<PAGE>
SCHEDULE 14A INFORMATION
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 /X/
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 Section240.14a-11(c) or
Section240.14a-12
ALLTRISTA CORPORATION
- --------------------------------------------------------------------------------
(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):
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(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:
-----------------------------------------------------------------------
(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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<PAGE>
ALLTRISTA CORPORATION
345 SOUTH HIGH STREET, MUNCIE, INDIANA 47305
-------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1997
-------------
The Annual Meeting of Shareholders of Alltrista Corporation will be held at
Alltrista Corporation, 345 South High Street, Suite 200, Muncie, Indiana, on
Wednesday, May 14, 1997, at 8:00 a.m. (EST) for the following purposes:
1. To elect two directors for three-year terms expiring at the Annual
Meeting of Shareholders to be held in 2000;
2. To ratify the appointment of the firm of Price Waterhouse LLP as
independent accountants for 1997; and
3. To transact any other business as properly may come before the meeting.
Alltrista Corporation's 1997 annual meeting will be held solely to tabulate
the votes cast and report the results of voting on the matters listed in this
proxy statement. There will be no other business transacted, and it is not
anticipated that any directors or senior executives will be in attendance.
Only holders of Common Stock of record at the close of business on March 20,
1997 are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
A Proxy Statement appears on the following pages. A copy of the Annual
Report for 1996 is being mailed to you with this Notice of Annual Meeting of
Shareholders and Proxy Statement.
By Order of the Board of Directors
Garnet E. King
CORPORATE SECRETARY
April 8, 1997
Muncie, Indiana
YOUR VOTE IS IMPORTANT.
YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN PROMPTLY YOUR PROXY IN THE
ENCLOSED ENVELOPE.
<PAGE>
ALLTRISTA CORPORATION
345 SOUTH HIGH STREET, SUITE 200, MUNCIE, INDIANA 47305
-------------
PROXY STATEMENT
APRIL 8, 1997
-------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1997
-------------
To Shareholders of Alltrista Corporation:
This Proxy Statement and the accompanying proxy card are furnished to
shareholders in connection with the solicitation by the Board of Directors of
the Corporation of proxies to be voted at the Annual Meeting of Shareholders to
be held on May 14, 1997, and any adjournment thereof, for the purposes stated in
the accompanying notice of the meeting.
The Corporation's 1997 annual meeting will be held solely to report the
results of voting on the those matters listed in this proxy statement. There
will be no other business transacted, and it is not anticipated that any
directors or senior executives will be in attendance. Since becoming an
independent company in 1993, shareholder attendance at the annual meeting has
declined steadily. In 1996, only 33 individuals attended who were not employees,
relatives of employees or company suppliers. These shareholders represented one
tenth of one percent of the Corporation's total shares outstanding. Considering
the expense and top management time it takes to conduct a formal meeting with
presentations by senior officers and others, it will be in the best interest of
shareholders to have management devote its time and attention to increasing
shareholder value, rather than reiterating information appearing in the Annual
Report to Shareholders of the Corporation and other shareholder communications.
While there will be no formal presentations, shareholders have the right to
attend the meeting. A written report of the results of the vote will be mailed
to each shareholder following the meeting.
A shareholder of the Corporation who has executed and returned a proxy may
revoke it at any time before it is voted, but only by executing and returning to
the Corporate Secretary at 345 South High Street, Suite 200, Muncie, IN 47305, a
proxy bearing a later date, by giving written notice of revocation to the
Corporate Secretary, or by attending the meeting and voting in person.
Attendance at the meeting does not, by itself, revoke a proxy.
A copy of the Annual Report to Shareholders of the Corporation, including
financial statements and a description of its operations for the year 1996, has
been mailed to each shareholder with this Proxy Statement. The approximate
mailing date of this Proxy Statement and the accompanying proxy card is April 8,
1997.
1
<PAGE>
ELECTION OF DIRECTORS
Under the Corporation's Articles of Incorporation, the Board of Directors of
the Corporation is divided into three classes, as nearly equal in number as
possible. One of the three classes is elected each year to succeed the directors
whose terms are expiring. Directors hold office until the annual meeting for the
year in which their terms expire and until their successors are elected and
qualified unless, prior to that time, they have resigned, retired, or otherwise
left office.
The nominees for whom the enclosed proxy is intended to be voted are set
forth below. All nominees have consented to be named as candidates in the Proxy
Statement and have agreed to serve if elected. It is not contemplated that any
of these nominees will be unavailable for election, but if such a situation
should arise, the Board of Directors may select a substitute nominee, and in
that event such shares will be voted for the person so selected. If a substitute
is not so selected, such shares will be voted for the election of the remaining
nominees. The Board has no reason to believe that any of the nominees will be
unable to serve. In accordance with the Indiana Business Corporation Law,
directors are elected by a plurality of the votes cast by the shares entitled to
vote in the election at a meeting at which a quorum is present. Abstentions and
broker non-votes are considered neither a vote "for" nor "against" the nominees.
Set forth below for each director nominee and continuing director are his
principal occupation and employment during the past five years and certain other
information.
