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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BUSH BOAKE ALLEN INC.
.................................................................
(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)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
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[Logo]
BUSH BOAKE ALLEN INC.
7 MERCEDES DRIVE,
MONTVALE, N.J. 07645
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1998
------------------------
The Annual Meeting of Stockholders of Bush Boake Allen Inc. will be held at
the Woodcliff Lake Hilton, 200 Tice Boulevard, Woodcliff Lake, New Jersey, on
Wednesday, May 6, 1998, at 11:00 A.M., to consider and act upon the following:
(1) The election of a Board of Directors for the ensuing year;
(2) The ratification of the appointment by the Board of Directors of
Price Waterhouse LLP as independent accountants for the year 1998;
(3) The approval of the Bush Boake Allen Inc. 1994 Stock Option and
Stock Award Plan;
(4) The approval of the Bush Boake Allen Inc. Directors' Stock Option
Plan; and
(5) Such other matters as may properly come before the meeting.
Only stockholders of record at the close of business on March 17, 1998 are
entitled to notice of, and to vote at, the meeting.
Your attention is directed to the accompanying proxy statement.
DENNIS M. MEANY
Secretary
Montvale, New Jersey
March 22, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO DATE, SIGN
AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH
REQUIRES NO UNITED STATES POSTAGE. THE PROXY IS REVOCABLE AND YOU MAY VOTE YOUR
SHARES IN PERSON IF YOU ATTEND THE MEETING AND WISH TO DO SO.
<PAGE>
<PAGE>
BUSH BOAKE ALLEN INC.
7 MERCEDES DRIVE,
MONTVALE, N.J. 07645
---------------------------------
PROXY STATEMENT
---------------------------------
ANNUAL MEETING OF STOCKHOLDERS FOR 1998
The accompanying proxy is solicited by the Board of Directors of Bush Boake
Allen Inc. ('BBA' or the 'Company') for use at the Annual Meeting of
Stockholders to be held on Wednesday, May 6, 1998, and any adjournment thereof.
Notice of Annual Meeting, proxy statement and proxy are being mailed to all
stockholders on or about March 22, 1998. Proxies in the accompanying form which
are properly executed will be voted and, if a choice is specified with respect
to any matter to be acted upon, the shares will be voted in accordance with such
specification. If a choice is not specified on such proxies, the shares will be
voted in accordance with the recommendations of the Board of Directors as set
forth on the accompanying proxy. Abstentions are counted for quorum purposes,
but such a vote will not affect the determination of whether more votes have
been cast in favor of a proposal than have been cast against it. A proxy may be
revoked by the person giving it at any time before its exercise.
The Board of Directors has fixed the close of business on March 17, 1998,
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the annual meeting. On February 25, 1998, there were
19,278,800 shares of common stock of the Company outstanding. Each share is
entitled to one vote on each matter presented for a vote at the annual meeting.
PROPOSAL 1 -- ELECTION OF DIRECTORS
Seven directors are to be elected to serve until the next Annual Meeting of
stockholders and until their successors shall have been duly elected. The
nominees will be elected if they receive a plurality of the votes cast by the
shares entitled to vote at the Annual Meeting if a quorum (a majority of the
votes entitled to be cast) is present in person or by proxy. All of the nominees
listed below are currently members of the Board of Directors and were elected by
the stockholders at the last annual meeting.
Votes (other than votes withheld) will be cast pursuant to the accompanying
proxy for the election of the nominees listed unless, by reason of death or
other unexpected occurrence, one or more of such nominees shall not be available
for election, in which event it is intended that such votes will be cast for a
substitute nominee or nominees designated by the Board of Directors, or, if no
substitute nominee or nominees are selected by the Board of Directors by the
Annual Meeting, an appropriate candidate or candidates will be selected and
appointed to fill the vacancy and to then serve until the next stockholders'
meeting. The Board of Directors has no reason to believe that any of the
nominees listed will not be available for election as a director.
The names of the directors and nominees, their ages, their principal
occupations during at least the past five years, other directorships held and
certain other biographical information are set forth below.
PETER L. ACTON, 51, has been a Director of the Company since November 1994.
He is Vice President and General Manager of the Chemical Products Division of
Union Camp Corporation (a manufacturer of paper, paperboard, packaging, and wood
and chemical products) ('Union Camp'). Prior to December 1995, Mr. Acton was
General Manager of the Chemical Products Division of Union Camp.
JULIAN W. BOYDEN, 53, has been a Director, President and Chief Executive
Officer of the Company since February 1994 and Chairman of the Board of the
Company since January 1, 1997. Prior to February 1994, Mr. Boyden was a Vice
President of Union Camp since January 1991 and the General Manager of the
Company since January 1989. Mr. Boyden has been associated with the Company
since 1968.
THOMAS R. CRANE, JR., 57, has been a Director of the Company since June
1994 and is Chairman of the Audit Committee and a member of the Compensation
Committee. From January 1,
<PAGE>
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1987 until January 31, 1998, Mr. Crane was a Director, President and Chief
Executive Officer of Castrol North America Holdings Inc. (a manufacturer and
marketer of motor oil and other lubricants) and also a Director of various
affiliates of Castrol North America.
L. ROBERT PFUND, 61, has been a Director of the Company since July 1995 and
is a member of the Audit Committee and the Compensation Committee. Mr. Pfund
retired in 1993 from the position of Corporate Group Vice President of Avon
Products, Inc. (a manufacturer and marketer of fragrances and cosmetics), which
position he held since 1990. Mr. Pfund is also a Director of Techart, Inc. and a
Trustee on the Board of TheValley Hospital in Ridgewood, New Jersey.
JAMES M. REED, 65, has been a Director and Vice Chairman of the Board of
the Company since February 1994. He was the Vice Chairman of the Board and the
Chief Financial Officer of Union Camp from April 1993 until June 1997 and Vice
Chairman and Chief Administrative Officer from June 1997 until his retirement
from active employment with Union Camp in November 1997. Prior to that, Mr. Reed
was an Executive Vice President and the Chief Financial Officer of Union Camp.
Mr. Reed is also a Director of Martin Marietta Materials, Inc.
GEORGE J. SELLA, JR., 69, has been a Director of the Company since February
1994 and is Chairman of the Compensation Committee and a member of the Audit
Committee. Mr. Sella retired in March 1993 from the positions of Chairman of the
Board and Chief Executive Officer of American Cyanamid Company (a research-based
biotechnology company), which positions he held since January 1991. Mr. Sella is
a Director of The Equitable Life Assurance Society of the United States, The
Equitable Companies Incorporated, Coulter Pharmaceutical and Union Camp.
WILLIAM H. TRICE, 64, has been a Director of the Company since February
1994 and was Chairman of the Board of Directors of the Company from that time
until December 31, 1996. Mr. Trice was Executive Vice President of Union Camp
from 1985 until his retirement from active employment on December 31, 1996.
BOARD OF DIRECTORS AND COMMITTEES
In 1997, the Board of Directors held five meetings. Directors are
reimbursed for their expenses associated with each meeting attended. The
directors who are not officers or employees of the Company or Union Camp
received as compensation for their services in 1997 an annual retainer of
$15,000 and fees of $1,000 for each Board meeting and $750 for each Committee
meeting attended. In addition, a $1,000 annual Committee Chairperson retainer is
paid. On February 17, 1998, in response to the report of an independent
compensation consultant which found compensation to eligible Board members to be
below competitive levels, the Board of Directors adopted, subject to shareholder
approval (see Proposal 4 below), a Directors' Stock Option Plan. If this
proposal is approved by shareholders, a grant consistent with the recommendation
of the independent compensation consultant to eligible directors in 1998 is
anticipated. Directors who are officers or employees of the Company or Union
Camp do not receive any additional compensation (and will not be eligible to
receive options under the Directors' Stock Option Plan) by reason of their
membership on, or attendance at meetings of, the Board.
The Board of Directors has appointed an Audit Committee and a Compensation
Committee, which are composed entirely of directors who are not officers or
employees of the Company or Union Camp.
The Audit Committee held two meetings during 1997. Generally, the Audit
Committee (i) recommends to the Board of Directors the independent accountants
to be appointed for the Company, (ii) meets with the independent accountants,
the chief internal auditor and corporate officers to review matters relating to
corporate financial reporting and accounting procedures and policies, adequacy
of financial, accounting and operating controls and the scope of the audits of
the independent accountants, (iii) reviews and reports on the results of such
audits to the Board of Directors and (iv) submits to the Board of Directors its
recommendations relating to financial reporting and accounting practices and
policies and financial accounting and operating controls.
The Compensation Committee held three meetings during 1997. Generally, the
Compensation Committee (i) reviews the compensation plans and sets the
compensation for executive officers of the Company, (ii) awards incentive
compensation and bonuses to executive officers of the Company and
2
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(iii) administers the Company's stock option and stock award plan and awards
options, restricted stock, stock appreciation rights and bonuses payable in
stock.
The Company's bylaws provide that any stockholder who wishes to nominate
any person for election as a director at the Annual Meeting must give the
Company's Secretary written notice of such intent at least sixty (60) days in
advance of the date established in the bylaws as the day of the Annual Meeting
(the first Wednesday in May of each year). Such notice must contain the
information required by the bylaws including information regarding such person
to be nominated as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission had the
person been nominated by the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Company, and based on a review of filings on
Schedule 13G and Schedule 13D in February 1998 with the Securities and Exchange
Commission, no person or group owned beneficially more than five percent of the
outstanding Common Stock of the Company except:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- --------------- ------------------------------------- ----------------- --------
<S> <C> <C> <C>
Common Union Camp Corporation(2) 13,150,000 68.21
1600 Valley Road
Wayne, N.J. 07470
</TABLE>
- ------------
(1) As used in this proxy statement, 'beneficially owned' or words of similar
import mean the sole or shared power to direct the voting of a security or
the sole or shared power to direct the disposition of a security.
(2) Union Camp owns these shares through its wholly-owned subsidiary, Union Camp
Patent Holdings, Inc.
SECURITY OWNERSHIP OF MANAGEMENT
AS OF DECEMBER 25, 1997
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
------------------------------------------
BBA PERCENT UCC PERCENT
NAME OF BENEFICIAL OWNER COMMON(1)(2) OF CLASS COMMON(3)(4) OF CLASS
- ----------------------------------------------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Peter L. Acton................................. 1,300 * 24,000 *
Julian W. Boyden............................... 44,076 * 14,550 *
Fred W. Brown, Jr.............................. 20,150 * 3,790 *
Thomas R. Crane, Jr............................ 2,500 * 0 *
James H. Dunsdon............................... 18,000 * 0 *
P. C. Mathew................................... 22,000 * 5,600 *
L. Robert Pfund................................ 2,000 * 0 *
James M. Reed.................................. 5,000 * 142,405 *
George J. Sella, Jr............................ 3,500 * 2,408 *
Peter A. Thorburn.............................. 18,800 * 5,648 *
William H. Trice............................... 11,000 * 102,577 *
Directors & Executive Officers as a Group (19
Persons)..................................... 220,264 1.14 312,094 *
</TABLE>
- ------------
* Less than one percent of the BBA common shares outstanding and less than one
percent of the UCC Common shares outstanding.
(1) BBA common stock.
(footnotes continued on next page)
3
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(footnotes continued from previous page)
(2) The shares shown as beneficially owned include the number of shares of BBA
common stock that directors and executive officers had the right to acquire
within 60 days after December 25, 1997 pursuant to unexercised options under
BBA stock option plans as follows: 39,076 shares for Mr. Boyden, 19,000
shares for Mr. Brown, 18,000 shares for Mr. Dunsdon, 18,000 shares for Mr.
Mathew, 18,000 shares for Mr. Thorburn and 179,814 shares for all directors
and executive officers as a group (19 persons).
(3) Union Camp common stock.
