SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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Commission file number 1-7349
BALL CORPORATION
State of Indiana 35-0160610
345 South High Street, P.O. Box 2407
Muncie, IN 47307-0407
317/747-6100
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1996
Common Stock,
without par value 30,197,709 shares
<PAGE>
Ball Corporation and Subsidiaries
QUARTERLY REPORT ON FORM 10-Q
For the period ended March 31, 1996
INDEX
Page Number
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Unaudited Condensed Consolidated Statement of Income
for the three month periods ended March 31, 1996, and
April 2, 1995 3
Unaudited Condensed Consolidated Balance Sheet at
March 31, 1996, and December 31, 1995 4
Unaudited Condensed Consolidated Statement of Cash Flows
for the three month periods ended March 31, 1996, and
April 2, 1995 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION 10
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Ball Corporation and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Millions of dollars except per share amounts)
<CAPTION>
Three months ended
-----------------------------------------
March 31, April 2,
1996 1995
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<S> <C> <C>
Net sales $ 462.0 $ 605.6
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Costs and expenses
Cost of sales 424.5 540.9
General and administrative expenses 19.6 23.9
Selling and product development expenses 4.5 7.4
Net gain on disposition of business and other -- (3.8)
Interest expense 8.4 9.6
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457.0 578.0
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Income before taxes on income, minority interests and
equity in earnings of affiliates 5.0 27.6
Provision for taxes on income (1.7) (10.1)
Minority interests -- (1.4)
Equity in earnings of affiliates 2.2 0.2
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Net income 5.5 16.3
Preferred dividends, net of tax benefit (0.8) (0.8)
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Earnings attributable to common shareholders $ 4.7 $ 15.5
=================== ==================
Earnings per share of common stock $ 0.16 $ 0.52
=================== ==================
Fully diluted earnings per share $ 0.15 $ 0.49
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Cash dividends declared per common share $ 0.15 $ 0.15
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</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
<TABLE>
Ball Corporation and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
<CAPTION>
March 31, December 31,
1996 1995
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<S> <C> <C>
ASSETS
Current assets
Cash and temporary investments $ 18.8 $ 5.1
Accounts receivable, net 242.6 200.0
Inventories, net
Raw materials and supplies 79.5 82.8
Work in process and finished goods 291.3 235.7
Deferred income tax benefits and prepaid expenses 89.1 69.1
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Total current assets 721.3 592.7
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Property, plant and equipment, at cost 1,210.4 1,146.8
Accumulated depreciation (534.7) (518.2)
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675.7 628.6
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Investment in affiliates 257.4 262.8
Goodwill and other assets 144.5 128.4
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$ 1,798.9 $ 1,612.5
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt and current portion of long-term debt $ 198.2 $ 155.0
Accounts payable 215.6 195.3
Salaries, wages and other current liabilities 139.2 147.2
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Total current liabilities 553.0 497.5
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Noncurrent liabilities
Long-term debt 456.8 320.4
Employee benefit obligations, deferred income taxes and other 197.5 205.9
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Total noncurrent liabilities 654.3 526.3
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Contingencies
Minority interests 9.2 6.0
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Shareholders' equity
Series B ESOP Convertible Preferred Stock 65.1 65.6
Unearned compensation - ESOP (50.4) (50.4)
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Preferred shareholder's equity 14.7 15.2
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Common stock (issued 32,365,775 shares - 1996;
32,172,768 shares - 1995) 299.1 293.8
Retained earnings 336.9 336.4
Treasury stock, at cost (2,245,509 shares - 1996;
2,058,173 shares - 1995) (68.3) (62.7)
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Common shareholders' equity 567.7 567.5
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$ 1,798.9 $ 1,612.5
================== ==================
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
<TABLE>
Ball Corporation and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
(Millions of dollars)
<CAPTION>
Three months ended
---------------------------------------
March 31, April 2,
1996 1995
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<S> <C> <C>
Cash flows from operating activities
Net income $ 5.5 $ 16.3
Reconciliation of net income to net cash used in operating activities:
Depreciation and amortization 20.2 32.0
Other, net (12.0) (15.8)
Changes in working capital components (107.4) (80.1)
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Net cash used in operating activities (93.7) (47.6)
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Cash flows from financing activities
Net change in long-term debt 137.4 (2.4)
Net change in short-term debt 41.8 70.6
Common dividends (4.5) (4.5)
Net proceeds from issuance of common stock under various employee and
shareholder plans 5.3 10.3
Acquisitions of treasury stock (5.5) (10.3)
Other, net 1.9 (0.3)
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Net cash provided by financing activities 176.4 63.4
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Cash flows from investing activities
Additions to property, plant and equipment (57.7) (34.6)
Net proceeds from disposition of business - 14.5
Investment in affiliates (9.3) (1.1)
Other, net (2.0) 3.1
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Net cash used in investing activities (69.0) (18.1)
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Net increase (decrease) in cash 13.7 (2.3)
Cash and temporary investments:
Beginning of period 5.1 10.4
================== ==================
End of period $ 18.8 $ 8.1
================== ==================
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE>
Ball Corporation and Subsidiaries
March 31, 1996
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General.
