (2)(3) 4455 Table Mountain Drive
Golden, Colorado 80403
Herman F. Coors Adolph Coors Company 1,435,000 5.0%
Trust Golden, Colorado 80401
(William K.
Coors, Jeffrey
H. Coors,
Joseph Coors,
Joseph Coors,
Jr. and Peter
H. Coors, co-
trustees with
shared voting
and investment
power)
Joseph Coors Adolph Coors Company 1,986,409 7.0%
(2)(4) Golden, Colorado 80401
Joseph Coors, 1,783,060 6.2%
Jr. (2)(5)
William K. 1,859,151 6.5%
Coors (2)(6)
John D. Beckett 34,187 *
(2)
John H. Mullin, 31,911 *
III (2)
James K. 25,412 *
Peterson (2)
John Hoyt 19,893 *
Stookey (2)
Jed J. Burnham 172,743 *
(2)
Gail A. 50,108 *
Constancio
(2)(7)
David W. 128 *
Scheible (8)
Jill B. W. 124,613 *
Sisson (2)(9)
Directors and 7,130,382 25.0%
Executive
Officers as a
Group (11
persons)
- -------------------------------------------------------------------------------
</TABLE>
* Holds less than 1% of the Common Stock.
(1) Except as otherwise indicated, the beneficial owner has sole voting and
investment power.
(2) Includes shares of Common Stock issuable pursuant to options which are
currently exercisable or will be exercisable within 60 days.
(3) Includes 1,726,652 shares held by Jeffrey H. Coors as trustee of the May
Kistler Coors Trust, as to which he shares voting and investment power with
William K. Coors, Joseph Coors, Joseph Coors, Jr. and Peter H. Coors, as
co-trustees. Also does not include: 131,677 shares of Common Stock
restricted and unissued until the earlier of (i) grantee's retirement,
death, disability or termination of employment, or (ii) the year 2000
(10,421 shares), 2001 (6,552 shares), 2002 (9,726 shares), 2004 (18,375
shares), 2005 (20,826) and 2010 (22,965 shares); or 121,343 shares of
Common Stock restricted and unissued until retirement. Includes 1,191,390
shares issuable pursuant to options that are currently exercisable or will
be exercisable within 60 days. Also includes shares held by 401(k) Plan.
10
<PAGE>
(4) Includes 250,000 shares held by Joseph Coors as co-trustee of his revocable
trust. Also includes 1,726,652 shares held by Joseph Coors as trustee of
the May Kistler Coors Trust, as to which he shares voting and investment
power with William K. Coors, Jeffrey H. Coors, Joseph Coors, Jr. and Peter
H. Coors, as co-trustees. Includes 3,638 shares issuable pursuant to
options that are exercisable or will be exercisable within 60 days.
(5) Includes 1,726,652 shares held by Joseph Coors, Jr. as trustee of the May
Kistler Coors Trust, as to which he shares voting and investment power with
William K. Coors, Jeffrey H. Coors, Joseph Coors and Peter H. Coors, as co-
trustees. All options to purchase shares of Company Common Stock were
converted into CoorsTek options and all stock units under the deferred
compensation plan were converted into CoorsTek stock units as a result of
the CoorsTek Spin-Off.
(6) Includes 1,726,652 shares held by William K. Coors as trustee of the May
Kistler Coors Trust, as to which he shares voting and investment power with
Jeffrey H. Coors, Joseph Coors, Joseph Coors, Jr. and Peter H. Coors, as
co-trustees. Does not include the following shares held by William K. Coors
as trustee as to which he disclaims beneficial ownership: (1) 178,064
shares: Jeffrey H. Coors, Joseph Coors and Peter H. Coors, co-trustees with
shared voting and investment power; and (2) 3,326,060 shares: Jeffrey H.
Coors, Joseph Coors, Joseph Coors, Jr. and Peter H. Coors, co-trustees with
shared voting and investment power. Includes 6,063 shares issuable pursuant
to options that are exercisable or will be exercisable within 60 days.
(7) Does not include 12,256 shares of common stock restricted and unissued
until the earlier of grantee's retirement, death, disability or termination
of employment.
(8) Includes shares held by 401(K) plan.
(9) Does not include 28,435 shares of Common Stock restricted and unissued
until the earlier of (i) grantee's retirement, death, disability or
termination of employment, or (ii) the year 2008 (1,059 shares) and 2009
(11,983 shares).
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The Compensation Committee (the "Committee") of the Board of Directors,
which is composed entirely of independent directors, is responsible for all
compensation matters regarding the Company's executive officers and for
administering and granting awards under all executive compensation plans in
which executive officers participate. The current members of the Committee are
John H. Mullin, III, who serves as Chairman, and John Hoyt Stookey.
Compensation Policies
General. The Company's compensation policies are intended to create value
for the Company's shareholders through long-term growth in sales and earnings.
The total compensation package, consisting of salary, benefits, an annual
incentive opportunity and equity grants, is designed to attract, motivate and
retain the quality of executives needed to successfully lead and manage the
Company. This package intentionally ties a sizable portion of the executives'
total compensation to Company performance and shareholder value. To further the
focus of its executives on shareholder value, the Committee encourages
executive officers to hold stock according to the following guidelines: 3 times
salary for the Office of the President and 1 time salary for all other
officers. These guidelines have been encouraged, but are not mandatory, and
have no impact on salary increases or participation in the annual incentive
plan.
Salary. Salary range midpoints are targeted to be at the median (the 50th
percentile) of salaries paid by similar-sized manufacturing companies as
determined from data in national salary surveys, a larger group of
manufacturing companies than those in the performance graph index. The data
were gathered and reported to the Company by an independent third-party
consultant. For 1999 the salary data taken from the surveys were based on
several hundred manufacturing companies. Through a regression analysis formula,
the salary data are adjusted to reflect companies with the same sales revenue
as that of the Company. An executive officer is paid within the salary range
depending upon the individual's level of experience, expertise and specific job
performance. Salaries are reviewed annually and any increases are approved by
taking into account the Company's actual financial performance, the executive
officer's performance in meeting Company goals and competitive salary data. The
Committee does not assign a predetermined specific weight to these items.
11
<PAGE>
Annual Incentive. The annual incentive is variable compensation and
depends 100 percent upon Company performance. The 1999 incentive plan provided
for targeted cash bonuses equal to 50 percent of base salary if certain
predetermined financial goals were achieved. These financial goals included an
earnings per share ("EPS") goal for ACX executive officers and the Company's
subsidiary executive officers. The goals were set by the Committee in December
1998 and included a "threshold" level below which no bonus would be earned.
Potential awards are uncapped and may exceed 100 percent of salary. Consistent
with the Company's Executive Incentive Plan, the Committee also reviewed the
goals in light of the unusual activities during 1999, i.e., the sale of the
flexible packaging business, the acquisition of Fort James' packaging
operations, the sale of the Company's interest in the solar business, and the
CoorsTek Spin-Off. For 1999, the Committee certified that the EPS goal exceeded
threshold (25%) and, therefore, cash bonuses paid to ACX executive officers
equaled 35 percent of base salary.
Executive officers may elect to defer up to 100 percent of the annual
bonus. Amounts deferred are deemed to be invested, at the executive officer's
election, in either a fixed rate fund or in a stock units fund, provided the
bonus is deferred for a minimum of two years. Bonuses deemed invested in the
fixed rate fund earn simple interest during the deferral period equal to the
average rate for 10-year Treasury notes plus two points. The bonus plus accrued
interest is paid in cash at the end of the deferral period. Bonuses deemed
invested in the stock units fund are denominated as a specific number of shares
of Common Stock by using the market value of these shares at the time of the
investment divided by the amount of the bonus invested in stock units. In
addition, the holder of stock units receives one non-qualified stock option for
each two stock units taken in place of the cash bonus. The options vest ratably
over two years and have a 10-year term. This provision is designed to further
encourage stock ownership by the executives. The stock units are paid by
issuing an equal number of shares of Common Stock at the end of the deferral
period.
Equity Grants. Equity grants are variable compensation and tied 100
percent to the future performance of the Company's Common Stock. The Company's
equity plan currently allows for equity grants of non-qualified stock options,
restricted shares, stock units and bonus shares. During 1999, the Committee
made accelerated option grants to executive officers equal to three times the
normal grants, with the understanding that no additional option grants are
anticipated through 2002. The accelerated option grants were made in order to
provide a stronger incentive as executive officers would benefit by the full
increase in stock price during the option term just as shareholders do. The
options can vest based on favorable stock performance, but will vest in any
event, based on continued employment no later than five years after grant.
Options were granted at 100 percent of the market price of the Company's Common
Stock on the date of grant. The Committee also granted stock units and stock
options at market price to those executive officers who elected to defer their
bonus and invest it in the stock units fund.
GAC. In addition, the Committee awarded the remainder of the bonuses for
the disposition of Golden Aluminum Company. In 1997 when GAC was originally
sold, Crown, the buyer, had the right to transfer GAC back to the Company (the
"stock put"). Because of the stock put right, the Committee decided to reserve
a portion of the executive officer bonus for 1997 until the expiration of the
stock put period or final sale of GAC. In 1999, Crown exercised the stock put
and transferred GAC back to the Company effective August 23, 1999. In November
1999, the Company, in turn, sold GAC's assets to Alcoa, Inc. The sale of GAC
having been finalized, the Committee awarded the remainder of the 1997 bonus to
the executive officers.
Chief Executive Officer Compensation
Two members served in the Office of the President and shared the chief
executive officer function during 1999. Each year the Office of the President
evaluates its performance against the
12
<PAGE>
following four strategic goals approved by the Committee: leadership, creation
of earnings, growth and innovation. The Committee considers this self-
evaluation at the time it does its own evaluation of the Office of the
President's performance.
Salaries for the two members are targeted, in total, to be no greater
than the combined median (the 50th percentile) salaries of the top two
executives in similar-sized manufacturing companies.
Each member of the Office of the President participated in the annual
incentive opportunity described above and earned a bonus for 1999 at the level
of 35 percent of salary. The target bonus opportunity for each member was 50
percent of salary and threshold was 25% of salary.
Non-qualified stock options were granted to each member during 1999 and
upon the deferral of a bonus which was invested in stock units, as described
above.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally limits the
Company's tax deduction for compensation paid to the executive officers named
in the Summary Compensation Table, which follows this report, to $1 million
unless certain requirements are met.