(4) The shares shown as beneficially owned include the number of shares of UCC
common stock that directors and executive officers had the right to acquire
within 60 days after December 25, 1997 pursuant to unexercised options under
Union Camp stock option plans as follows: 24,000 shares for Mr. Acton,
13,000 shares for Mr. Boyden, 2,950 shares for Mr. Brown, 5,600 shares for
Mr. Mathew, 102,619 shares for Mr. Reed, 5,600 shares for Mr. Thorburn,
84,629 shares for Mr. Trice and 247,898 for all directors and executive
officers as a group (19 persons). The shares shown include 7,210 shares held
in a family trust by Mr. Trice in which he is a trustee.
EXECUTIVE COMPENSATION
The following table shows information with respect to the annual and
long-term compensation for services in all capacities to the Company and its
subsidiaries during the Company's fiscal year which ended December 25, 1995,
1996 and 1997, paid or accrued to the chief executive officer and the other four
most highly compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
----------------
ANNUAL COMPENSATION
------------------------------------------- AWARDS
OTHER ANNUAL ---------------- ALL OTHER
COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) (# OF SHARES)(3) ($)(4)
- ---------------------------------- ---- -------- -------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Julian W. Boyden ................. 1997 $410,000 $255,400 0 25,740 $ 21,897
President and Chief Executive 1996 380,000 205,399 0 0 20,550
Officer 1995 350,000 214,083 0 3,076 12,614
James H. Dunsdon ................. 1997 240,000 120,800 0 12,090 3,600
Executive Vice President 1996(1) 185,554 57,971 0 0 1,749
1995(2) 146,280 73,889 0 0 1,534
P. C. Mathew ..................... 1997 227,700 94,000 0 7,310 11,254
Vice President, Aroma and 1996 220,000 88,901 $ 64,004 0 9,900
Terpene Chemicals 1995(2) 137,772 106,266 81,716 0 1,406
Peter A. Thorburn ................ 1997 217,300 94,000 0 6,570 11,892
Vice President, Chemical Sales 1996 211,000 84,033 0 0 11,472
1995(2) 184,604 102,909 0 0 4,784
Fred W. Brown, Jr ................ 1997 187,300 83,000 0 6,570 9,145
Vice President and Chief 1996 175,000 68,892 0 0 8,682
Financial Officer 1995 153,750 82,790 0 0 4,613
</TABLE>
- ------------
(1) Compensation was converted into U.S. dollars from pounds sterling at a rate
of U.S. $1.56/`L'.
(2) Compensation was converted into U.S. dollars from pounds sterling at a rate
of U.S. $1.59/`L'.
(3) 1994 option awards constituted a grant for the years 1994, 1995 and 1996.
(4) The compensation reported represents (i) Company contributions under the
Union Camp Salaried Employees Savings and Investment Plan in 1995 and
through June 30, 1997 and, thereafter, under its replacement, the Bush Boake
Allen Inc. Employees Savings and Investment Plan and (ii) amounts imputed or
credited to the named executive officer for premiums paid for group life
insurance. The
(footnotes continued on next page)
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(footnotes continued from previous page)
Company contributions during 1997 pursuant to the Employee Savings and
Investment Plans were as follows: $18,000 for Mr. Boyden, $3,600 for Mr.
Dunsdon, $8,243 for Mr. Brown, $10,131 for Mr. Mathew and $9,684 for Mr.
Thorburn. The amounts imputed or credited for life insurance premiums were
as follows: $3,897 to Mr. Boyden, $1,123 to Mr. Mathew, $2,209 to Mr.
Thorburn and $902 to Mr. Brown.
OPTIONS AND STOCK APPRECIATION RIGHTS
The following two tables summarize option grants to, and exercises by, the
executive officers named in the Summary Compensation Table during 1997 and the
value of the options held by them as of December 25, 1997. No stock appreciation
rights were granted in 1997.
OPTION/SAR GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE
- ------------------------------------------------------------------------------------------- AT ASSUMED ANNUAL
% OF TOTAL RATES
NUMBER OF OPTIONS/ OF STOCK PRICE
SECURITIES SARS EXERCISE(2) APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES PRICE EXPIRATION ----------------------
NAME GRANTED(1) IN 1997 ($/SH) DATE 5%(4) 10%(5)
- --------------------------------- ------------ ---------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Julian W. Boyden................. 25,740 11.2 28.75 5/6/07 $465,379 $1,179,407
James H. Dunsdon................. 12,090 5.2 28.75 5/6/07 218,587 553,964
P. C. Mathew..................... 7,310 3.2 28.75 5/6/07 132,165 334,944
Peter A. Thorburn................ 6,570 2.9 28.75 5/6/07 118,786 301,037
Fred W. Brown, Jr................ 6,570 2.9 28.75 5/6/07 118,786 301,037
</TABLE>
- ------------
(1) The options become exercisable three years from the date of grant, i.e., on
May 6, 2000.
(2) The exercise price is the fair market value of the underlying stock on the
date of the option grant.
(3) The dollar amounts under these columns are the result of calculations at an
annual rate of 5% and 10% rates set by the SEC and are not intended to
forecast possible future appreciation, if any, of Company Common Stock.
(4) Company Common Stock would be trading at $46.83 per share for the values
shown to be realizable, an increase in stock price which would benefit all
shareholders.
(5) Company Common Stock would be trading at $74.57 per share for the values
shown to be realizable, an increase in stock price which would benefit all
shareholders.
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
VALUE OPTIONS/SARS AT OPTIONS/SARS AT FISCAL
SHARES ACQUIRED REALIZED FISCAL YEAR-END (#) YEAR-END ($)
NAME ON EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- ----------------------------- --------------- -------- --------------------------- ----------------------------
<S> <C> <C> <C> <C>
Julian W. Boyden............. 0 0 39,076/49,740 $375,750/250,500
James H. Dunsdon............. 0 0 18,000/24,090 187,875/125,250
P. C. Mathew................. 0 0 18,000/19,310 187,875/125,250
Peter A. Thorburn............ 0 0 18,000/18,570 187,875/125,250
Fred W. Brown, Jr............ 0 0 19,000/12,570 130,188/ 90,875
</TABLE>
- ------------
(1) Value is the difference between the market value of the Company's common
stock on December 25, 1997, i.e., $26.4375 per share, and the exercise
price.
5
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REPORT OF THE
COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
THE COMMITTEE'S FUNCTION
The Compensation Committee (the 'Committee') is composed entirely of
independent, non-employee directors. The Committee reviews and approves each
element of the Company's executive compensation program and assesses the
effectiveness of the program as a whole. The Committee approves the salaries of
the Company's Chief Executive Officer (the 'CEO') and its other executive
officers, makes awards to the CEO and other executive officers under the Bush
Boake Allen Annual Executive Incentive Plan (the 'Annual Incentive Plan') and
grants stock options under the 1994 Stock Option and Stock Award Plan (the
'Stock Option Plan').
OBJECTIVES OF THE EXECUTIVE COMPENSATION PROGRAM
The executive compensation program is designed to: (a) attract, retain and
motivate talented executives to work on behalf of stockholders, the Company's
employees, customers and the communities within which the Company operates; (b)
provide compensation at levels that are competitive with those provided in the
various markets where BBA competes for executive resources; (c) place a
significant portion of executive pay at risk; and (d) recognize and reward
exceptional individual accomplishments. The Company's CEO participates in the
same programs and receives compensation based on the same factors as the other
executive officers.
The Committee considered soon after it was formed the deductibility of
executive compensation under Section 162(m) of the Internal Revenue Code which
was enacted in 1993. Under this provision, beginning in 1994 a publicly held
corporation is not permitted to deduct compensation in excess of one million
dollars per year paid to the CEO and the other executive officers named in the
proxy statement except to the extent the compensation was paid under
compensation plans meeting tax code requirements to be considered
performance-based. The Committee noted that compensation paid in 1997 to its CEO
and other named executive officers was fully deductible. The Committee
determined that, in reviewing the design of and administering the executive
compensation program, the Committee will attempt to preserve the Company's tax
deductions for executive compensation unless this goal conflicts with the
primary objectives of the Company's compensation program.
The Committee also seeks an appropriate balance among program objectives.
Particular attention is paid to the two key objectives discussed below.
PROVIDING COMPETITIVE LEVELS OF COMPENSATION
The Committee intends to provide the Company's CEO and its executives with
total compensation that, at targeted levels of performance, according to an
independent compensation consultant, is competitive with the average total
compensation earned by executives who hold comparable positions or have similar
qualifications in the flavor and fragrance and the aroma chemical industry and
within general industry for companies of comparable size. Those companies
include some of the companies which were selected on the basis of the business
set forth in the Performance Graph below, but they also include companies in
other businesses (regressed to comparable size) because competition for
executives extends beyond the Company's current lines of business. To determine
average competitive levels of base salary and target incentive compensation, the
Committee regularly reviews information drawn from various sources, including
proxy statements and industry surveys which are presented by an independent
compensation consultant. The Committee then examines specific salary and target
incentive recommendations for BBA's CEO and other executive officers,
considering each position's relative content, accountability, scope of
responsibility as well as the individual's performance and experience. While the
targeted value of an executive's total compensation is generally set at average
competitive levels, a large portion of an executive's compensation is at risk
and will exceed or fall below the targeted levels depending on actual
performance measured against predetermined objectives.
6
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ENSURING THAT INCENTIVE COMPENSATION VARIES WITH PERFORMANCE
BBA's Annual Incentive Plan is designed to ensure that incentive
compensation is predictable with the financial and strategic performance of the
Company and/or its business units as measured against predetermined objectives
which are approved annually by the Committee.
OVERVIEW OF EXECUTIVE COMPENSATION AND 1997 ACTIONS
The Company's executive compensation program for its CEO and its executive
officers including the four most highly compensated executive officers shown in
the Summary Compensation Table (the 'named executive officers') has three
principal elements: base salary, the Annual Incentive Plan and the Stock Option
Plan. Following is an overview of each program element and actions taken in
1997.
BASE SALARY
Base salaries are intended to be externally competitive and internally
equitable. They reflect an individual's sustained performance and length of time
in the position. Base salary levels are adjusted periodically based on an
individual's performance and the external market. Base salaries are annually
targeted at average base salary levels for similar positions in the flavor and
fragrance and aroma chemical industry and within general industry for companies
of comparable size. Base salaries may be less than or exceed the targeted
averages if warranted by sustained performance.
1997 Action: The base salary for executive officers for 1997 was considered
and established by the Committee at its November 20, 1996 meeting.
Recommendations for the 1997 base salaries for the executive officers other than
the CEO were made by the CEO to the Committee based on his evaluation of the
1996 performance of each such officer in his current position. The base salary
for the CEO for 1997 was determined by the Committee based on its evaluation of
his performance as chief executive officer in 1996. The recommended base
salaries for both the CEO and the other executive officers were also based on
the salaries paid to other chief executive officers and executive officers at
other companies as described under this caption 'Base Salary' as well as
differing pay scales in different areas of the world. This data was presented by
and discussed with an independent compensation consultant at the November 20,
1996 Committee meeting.
BUSH BOAKE ALLEN ANNUAL EXECUTIVE INCENTIVE PLAN
The amount of the incentive targeted for the CEO and the Company's
executive officers including the named executive officers under the Annual
Incentive Plan is the average competitive annual incentive recommended by an
independent compensation consultant based on the average annual incentive
compensation paid to individuals in comparable positions by the comparable group
referred to under the caption 'Providing competitive levels of compensation'.
The incentive targeted is based on (i) the Company and/or key business units
achieving their annual financial plan and (ii) the CEO and the named executive
officers achieving predetermined operating or strategic goals that are
established as part of the Company's annual planning and budgetary process. At
the beginning of each year the Committee will review the operating or strategic
goals established for the CEO and the named executive officers and the financial
performance measures for the Company and its key business units.
Executives' awards are tied to the financial performance measures most
appropriate to their responsibilities. To reinforce the need for teamwork and
focus attention on overall corporate objectives, all participants have a portion
of their award tied to the financial performance measures for the Company as a
whole. While the portion of the award based on financial performance measures
for Mr. Boyden and Mr. Brown is determined solely by corporate earnings results,
the other named executive officers have a portion of their awards based on
financial performance measures linked to the performance of the key business
units for which they are responsible.