DIRECTOR NOMINEES AND CONTINUING DIRECTORS
TO BE ELECTED FOR A TERM OF THREE YEARS UNTIL THE 2000 ANNUAL MEETING (CLASS
III)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
- ------------------------ --- ----------- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Thomas B. Clark 51 1994 Mr. Clark has been President and Chief Executive Officer of the Corporation
since January 1995. Mr. Clark was elected a director of the Corporation in May
1994 and served as President and Chief Operating Officer of the Corporation
from March 1994 until December 1994. From April 1993 to February 1994, Mr.
Clark served as Senior Vice President and Chief Financial Officer of the
Corporation. Mr. Clark served as Vice President of Ball Corporation from August
1992 until April 1993 and as Vice President, Communications, Planning and
Development of Ball Corporation from May 1989 until August 1992. Mr. Clark also
is a director of First Merchants Corporation.
David L. Swift 60 1993 Mr. Swift retired from Acme-Cleveland Corporation in July 1996. Before his
retirement, he was Chairman, President and Chief Executive Officer of
Acme-Cleveland Corporation since January 1993. Mr. Swift served as President
and Chief Executive Officer of Acme-Cleveland Corporation from April 1987 until
January 1993. Mr. Swift also serves as a director of Twin Disc. Incorporated
and Cuno Incorporated.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THE ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
2
<PAGE>
TERMS EXPIRING AT THE 1998 ANNUAL MEETING (CLASS II)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
- ------------------------ --- ----------- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert E. Fowler, Jr. 61 1993 Mr. Fowler has been President & Chief Operating Officer of IMC Global, Inc.
since July 1996 and was elected Director and Co-President and Chief Operating
Officer of IMC Global, Inc. in March 1996. Previously, Mr. Fowler was President
and Chief Executive Officer of The Vigoro Corporation since September 1994,
served as President and Chief Operating Officer of The Vigoro Corporation from
July 1993 and was a member of Vigoro's Board of Directors since August 1993.
From September 1991 to July 1993, Mr. Fowler was Chairman of the Board of
Silvestri Corporation and from September 1991 to June 1993 was President and
Chief Executive Officer of BCC Industrial Services, Inc.. Mr. Fowler also
serves as a director of Anixter International and Manville Corporation.
Richard L. Molen 56 1993 Mr. Molen was elected Chairman of Huffy Corporation in September 1994. Mr.
Molen has been President and Chief Executive Officer of Huffy Corporation since
April 1993, and has served on its Board of Directors since June 1984. From
April 1986 until April 1993, he was President and Chief Operating Officer of
Huffy Corporation. Mr. Molen also serves as a director of Huntington Bank and
Duriron Company.
</TABLE>
TERMS EXPIRING AT THE 1999 ANNUAL MEETING (CLASS III)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
- ------------------------ --- ----------- -------------------------------------------------------------------------------
<S> <C> <C> <C>
William A. Foley 49 1995 Mr. Foley was elected Chairman of the Board of LESCO, Inc. in October 1994. Mr.
Foley joined LESCO, Inc. in July 1993 as President, Chief Executive Officer and
a director. Mr. Foley was President and Chief Executive Officer of Imperial
Wallcoverings, Inc., a wallpaper producer and a subsidiary of Collins & Aikman,
Inc., from October 1990 until February 1993. Mr. Foley also serves as a
director of Libbey, Inc.
William L. Peterson 67 1993 Mr. Peterson has been Chairman of the Corporation since May 1993. Mr. Peterson
was Chief Executive Officer from April 1993 until his retirement from the
Corporation in December 1994, and was President of the Corporation from April
1993 until March 1994. Mr. Peterson served as Vice Chairman and Executive Vice
President of Ball Corporation from August 1992 until April 1993 and as Vice
Chairman and Chief Financial Officer of Ball Corporation from August 1989 until
August 1992. Mr. Peterson also is a director of ANB Corporation.
Patrick W. Rooney 61 1993 Mr. Rooney has been Chairman, President, and Chief Executive Officer of Cooper
Tire & Rubber Company since October 1994. From January 1992 until October 1994,
Mr. Rooney served as President and Chief Operating Officer of Cooper Tire &
Rubber Company. Mr. Rooney was named President and elected a director of Cooper
Tire & Rubber Company in February 1990. Mr. Rooney also serves as a director of
Huffy Corporation.
</TABLE>
3
<PAGE>
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
At the close of business on March 20, 1997, there were outstanding and
entitled to vote 7,501,526 shares of Common Stock. Each share of Common Stock is
entitled to one vote. Shareholders do not have cumulative voting rights with
respect to the election of directors.
So far as is known to the Board of Directors, the following table indicates
the only beneficial owners of more than five percent of the Corporation's
outstanding Common Stock as of March 20, 1997. The information shown below is
derived from reports provided to the Corporation by the entities named below.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED PERCENT OF CLASS
- ---------------------------------------------------------- ------------------------ -----------------
<S> <C> <C>
David L. Babson & Co. Inc. 463,000(1) 6.09%
One Memorial Drive
Cambridge, MA 02142-1300
First Manhattan Co. 653,650(2) 8.60
437 Madison Avenue
New York, NY 10022-7002
Neuberger & Berman L.P. 677,650(3) 8.92
605 Third Avenue
New York, NY 10158-3698
The Prudential Insurance Company of America 547,000(4) 7.20
751 Broad Street
Newark, NJ 07102-3777
</TABLE>
- --------------
(1) Includes 141,100 shares for which voting power is shared.