The Committee has taken and intends to continue taking the necessary
steps to ensure that the Company's tax deduction is preserved and not limited
by the $1 million deductibility cap. In particular, the Committee sought and
obtained shareholder approval for the Company's Executive Incentive Plan and
its Equity Incentive Plan, as required under Section 162(m) and is seeking
approval of an amendment to the Executive Incentive Plan at the 2000
Shareholders Meeting.
This report is submitted by the Compensation Committee of the Board of
Directors:
JOHN H. MULLIN, III, Chairman
JOHN HOYT STOOKEY
13
<PAGE>
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
Summary Compensation Table
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
----------------------------------- ----------------------- All
Other Restricted Securities Other
Annual Stock Underlying Compen-
Name and Principal (1) Compen- Award(s) Options/SARs sation
Position Year Salary ($) Bonus ($) sation ($) ($) (2) (#) ($) (3)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jeffrey H. Coors 1999 $510,000 $206,700 (4) 293,721 $10,025
Office of the President 1998 $485,000 $305,550 $56,150 (5) 67,048 $ 9,031
1997 $460,000 $479,780 $ 6,703 (6) 24,189 $ 8,053
Joseph Coors, Jr. 1999 $510,000 $206,700 (4) 288,000 $14,018
Office of the President 1998 $485,000 $305,550 62,000 $12,705
1997 $460,000 $479,780 $ 3,236 (6) 15,000 $ 8,659
Jed J. Burnham 1999 $231,000 $ 95,600 (4) 61,500 $ 9,245
CFO and Treasurer 1998 $220,000 $138,600 $56,164 (5) 12,000 $ 8,842
1997 $195,000 $203,385 15,000 $ 4,000
Jill B.W. Sisson 1999 $192,000 $ 86,060 (4) 52,772 $ 6,498
General Counsel and 1998 $182,500 $114,975 10,000 $ 6,241
Secretary 1997 $170,000 $177,310 13,358 $ 2,981
Beth A. Parish 1999 $120,000 $ 46,600 $22,035 (7) 32,222 $ 3,950
Controller 1998 $110,000 $ 94,300 (8) $21,765 (9) 6,000 $ 3,374
1997 $ 75,252 $ 50,000 3,000 $ 1,850
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Bonuses shown are the total bonuses for 1999 and are paid 100 percent in
cash except where executives elect to defer a portion of the bonus into
either the fixed rate fund or the stock units fund as described above in
the Committee's Report.
(2) Stock units were granted on October 1, 1994 in an amount approximately
equal to the Company's liability as of January 1, 1994 for the benefit due
certain named executives under salary continuation agreements. The stock
units replace a cash liability of the Company and tie the eligible named
executive's post-retirement benefit to stock value. The stock units are
payable in full upon retirement at age 60 or after. The stock units are 50
percent vested at age 50 with 10 years of service and the remaining 50
percent vests in 5 percent increments between ages 51 and 60. The number
of stock units granted, the percent vested at year end 1999 and the market
value at year end 1999, respectively, were: Jeffrey H. Coors--66,672
units, 65 percent vested, valued at $854,235 and Joseph Coors, Jr.--64,032
units, 75 percent vested, valued at $820,410.
(3) All Other Compensation includes the value of term life insurance
benefiting the executive and the employer's contribution to the 401(K)
plan. For 1999, the value of term life insurance benefits and the
employer's 401-K contributions, respectively, were as follows: Jeffrey H.
Coors--$6,025 and $4,000; Joseph Coors, Jr.--$10,018 and $4,000; Jed J.
Burnham--$5,245 and $4,000; Jill B. W. Sisson--$2,498 and $4,000; and Beth
A. Parish--$991 and $2,959.
(4) Amounts paid were less than $50,000 or 10% of total annual salary and
bonus.
(5) Amounts shown include the imputed value to the executive of converting a
company-owned country club membership to a personal membership. The club
memberships were valued at $24,385 for Mr. Coors and $33,478 for Mr.
Burnham. The amount shown for Mr. Coors also includes an annual car
allowance of $18,000.
(6) Amounts shown are reimbursements during the year for taxes.
(7) Amount shown consists of car allowance ($12,000), personal benefit
($6,000) and country club dues including reimbursement for taxes ($3,765).
(8) In addition to the annual cash bonus in 1998, Ms. Parish received a one-
time bonus of $25,000 as a result of her election as an officer of the
Company.
(9) Amount shown includes a personal benefit of ($6,000) and an annual car
allowance of ($12,000).
14
<PAGE>
Option/SAR Grants in Last Fiscal Year
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Individual Grants (1)
-------------------------------------------------------------
Number of % of Total
Securities Options/
Underlying SARs Exercise Grant Date
Options/ Granted to or Base Present
SARs Granted Employees Price Expiration Value ($)
Name (#) in Fiscal Yr. ($/Sh) (2) Date (3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jeffrey H. Coors 288,000 (4) $13.750 02/08/09 $2,077,315
5,721 (5) $12.843 02/28/09 $ 28,421
-------
293,721 16.2%
Joseph Coors, Jr. 288,000 (4) 15.9% $13.750 02/08/09 $2,077,315
$ 443,593
Jed J. Burnham 61,500 (4) 3.4% $13.750 02/08/09
Jill B. W. Sisson 51,000 (4) $13.750 02/08/09 $ 367,858
1,722 (5) $12.843 02/28/09 $ 8,555
-------
52,722 2.9%
Beth A. Parish 31,500 (4) $13.750 02/08/09 $ 227,206
722 (5) $12.843 02/28/09 $ 3,587
-------
32,222 1.8%
- --------------------------------------------------------------------------------
</TABLE>
(1) All options are granted at the Common Stock's market value on the grant
date, and each grant has an expiration date as specified in the table. All
options vest in the event of a change in control. The option price may be
paid in cash, by surrendering shares owned for more than 6 months, or
through irrevocable instructions to a broker to deduct the option price
from the proceeds of the sale. Options include the right to have shares
withheld by the Company to pay withholding tax obligations due in
connection with the exercise.
(2) The exercise price of all outstanding options to acquire Common Stock has
not been adjusted to take into account the impact on the market price of
the Common Stock resulting from the CoorsTek Spin-Off.
(3) Values indicated are an estimate based on the Black-Scholes option pricing
model using the following assumptions: (a) 30.8 percent stock price
volatility based on the average stock price volatility of the companies
included in the S&P Manufacturing (Diversified/Industrials) Index; (b) 6.46
percent average risk-free rate of return; (c) zero dividend yield; (d)
anticipated exercising at the end of the option term; and (e) no adjustment
for non-transferability or risk of forfeiture. The actual value realized
will be determined by the excess of the stock price over the exercise price
on the date the option is exercised. There is no certainty the actual value
realized will be at or near the value estimated by the Black-Scholes option
pricing model.
(4) Options granted annually which vest as follows: 50% shall vest if the
Company's stock price is $20.00 per share on average for 30 consecutive
trading days; the remaining 50% (100% in total) shall vest if the Company's
stock price is $25.00 per share on average for 30 consecutive trading days.
Grant is fully vested and exercisable after five years and until the tenth
anniversary of the grant date.
(5) Options granted as a result of an election to defer the 1998 cash bonus by
investing it in stock units. Options vest ratably over 2 years with each
vested increment being exercisable until the tenth anniversary of the grant
date. Any unvested options are subject to forfeiture if the underlying
bonus shares are not retained for 2 years.
15
<PAGE>
The following two tables set forth the aggregated options/SAR exercises
in the last fiscal year and fiscal year-end option/SAR values. The first table
sets forth the required information as of December 31, 1999 without taking into
account the CoorsTek Spin-Off. The second table sets forth the required
information after taking into account the impact and adjustment resulting from
the CoorsTek Spin-Off.
PRE-COORSTEK SPIN-OFF
- --------------------------------------------------------------------------------
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexer- Value of Unexercised In-
Acquired cised Options/SARs The-Money Options/SARs
On Value at 12/31/99 (#) at 12/31/99 ($) (1)
Exercise Realized ------------------------- -------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey H. Coors -- $-- 664,970 342,579 $24,106 $--
Joseph Coors, Jr. -- $-- 651,832 334,334 $34,437 $--
Jed J. Burnham -- $-- 88,832 74,500 $ -- $--
Jill B.W. Sisson -- $-- 60,435 63,389 $ -- $--
Beth A. Parish -- $-- 5,500 37,222 $ -- $--
- ----------------------------------------------------------------------------------------
</TABLE>
(1) Value of unexercised options equals market value of the shares ($10.6875)
underlying in-the-money options at December 31, 1999, less the exercise
price, times the number of in-the-money options outstanding prior to taking
the CoorsTek Spin-Off into account.
POST-COORSTEK SPIN-OFF
- --------------------------------------------------------------------------------
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexer- Value of Unexercised In-
Acquired cised Options/SARs The-Money Options/SARs
On Value at 12/31/99 (#) at 12/31/99 ($) (1)
Exercise Realized ------------------------- -------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey H. Coors -- $-- 1,191,390 623,150 $24,106 $--
Joseph Coors, Jr.(2) -- $-- -- -- $ -- $--
Jed J. Burnham -- $-- 161,585 135,516 $ -- $--
Jill B.W. Sisson -- $-- 109,931 115,304 $ -- $--
Beth A. Parish -- $-- 10,005 67,707 $ -- $--
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Value of unexercised options equals market value of the shares ($5.875)
underlying in-the-money options at December 31, 1999, less the exercise
price, times the number of in-the-money options outstanding, after taking
the CoorsTek Spin-Off into account.
(2) At Spin-Off, all options were converted into options to purchase CoorsTek
shares.
16
<PAGE>
Pension Plan Table
The estimated total annual retirement benefits payable under the defined
benefit plan in which the named executives participate are set forth in the
table below. The table illustrates benefits accrued through fiscal year 1999
and includes years of service and compensation earned while employed by ACCo,
the former parent of ACX. In connection with the ACX Spin-Off, ACX assumed the
pension liability for the ACCo former employees who transferred to ACX as part
of the ACX Spin-Off and ACX received the funding associated with that
liability.