1997 Action: Incentive compensation for 1997 performance by the CEO and the
Company's executive officers was awarded by the Committee in early 1998. The
award process began in early 1997 when the Committee established financial
performance measures for the CEO and executive officers. Since the Company's
1997 earnings results were less than the Company financial performance measure
7
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established, the portion of the targeted incentive based on Company financial
performance measures was decreased. The earnings results of the key business
units varied against the financial measures established. The executive officers
responsible for these key business units had their targeted incentives adjusted
accordingly.
In addition, at the beginning of 1997, a number of specific operational and
strategic goals were established and approved by the Committee. These goals were
weighted and the CEO and the executive officers had to accomplish them in order
to receive the targeted awards after those targeted awards were adjusted for
achievement of the financial performance measure. The Committee regards the
specific operational and strategic goals as competitively sensitive information.
Since the CEO and named executive officers met some but not all of these goals,
the Committee approved further adjustments of their incentives in accordance
with each's performance.
1994 STOCK OPTION AND STOCK AWARD PLAN
Stock options are the final element of the Company's compensation for its
CEO and executive officers. The primary objective of issuing stock options is to
encourage the CEO and the officers of the Company to maintain an equity interest
in the Company and provide financial incentives linked to the future performance
of the Company's common stock.
1997 Action: The starting point for the determination of stock option
awards for the CEO and the executive officers is the average competitive total
compensation for comparable positions recommended by the independent
compensation consultant (as discussed under the caption 'Providing competitive
levels of compensation'). The Committee approved stock option grants in May 1997
based on the recommendation of the independent consultant. These grants were
determined by offsetting the average competitive total compensation reported by
the consultant, by the CEO's and executive officers' base salaries and the
Annual Incentive Plan target awards. For this calculation, the expected present
value of the stock option grants was determined by the independent consultant
using a version of the Black-Scholes formula. The Committee expects to use the
same methodology each year it grants options and does not consider the amount of
stock options previously awarded in determining the size of a grant of stock
options under the Stock Option Plan. The stock options granted to the CEO and
the named executive officers in 1997 are shown in the Option Grants table.
SUMMARY
The Company's emphasis on variable pay and the compensation programs'
direct link to both short and long-term financial performance, as well as stock
performance, tie executive pay to critical measures of corporate performance.
George J. Sella, Jr.
Thomas R. Crane, Jr.
L. Robert Pfund
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STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return of BBA
common stock, the S & P 500 Composite -- 500 Stock Index and an index of a peer
group, for the period of approximately forty-three and one-half months beginning
on May 12, 1994, the date BBA common stock was registered under Section 12 of
the Securities Exchange Act of 1934, as amended, and ending on December 25,
1997, the end of the Company's fiscal year (assuming that the value of the
investment in BBA common stock and each index was $100 on May 12, 1994 and that
all dividends were reinvested). The peer group index is comprised of the
following companies: Alberto-Culver Company, Avon Products, Inc., Block Drug
Company, Inc., Borden Inc. (from May 12, 1994 -- December 25, 1994, when it
ceased to trade publicly), Church & Dwight Inc., Crompton & Knowles Corp.,
Ecolab Inc., Ethyl Corporation, Helene Curtis Industries, Inc. (from May 12,
1994 -- December 25, 1995, when it ceased to trade publicly), Hershey Foods
Corp., International Flavors & Fragrances Inc., McCormick & Company, Inc.,
Morton International, Inc., NCH Corporation, Nalco Chemical Company, The Quaker
Oats Company, Ralston Purina Company, Tambrands Inc. (from May 12,
1994 -- December 25, 1996, the last full year it traded publicly), Wm. Wrigley
Jr. Company and W. R. Grace & Company. The performance of the peer group is
weighted based on market capitalization.
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR
PERIOD ENDING DECEMBER 25, 1997
[GRAPH]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
May 12, 1994 Dec. 25, 1994 Dec. 25, 1995 Dec. 25, 1996 Dec. 25, 1997
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Bush Boake Allen 100.00 158.59 171.88 164.84 165.23
- ---------------------------------------------------------------------------------------------------------
S&P 500 100.00 105.16 143.65 180.27 227.95
- ---------------------------------------------------------------------------------------------------------
Peer Group 100.00 101.75 132.98 159.86 200.97
- ---------------------------------------------------------------------------------------------------------
</TABLE>
RETIREMENT PLANS
Mr. Boyden and other named executives, except Mr. Brown, participate in the
BBA Pension Scheme and the BBA Executive Pension Scheme, as deferred members. As
of February 1997, the BBA Executive Pension Scheme was merged with the larger
BBA Pension Scheme (the 'Scheme'). The years of pensionable service credited
under the Scheme are 31 for Mr. Boyden, 29 for Mr. Dunsdon, 18 for Mr. Thorburn
and 14 for Mr. Mathew.
The Scheme is a defined benefit arrangement, funded solely by company
contributions, and is exempt approved under the United Kingdom Income &
Corporation Taxes Act 1988. An enhanced level of benefit is granted, at the
discretion of the company, to a limited number of executives who have attained a
predetermined employment grade based primarily on the level of job
responsibility. The participants who have been granted enhanced benefits are Mr.
Boyden and the other named executives, except Mr. Brown, and three other
executives based in the United Kingdom.
The calculation of benefits under the Scheme is directly linked to
pensionable service and final average compensation, which includes base salary,
bonuses, and certain taxable benefits in kind, received by the member during the
36 consecutive most highly compensated months of the 120 months preceding
retirement (the 'Final Pensionable Salary').
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The amount of benefit provided for participating members is 1.6667% of
Final Pensionable Salary for each year, and completed months of pensionable
service, subject to the benefits payable not exceeding limits imposed by the UK
Inland Revenue regulations, which are reflected in the table shown below.
The table shows the approximate pension payable under the Scheme and
assumes retirement at age 65 and Final Pensionable Salary and years of
pensionable service in the classifications indicated.
BBA PENSION SCHEME
APPROXIMATE ANNUAL PENSION AT AGE 65
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------------
FINAL PENSIONABLE SALARY 15 20 25 30 35 40
- ---------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000.................... $ 25,000 $ 33,300 $ 41,700 $ 50,000 $ 58,300 $ 66,700
200,000.................... 50,000 66,700 83,300 100,000 116,700 133,000
300,000.................... 75,000 100,000 125,000 150,000 175,000 200,000
400,000.................... 100,000 133,300 166,700 200,000 233,300 266,700
500,000.................... 125,000 166,700 208,300 250,000 291,700 333,300
600,000.................... 150,000 200,000 250,000 300,000 350,000 400,000
700,000.................... 175,000 233,300 291,700 350,000 408,300 466,600
</TABLE>
The calculation of the amounts shown above assumes that employees remain in
service of the company until age 65 and that the Scheme continues in its present
form. The employee receives the benefit shown for life and a surviving spouse
receives a benefit of fifty percent of such amount for life following the
employee's death after retirement.
The Pension Plan for Eligible Employees of BBA in the United States (the
'Retirement Plan') in which Messrs. Boyden, Brown, Dunsdon, Mathew and Thorburn
participate is a defined benefit plan and is funded solely by Company
contributions. The calculation of benefits under the Retirement Plan is based
upon final average earnings. Final average earnings are determined by dividing
by five the sum of all compensation, including base salary, bonuses, taxable
benefits in kind and any vacation payments, received by the member during the 60
consecutive most highly compensated months of the 120 months preceding
retirement (the 'Final Average Earnings'). The amount of the retirement benefit
provided to a participating employee under the Retirement Plan equals the
product of the sum of 1.05% of the participating employee's Final Average
Earnings plus .45% of those Final Average Earnings in excess of the average
applicable Social Security wage base at the date of retirement, multiplied by
the number of years of credited service of the employee with the Company.
Benefits under the Retirement Plan are not subject to any deduction for Social
Security benefits or other offset amounts. To the extent that retirement
benefits payable exceed limitations imposed by the Internal Revenue Code of
1986, as amended (the 'Code'), with respect to payments from tax qualified
trusts, such excess amounts will not be paid from a qualified trust fund, but
will be paid by the Company on an unfunded basis out of its general assets.
The following table shows the approximate annual pension payable under the
Retirement Plan to Messrs. Boyden, Brown, Dunsdon, Mathew and Thorburn assuming
retirement at age 65 and Final Average Earnings and years of service in the
classifications indicated.
BBA RETIREMENT PLAN
APPROXIMATE ANNUAL PENSION AT AGE 65
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE --------------------------------------------------------------------------------
EARNINGS 10 15 20 25 30 35 40
- ------------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000.......... $ 13,700 $ 20,500 $ 27,400 $ 34,200 $ 41,000 $ 47,900 $ 54,700
200,000.......... 28,700 43,000 57,400 71,700 86,000 100,400 114,700
300,000.......... 43,700 65,500 87,400 109,200 131,000 152,900 174,700
400,000.......... 58,700 88,000 117,400 146,700 176,000 205,400 234,700
500,000.......... 73,700 110,500 147,400 184,200 221,000 257,900 294,700
600,000.......... 88,700 133,000 177,400 221,700 266,000 310,400 354,700
700,000.......... 103,700 155,500 207,400 259,200 311,000 362,900 414,700
</TABLE>
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The calculation of the amounts shown above assumes that these executives
remain in the service of the Company until age 65, that the retirement programs
are continued in their present form and that each of them receives the benefits
in the form of a single life annuity. As of December 25, 1997, Messrs. Boyden
and Thorburn were each credited with three years, Mr. Mathew credited with two
years, Mr. Dunsdon credited with one year, and Mr. Brown credited with 26 years,
of vested service under the Retirement Plan.
SEVERANCE ARRANGEMENTS
The individuals named in the Summary Compensation Table and six other
executive officers have executed individual severance agreements with the
Company. Each agreement provides that if, during the thirty month period
following a change in control of the Company or Union Camp, the Company
terminates the executive's employment without 'cause' (other than for
'disability') or the executive terminates his employment for 'good reason' (as
such terms are defined in the severance agreements), the executive will receive
from the Company as a severance benefit a lump sum payment equal to two and
one-half times the sum of such executive's annual salary and two and one-half
times the amount of his normal bonus opportunity (as such term is defined in the
severance agreements). An executive officer would also be entitled to continue
to receive certain welfare insurance benefits for thirty months. The Company
will also make an additional payment to the executive to ensure that the
components of the severance benefit described above that are multiples of salary
and bonus will not be subject to net reduction due to the imposition of excise
taxes under section 4999 of the Code. The individual severance agreements
provide for the distribution to the executives of their benefits under the
Company's Supplemental Retirement Plan promptly following both a change in
control of the Company or Union Camp and termination, as noted above.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The discussion set forth below includes summaries of significant terms of
various agreements between the Company and Union Camp and between the Company
and certain of the Company's officers and directors.
EMPLOYMENT CONTRACTS
As partial consideration for Messrs. Dunsdon, Mathew, Wright (Vice
President, Commerce and Technology) and Thorburn's acceptance of positions
requiring relocation to the United States, the Company agreed that if their
employment is terminated during the initial three years after relocation (other
than for voluntary resignation, retirement, death or disability) they shall
receive six months salary (twelve months for Mr. Dunsdon) in lieu of notice.
TRANSACTIONS WITH PRINCIPAL STOCKHOLDER
The Company and Union Camp have entered into various agreements described
below which initially provided for the transition of the Company from a
wholly-owned subsidiary of Union Camp to a public company and which govern
certain ongoing relationships between the Company and Union Camp.
Services Agreement. Prior to the initial public offering of the Company's
common stock, Union Camp provided to the Company certain administrative
services, including treasury activities, employee benefit administration, human
resource administration, environmental, tax, risk management, legal, accounting,
safety and health administration, transportation logistics, corporate
communication and research and development activities. The Company has entered
into a Services Agreement with Union Camp under which Union Camp has agreed to
continue to make these services available to the Company. Union Camp or BBA may
terminate any or all of the services covered by the Services Agreement upon
ninety days prior written notice, except for research and development services
which will require two years prior written notice. The obligations of Union Camp
under the Services Agreement will be subject to the reasonable demands and
requirements of the Company's ongoing operations. Union Camp may provide for
independent subcontractors to perform the work if it is unable to do so itself.
