<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
Ball Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
BALL CORPORATION
345 SOUTH HIGH STREET, MUNCIE, INDIANA 47305
-------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1994
-------------
The Annual Meeting of Shareholders of Ball Corporation will be held at the
Horizon Convention Center, 401 South High Street, Muncie, Indiana, on Tuesday,
April 26, 1994, at 9:00 a.m. (EST) for the following purposes:
1. To elect two directors for three-year terms expiring at the Annual
Meeting of Shareholders to be held in 1997;
2. To ratify the appointment of the firm of Price Waterhouse as independent
public accountants for 1994;
3. To transact any other business as properly may come before the meeting.
Only holders of Common Stock of record at the close of business March 1,
1994, are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
A Proxy Statement appears on the following pages. A copy of the Annual
Report for 1993 is being mailed to you with this Notice of Annual Meeting of
Shareholders and Proxy Statement.
By Order of the Board of Directors
George A. Sissel
CORPORATE SECRETARY
March 21, 1994
Muncie, Indiana
YOUR VOTE IS IMPORTANT.
YOU ARE URGED TO DATE, SIGN AND RETURN PROMPTLY YOUR PROXY IN THE ENCLOSED
ENVELOPE.
__________________________
IT WILL HELP US IN PLANNING THE ANNUAL MEETING IF YOU WILL FILL OUT AND MAIL
THE ENCLOSED CARD IF YOU PLAN TO ATTEND. CHECK-IN BEGINS AT 8:00 A.M., AND THE
MEETING WILL START PROMPTLY AT 9:00 A.M.
<PAGE>
BALL CORPORATION
345 SOUTH HIGH STREET, MUNCIE, INDIANA 47305
-------------
PROXY STATEMENT
MARCH 21, 1994
-------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1994
-------------
To Shareholders of Ball Corporation:
This Proxy Statement and the accompanying proxy card are furnished to
shareholders in connection with the solicitation by the Board of Directors of
Ball Corporation of proxies to be voted at the Annual Meeting of Shareholders to
be held April 26, 1994, for the purposes stated in the accompanying notice of
the meeting.
A shareholder of the Corporation who has executed and returned a proxy may
revoke it at any time before it is voted, but only by executing and returning to
the Corporate Secretary at 345 South High Street, Muncie, IN 47305, a proxy
bearing a later date, by giving written notice of revocation to the Corporate
Secretary, or by attending the meeting and voting in person. Attendance at the
meeting does not, by itself, revoke a proxy.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
At the close of business on March 1, 1994, there were outstanding and
entitled to vote 29,557,117 shares of Common Stock (including the associated
preferred stock purchase rights under the Rights Agreement dated as of July 22,
1986, between the Corporation and The First National Bank of Chicago). Each
share of Common Stock is entitled to one vote. Shareholders do not have
cumulative voting rights with respect to the election of directors. The
Corporation-related descendants of the five founding Ball brothers, the
company's directors (present and former), and its officers and employees (active
and retired) currently own approximately 33 percent of the outstanding Common
Stock of Ball Corporation, which represents approximately 31 percent of the
total share vote. Voting Preferred Stock issued pursuant to the Corporation's
Employee Stock Ownership Plan, adopted in May 1989, totals approximately 7
percent additional share votes. This results in a total holding by
Corporation-related interests of approximately 38 percent of the total share
vote.
So far as is known to the Board of Directors, the following table indicates
the only beneficial owner of more than 5 percent of the Corporation's
outstanding Common Stock as of March 1, 1994:
<TABLE>
<CAPTION>
TITLE OF NAME OF
CLASS BENEFICIAL OWNER SHARES BENEFICIALLY OWNED PERCENT OF CLASS
- ------------ ---------------------- -------------------------- -----------------
<C> <S> <C> <C>
Common Brinson Partners, Inc. 2,100,000 7.1048
209 South LaSalle (Full voting and
Street dispositive power)
Chicago, IL 60604-1295
(As an investment
advisor for separately
managed accounts)
</TABLE>
1
<PAGE>
The following table lists the beneficial ownership, as of the close of
business on March 1, 1994, of Common Stock of the Corporation, of director
nominees, continuing directors, the Chief Executive Officer and the four other
most highly compensated executive officers and, as a group, of such persons and
other executive officers. Unless otherwise noted, the beneficial owner has sole
voting and investment power.
<TABLE>
<CAPTION>
TITLE OF NAME OF SHARES BENEFICIALLY
CLASS BENEFICIAL OWNER OWNED(1) PERCENT OF CLASS
- ------------ ---------------------- -------------------------- -----------------
<C> <S> <C> <C>
Common Delmont A. Davis 112,357(2) .3801
Common Howard M. Dean 2,000 .0068
Common Richard M. Gillett 3,000 .0101
Common John A. Haas 79,756(3) .2698
Common John T. Hackett 1,000 .0034
Common John F. Lehman 4,000 .0135
Common William A. Lincoln 28,991(4) .0981
Common H. Ray Looney 23,829(5) .0806
Common Alvin Owsley 533,271(6) 1.8042
Common David B. Sheldon 28,166(7) .0953
Common Delbert C. Staley 3,360 .0114
Common W. Thomas Stephens 2,000 .0068
Common William P. Stiritz 3,000 .0101
Common All of the above 946,916 3.2037
and present
executive
officers as a group
(23)
<FN>
(Footnotes)
1. Full voting and dispositive power, unless otherwise noted.
2. Includes 89,453 shares which Mr. Davis may acquire during the next 60 days
under a stock option plan.