<TABLE>
- -------------------------------------------------------------------------------------
<CAPTION>
Years of Service
--------------------------------------------------------------------
Remuneration 15 20 25 30 35
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $ 32,813 $ 43,750 $ 54,688 $ 65,625 $ 68,750
$150,000 $ 39,375 $ 52,500 $ 65,625 $ 78,750 $ 82,500
$175,000 $ 45,938 $ 61,250 $ 76,563 $ 91,875 $ 96,250
$200,000 $ 52,500 $ 70,000 $ 87,500 $105,000 $110,000
$225,000 $ 59,063 $ 78,750 $ 98,438 $118,125 $123,750
$250,000 $ 65,625 $ 87,500 $109,375 $131,250 $137,500
$275,000 $ 72,188 $ 96,250 $120,313 $144,375 $151,250
$300,000 $ 78,750 $105,000 $131,250 $157,500 $165,000
$325,000 $ 85,313 $113,750 $142,188 $170,625 $178,750
$350,000 $ 91,875 $122,500 $153,125 $183,750 $192,500
$375,000 $ 98,438 $131,250 $164,063 $196,875 $206,250
$400,000 $105,000 $140,000 $175,000 $210,000 $220,000
$425,000 $111,563 $148,750 $185,938 $223,125 $233,750
$450,000 $118,125 $157,500 $196,875 $236,250 $247,500
$475,000 $124,688 $166,250 $207,813 $249,375 $261,250
$500,000 $131,250 $175,000 $218,750 $262,500 $275,000
$525,000 $137,813 $183,750 $229,688 $275,625 $288,750
$550,000 $144,375 $192,500 $240,625 $288,750 $302,500
$575,000 $150,938 $201,250 $251,563 $301,875 $316,250
- -------------------------------------------------------------------------------------
</TABLE>
(1) The maximum permissible benefit under ERISA from the qualified Retirement
Plan for 1999 was $135,000. In addition, the maximum compensation for 1999
which may be used in determining benefits from the qualified Retirement
Plan is $170,000. The Company has a non-qualified supplemental retirement
plan which provides the benefits which are not payable from the qualified
Retirement Plan because of these limitations. The amounts shown in this
table include the benefits payable under the non-qualified supplemental
retirement plan. The benefit is computed on the basis of a straight life
annuity and is subject to a reduction to reflect, in part, the payment of
Social Security benefits.
(2) The compensation covered by the Retirement Plan is salary only and does not
include any of the other compensation items shown on the summary
compensation table. The salary used to compute benefits is the highest
average salary amount over a 36 consecutive month period in the last ten
years. As of fiscal year-end 1999, average annual compensation covered by
the Retirement Plan and credited years of service with ACX, including
previous compensation and years of service with ACCo and its subsidiaries,
for the named executives are as follows: Jeffrey H. Coors--$485,000 and 28
years; Joseph Coors, Jr.--$485,000 and 23 years; Jed J. Burnham--$215,333
and 7 years; Jill B. W. Sisson--$181,500 and 7 years; and Beth A. Parish--
$101,751 and 12 years.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
The Company has no employment contracts with the named executives.
Compensation received by the named executives upon retirement includes normal
retirement benefits and, Jeffrey Coors, CEO-President, a number of shares of
stock to be granted under the salary continuation agreement described above in
footnote 2 to the Summary Compensation Table. In addition, in the case of a
change in control of the Company, the Company's compensation plans will be
affected as follows: (1) under the Equity Incentive Plan, all outstanding
options will become exercisable in full and all stock units will become payable
in full; (2) under the Executive Incentive Plan (the annual incentive plan),
the
17
<PAGE>
plan will terminate and prorated bonuses will be calculated and paid, if
earned; (3) under the deferred compensation plan, distributions of deferred
amounts will be made in a lump sum within 90 days after the change in control;
and (4) under the salary continuation agreements, stock units vest 100 percent
without regard to the executive's age or service. The definition of change in
control for these purposes is as follows: (i) The acquisition of, or the
ownership of, 50 percent or more of the total Common Stock of the Company then
issued and outstanding, by any person, or group of affiliated persons, or
entities not affiliated with the Company as of the effective dates of these
plans, without the consent of the Board of Directors, or (ii) The election of
individuals constituting a majority of the Board of Directors who were not
either (A) members of the Board of Directors prior to the election or (B)
recommended to the shareholders by management of the Company, or (iii) A
legally binding and final vote of the shareholders of the Company in favor of
selling all or substantially all of the assets of the Company.
Compensation Committee Interlocks and Insider Participation
During 1999, the following individuals served on the Compensation
Committee: John H. Mullin, III and John Hoyt Stookey. There were no
Compensation Committee interlocks during 1999.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
the Company's directors and certain of its officers, and persons holding more
than ten percent of the Company's Common Stock are required to file forms
reporting their beneficial ownership of the Company's Common Stock and
subsequent changes in that ownership with the Securities and Exchange
Commission. Such persons are also required to furnish the Company with copies
of all forms so filed.
Based solely upon a review of copies of such forms filed on Forms 3, 4
and 5, and amendments thereto furnished to the Company, the Company believes
that during the year ended December 31, 1999, its executive officers, directors
and greater than ten percent beneficial owners complied on a timely basis with
all Section 16(a) filing requirements, except as follows: Two statements of
changes of beneficial ownership on Form 4 required to be filed by John D.
Beckett, a director of the Company, to report the acquisition of shares of
common stock were inadvertently filed late reporting four and three
transactions, respectively.
18
<PAGE>
Performance Graph
The following performance graph compares the performance of the Company's
Common Stock to the Standard & Poor's 500 Stock Index and to the Standard &
Poor's Manufacturing (Diversified/Industrials) Index for the period from
December 31, 1994 through December 31, 1999. The graph assumes that the value
of the investment in the Company's Common Stock and each index was $100 at
December 31, 1994 and that all dividends, if any, were reinvested, although it
should be noted that the Company has not paid cash dividends on its Common
Stock. The information contained in this graph is not necessarily indicative of
future Company performance.
[GRAPH]
S&P
S&P Manufacturing
500 (Diversified) ACX Technologies, Inc.
12/31/94 100 100 100
12/31/95 137 141 76
12/31/96 169 194 100
12/31/97 226 231 123
12/31/98 290 268 67
12/31/99 351 329 54
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
S&P 500 $100 $137 $169 $226 $290 $351
S&P Manufacturing
(Diversified) $100 $141 $194 $231 $268 $329
ACX Technologies, Inc. $100 $ 76 $100 $123 $ 67 $ 54
19
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
Joseph Coors, William K. Coors, Joseph Coors, Jr., Jeffrey H. Coors, John
K. Coors, J. Brad Coors and Peter H. Coors are co-trustees of one or more of
the family trusts which collectively own approximately 45% of the Common Stock
of the Company and a majority of the non-voting common stock of ACCo. In
addition, one of those trusts owns 100 percent of the voting common stock of
ACCo. Peter H. Coors is a brother of Jeffrey H. Coors, John K. Coors and Joseph
Coors, Jr. and son of Joseph Coors and is a director and executive officer of
ACCo and Coors Brewing. J. Brad Coors is a son of Joseph Coors, Jr. and a
nephew of Jeffrey H. Coors and John K. Coors, and is an employee of ACCo.
Joseph Coors and William K. Coors are brothers and directors of ACCo. Joseph
Coors, Jr. And John K. Coors are executive officers and Directors of CoorsTek.
ACX, ACCo, and CoorsTek, or their subsidiaries, have certain business
relationships and have engaged or propose to engage in certain transactions
with one another, as described below.
Transactions with Adolph Coors Company
In connection with the 1992 ACX Spin-Off, certain ACX subsidiaries
entered into market-based, long-term supply agreements with Coors Brewing to
provide packaging and starch products to Coors Brewing for use in its business.
Under the original packaging supply agreement, Coors Brewing agreed to
purchase and the Company agreed to supply substantially all of Coors Brewing's
paperboard and label packaging requirements through 1997. In early 1997, this
agreement was modified and extended to a three year, rolling term contract, and
in 1998 was renegotiated through 2002. The new five-year agreement also
provides for a three-year extension to be negotiated by December 31, 2000.
Total sales under the packaging contract have been a material source of revenue
for the Company, accounting for sales of approximately $108,000,000 in 1999 and
are anticipated to be approximately $106,000,000 in 2000.
Until the sale of the starch manufacturing facility in January 1999, the
Company (through its subsidiary, Golden Technologies) sold refined corn starch
to Coors Brewery and purchased brewery by-products, retaining a percentage of
the net sales price on the resale of such by-products. Payments to Coors
Brewing under these arrangements were approximately $454,000 in 1999.
In addition, certain subsidiaries of ACX and ACCo are parties to a few
miscellaneous market-based transactions. The Company's real estate brokerage
subsidiary and the partnership described below received rental income from
Coors Brewing for the use of recreational facilities and Coors Brewing provided
water and waste water treatment services for a CoorsTek ceramics facility
located on property leased from Coors Brewing. During 1999, the Company
received approximately $64,000 for the use of the recreational facilities and
anticipates it will receive approximately $52,000 for this service in 2000.
During 1999, CoorsTek paid ACCo and its subsidiaries approximately $321,000 for
water and the land leased from ACCo. CoorsTek was spun off from the Company on
December 31, 1999.
An ACX subsidiary is a general partner in a limited partnership in which
Coors Brewing is the limited partner. The partnership owns, develops, operates
and sells certain real estate previously owned directly by Coors Brewing or
ACCo. Distributions of $1,825,000 were made to each partner in 1999.
Distributions were allocated equally between the partners until late 1999 when
Coors Brewing recovered its investment. Thereafter distributions are made 80
percent to the general partner and 20 percent to Coors Brewing. It is estimated
that total distributions for 2000 will be $3,000,000.
Transactions with CoorsTek
The CoorsTek Spin-Off was made pursuant to a Distribution Agreement
between the Company and CoorsTek. It established the procedures to effect the
spin-off and provided for the distribution of the
20
<PAGE>
CoorsTek common stock to the shareholders of ACX, the allocation to CoorsTek of
certain assets and liabilities of ACX and the transfer to and assumption by
CoorsTek of those assets and liabilities. In the Distribution Agreement
CoorsTek agreed to repay all outstanding intercompany debt owed by CoorsTek to
ACX and also pay a special dividend to ACX. The total amount of the repayment
and the special dividend together was $200 million. Pursuant to the
Distribution Agreement ACX agreed to continue existing coverage under ACX
insurance policies for CoorsTek until such coverage expires by its terms in
March 2000 (for property insurance) and May 2000 (for casualty insurance) and
for the allocation between ACX and CoorsTek of costs and liabilities associated
with the insurance. Under the Distribution Agreement, ACX and CoorsTek have
each agreed to retain, and to make available to the other, books and records
and related assistance for audit, accounting, claims defense, legal, insurance,
tax, disclosure, benefit administration and other business purposes. Each has
also agreed to pay its own costs related to the CoorsTek Spin-Off and CoorsTek
has agreed to indemnify ACX if the CoorsTek Spin-Off is taxable or if ACX
incurs certain liabilities.