The accompanying condensed consolidated financial statements have been prepared
by the company without audit. Certain information and footnote disclosures,
including significant accounting policies, normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. However, the company believes that the financial
statements reflect all adjustments which are necessary for a fair statement of
the results for the interim period. Results of operations for the periods shown
are not necessarily indicative of results for the year, particularly in view of
some seasonality in packaging operations. It is suggested that these unaudited
condensed consolidated financial statements and accompanying notes should be
read in conjunction with the consolidated financial statements and the notes
thereto included in the company's latest annual report.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
reported amounts of revenues and expenses during the reporting period. Future
events could affect these estimates.
2. Reclassifications.
Certain prior year amounts have been reclassified in order to conform with the
1996 presentation.
3. Severance Charges.
The company eliminated approximately 75 salaried administrative and technical
positions as part of a cost reduction program within its metal packaging
business in March 1996. For employees whose employment was terminated, the
company incurred an after-tax charge for severance of $1.7 million, or 6 cents
per share included in general and administrative expenses.
4. Equity Affiliate.
The company's significant equity affiliate, Ball-Foster Glass Container Co.,
L.L.C. (Ball-Foster) reported the following unaudited financial results for the
three months ended March 31, 1996 (in millions):
Net sales $ 307.2
Cost of sales 276.4
Net loss reported by Ball-Foster (1.5)
Net loss attributable to Ball Corporation (0.6)
Net loss after taxes included in equity in earnings of affiliates $ (0.2)
5. Shareholders' Equity.
Issued and outstanding shares of the Series B ESOP Convertible Preferred Stock
(ESOP Preferred) were 1,772,133 shares at March 31, 1996, and 1,786,852 shares
at December 31, 1995.
<PAGE>
6. Contingencies.
In the ordinary course of business, the company is subject to various risks and
uncertainties due, in part, to the highly competitive nature of the industries
in which the company participates, its operations in developing markets outside
the U.S., volatile costs of commodity materials used in the manufacture of its
products, and changing capital markets. Where possible and practicable, the
company attempts to minimize these risks and uncertainties.
From time to time, the company is subject to routine litigation incident to its
business. Additionally, the U.S. Environmental Protection Agency has designated
the company as a potentially responsible party, along with numerous other
companies, for the cleanup of several hazardous waste sites. However, the
company's information at this time does not indicate that these matters will
have a material, adverse effect upon financial condition, results of operations,
capital expenditures or competitive position of the company.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated net sales of $462.0 million for the first quarter of 1996 increased
11.8 percent compared to the first quarter of 1995, excluding 1995 net sales
totaling $192.3 million, from the company's former glass business and Efratom
time and frequency measurement division (Efratom), which were sold in September
and March of that year, respectively. All product lines reported increased sales
enhanced by sales from the company's polyethylene terephthalate (PET) plastic
container business, which began operations during the quarter. Consolidated
operating earnings for the first quarter of 1996 were $13.4 million as compared
to $39.5 million in the first quarter of 1995. This decrease was primarily due
to the inclusion of earnings from the glass business in the 1995 quarter,
reduced profits in the metal beverage can business due to higher raw material
costs and price competition, costs in connection with the start-up of operations
of the PET plastic container business and costs incurred for reductions in metal
packaging administrative and technical staff.
Consolidated interest expense for the first quarter of 1996 was $8.4 million
compared to $9.6 million for the first quarter of 1995. The decrease was
attributable to a decrease in the average level of short-term borrowings
outstanding partially offset by an increase in long-term borrowings.