3. Includes 1,250 shares which Mr. Haas may acquire during the next 60 days
under a stock option plan.
4. Includes 24,885 shares which Mr. Lincoln may acquire during the next 60
days under a stock option plan.
5. Includes 14,672 shares which Mr. Looney may acquire during the next 60 days
under a stock option plan.
6. Includes 104,860 shares owned by a private foundation charitable trust for
which Mr. Owsley shares voting and investment power with other trustees but
for which Mr. Owsley disclaims any beneficial ownership; 6,328 shares held
in trust for Mr. Owsley for which he shares voting and investment power
with another trustee; 109,800 shares held in various trusts for others for
which he shares voting and investment power with another trustee; and
54,623 shares held in trust for others for which he, as trustee, has sole
voting and investment power. Mr. Owsley has a remote contingent interest in
the shares held in trust for the benefit of others, other than those held
by the private foundation charitable trust. Also includes 50,000 shares
owned by a private corporation of which Mr. Owsley is a director and
officer, as to which he disclaims any beneficial interest.
7. Includes 22,257 shares which Mr. Sheldon may acquire during the next 60
days under a stock option plan.
</TABLE>
ELECTION OF DIRECTORS
Richard M. Ringoen, Chairman of the Board of Ball Corporation from April
1986 to April 1991 and a director of the Corporation since April 1975, died on
July 4, 1993. Mr. Ringoen served Ball Corporation with dedication and
distinction, and his outstanding service and achievements greatly benefited the
Corporation and its shareholders, directors, officers and employees. We will
miss his counsel and friendship.
William L. Peterson, who served as a director since April 1983 and as Vice
Chairman of the Board since August 1989, retired on April 2, 1993, to become
Chairman, President and Chief Executive Officer of Alltrista Corporation. Ball
Corporation wishes to express its appreciation to Mr. Peterson for his
conscientious and effective service and leadership and his invaluable
contributions during his tenure as an officer and director.
At their 1985 Annual Meeting, the shareholders adopted the Amended Articles
of Incorporation of Ball Corporation, dividing the Board into three classes, as
nearly equal in number as possible, with directors serving staggered three-year
terms. On April 26, 1994, two persons are to be elected to serve as directors
until 1997, or, in each case until his respective successor is elected and
qualified. Unless otherwise instructed on the proxy card, the persons named in
the accompanying proxy intend to vote for nominees Howard M. Dean and John T.
Hackett to hold office as directors of the Corporation until the 1997 Annual
Meeting of Shareholders, or, in each case until his respective successor is
elected and
2
<PAGE>
qualified. All nominees have consented to be named as candidates in the Proxy
Statement and have agreed to serve if elected. If, for any reason, any of the
nominees becomes unavailable for election, the shares represented by proxies
will be voted for any substitute nominee or nominees designated by the Board of
Directors. The Board has no reason to believe that any of the nominees will be
unable to serve.
Richard M. Gillett, who has served as a director since 1979, has reached the
retirement age of 70 for directors and is, therefore, ineligible to stand for
reelection. In anticipation of Mr. Gillett's retirement, the Nominating
Committee of the Board and other Board members have been aggressively
identifying and interviewing prospective candidates for Board membership to
succeed Mr. Gillett. By March 21, 1994, none of several qualified candidates has
agreed to be nominated for election to succeed Mr. Gillett in Class III.
Consequently, Mr. Gillett will continue to serve as a director until a successor
can be elected and qualified.
All directors in Classes I and II, whose terms have not expired, and Howard
M. Dean, one of the director nominees for Class III, were previously elected by
the shareholders. The other nominee for Class III, John T. Hackett, Managing
General Partner, CID Equity Partners, has not been elected by the shareholders.
Mr. Hackett was elected by the Board of Directors to serve as a director
beginning January 26, 1994, and to stand for reelection as a director in Class
III by the shareholders on April 26, 1994.
In accordance with Indiana Business Corporation Law, directors are elected
by a plurality of the votes cast by the shares entitled to vote in the election
at a meeting at which a quorum is present. Abstentions and broker non-votes are
considered neither votes "for" nor "against." Proxies may not be voted for a
greater number of persons than the two nominees named.
Set forth for each director nominee in Class III and for each continuing
director in Classes I and II are his principal occupation and employment during
the past five years, the period during which he has served as a director and
certain other information.
DIRECTOR NOMINEES AND CONTINUING DIRECTORS
TO BE ELECTED FOR A TERM OF THREE YEARS UNTIL THE 1997 ANNUAL MEETING (CLASS
III)
<TABLE>
<C> <S> <C>
[PHOTO]
Chairman of the Board and Chief Director since 1984. Member, Audit,
Executive Officer, Dean Foods Executive and Finance Committees.
Company, Franklin Park, Illinois,
since January 1989; President and Mr. Dean is a director of Dean Foods
Chief Executive Officer, 1987 to Company, Franklin Park, Illinois;
1989; President and Chief Operating Nalco Chemical Company, Naperville,
Officer, 1969 to 1987. Age 56. Illinois; and Yellow Freight System,
Inc., Overland Park, Kansas.
HOWARD M. DEAN
[PHOTO]
Managing General Partner, CID Equity Director since January 26, 1994.
Partners, Indianapolis, Indiana,
since 1991; Vice President of Mr. Hackett is a director of Irwin
Finance and Administration, Indiana Financial Corporation, Columbus,
University, Bloomington, Indiana, Indiana; Meridian Insurance Group,
1988 to 1991. Age 61. Inc., Indianapolis, Indiana; and
Wabash National Corp., Lafayette,
Indiana.