The rates charged by Union Camp to the Company approximate the fair market
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value of the services to be provided by the Company. None of these services
agreements have been terminated through the end of 1997.
Technology Agreement. Union Camp and BBA have each granted (or caused one
or more of their subsidiaries to grant) to each other an irrevocable,
non-exclusive, royalty-free license to use their respective patents, patent
applications, know-how and trademarks that are used or useful in their
respective businesses.
Supply Agreement. The Company and Union Camp have entered into a Supply
Agreement relating to the terms and conditions pursuant to which the Company
will purchase turpentine from Union Camp as well as the procurement of
turpentine by Union Camp from other sources for sale to the Company, in each
case at approximately fair market value.
Tax Allocation Agreement. The Company has entered into a tax allocation
agreement with Union Camp. Under terms of this agreement Union Camp and the
Company agree to mutually indemnify each other against potential claims,
assessments or adjustments made by any taxing authority with respect to any tax
position taken by the Company or Union Camp for periods prior to the initial
public offering of the Company's common stock.
Cross-Indemnification Agreement. The Company and Union Camp have entered
into an agreement whereby each party will indemnify the other party against
liabilities relating to the business of the indemnifying party as it has been
conducted prior to the initial public offering of the Company's common stock,
including Union Camp's agreement to indemnify the Company against all
liabilities relating to the operations and business of the Company's
Jacksonville facility at any time up to and including December 31, 1986, after
which date the Jacksonville facility was operated as part of BBA.
Registration Rights Agreement. The Company and Union Camp have entered into
a Registration Rights Agreement pursuant to which the Company has granted
certain registration rights to Union Camp and certain of its affiliates with
respect to the shares of common stock of the Company owned by Union Camp or
acquired by any such affiliate from Union Camp following the public offering of
Company common stock. In the event that the Company proposes to register any of
its shares of common stock for sale under the Securities Act of 1933, as amended
(the 'Securities Act'), Union Camp is entitled to require the Company to include
all or a portion of the shares of common stock of the Company held by Union Camp
or its affiliates, subject to the restrictions set forth in the Registration
Rights Agreement. Union Camp also has the right to require that the Company
register all or a portion of the common stock of the Company held by Union Camp
or its affiliates for sale under the Securities Act three times, subject to the
terms of the Registration Rights Agreement. The Company's obligations are
subject to limitations relating to a minimum number of shares of common stock of
the Company required for any such registration, the timing of registration and
other similar matters. The Company is obligated to pay all expenses incidental
to any such registration, excluding underwriters' discounts and certain legal
fees and expenses. The Company has agreed to indemnify Union Camp for certain
liabilities, including liabilities under the Securities Act, in connection with
any such registration. Under the Registration Rights Agreement, Union Camp and
certain of its affiliates have the right to transfer their respective rights to
a transferee other than pursuant to a public offering.
PROPOSAL 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP has been recommended by the Audit Committee and
appointed by the Board of Directors, subject to ratification by the
stockholders, to make an examination of the consolidated balance sheet of the
Company and its consolidated subsidiaries as of December 25, 1998 and the
related consolidated statements of income and cash flows for the year ended
December 25, 1998, and for such other purposes incidental thereto as may be
required. Price Waterhouse LLP has been the Company's independent accountants
since it became a public company in May 1994 and, prior to that, since its
acquisition by Union Camp in 1982.
The Company expects that a representative of Price Waterhouse LLP will be
present at the meeting and will be available to respond to appropriate questions
from stockholders. The representative from Price Waterhouse LLP will have an
opportunity to make a statement at the meeting if he so desires.
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The Board of Directors recommends that you vote FOR this proposal. The
accompanying proxy will be voted FOR the proposal unless a contrary
specification is made. The Proposal will have been adopted if more votes are
cast in favor of it than are cast against it.
PROPOSAL 3 -- APPROVAL UNDER IRC SECTION 162(m) OF
BUSH BOAKE ALLEN INC.
1994 STOCK OPTION AND STOCK AWARD PLAN
A proposal will be presented at the Annual Meeting to approve the Company's
1994 Stock Option and Stock Award Plan, as amended, (the '1994 Plan'). The 1994
Plan was originally adopted by the Board of Directors of the Company on February
24, 1994, and approved by the Company's sole shareholder at the time, Union Camp
Corporation, on May 4, 1994, prior to the initial public offering of the
Company's shares. On December 1, 1996, the 1994 Plan was amended by the Board of
Directors to permit immediate vesting of options granted in the event of a
change of control (see Section 12 of the 1994 Plan in Exhibit A).
Section 162(m) of the Internal Revenue Code ('Code') and the regulations
thereunder limit a public company's tax deductions for compensation to the chief
executive officer and the other executive officers named in the Company's Proxy
Statement to the extent the individual's compensation exceeds $1,000,000. In
accordance with the regulations under Section 162(m), approval of the Company's
shareholders is being sought in order that compensation realized from the
exercise of options granted to such individuals under the 1994 Plan will be
exempt from this deduction limitation.
The material features of the 1994 Plan are summarized below. This summary
is qualified in its entirety by reference to the terms of the 1994 Plan, which
is attached to this proxy statement as Exhibit A.
SUMMARY OF MATERIAL FEATURES OF THE 1994 PLAN
Purposes of the 1994 Plan and Eligibility. The 1994 Plan is designed to
promote the growth and profitability of the Company and its subsidiaries by
giving key employees the opportunity to acquire a stock ownership interest in
the Company. The 1994 Plan authorizes the Compensation Committee ('Committee')
to grant incentive stock options or non-qualified stock options, or both, stock
appreciation rights, awards of restricted stock, and bonuses payable in Company
Common Stock, to those employees who the Committee, in its sole discretion,
determines from time to time have the ability to make a substantial contribution
to the growth and profitability of the Company or any of its subsidiaries. Key
employees, including officers of the Company, are eligible to receive grants and
awards under the 1994 Plan. Non-employee directors and Committee members are not
eligible to participate in the 1994 Plan.
Administration. The Committee is authorized to determine the term during
which an option may be exercised, which may not be longer than ten years. No
option is exercisable before six months from the date it was granted except in
the case of death or certain tender offers, mergers, liquidation, dissolution or
a change in control as described in the 1994 Plan. The Committee is also
authorized to specify, in its sole discretion, the number of shares to be
covered by each award as well as the option price, which may not be less than
100% of the fair market value of a share of Company Common Stock at the time the
option is granted. The Committee has full power and authority to administer and
interpret the 1994 Plan, and the Committee's interpretations, as well as its
grants and awards, are final and conclusive.
Shares Subject to the Plan. The total number of shares that may be granted
or awarded under the 1994 Plan is 750,000 shares of Company Common Stock, plus
an additional amount of shares of Company Common Stock on May 1 of each year,
from May 1, 1995 to May 1, 2003 inclusive, equal to one percent (1%) of the
number of shares of Company Common Stock outstanding on April 30 of such year
('Additional Annual Increment'), of which (i) 150,000 shares plus shares equal
to twenty percent (20%) of each Additional Annual Increment may be awarded as
restricted stock and (ii) no more than one million shares may be awarded as
incentive stock options under Section 422 of the Code, all subject to adjustment
as provided in the Plan.
Payment of Exercise Price. The purchase price upon exercise of an option
may be paid either in cash or in shares of Company Common Stock already owned by
the optionee or a combination of cash
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and shares. No optionee shall have any rights to dividends or other rights of a
shareholder with respect to shares subject to the option until the optionee has
given written notice of exercise and has paid for such shares and applicable
taxes thereon. The Committee may permit tax withholding obligations to be met by
the withholding of Company Common Stock otherwise deliverable to the recipient
pursuant to procedures approved by the Committee.
Per Individual Limitation. No 1994 Plan participant may receive, over the
term of the 1994 Plan, awards in the form of incentive stock options or options
other than incentive stock options, to purchase more than 500,000 shares of
Company Common Stock, subject to adjustment in accordance with the provisions of
the 1994 Plan.
Death, Disability and Retirement. If the optionee's employment is
terminated by reason of death, retirement under a retirement plan of the Company
or a subsidiary or permanent disability, as determined by the Committee, the
optionee's option is exercisable until the expiration of the stated period of
the option. Related stock appreciation rights are exercisable in such cases for
three years, but not beyond the expiration of the option period. In all other
cases, unless the Committee determines otherwise, options held by optionees
terminate when the optionee's employment with the Company or a subsidiary
terminates. No option is transferable except by will or by operation of the laws
of descent and distribution and an option may be exercised during an optionee's
lifetime only by the optionee.
Adjustments. Subject to certain limitations, the 1994 Plan provides for
adjusting the shares of Company Common Stock subject to outstanding awards, or
the numbers, class or exercise prices thereof, in the event of a stock dividend,
stock split, reverse split, subdivision, recapitalization, merger,
consolidation, combination or exchange of shares, separation, reorganization or
liquidation.
Appreciation Rights. In the Committee's discretion, an option may provide a
right to exercise such option without payment of the purchase price (a stock
appreciation right). Upon exercise of such right, an optionee shall receive the
number of whole shares of Company Common Stock, or, in the Committee's
discretion, cash, determined by dividing the fair market value per share on the
date of exercise into the excess of the aggregate fair market over the aggregate
exercise price for the number of option shares covered by the exercise. The
option is reduced by the number of shares with respect to which such rights are
exercised which may not thereafter again be optioned.
Limited Rights. The 1994 Plan provides that the Committee may, in its
discretion, grant options containing provisions for limited rights, exercisable
upon the occurrence of certain events and expiring thirty days thereafter,
including consummation of a tender offer for at least 20% of the outstanding
Company Common Stock, a proxy contest resulting in the replacement of a majority
of the Company's Board of Directors, a merger or reorganization of the Company
in which the Company does not survive or in which the shareholders of the
Company receive stock or securities of another corporation or cash, a
liquidation or dissolution of the Company, or similar events. Limited rights
permit optionees to receive in cash either (i) for each share covered by an
option the highest market price per share at which Company Common Stock traded
on the New York Stock Exchange for the 60 days immediately preceding the
exercise event (or, if such exercise event is a tender offer or exchange offer,
the value per share set by the tenderor or offeror), or (ii) if provided by the
Committee in its discretion at the time of grant, for each share covered by the
option the highest market price per share at which Company Common Stock traded
on the New York Stock Exchange on the date of exercise, less the option price
per share specified in the option. Limited rights may not extend the exercise
period of any option and, to the extent exercised, reduce the shares of Company
Common Stock available under the 1994 Plan and the shares of such stock covered
by the options to which the limited rights relate.
Restricted Stock. The 1994 Plan provides that awards of restricted stock
may be granted in addition to or in lieu of option grants. During a period set
by the Committee at the time of each award of restricted stock, a restricted
stock award recipient is prohibited from selling, transferring, pledging or
assigning the shares of restricted stock unless the recipient dies or his
employment terminates by reason of permanent disability, as determined by the
Committee, or, if established by the Committee, by retirement under a retirement
plan of the Company or a subsidiary, in which case, shares of restricted stock
become free of all restrictions. Shares of restricted stock may be voted and,
subject to certain limitations, holders of restricted stock may receive all
dividends paid thereon. Unless the Committee determines otherwise, shares of
restricted stock are forfeited and revert to the Company upon the
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recipient's termination of employment during the restriction period for any
reason other than the recipient's death, permanent disability, as determined by
the Committee, or, if established by the Committee, retirement under a
retirement plan of the Company or a subsidiary.
Change in Control. In the event of a 'change in control' as set forth in
Section 12 of the 1994 Plan, the 1994 Plan provides that (i) all restrictions on
restricted stock previously awarded under the 1994 Plan shall lapse and (ii) all
stock options and stock appreciation rights which are outstanding shall become
immediately exercisable in full. In addition, the Committee may determine that
outstanding options shall be adjusted and shall make such adjustments by
substituting for Company Common Stock subject to options, stock or other
securities of any successor to the Company.