Net income decreased from $16.3 million for the first quarter of 1995 to $5.5
million for the same period in 1996, while earnings per share decreased from 52
cents per share in 1995 to 16 cents per share in 1996. In addition to the after
tax effects of operating earnings, lower net income reflects the $0.2 million
loss from the Ball-Foster joint venture and a $0.4 million after-tax loss for
EarthWatch, Inc. (EarthWatch). The PET start-up costs, the EarthWatch loss and
charge for reductions in metal packaging administrative and technical staff
reduced earnings per share by 16 cents. Net income in 1995 includes an after-tax
gain of $7.7 million resulting from the sale of the company's Efratom division
net of a $4.9 million after-tax charge related to the wind down of the visual
image generation systems (VIGS) business.
Business Segments
Packaging segment net sales represented approximately 82.0 percent of first
quarter 1996 consolidated net sales and increased to $378.2 million compared to
$342.5 million in the first quarter of 1995, exclusive of 1995 sales of the
glass packaging business. Operating earnings declined for the first quarter of
1996 as a result of PET start-up losses, including operating losses for the
start-up operations of the PET plastic container manufacturing facility in
Chino, California; the aforementioned charge for reductions in metal packaging
administrative and technical staff; increased aluminum costs and the competitive
pricing environment.
Within the packaging segment, sales in the metal container business increased
9.1 percent for the three-month period due to higher North American beverage and
food can unit volumes and increased international sales. The effects of
increased unit volume sales in the North American metal beverage container
business more than offset the effects of lower selling prices experienced in
that part of the business. Operating earnings declined in the metal beverage
container business reflecting increased costs of aluminum can sheet. Earnings in
the metal food container business improved for the quarter reflecting higher
unit volumes and sales prices.
Sales in the aerospace and technology segment increased 4.6 percent in 1996
compared to 1995. This improvement was primarily due to percentage of completion
revenues recognized in connection with prior year contract awards and was
partially offset by the company's sale of Efratom to Datum Inc. in March 1995.
EarthWatch, a subsidiary of the company formed in late 1994, merged with
WorldView Imaging Corporation during the first quarter of 1995 to serve the
market for satellite-based remote sensing of the earth. Development stage losses
of $0.4 million after-tax were recorded during the first quarter of 1996 related
to this joint venture. Backlog at the quarter end was approximately $419 million
compared to $420 million at December 31, 1995, and $293 million at the end of
the first quarter of 1995.
<PAGE>
RESTRUCTURING AND OTHER RESERVES
In 1993, the company recorded aggregate restructuring and other reserves of
$108.7 million pretax in the third and fourth quarters for asset write-offs and
write-downs to net realizable values, employee costs, termination benefits and
pension curtailment losses. The balance of these reserves at December 31, 1995,
was $22.0 million, of which $0.4 million was utilized during the three months
ended March 31, 1996, for plant closings and $0.7 million was utilized for the
disposal of the visual imaging product line.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Cash used by operations increased from $47.6 million in 1995 to $93.7 million in
1996 as a result of working capital requirements and decreased net income. The
current ratio was 1.3 at March 31, 1996, compared to 1.2 at December 31, 1995.
Total debt increased by $179.6 million to $655.0 million at March 31, 1996, from
$475.4 million at December 31, 1995, resulting in an increase in the
debt-to-total capitalization ratio to 52.5 percent at March 31, 1996, from 44.7
percent as of December 31, 1995. The increase occurred in both short-term and
long-term borrowings. The $136.4 million net increase in long-term borrowings is
due almost entirely to the completion, in January 1996, of a $150 million
private placement of long-term senior notes. The company had committed revolving
credit facilities as of March 31, 1996, of $280.0 million with various banks
consisting of a $150.0 million, five-year facility and several 364-day
facilities amounting to $130.0 million. The company also has $356.0 in
uncommitted credit facilities from various banks, of which $66.5 million was
outstanding, and a Canadian dollar commercial paper facility of approximately
$88.3 million, of which $65.4 million was outstanding at quarter end. Under an
existing receivable sale agreement, a net amount of $66.5 million of packaging
trade receivables have been sold without recourse as of March 31, 1996 (fees
related to this agreement of $0.9 million and $1.2 million in 1996 and 1995,
respectively, are included in general and administrative expenses at
quarter-end).
The company anticipates total 1996 capital spending of approximately $280
million, including significant amounts for emerging businesses such as domestic
plastic (PET) containers and metal beverage and food containers in China.
Spending in existing businesses is concentrated within the packaging segment
including conversion of a metal beverage container line to produce two-piece
drawn and ironed food containers and completion of conversions of metal beverage
container equipment to new industry specifications.