JOHN T. HACKETT
</TABLE>
3
<PAGE>
TO CONTINUE IN OFFICE UNTIL THE 1995 ANNUAL MEETING (CLASS I)
<TABLE>
<C> <S> <C>
[PHOTO]
President and Chief Executive Director since 1989. Member,
Officer since April 1991; President Executive and Finance Committees.
and Chief Operating Officer, August
1989 to April 1991; Executive Vice Mr. Davis is a director of Cooper
President, Packaging Products, Tire & Rubber Company, Findlay,
January 1988 to August 1989; Ohio, and TRINOVA Corporation,
Executive Vice President, Metal Maumee, Ohio.
Containers, April 1987 to January
1988; Group Vice President, Metal
Containers, October 1976 to April
1987; Vice President and General
Manager, Metal Container Group, May
1976 to October 1976; Vice President
of Operations, Metal Container
Group, 1974-1976; various
engineering
DELMONT A. DAVIS positions, 1969-1974. Age 58.
[PHOTO]
Chairman of the Board, Sperry Marine Director since 1987. Member, Audit
Inc., Charlottesville, Virginia, and Finance Committees.
since November 1993, and Chairman,
J. F. Lehman & Company, New York,
New York, since November 1990;
Managing Director, Investment
Banking Division, PaineWebber Inc.,
New York, New York, January 1988 to
November 1990; Secretary of the
Navy, Washington, D.C., from
February 1981 to April 1987. Age 51.
JOHN F. LEHMAN
[PHOTO]
Retired Chairman of the Board and Director since 1977. Member,
Chief Executive Officer, NYNEX Executive, Executive Compensation
Corporation, New York, New York. Age and Nominating Committees.
69.
Mr. Staley is a director of The Bank
of New York Company, Inc., and its
subsidiary, The Bank of New York,
both of New York, New York;
AlliedSignal Inc., Morristown, New
Jersey; Dean Foods Company, Franklin
Park, Illinois; Digital Equipment
Corporation, Maynard, Massachusetts;
and Polaroid Corporation, Cambridge,
Massachusetts.
DELBERT C. STALEY
</TABLE>
4
<PAGE>
TO CONTINUE IN OFFICE UNTIL THE 1996 ANNUAL MEETING (CLASS II)
<TABLE>
<C> <S> <C>
[PHOTO]
Chairman of the Board since April Director since 1967. Member, Audit,
1991. Retired Senior Partner, Baker Executive Compensation and
& Botts, Attorneys, Houston, Texas. Nominating Committees.
Age 68.
ALVIN OWSLEY
[PHOTO]
Chairman, President and Chief Director since 1992. Member, Audit
Executive Officer, Manville and Finance Committees.
Corporation, Denver, Colorado, since
June 1990; President and Chief Mr. Stephens is a director of
Executive Officer, 1986 to 1990. Age Manville Corporation, Denver,
51. Colorado, and its subsidiary,
Riverwood International, Atlanta,
Georgia; and Public Service Company
of Colorado, Denver, Colorado.
W. THOMAS STEPHENS
[PHOTO]
Chairman, President and Chief Director since 1983. Member, Audit,
Executive Officer, Ralston Purina Executive Compensation and
Company, St. Louis, Missouri, since Nominating Committees.
January 1982. Age 59.
Mr. Stiritz is a director of Ralston
Purina Company, Angelica Corp.,
Boatmen's Bancshares, Inc.,
Reinsurance Group of America, Inc.
and May Department Stores Co., all
of St. Louis, Missouri.
WILLIAM P. STIRITZ
</TABLE>
5
<PAGE>
CERTAIN COMMITTEES OF THE BOARD
Among the standing committees of the Board of Directors are the Audit,
Nominating and Executive Compensation Committees.
AUDIT COMMITTEE:
The duties of the Audit Committee are: (a) recommend for nomination by the
Board of Directors the independent certified public accountants who shall
conduct the annual audit of the Corporation; (b) provide assistance to the Board
of Directors in fulfilling its fiduciary responsibilities relating to corporate
accounting and reporting practices, including review by the Committee of
accounting policies, financial statements, annual audit procedures and results,
and general financial disclosure procedures; (c) maintain, through regularly
scheduled meetings as well as informal conferences, a direct line of
communication with the independent accountants to provide for exchanges of views
and information; and (d) review the continuing effectiveness of the
Corporation's accounting and operating conflicts of interest policies. The Audit
Committee met three times during 1993.
NOMINATING COMMITTEE:
The duties of the Nominating Committee are: (a) develop and maintain a list
of qualified candidates to fill vacancies on the Board and aid in attracting
qualified candidates to the Board; (b) recommend to the Board candidates to fill
any vacancies on the Board; (c) recommend to the Board annually a slate of
directors to be elected by the shareholders at the Annual Meeting and recommend
to the Board the inclusion of the slate in the Proxy Statement; and (d)
recommend the compensation for services as director to be paid to non-management
directors. The Nominating Committee met once during 1993. The Nominating
Committee will consider nominees recommended by shareholders. Any such
recommendation should be in writing and addressed to the Corporate Secretary,
Ball Corporation, 345 South High Street, Muncie, IN 47305.