In addition, ACX and CoorsTek entered into contracts governing certain
relationships between them following the CoorsTek Spin-Off, including a Tax-
Sharing Agreement, a Transitional Services Agreement and certain other
agreements. CoorsTek and ACX believe that these agreements are at fair market
value and are on terms comparable to those that would have been reached in
arm's-length negotiations had the parties been unaffiliated at the time of the
negotiations.
The Tax Sharing Agreement defines the parties' rights and obligations
with respect to deficiencies and refunds of federal, state and other taxes
relating to the CoorsTek business for tax years prior to the CoorsTek Spin-Off
and with respect to certain tax attributes of CoorsTek after the CoorsTek Spin-
Off. In general, ACX is responsible for filing consolidated federal and
combined or consolidated state tax returns and paying the associated taxes for
periods through December 31, 1999. CoorsTek will reimburse ACX for the portion
of such taxes related to the CoorsTek business for periods beginning on or
after December 31, 1999. ACX and CoorsTek have agreed to cooperate with each
other and to share information in preparing such tax returns and in dealing
with other tax matters. ACX and CoorsTek will be responsible for their own
taxes other than those described above.
Other Transactions
In 1999, the real estate limited partnership with Coors Brewing described
above sold five lots located in Bear Tooth Ranch, a development of 35 acre or
larger parcels north of Golden, Colorado, to Joseph Coors, Jr. The contract
price for each of the five parcels was based on its appraised value as follows:
three parcels at $325,000 each, one parcel at $310,000, and one parcel at
$332,700.
OTHER BUSINESS
- --------------------------------------------------------------------------------
The Board of Directors of the Company is not aware of any other matters
that are to be presented at the Annual Meeting. If other matters should
properly be presented at the Annual Meeting, the persons named in the proxy
will vote on these matters using their best judgment.
INFORMATION ON INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
The Board has unanimously reappointed the firm of PricewaterhouseCoopers
LLP ("PWC") as independent accountants for the 2000 fiscal year. A
representative of PWC will be present at the Annual Meeting to answer questions
from the shareholders and will be given an opportunity to make a statement on
behalf of PWC.
21
<PAGE>
RESOLUTIONS PROPOSED BY INDIVIDUAL SHAREHOLDERS
- --------------------------------------------------------------------------------
In order to include a shareholder proposal in the Company's Proxy
Statement and form of proxy relating to the Company's next Annual Meeting of
Shareholders following the end of the 2000 fiscal year, it must be received by
the Company no later than December 31, 2000. The Company intends to hold its
2000 Annual Meeting in May 2001.
REPORT ON FORM 10-K
- --------------------------------------------------------------------------------
The 1999 Annual Report is enclosed with this Proxy Statement and includes
the Company's Annual Report on Form 10-K.
This Notice and Proxy Statement are sent by order of the Board of
Directors.
/s/ Jill . W. Sisson
Dated: March 30, 2000 Jill B. W. Sisson, General Counsel and
Secretary
22
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
ACX TECHNOLOGIES, INC.
Pursuant to Section 7-110-106 of the Colorado Corporate Code, ACX
Technologies, Inc., a Colorado Corporation (the "Corporation"), hereby
certifies as follows:
1. The name of the corporation is ACX Technologies, Inc.
2. Article One of the Articles of Incorporation is hereby amended to
read in its entirety as follows:
"The name of the corporation is Graphic Packaging International
Corporation."
3. This amendment to the Articles of Incorporation was adopted by a vote
of the shareholders of the Corporation on May 9, 2000. The number of
shares voted for the amendment was sufficient for approval.
4. Except as amended hereby, the provisions of the Articles of
Incorporation shall remain in full force and effect.
Dated: , 2000.
ACX Technologies, Inc.
By: _________________________________
[name]
[title]
ATTEST:
_____________________________________
[name, title]
A-1
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
ACX TECHNOLOGIES, INC.
Pursuant to Section 7-110-106 of the Colorado Corporate Code, ACX
Technologies, Inc., a Colorado Corporation (the "Corporation"), hereby
certifies as follows:
1. The name of the corporation is ACX Technologies, Inc.
2. Article One of the Articles of Incorporation is hereby amended to
read in its entirety as follows:
"The name of the corporation is Graphic Packaging International
Corporation."
3. This amendment to the Articles of Incorporation was adopted by a vote
of the shareholders of the Corporation on May 9, 2000. The number of
shares voted for the amendment was sufficient for approval.
4. Except as amended hereby, the provisions of the Articles of
Incorporation shall remain in full force and effect.
Dated: , 2000.
ACX Technologies, Inc.
By: _________________________________
[name]
[title]
ATTEST:
_____________________________________
[name, title]
A-1
<PAGE>
Graphic Packaging International Corporation
Executive Incentive Plan
Effective January 1, 1996
(as amended through March __, 2000)
The name of this plan shall be the Graphic Packaging International
Corporation Executive Incentive Plan. This plan replaces any previous annual and
long-term cash incentive plans used by Graphic Packaging International
Corporation (f/k/a ACX Technologies, Inc.) (the "Company") and it subsidiaries
listed below in Section II. Eligible Participants. This plan is effective for
fiscal years commencing on and after January 1, 1996.
I. PLAN INCLUDES:
A. Cash bonuses based upon predetermined financial goals; and
B. Annual grants of stock options.
II. ELIGIBLE PARTICIPANTS:
The Company's executive officers, division presidents and president and
senior vice-president of sales and marketing.
III. CASH BONUS OPPORTUNITY:
A. Goals:
1. Financial goals are approved at the beginning of each year by the
Company's Compensation Committee (the "Committee") of the Board of
Directors. Goal achievement determines the bonus amount.
2. The Committee may select from one or more of the following
financial measures in determining the financial goals for each
year: operating income, earnings before interest and taxes, return
on net assets employed, return on equity, return on capital,
return on invested capital, earnings per share or cash flow of the
Company or of the applicable Business as appropriate. Definitions
are in Section E below.
3. The financial goals are set at "target", the expected performance
level, with a minimum performance level ("threshold") and the
1
<PAGE>
level at which 100% of salary could be earned ("100%" level) also
set each year.
B. Bonus Awards:
1. Potential bonus awards, as a percent of annual salary, are the
same for all participants as follows:
Threshold performance - 25%
Target performance - 50%
100% level performance - 100%
2. Potential bonus awards are uncapped except for the Section 162(m)
limitation in C.2. below.
3. The Committee has the authority to reduce a bonus amount
unilaterally and retroactively, if needed, to adjust for an
unintended benefit or to address a specific transaction which
occurs after the beginning of the year.
C. Bonus Payments:
1. Bonuses equal to or less than 100% of salary are paid in cash. Any
portion over 100% of salary is paid in cash except in those cases
where the participant has not met the Company's stock ownership
guidelines, in which case the amount over 100% of salary is paid
in stock. All bonuses are paid net of applicable withholding
taxes.
2. To comply with Section 162(m) of the Internal Revenue Code, the
maximum bonus which may be earned by any participant in any year
is limited as follows:
Office of the President - $1.5 million
Officers - $1.0 million
D. Unusual Items:
1. For purposes of measuring the extent to which an incentive goal is
achieved, the following unusual items shall generally be excluded
unless the Committee, in its sole judgment, determines the items
shall be included:
a) restructuring charges as defined by authoritative accounting
literature;
b) income or loss, including shares issued, related to
acquisitions and dispositions of businesses, business segments
or substantial assets in the year of the transaction;
2
<PAGE>
c) the current year effective of adopting accounting
pronouncements under generally accepted accounting principles;
d) legal settlements, judgments, and/or tax audit claims;
e) tax effect of statutory tax rate changes;
f) environmental remediation costs incurred as a result of law
changes affecting prior years;
g) accounting changes, extraordinary items, gain or loss on
disposal of a discontinued operation and/or unusual items as
reported under Accounting Principles Board Opinion No. 30;
h) gains or losses from the issuance or retirement of financial
instruments;
i) other unusual items which are required to be shown as a
separate line item on the income statement; and
j) current year impact of share repurchase programs.
E. Definitions:
1. Cash flow means one or more of the cash flow components in the
Statement of Cash Flows.
2. Earnings per share means "primary earnings per share".
3. Earnings before interest and taxes (EBIT) means operating income
plus other income and expense except for interest.
4. Return on capital is defined as net income for the year divided by
the average of total capital at the beginning and end of the year.
Total capital is the sum of equity and long-term debt.
5. Return on equity is defined as net income for the year divided by
the average of equity at the beginning and end of the year.
6. Return on net assets employed is defined as EBIT divided by a 5-
quarter average of total assets less current liabilities.
7. Return on invested capital is defined as divisional net income
divided by a 5-quarter average of invested capital.
IV. STOCK OPTION GRANTS:
Grants of stock options shall be made pursuant to the terms of the the
Company's Equity Incentive Plan.
3
<PAGE>
V. ADMINISTRATIVE PROVISIONS:
A. Participation for Newly Promoted or Newly Hired Officers:
Annual cash bonus is prorated based upon number of days in the eligible
position unless an exception is made at the time of promotion or hire.
The exception for a participant at the Company is made by Office of the
President and for a Business participant by the president of the
Business.
B. Impact of Employment Termination on Bonus Payouts:
Participant must be employed on last day of calendar year to earn a
bonus except for the following terminations which may result in a
prorated bonus based upon number of days of participation during the
year. Any exceptions and a prorated bonus must be approved by the Office
of the President for a Company participant and by the president of a
Business for a Business participant.
1. retirement, including early retirement;
2. death;
3. long-term disability;
4. transfer to another Business within the Company; or
5. elimination of position or demotion for reasons other than poor
performance.
C. Bonuses:
1. Bonus amounts must be self-funded, i.e., they must be accrued before
determining whether a bonus is earned.
2. Bonuses are subject to annual review/audit and approval by the
Committee.