(2) Includes 67,550 shares for which beneficial ownership is disclaimed and
8,200 shares for which dispositive power is disclaimed. Of the total, 6,960
shares have sole voting and 6,950 shares have sole dispositive power with
614,430 shares for which voting power is shared and 646,700 shares for which
dispositive power is shared.
(3) Includes 92,000 shares for which voting power is shared and 677,650 shares
for which dispositive power is shared.
(4) Includes 87,000 shares for which voting and dispositive power is shared.
4
<PAGE>
SECURITY OWNERSHIP BY MANAGEMENT AND DIRECTORS
The following table lists the beneficial ownership of Common Stock of the
Corporation, as of the close of business on March 20, 1997, held by director
nominees, continuing directors, each of the non-director executive officers
named in the Summary Compensation Table, and, all directors and executive
officers as a group. Unless otherwise noted, the beneficial owner has sole
voting and investment power.
SHARES
BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER OWNED(1) CLASS
- ------------------------------------------ ------------------ ------------
Kevin D. Bower............................ 8,856 *
Thomas B. Clark........................... 58,907(2) *
William A. Foley.......................... 650 *
Robert E. Fowler, Jr...................... 1,400 *
Jerry T. McDowell......................... 70,403 *
Larry D. Miller........................... 31,723 *
Richard L. Molen.......................... 1,400 *
William L. Peterson....................... 112,931(3) 1.50
Patrick W. Rooney......................... 1,500 *
William L. Skinner........................ 33,912 *
David L. Swift............................ 1,900 *
All of the above and present executive
officers as a group (11 persons)......... 336,426 4.48
- --------------
* Less than 1%
(1) The shares shown include the following shares that may be purchased pursuant
to stock options that are exercisable within 60 days of March 20, 1997: Mr.
Bower, 8,250 shares; Mr. Clark, 28,090 shares; Mr. McDowell, 57,827 shares;
Mr. Miller, 23,210 shares; Mr. Skinner, 4,062 shares; Mr. Foley, 350 shares;
Mr. Fowler, 1,050 shares; Mr. Molen, 1,050 shares; Mr. Rooney, 1,400 shares
and Mr. Swift, 1,400 shares.
(2) Includes 29,791 shares held in trust for which he disclaims any beneficial
ownership.
(3) Includes 3,944 shares held in trust for which he disclaims any beneficial
ownership.
CERTAIN COMMITTEES OF THE BOARD
The standing committees of the Board of Directors are the Audit, Nominating,
and Executive Compensation Committees.
AUDIT COMMITTEE
The Audit Committee is comprised of four directors, Messrs. Swift (Committee
Chairman), Foley, Peterson, and Rooney. The duties of the Audit Committee are
to: (a) recommend for nomination by the Board of Directors the independent
certified public accountants who shall conduct the annual audit of the
Corporation; (b) assist the Board of Directors in fulfilling its fiduciary
responsibilities relating to corporate accounting and reporting practices
through review of accounting principles, policies, and changes thereto,
financial statements, and general financial disclosure procedures; (c) maintain,
through periodic meetings, a direct line of communication with the independent
accountants to provide for exchanges of views and information; and (d) review
management's evaluation of the adequacy of the Corporation's internal control
structure and the extent to which major recommendations made by the independent
accountants have been implemented. The Audit Committee met twice during 1996.
NOMINATING COMMITTEE
The Nominating Committee is comprised of four directors, Messrs. Molen
(Committee Chairman), Foley, Fowler, and Rooney. The duties of the Nominating
Committee are to review and make recommendations regarding: (a) the organization
and structure of the Board; (b) the candidate for Chairperson of the Board; (c)
the qualifications for director candidates; (d) the candidates for election to
the Board; and (e) the effectiveness of the Board and each director in the
corporate governance process. The Nominating Committee met three times during
1996. The Nominating Committee seeks potential nominees for Board membership in
a number of ways and will consider nominees recommended by shareholders. Any
such recommendation should be in writing and addressed to the Corporate
Secretary, Alltrista Corporation, 345 South High Street, Suite 200, Muncie, IN
47305.
5
<PAGE>
EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee is comprised of four directors, Messrs.
Fowler (Committee Chairman), Molen, Peterson, and Swift. The duties of the
Executive Compensation Committee are to: (a) approve the salaries of all elected
corporate officers and other employees of the Corporation, as the Board of
Directors may determine and direct from time to time; (b) approve the
Corporation's schedule of salary ranges and grades for all salaried employees;
(c) approve the Corporation's schedule for approval signatures to be required
for salary and employee status changes; (d) approve the Corporation's incentive
compensation program, including its design, administration, participation basis
and participation rates, as they apply to all elected corporate officers and
other employees of the Corporation, as the Board of Directors may determine and
direct from time to time; (e) approve major salaried employee benefit plans and
changes, thereto, including plan additions, terminations, and discontinuations;
(f) direct the administration of the Corporation's various stock option plans,
restricted stock plans, and deferred compensation plans in accordance with such
plans; (g) designate from time to time those officers and other key employees of
the Corporation and its subsidiaries to whom option and/or restricted stock
awards are to be granted, approve the number of shares to be optioned and/or
granted from time to time to any individual, and determine the exercise price of
the options granted; and (h) perform such other functions with respect to
employee compensation as may be requested by the Board of Directors. The
Executive Compensation Committee met twice during 1996.