EXECUTIVE COMPENSATION COMMITTEE:
The duties of the Executive Compensation Committee are: (a) approve the
salaries of all elected corporate officers and other employees of the
Corporation, as the Board of Directors may determine and direct from time to
time; (b) approve the Corporation's schedule of salary ranges and grades for all
salaried employees; (c) approve the Corporation's schedule for approval
signatures to be required for salary and employee status changes; (d) approve
the Corporation's incentive compensation program, including its design,
participation basis and participation rates, as they apply to all elected
corporate officers and other employees of the Corporation as the Board of
Directors may determine and direct from time to time; (e) approve major salaried
benefit plans, changes, plan additions, terminations, and discontinuations; (f)
direct the administration of the Corporation's various stock option plans, and
stock appreciation rights plans, the restricted stock plans, and deferred
compensation plans, in accordance with such plans; (g) designate from time to
time those officers and other key employees of the Corporation and its
subsidiaries to whom option and/or restricted stock awards are to be granted and
approve the number of shares to be optioned and/or granted from time to time to
any individual; and (h) perform such other functions with respect to employee
compensation as may be requested by the Board of Directors. The Executive
Compensation Committee met five times during 1993.
BOARD MEETINGS
The Board of Directors held five meetings during 1993. No director attended
less than 75 percent of the aggregate of (1) the total number of meetings of the
Board of Directors and (2) the total number of meetings held by all committees
of the Board on which he served.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the April 25, 1995,
Annual Meeting must be in writing and received by the Corporate Secretary at the
Corporation's principal executive offices, 345 South High Street, Muncie, IN
47305, by November 21, 1994, for inclusion in the Corporation's 1995 Proxy
Statement.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Corporation of the
Chief Executive Officer and each of the next four most highly compensated
executive officers of the Corporation (the Named Officers):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION(1)
-----------------------
ANNUAL COMPENSATION(1) AWARDS
----------------------------------- -----------------------
OTHER ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) COMPENSATION (SHARES) COMPENSATION(3)
- -------------------------------------- ---- --------- --------- ------------- ----------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Delmont A. Davis 1993 $ 480,000 $ 96,720 10,000 $ 30,550
President & Chief 1992 450,000 382,590 $ 89,018 10,000 21,675
Executive Officer 1991 393,750 419,737 50,000
John A. Haas 1993 159,348 105,440 5,000 1,151,011
Group Vice President (President,
Metal Food Containers & Specialty
Products Group)
William A. Lincoln 1993 218,000 160,900 5,000 12,076
Executive Vice President, Metal 1992 201,250 178,671 5,000 29,635
Container Operations 1991 157,500 153,090 5,000
H. Ray Looney 1993 250,000 15,500 5,000 60,350
Group Vice President (President & 1992 235,000 120,031 5,000 74,202
CEO, Ball-InCon Glass Packaging
Corp.)
David B. Sheldon 1993 181,500 132,026 5,000 7,505
Group Vice President (President, 1992 167,500 165,639 5,000 5,355
Metal Beverage Containers Group)
<FN>
- ------------------------------
(1) Amounts shown in the Salary, Bonus and Other Annual Compensation columns
for Messrs. Haas, Looney and Sheldon are for those years of the latest
three in which they were executive officers.
(2) As noted in the Report of the Executive Compensation Committee, Ball
Corporation uses the term Incentive Compensation rather than Bonus. Also
noted in the Report of the Executive Compensation Committee is the
performance level of the Corporation and each of the operating groups in
relation to incentive targets and the resulting impact on the "bonus"
amounts shown above.
(3) The amounts shown in the All Other Compensation column for 1993 consist of
the following:
Mr. Davis -- above-market interest on deferred compensation account,
$23,800; life insurance premiums, $2,250; company contribution to Employee
Stock Purchase Plan, $1,200; company contribution to Employee Stock
Ownership Plan, $1,000; Supplemental Long Term Disability premium, $2,300.
Mr. Haas -- life insurance premiums, $981; company contribution to Employee
Stock Ownership Plan, $1,000; Supplemental Long Term Disability premium,
$1,725; relocation expenses paid under the Corporation's standard
relocation policy, $21,709; payment in accordance with Heekin Can, Inc.,
employment agreement related to Ball Corporation's purchase of Heekin Can,
Inc., $1,125,596.
Mr. Lincoln -- above-market interest on deferred compensation account,
$6,800; life insurance premiums, $1,440; company contribution to Employee
Stock Purchase Plan, $536; company contribution to Employee Stock Owner-
ship Plan, $1,000; Supplemental Long Term Disability premium, $2,300.
Mr. Looney -- above-market interest on deferred compensation account,
$55,250; life insurance premiums, $1,800; company contribution to Employee
Stock Ownership Plan, $1,000; Supplemental Long Term Disability premium,
$2,300.
Mr. Sheldon -- above-market interest on deferred compensation account,
$3,451; life insurance premiums, $760; company contribution to Employee
Stock Ownership Plan, $1,000; Supplemental Long Term Disability premium,
$2,294.
</TABLE>
7
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The following tables present certain information for the Named Officers
relating to stock option grants and exercises during 1993 and, in addition,
information relating to the valuation of unexercised stock options:
STOCK OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL OPTIONS
GRANTED TO GRANT DATE
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL 1993 (PER SHARE) DATE VALUE(2)
- ----------------------------- ------------- ------------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Delmont A. Davis............. 10,000 4.16% $ 32.00 4/26/03 $ 117,181
John A. Haas................. 5,000 2.08% 32.00 4/26/03 58,591
William A. Lincoln........... 5,000 2.08% 32.00 4/26/03 58,591
H. Ray Looney................ 5,000 2.08% 32.00 4/26/03 58,591
David B. Sheldon............. 5,000 2.08% 32.00 4/26/03 58,591
<FN>
- ------------------------
(1) Options were granted April 27,1993, and are exercisable beginning one year
after grant and each year thereafter in 25 percent increments.
