<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BALL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
LOGO
BALL CORPORATION
345 SOUTH HIGH STREET, MUNCIE, INDIANA 47305
-----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 23, 1997
-----------
The Annual Meeting of Shareholders of Ball Corporation will be held in the
auditorium at the Corporation's offices, 345 South High Street, Muncie,
Indiana, on Wednesday, April 23, 1997, at 9:00 a.m. (EST) for the following
purposes:
1. To elect four directors for three-year terms expiring at the Annual
Meeting of Shareholders to be held in 2000;
2. To ratify the appointment of the firm of Price Waterhouse LLP as
independent public accountants for 1997;
3. To act on a proposal to approve the 1997 Stock Incentive Plan; and
4. 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 3,
1997, are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
A Proxy Statement appears on the following pages. A copy of the Annual
Report for 1996 is being mailed to you with this Notice of Annual Meeting of
Shareholders and Proxy Statement.
By Order of the Board
of Directors
Elizabeth A. Overmyer
Corporate Secretary
March 17, 1997
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 17, 1997
-----------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 23, 1997
-----------
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 23, 1997, 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 3, 1997, there were outstanding and
entitled to vote 30,547,685 shares of Common Stock (including the associated
preferred stock purchase rights under the Rights Agreement dated as of January
24, 1996, 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
Corporation's directors, and its officers and employees (active and retired)
currently own approximately 24 percent of the outstanding Common Stock of Ball
Corporation, which represents approximately 22 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 6 percent
additional share votes. This results in a total holding by Corporation-related
interests of approximately 28 percent of the total share vote.
Based on Schedule 13G filings received to date, the following table
indicates the only beneficial owners of more than 5 percent of the
Corporation's outstanding Common Stock:
<TABLE>
<CAPTION>
TITLE SHARES PERCENT
OF NAME AND ADDRESS OF BENEFICIALLY OF
CLASS BENEFICIAL OWNER OWNED CLASS
------ ------------------------ --------------- -------
<S> <C> <C> <C>
Common Reich & Tang Asset 1,752,987 5.74
Management L.P. (shared voting
600 Fifth Avenue and dispositive
New York, New York 10020 power)
</TABLE>
<PAGE>
The following table lists the beneficial ownership, as of the close of
business on March 3, 1997, 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 SHARES
OF NAME OF BENEFICIALLY
CLASS BENEFICIAL OWNER OWNED(1) PERCENT OF CLASS
------ ---------------- ------------ ----------------
<S> <C> <C> <C>
Common Frank A. Bracken 497,234(2) 1.63
Common Howard M. Dean 3,250(3) .01
Common Duane E. Emerson 83,220(4) .27
Common John T. Hackett 2,000 .01
Common Donovan B. Hicks 66,383(5) .22
Common R. David Hoover 83,630(6) .27
Common John F. Lehman 5,000 .02
Common George McFadden 158,000(7) .52
Common Ruel C. Mercure, Jr. 11,000 .04
Common Jan Nicholson 8,000 .03
Common David B. Sheldon 80,440(8) .26
Common George A. Sissel 170,260(9) .56
Common William P. Stiritz 4,000 .01
Common All of the above and present executive
officers as a group (18) 1,283,503 4.20
</TABLE>
(Footnotes)
1. Full voting and dispositive power, unless otherwise noted.
2. Includes 236,518 shares held in trust for another family member for which
Mr. Bracken, as co-trustee, has sole voting and shared investment power,
and 6,220 shares owned by his wife, as to which he disclaims beneficial
ownership.
3. Includes 250 shares owned by Mr. Dean's wife, as to which he disclaims
beneficial ownership.
4. Includes 5,683 shares owned by Mr. Emerson's wife, as to which he disclaims
beneficial ownership, and 51,339 shares which he may acquire during the
next 60 days upon the exercise of stock options. Mr. Emerson retired as an
officer effective January 31, 1997.
5. Includes 8,500 shares owned by Mr. Hicks' wife, as to which he disclaims
beneficial ownership, and 40,093 shares which he may acquire during the
next 60 days upon the exercise of stock options. Mr. Hicks retired
effective December 31, 1996.
6. Includes 1,327 shares held by Mr. Hoover's wife and 613 shares held by Mr.
Hoover's wife as custodian for their son, all as to which he disclaims
beneficial ownership, and 66,006 shares which he may acquire during the
next 60 days upon the exercise of stock options.
7. Includes 120,000 shares held in family trusts for which Mr. McFadden, as
co-trustee, has shared voting and investment power, and 37,000 shares owned
by his wife, as to which he disclaims beneficial ownership.
8. Includes 5,000 shares owned by Mr. Sheldon's wife, as to which he disclaims
beneficial ownership, and 69,508 shares which he may acquire during the
next 60 days upon the exercise of stock options. Mr. Sheldon retired
effective February 28, 1997.
9. Includes 10,000 shares owned by Mr. Sissel's wife, as to which he disclaims
beneficial ownership, and 138,678 shares which he may acquire during the
next 60 days upon the exercise of stock options.
ELECTION OF DIRECTORS
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 23, 1997, four persons are to be elected to serve as
directors until 2000, 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, John T. Hackett, R. David Hoover and Jan Nicholson to hold office as
directors of the Corporation until the 2000 Annual Meeting of Shareholders,
or, in each case until his respective successor is elected and 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.
All directors in Class I and two of the directors in Class II, whose terms
have not expired, were previously elected by the shareholders. Mr. Mercure was
elected by the Board of Directors to serve as a director beginning September
25, 1996. Howard M. Dean, John T. Hackett and Jan Nicholson, three of the
director nominees for Class III, were previously elected by the shareholders.
The other nominee for Class III, R. David Hoover, was elected by the Board of
Directors to serve as a director beginning October 23, 1996, and to stand for
reelection by the shareholders on April 23, 1997.
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
nonvotes are considered neither votes "for" nor "against." Proxies may not be
voted for a greater number of persons than the four 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.
2
<PAGE>
DIRECTOR NOMINEES AND CONTINUING DIRECTORS
To Be Elected for a Term of Three Years Until the 2000 Annual Meeting (Class
III)
Chairman of the Board and Director since 1984. Member,
Chief Executive Officer, Executive, Human Resources
Dean Foods Company, and Nominating Committees.