3. Bonuses will be paid, net of withholding taxes, after the Company
releases its annual earnings for the bonus year.
4. Bonuses may be denied in whole or in part by the Committee, if in
its judgment, the participant took any actions which were deemed to
be detrimental to the Business, to the Company or to one of its
subsidiaries.
D. Plan Administration and Termination:
1. The incentive plan is administered by each company at the direction
of the Committee which reserves the right to interpret, modify or
terminate the incentive plan. Changes to the plan will not apply to
bonuses which have been earned but not paid.
4
<PAGE>
2. Participation in the incentive plan does not in any way constitute a
contract of employment and does not guarantee continued employment
with the Company or any of its subsidiaries.
3. In the event of a change of control, the incentive plan will
normally end and prorated bonuses will be calculated and paid, if
any are earned. Change in control at the Business shall mean the
sale or other disposition of 50% or more of the capital stock or
assets by the Business or the Company. Change in control at the
Company shall be defined as in the the Company's Equity Incentive
Plan.
4. Potential bonus awards may not be pledged, encumbered, assigned,
alienated, anticipated or commuted in any manner by the participant.
5. The Committee reserves the right to offset any earned bonus against
any debts owed by the participant to the Business, to the Company or
to any of the Company's subsidiaries.
ATTEST: GRAPHIC PACKAGING INTERNATIONAL
CORPORATION
/s/ Jill B.W. Sisson
- --------------------------- -------------------------------------
Jill B.W. Sisson, Corporate Secretary
Dated: ____________________
5
<PAGE>
GRAPHIC PACKAGING INTERNATIONAL CORPORATION
EXECUTIVE INCENTIVE PLAN
Effective January 1, 1996
(as amended through March , 2000)
The name of this plan shall be the Graphic Packaging International
Corporation Executive Incentive Plan. This plan replaces any previous annual
and long-term cash incentive plans used by Graphic Packaging International
Corporation (f/k/a ACX Technologies, Inc.) (the "Company") and it subsidiaries
listed below in Section II. Eligible Participants. This plan is effective for
fiscal years commencing on and after January 1, 1996.
I.PLAN INCLUDES:
A. Cash bonuses based upon predetermined financial goals; and
B.Annual grants of stock options.
II.ELIGIBLE PARTICIPANTS:
The Company's executive officers, division presidents and senior vice-
president of sales.
III.CASH BONUS OPPORTUNITY:
A. Goals:
1. Financial goals are approved at the beginning of each year by the
Company's Compensation Committee (the "Committee") of the Board of
Directors. Goal achievement determines the bonus amount.
2. The Committee may select from one or more of the following
financial measures in determining the financial goals for each
year: operating income, earnings before interest and taxes, return
on net assets employed, return on equity, return on capital,
return on invested capital, earnings per share or cash flow of the
Company or of the applicable Business as appropriate. Definitions
are in Section E below.
3. The financial goals are set at "target", the expected performance
level, with a minimum performance level ("threshold") and the
level at which 100% of salary could be earned ("100%" level) also
set each year.
B. Bonus Awards:
1. Potential bonus awards, as a percent of annual salary, are the
same for all participants as follows:
<TABLE>
<S> <C>
Threshold performance--25%
Target performance--50%
100% level performance--100%
</TABLE>
2. Potential bonus awards are uncapped except for the Section 162(m)
limitation in C.2. below.
3. The Committee has the authority to reduce a bonus amount
unilaterally and retroactively, if needed, to adjust for an
unintended benefit or to address a specific transaction which
occurs after the beginning of the year.
B-1
<PAGE>
C. Bonus Payments:
1. Bonuses equal to or less than 100% of salary are paid in cash. Any
portion over 100% of salary is paid in cash except in those cases
where the participant has not met the Company's stock ownership
guidelines, in which case the amount over 100% of salary is paid
in stock. All bonuses are paid net of applicable withholding
taxes.
2. To comply with Section 162(m) of the Internal Revenue Code, the
maximum bonus which may be earned by any participant in any year
is limited as follows:
<TABLE>
<S> <C>
Office of the President-- $1.5 million
Officers-- $1.0 million
</TABLE>
D. Unusual Items:
1. For purposes of measuring the extent to which an incentive goal is
achieved, the following unusual items shall generally be excluded
unless the Committee, in its sole judgment, determines the items
shall be included:
a) restructuring charges as defined by authoritative accounting
literature;
b) income or loss, including shares issued, related to
acquisitions and dispositions of businesses, business segments
or substantial assets in the year of the transaction;
c) the current year effective of adopting accounting
d) legal settlements, judgments, and/or tax audit claims;
e) tax effect of statutory tax rate changes;
f) environmental remediation costs incurred as a result of law
changes affecting prior years;
g) accounting changes, extraordinary items, gain or loss on
disposal of a discontinued operation and/or unusual items as
reported under Accounting Principles Board Opinion No. 30;
h) gains or losses from the issuance or retirement of financial
instruments;
i) other unusual items which are required to be shown as a
separate line item on the income statement; and
j) current year impact of share repurchase programs.
E. Definitions:
1. Cash flow means one or more of the cash flow components in the
Statement of Cash Flows.
2. Earnings per share means "primary earnings per share".
3. Earnings before interest and taxes (EBIT) means operating income
plus other income and expense except for interest.
4. Return on capital is defined as net income for the year divided by
the average of total capital at the beginning and end of the year.
Total capital is the sum of equity and long-term debt.
5. Return on equity is defined as net income for the year divided by
the average of equity at the beginning and end of the year.
6. Return on net assets employed is defined as EBIT divided by a 5-
quarter average of total assets less current liabilities.
7. Return on invested capital is defined as divisional net income
divided by a 5-quarter average of invested capital.
IV.STOCK OPTION GRANTS:
Grants of stock options shall be made pursuant to the terms of the the
Company's Equity Incentive Plan.
B-2
<PAGE>
V.ADMINISTRATIVE PROVISIONS:
A. Participation for Newly Promoted or Newly Hired Officers:
Annual cash bonus is prorated based upon number of days in the
eligible position unless an exception is made at the time of
promotion or hire. The exception for a participant at the Company is
made by Office of the President and for a Business participant by the
president of the Business.
B. Impact of Employment Termination on Bonus Payouts:
Participant must be employed on last day of calendar year to earn a
bonus except for the following terminations which may result in a
prorated bonus based upon number of days of participation during the
year. Any exceptions and a prorated bonus must be approved by the
Office of the President for a Company participant and by the
president of a Business for a Business participant.
1. retirement, including early retirement;
2. death;
3. long-term disability;
4. transfer to another Business within the Company; or
5. elimination of position or demotion for reasons other than poor
performance.
C.Bonuses:
1. Bonus amounts must be self-funded, i.e., they must be accrued
before determining whether a bonus is earned.
2. Bonuses are subject to annual review/audit and approval by the
Committee.
3. Bonuses will be paid, net of withholding taxes, after the Company
releases its annual earnings for the bonus year.
4. Bonuses may be denied in whole or in part by the Committee, if in
its judgment, the participant took any actions which were deemed
to be detrimental to the Business, to the Company or to one of its
subsidiaries.
D. Plan Administration and Termination:
1. The incentive plan is administered by each company at the
direction of the Committee which reserves the right to interpret,
modify or terminate the incentive plan. Changes to the plan will
not apply to bonuses which have been earned but not paid.
2. Participation in the incentive plan does not in any way constitute
a contract of employment and does not guarantee continued
employment with the Company or any of its subsidiaries.
3. In the event of a change of control, the incentive plan will
normally end and prorated bonuses will be calculated and paid, if
any are earned. Change in control at the Business shall mean the
sale or other disposition of 50% or more of the capital stock or
assets by the Business or the Company. Change in control at the
Company shall be defined as in the the Company's Equity Incentive
Plan.
4. Potential bonus awards may not be pledged, encumbered, assigned,
alienated, anticipated or commuted in any manner by the
participant.
B-3
<PAGE>
5. The Committee reserves the right to offset any earned bonus
against any debts owed by the participant to the Business, to the
Company or to any of the Company's subsidiaries.
ATTEST: Graphic Packaging International
Corporation
_____________________________________
/s/ Jill B.W. Sisson
Dated: ______________________________ _____________________________________
Jill B.W. Sisson,
Corporate Secretary
B-4
<PAGE>
time to time by the Board, shall serve at the pleasure of the Board and may
resign at any time upon written notice to the Board.
(c) "Director" means a member of the Board who is neither an
officer nor an employee of the Company. For purposes of the Plan, an employee is
an individual whose wages are subject to the withholding of federal income tax
under Section 3401 of the Internal Revenue Code, and an officer is an individual
elected or appointed by the Board or chosen in such other manner as may be
prescribed in the bylaws of the Company to serve as such.
(d) "Fair Market Value" means the average of the highest and
lowest prices of the Stock as reported on the New York Stock Exchange ("NYSE")
on a particular date. If there are no Stock transactions on such date, the Fair
Market Value shall be determined as of the immediately preceding date on which
there were Stock transactions. If the price of the Stock is not reported on
NYSE, the Fair Market Value of the Stock on the particular date shall be as
determined by the Committee using a reference comparable to the NYSE system. If,
upon exercise of an Option, the exercise price is paid by a broker's transaction
as provided in subsection 6A.3(g)(ii)(c) or subsection 6B.2(g), the Fair Market
Value, for purposes of the exercise, shall be the price at which the Stock is
sold by the broker.
(e) "Internal Revenue Code" means the Internal Revenue Code of
1986, as it may be amended from time to time.
(f) "Option" means a right to purchase Stock at a stated price
for a specified period of time. All options granted under the Plan shall be
"non-qualified stock options" whose grant is not intended to fall under the
provisions of Section 422 of the Code.
(g) "Option Price" means the price at which shares of Stock
subject to an Option may be purchased, as determined in accordance with
subsection 6A.3(b) or subsection 6B.2(b).
(h) "Restricted Stock Award" means an award of Stock granted to
a Director or Subsidiary Director pursuant to Section 6 or Section 6B that is
subject to certain restrictions imposed in accordance with the provisions of the
Plan.
(i) "Stock" means the $0.01 par value Common Stock of the
Company.
(j) "Subsidiary" means a corporation, more than 50% of the
stock of which is owned by the Company, or a corporation, more than 50% of the
stock of which is owned by a Subsidiary.