(2) Estimated at a value of $11.7181 per share, based on the Black-Scholes
option pricing model adapted for use in valuing executive stock options,
using volatility and dividend yield data over the latest three years. The
estimated values under that model are based on assumptions of volatility of
0.2412 (monthly closing prices over three years); risk-free rate of return
of 6.49 percent; dividend yield of 2.20 percent; option term of ten years;
and no adjustment for nontransferability or risk of forfeiture. The actual
value, if any, an executive may realize will depend on the excess of the
stock price over the exercise price on the date the option is exercised.
Consequently, there is no assurance the value realized by an executive will
be at or near the value estimated by the Black-Scholes model.
</TABLE>
AGGREGATED STOCK OPTION EXERCISES IN 1993
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS HELD AT AT
DECEMBER 31, 1993 DECEMBER 31, 1993(1)
SHARES ACQUIRED VALUE ------------------------------ --------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------------- ----------- ------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Delmont A. Davis.. 8,000 $ 92,500 66,528 50,851 $ 369,544 $ 190,014
John A. Haas...... -0- -0- -0- 5,000 -0- -0-
William A.
Lincoln.......... 4,000 44,250 19,259 13,751 102,112 26,956
H. Ray Looney..... -0- -0- 11,964 12,877 72,642 27,710
David B.
Sheldon.......... 3,150 31,028 17,798 11,710 95,601 15,545
<FN>
- ------------------------
(1) Based on the closing price on the New York Stock Exchange -- Composite
Transactions of the Corporation's Common Stock on December 31, 1993, of
$30.25.
</TABLE>
8
<PAGE>
RETIREMENT PLANS
The following table, for purposes of illustration, indicates the amounts of
annual retirement income which would be payable in 1994 for persons at normal
retirement at age 65. The calculation of retirement benefits under the plans
generally is based upon average earnings for the highest five consecutive years
of the ten years preceding retirement.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
AVERAGE ANNUAL EARNINGS 15 20 25 30 35
- ----------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 20,000 $ 3,000 $ 4,000 $ 5,000 $ 6,000 $ 7,000
40,000 7,177 9,569 11,961 14,353 16,745
60,000 11,677 15,569 19,461 23,353 27,245
80,000 16,177 21,569 26,961 32,353 37,745
100,000 20,677 27,569 34,461 41,353 48,245
120,000 25,177 33,569 41,961 50,353 58,745
140,000 29,677 39,569 49,461 59,353 69,245
160,000 34,177 45,569 56,961 68,353 79,745
180,000 38,677 51,569 64,461 77,353 90,245
200,000 43,177 57,569 71,961 86,353 100,745
220,000 47,677 63,569 79,461 95,353 111,245
</TABLE>
The Corporation's salaried retirement plans provide defined benefits
determined by base salary and years of service. However, no compensation in
excess of the indexed compensation cap (Internal Revenue Code 401(a)(17)) is
considered. The benefits are payable as a straight-life annuity. The only offset
to benefits is for pensions payable from certain related former employers. This
exception occurs for H. Ray Looney, who will receive $71,811 per year at age 65
as an offsetting pension from a former employer.
Average Annual Earnings used under the pension formula to calculate
benefits, together with years of benefit service, as of December 31, 1993, for
the Named Officers are: Delmont A. Davis, $218,391 (23.0 years); John A. Haas,
$200,000 (.66 year); William A. Lincoln, $164,674 (23.0 years); H. Ray Looney,
$219,224 (6.7 years); and David B. Sheldon, $142,841 (23.0 years).
CHANGE IN CONTROL ARRANGEMENTS
The Corporation has established a revocable, funded grantor trust, which, in
the event a change in control of the Corporation occurs, would become
irrevocable with funds thereunder to be available to apply to the Corporation's
obligations under two of its deferred compensation plans. Those plans cover key
employees, including the named executives. A subsidiary of the Corporation has
established a similar trust covering deferred compensation of Mr. Looney. Under
the trusts, "change in control" can occur by virtue, in general terms, of an
acquisition by any person of 40 percent or more of the Corporation's voting
shares; a merger in which shareholders of the Corporation before the merger own
less than 60 percent of the Corporation's common stock after the merger;
shareholder approval of a plan to sell or dispose of substantially all of the
assets of the Corporation; a change of a majority of the Corporation's Board of
Directors within a 12-month period unless approved by two-thirds of the
directors in office at the beginning of such period; a threatened change in
control, deemed to exist if there is an agreement or public announcement of a
change in control; and by the adoption by the Board of Directors of a resolution
to the effect that a change in control has occurred for purposes of the trusts.
The trusts are funded with the cash values of company-owned life insurance
policies on the lives of various employees, including participants in the plans.
Approximately $86 million of cash value under the policies would be available
currently to cover the approximately $35 million of current deferred
compensation account balances of the beneficiaries of the trusts. If the funds
set aside in the trusts would be insufficient to pay amounts due the
beneficiaries, then the Corporation (or its subsidiary) would remain obligated
to pay those amounts. In the event of the insolvency of the Corporation (or its
subsidiary), the funds in the trusts would be available to satisfy the claims of
the creditors of the Corporation (or its subsidiary). The trusts were not
established in response to any effort to acquire control of the Corporation, and
the Board is not aware of any such effort.