BOARD OF DIRECTORS MEETINGS
The Board of Directors met seven times during 1996. All directors of the
Corporation's Board of Directors attended at least 75 percent of the aggregate
of (1) the total number of meetings of the Board of Directors and (2) the total
number of meetings held by all committees of the Board on which they served,
except for Mr. Fowler who attended nine of the thirteen Board and Committee
meetings.
EXECUTIVE COMPENSATION
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
INTRODUCTION
The Corporation's Executive Compensation Committee ("Committee") consists of
four directors, all of whom have considerable experience in executive
compensation issues and management development. Three of the four members of the
Committee have never been an officer or employee of the Corporation, nor is
there a direct or indirect relationship between any of the members of the
Committee and any of the Corporation's executive officers.
The Board of Directors of the Corporation has established certain benefit
plans. These plans include the 1993 Economic Value Added Incentive Compensation
Plan for Key Members of Management ("EVA Plan"), the 1996 Employee Stock
Purchase Plan, the 1993 Stock Option Plan ("Stock Option Plan"), the 1993
Restricted Stock Plan ("Restricted Stock Plan"), the 1993 Deferred Compensation
Plans ("Deferred Compensation Plans"), and the 1996 Stock Option Plan for
Nonemployee Directors ("Director Stock Option Plan").
The Committee has approved a compensation philosophy for the Corporation,
which is described below, oversees the administration of executive programs, and
annually determines compensation of the Corporation's senior management and its
executive officers.
EXECUTIVE COMPENSATION PHILOSOPHY
The basic elements of the Corporation's compensation philosophy are to
provide competitive annual compensation combined with long-term reward
opportunities and risks by linking management's compensation to the
Corporation's success in creating value for its shareholders. The total
compensation package, which includes base salary, incentive compensation and
long-term incentive opportunities in the form of stock, is designed to allow the
Corporation to attract, motivate, and retain top quality executive officers.
An executive's total compensation, including the Chief Executive Officer, is
determined after a subjective review of the executive's objectives and
performance compared to peers within the Corporation. The Corporation also
compares the pay of executives in similar positions of other manufacturing firms
of similar size (based upon sales, business activity and total employment) as
reflected in studies and salary surveys prepared by compensation consulting
firms, which are among those most widely used. Over two-thirds of the companies
in the Dow Jones Industrial - Diversified Index used in the Shareholder Return
Performance section participate in one or more of the surveys. The
6
<PAGE>
comparison is made against a data base of many industrial corporations rather
than only companies in the various industries in which the Corporation does
business because the Committee believes industrial corporations generally
represent the Corporation's most direct competitors for executive talent.
The combination of base salary and target incentive compensation is intended
to result in compensation ranges having an upper limit which is approximately
20% above, and a lower limit which is approximately 20% below, median levels of
comparable industrial companies for equivalent positions. The target
compensation level within the 20% range above and below the median for each
executive, other than the Chief Executive Officer, is established based on
recommendations from the Chief Executive Officer, together with the Committee's
consideration of the executive's responsibilities and individual performance
versus predetermined personal goals and objectives. The Committee determines the
target total compensation of the Chief Executive Officer based upon the same
criteria. These determinations are based primarily on subjective factors.
ANNUAL CASH COMPENSATION
For 1996, base salaries and target incentive compensation participation
rates (percentage of base salary) for the Corporation's executive officers were
established by the Committee. Base salary and incentive compensation (total cash
compensation) earned in 1996 by the named executive officers are reflected in
the "Salary" and "Bonus" columns in the Summary Compensation Table.
Once the appropriate target total compensation for an executive is
established, base salary is determined by dividing total target compensation by
the sum of one plus the executive's incentive compensation participation rate.
For example, Mr. Clark's incentive compensation participation rate for 1996 was
65%. Accordingly, his base salary was calculated by dividing his target total
compensation by 1.65. Consequently, when target performance as defined in the
EVA Plan is attained, Mr. Clark will be paid a total compensation which equals
the amount established by the Committee as appropriate for his performance when
compared to executives in similar positions at other companies. Target incentive
compensation participation rates are set by level of responsibility and
represent a greater proportion of total compensation as the responsibility of
the executive increases. As a result, senior executives have a significant
portion of total compensation "at risk" and dependent on increasing economic
value. The 1996 target incentive compensation for Mr. Clark was 65% of his base
salary, for Mr. McDowell and Mr. Skinner 50% of their base salary, for Mr. Bower
40% of his base salary, and Mr. Miller 35% of his base salary. For the year
ended December 31, 1996 incentive compensation for corporate level participants
was paid at 1.36 times the target incentive compensation established under the
EVA Plan.