Bonuses Payable in Stock. In lieu of paying a cash bonus to employees
eligible to participate in the 1994 Plan, the Committee, in its sole discretion,
may pay bonuses in shares of unrestricted Company Common Stock or partly in
shares of unrestricted Company Common Stock and partly in cash. The number of
shares of Company Common Stock payable in lieu of cash shall be determined by
dividing such bonus amount by the fair market value, as determined under the
1994 Plan, of one share of Company Common Stock on the date the bonus is
payable. The Company shall withhold from any such bonus an amount of cash
sufficient to meet tax withholding obligations.
Amendments. The Board of Directors may amend, alter or discontinue the 1994
Plan, but no amendment may, without shareholder approval, increase the maximum
number of shares for which options and awards may be granted, decrease the
option price of an option to less than 100% of the fair market value of a share
of Company Common Stock on the date of the granting of the option, change the
class of persons eligible to receive options and other awards under the 1994
Plan, or extend the duration of the 1994 Plan. No award or option may be granted
under the 1994 Plan after February 23, 2004, but awards or options theretofore
granted may extend beyond that date.
Option grants and awards under the 1994 Plan are not currently determinable
since such grants and awards are based on discretionary determinations of the
Committee.
FEDERAL INCOME TAX CONSEQUENCES
Under the Code, the grant of options does not result in taxable income to
the optionees or any tax deduction to the Company. However, the transfer of
Company Common Stock to optionees upon exercise of their options may give rise
to immediate or deferred taxable income to the optionees and may or may not give
rise to tax deductions to the Company depending upon whether or not the options
are incentive stock options. In general, the exercise of an incentive stock
option is exempt from regular income tax (but not alternative minimum tax) and
does not result in a tax deduction to the Company unless the optionee disposes
of the Company Common Stock within two years of the grant of the option or
within one year of the transfer of such Company Common Stock to the individual.
On the other hand, the exercise of an option which is not an incentive stock
option generally results in immediate taxable income to the optionee equal to
the difference between the exercise price and the fair market value of the
underlying shares and a corresponding tax deduction to the Company equal to the
amount of ordinary income recognized by the individual for the taxable year in
which the individual recognizes such income.
The transfer of restricted stock to an employee is generally taxable to the
employee and deductible by the Company when the restrictions lapse, unless the
employee elects to be taxed at the time of transfer (without regard to the
restrictions). The payment of bonuses in Company Common Stock is immediately
taxable to the individual and deductible by the Company. The exercise of a stock
appreciation right for Company Common Stock is generally taxable and deductible
in the same manner as the exercise of an option which is not an incentive stock
option.
Section 162(m) limits the income tax deduction for publicly held companies
to $1,000,000 in any tax year for compensation paid to each of the Chief
Executive Officer and the other executive officers named in the Proxy Statement.
This limitation applies to all deductible compensation including the deduction
arising from the payment of incentive compensation. Various forms of
compensation are exempt from this deduction limitation, including payments that
are (i) subject to the attainment of pre-established, objective performance
goals, (ii) established and administered by outside directors, and (iii)
approved by shareholders. The Company believes compensation derived under the
1994 Plan, if
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approved by shareholders, will qualify for exemption from the operation of
Section 162(m) and, therefore, will be deductible by the Company.
The Board of Directors recommends that you vote FOR the proposal. The
accompanying proxy will be voted FOR the proposal unless a contrary
specification is made. The 1994 Plan will be approved if more votes are cast in
favor of it than are cast against it. Abstentions and broker non-votes are
counted for quorum purposes, but are not votes cast and do not affect whether
more votes have been cast in favor of the proposal than have been cast against
it.
PROPOSAL 4 -- APPROVAL OF BUSH BOAKE ALLEN INC.
DIRECTORS' STOCK OPTION PLAN
A proposal will be presented at the meeting to approve the Bush Boake Allen
Inc. Directors' Stock Option Plan (the 'Directors' Plan') which was adopted by
the Board of Directors on February 17, 1998, subject to shareholder approval.
The principal features of the Directors' Plan are summarized below. This
summary is qualified in its entirety by reference to the terms of the Directors'
Plan, which is attached to this proxy statement as Exhibit B. The Directors'
Plan is intended to encourage directors who are not employees of the Company or
Union Camp Corporation to acquire a proprietary interest in the future of the
Company through the ownership of Company Common Stock. It is also expected that
the Directors' Plan will encourage qualified persons to serve as directors of
the Company.
SUMMARY OF MATERIAL FEATURES OF THE DIRECTORS' PLAN
The Directors' Plan will be administered and interpreted by the Board of
Directors of the Company ('Board'), including the determination as to when and
to whom options will be granted and the number of shares to be included in each
grant. Directors who are not employees of the Company or Union Camp Corporation
are eligible to be granted options under the Directors' Plan. There are
currently five such directors. The total number of shares that may be issued
pursuant to options granted under the Directors' Plan is 100,000 shares of
Company Common Stock subject to adjustments in accordance with the terms of the
Directors' Plan. The Plan will continue until the earlier of termination by the
Board (in which case outstanding options shall remain outstanding for the term
of their grant) or the date when all shares covered by the Directors' Plan are
purchased or all options have expired.
The option price per share shall be as determined by the Board, although
same may not be less than 100% of the fair market value of a share of Company
Common Stock on the date the option is granted. The term shall be as determined
by the Board but may not exceed 10 years. Options are immediately exercisable
through the payment of cash and/or shares of Company Common Stock.
Options are not transferable by the optionee other than by will or the laws
of descent and distribution; provided, however, that the Board may, in its
discretion, permit transfer to the optionee's immediate family or a trust or
similar vehicle established solely for the benefit of such family members.
Subject to certain limitations, the Directors' Plan provides for adjusting
the shares of Company Common Stock subject to outstanding options, or the
numbers or option prices thereof, in the event of a stock dividend, stock split,
reverse split, subdivision, recapitalization, merger, consolidation, combination
or exchange of shares, separation, reorganization or liquidation.
The Board may amend, alter or discontinue the Directors' Plan, but no
amendment may, without shareholder approval, increase the number of shares for
which options may be granted or decrease the option price of an option to less
than 100% of the fair market value of a share of Company Common Stock on the
date of the granting of the option.
The expected value of stock option grants is intended to be an amount
which, when combined with other Board compensation, will put the total
compensation of eligible Board members at a level which is competitive with
comparable companies, all as determined by an independent compensation
consultant. If the Directors' Plan is approved by stockholders, it is
anticipated that during 1998 the Board will grant each eligible Director stock
options with an expected value of $10,000 as determined using a version of the
Black-Scholes formula.
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FEDERAL INCOME TAX CONSEQUENCES
Under the Code, the grant of options does not result in taxable income to
the optionees or any tax deduction to the Company. The exercise of an option
generally results in ordinary taxable income to the optionee equal to the
difference between the exercise price and the fair market value of the
underlying shares, and a corresponding tax deduction to the Company equal to the
amount of ordinary income recognized by the individual for the taxable year in
which the individual recognizes such income.
The Board of Directors recommends that you vote FOR the proposal. The
accompanying proxy will be voted FOR the proposal unless a contrary
specification is made. The Directors' Plan will be approved if more votes are
cast in favor of it than are cast against it. Abstentions and broker non-votes
are counted for quorum purposes, but are not votes cast and do not affect
whether more votes have been cast in favor of the proposal than have been cast
against it.
OTHER MATTERS
The Board of Directors has at this time no knowledge of any matters to be
brought before the meeting other than those referred to above. The Company's
bylaws provide that stockholders who wish to propose the transaction of any
business at the annual meeting must give the Company's Secretary written notice
of such intent containing the information required by the bylaws at least sixty
(60) days in advance of the day established by the bylaws as the date of the
annual meeting (the first Wednesday in May). However, if any other matters
properly come before the meeting, it is the intention of the persons named in
the accompanying form of proxy to vote said proxy in accordance with their
judgment on such matters.
STOCKHOLDER PROPOSALS
Any proposal of a stockholder for presentation at the 1999 Annual Meeting
of the Stockholders of the Company must be received by the Company not later
than November 22, 1998 for inclusion in the Company's 1999 Proxy Statement and
Proxy.
EXPENSES
All expenses in connection with solicitation of proxies will be borne by
the Company. In addition to the solicitation of proxies by use of the mails,
certain directors, officers and regular employees of the Company may solicit the
return of proxies in person and by telephone and other means of
telecommunication. The Company will reimburse brokers and other nominees for
their expenses in forwarding soliciting materials to beneficial owners of the
stock held of record by such persons.
By Order of the Board of Directors
DENNIS M. MEANY
Secretary
March 22, 1998
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EXHIBIT A
BUSH BOAKE ALLEN INC.
1994 STOCK OPTION AND STOCK AWARD PLAN
1. PURPOSE
The purpose of this 1994 Stock Option and Stock Award Plan (the 'Plan') is
to encourage and enable selected officers and other key employees of Bush Boake
Allen Inc. (the 'Company') and its subsidiaries to acquire a proprietary
interest in the Company through the ownership of common stock of the Company.
Such ownership will provide such employees with a more direct stake in the
future welfare of the Company, and encourage them to remain with the Company and
its subsidiaries. It is also expected that the Plan will encourage qualified
persons to seek and accept employment with the Company and its subsidiaries.
Pursuant to the Plan, such employees will be offered the opportunity to acquire
such common stock through the grant of options, the award of restricted stock
under the Plan, bonuses payable in stock or a combination thereof.
As used herein, the term 'subsidiary' shall mean any present or future
corporation which is or would be a 'subsidiary corporation' of the Company as
the term is defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended (the 'Code').
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company or
a Compensation Committee as appointed from time to time by the Board of
Directors of the Company, which Compensation Committee shall consist of not less
than two (2) members of such Board of Directors and shall be constituted so far
as possible to permit the Plan to comply with the administration requirements of
Rule 16b-3 (c) (2) (i) of the Securities Exchange Act of 1934, as it may be
amended from time to time (the 'Exchange Act'); none of the members of the
Compensation Committee shall be eligible to be granted options or awarded
restricted stock under the Plan or receive bonuses payable in stock. No member
of the Board of Directors shall be appointed to the Compensation Committee who
has been granted an option, awarded restricted stock or received a bonus payment
in stock under the Plan within one year prior to appointment. As used
hereinafter the term 'Committee' shall mean (i) the Board of Directors of the
Company at all times that a Compensation Committee is not in existence or (ii)
the Compensation Committee at all times that a Compensation Committee is in
existence.
In administering the Plan, the Committee may adopt rules and regulations
for carrying out the Plan. The interpretation and decision with regard to any
question arising under the Plan made by the Committee shall be final and
conclusive on all employees of the Company and its subsidiaries participating or
eligible to participate in the Plan. The Committee may consult with counsel, who
may be of counsel to the Company, and shall not incur any liability for any
action taken in good faith in reliance upon the advice of counsel.
The Committee shall determine the employees to whom, and the time or times
at which, grants or awards shall be made and the number of shares to be included
in the grants or awards.
Each option granted pursuant to the Plan shall be evidenced by an Option
Agreement (the 'Agreement'). The Agreement shall not be a precondition to the
granting of options; however, no person shall have any rights under any option
granted under the Plan unless and until the optionee to whom such option shall
have been granted shall have executed and delivered to the Company an Agreement.
The Committee shall prescribe the form of the Agreement. A fully executed
original of the Agreement shall be provided to both the Company and the
optionee.
3. SHARES OF STOCK SUBJECT TO THE PLAN
The total number of shares that may be optioned or awarded under the Plan
is 750,000 shares of the $1.00 par value common stock of the Company (the
'Common Stock') plus an additional amount of shares on May 1 each year, from May
1, 1995 to May 1, 2003, inclusive, equal to one percent (1%) of
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the number of shares of Common Stock outstanding on the immediately preceding
April 30 (the 'Additional Annual Increment'), of which (i) 150,000 shares plus
shares equal to twenty percent (20%) of each Additional Annual Increment may be
awarded as restricted stock and (ii) no more than one million (1,000,000) shares
may be awarded as Incentive Stock Options, as defined in Section 422 of the
Code, except that, notwithstanding any of the foregoing limitations set forth in
this Paragraph 3, said numbers of shares shall be adjusted as provided in
Paragraph 12. Any shares subject to an option which for any reason expires or is
terminated unexercised and any restricted stock which is forfeited may again be
optioned or awarded under the Plan; provided, however, that forfeited shares
shall not be available for further awards if the employee has realized any
benefits of ownership from such shares. Shares subject to the Plan may be either
authorized and unissued shares or issued shares acquired by the Company or its
subsidiaries.