The Corporation has change in control severance agreements with several key
executives, including Messrs. Davis, Haas, Lincoln, Looney and Sheldon. The
agreements are effective on a year-to-year basis and would provide severance
benefits in the event of both a change in control of the Corporation and an
actual or constructive termination of employment within two years after a change
in control. Under the agreements, a "change in control" can occur by
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virtue, in general terms, of an acquisition by any person of 30 percent or more
of the Corporation's voting shares; a merger in which the shareholders of the
Corporation before the merger own 50 percent or less of the Corporation's voting
shares after the merger; shareholder approval of a plan of liquidation or to
sell or dispose of substantially all of the assets of the Corporation; and if,
during any two-year period, directors at the beginning of the period fail to
constitute a majority of the Board of Directors. "Actual termination" is any
termination other than by death or disability, by the Corporation for cause, or
by the executive other than for constructive termination. "Constructive
termination" means, in general terms, any significant reduction in duties,
compensation or benefits or change of office location from those in effect
immediately prior to the change in control, unless agreed to by the executive.
The severance benefits payable, in addition to base salary and incentive
compensation accrued through the date of termination, shall include two times
current annual base salary and target incentive compensation, the bargain
element value of then outstanding stock options, the present value of the amount
by which pension payments would have been larger had the executive accumulated
two additional years of benefit service; two years of life, disability, accident
and health benefits; outplacement services; and legal fees and expenses
reasonably incurred in enforcing the agreements. Such benefits, together with
other benefits paid because of a change in control, may not exceed 2.99 times
the executive's "base amount"' as defined in Section 280G of the Internal
Revenue Code. The agreements were not entered into in response to any effort to
acquire control in the Corporation, and the Board is not aware of any such
effort.
DIRECTORS' COMPENSATION
Directors who are not employees of the Corporation receive as compensation
an annual retainer of $18,000. Those serving as members of the Executive
Committee receive additional annual retainers of $5,000, and one serving as
chairman of the board receives an additional annual retainer of $25,000. Such
directors receive a fee of $1,000 for attending each Board meeting; a fee of
$750 for attending one or more committee meetings held on any one day; a fee of
$250 per month for serving as chairman of a Board committee; and a per diem
allowance of $500 for special assignments. In addition, nonemployee members of
the Executive Committee receive a fee of $1,000 for attending each committee
meeting. Directors who are also employees of the Corporation receive no
additional compensation for their service on the Board or on any Board
committee.
Under the Ball Corporation 1986 Deferred Compensation Plan for Directors,
nonemployee directors may elect to defer the payment of all or a portion of
their directors' fees, including the annual retainer and the board and committee
meeting fees. Interest is credited annually to the accounts at a rate equal to
the annual average composite yield on Moody's Seasonal Corporate Bond Yield
Index plus five percent. The fees, together with credited interest, may be
deferred until no later than the year following the year of retirement as a
director and may be distributed over a period not to exceed fifteen (15) years,
both as selected by the director. In order to provide for its liabilities under
the Plan, the Corporation purchased insurance on lives of participating
directors.
The 1991 Restricted Stock Plan for Nonemployee Directors of Ball Corporation
authorizes the award of Common Stock of the Corporation to directors who, at the
time of grant, are not employees of the Corporation or any of its subsidiaries.
Messrs. Owsley, Stephens and Stiritz received 1,000-share awards each upon
re-election as directors on April 27, 1993. All participants will receive
additional 1,000-share awards each upon re-election for three-year terms. Newly
eligible participants will receive 1,000-share awards each when they are elected
or appointed for initial terms and upon re-election for three-year terms. The
restrictions against disposal of the shares will lapse upon the termination of
the director's service to the Corporation as a director, for whatever reason
other than voluntary resignation, in which case the restriction will not lapse
and the director will forfeit the shares. For federal income tax purposes, the
value of the shares will be taxable to the recipient as compensation income in
an amount equal to the fair market value of the Common Stock on the date the
restrictions lapse.
The Corporation has a Retirement Plan for Nonemployee Directors of Ball
Corporation, under which a retiring director who is not and has not been an
employee of the Corporation will be eligible for benefits under the Plan if he
has attained the age of 65 and has five or more full years of service as a
director. The amount of annual retirement income will be a percentage of the
annual retainer being paid to the director in effect at the time of his
retirement from the Board. A retiring director with the minimum of five years of
service will receive 50 percent of the annual retainer. For each additional year
of service, the retired director will receive an additional 10 percent of the
annual retainer, up to a maximum total annual retirement benefit income equal to
100 percent of the annual retainer. The annual retirement benefit will be paid
for up to the same number of years as those served on the Board, but will be
discontinued upon and not payable after the death of the retired director.
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REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (the "Committee") of the Board of
Directors oversees the administration of executive compensation programs and
determines the compensation of the executive officers of Ball Corporation,
subject to the approval of the Board. The Committee is composed solely of
independent, nonemployee directors and employs a compensation consulting firm to
advise and provide input in the course of its deliberations.
Total compensation of executive officers of the Corporation, including the
Chief Executive Officer, is determined after reviewing the executive's
performance and the pay of similarly situated executives at other Fortune 500
manufacturing firms of similar size (based upon total employment and sales),
capital structure, customer base, market orientation and employee demographics.
Companies chosen for this comparison are the same as those included in the peer
group for purposes of the performance graph, except that such information was
not available for two of the peer group companies.