The EVA Plan awards incentive compensation to the Named Executive Officers,
as defined below, based upon actual performance of the Corporation relative to
Economic Value Added ("EVA") targets, and the awards of the individuals in each
division are based on the actual performance of the respective divisions
relative to their individual EVA target. The EVA Plan recognizes the correlation
between changes in EVA and changes in the Corporation's market value. Generally,
increases in EVA will result in total compensation which exceeds target total
compensation, maintenance of EVA will result in total compensation equivalent to
target total compensation, and reductions in EVA will result in total
compensation which is less than target total compensation. The program applies
to all key employees and all executive officers, including the Chief Executive
Officer.
Incentive compensation is not, in part or in total, discretionary, but
instead is driven by actual EVA compared to an established target. The target
return on invested capital ("EVA target") for any year is determined in
accordance with the provisions of the EVA Plan. The EVA target for a year is a
function of the prior year's target, adjusted up or down depending on the prior
year's actual performance versus the prior year's target, i.e., if actual
performance exceeds target, the target for the following year is increased by a
portion of such excess; if actual performance is less than target, the target
for the following year is reduced by a portion of such shortfall. This
adjustment process is carried out according to a specific formula and is not
discretionary. The purpose of the EVA Plan is to encourage sustained value
creation by the management of the Corporation by establishing a direct link
between EVA achieved and incentive compensation payments. This approach
establishes a link between shareholder value and incentive compensation.
LONG-TERM EVA PLAN COMPENSATION
There is no maximum on the annual amount of incentive compensation which can
be earned; however, incentive compensation earned in any year in excess of two
times the individual's target incentive compensation is accrued in a contingent
"bank." The amount of incentive compensation earned in a year may be negative,
in which case such negative amount is applied against any positive bank balance
resulting from prior years' performance, and may result in a negative bank
balance. One-third of the beginning of the year bank balance, after
consideration of any negative incentive compensation from the current year, is
paid to the individual in combination with the current year's incentive
7
<PAGE>
compensation. Positive bank balances remain completely at risk at all times
except in the event of death or disability. A positive bank balance at death or
disability will be paid in full without adjustments for negative performance in
the first full year following such death or disability. Upon retirement, the
bank balance will be paid in full after adjustments for any negative performance
in the year following the year of retirement. The bank balance will be forfeited
upon any other termination of employment.
Certain participants in the EVA Plan, which include all of the Named
Executive Officers, may elect to receive in cash all or any part of the
incentive compensation payable, with the remaining portion deferred under
various deferred compensation options selected by the participant. The
participant may elect to have the deferrals paid at a future date, either in a
lump sum or in up to fifteen substantially equal annual installments.
LONG-TERM, EQUITY-BASED INCENTIVE COMPENSATION
Under the Corporation's Stock Option Plan, stock options are granted to the
Corporation's executive officers and other key employees. The Committee has set
guidelines which determine the number of shares to be granted and the frequency
of stock option awards. These guidelines, which are applicable to all
participants including the Chief Executive Officer, provide that awards will
generally be based upon the employee's position within the Corporation and a
subjective review of the employee's performance. Any such decision would be
subjective in nature and not based upon any objective factors. The stock option
awards to each individual are not conditioned on the number of previously
granted options. However, in no event shall the total stock option grants in any
year exceed 1% of shares outstanding. All awards are made by the Committee which
has the discretion to elect not to award stock option grants. Stock options are
granted with an exercise price equal to the closing market price of the Common
Stock on the date of the grant and become exercisable at a rate of 25% annually
beginning on the first anniversary of the grant.
The Corporation's Restricted Stock Plan allows the Committee to award grants
of shares of restricted stock to select key employees, including the Named
Executive Officers but primarily under circumstances associated with initial
employment or a significant increase in responsibility. Mr. Clark, Chief
Executive Officer, holds no restricted stock. Among other restrictions, the
Restricted Stock Plan requires that any stock issued under the Plan on which the
restrictions have not lapsed must be returned to the Corporation if the
employee's employment with the Corporation is terminated for any reason other
than death or disability. These restrictions lapse at a rate of 20% annually
beginning on the first anniversary of the award. The holders of restricted stock
have a right to vote the shares and receive dividends, if declared.
In 1996, Mr. Clark received options for 7,000 shares as described in the
Option Grants in 1996 table.
The Committee believes that the total compensation package has been designed
to motivate executive officers and focus on increasing the market value of the
Corporation's Common Stock. The following tables reflect the compensation
structure being pursued by the Committee.