In the ordinary course of business, the company is subject to various risks and
uncertainties due, in part, to the highly competitive nature of the industries
in which the company participates, its operations in developing markets outside
the U.S., volatile costs of commodity materials used in the manufacture of its
products, and changing capital markets. Where possible and practicable, the
company attempts to minimize these risks and uncertainties.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
reported amounts of revenues and expenses during the reporting period. Future
events could affect these estimates.
From time to time, the company is subject to routine litigation incident to its
business. Additionally, the U.S. Environmental Protection Agency has designated
the company as a potentially responsible party, along with numerous other
companies, for the cleanup of several hazardous waste sites. However, the
company's information at this time does not indicate that these matters will
have a material, adverse effect upon financial condition, results of operations,
capital expenditures or competitive position of the company.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal proceedings
On April 17, 1996, the company was served with a lawsuit filed by Marian Steich,
Randall Steich and Ronald Mark Steich, alleging that the company's metal
container group, a/k/a Ball Corporation, and over fifty other defendants
disposed of certain hazardous waste at the hazardous waste disposal site
operated by Gibraltar Chemical Resources, Inc., located in Winona, Smith County,
Texas. The lawsuit also alleges that American Ecology Corp., American Ecology
Management Corp., American Ecology Environmental Services Company f/k/a
Gibraltar Chemical Resources, Mobley Environmental Services, Inc., SSI Mobley
Co., Inc., Mobley Company, Inc. and the managers of the site for Gibraltar,
failed to manage appropriately the waste disposed of or treated at the Gibraltar
site, resulting in release of hazardous substances into the environment. The
plaintiffs allege that they have been denied the enjoyment of their property and
have sustained personal and bodily injury and damages due to the release of
hazardous waste and toxic substances into the environment caused by all the
defendants. The plaintiffs allege numerous causes of action under state law and
common law. Plaintiffs also seek to recover damages for past, present, and
future medical treatment; mental and emotional anguish and trauma; loss of wages
and earning capacity; and physical impairment, as well as punitive damages and
prejudgement interest in unspecified amounts. The company intends to defend
against this matter. Based on the limited information available to the company,
at this time, the company is unable to express an opinion as to the actual
exposure of the company for this matter.
Item 2. Changes in securities
There were no events required to be reported under Item 2 for the quarter ending
March 31, 1996.
Item 3. Defaults upon senior securities
There were no events required to be reported under Item 3 for the quarter ending
March 31, 1996.
Item 4. Submission of matters to a vote of security holders
There were no events required to be reported under Item 4 for the quarter ending
March 31, 1996.
Item 5. Other information
There were no events required to be reported under Item 5 for the quarter ending
March 31, 1996.
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
10.1 Form of Amended and Restated Severance Benefit Agreement
dated May 1, 1996, which exists between the Company and
its executive officers.
11.1 Statement Re: Computation of Earnings per Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K
A Current Report on Form 8-K, dated January 26, 1996, announcing
approval by the Board of Directors of an extension of the benefits
afforded by the company's existing shareholder rights plan by the
adoption of a new shareholder rights plan, filed February 14, 1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Ball Corporation
(Registrant)
By: /s/ R. David Hoover
-------------------------
R. David Hoover
Executive Vice President,
Chief Financial Officer
and Treasurer
Date: May 15, 1996
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<PAGE>
Ball Corporation and Subsidiaries
QUARTERLY REPORT ON FORM 10-Q
March 31, 1996
EXHIBIT INDEX
Description Exhibit
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Form of Amended and Restated Severance Benefit Agreement dated
May 1, 1996, which exists between the Company and its
executive officers. EX-10.1
Statement Re: Computation of Earnings per Share EX-11.1
Financial Data Schedule EX-27.1
Exhibit 10.1
- ------------
Form of Amended and Restated Severance Benefit Agreement dated May 1, 1996 which
exists between the company and its executive officers.
AMENDED AND RESTATED SEVERANCE BENEFIT AGREEMENT
THIS AMENDED AND RESTATED SEVERANCE BENEFIT AGREEMENT (the "Agreement")
made and entered into as of the 1st day of May, 1996 (the "Effective Date"), by
and between Ball Corporation (the "Corporation") having its principal place of
business located at 345 South High Street, Muncie, Indiana, and ____________
(the "Executive").
WHEREAS, the Corporation desires that the Executive continue as an
employee of the Corporation in accordance herewith;
WHEREAS, effective as of August 1, 1994, and as amended on January 24,
1996, the Corporation and the Executive entered into a Severance Benefit
Agreement setting forth certain terms should the employment relationship of the
Executive terminate during the term of that agreement;
WHEREAS, the parties desire to enter into this Amended and Restated
Severance Benefit Agreement as of the Effective Date, setting forth certain
terms should the employment relationship of the Executive terminate during the
Term (as hereinafter defined), which amends and restates the Severance Benefit
Agreement effective as of August 1, 1994, and as amended on January 24, 1996.