Franklin Park, Illinois,
since January 1989; Presi-
dent and Chief Executive
Officer, 1987 to 1989. Age
59.
Mr. Dean is a director of
Dean Foods Company, Franklin
Park, Illinois; Nalco Chemi-
cal Company, Naperville, Il-
linois; and Yellow Corpora-
tion, Overland Park, Kansas.
LOGO
HOWARD M. DEAN
Managing General Partner, Director since 1994. Member,
CID Equity Partners, Indi- Executive, Human Resources
anapolis, Indiana, since and Nominating Committees.
1991; Vice President of
Finance and Administra-
tion, Indiana University,
Bloomington, Indiana, 1989
to 1991. Prior to 1989,
he served as Executive
Vice President, Chief Fi-
nancial Officer and Direc-
tor of Cummins Engine Com-
pany, Columbus, Indiana.
Age 64.
Mr. Hackett is a director of
Irwin Financial Corporation,
Columbus, Indiana; Meridian
Insurance Group, Inc., Indi-
anapolis, Indiana; and Wa-
bash National Corp., Lafay-
ette, Indiana.
LOGO
JOHN T. HACKETT
Executive Vice President, Director since October 1996.
Chief Financial Officer Member, Finance Committee.
and Treasurer, Ball Corpo-
ration, since April 1996;
Executive Vice President
and Chief Financial Offi-
cer, July 1995 to April
1996; Senior Vice Presi-
dent and Chief Financial
Officer, August 1992 to
July 1995; Vice President
and Treasurer, September
1988 to August 1992; vari-
ous financial positions
since 1970. Age 51.
Mr. Hoover is a director of
ANB Corporation, Muncie, In-
diana, and Datum, Inc., Ir-
vine, California.
LOGO
R. DAVID HOOVER
Managing Director of Capi- Director since 1994. Member,
tal Markets Assurance Cor- Audit and Finance Commit-
poration (CapMAC), New tees.
York, New York, since May
1994; Vice President and
Manager of Northeast
Department for Citicorp
Real Estate, New York, New
York, 1990 to 1994. Age
51.
Ms. Nicholson is a director
of Rubbermaid Incorporated,
Wooster, Ohio.
LOGO
JAN NICHOLSON
3
<PAGE>
To Continue in Office Until the 1998 Annual Meeting (Class I)
Of Counsel, Bingham Sum- Director since 1995. Member,
mers Welsh & Spilman, At- Audit, Executive and Nomi-
torneys at Law, Indianapo- nating Committees.
lis, Indiana, since June
1994; Deputy Secretary,
U.S. Department of the In-
terior, 1989 to 1993;
Chairman of the Board,
Ball-InCon Glass Packaging
Corp., 1987 to 1989. Vari-
ous corporate positions,
1972 to 1987. Age 62.
Mr. Bracken is a director of
First Merchants Corporation,
Muncie, Indiana.
LOGO
FRANK A. BRACKEN
Chairman, J. F. Lehman & Director since 1987. Member,
Company, New York, New Finance, Human Resources and
York, since November 1990; Nominating Committees.
Chairman of the Board,
Sperry Marine Inc., Char-
lottesville, Virginia, No-
vember 1993 to May 1996;
Managing Director, Invest-
ment 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 54.
LOGO
JOHN F. LEHMAN
Chairman, President and Director since 1995. Member,
Chief Executive Officer, Executive Committee.
Ball Corporation, since
April 1996; President and
Chief Executive Officer,
April 1995 to April 1996;
Acting President and Chief
Executive Officer, May
1994 to April 1995; Senior
Vice President, Corporate
Affairs; Corporate Secre-
tary and General Counsel
1993 to 1995; Senior Vice
President, Corporate Sec-
retary and General Coun-
sel, 1987 to 1993; Vice
President, Corporate Sec-
retary and General Coun-
sel, 1981 to 1987; various
corporate positions, 1970
to 1981. Age 60.
Mr. Sissel is a director of
First Merchants Corporation,
Muncie, Indiana.
LOGO
GEORGE A. SISSEL
4
<PAGE>
To Continue in Office Until the 1999 Annual Meeting (Class II)
General Partner, McFadden Director since April 1996.
Brothers, New York, New Member, Audit and Finance
York, since 1978. Age 56. Committees.
Mr. McFadden is a director
of Triangle Pharmaceuticals,
Inc., Durham, North
Carolina.
LOGO
GEORGE MCFADDEN
Chairman, WITI Corpora- Director since September
tion, Boulder, Colorado, 1996. Member, Audit and Fi-
since 1991; Member of the nance Committees.
faculty, University of
Colorado, 1988 to 1996;
Owner, Colorado Venture
Management, 1980 to 1988;
various executive aero-
space positions, Ball Cor-
poration, 1956 to 1980.
Age 65.
Mr. Mercure is a director of
Applied Magnetics Corp.,
Goleta, California, and IMEX
Medical Systems, Inc., Gold-
en, Colorado.
LOGO
RUEL C. MERCURE,
JR.
Chairman, President and Director since 1983. Member,
Chief Executive Officer, Audit, Human Resources and
Ralston Purina Company, Nominating Committees.
St. Louis, Missouri, since
January 1982. Age 62.
Mr. Stiritz is a director of
Ralston Purina Company, An-
gelica Corp., Ralcorp Hold-
ings, Inc., Reinsurance
Group of America, Inc., and
May Department Stores Co.,
all of St. Louis, Missouri,
and Interstate Bakeries Cor-
poration, Kansas City, Mis-
souri.
LOGO
WILLIAM P.
STIRITZ
5
<PAGE>
CERTAIN COMMITTEES OF THE BOARD
Among the standing committees of the Board of Directors are the Audit,
Nominating and Human Resources 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. Current members of the Audit Committee, none
of whom are employees of the Corporation, are Messrs. Stiritz (Chairman),
Bracken, McFadden and Mercure, and Ms. Nicholson. The Audit Committee met
three times during 1996.
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. Current members of the Nominating Committee are Messrs.
Bracken (Chairman), Dean, Hackett, Lehman and Stiritz. The Nominating
Committee met twice during 1996. 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.