(k) "Subsidiary Director" means a member of the board of
directors of a Subsidiary, who is neither an officer or employee of the
Subsidiary nor an officer, employee, or director of the Company. For purposes of
the Plan, an employee is an individual whose wages are subject to the
withholding of federal income tax under Section 3401 of the Internal Revenue
Code, and an officer is an individual elected or
2
<PAGE>
appointed by the board of directors of the Subsidiary or chosen in such other
manner as may be prescribed in the bylaws of the Subsidiary to serve as such.
2.2 Gender and Number. Except when otherwise indicated by the
context, the masculine gender shall also include the feminine gender, and the
definition of any term herein in the singular shall also include the plural.
Section 3
Plan Administration
-------------------
The Committee shall be responsible for the administration of the Plan.
However, the Committee shall have no authority, discretion or power to select
the Directors who will receive Restricted Stock Awards or Options, determine the
Restricted Stock Awards to be granted pursuant to the Plan, the number of shares
of Stock to be issued thereunder or the time at which such Restricted Stock
Awards are to be granted, determine the number of shares subject to an Option
granted to a Director, establish the duration and nature of Restricted Stock
Awards or Options or alter any other terms or conditions specified in the Plan,
except in the sense of administering the Plan subject to the provisions of the
Plan. However, as to Subsidiary Directors, the Committee shall have the sole
discretion and authority to select the Subsidiary Directors to whom Options
shall be granted, the number of shares subject to the Options, the Option Price,
the period and manner in which an Option becomes exercisable, and all terms and
conditions of the Options to the extent not otherwise specified in the Plan.
Subject to the foregoing limitations, the Committee, by majority action thereof,
is authorized to interpret the Plan, prescribe, amend and rescind rules and
regulations relating to the Plan, provide for conditions and assurances deemed
necessary or advisable to protect the interests of the Company and make all
other determinations necessary or advisable for the administration of the Plan,
but only to the extent not contrary to the express provisions of the Plan. No
member of the Committee shall be liable for any action or determination made in
good faith. The determinations, interpretations and other actions of the
Committee pursuant to the provisions of the Plan shall be binding and conclusive
for all purposes and on all persons.
Section 4
Stock Subject to the Plan
-------------------------
4.1 Number of Shares. One Hundred Fifty Thousand (150,000) shares of
Stock are authorized for issuance under the Plan in accordance with the
provisions of the Plan and subject to such restrictions or other provisions as
the Committee may from time to time deem necessary. This authorization may be
increased from time to time by approval of the Board and by the shareholders of
the Company if, in the opinion of counsel for the Company, such shareholder
approval is required. Shares of Stock that are issued as Restricted Stock
Awards and that may be issued on the exercise of Options shall be applied to
reduce the maximum number of shares of Stock remaining available for use under
the Plan. The Company shall at all times during the term of the Plan retain as
authorized and unissued Stock at least the
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number of shares from time to time required under the provisions of the Plan or
otherwise assure itself of its ability to perform its obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are subject to
an Option that expires or for any reason is terminated unexercised shall
automatically become available for use under the Plan. Any shares of Stock that
are subject to a Restricted Stock Award and that are forfeited and any shares of
Stock that are withheld for the payment of taxes or received by the Company as
payment of the exercise price of an Option shall be available for use under the
Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company
shall at any time increase or decrease the number of its outstanding shares of
Stock or change in any way the rights and privileges of such shares by means of
the payment of a stock dividend or any other distribution upon such shares
payable in Stock, or through a stock split, subdivision, consolidation,
combination, reclassification or recapitalization involving the Stock, then in
relation to the Stock that is affected by one or more of the above events, the
numbers, rights and privileges of the following shall be increased, decreased or
changed in like manner as if they had been issued and outstanding, fully paid
and nonassessable at the time of such occurrence: (i) the shares of Stock as to
which Restricted Stock Awards and Options may be granted under the Plan; and
(ii) the shares of the Stock then included in each outstanding Restricted Stock
Award and Option granted hereunder.
4.4 Other Distributions and Changes in Stock. If
(a) the Company shall at any time distribute with respect to
the Stock assets or securities of persons other than the Company (excluding cash
or distributions referred to in Section 4.3),
(b) the Company shall at any time grant to the holders of its
Stock rights to subscribe pro rata for additional shares or for any other
securities of the Company, or
(c) there shall be any other change (except as described in
Section 4.3) in the number or kind of outstanding shares of Stock or of any
other stock or securities into which the Stock shall be changed or for which it
shall have been exchanged,
and if the Committee shall in its discretion determine that the event described
in subsection (a), (b), or (c) above equitably requires an adjustment in the
number or kind of shares subject to a Restricted Stock Award or Option or the
taking of any other action by the Committee, including without limitation, the
setting aside of any property for delivery to the Participant upon the exercise
of an Option or the full vesting of a Restricted Stock Award, then such
adjustments shall be made, or other action shall be taken, by the Committee and
shall be effective for all purposes of the Plan and on each outstanding
Restricted Stock Award or Option that involves the particular type of stock for
which a change was effected. Notwithstanding the foregoing provisions of this
Section 4.4, a Participant holding Stock received as a Restricted Stock Award
shall have the right to receive all amounts, including cash and property of any
kind, distributed with
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respect to the Stock after the grant of such Restricted Stock Award upon the
Participant's becoming a holder of record of the Stock.
4.5 General Adjustment Rules. No adjustment or substitution provided
for in this Section 4 shall require the Company to issue a fractional share of
Stock, and the total substitution or adjustment with respect to each Restricted
Stock Award and Option shall be limited by deleting any fractional share. In
the case of any such substitution or adjustment appropriate adjustments shall be
made to Restricted Stock Awards and Options to reflect any such substitution or
adjustment.
4.6 Determination by the Committee, Etc. Adjustments under this
Section 4 shall be made by the Committee, whose determinations with regard
thereto shall be final and binding upon all parties thereto.
Section 5
Participation
-------------
5.1 In General. Each Director shall receive Restricted Stock Awards
and Options on the terms and conditions set forth under the Plan. Each Director
shall, if required by the Committee, enter into an agreement with the Company,
in such form as the Committee shall determine and which is consistent with the
provisions of the Plan. In the event of any inconsistency between the
provisions of the Plan and any such agreement entered into hereunder, the
provisions of the Plan shall govern. Each Subsidiary Director who is selected
by the Committee for participation shall receive a grant of Options or
Restricted Stock Award pursuant to Section 6B.
5.2 Restriction on Award Grants to Certain Individuals.
Notwithstanding the foregoing provisions of Section 5.1, the Committee shall not
grant any Restricted Stock Award or Option to any lineal descendant of Adolph
Coors, Jr. without first consulting with counsel to the Company as to the effect
of any such grant on the possible status of the Company as a "personal holding
company" within the mean of Section 542 of the Internal Revenue Code.
Section 6
Restricted Stock Awards
-----------------------
6.1 Minimum Grant of Restricted Stock. Each Director shall receive
twenty percent of the value of his annual retainer as a director in the form of
a Restricted Stock Award (the "Minimum Grant").
6.2 Elective Grant of Restricted Stock.
(a) Beginning in 1994, each Director may make an annual election
(the "Election") to receive any or all of the remaining cash balance of his
annual retainer as a director in the form of a Restricted Stock Award (the
"Elective Grant"). The Minimum Grant and the Elective Grant are referred to
collectively as the "Grants". The Election must be in writing and must be
delivered to the Secretary of the Company no
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later than the day before the last business day of the month during which the
annual meeting of shareholders of the Company is held.
(b) For the period commencing on December 28, 1992, and ending
with the annual meeting of the Company's shareholders in April 1994, a Director
may elect to receive an Elective Grant by giving written notice to the Secretary
of the Company no later than the last business day of January 1993. A Director
who becomes a Director after January 1993 may elect to receive an Elective Grant
by giving written notice to the Secretary of the Company no later than the last
business day of the month in which the Director is elected to the Board.
(c) All Elections made by a Director pursuant to this Section
6.2 shall be irrevocable.
6.3 Date of Grant, Number of Shares.
(a) The Minimum Grant for the first year, the period commencing
on December 28, 1992 and ending with the annual meeting of the Company's
shareholders in April 1994, shall be made on the last business day of January
1993. A Director who becomes a member of the Board after January 1993 and before
the annual meeting of the Company's shareholders in April 1994 shall receive the
Minimum Grant on the last business day of the month in which the Director is
elected to the Board. Beginning in 1994, the Minimum Grant shall be made on the
last business day of the month in which the annual meeting of shareholders is
held. Beginning in 1994 and prior to 1997, the Elective Grant shall be made on
the first business day that is at least six months and one day following the
date of the Minimum Grant. Beginning in 1997, the Elective Grant shall be made
on the last day of the month in which the annual meeting of shareholders is
held.
(b) The total number of shares of Stock included in each such
Restricted Stock Award shall be determined by dividing the amount of the
Director's retainer that is to be paid in restricted stock by the Fair Market
Value of a share of stock on the date of grant. In no event shall the Company
be required to issue fractional shares. Whenever under the terms of this
Section 6 a fractional share of Stock would otherwise be required to be issued,
an amount in lieu thereof shall be paid in cash based upon the Fair Market Value
of such fractional share.
6.4 Retention of Award, Termination. If a Director's services as a
Board member are terminated at any time, for any reason, before the date of the
annual meeting of the shareholders of the Corporation next following the Minimum
and Elective Grants, all of the shares of Stock granted pursuant to the Minimum
and Elective Grants shall be forfeited.
6.5 Restrictions. Except as otherwise provided in the Plan, shares
of Stock received pursuant to a Restricted Stock Award may not be sold,
assigned, pledged, hypothecated, transferred or otherwise disposed of until the
restrictions applicable to such Stock have lapsed pursuant to Section 6.6.
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6.6 Lapse of Restrictions. All restrictions on Stock covered by
Restricted Stock Awards for a year shall lapse upon the date of the annual
meeting of the shareholders of the Corporation next following the Minimum Grant.
6.7 Privileges of a Stockholder, Transferability. A Director shall
have all voting, dividend, liquidation and other rights with respect to Stock in
accordance with its terms received by him as a Restricted Stock Award under this
Section 6. A Director's right to sell, encumber or otherwise transfer Stock
after restrictions applicable to such Stock have lapsed shall be subject to the
limitations of Section 8.2.