No employee shall receive, over the term of the Plan, awards in the form of
options, whether incentive stock options or options other than incentive stock
options, to purchase more than 500,000 shares of Common Stock.
4. ELIGIBILITY
Key employees, including officers, of the Company and its subsidiaries (but
excluding members of the Committee) are eligible to be granted options and
awarded restricted stock under the Plan and to have their bonuses payable in
stock. The employees who shall receive awards or options under the Plan shall be
selected from time to time by the committee, in its sole discretion, from among
those eligible, and the Committee shall determine, in its sole discretion, the
number of shares to be covered by the award or awards and by the option or
options granted to each such employee selected.
5. DURATION OF THE PLAN
The Plan shall be adopted by the Board as of the date on which it is
approved by a majority of the Company's stockholders, which approval must occur
within the period ending twelve months after the date the Plan is adopted. The
Plan shall terminate upon the earlier of the following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the
Plan; or
(b) ten years from the date of adoption of the Plan by the Board; or
(c) the date all shares of Common Stock subject to the Plan shall have
been purchased according to the Plan's provisions.
No such termination of the Plan shall affect the rights of any Participant
hereunder and all options previously granted and restricted stock and stock
bonus awarded hereunder shall continue in force and in operation after the
termination of the Plan, except as they may be otherwise terminated in
accordance with the terms of the Plan.
6. TERMS AND CONDITIONS OF STOCK OPTIONS
All options granted under this Plan shall be either Incentive Stock Options
as defined in Section 422 of the Code or options other than Incentive Stock
Options. Each such option shall be subject to all the applicable provisions of
the Plan, including the following terms and conditions, and to such other terms
and conditions not inconsistent therewith as the Committee shall determine.
(a) The option price per share shall be determined by the Committee.
However, the option price shall not be less than 100% of the fair market
value at the time the option is granted, except, that, the initial grant of
options may be at the initial public offering price of the Common Stock.
The fair market value shall be the mean of the high and low sales prices of
the Common Stock as reported on the Composite Tape for New York Stock
Exchange issues for the day on which the option is granted. If there is no
sale of the shares reported on such Tape on the date the option is granted,
the mean of the bid and asked prices reported on such Tape at the close of
the market on such date shall be deemed to be the fair market value of the
shares. In the event that the Common Stock is not listed on the New York
Stock Exchange or the method for determining the fair market
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value of the shares provided for in this Paragraph 6(a) shall not for any
reason be practicable, then the fair market value per share shall be
determined by such other reasonable method as the Committee shall, in its
discretion, select and apply at the time of grant of the option concerned.
(b) Each option shall be exercisable during and over such period
ending not later than ten years from the date it was granted, as may be
determined by the Committee and stated in the option.
(c) No option shall be exercisable prior to the expiration of the
period specified by the Committee at the time of grant (the 'vesting
period'), which period shall not be less than six (6) months, except as
provided in Paragraphs 6(j), 9 and 12 of the Plan.
(d) Each option shall state whether it will or will not be treated as
an Incentive Stock Option.
(e) Each option may be exercised by giving written notice to the
Company specifying the number of shares to be purchased, which shall be
accompanied by payment in full including applicable taxes, if any. Payment
shall be (i) in cash, or (ii) in shares of Common Stock of the Company
already owned by the optionee (the value of such stock shall be its fair
market value on the date of exercise as determined under Paragraph 6(a), or
(iii) by a combination of cash and shares of Common Stock of the Company.
No option shall be exercised for less than the lesser of 50 shares or the
full number of shares for which the option is then exercisable. No optionee
shall have any rights to dividends or other rights of a shareholder with
respect to shares subject to his option until he has given written notice
of exercise of his option and paid in full for such shares. Payment of
taxes, if any, shall be in cash at time of exercise or on the applicable
tax date under Section 83 of the Code, if later, provided, however, tax
withholding obligations may be met by the withholding of Common Stock
otherwise deliverable to the optionee pursuant to procedures approved by
the Committee. In no event shall Common Stock be delivered to any optionee
until he has paid to the Company in cash the amount of tax required to be
withheld by the Company or has elected to have his tax withholding
obligations met by the withholding of Common Stock in accordance with the
procedures approved by the Committee, except that in the case of later tax
dates under Section 83 of the Code, the Company may deliver Common Stock
prior to the optionee's satisfaction of tax withholding obligations if the
optionee makes arrangements satisfactory to the Company that such
obligations will be met on the applicable tax date.
(f) Notwithstanding the foregoing Paragraph 6(e) of the Plan, each
option granted hereunder may provide, or be amended to provide, the right
either (i) to exercise such option in whole or in part without any payment
of the option price, or (ii) to request the Committee to permit, in its
sole discretion, such exercise without any payment of the option price. If
an option is exercised without a payment of the option price, the optionee
shall be entitled to receive that number of whole shares as is determined
by dividing (a) an amount equal to the fair market value per share on the
date of exercise as determined under Paragraph 6(a) into (b) an amount
equal to the excess of the total fair market value of the shares on such
date as so determined with respect to which the option is being exercised
over the total cash purchase price of such shares as set forth in the
option. Fractional shares will be rounded to the next lowest number and the
optionee will receive cash in lieu thereof. At the sole discretion of the
Committee, or as specified in the option, the settlement of all or part of
an optionee's rights under this Paragraph 6(f) may be made in cash in an
amount equal to the fair market value of the shares otherwise payable
hereunder. The number of shares with respect to which any option is
exercised under this Paragraph 6(f) shall reduce the number of shares
thereafter available for exercise under the option, and such shares
thereafter may not again be optioned under the Plan.
(g) Each option may provide, or be amended to provide, that the
optionee may exercise the option without payment of the option price by
delivery to the Company of an exercise notice and irrevocable instructions
to deliver shares of Common Stock directly to the stock broker named
therein in exchange for payment of the option price and withholding taxes
by such broker to the Company.
(h) If an optionee's employment by the Company or a subsidiary
terminates by reason of his retirement under a retirement plan of the
Company or a subsidiary, his option may thereafter be
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exercised whenever the vesting period has elapsed until the expiration of
the stated period of the option; provided, however, that if the optionee
dies after such termination of employment, any unexercised option may
thereafter be immediately exercised in full by the legal representative of
his estate or by the legatee of the optionee under his last will until the
expiration of the stated period of the option; provided, further, that any
right granted to such an optionee pursuant to Paragraph 6(f) of the Plan,
shall terminate on the date of such termination of employment.
(i) If an optionee's employment by the Company or a subsidiary
terminates by reason of permanent disability, as determined by the
Committee, his option may thereafter be exercised whenever the vesting
period has elapsed until the expiration of the stated period of the option;
provided, however, that if the optionee dies after such termination of
employment, any unexercised option may thereafter be immediately exercised
in full by the legal representative of his estate or by the legatee of the
optionee under his last will until the expiration of the stated period of
the option; provided, further, that any right granted to such an optionee
pursuant to Paragraph 6(f) of the Plan, shall terminate on the date of such
termination of employment.
(j) If an optionee's employment by the Company or a subsidiary
terminates by reason of his death, his option may thereafter be immediately
exercised in full by the legal representative of his estate or by the
legatee of the optionee under his last will until the expiration of the
stated period of the option; provided, however, that any right granted to
such an optionee pursuant to Paragraph 6(f) of the Plan, shall terminate on
the date of his death.
(k) Unless otherwise determined by the Committee, if an optionee's
employment terminates for any reason other than death, retirement or
permanent disability, his option shall thereupon terminate.
(l) The option by its terms shall be personal and shall not be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution. During the lifetime of an optionee, the option
shall be exercisable only by him.
(m) Notwithstanding any intent to grant Incentive Stock Options, an
option granted will not be considered an Incentive Stock Option to the
extent that it together with any earlier Incentive Stock Options permits
the exercise for the first time in any calendar year of more than $100,000
in value of Common Stock (determined at the time of grant).
(n) In the event any option is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased optionee,
the Company shall be under no obligation to issue Common Stock thereunder
unless and until the Company is satisfied that the person or persons
exercising the option are the duly appointed legal representative of the
deceased optionee's estate or the proper legatees or distributees thereof.
(o) No incentive stock option shall be granted to an employee who owns
immediately before the grant of such option, directly or indirectly, stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Company. This restriction does not apply if, at the time
such incentive stock option is granted, the option price is at least 110%
of the fair market value of one share of Common Stock, as determined in
Paragraph 6(a), on the date of grant and the incentive stock option by its
terms is not exercisable after the expiration of five years from the date
of grant.
7. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS
All awards of restricted stock under the Plan shall be subject to all the
applicable provisions of the Plan, including the following terms and conditions,
and to such other terms and conditions not inconsistent therewith, as the
Committee shall determine.
(a) Awards of restricted stock may be in addition to or in lieu of
option grants.
(b) During a period set by the Committee at the time of each award of
restricted stock (the 'restriction period'), the recipient shall not be
permitted to sell, transfer, pledge, or assign the shares of restricted
stock.
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(c) Shares of restricted stock shall become free of all restrictions
if the recipient dies or his employment terminates by reason of permanent
disability, as determined by the Committee, during the restriction period
and, to the extent set by the Committee at the time of the award or later,
if the recipient retires under a retirement plan of the Company or a
subsidiary during such period. The Committee may require medical evidence
of permanent disability, including medical examinations by physicians
selected by it. If the Committee determines that any such recipient is not
permanently disabled or that a retiree's restricted stock is not to become
free of restrictions, the restricted stock held by either such recipient,
as the case may be, shall be forfeited and revert to the Company.
(d) Shares of restricted stock shall be forfeited and revert to the
Company upon the recipient's termination of employment during the
restriction period for any reason other than death, permanent disability or
retirement under a retirement plan of the Company or a subsidiary except to
the extent the Committee, in its sole discretion, finds that such
forfeiture might not be in the best interest of the Company and, therefore,
waives all or part of the application of this provision to the restricted
stock held by such recipient.
(e) Stock certificates for restricted stock shall be registered in the
name of the recipient but shall be appropriately legended and returned to
the Company by the recipient, together with a stock power, endorsed in
blank by the recipient. The recipient shall be entitled to vote shares of
restricted stock and shall be entitled to all dividends paid thereon,
except that dividends paid in Common Stock or other property shall also be
subject to the same restrictions.
(f) Restricted stock shall become free of the foregoing restrictions
upon expiration of the applicable restriction period and the Company shall
deliver Common Stock certificates evidencing such stock.
(g) Recipients of restricted stock shall be required to pay taxes to
the Company upon the expiration of restriction periods or such earlier
dates as elected pursuant to Section 83 of the Code; provided, however, tax
withholding obligations may be met by the withholding of Common Stock
otherwise deliverable to the recipient pursuant to procedures approved by
the Committee. In no event shall Common Stock be delivered to any awardee
until he has paid to the Company in cash the amount of tax required to be
withheld by the Company or has elected to have his withholding obligations
met by the withholding of Common Stock in accordance with the procedures
approved by the Committee.
8. BONUSES PAYABLE IN STOCK
In lieu of cash bonuses otherwise payable under the Company's compensation
practices to employees eligible to participate in the Plan, the Committee, in
its sole discretion, may determine that such bonuses shall be payable in stock
or partly in stock and partly in cash. Such bonuses shall be in consideration of
services previously performed and shall consist of shares of Common Stock free
of any restrictions imposed by the Plan. The number of shares of Common Stock
payable in lieu of an amount of each bonus otherwise payable shall be determined
by dividing such amount by the fair market value of one share of Common Stock on
the date the bonus is payable, with the fair market value determined in
accordance with Paragraph 6(a). The Company shall withhold from any such bonus
an amount of cash sufficient to meet its tax withholding obligations.