The Committee generally intends that target total compensation, defined as
the sum of base salary and incentive compensation at target, for each of the
Corporation's executive officers will be between the 40th and 60th percentile of
what comparable companies are paying. The target total compensation level within
that range for each executive, other than the Chief Executive Officer, is
determined based on recommendation from the Chief Executive Officer, together
with the Committee's consideration of the executive's responsibilities,
individual performance and the performance of the executive's area of
responsibility. The Chief Executive Officer's target total compensation is
similarly determined in relation to the market percentile range above, the
Committee's assessment of individual performance and the financial performance
of the Corporation. For the purpose of determination of Target Total
Compensation, the evaluation of each executive's performance, including the
Chief Executive Officer, is largely subjective and no specific weighting is
assigned to any particular factor. Target total compensation for each of the
executives named in the accompanying Executive Compensation Summary, including
the Chief Executive Officer, was within the established percentile range.
After the Committee has established the appropriate target total
compensation for an executive, base salary is determined by dividing target
total compensation by one plus the executive's incentive compensation
participation rate. For example, Mr. Davis' incentive compensation participation
rate is 65 percent. Accordingly, his base salary is calculated by dividing his
target total compensation by 1.65. Consequently, when target performance as
defined in the EVA Incentive Compensation Plan (the "EVA Plan"), discussed
below, is attained, Mr. Davis will be paid a total compensation which equals
that established by the Committee as appropriate for his performance and when
compared to similarly situated executives at other companies. Incentive
compensation participation rates for executives, including the Chief Executive
Officer, are set by organizational level; for example, all senior executive
officers, including the Chief Executive Officer, participate at the same rate,
while other officers participate at lower rates and other key employees at lower
rates yet. The Committee intends that a larger percentage of an executive's
target total compensation be at risk, when compared with compensation survey
data. Such data is analyzed to determine the levels of incentive participation
and target total compensation. If the survey data indicates a target incentive
compensation rate of 50 to 60 percent, for example, Ball Corporation could be
expected to use a rate of 65 percent, thereby causing target total compensation
to be composed of a lower base salary and a higher at-risk incentive
compensation.
Base salary is referred to as "salary" in the Summary Compensation Table and
incentive compensation actually earned by an executive officer is reported under
the heading "Bonus." Actual incentive compensation earned is not, in part or in
total, discretionary, but instead is driven by the Economic Value Added (EVA)
targets approved by the Committee at the beginning of the year. The EVA targets
are calculated taking into account historical performance, the company's cost of
capital and the capital investment of each business unit. The resulting targets
are set at levels requiring improvement in EVA each year. The EVA Plan applies
to all officers and other key employees.
The EVA Plan awards incentive compensation to executives based upon actual
performance of the Corporation, or in certain cases the actual performance of
the profit center for which the executive is responsible, in achieving
improvements in EVA relative to the established EVA targets. Improvement in EVA
occurs when the ratio of net operating profit after tax to capital employed in
the business increases over time. It establishes a direct link between incentive
compensation and return earned on capital relative to a specified target return.
EVA was selected as the measure for the Corporation's incentive plan on the
belief that it correlates closely management's incentive with shareholder total
return.
If actual performance for the year is higher than the target performance
level, then the actual compensation for such year will be higher than target.
Whenever actual performance falls below the target performance level, the
executive will receive incentive compensation less than target. If performance
falls below the minimum acceptable level established in the EVA Plan, then no
incentive compensation will be earned, and the executive's annual compensation
will consist only of base salary for the year. The Committee intends that at an
executive's target incentive compensation should be a significant portion of his
target total compensation. In the case of the named executives in the Summary
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Compensation Table, the portion of target total compensation represented by
target incentive compensation is approximately 40 percent. It is not intended or
perceived as a "bonus" but rather as the component of total compensation which
is "at risk" as an incentive, dependent on operating performance. For the year
ended December 31, 1993, actual incentive compensation for Mr. Davis and Mr.
Looney was below target, for Mr. Haas approximately at target, and for Mr.
Lincoln and Mr. Sheldon above target. These incentive compensation levels for
1993 reflect the performance of the Corporation as a whole, which was below the
EVA target. Also reflected is the above-target performance of metal beverage
containers, below-target performance of U.S. metal food and specialty products
and the performance of glass packaging operations at less than the minimum set
by the EVA Plan. Mr. Davis' incentive compensation is based entirely on the
combined results of the Corporation, while the other named officers' incentive
compensation levels are based primarily on the performance of their area of
profit responsibility with a lesser portion based on the total Corporation
performance.
The Corporation has broad-based employee stock option plans designed to
encourage employee stock ownership and to recognize and reward employees for
their levels of responsibility in building shareholder value. Grants of stock
options to employees, including executive officers, are generally made by the
Committee after considering the recommendation of the Chief Executive Officer,
based primarily on the level of the employee's position within the Corporation,
taking into account the number of outstanding and previously granted options.
Stock options granted to the Chief Executive Officer are determined by the
Committee in relation to grant levels of other executive officers within the
Corporation and a subjective evaluation of his past and expected performance as
well as the number of outstanding and previously granted options. As the stock
option plans are long term in nature, grants are determined independently of the
shorter term EVA Plan.
Under present circumstances, the Committee believes that the compensation
program described above will not result in compensation for any of the
Corporation's executives in excess of the one million dollar deduction cap
applicable for years beginning January 1, 1994.