6.8 Enforcement of Restrictions. The Committee shall cause a legend
to be placed on the Stock certificates issued pursuant to each Restricted Stock
Award referring to the restrictions imposed in the Plan and, in addition, may in
its sole discretion require one or more of the following methods of enforcing
such restrictions:
(a) Requiring the Director to keep the Stock certificates, duly
endorsed, in the custody of the Company while the restrictions remain in effect;
or
(b) Requiring that the Stock certificates, duly endorsed, be
held in the custody of a third party while the restrictions remain in effect.
Section 6A
Grant of Options to Directors
-----------------------------
6A.1 Grant. Each Director who is elected to the Board by the
shareholders of the Company for a three year term shall be granted an Option to
purchase 2,000 shares of Stock. If the term for which the Director is elected
is two years, the number of shares subject to the Option shall be 1,332 shares,
and if the terms for which the Director is elected is one year, the number of
shares subject to the Option shall be 666. If insufficient shares are available
for grant to each Director following the Directors' election to the Board, the
number of shares subject to each Option shall be reduced pro rata.
6A.2 Date of Grant. The Options shall be granted as of the last
business day of the month in which the shareholders' meeting at which the
Director was elected was held (the "Grant Date").
6A.3 Stock Option Certificates. Each Option granted to a Director
under the Plan shall be evidenced by a written stock option certificate. A
stock option certificate shall be issued by the Company in the name of the
Director to whom the Option is granted and shall incorporate and conform to the
conditions set forth in this Section 6A.3.
(a) Number. Each Director shall receive under the Plan
Options to purchase the number of shares of Stock specified in Section 6A.1,
subject to adjustment as provided in Section 4. Such grants shall be effective
at the time specified in Section 6A.2.
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(b) Price. The Option Price for each share of Stock covered
by the Option shall be the Fair Market Value of the Stock on the date of grant,
subject to adjustment as provided in Section 4.
(c) Vesting. An Option covering 2,000 shares shall vest in
increments as follows commencing on the first anniversary of the Grant Date:
Number of
Anniversary Shares
----------- ---------
First 666
Second 667
Third 667
An option covering 1,332 shares shall vest as to an increment of 666 shares on
the first anniversary of the Grant Date and as to the remaining increment of 666
shares on the second anniversary of the Grant Date. An Option covering 666
shares shall vest as to all 666 shares on the first anniversary of the Grant
Date. Except as set forth in Sections 7.1 and 7.2, the Option shall not be
exercisable as to any shares as to which the continuous service requirement has
not been satisfied, regardless of the circumstances under which the Director
ceased to be a director. The number of shares as to which the Option may be
exercised shall be cumulative, so that once the Option becomes exercisable as to
any shares it shall continue to be exercisable as to those shares until
expiration or termination of the Option as provided below.
(d) Duration of Options. Each vested increment shall be
exercisable for a period of six years (the "Option Period") after it vests,
unless terminated sooner pursuant to subsection (e) below or fully exercised
prior to the end of such period.
(e) Termination of Service, Death, Etc. The Option shall
terminate in the following circumstances if the Director ceases to be a
director:
(i) If the Director is removed from the Board during the
Option Period for cause, the Option shall be void thereafter for all purposes.
(ii) If the Director ceases to be a member of the Board
for any other reason, the Option shall be exercisable for a period of three
years following the termination to the extent the Option was vested on the date
the Director's services as a director cease.
(f) Transferability, Exercisability. Each Option granted
under the Plan shall not be transferable by a Director other than by will or the
laws of descent and distribution and shall be exercisable during the Director's
lifetime only by the Director or, in the event of disability or incapacity, by
the Director's guardian or legal representative. Notwithstanding any other
provision of the Plan, no Option may be exercised unless and until the amended
and restated Plan is approved by the shareholders of the Company in accordance
with Section 1.3.
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(g) Exercise, Payments, Etc.
(i) The method for exercising each Option granted shall
be by delivery to the Corporate Secretary of the Company of written notice
specifying the number of shares with respect to which the Option is exercised
and payment of the Option Price. The notice shall be in a form satisfactory to
the Committee and shall specify the particular Option (or portion thereof) that
is being exercised and the number of shares with respect to which the Option is
being exercised. The exercise of the Option shall be deemed effective upon
receipt of such notice by the Corporate Secretary and payment to the Company. If
requested by the Company, such notice shall contain the Director's
representation that he or she is purchasing the Stock for investment purposes
only and his or her agreement not to sell any stock so purchased in any manner
that is in violation of the Securities Act of 1933, as amended, or any
applicable state law. Such restrictions, or notice thereof, shall be placed on
the certificates representing the Stock so purchased. The purchase of Stock
pursuant to the Option shall take place at the principal office of the Company
upon delivery of such notice, at which time the purchase price of the Stock
shall be paid in full by any of the methods set forth in Section 6A.3(g)(ii) or
a combination thereof. A properly executed certificate or certificates
representing the Stock shall be delivered to the Holder upon payment therefor.
(ii) The exercise price shall be paid by any of the
following methods or any combination of such methods, at the option of the
Director:
(A) cash;
(B) certified or cashier's check, payable to the
order of the Company;
(C) delivery to the Company of a properly executed
notice of exercise together with irrevocable instructions to a broker to deliver
promptly to the Company the amount of the sale or all or a portion of the Stock
from the broker to the Director necessary to pay the purchase price of the
Stock; or
(D) delivery to the Company of certificates
representing the number of shares of Stock then owned by the Director, the Fair
Market Value of which equals the price of the Stock to be purchased pursuant to
the Option, properly endorsed for transfer to the Company. No Option may be
exercised by delivery to the Company of certificates representing Stock that has
been held by the Director for less than six months or such other period as shall
be sufficient for the Company to avoid, if possible, the recognition of expense
with respect to the Option for accounting purposes. The exercise date shall be
the day of delivery of the certificates for the Stock used as payment of the
Option Price.
6A.4 Shareholder Privileges. No Director shall have any rights as a
shareholder with respect to any shares of Stock covered by an Option until the
Director becomes the holder of record of such Stock, and no adjustments shall be
made for dividends or other distributions or other rights as to which there is a
record date
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preceding the date such Director becomes the holder of record of such Stock,
except as provided in Section 4.
Section 6B
Grants to Subsidiary Directors
------------------------------
6B.1 Grant. Coincident with or following designation for
participation in the Plan, a Subsidiary Director may be granted one or more
Options and/or Restricted Stock Awards. In no event shall the exercise of one
Option affect the right to exercise any other Option or affect the number of
shares of Stock for which any other Option may be exercised.
6B.2 Stock Option Certificates. Each Option granted to a Subsidiary
Director under the Plan shall be evidenced by a written stock option
certificate. A stock option certificate shall be issued by the Company in the
name of the Subsidiary Director to whom the Option is granted and shall
incorporate and conform to the conditions set forth in this Section 6B.2.
(a) Number of Shares. Each stock option certificate shall
state that it covers a specified number of shares of the Stock, as determined by
the Committee.
(b) Price. The price at which each share of Stock covered by
an Option may be purchased shall be determined in each case by the Committee and
set forth in the stock option certificate, but in no event shall the price be
less than 100 percent of the Fair Market Value of the Stock on the date the
Option is granted.
(c) Duration of Options; Restrictions on Exercise. Each
stock option certificate shall state the period of time, determined by the
Committee, within which the Option may be exercised by the Subsidiary Director
(the "Option Period"), and shall also set forth any installment or other
restrictions on Option exercise during such period, if any, as may be determined
by the Committee; however, no Option may be exercised for at least six months
after the date of grant.
(d) Termination of Service, Death, Disability, Etc. The
Option shall terminate at the times provided in Section 6A.3(e).
(e) Transferability, Exercisability. Each Option shall not be
transferable by the Option Holder except by will or pursuant to the laws of
descent and distribution, and shall be exercisable during the Option Holder's
lifetime only by him or her, or in the event of disability or incapacity, by his
or her guardian or legal representative.
(f) Exercise, Payments, Etc. The Option shall be subject to
the same exercise and payment terms as provided in Section 6A.3(g).
(g) Date of Grant. An option shall be considered as having
been granted on the date specified in the grant resolution of the Committee.
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6B.3 Restricted Stock.
(a) Date of Grant, Number of Shares. The Committee shall
determine the number of shares of Restricted Stock to be granted to a Subsidiary
Director and shall determine the Date of Grant.
(b) Restrictions. The restrictions shall be determined by the
Committee and need not be identical for all awards. The restrictions shall
lapse at the time or times established by the Committee. Except as otherwise
provided in the Plan, shares of Stock received pursuant to a Restricted Stock
Award may not be sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of until the restrictions applicable to such Stock have lapsed pursuant
to this subsection 6B.3(b).
(c) Retention of Award Termination. If a Subsidiary Director's
services as a board member are terminated at any time, for any reason, before
the Restricted Stock Award is fully vested, all of the unvested shares shall be
forfeited.
(d) Enforcement of Restrictions. The Committee shall cause a
legend to be placed on the Stock certificates issued pursuant to each Restricted
Stock Award referring to the restrictions imposed in the Plan and, in addition,
may in its sole discretion require one or more of the following methods of
enforcing such restrictions:
(i) Requiring the Subsidiary Director to keep the Stock
certificates, duly endorsed, in the custody of the Company while the
restrictions remain in effect; or
(ii) Requiring that the Stock certificates, duly
endorsed, be held in the custody of a third party while the restrictions remain
in effect.
6B.4 Shareholder Privileges. No Subsidiary Director shall have any
rights as a shareholder with respect to any shares of Stock covered by an Option
until the Subsidiary Director becomes the holder of record of such Stock, and no
adjustments shall be made for dividends or other distributions or other rights
as to which there is a record date preceding the date such Subsidiary Director
becomes the holder of record of such Stock, except as provided in Section 4. A
Subsidiary Director shall have all voting, dividend, liquidation and other
rights with respect to Stock in accordance with its terms received by him as a
Restricted Stock Award under this Section 6B. A Subsidiary Director's right to
sell, encumber or otherwise transfer Stock after restrictions applicable to such
Stock have lapsed shall be subject to the limitations of Section 8.2.