Human Resources Committee:
The duties of the Human Resources 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, 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. Current
members of the Human Resources Committee are Messrs. Dean (Chairman), Hackett,
Lehman and Stiritz. The Human Resources Committee met four times during 1996.
BOARD MEETINGS
The Board of Directors held eight meetings during 1996. 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 22, 1998,
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 17, 1997, for inclusion in the Corporation's 1998 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 Executive Officers) in office
on December 31, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ---------------------
RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING COMPEN-
POSITION YEAR SALARY BONUS(/1/) COMPENSATION AWARDS OPTIONS SATION(/2/)
------------------- ---- -------- ---------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
George A. Sissel 1996 $550,000 $151,948 100,000 $114,323
Chairman, 1995 440,496 391,409 25,000 104,809
President and
Chief Executive 1994 258,000 408,070 23,000 55,279
Officer(/3/)
Donovan B. Hicks 1996 218,181 347,465(/4/) 10,000 57,992
Group Vice 1995 205,710 315,746 8,000 49,735
President; CEO,
Ball Aerospace & 1994 195,000 296,966 8,000 51,901
Technologies Corp.
R. David Hoover 1996 257,876 73,108 40,000 107,217
Executive Vice 1995 207,749 189,761 8,000 57,093
President,
Chief Financial 1994 160,000 225,160 $131,875 8,000 44,936
Officer and
Treasurer
David B. Sheldon 1996 257,576 22,792 40,000 100,834
Executive Vice 1995 229,000 177,075 8,000 79,867
President
1994 181,500 277,350 8,000 47,836
Duane E. Emerson 1996 200,640 58,954 30,000 49,158
Senior Vice 1995 182,320 170,504 8,000 38,722
President and
Chief 1994 168,500 237,122 131,875 8,000 39,507
Administrative
Officer
</TABLE>
- -------------------
(1) As noted in the Report of the Human Resources Committee, Ball Corporation
uses the term Incentive Compensation rather than Bonus. Also noted in the
Report of the Human Resources 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.
(2) The amounts shown in the All Other Compensation column for 1996 consist of
the following:
Mr. Sissel--above-market interest on deferred compensation account,
$46,853; company contribution to Employee Stock Ownership Plan, $1,331;
Supplemental Long-Term Disability premium, $2,300; compensation
attributable to the split-dollar life insurance program, $63,839.
Mr. Hicks--above-market interest on deferred compensation account, $32,496;
company contribution to Employee Stock Ownership Plan, $1,331; Supplemental
Long-Term Disability premium, $2,300; compensation attributable to the
split-dollar life insurance program, $21,865.
Mr. Hoover--above-market interest on deferred compensation account,
$10,355; company contribution to Employee Stock Ownership Plan, $1,331;
Supplemental Long-Term Disability premium, $2,300; compensation
attributable to the split-dollar life insurance program, $93,231.
Mr. Sheldon--above-market interest on deferred compensation account,
$15,191; company contribution to Employee Stock Ownership Plan, $1,331;
company contribution to Employee Stock Purchase Plan, $92; Supplemental
Long-Term Disability premium, $2,300; compensation attributable to the
split-dollar life insurance program, $81,920.
Mr. Emerson--above-market interest on deferred compensation account,
$28,371; company contribution to Employee Stock Ownership Plan, $1,331;
Supplemental Long-Term Disability premium, $2,300; compensation
attributable to the split-dollar life insurance program, $17,156.
(3) Mr. Sissel--on April 26, 1995, was elected President and Chief Executive
Officer, and on April 24, 1996, was elected to the additional position of
Chairman of the Board of Directors.
(4) Mr. Hicks' bonus amount in 1996 includes an Aerospace Retention Agreement
Bonus in the amount of $80,000.
7
<PAGE>
LONG-TERM INCENTIVE COMPENSATION
STOCK OPTION GRANTS AND EXERCISES
The following tables present certain information for the Named Executive
Officers relating to stock option grants and exercises during 1996 and, in
addition, information relating to the valuation of unexercised stock options:
STOCK OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL
OPTIONS GRANTED EXERCISE GRANT DATE
OPTIONS TO EMPLOYEES PRICE EXPIRATION PRESENT
NAME GRANTED IN FISCAL 1996 (PER SHARE) DATE VALUE(/3/)
---- ------- ------------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
George A. Sissel........ Tier A(/1/) 25,000 4.22 $24.375 07/23/06 $216,750
Tier B(/2/) 75,000 12.67 24.375 07/23/06 642,000
Donovan B. Hicks........ Tier A(/1/) 10,000 1.69 24.375 07/23/06 86,700
R. David Hoover......... Tier A(/1/) 10,000 1.69 24.375 07/23/06 86,700
Tier B(/2/) 30,000 5.07 24.375 07/23/06 256,800
David B. Sheldon........ Tier A(/1/) 10,000 1.69 24.375 07/23/06 86,700
Tier B(/2/) 30,000 5.07 24.375 07/23/06 256,800
Duane E. Emerson........ Tier A(/1/) 10,000 1.69 24.375 07/23/06 86,700
Tier B(/2/) 20,000 3.38 24.375 07/23/06 171,200
</TABLE>
- -------------------
(1) Tier A options were granted July 23, 1996, and are exercisable beginning
one year after grant and each year thereafter in 25 percent increments.
(2) Tier B options were granted July 23, 1996, and are exercisable after the
Corporation's stock has closed for ten consecutive trading days on the New
York Stock Exchange Composite Listing at or above $50 per share.
(3) Tier A options have an estimated weighted fair value, at date of grant, of
$8.67 per share based on the Black-Scholes option pricing model adapted
for use in valuing compensatory stock options under Statement of Financial
Accounting Standards No. 123. Under the same methodology, Tier B options
have an estimated fair value, at date of grant, of $8.56 per share. Values
under the Black-Scholes model were estimated using the following weighted
average assumptions: expected volatility of 24.26 percent; risk-free
interest rate of 6.77 percent; expected life of 6.96 years; dividend yield
of 2.33 percent; and no adjustment for 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.