9. LIMITED RIGHTS
Any option granted under the Plan may, at the discretion of the Committee,
contain provisions for limited rights, as described herein. A limited right
shall be exercisable upon the occurrence of an event specified in the option as
an exercise event, and shall expire thirty (30) days after the occurrence of
such event. Exercise events may include, at the discretion of the Committee and
as specified in the option, consummation of a tender or exchange offer for at
least 20% of the Company's Common Stock outstanding at the commencement of such
offer or a proxy contest the result of which is the replacement of a majority of
the members of the Company's Board of Directors, or consummation of a merger or
reorganization of the Company in which the Company does not survive or in which
the
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shareholders of the Company receive stock or securities of another corporation
or cash, or a liquidation or dissolution of the Company or other similar events.
Limited rights shall permit optionees to receive in cash either (i) the highest
market price per share for each share covered by an option, without regard to
the date on which the option otherwise would be exercisable, which the Company's
Common Stock traded on the New York Stock Exchange for the sixty days
immediately preceding the exercise event or (ii) if provided by the Committee in
its discretion at the time of grant, the highest market price per share for each
share covered by the option which the Company's Common Stock traded on the New
York Stock Exchange on the date of exercise, less the option price per share
specified in the option. In the event the exercise event is consummation of a
tender or exchange offer, the value per share set by the tenderor or offeror
shall be substituted for the highest market price per share provided in clause
(i) in the preceding sentence. Limited rights shall not extend the exercise
period of any option and, to the extent exercised, shall reduce the shares of
Company Common Stock available under the Plan and the shares of such Stock
covered by the options to which the limited rights relate.
10. TRANSFER, LEAVE OF ABSENCE, ETC.
For the purpose of the Plan: (a) a transfer of an employee from the Company
to a subsidiary, or vice versa, or from one subsidiary to another, and (b) a
leave of absence, duly authorized in writing by the Company, shall not be deemed
a termination of employment.
11. RIGHTS OF EMPLOYEES
(a) No person shall have any rights or claims under the Plan except in
accordance with the provisions of the Plan.
(b) Nothing contained in the Plan shall be deemed to give any employee
the right to be retained in the service of the Company or its subsidiaries.
12. CHANGES IN CAPITAL
Upon changes in the Common Stock by a stock dividend, extraordinary
dividend payable in cash or property, stock split, reverse split, subdivision,
recapitalization, merger, consolidation (whether or not the Company is a
surviving corporation), combination or exchange of shares, separation,
reorganization or liquidation, the number and class of shares available under
the Plan as to which stock options and restricted stock may be awarded, the
number and class of shares under each option and the option price per share
shall be correspondingly adjusted by the Committee, such adjustments to be made
in the case of outstanding options without change in the total price applicable
to such options; provided, however, no such adjustments shall be made in the
case of stock dividends aggregating in any fiscal year of the Company not more
than 10% of the Common Stock issued and outstanding at the beginning of such
year or in the case of one or more splits, subdivisions or combinations of the
Common Stock during any fiscal year of the Company resulting in an increase or
decrease of not more than 10% of the Common Stock issued and outstanding at the
beginning of such year.
In the event of a 'Change of Control of the Company' or a 'Change in
Control of Union Camp' (as hereinafter defined) (i) all restrictions on
restricted stock previously awarded to recipients under the Plan shall lapse and
(ii) all stock options and stock appreciation rights which are outstanding shall
become immediately exercisable in full without regard to any limitations of time
or amount otherwise contained in the Plan, the options or the rights. Further,
in the event of a Change in Control of the Company, the Committee may determine
that the options shall be adjusted and make such adjustments by substituting for
Common Stock subject to options, stock or other securities of any successor
corporation to the Company that may be issuable by another corporation that is a
party to such Change in Control of the Company if such stock or other securities
are publicly traded or, if such stock or other securities are not publicly
traded, by substituting stock or other securities of a parent or affiliate of
such corporation if the stock or other securities of such parent or affiliate
are publicly traded, in which event the aggregate option price shall remain the
same and the amount of shares or other securities subject to option shall be the
amount of shares or other securities which could have been purchased on the day
of the Change in Control of the Company with the proceeds which would have been
received by the
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optionee if the option had been exercised in full prior to such Change in
Control of the Company and the optionee had exchanged all of such shares in the
Change in Control transaction. No optionee shall have any right to prevent the
consummation of any of the foregoing acts affecting the number of shares
available to the optionee.
For purposes of the foregoing, 'Union Camp' shall mean Union Camp
Corporation, a Virginia corporation and a Change in Control of the Company or
Union Camp shall include either a 'Change in Control of the Company' or a
'Change in Control of Union Camp' (as each is hereafter defined) or both.
I. For purposes of the foregoing, a 'Change in Control of the Company'
shall be deemed to have occurred upon the occurrence of one of the
following events:
(a) 'any person,' as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the 'Exchange Act')
(other than the Company, any employee benefit plan sponsored by the
Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, or Union
Camp or any subsidiary of Union Camp in which Union Camp's ownership is
greater than 50% of the combined voting power of such subsidiary's then
outstanding securities eligible to vote for the election of its board of
directors (a 'Union Camp Subsidiary')), is or becomes (other than
pursuant to a transaction which is deemed to be a 'Non-Qualifying
Transaction' under Subsection 12.I.(c)) the 'beneficial owner' (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 50% or more of the combined
voting power of the Company's then outstanding securities eligible to
vote for the election of the Board of Directors of the Company (the
'Company Voting Securities');
(b) individuals who, on December 1, 1996, constitute the Board of
Directors of the Company (the 'Incumbent Directors') cease for any
reason to constitute at least a majority of the Board of Directors of
the Company, provided that any person becoming a director subsequent to
December 1, 1996, whose election or nomination for election was approved
by a vote of at least two-thirds of the Incumbent Directors then on the
Board of Directors of the Company (either by a specific vote or by
approval of the proxy statement of the Company in which such person is
named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company
as a result of an actual or threatened election contest with respect to
directors (including without limitation in order to settle any such
contest) or any other actual or threatened solicitation of proxies by or
on behalf of any person other than the Board of Directors of the Company
shall be an Incumbent Director;
(c) the stockholders of the Company approve a merger,
consolidation, statutory share exchange or similar form of corporate
transaction involving the Company or any of its subsidiaries that
requires such approval, whether for such transaction or the issuance of
securities in the transaction (a 'Business Combination'), unless
immediately following such Business Combination: (i) more than 50% of
the total voting power of (x) the corporation resulting from such
Business Combination (the 'Surviving Corporation'), or (y) if
applicable, the ultimate parent corporation that directly or indirectly
has beneficial ownership of 100% of the voting securities eligible to
elect directors of the Surviving Corporation (the 'Parent Corporation'),
will be represented by Company Voting Securities that were outstanding
immediately prior to such Business Combination (or, if applicable,
shares into which such Company Voting Securities were converted pursuant
to such Business Combination), (ii) no person (other than Union Camp,
any Union Camp Subsidiary, any employee benefit plan sponsored or
maintained by the Surviving Corporation or the Parent Corporation) will
be or becomes the beneficial owner, directly or indirectly, of 25 % or
more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) and (iii) at least a
majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent
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Corporation, the Surviving Corporation) following the consummation of
the Business Combination were Incumbent Directors at the time of the
approval of the Board of Directors of the Company of the execution of
the initial agreement providing for such Business Combination (any
Business Combination which satisfies all of the criteria specified in
(i), (ii) and (iii) above shall be deemed to be a 'Non-Qualifying
Transaction'); or
(d) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale
or disposition by the Company of all or substantially all of the
Company's assets.
II. For purposes of the foregoing, a 'Change in Control of Union Camp'
shall be deemed to have occurred upon the occurrence of one of the
following events when, immediately prior thereto, Union Camp is the
beneficial owner, directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company Voting
Securities:
(a) any person (other than Union Camp, any employee benefit plan
sponsored by Union Camp, any trustee or other fiduciary holding
securities under an employee benefit plan of Union Camp, or any
corporation owned, directly or indirectly, by the stockholders of Union
Camp in substantially the same proportions as their ownership of stock
of Union Camp), is or becomes (other than pursuant to a transaction
which is deemed to be a UC-Involved Non-Qualifying Transaction under
Subsection 12. II.(c)) the beneficial owner, directly or indirectly, of
securities of Union Camp representing 50% or more of the combined voting
power of Union Camp's then outstanding securities eligible to vote for
the election of the Board of Directors of Union Camp (the 'UC Voting
Securities');
(b) individuals who, on October 29, 1996, constitute the Board of
Directors of Union Camp (the 'Incumbent UC Directors') cease for any
reason to constitute at least a majority of the Board of Directors of
Union Camp, provided that any person becoming a director subsequent to
October 29, 1996, whose election or nomination for election was approved
by a vote of at least two-thirds of the Incumbent UC Directors then on
the Board of Directors of Union Camp (either by a specific vote or by
approval of the proxy statement of Union Camp in which such person is
named as a nominee for director, without written objection to such
nomination) shall be an Incumbent UC Director; provided, however, that
no individual initially elected or nominated as a director of Union Camp
as a result of an actual or threatened election contest with respect to
directors (including without limitation in order to settle any such
contest) or any other actual or threatened solicitation of proxies by or
on behalf of any person other than the Board of Directors of Union Camp
shall be an incumbent UC Director;
(c) the stockholders of Union Camp approve a merger, consolidation,
statutory share exchange or similar form of corporate transaction
involving Union Camp or any of its subsidiaries that requires such
approval, whether for such transaction or the issuance of securities in
the transaction (a 'UC-Involved Business Combination'), unless
immediately following such UC-Involved Business Combination: (i) more
than 50% of the total voting power of (x) the corporation resulting from
such UC-Involved Business Combination (the 'UC-Involved Surviving
Corporation'), or (y) if applicable, the ultimate parent corporation
that directly or indirectly has beneficial ownership of 100% of the
voting securities eligible to elect directors of the UC-Involved
Surviving Corporation (the 'UC-Involved Parent Corporation'), will be
represented by UC Voting Securities that were outstanding immediately
prior to such UC-Involved Business Combination (or, if applicable,
shares into which such UC Voting Securities were converted pursuant to
such UC-Involved Business Combination), (ii) no person (other than any
employee benefit plan sponsored or maintained by the UC-Involved
Surviving Corporation or the UC-Involved Parent Corporation) will be or
becomes the beneficial owner, directly or indirectly, of 25% or more of
the total voting power of the outstanding voting securities eligible to
elect directors of the UC-Involved Parent Corporation (or, if there is
no UC-Involved Parent Corporation, the UC-Involved Surviving
Corporation) and (iii) at least a majority of the members of the board
of directors of the UC-Involved Parent Corporation (or, if there is no
UC-Involved Parent Corporation, the UC-Involved Surviving Corporation)
following the consummation of the UC-Involved Business Combina-
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tion were Incumbent UC Directors at the time of the Board of Directors
of Union Camp's approval of the execution of the initial agreement
providing for such UC-Involved Business Combination (any UC-Involved
Business Combination which satisfies all of the criteria specified in
(i), (ii) and (iii) above shall be deemed to be a 'UC-Involved
Non-Qualifying Transaction'); or
(d) the stockholders of Union Camp approve a plan of complete
liquidation or dissolution of Union Camp or an agreement for the sale or
disposition by Union Camp of all or substantially all of Union Camp's
assets.
Anything contained herein to the contrary notwithstanding, a Change in
Control of the Company or Union Camp shall be deemed not to have occurred with
respect to any optionee who participates as an investor in the acquiring entity
(which shall include the Parent Corporation or the UC-Involved Parent
Corporation, when and as applicable) in any such Change in Control transaction
unless such acquiring entity is a publicly-traded corporation and the optionee's
interest in such acquiring entity immediately prior to the acquisition
constitutes less than one percent (1%) of both (1) the combined voting power of
such entity's outstanding securities and (2) the aggregate fair market value of
such entity's outstanding equity securities. For this purpose the optionee's
interest in any equity securities shall include any such interest of which such
optionee is a beneficial owner.