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. Term of Agreement. The term shall commence as of the Effective Date,
and shall continue until the third anniversary of the Effective Date (the
"Term"); provided, however, that commencing on the first anniversary of the
Effective Date, and on each anniversary thereafter (each, an "Anniversary
Date"), the Term of this Agreement shall be extended automatically for one
additional year unless the Corporation shall have given notice to the Executive
no later than sixty (60) days prior to such Anniversary Date of its intent to
terminate this Agreement at the end of two years following such Anniversary
Date.
<PAGE>
2. Termination of Employment.
(a) Death or Disability. For purposes of this Agreement, the
Executive's employment shall terminate automatically upon the Executive's death
or "Disability" during the Term; provided, however, this provision shall have no
effect on whether the Executive's employment has terminated for purposes of the
Corporation's long-term disability plan or program then in effect. For purposes
of this Agreement, the Executive's employment may be terminated by reason of
"Disability," if, as a result of the Executive's incapacity due to physical or
mental illness, the Executive shall have been absent from the full-time
performance of his duties with the Corporation for six (6) consecutive months,
and within thirty (30) days after written "Notice of Termination" (as defined in
subsection 2(d) hereof) is given, the Executive shall not have returned to the
full-time performance of his duties.
(b) By the Corporation for Cause. The Corporation may
terminate the Executive's employment during the Term for "Cause" or for reasons
other than for Cause. For purposes of this Agreement, "Cause" shall mean
termination (i) upon the willful and continued failure of the Executive to
substantially perform his duties with the Corporation (other than any such
failure resulting from his incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
by the Executive or on account of "Constructive Termination" (as defined in
subsection 2(c) hereof)), after a written demand for substantial performance is
delivered to the Executive by the Corporation, which demand specifically
identifies the manner in which the Board of Directors of the Corporation (the
"Board") believes that the Executive has not substantially performed his duties,
or (ii) the willful engaging by the Executive in conduct that is demonstrably
and materially injurious to the Corporation, monetarily or otherwise. For
purposes of this subsection, no act, or failure to act, on the Executive's part
shall be deemed "willful" unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that such action or omission was
in the best interest of the Corporation.
(c) By the Executive for Constructive Termination. The
Executive may terminate his employment during the Term for "Constructive
Termination." For purposes of this Agreement, "Constructive Termination" shall
mean, without the Executive's express written consent, the occurrence of any one
or more of the following circumstances, unless such circumstances are corrected
prior to the "Date of Termination" (as defined in subsection 2(e) hereof)
specified in the Notice of Termination given in respect thereof:
(i) a reduction in the Executive's annual base
salary ("Annual Base Salary") or the failure of the Corporation to pay
to the Executive any portion or installment of deferred compensation
under any deferred compensation program of the Corporation within
fourteen (14) days of the date such compensation is due, except for
across-the-board salary reductions similarly affecting all similarly
situated executives of the Corporation;
<PAGE>
(ii) the failure by the Corporation to continue in
effect any compensation or benefit plan in which the Executive
participates as of the Effective Date that is material to the
Executive's total compensation, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made
with respect to such plan, or the failure by the Corporation to
continue the Executive's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in
terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, as existed as
of the Effective Date, except for across-the-board benefit reductions
similarly affecting comparably situated executives of the Corporation;
(iii) the failure by the Corporation to continue to
provide the Executive with benefits substantially similar to those
enjoyed by comparably situated executives under any of the
Corporation's life insurance, medical, health and accident or
disability plans in which the Executive was participating as of the
Effective Date, or the failure by the Corporation to provide the
Executive with the number of paid vacation days to which the Executive
is entitled on the basis of years of service with the Corporation in
accordance with the Corporation's normal vacation policy in effect as
of the Effective Date;
(iv) the failure of the Corporation to obtain
satisfactory agreement from any successor of the Corporation to assume
and agree to perform this Agreement, as contemplated by Section 6(b)
hereof; or
(v) any material breach by the Corporation of any
other material provision of this Agreement.
No circumstances other than those set forth in Sections 2(c)(i) through 2(c)(v)
above shall constitute Constructive Termination. In the event the Executive
believes such Constructive Termination exists, he shall, in advance of delivery
of any Notice of Termination, specify to the Corporation in writing the
circumstances alleged to constitute Constructive Termination, and provide the
Corporation with a reasonable period of time within which to cure such
circumstances.