AGGREGATED STOCK OPTION EXERCISES IN 1996
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES HELD AT DECEMBER 31, 1996 AT DECEMBER 31, 1996(/1/)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George A. Sissel........ -0- -0- 129,178 56,500 $186,794 $46,875
Donovan B. Hicks........ -0- -0- 40,093 -0- 56,018 -0-
R. David Hoover......... -0- -0- 60,756 21,250 89,311 18,750
David B. Sheldon........ -0- -0- 64,258 21,250 87,455 18,750
Duane E. Emerson........ -0- -0- 46,089 21,250 46,742 18,750
</TABLE>
- -------------------
(1) Based on the closing price on the New York Stock Exchange--Composite
Transactions of the Corporation's Common Stock on December 31, 1996, of
$26.25.
8
<PAGE>
LONG-TERM CASH INCENTIVE
The following table presents information for the Named Executive Officers
concerning the Long-Term Cash Incentive Plan and, in addition, information
relating to the estimated future payouts.
LONG-TERM CASH INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
(AS AMENDED OCTOBER 23, 1996)
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PERFORMANCE PAYOUTS(/2/)
NUMBER OF PERIOD UNTIL ---------------------------
NAME UNITS(/1/) MATURATION THRESHOLD TARGET MAXIMUM
- ---- ---------- --------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
George A. Sissel......... 0 1/1/95-12/31/97 $142,677 $293,747 $587,493
Donovan B. Hicks......... 0 1/1/95-12/31/97 39,550 81,427 162,855
R. David Hoover.......... 0 1/1/95-12/31/97 70,074 144,269 288,539
David B. Sheldon......... 0 1/1/95-12/31/97 49,235 101,366 202,733
Duane E. Emerson......... 0 1/1/95-12/31/97 43,155 88,849 177,698
</TABLE>
- -------------------
(1) Participants are not awarded a number of units. Rather, awards are
expressed as a percentage of average annual salary and "bonus" at target
during the performance period.
(2) Estimated future payouts ("earned awards") are based on the achievement of
total return performance, in terms of annual average compound rate of
growth in shareholder return, i.e., stock price appreciation plus
dividends, relative to total return performance of the S&P Industrials
Index over three-year cycles. The total return performance comparison for
the cycle ending December 31, 1997, will be made by comparing average
daily closing prices of and dividends on the Corporation's Common Stock in
the third year of the cycle with the average daily closing stock prices
and dividends in the year 1996, as compared with those for the S&P
Industrials Index for those years.
RETIREMENT PLANS
The following table, for purposes of illustration, indicates the amounts of
annual retirement income which would be payable in 1997, to the Named
Executive Officers at normal retirement age 65. The calculation of retirement
benefits under the plans generally is based upon average earnings (base salary
only) 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>
$150,000 $ 31,723 $ 42,298 $ 52,872 $ 63,446 $ 74,021
200,000 42,973 57,298 71,622 85,946 100,271
250,000 54,223 72,298 90,372 108,446 126,521
300,000 65,473 87,298 109,122 130,946 152,771
350,000 76,723 102,298 127,872 153,446 179,021
400,000 87,973 117,298 146,622 175,946 205,271
450,000 99,223 132,298 165,372 198,446 231,521
500,000 110,473 147,298 184,122 220,946 257,771
550,000 121,723 162,298 202,872 243,446 284,021
</TABLE>
The Corporation's qualified salaried retirement plans provide defined
benefits determined by base salary and years of service. The Corporation has
also adopted a nonqualified supplemental executive retirement plan which
provides benefits otherwise not payable under the qualified pension plan to
the extent that the Internal Revenue Code limits the pension to which an
executive would be entitled under the qualified pension plan. The benefit
amounts shown in the above table reflect the amount payable as a straight life
annuity and include amounts payable under the supplemental retirement plan.
Certain key employees, including the Named Executive Officers, participate in
a split-dollar life insurance plan and supplemental retirement benefits cease
thirty days following the termination of the Corporation's interest in the
participant's split-dollar policy.
Average Annual Earnings used under the pension formula to calculate
benefits, together with years of benefit service, as of December 31, 1996, for
the Named Executive Officers are: George A. Sissel, $294,924 (26.33 years);
Donovan B. Hicks, $196,292 (35.25 years); David B. Sheldon, $201,667 (26.00
years); R. David Hoover, $180,807 (26.54 years); and Duane E. Emerson,
$171,561 (23.33 years).
9
<PAGE>
TERMINATION OF EMPLOYMENT AND 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 Executive Officers. Under the
trust, "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 trust. The trust was funded as of December 31, 1996, with the net equity
of company-owned life insurance policies on the lives of various employees,
including participants in the plans and with a Letter of Credit that ensures
that the trust will be fully funded in the event of a change in control.
Approximately $19.3 million of net equity under the policies would be
available currently to cover the approximately $36.0 million of current
deferred compensation account balances of the beneficiaries of the trust. In
the event of a change in control, up to an additional $32.0 million would be
available under the trust pursuant to the Letter of Credit. If the funds set
aside in the trust would be insufficient to pay amounts due the beneficiaries,
then the Corporation would remain obligated to pay those amounts. In the event
of the insolvency of the Corporation, the funds in the trust would be
available to satisfy the claims of the creditors of the Corporation. The trust
was 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 certain key
employees, including the active Named Executive Officers. The agreements are
effective on a year-to-year basis and would provide severance benefits in the
event of both a change in control of the Corporation and an actual or
constructive termination of employment within two years after a change in
control. Under the agreements, a "change in control" can occur by virtue, in
general terms, of an acquisition by any person of 30 percent or more of the
Corporation's voting shares; a merger in which the shareholders of the
Corporation before the merger own 50 percent or less of the Corporation's
voting shares after the merger; shareholder approval of a plan of liquidation
or to sell or dispose of substantially all of the assets of the Corporation;
and if, during any two-year period, directors at the beginning of the period
fail to constitute a majority of the Board of Directors. "Actual termination"
is any termination other than by death or disability, by the Corporation for
cause, or by the executive other than for constructive termination.
"Constructive termination" means, in general terms, any significant reduction
in duties, compensation or benefits or change of office location from those in
effect immediately prior to the change in control, unless agreed to by the
executive. The severance benefits payable, in addition to base salary and
incentive compensation accrued through the date of termination, shall include
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. In the
event such benefits, together with other benefits paid because of a change in
control, would be subject to the excise tax imposed under Section 280G of the
Internal Revenue Code, the Corporation would reimburse the executive for such
excise taxes paid, together with taxes incurred as a result of such
reimbursement. The agreements were not entered into in response to any effort
to acquire control of the Corporation, and the Board is not aware of any such
effort.