13. USE OF PROCEEDS
Proceeds from the sale of shares pursuant to options granted under this
Plan shall constitute general funds of the Company.
14. AMENDMENTS
The Board of Directors may amend, alter or discontinue the Plan, including
without limitation any amendment considered to be advisable by reason of changes
to the United States Internal Revenue Code, but no amendment, alteration or
discontinuation shall be made which would impair the rights of any holder of an
award of restricted stock or option or stock bonus theretofore granted, without
his consent, or which, without the approval of the shareholders, would:
(a) Except as is provided in Paragraph 12 of the Plan, increase the
total number of shares reserved for the purpose of the Plan.
(b) Except as is provided in Paragraphs 6(f) and 12 of the Plan,
decrease the option price of an option to less than 100% of the fair market
value on the date of the granting of the option.
(c) change the class of persons eligible to receive an award of
restricted stock or options under the Plan; or
(d) Extend the duration of the Plan.
The Committee may amend the terms of any award of restricted stock or
option theretofore granted, retroactively or prospectively, but no such
amendment shall impair the rights of any holder without his consent.
15. MISCELLANEOUS PROVISIONS
(a) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the issuance of shares upon exercise of any option under the
Plan.
(b) It is understood that the Committee may, at any time and from time to
time after the granting of an option or the award of restricted stock or bonuses
payable in Common Stock hereunder, specify such additional terms, conditions and
restrictions with respect to such option or stock as may be deemed necessary or
appropriate to ensure compliance with any and all applicable laws, including,
but not limited to, terms, restrictions and conditions for compliance with
federal and state securities laws and methods of withholding or providing for
the payment of required taxes.
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(c) If at any time the Committee shall determine, in its discretion, that
the listing, registration or qualification of shares of Common Stock upon any
national securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the sale or purchase of shares of Common
Stock hereunder, no option or stock appreciation right may be exercised or
restricted stock or stock bonus may be transferred in whole or in part unless
and until such listing, registration, qualification, consent or approval shall
have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Committee.
(d) The Plan shall be governed by and construed in accordance with the laws
of the Commonwealth of Virginia.
16. LIMITS OF LIABILITY
(a) Any liability of the Company or a subsidiary of the Company to any
Participant with respect to an option or stock or other award shall be based
solely upon contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a subsidiary of the Company, nor any member of
the Committee or the Board, nor any other person participating in any
determination of any question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any liability to any party
for any action taken or not taken in connection with the Plan, except as may
expressly be provided by statute.
Amended January 2, 1997
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EXHIBIT B
BUSH BOAKE ALLEN INC.
DIRECTORS' STOCK OPTION PLAN
1. PURPOSE
The purpose of the Bush Boake Allen Inc. Directors' Stock Option Plan (the
'Plan') is to encourage directors who are not employees of Bush Boake Allen Inc.
(the 'Company') or Union Camp Corporation to acquire a proprietary interest in
the future of the Company through the ownership of the $1.00 par value common
stock of the Company ('Common Stock'). It is also expected that the Plan will
encourage qualified persons to serve as directors of the Company.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company
(the 'Board'). In administering the Plan, the Board may adopt rules and
regulations for carrying out the Plan. The interpretation and decision with
regard to any question arising under the Plan made by the Board shall be final
and conclusive on all directors participating or eligible to participate in the
Plan.
3. SHARES OF STOCK SUBJECT TO THE PLAN
The total number of shares that may be issued pursuant to options granted
under the Plan is 100,000 shares of Common Stock, subject to adjustment as
provided in Paragraph 7. Any shares subject to an option which for any reason
expires or is terminated unexercised may again be subject to an option under the
Plan.
4. ELIGIBILITY
Directors who are not employees of the Company or Union Camp Corporation or
any of its subsidiaries are eligible to be granted options under the Plan. The
directors who shall receive options under the Plan shall be selected from time
to time by the Board and the Board shall determine the number of shares to be
covered by the option granted to each such director.
5. DURATION OF THE PLAN
The Plan shall become effective as of February 17, 1998, subject to its
approval by the stockholders of the Company. The Plan shall terminate upon the
earliest of the following to occur: (a) the adoption of a resolution by the
Board terminating the Plan, provided, however, options then outstanding shall
extend beyond such termination date; or (b) the date all shares of Common Stock
subject to options are purchased or all unexercised options have expired.
6. TERMS AND CONDITIONS OF STOCK OPTIONS
All options granted under this Plan shall be evidenced by an agreement
between the Company and the optionee and shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and such
other terms and conditions not inconsistent therewith as the Board shall
determine.
(a) The option price per share shall be determined by the Board, but
shall not be less than 100% of the fair market value of a share of Common
Stock on the date the option is granted. The fair market value shall be the
mean of the high and low sales prices for the Common Stock as reported on
the Composite Tape for New York Stock Exchange issues for the day on which
the option is granted. If there is no sale of the shares on such Exchange
on the date the option is granted, the mean of the bid and asked prices on
such Exchange at the close of the market on such date shall be deemed to be
the fair market value of the Common Stock. In the event that the method for
determining the fair market value of the Common Stock provided for in this
Paragraph
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6(a) shall not be practicable, then the fair market value per share shall
be determined by such other reasonable method as the Board shall, in its
discretion, select and apply at the time of grant of the option concerned.
(b) Each option shall be exercisable during and over such period
ending not later than ten years from the date it was granted, as may be
determined by the Board and stated in the option grant agreement.
(c) Options shall be immediately exercisable.
(d) Each option may be exercised by giving written notice to the
Company specifying the number of shares to be purchased, which shall be
accompanied by payment in full including applicable taxes, if any. Payment
shall be (i) in cash, or (ii) in shares of Common Stock already owned by
the optionee (the value of such Common Stock shall be its fair market value
on the date of exercise as determined under Paragraph 6(a)), or (iii) by a
combination of cash and shares of Common Stock. No option shall be
exercised for less than the lesser of 50 shares or the full number of
shares for which the option is then exercisable. No optionee shall have any
rights to dividends or other rights of a shareholder with respect to shares
of Common Stock subject to his option until he has given written notice of
exercise of his option and paid in full for such shares.
(e) Each option may provide, or be amended to provide, that the
optionee may exercise the option without payment of the option price by
delivery to the Company of an exercise notice and irrevocable instructions
to deliver shares of Common Stock directly to the brokerage firm named
therein in exchange for payment of the option price by such brokerage firm
to the Company.
(f) Upon an optionee's death, his option may thereafter be immediately
exercised by the legal representative of his estate or by the legatee of
the optionee under his last will until the expiration of the option.
(g) Except as otherwise provided in this paragraph (g) of Section 6,
the option by its terms shall be personal and shall not be transferable by
the optionee otherwise than by will or by the laws of descent and
distribution. During the lifetime of an optionee, the option shall be
exercisable only by him. The Board may, in its discretion, authorize any
option to be on terms which permit transfer of all or a portion of such
option to members of the optionee's immediate family or a trust or
partnership, or similar vehicle, established solely for the benefit of, or
the partners or members of which are solely, such family members, provided
that the option grant agreement expressly permits such transferability and
any transfer of such option shall be in accordance with any other terms,
conditions, rules and limitations prescribed by the Board and/or set forth
in the applicable option grant agreement. Following the valid transfer of
any such option, the transferred option shall continue to be subject to the
same terms and conditions as were applicable to such option immediately
prior to such transfer, provided that the transferee of such option shall
be treated under the Plan and the applicable agreement as the optionee.
7. CHANGES IN CAPITAL/CHANGE IN CONTROL
Upon changes in the Common Stock by a stock dividend, stock split, reverse
split, subdivision, recapitalization, merger, consolidation (whether or not the
Company is a surviving corporation) combination or exchange of shares,
separation, reorganization or liquidation, the number and class of shares
available under the Plan as to which options may be granted, the number and
class of shares under each option and the option price per share shall be
correspondingly adjusted by the Board, such adjustments to be made in the case
of outstanding options without change in the total price applicable to such
options; provided, however, no such adjustments shall be made in the case of
stock dividends aggregating in any fiscal year of the Company not more than 10%
of the Common Stock issued and outstanding at the beginning of such year or in
the case of one or more splits, subdivisions or combinations of the Common Stock
during any fiscal year of the Company resulting in an increase or decrease of
not more than 10% of the Common Stock issued and outstanding at the beginning of
such year.
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8. USE OF PROCEEDS
Proceeds from the sale of shares pursuant to options granted under this
Plan shall constitute general funds of the Company.
9. AMENDMENTS
The Board may amend, alter or discontinue the Plan, including without
limitation any amendment considered to be advisable by reason of changes to the
Internal Revenue Code, but no amendment, alteration or discontinuation shall be
made which would impair the rights of any holder of an option theretofore
granted, without his consent, or which, without the approval of the
shareholders, would:
(a) Except as is provided in Paragraph 7 of the Plan, increase the
total number of shares reserved for the purpose of the Plan.
(b) Decrease the option price to less than 100% of the fair market
value of a share of Common Stock on the date of the granting of the option.
The Board may amend the terms of any option heretofore granted,
retroactively or prospectively, but no such amendment shall impair the rights of
any holder without his consent.
10. GOVERNING LAW
The Plan shall be governed by and construed in accordance with the laws of
the State of New Jersey.
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APPENDIX 1
PROXY CARD
The Board of Directors recommends a vote "FOR" Items 1, 2, 3 and 4.
<TABLE>
<S> <C> <C> <C>
(1) Election of Directors FOR all nominees WITHHOLD AUTHORITY to vote
listed below [X] for all nominees listed below [X] *EXCEPTIONS [X]
</TABLE>
Nominees: P.L. Acton, J.W. Boyden, T.R. Crane, Jr., L.R. Pfund, J.M. Reed,
G.J. Sella, Jr., W.H. Trice
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space provided
below.)
*Exceptions____________________________________________________________________
(2) Ratification of appointment of independent accountants.
FOR [X] AGAINST [X] ABSTAIN [X]
(3) Approval of BBA 1994 Stock Option Plan.
FOR [X] AGAINST [X] ABSTAIN [X]
(4) Approval of Directors' Stock Option Plan.
FOR [X] AGAINST [X] ABSTAIN [X]
Change of Address and
or Comments Mark Here [X]
Please sign exactly as your names appear. If
Executor, Trustee, etc., give full title. If stock
is registered in two names, both should sign.
Dated: ______________________________, 1998
___________________________________________
Signature(s)
___________________________________________
Signature(s)
Votes MUST be indicated [X]
(X) in Black or Blue ink.
Please Sign, Date and Return the Proxy Card Promptly Using the Enclosed
Envelope.
[LOGO] BUSH BOAKE ALLEN INC.
Proxy Solicited by the Board of Directors for
Annual Meeting of Stockholders May 6, 1998
The undersigned hereby appoints JULIAN W. BOYDEN, FRED W. BROWN, JR. and
DENNIS M. MEANY, and each of them, proxies, with power of substitution and
revocation, to vote all Common Stock of BUSH BOAKE ALLEN INC. standing in the
name of the undersigned at the annual meeting of stockholders of said
corporation at the Woodcliff Lake Hilton, 200 Tice Boulevard, Woodcliff Lake,
N.J. on Wednesday, May 6, 1998 at 11:00 A.M., and any and all adjournments
thereof, with all the powers which the undersigned would possess if personally
present, upon and in respect of the following matters and in their discretion
for the transaction of such other business as may properly come before the
meeting; all as set forth in the Proxy Statement dated March 22, 1998.
Shares represented by this proxy will be voted as instructed on the reverse
side. In the absence of any instructions, such shares will be voted for the
election of the nominees as directors and for the ratification of independent
accountants, all as referred to on the reverse side.
(Continued, and to be SIGNED on the reverse side.)
BUSH BOAKE ALLEN INC.
P.O. BOX 11330
NEW YORK, N.Y. 10203-0330