Respectfully submitted. Executive Compensation Committee
Robert E. Fowler, Jr., CHAIRMAN
Richard L. Molen
William L. Peterson
David L. Swift
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the annual and long-term
compensation of the Chief Executive Officer and the four other most highly
compensated executive officers (the "Named Executive Officers") of the
Corporation for the year ended December 31, 1996 for services in all capacities
to the Corporation.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
AWARD
ANNUAL COMPENSATION ------------------------ PAYOUT
RESTRICTED SECURITIES -----------
-------------------- STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) AWARDS OPTIONS PAYOUTS(3) COMPENSATION(4)
- ---------------------------------------- --- --------- --------- ----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas B. Clark 1996 $ 239,230 $ 210,630 0 7,000 $ 10,888 $ 18,971
President and Chief 1995 220,000 $ 153,360 0 7,000 16,333 18,523
Executive Officer 1994 175,384 173,460 0 5,000 24,500 15,390
Kevin D. Bower 1996 110,769 60,101 0 2,500 2,903 7,233
Vice President of Finance 1995 102,231 41,675 0 2,500 4,356 6,544
and Controller 1994 91,002 48,567 0 2,500 6,534 5,830
Jerry T. McDowell(2) 1996 181,538 123,053 0 5,000 25,459 26,409
Senior Vice President 1995 170,000 98,845 0 4,500 38,189 21,391
and Chief Operating
Officer
Larry D. Miller 1996 105,807 50,309 0 2,000 4,914 14,583
Vice President, 1995 102,805 42,051 0 2,000 7,372 14,061
Communications and Investor Relations 1994 99,620 63,366 0 2,000 11,058 13,933
William L. Skinner 1996 146,730 100,365 0 2,500 9,800 14,793
Senior Vice President, 1995 145,572 85,069 0 3,000 14,700 14,162
Administration and Corporate 1994 140,754 128,086 0 3,250 22,050 13,971
Development
</TABLE>
- --------------
(1) Excludes amounts that were paid from the officer's banked amounts under the
Corporation's EVA Plan for prior performance.
(2) Mr. McDowell was elected Senior Vice President and Chief Operating Officer
effective January 1, 1995. Previously, Mr. McDowell served as President of
the Corporation's Zinc Products division.
(3) Represents amounts paid from the "bank" (See "Report of The Executive
Compensation Committee, Long-Term EVA Plan Compensation").
(4) The amounts shown in the All Other Compensation column for 1996 are
comprised as follows:
Mr. Clark -- above-market interest on deferred compensation account,
$6,798; life insurance premiums, $1,368; long term disability premiums,
$1,805; the Corporation's match on the employee's 401(k) contribution,
$4,500; the Corporation's additional contribution to the employee's
401(k), $4,500.
Mr. Bower -- life insurance premiums, $1,010; long term disability
premiums, $759; the Corporation's match on the employee's 401(k)
contribution, $3,314; the Corporation's additional contribution to the
employee's 401(k), $1,500; the Corporation's contribution to Employee
Stock Purchase Plan, $650.
Mr. McDowell -- above-market interest on deferred compensation account,
$12,457; life insurance premiums, $1,368; long term disability premium,
$1,334; the Corporation's match on the employee's 401(k) contribution,
$4,500; the Corporation's additional contribution to the employee's
401(k), $6,750.
Mr. Miller -- life insurance premiums, $964; long term disability
premiums, $699; the Corporation's match on the employee's 401(k)
contribution, $3,170; the Corporation's additional contribution to the
employee's 401(k), $9,750.
Mr. Skinner -- life insurance premiums, $1,338; long term disability
premiums, $1,078; the Corporation's match on the employee's 401(k)
contribution, $4,427; the Corporation's additional contribution to the
employee's 401(k), $6,750; the Corporation's contribution to Employee
Stock Purchase Plan, $1,200.
9
<PAGE>
OPTION GRANTS IN 1996
The following table summarizes the grants of stock options awarded during
1996 under the Corporation's Stock Option Plan to the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENTAGE OF TOTAL
SECURITIES OPTIONS GRANTED TO EXERCISE GRANT DATE
UNDERLYING EMPLOYEES IN FISCAL PRICE EXPIRATION PRESENT
NAME OPTIONS GRANTED(1) 1996 ($/SH.) DATE(2) VALUE(3)
- ---------------------------------------------- ------------------- ------------------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Thomas B. Clark............................... 7,000 9.89% $ 21.25 3/11/06 $ 63,910
Kevin D. Bower................................ 2,500 3.53 21.25 3/11/06 22,825
Jerry T. McDowell............................. 5,000 7.06 21.25 3/11/06 45,650
Larry D. Miller............................... 2,000 2.83 21.25 3/11/06 18,260
William L. Skinner............................ 2,500 3.53 21.25 3/11/06 22,825
</TABLE>
- --------------
(1) Options were granted on March 11, 1996, and are exercisable in 25 percent
increments beginning one year from the date of grant and each year
thereafter.
(2) Subject to earlier expiration if the executive officer ceases to be an
employee of the Corporation.
(3) The Corporation used the Black-Scholes model of option valuation to
determine the grant date present value of $9.13 per share for options
granted during 1996. Calculations for the Named Executive Officers are based
on a 7.5 year term which reflects the Corporation's experience that its
options, on average, are outstanding for 7.5 years from the date of grant.
Other assumptions used for the valuation are: risk-free rate of return of
6.31%; estimated future dividend yield of 0.0%; and volatility of 21.24%.
The value ultimately realized, if any, from the actual exercise of the
options will depend on the amount the market price of the stock exceeds the
exercise price on the date of exercise.