The Corporation has severance benefit agreements with certain key employees,
including the active Named Executive Officers. The agreements are effective
for an initial three-year term. On the first anniversary of their effective
date and on each anniversary date thereafter, the term is extended for one
additional year unless notice of non-extension is given. The agreements
provide severance benefits in the event of an actual or constructive
termination of employment. "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 compensation or benefits, 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 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. Upon the occurrence of a change in
control as
10
<PAGE>
defined in the change in control severance agreements, the executive is
entitled to the greater of each of the benefits provided in this agreement and
each of the benefits provided in the change in control severance agreement,
including reimbursement thereunder resulting from excise taxes which may be
incurred as a result of such payments. (Mr. Hicks also had a similar severance
benefit agreement, but that agreement was for a fixed term of two years and
provided for payment of a retention bonus at the expiration of the two-year
term provided he was employed by the Corporation or a successor owner of the
aerospace business, or in the event of actual or constructive termination
prior to expiration of the agreement. That agreement expired on June 22, 1996,
and Mr. Hicks received payment of the retention bonus which is reported in the
accompanying Summary Compensation Table.)
The Corporation entered into a consulting agreement with Donovan B. Hicks,
effective following his retirement on December 31, 1996, as Group Vice
President; CEO, Ball Aerospace & Technologies Corp. The agreement is to remain
in effect until such time as it is terminated by either Mr. Hicks or Ball
Corporation. Pursuant to this agreement, Mr. Hicks will receive a basic
retainer of $3,500 per month in consideration for consulting services.
Additional services in excess of predetermined levels may be authorized from
time to time in amounts ranging from $1,200 to $1,500 per day, depending on
the assignment. These amounts are payable in addition to such amounts as Mr.
Hicks is entitled to receive under the Corporation's plans for retired
employees and pursuant to short- and long-term incentives previously granted
to him.
The Corporation entered into an agreement with David B. Sheldon, effective
following his retirement on March 1, 1997, as Executive Vice President. Mr.
Sheldon will be paid $35,417 per month through December 31, 1998, in
consideration for consulting services of up to 100 hours per month and for not
engaging in activities that compete with the packaging business of the
Corporation through September 30, 1999. This amount is payable in addition to
such amounts as Mr. Sheldon is entitled to receive under the Corporation's
plans for retired employees and pursuant to short- and long-term incentives
previously granted to him.
The Corporation entered into an agreement with Duane E. Emerson, effective
February 1, 1997. Mr. Emerson commenced part-time employment on February 1,
1997, as a consultant to the Chairman, President and Chief Executive Officer,
and not as a corporate officer. Mr. Emerson will provide consulting services
following his retirement on July 31, 1997, and continuing until December 31,
1997. During this period, Mr. Emerson will be paid $14,340 per month in
consideration for consulting services of up to 80 hours per month and for not
engaging in activities that compete with the packaging business of the
Corporation. This amount is payable in addition to such amounts as Mr. Emerson
is entitled to receive under the Corporation's plans for retired employees and
pursuant to short- and long-term incentives previously granted to him.
DIRECTORS' COMPENSATION
Directors who are not employees of the Corporation receive as compensation
an annual retainer of $22,000. Nonemployee 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. McFadden and Mercure each received a 1,000-share award
upon election as directors on April 24, 1996, and September 25, 1996,
respectively, and Mr. Stiritz received a 1,000-share award upon re-election as
a director on April 24, 1996. 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
11
<PAGE>
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.
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
OVERALL POLICY
The Human Resources 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. 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
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.
ANNUAL COMPENSATION
The Committee generally intends that target total annual compensation,
defined as the sum of base salary and incentive compensation at target, for
each of the Corporation's executive officers will approximate the 50th
percentile of what comparable companies are paying. The target total annual
compensation level 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
annual compensation is similarly determined in relation to the market's 50th
percentile, the Committee's assessment of individual performance and the
financial performance of the Corporation. For the purpose of determination of
target total annual 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
annual compensation for each of the executives named in the accompanying
Executive Compensation Summary, including the Chief Executive Officer,
approximated the 50th percentile.
After the Committee has established the appropriate target total annual
compensation for an executive, base salary is determined by dividing target
total annual compensation by the sum of one plus the executive's incentive
compensation participation rate. When target performance as defined in the EVA
Incentive Compensation Plan (the "EVA Plan"), discussed below, is attained,
the executive will be paid a total annual 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 annual 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 55 to 60 percent, for
example, Ball Corporation could be expected to use a rate of 65 percent,
thereby causing target total annual compensation to be composed of a lower
base salary and a higher at-risk incentive compensation.
12
<PAGE>
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 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 because it has been demonstrated 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 incentive 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 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 Compensation Table, the portion of target
total annual 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,
1995, actual incentive compensation for the Named Executive Officers was above
target for each named executive, reflecting the above-target performance. The
incentive compensation levels for 1996 reflect the below-target performance of
the Corporation as a whole and for the packaging operations. The aerospace and
technologies operations continued to perform above target levels in 1996.
Incentive compensation for Messrs. Sissel, Hoover and Emerson was based
entirely on the performance of the Corporation as a whole, as measured by the
EVA Plan, while the other named officers' incentive compensation levels were
based 70 percent on the performance of their areas of profit responsibility
and 30 percent on the performance of the Corporation as a whole.
LONG-TERM INCENTIVE PROGRAM
The Corporation's long-term incentive program consists of two types of
plans, the calculation of which is targeted at the 50th percentile of market,
both based upon the performance of Ball Corporation's Common Stock. The first
type comprises 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.
The second part of the Corporation's long-term incentive program is the
Long-Term Cash Incentive Plan. This plan is limited in its participation to
selected key executives, including the Named Executive Officers, who
contribute materially to the success of Ball Corporation and its subsidiaries
through their leadership skills, vision and dedication. The plan provides cash
awards on the basis of Ball's total shareholder return performance, i.e.,
stock price appreciation plus dividends, over three-year performance cycles
which begin at the start of each calendar year, relative to targets determined
by the Committee during the cycles ended December 31, 1995 and 1996, and the
S&P Industrials Index companies for later cycles. The performance requirements
for the cycle ending December 31, 1997, however, will be based on total
shareholder return in relation to the base year of 1996. The first
opportunities for payout under this plan were based on the periods August 1,
1994, through December 31, 1995, and August 1, 1994, through December 31,
1996, and resulted in no payout, and therefore no compensation under this plan
is reported in the accompanying Summary Compensation Table.