Notwithstanding the foregoing, in the event that the Executive terminates his
employment during the Term for Constructive Termination following the occurrence
of a "Change in Control," as defined in Section 2 of the severance agreement as
amended and restated effective as of January 24, 1996 (the "Severance
Agreement") between the Corporation and the Executive, then in lieu of the
definition set forth in this Section 2(c) above, "Constructive Termination"
shall have the meaning ascribed to it in Section 4(iv) of the Severance
Agreement.
<PAGE>
(d) Notice of Termination. Any termination by the Corporation
for Cause, or by the Executive for Constructive Termination, shall be
communicated by Notice of Termination to the other party hereto given in
accordance with this Agreement. For purposes of this Agreement, a "Notice of
Termination," means a written notice that (i) indicates the specific termination
provision in this Agreement relied upon and (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated. The failure by the Executive or the Corporation to set forth in the
Notice of Termination any fact or circumstance that contributes to a showing of
Constructive Termination or Cause shall not waive any right of the Executive or
the Corporation hereunder or preclude the Executive or the Corporation from
asserting such fact or circumstance in enforcing the Executive's or the
Corporation's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Corporation for Cause, or by the
Executive for Constructive Termination, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Corporation other than for Cause,
the Date of Termination shall be the date on which the Corporation notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death or Disability (as the case may be).
(f) Termination Following Change in Control. Notwithstanding
subsection 3(a)(iii) hereof, in the case of termination, during the Term, by the
Corporation other than for Cause or by the Executive for Constructive
Termination, following the occurrence of a "Change in Control," as defined in
Section 2 of the Severance Agreement, the Executive shall be entitled to (i) a
benefit (the "Change in Control Benefit") equal to the greater of each of the
benefits otherwise provided in Section 3 hereof, and each of the benefits
provided under Section 5 of the Severance Agreement (without regard to the
"Gross-Up Payment" provided pursuant to Section 5(vi) of the Severance
Agreement), plus (ii) an additional amount (the "Severance Gross-Up Payment")
such that the net amount retained by the Executive, after deduction of any
Excise Tax (as defined in Section 5(vi)(a) of the Severance Agreement) on the
Change in Control Benefit, and any federal, state and local income and
employment taxes and Excise Tax on the Severance Gross-Up Payment, shall be
equal to the Change in Control Benefit. Such Severance Gross-Up Payment shall be
calculated pursuant to the procedures set out in Section 5(vi) of the Severance
Agreement. Notwithstanding the foregoing, in the event that the Executive
receives the Change in Control Benefit pursuant to this subsection 2(f) and the
Severance Gross-Up Payment pursuant to this subsection 2(f), the Executive shall
not be entitled to receive any additional benefits under the Severance
Agreement.
<PAGE>
3. Obligations of the Corporation upon Termination.
-----------------------------------------------
(a) Certain Terminations. During the Term, if the Corporation
shall terminate the Executive's employment other than for Cause or if the
Executive shall terminate his employment for Constructive Termination, or if the
Executive's employment shall terminate by reason of death or Disability
(termination in any such case referred to as "Termination"), then even though
such Termination may result in the Executive taking retirement:
(i) the Corporation shall pay to the Executive a
lump sum amount in cash equal to the sum of (A) the Executive's Annual
Base Salary through the Date of Termination to the extent not
theretofore paid, and (B) an amount equal to the Executive's annual
incentive compensation ("Annual Incentive Compensation"), calculated in
accordance with the provisions of the Corporation's Economic Value
Added Incentive Compensation Plan (the "Incentive Compensation Plan"),
or successor or other similar plan or plans in effect from time to
time, at target level, for the fiscal year that includes the Date of
Termination, multiplied by a fraction the numerator of which shall be
the number of days from the beginning of such fiscal year to and
including the Date of Termination and the denominator of which shall be
365. (The amounts specified in clauses (A) and (B) shall be hereinafter
referred to as the "Accrued Obligations".) The amounts specified in
this subsection 3(a)(i) shall be paid within thirty (30) days after the
Date of Termination; and
(ii) in the event of Termination by the Company other
than for Cause or by the Executive for Constructive Termination, then:
(A) the Company shall also pay to the Executive within thirty (30) days
of such Date of Termination a lump sum amount, in cash, equal to two
(2) times the sum of (x) the Executive's Annual Base Salary in effect
immediately prior to the Date of Termination, and (y) the Executive's
Annual Incentive Compensation, calculated based on the Target Incentive
Percent, as defined in the Incentive Compensation Plan, established for
the Executive, for the fiscal year in which the Date of Termination
occurs; (B) the Corporation shall also pay to the Executive the present
value (discounted at an interest rate equal to the prime rate