The foregoing report has been furnished by the following directors and
members of the Executive Compensation Committee:
Richard M. Gillett, Chairman
Alvin Owsley
Delbert C. Staley
William P. Stiritz
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SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
Ball Corporation's cumulative total shareholder return on its Common Stock with
the cumulative total return of the S&P Composite 500 Stock Index and a peer
group of companies selected for the period of five years commencing January 1,
1988, and ending December 31, 1993.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG BALL CORPORATION
COMMON, S&P COMPOSITE 500 AND SELECTED PEER ISSUER GROUP
[GRAPHIC]
The Peer Issuer Group was selected from among Fortune 500 manufacturing
firms having similarities in the following criteria:
- Size (total employment and sales)
- Capital structure (similar debt/equity ratios)
- Customer base (companies selling to other companies rather than
directly to the consumer)
- Market orientation (primarily domestic with some international)
- Employee demographics (companies with long service employees
with ages similar to Ball Corporation employees)
Companies included in the Peer Issuer Group in addition to Ball Corporation
are: Arvin Industries, Inc.; Cummins Engine Company, Inc.; Eaton Corporation;
GenCorp Inc.; General Signal Corporation; Harsco Corp.; Illinois Tool Works,
Inc.; Maytag Corporation; Parker-Hannifin Corp.; Sequa Corporation; The Stanley
Works; Sundstrand Corporation; and Tyco Laboratories, Inc.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS AND CERTAIN
OTHER RELATIONSHIPS AND RELATED TRANSACTIONS
During 1993, Price Waterhouse rendered audit and non-audit services to the
Corporation. Audit services included examinations of the consolidated financial
statements and statutory financial statements required to be filed; reviews of
quarterly financial data and filings with the Securities and Exchange
Commission; and consultations relating to the application of generally accepted
accounting principles to transactions into which the Corporation has entered.
Non-audit services included advice and consultations relating to acquisitions
and dispositions then being considered by the Corporation. It is the policy of
the Audit Committee of the Board of Directors to approve in advance the
engagement of Price Waterhouse for all audit and, except for minor assignments,
non-audit services. Representatives of Price Waterhouse are expected to be
present at the Annual Meeting of Shareholders and to be available to respond to
appropriate questions and to make a statement if they so desire.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that the shareholders vote for
ratification of the appointment of Price Waterhouse as independent public
accountants for 1994. If the appointment of Price Waterhouse is not ratified by
the shareholders, the Audit Committee will select another firm of independent
public accountants for 1994.
SOLICITATION AND OTHER MATTERS
The cost of soliciting proxies will be paid by the Corporation. In addition
to solicitations by mail, some directors, officers and regular employees of the
Corporation, without extra remuneration, may conduct solicitations by telephone,
telegraph and personal interview. The Corporation will reimburse brokerage firms
and other custodians, nominees and fiduciaries for reasonable expenses incurred
by them in sending proxy material and annual reports to the beneficial owners of
Common Stock. In addition, the Corporation has engaged Beacon Hill Partners,
Inc., to assist it in the solicitation of proxies, for a fee of approximately
$3,000, plus out-of-pocket expenses.
As of the date of this Proxy Statement, the Board of Directors of the
Corporation has no knowledge of any matters to be presented for consideration at
the meeting other than those referred to above. However, persons named in the
accompanying form of proxy shall have authority to vote such proxy as to any
other matters which do properly come before the meeting and as to matters
incidental to the conduct of the meeting, according to their discretion.
By Order of the Board of Directors
George A. Sissel
CORPORATE SECRETARY
March 21, 1994
Muncie, Indiana
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BALL CORPORATION PROXY/VOTING INSTRUCTION CARD
345 SOUTH HIGH STREET, MUNCIE, INDIANA 47305
P -----------------------------------------------------------------
R THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON APRIL 26, 1994.
O
The undersigned hereby appoints Edmund F. Ball, John w. Fisher and Alvin
X Owsley and each or any of them as Proxies, with full power of substitution,
to vote all shares of Ball Corporation Common Stock entitled to be voted by
Y the undersigned for the election of directors and on Proposal 2 referred to
on the reverse side of this Proxy Card and described in the Proxy
Statement, and on any other business as properly may come before the Annual
Meeting of Shareholders on April 26, 1994, or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR ITEMS 1 AND 2.
Election of two Directors. Nominees are:
Howard M. Dean and John T. Hackett
YOU ARE ENCOURAGED TO SPECIFY YOUR VOTES BY MARKING THE APPROPRIATE BOXES
ON THE REVERSE SIDE.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE.
<PAGE>
__
X PLEASE MARK YOUR | | 3101
VOTES AS IN THIS --
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S).
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS 1 AND 2.
- -------------------------------------------------------------------------------
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2. |
- -------------------------------------------------------------------------------
WITHHOLD
AUTHORITY
FOR ALL
FOR NOMINEES FOR AGAINST ABSTAIN
1.Election / / / / To withhold authority 2.Proposal to / / / / / /
of to vote for any approve the
Directors specific nominee(s), appointment of
mark the "FOR" box and Price Waterhouse
write the name of as the independent
each such nominee for public accountants
whom you are of the Corporation.
withholding authority
to vote on the line
provided below.
3.In their discretion, the proxies
are authorized to vote upon such
other business as properly may
come before the meeting.
- ---------------------------------------------------
Please sign exactly as name
appears at left. When signing as
attorney, executor, administrator,
trustee, or guardian, please
give full title as such. If a
corporation, please sign in full
corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
----------------------------------
----------------------------------
Signature(s) Date
Note: Please sign exactly as name
appears hereon. Joint owners
should each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such.