AGGREGATED OPTION EXERCISES IN 1996
AND FISCAL YEAR-END OPTION VALUES
The following table summarizes the stock options exercised during 1996 and
the stock options outstanding on December 31, 1996 for the Named Executive
Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, 1996 AT DECEMBER 31, 1996(2)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas B. Clark......................... -0- $ 0 21,465 16,625 $ 246,648 $ 88,625
Kevin D. Bower.......................... -0- -0- 5,250 6,750 52,031 39,531
Jerry T. McDowell....................... -0- -0- 53,452 11,125 744,533 59,125
Larry D. Miller......................... 2,600 37,830 20,585 5,625 275,255 34,437
William L. Skinner...................... 13,241 120,228 0 8,249 0 52,509
</TABLE>
- --------------
(1) Before taxes.
(2) Before taxes. The dollar value reported is based on the difference between
the exercise price of the option outstanding and the market price of
Alltrista Common Stock at the close of trading on December 31, 1996. The
closing market price on that date was $25.75 per share.
10
<PAGE>
CHANGE IN CONTROL ARRANGEMENTS
The Corporation has change in control severance agreements with the Named
Executive Officers. The agreements are effective on a year-to-year basis and
would provide severance benefits in the event of both a change in control of the
Corporation and an actual or constructive termination of employment within two
years after a change in control. Under the agreements, a "change in control" can
occur by virtue, in general terms, of an acquisition by any person of 30 percent
or more of the Corporation's voting shares; a merger in which the shareholders
of the Corporation before the merger own 50 percent or less of the Corporation's
voting shares after the merger; shareholder approval of a plan of liquidation or
to sell or dispose of substantially all of the assets of the Corporation; and
if, during any two-year period, directors at the beginning of the period fail to
constitute a majority of the Board of Directors. "Actual termination" is any
termination other than by death or disability, by the Corporation for cause, or
by the executive other than for constructive termination. "Constructive
termination" means, in general terms, any significant reduction in duties,
compensation or benefits or change of office location from those in effect
immediately prior to the change in control, unless agreed to by the executive.
The severance benefits payable, in addition to base salary and incentive
compensation accrued through the date of termination, shall include (i) three
times current annual base salary and target incentive compensation; (ii) the
bargain element value of then outstanding stock options; (iii) an amount equal
to the employer and matching contributions the individual would have received
under the Corporation's defined contribution plans for a period of 3 years; (iv)
life, disability, accident and health benefits for a period of 35 months; (v)
the amount of any "bank" balance of the individual under the Corporation's EVA
Plan; (vi) outplacement services; and (vii) legal fees and expenses reasonably
incurred in enforcing the agreements. In February 1997, the Corporation entered
into amended agreements with the Named Executive Officers. The amendments have
the effect of changing the factor in clause (i) from two to three, clarifying
the benefit relating the Corporation's defined contribution plans, adding the
coverage of any "bank" balance under the Corporation's EVA Plan and including a
tax gross-up feature for the benefit of the participating individuals in the
event that excise tax is payable by the individual under applicable provisions
of the Internal Revenue Code.
The agreements were not entered into in response to any effort to acquire
control of the Corporation, and the Corporation is not aware of any such effort.
DIRECTORS' COMPENSATION
A non-employee director who serves as Chairman of the Board will receive as
compensation an annual retainer of $36,000, plus meeting fees at the same rate
as those for other non-employee directors. Directors who are not employees of
the Corporation receive as compensation an annual retainer of $12,000 and an
annual fee of $1,500 for serving as chairman of a Board committee. In addition,
non-employee directors will be paid a fee of $750 for attendance at each Board
of Directors' meeting, $600 per day for attendance at one or more committee
meetings, $625 for participation in a telephonic Board of Directors' meeting,
and $500 for participation in a telephonic committee meeting. Directors who are
also employees of the Corporation receive no additional compensation for their
service on the Board or on any Board committee.
The 1993 Directors Stock Option Plan authorized the grant of an option to
acquire 350 shares of the Corporation's Common Stock on April 30 of each year to
each non-employee director. Messrs. Foley, Fowler, Molen, Rooney and Swift each
received 350 share grants in 1996. The exercise price for each share of the
Corporation's Common Stock subject to the option granted to such director will
be equal to the fair market value of a share of the Corporation's Common Stock
as of the date such option is granted. The option will be a nonqualified option
and will expire ten years after the date it is granted. The option will become
exercisable at the earlier of one year subsequent to the date the option was
granted or upon the optionee's death, disability or attainment by the optionee
of age 70.
Subsequent to the stock option grant in 1996, the shareholders approved the
1996 Stock Option Plan for Non-employee Directors that authorizes the grant of
an option to acquire 1,000 shares of the Corporation's Common Stock on April 30
of each year to each non-employee director. The terms and conditions of the Plan
are identical to the 1993 Directors Stock Option Plan.