promulgated by the First Chicago - NBD and in effect as of the date of
payment, plus one percent (the "Prime Rate")) of all benefits under the
Corporation's Pension Plan for Salaried Employees, or any successor
plan thereto and any supplemental executive retirement plans to which
the Executive would have been entitled had he remained in employment
with the Corporation for an additional two (2) years, each, where
applicable, at the rate of Annual Base Salary, and using the same
assumptions and factors, in effect at the time Notice of Termination is
given, minus the present value (discounted at the Prime Rate) of the
benefits to which he is actually entitled under the above-mentioned
plans; (C) the Corporation shall continue, for a period of two (2)
years from the Date of Termination, medical and welfare benefits to the
Executive and/or the Executive's family at least equal to those that
would have been provided if the Executive's employment had not been
terminated, such benefits to be in accordance with the medical and
welfare benefit plans, practices, programs or policies (the "M&W
Plans") of the Corporation as in effect and applicable generally to
other executives of the Corporation and their families immediately
preceding the Date of Termination; provided, however, that if the
Executive becomes employed with another employer and is eligible to
receive medical or other welfare benefits under another
employer-provided plan, the benefits under the M&W Plans shall be
reduced to the extent comparable benefits are actually received by or
made available to the Executive without cost during the two (2) year
period following the Executive's Date of Termination (and any such
benefits actually received by the Executive shall be reported to the
Corporation by the Executive) and (D) the Corporation shall, for
purposes of payout elections, treat balances under the Corporation's
Deferred Compensation Plans for executives under age 55 at time of
Termination as if the Executive were 55 years of age; and
(iii) Subject to subsection 2(f) hereof, the
Corporation shall pay or otherwise perform its obligations to the
Executive under any benefit or other then-existing plan, policy,
practice or program of the Corporation, including those related to, but
not limited to, individual outplacement services in accordance with the
general custom and practice generally accorded to comparably situated
executives, severance compensation, vacation payments, stock options
and deferred compensation, as well as under any contract or agreement
entered into before or after the date hereof with the Corporation.
(b) Termination of the Executive for Cause or by the Executive
Other than for Constructive Termination. If the Executive's employment shall be
terminated for Cause during the Term, or if the Executive terminates employment
during the Term other than a termination for Constructive Termination, which he
shall not be prohibited from doing, the Corporation shall have no further
obligations to the Executive under this Agreement.
(c) Legal Expenses. The Corporation shall pay to the Executive
such reasonable legal fees and expenses incurred by the Executive in enforcing
the Executive's rights hereunder as a result of a Termination pursuant to
subsection 3(a)(ii) hereof, but only with respect to such claim or claims upon
which the Executive substantially prevails. Such payments shall be made within
fourteen (14) business days after delivery of the Executive's written request
for payment accompanied with such evidence of fees and expenses incurred as the
Corporation reasonably may require.
4. Mitigation. Except as provided in subsection 3(a)(ii)(C) hereof, in
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts (including amounts for damages
for breach) payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment.
<PAGE>
5. Confidential Information and Nondisparagement. The Executive shall
hold in a fiduciary capacity for the benefit of the Corporation all secret,
confidential or proprietary information, knowledge or data relating to the
Corporation or any of their affiliated companies, and their respective
businesses, that shall have been obtained by the Executive during the
Executive's employment by the Corporation or any of their affiliated companies
and that shall not have been or now or hereafter have become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). During the Term, and at all times thereafter,
regardless of the reason for termination of the Executive's employment, the
Executive shall not, without the prior written consent of the Corporation or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Corporation and
those designated by it. The Executive understands that during the Term, the
Corporation may be required from time to time to make public disclosure of the
terms or existence of this Agreement in order to comply with various laws and
legal requirements.
During the Term and at all times thereafter, the Executive shall not
disparage or criticize, orally or in writing, the performance of the
Corporation, the Board, any director of the Corporation, any specific former or
current officer of the Corporation or any operating company, any group president
or the Corporation's management group to any person; provided, however, that the
Executive may divulge, discuss or provide the information described in the
preceding paragraph to the extent that he is compelled by law to do so, and, in
such event, the Executive shall notify the Corporation immediately upon any
request or demand for information so that the Corporation may seek a protective
order or other appropriate remedy.