13
<PAGE>
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 federal income
tax deduction cap.
The foregoing report has been furnished by the following directors and
members of the Human Resources Committee:
Howard M. Dean, Chairman
John T. Hackett
John F. Lehman
William P. Stiritz
14
<PAGE>
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, The Dow Jones
Containers & Packaging Index and a peer group of companies selected for the
five-year period ending December 31, 1996.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG BALL CORPORATION
COMMON, S&P COMPOSITE 500, DOW JONES CONTAINERS & PACKAGING AND SELECTED PEER
ISSUER GROUP
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION>
Measurement Period S&P DJ CONTAINERS
(Fiscal Year Covered) Ball Corporation 500 INDEX PEER GROUP w/BALL & PACKAGING
- --------------------- ---------------- --------- ----------------- -------------
<S> <C> <C> <C> <C>
Measurement Pt-
12/31/91 $100 $100 $100 $100
FYE 12/31/92 $ 96 $108 $112 $110
FYE 12/31/93 $ 97 $118 $135 $105
FYE 12/31/94 $104 $120 $134 $104
FYE 12/31/95 $ 93 $165 $169 $113
FYE 12/31/96 $ 90 $203 $217 $142
</TABLE>
Notes: Assumes $100 invested on December 31, 1991.
Total return assumes reinvestment of dividends.
Peer group and Dow Jones Containers & Packaging Index total return
weighted by market capitalization.
The Peer Issuer Group was selected from among 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 International Ltd.
This year, an additional index, Dow Jones Containers & Packaging, has been
added. It provides information aggregating the performance of the following
companies: Ball Corporation; Crown Cork & Seal Company, Inc.; Bemis Company,
Inc.; Owens-Illinois, Inc.; Sonoco Products Company; Stone Container
Corporation and Temple-Inland, Inc. This index is provided to reflect Ball
Corporation's performance against packaging businesses, its principal industry
group. This index will be included in future years as well.
15
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS AND CERTAIN
OTHER RELATIONSHIPS AND RELATED TRANSACTIONS
During 1996, Price Waterhouse LLP 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 LLP for all audit
and, except for minor assignments, non-audit services. Representatives of
Price Waterhouse LLP 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 LLP as independent public
accountants for 1997. If the appointment of Price Waterhouse LLP is not
ratified by the shareholders, the Audit Committee will select another firm of
independent public accountants for 1997.
PROPOSAL TO APPROVE THE BALL CORPORATION 1997 STOCK INCENTIVE PLAN
The Board of Directors recommends approval of the 1997 Stock Incentive Plan
in the form attached as Exhibit A.
The Directors believe that the Corporation and its shareholders have
benefited substantially over the years from the use of stock options as an
effective means to secure, motivate and retain competent key personnel. Such
plans, beginning with the first plan in 1958, have been significant factors in
the success and growth of the Corporation. The 1972, 1975, 1980 and 1983 Stock
Option Plans have expired. The 1988 Stock Option and Stock Appreciation Rights
Plan reserved an aggregate of 1,000,000 shares of Common Stock for issuance to
key employees and has 11,683 shares remaining available for option grants. The
1993 Stock Option Plan reserved an aggregate of 1,500,000 shares of Common
Stock for issuance to key employees, and 477,675 shares remain available for
option grants. The 1988 Restricted Stock Plan reserved 300,000 shares of
Common Stock for issuance to key employees, and 208,325 shares remain
available for awards. The 1991 Restricted Stock Plan for Nonemployee Directors
of Ball Corporation reserved 50,000 shares of Common Stock for issuance to
nonemployee directors, and 28,000 shares remain available for awards.
Believing that a new plan is both necessary and appropriate for the
Corporation to continue offering stock value incentives to key employees and
directors of the Corporation and its Subsidiaries, the Board of Directors
adopted the 1997 Stock Incentive Plan (the "Plan") on January 22, 1997,
subject to approval by the shareholders.
The Plan reserves for issuance a total of 3,000,000 shares of Common Stock,
and no more than 750,000 shares of Stock may be granted to any participant in
any five-year period. The Plan will be administered by a Board of Directors'
committee (the "Committee") consisting of two or more nonemployee directors as
to grants and awards to employees of the Corporation. The Board of Directors
(the "Board" or "Board of Directors") will administer the Plan as to grants
and awards to nonemployee directors. The principal features of the Plan are
summarized below.
16
<PAGE>
STOCK INCENTIVE FEATURES
The Plan provides for Stock Incentives which are defined to include awards
of stock options to purchase the Corporation's Common Stock, awards or
opportunities to purchase Stock Appreciation Rights, and Stock Bonus Awards,
including, but not limited to, Performance Unit Awards and Restricted Stock
Awards. Under the Plan, stock options (incentive and/or non-qualified stock
options under the Internal Revenue Code) to purchase the Corporation's Common
Stock may be granted to directors and key executive, administrative,
professional and technical employees, including corporate officers, of the
Corporation or any of its subsidiaries. The directors and the number of key
employees who will be selected to participate in the Plan are not identifiable
at this time. The benefits or amounts payable under the Plan are discretionary
and are not determinable.
Generally, each incentive stock option will have a ten-year term from the
date of grant and will be exercisable at such time or in such increments as
shall be decided by the Committee or the Board. Outstanding stock options will
be exercisable as decided by the Committee or the Board in accordance with
law. Incentive stock options may be exercised upon termination of employment
or the termination of a director's service, as the Committee or the Board
shall so determine in accordance with law. A stock option may not be
transferred by an optionee during his lifetime.