11
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a graph comparing the shareholder return from March 24,
1993, the day the Corporation Common Stock began trading on Nasdaq, through
December 31, 1996 for the Corporation, the Dow Jones Equity Market Index, and
the Dow Jones Industrial - Diversified Index. The graph assumes that the
beginning value of the Common Stock of the Corporation on each index was $100.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG ALLTRISTA, DOW JONES
EQUITY MARKET INDEX AND DOW JONES INDUSTRIAL - DIVERSIFIED INDEX
[LOGO]
<TABLE>
<CAPTION>
MARCH 24, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1993 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C>
ALLTRISTA............................... $100 $103 $120 $109 $156
D.J. EQUITY............................. $100 $106 $107 $148 $183
D.J. INDUSTRIAL -- DIVERSIFIED.......... $100 $111 $102 $133 $172
</TABLE>
The Dow Jones Industrial - Diversified Index was selected for comparison
purposes since the Corporation is a multi-industry company. This index is
comprised of companies that participate in two or more industries in the
industrial market sector or whose products are used in many different
industries.
12
<PAGE>
ACTIVITIES AND RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
During 1996, Price Waterhouse LLP rendered audit and nonaudit services to
the Corporation. Audit services included examinations of the consolidated
financial statements and statutory financial statements required to be filed,
reviews of quarterly financial data and filings with the Securities and Exchange
Commission, and consultations relating to the application of generally accepted
accounting principles to transactions into which the Corporation entered or was
contemplating. Nonaudit services included advice and consultations relating to
asset purchases then being considered by the Corporation and assistance in
evaluating alternative management and production accounting methodologies.
Representatives of Price Waterhouse LLP are not expected to be present at the
Annual Meeting of Shareholders, and thus will not be available to respond to
questions from, and to make a statement, to the shareholders.
The Board of Directors recommends that the shareholders vote for
ratification of the appointment of Price Waterhouse LLP as independent public
accountants for 1997. If the appointment of Price Waterhouse LLP is not ratified
by the shareholders, the Audit Committee will select another firm of independent
public accountants for 1997.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP
AS INDEPENDENT ACCOUNTANTS FOR 1997.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
The Corporation believes that during 1996 its executive officers and
directors complied with all Section 16 filing requirements under Section 16(a)
of the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1998 Annual
Meeting must be in writing and received by the Corporate Secretary at the
Corporation's principal executive offices, 345 South High Street, Suite 200,
Muncie, IN 47305, by December 1, 1997, for inclusion in the Corporation's 1998
Proxy Statement.
SOLICITATION AND OTHER MATTERS
The cost of soliciting proxies will be paid by the Corporation. In addition
to solicitations by mail, some directors, officers and regular employees of the
Corporation, without extra remuneration, may conduct solicitations by telephone,
facsimile and personal interview. The Corporation will reimburse brokerage firms
and other custodians, nominees and fiduciaries for reasonable expenses incurred
by them in sending proxy material and annual reports to the beneficial owners of
Common Stock. In addition, the Corporation has engaged Beacon Hill Partners,
Inc. to assist it in the solicitation of proxies, for a fee of approximately
$2,500 plus out-of-pocket expenses.
As of the date of this Proxy Statement, the Board of Directors of the
Corporation has no knowledge of any matters to be presented for consideration at
the meeting other than those referred to above. However, persons named in the
accompanying form of proxy shall have the authority to vote such proxy as to any
other matters which do properly come before the meeting and as to matters
incidental to the conduct of the meeting, according to their discretion.
By Order of the Board of Directors
Garnet E. King
CORPORATE SECRETARY
April 8, 1997
Muncie, Indiana
13
<PAGE>
[LOGO]
<PAGE>
ALLTRISTA CORPORATION PROXY/VOTING INSTRUCTION CARD
345 SOUTH HIGH STREET, MUNCIE, INDIANA 47305
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
R MEETING ON MAY 14, 1997.
O
X The undersigned hereby appoints Jerry T. McDowell, Larry D. Miller, William
Y L. Skinner, and each or any of them as Proxies, with full power of
substitution, to vote all shares of Alltrista Corporation Common Stock
entitled to be voted by the undersigned for the election of directors and on
Proposal 2 referred to on the reverse side of this Proxy Card and described
in the Proxy Statement, and on any other business as properly may come before
the Annual Meeting of Shareholders on May 14, 1997, or any adjournment
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR ITEMS 1 AND 2.
Election of two Directors. Nominees are:
Thomas B. Clark, David L. Swift
YOU ARE ENCOURAGED TO SPECIFY YOUR VOTES BY MARKING THE APPROPRIATE BOXES
ON THE REVERSE SIDE.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE.
<PAGE>
1929
/X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSALS 1 AND 2.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
- -------------------------------------------------------------------------------
FOR WITHHELD AUTHORITY FOR ALL NOMINEES
1. Election of Directors. / / / /
To withhold authority to vote for any specific nominee(s), mark the "FOR" box
and write the name of each such nominee for whom you are withholding
authority to vote on the line provided below
- -------------------------------------------------------------------------------
2. Proposal to approve the appointment of Price FOR AGAINST ABSTAIN
Waterhouse LLP as the independent public / / / / / /
accountants of the Corporation.
3. In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the meeting.
Please sign exactly as name appears at left. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as
such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name
by authorized person.
- -------------------------------------------------------------------------------
Signature Date
- -------------------------------------------------------------------------------
Signature (if held jointly) Date