Section 7
Reorganization or Change of Control
-----------------------------------
7.1 Reorganization. If the Company is merged or consolidated with
another corporation (other than a merger or consolidation in which the Company
is the continuing corporation and which does not result in any reclassification
or change of outstanding stock), or if all or substantially all of the assets or
more than 50 percent of
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the outstanding voting stock of the Company is acquired by any other
corporation, business entity or person (other than a sale or conveyance in which
the Company continues as a holding company of an entity or entities that conduct
the business or businesses formerly conducted by the Company), or in case of a
reorganization (other than a reorganization under the United States Bankruptcy
Code) including a divisive reorganization under Section 355 of the Code, or
liquidation of the Company, the Committee, or the board of directors of any
corporation assuming the obligations of the Company, shall, as to the Plan and
outstanding Restricted Stock Awards and Options, either (i) make appropriate
provision for the adoption and continuation of the Plan by the acquiring or
successor corporation and for the protection of any such outstanding Restricted
Stock Awards and Options by the substitution on an equitable basis of
appropriate stock of the Company or of the merged, consolidated or otherwise
reorganized corporation which will be issuable with respect to the Stock,
provided that no additional benefits shall be conferred upon the Directors and
Subsidiary Directors holding such Restricted Stock Awards and Options as a
result of such substitution and the excess of the aggregate Fair Market Value of
the shares subject to such Options immediately before such substitution over the
Option Price thereof, or (ii) accelerate the restriction period for any
outstanding Restricted Stock Awards so that all restrictions applicable to
Restricted Stock Awards shall lapse prior to any such event and, upon written
notice to the Directors and Subsidiary Directors, provide that all unexercised
Options must be exercised within a specified number of days of the date of such
notice or they will be terminated. In the latter event, the Committee shall
accelerate the exercise dates of outstanding Options.
7.2 Change of Control
(a) In General. Upon a change in control of the Company as
defined in subsection 7.2(c), then (i) all Options shall become immediately
exercisable in full during the remaining term thereof, and shall remain so,
whether or not the individuals to whom such Option have been granted remain
Directors or Subsidiary Directors; and (ii) all restrictions with respect to
outstanding Restricted Stock Awards shall immediately lapse.
(b) Limitation on Payments. If the provisions of this Section
7.2 would result in the receipt by any Director or Subsidiary Director of a
payment within the meaning of Section 280G of the Code and the regulations
promulgated thereunder and if the receipt of such payment by any Director or
Subsidiary Director would, in the opinion of independent tax counsel of
recognized standing selected by the Company, result in the payment of such
Director or Subsidiary Director of any excise tax provided for in Sections 280G
and 4999 of the Code, then the amount of such payment shall be reduced to the
extent required, in the opinion of independent tax counsel, to prevent the
imposition of such excise tax; provided, however, that the Committee, in its
sole discretion, may authorize the payment of all or any portion of the amount
of such reduction to the Director or Subsidiary Director.
(c) Definition. For purposes of the Plan, a "change in
control" shall mean any of the following:
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(i) The acquisition of or the ownership of 50 percent
or more of the total Stock of the Company then issued and outstanding, by any
person, or group of affiliated persons, or entities not affiliated with the
Company as of the Effective Date of this Plan, without the consent of the Board
of Directors, or
(ii) The election of individuals constituting a majority
of the Board of Directors who were not either (A) members of the Board of
Directors prior to the election or (B) recommended to the shareholders by
management of the Company, or
(iii) A legally binding and final vote of the
shareholders of the Company in favor of selling all or substantially all of the
assets of the Company.
Section 8
Rights of Directors
-------------------
8.1 Retention as Director. Nothing contained in the Plan or in any
Restricted Stock Award or Option granted under the Plan shall interfere with or
limit in any way the right of the shareholders of the Company to remove any
Director from the Board or a Subsidiary Director from the board of directors of
a Subsidiary, pursuant to the bylaws of the Company or Subsidiary, nor confer
upon any Director or Subsidiary Director any right to continue in the service of
the Company or Subsidiary.
8.2 Nontransferability. No right or interest of any Director or
Subsidiary Director in a Restricted Stock Award (prior to the completion of the
restriction period applicable thereto) or Option, granted pursuant to the Plan,
shall be assignable or transferable during the lifetime of the Director or
Subsidiary Director, either voluntarily or involuntarily, or subjected to any
lien, directly or indirectly, by operation of law, or otherwise, including
execution, levy, garnishment, attachment, pledge or bankruptcy. In the event of
a Director's or a Subsidiary Director's death, the Director's or Subsidiary
Director's rights and interests in Restricted Stock Awards and Options shall, to
the extent provided in Section 6, be transferable by testamentary will or the
laws of descent and distribution. If in the opinion of the Committee a person
entitled to payments or to exercise rights with respect to the Plan is disabled
from caring for his affairs because of mental condition, physical condition or
age, payment due such person may be made to, and such rights shall be exercised
by, such person's guardian, conservator or other legal personal representative
upon furnishing the Committee with evidence satisfactory to the Committee of
such status.
Section 9
General Restrictions
--------------------
9.1 Investment Representations. The Company may require any person
to whom a Restricted Stock Award or Option is granted, as a condition of
receiving such Restricted Stock Award or of exercising such Option, to give
written assurances in substance and form satisfactory to the Company and its
counsel to the effect that such person is acquiring the Stock subject to the
Restricted Stock Award or
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<PAGE>
Option for his own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with Federal and
applicable state securities laws.
9.2 Compliance with Securities Laws. Each Restricted Stock Award and
Option shall be subject to the requirement that, if at any time counsel to the
Company shall determine that the listing, registration or qualification of the
shares subject to such Restricted Stock Award or Option upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in
connection with, the issuance of shares thereunder, such Restricted Stock Award
or Option may not be accepted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
9.3 Changes in Accounting Rules. Notwithstanding any other provision
of the Plan to the contrary, if, during the term of the Plan, any changes in the
financial or tax accounting rules applicable to Restricted Stock Awards or
Options shall occur which, in the sole judgment of the Committee, may have a
material adverse effect on the reported earnings, assets or liabilities of the
Company, the Committee shall have the right and power to modify as necessary any
then outstanding Restricted Stock Awards and Options as to which the applicable
restrictions have not been satisfied.
9.4 Withholding of Tax. To the extent required by applicable law and
regulation, each Director and Subsidiary Director must arrange with the Company
for the payment of any federal, state or local income or other tax applicable to
the Restricted Stock Award granted hereunder or the exercise of an Option
granted hereunder before the Company shall be required to deliver to the
Director or Subsidiary Director a certificate for such Stock free and clear of
all restrictions under this Plan.
Section 10
Plan Amendment, Modification and Termination
--------------------------------------------
The Board may at any time terminate, and from time to time may amend
or modify the Plan provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
shareholders if shareholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that shareholder approval is otherwise necessary
or desirable.
No amendment, modification or termination of the Plan shall in any
manner adversely affect any Restricted Stock Awards or Options theretofore
granted under the Plan without the consent of the Director holding such
Restricted Stock Awards or Options.
Section 11
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Requirements of Law
-------------------
11.1 Requirements of Law. The issuance of stock and the payment of
cash pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
11.2 Federal Securities Law Requirements. Restricted Stock Awards
and Options granted hereunder shall be subject to all conditions required under
Rule 16b-3 to qualify the Restricted Stock Award or Option for any exception
from the provisions of Section 16(b) of the 1934 Act available under that Rule.
Such conditions shall be set forth in the agreement or stock option certificate
with the Director or Subsidiary Director that describes the Restricted Stock
Award or Option.
11.3 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Colorado.
Section 12
Duration of the Plan
--------------------
The Plan shall terminate at such time as may be determined by the
Board of Directors, and no Restricted Stock Award or Option shall be granted
after such termination. Restricted Stock Awards outstanding at the time of the
Plan termination shall become free of restrictions in accordance with their
terms. Options outstanding at the time of the Plan termination shall continue
for the duration of the Option Term applicable to the Option.
Dated: March __, 2000
ATTEST: GRAPHIC PACKAGING INTERNATIONAL
CORPORATION
By: /s/ Jill B.W. Sisson
---------------------
Jill B.W. Sisson
Vice President and
General Counsel
15
<PAGE>
[ACX Logo Here]
ANNUAL MEETING OF SHAREHOLDERS
Tuesday, May 9, 2000
10:30 a.m.
ARVADA CENTER\6901 Wadsworth Boulevard
Arvada, Colorado
- --------------------------------------------------------------------------------
[Form of Proxy Card]
PROXY
For the Annual Meeting of Shareholders of
ACX TECHNOLOGIES, INC.
4455 Table Mountain Drive
Golden, Colorado 80403
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Jeffrey H. Coors and William K. Coors, or
either of them, as proxies, with power of substitution to vote all the shares of
the undersigned held of record by the undersigned as of March 22, 2000, with all
of the powers which the undersigned would possess if personally present at the
Annual Meeting of Shareholders of ACX Technologies, Inc. (the "Company"), to be
held at 10:30 A.M. (local time) on May 9, 2000 at the Arvada Center for the Arts
and Humanities, 6901 Wadsworth Boulevard, Arvada, Colorado, or any adjournments
thereof.
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE, VOTE, DATE, SIGN AND RETURN
THIS PROXY IN THE ACCOMPANYING ENVELOPE. [TO VOTE IN ACCORDANCE WITH THE BOARD
OF DIRECTORS RECOMMENDATIONS, MERELY SIGN BELOW. NO BOXES NEED TO BE CHECKED.]
<PAGE>
The Board of Directors recommends a vote FOR all of the nominees for director
listed below under Proposal and approval of Proposals 2, 3 and 4.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR the Proposals stated below.
Proposal 1 - Election of Directors.
FOR all Nominees listed below [ ] WITHHOLDING AUTHORITY [ ]
(except as marked to the contrary below) To Vote FOR all Nominees below
Nominees: John D. Beckett
William K. Coors
(Instructions: To withhold authority to vote for any indicated nominee, write
the number(s) of the nominee(s) in the box provided to the right.)
Proposal 2 - Approval of the amendment to the Company's Articles of
Incorporation changing the Company's name to "Graphic Packaging International
Corporation."
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 3 - Approval of amendments to the Company's Executive Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 4 - Approval of amendment to the Company's Equity Compensation Plan For
Non-Employee Directors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER, IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPORALS STATED ABOVE.
---
Address Change? Mark Box [ ] Indicate changes below:
Date:
Signature:
Signature(s) in Box
(Please sign exactly as your name(s) appear on Proxy. If held in joint tenancy,
all persons must sign. Trustees, administrators, etc., should include title and
authority. Corporations should provide full name of corporation and title of
authorized officer signing the proxy.