6. Successors.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Corporation shall not be assignable by the
Executive, except that this Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) The Corporation shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform this Agreement if no
such succession had taken place.
7. Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach of this Agreement shall be settled exclusively by
arbitration conducted before a panel of three arbitrators (one chosen by the
Executive, one by the Corporation and the third by the other two) in Muncie,
Indiana, in accordance with the rules of the American Arbitration Association
then in effect. The determination of the arbitrators shall be conclusive and
binding on the Corporation and the Executive, and judgment may be entered on the
arbitrators' award in any court having appropriate jurisdiction; provided,
however, that the Corporation shall be entitled to seek a restraining order or
injunction in any court of competent jurisdiction to prevent any continuation of
any violation of Section 5 of this Agreement.
<PAGE>
8. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without reference to
principles of conflict of laws.
(b) The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(c) This Agreement may not be amended, modified, repealed,
waived, extended or discharged except by an agreement in writing signed by the
party against whom enforcement of such amendment, modification, repeal, waiver,
extension or discharge is sought. No person, other than pursuant to a resolution
of the Board or a committee thereof, shall have authority on behalf of the
Corporation to agree to amend, modify, repeal, waive, extend or discharge any
provision of this Agreement or anything in reference thereto.
(d) The parties hereto acknowledge that the Executive's
employment relationship is employment at will, except for the Corporation's
obligations under this Agreement.
(e) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: _______________
- -------------------
_______________
_______________
If to Ball Corporation: Ball Corporation
- ---------------------- 345 South High Street
Muncie, IN 47305
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(g) The Corporation may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
<PAGE>
(h) The Executive's or the Corporation's failure to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Corporation
may have hereunder, including without limitation the right of the Executive to
terminate employment for Constructive Termination pursuant to subsection 2(c) of
this Agreement, or the right of the Corporation to terminate the Executive's
employment for Cause pursuant to subsection 2(b) of this Agreement, shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.
(i) This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Executive and, pursuant to due
authorization from its Board of Directors, the Corporation has caused this
Agreement to be executed as of the day and year first above written.
BALL CORPORATION
----------------------------
EXECUTIVE
----------------------------
<TABLE>
Exhibit 11.1
- ------------
Ball Corporation and Subsidiaries
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Millions of dollars except per share amounts)
<CAPTION>
March 31, April 2,
1996 1995
------------------ ------------------
<S> <C> <C>
Earnings per Common Share - Assuming No Dilution
- ------------------------------------------------
Net income $ 5.5 $ 16.3
Preferred dividends, net of tax (0.8) (0.8)
------------------ ------------------
Net earnings attributable to common shareholders $ 4.7 $ 15.5
================== ==================
Weighted average number of common shares outstanding (000s) 30,067 29,962
================== ==================
Net earnings per share of common stock $ 0.16 $ 0.52
================== ==================
Earnings per Share - Assuming Full Dilution
- -------------------------------------------
Net income $ 5.5 $ 16.3
Adjustments for deemed ESOP cash contribution in lieu of Series B ESOP
Preferred dividend (0.6) (0.6)
------------------ ------------------
Net earnings attributable to common shareholders $ 4.9 $ 15.7
================== ==================
Weighted average number of common shares outstanding (000s) 30,067 29,962
Dilutive effect of stock options 128 302
Common shares issuable upon conversion of Series B ESOP Preferred stock
2,059 2,107
------------------ ------------------
Weighted average number shares applicable to fully diluted earnings per
share 32,254 32,371
================== ==================
Fully diluted earnings per share $ 0.15 $ 0.49
================== ==================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27.1
- ------------
BALL CORPORATION
FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND THE UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF
MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 18,800
<SECURITIES> 0
<RECEIVABLES> 242,600
<ALLOWANCES> 0
<INVENTORY> 370,800
<CURRENT-ASSETS> 721,300
<PP&E> 1,210,400
<DEPRECIATION> 534,700
<TOTAL-ASSETS> 1,798,900
<CURRENT-LIABILITIES> 553,000
<BONDS> 456,800
0
14,700
<COMMON> 230,800
<OTHER-SE> 336,900
<TOTAL-LIABILITY-AND-EQUITY> 1,798,900
<SALES> 462,000
<TOTAL-REVENUES> 462,000
<CGS> 424,500
<TOTAL-COSTS> 424,500
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,400
<INCOME-PRETAX> 5,000
<INCOME-TAX> 1,700
<INCOME-CONTINUING> 5,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,500
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.15
</TABLE>