The stock option price for both incentive stock options and non-qualified
stock options shall not be less than 100 percent of the fair market value of
the Corporation's Common Stock on the date of grant, defined to be the closing
price of the Corporation's Common Stock as published in The Wall Street
Journal report of the New York Stock Exchange--Composite Transactions. The
exercise price may be paid in cash or, with the consent of the Committee or
the Board, in Common Stock which the optionee owns. The exercise price under
each stock option will not change during the life of the option (subject to an
adjustment as provided in the Plan to reflect stock dividends,
recapitalizations or corporate transactions affecting the number or kind of
outstanding shares), regardless of changes in the market value of the Common
Stock. As of March 3, 1997, the fair market value, as defined, of the
Corporation's Common Stock was $25.00 per share.
If the employment of an optionee or the service of a director terminates for
any reason, he may exercise his stock option to the extent he was entitled to
exercise it as provided by the Committee or the Board of Directors. If an
optionee, including a director, dies while he is entitled to exercise his
stock option, the stock option may be exercised within such a period of time
after his death as set forth by the Committee or the Board of Directors by the
person or persons to whom his rights pass, to the extent that the option was
exercisable on the date of his death. In no case may a stock option be
exercised later than the expiration date specified in the grant.
No incentive stock options may be granted under the Plan after January 22,
2007.
The Board or the Committee, as appropriate, may grant Stock Bonus Awards,
including, but not limited to, Performance Unit Awards or Restricted Stock
Awards as well as Stock Appreciation Rights under the Plan. The Board and
Committee may, but need not, grant any Stock Incentive linked to another Stock
Incentive. Linked Stock Incentives may be granted as other alternatives or
supplements to one another. The Board or Committee shall have the discretion
to decide the terms and conditions of each award, including, but not limited
to, the number of stock incentives, the price, the time period that
installments, if any, shall vest, performance criteria, the acceleration of
stock incentives and rights to exercise stock incentives upon termination of a
participant's employment for any reason or the termination of a director's
service on the Board for any reason.
STOCK APPRECIATION RIGHTS
Stock Appreciation Rights (SARs) entitle the holder to receive, upon
exercise, for each SAR exercised, the difference between the fair market value
of a share of Common Stock on the date of exercise over the grant price of
each SAR, multiplied by the number of shares with respect to which the SAR is
exercised. SARs may be linked to other Stock Incentives, in lieu of a related
option, or be granted independent of any other Stock Incentive.
A SAR may be awarded based upon the attainment of certain performance
criteria. A SAR may be exercised with or without the payment of consideration
as determined by the Committee or the Board. In the event that the grant price
per share of any SAR is established by the Committee or the Board, it will be
equal to 100 percent of the fair market value of a share of Common Stock on
the date the SAR is granted. The term of each SAR will be determined by the
Committee or the Board. SARs will be subject to such terms and conditions and
may be granted to a participant at any time and from time to time as
determined by the Committee or the Board. SARs will be exercisable at such
time or times as are determined by the Committee or the Board.
17
<PAGE>
RESTRICTED STOCK
A Restricted Stock Award consists of a grant of Common Stock to a
participant, which is subject to substantial risk of forfeiture and the
transfer of which is subject to restrictions which lapse upon the passage of
time, the achievement of performance goals or upon the occurrence of other
events as determined by the Committee or the Board. The period of restriction
is established by the Committee or the Board at the time of grant.
Unless otherwise designated by the Committee or the Board during the period
of restriction, a holder of restricted shares will have all other rights of a
shareholder, including the right to vote the shares and receive the dividends
paid thereon. The Corporation will retain the stock certificates until the
lapse of any applicable restrictions. The Committee or the Board, at its sole
discretion, will establish a participant's rights to receive Restricted Stock
in the event the participant's employment or a director's service is
terminated prior to vesting, such rights to be reflected in the participant's
award agreement.
PERFORMANCE UNITS
Subject to the terms of the Plan, performance units and performance shares
may be granted to eligible employees and nonemployee directors at any time as
determined by the Committee or the Board. The Board or the Committee will have
complete discretion to establish the initial number and value of such units
and shares and the performance period. The Board or the Committee will
establish performance goals at its discretion which, depending on the level of
performance achieved, will determine the number and/or value of performance
units/shares earned. Where an award is intended to meet the requirements for
performance-based exceptions to the deductibility limit imposed by Section
162(m) of the Internal Revenue Code, as amended, the performance goals will be
timely established and their achievement will be timely certified by the
Committee or the Board of Directors, and will be based on any one or more of
objective business criteria, including, but not limited to: earnings per
share; return on equity; pretax profit; post-tax profit; consolidated net
income; stock price; market share; sales; unit sales volume; return on assets;
return on invested capital; cash flow; discounted cash flow; economic value
added; cost; production; unit production volume(s); and total shareholder
return. The performance periods will also be established by the Committee or,
in the case of nonemployee directors, by the Board of Directors.
Payments of earned performance units/shares will occur at the end of the
performance period at the discretion of the Board or the Committee and will be
paid either in cash or shares of Common Stock. At the discretion of the Board
or the Committee, participants may be entitled to dividends declared with
respect to shares earned in connection with the grant of performance units
and/or performance shares.
The Board or the Committee may establish the terms and conditions of any
payout of performance units or shares (if any) upon the termination of the
participant's employment or service on the Board.
STOCK BONUS AWARDS
Subject to the terms of the Plan, other incentive awards, including Stock
Bonus Awards, may be granted to eligible employees or nonemployee directors at
any time as determined by the Committee or the Board, as appropriate. The
Board or the Committee will have complete discretion to establish the amount
of other incentive awards granted, the applicable related performance period
and performance goals and other terms and conditions applicable to such grant.
At the discretion of the Board or the Committee, payment of other incentive
awards may be in the form of cash or shares of Common Stock.
AWARDS NONTRANSFERABLE
No award may be assigned, transferred, pledged or otherwise encumbered by a
participant, other than by will or the laws of descent and distribution. An
option or SAR may be exercised during the participant's lifetime only by the
participant or the participant's legal representative.
CHANGE IN CONTROL
In order to protect the participant's rights in the event of a Change in
Control of the Corporation (as defined in the Plan), the Plan provides for the
immediate vesting of all outstanding options and SARs granted under the Plan
that are outstanding at the time of such Change in Control, and such options
and SARs shall become immediately exercisable in full, without regard to the
number of years that have elapsed from the date of grant.
18
<PAGE>
DURATION OF THE PLAN
If approved by the shareholders, the Plan will become effective on January
22, 1997, subject to the right of the Board of Directors to terminate or amend
the Plan, until all shares have been purchased or acquired. Incentive stock
options may not be granted under the Plan after January 22, 2007. If the Plan
is not approved by the shareholders, the Plan and any awards granted
thereunder will be null, void and of no force or effect.
THE ADMINISTRATION OF THE PLAN
With respect to employees of the Corporation, the Committee administering
the Plan will be the Board of Directors' Committee, consisting of no fewer
than two nonemployee directors. The Board will administer the Plan as it
pertains to nonemployee directors. The Board or the Committee will decide to
whom and when to make grants, the number of shares to be covered by the grants
and any special terms or provisions relating to the grant and exercise of the
stock options or stock incentives. The Board or the Committee may at any time
adopt such resolutions, rules and regulations for the Plan and interpret the
Plan as it deems advisable. The Board or the Committee may amend or terminate
the Plan and change its terms and conditions as they deem appropriate. The
Plan may be amended by the Board of Directors, without shareholder approval,
at any time and in any respect, unless shareholder approval of the amendment
in question is required under Indiana law, the Code (including, without
limitation, Code Section 162(m)(4) and Code Section 422, including Proposed
Treasury Regulation Section 1422A(B)(iv)), any applicable exemption from
Section 16 of the Exchange Act (including, without limitation, SEC Rule 16b-3)
for which the Corporation intends transactions by or with respect to Section
16 Persons to qualify, any material securities exchange or system on which
shares of Stock are then listed or reported, any regulatory body having
jurisdiction with respect to the Plan, or under any other applicable laws,
rules or regulations. The Plan may also be terminated at any time by the Board
of Directors. No amendment or termination of this Plan shall adversely affect
any Stock Incentive granted prior to the date of such amendment or termination
without the written consent of the participant.
FEDERAL TAX CONSEQUENCES
The Corporation has been advised by counsel that an optionee will not
realize income upon the granting of a stock option under the Plan, nor would
the Corporation be entitled to a deduction at such time.
Generally, there will be no realization of income by the optionee upon the
exercise of an incentive stock option (if exercised no later than three months
after any termination of employment). If the optionee sells the incentive
stock option Common Stock after the later of one year from the exercise date
or two years from the date of grant, any gain or loss on the sale generally
will be treated as long-term capital gains, and the Corporation will not be
entitled to any deduction on account of the issuance of Common Stock or the
grant of the incentive stock option. The tax consequences of any untimely
exercise or disposition of shares with respect to an incentive stock option
will be determined in accordance with the rules applicable to non-qualified
stock options. The amount by which the fair market value of the stock on the
exercise date of an incentive stock option exceeds the option price will be an
item of tax adjustment for purposes of the "alternative minimum tax" imposed
by Section 55 of the Internal Revenue Code.
Upon the exercise of a non-qualified stock option, the optionee will realize
compensation income in the amount of the excess of the fair market value of
the Corporation's Common Stock on the day of exercise over the stock option
exercise price. The tax basis of any non-qualified stock option shares of
Common Stock received will be the fair market value of such shares on the date
the stock option is exercised.
With respect to Restricted Stock, a participant will generally not realize
income at the date of the award, nor would the Corporation be entitled to a
deduction at that time. The participant will realize compensation income in an
amount equal to the fair market value of the awarded shares at the time the
restrictions lapse on such shares, and the Corporation will be entitled to a
corresponding tax deduction. Dividends paid to participants prior to the lapse
of restrictions will be taxed as compensation income to the participant and
deductible as such by the Corporation.
A participant will not realize income upon the granting of a SAR,
performance unit or stock award nor would the Corporation be entitled to a
deduction at such time. When a SAR is exercised or restrictions lapse, the
participant would realize compensation income equal to the then fair market
value of such cash or Common Stock received upon such exercise or lapse of
such restrictions (less any consideration paid by the grantee for such award).
The Corporation would be entitled to a deduction for federal income tax
purposes in the amount and in the year that the optionee realizes the
compensation income. The tax basis of any shares of any Common Stock received
will be the fair market value of such shares on the date the stock award, SAR,
or performance unit is exercised or restrictions applicable thereto lapse.
19
<PAGE>
The above Plan was written to maximize the deduction, for federal income tax
purposes, allowable to the Corporation, taking into consideration the
limitations under Section 162(m) of the Internal Revenue Code, as amended.
The foregoing summary constitutes a brief overview of the principal federal
income tax consequences relating to the above-described awards based upon
current federal income tax laws. This summary is not intended to be exhaustive
and does not describe state, local or foreign tax consequences.
SHAREHOLDER APPROVAL
The Plan will be approved if the votes cast favoring the Plan exceed the
votes cast opposing approval of the Plan. Abstentions and broker nonvotes are
considered neither a vote "for" nor "against."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
APPROVE THE 1997 STOCK INCENTIVE PLAN.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation believes that during 1996 its directors and executive
officers complied with all Section 16 filing requirements, with the exception
of one Form 4 report which George McFadden, a director, filed five days late
to report purchases of shares on behalf of several family trusts.
SOLICITATION AND OTHER MATTERS
The cost of soliciting proxies will be paid by the Corporation. In addition
to solicitations by mail, some directors, officers and regular employees of
the Corporation, without extra remuneration, may conduct solicitations by
telephone, facsimile and personal interviews. 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
Georgeson & Company Inc. to assist it in the solicitation of proxies, for a
fee of approximately $8,500, plus out-of-pocket expenses.
As of the date of this Proxy Statement, the Board of Directors of the
Corporation has no knowledge of any matters to be presented for consideration
at the meeting other than those referred to above. However, persons named in
the accompanying form of proxy shall have 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
Elizabeth A. Overmyer
Corporate Secretary
March 17, 1997
Muncie, Indiana
20
<PAGE>
EXHIBIT A
BALL CORPORATION
1997 STOCK INCENTIVE PLAN
1. Purposes. The purpose of this 1997 Stock Incentive Plan is to promote the
interest of the Corporation and its shareholders by encouraging and enabling
the acquisition of a larger proprietary interest in it by key employees and
directors of the Corporation upon whose judgment and keen interest the
Corporation is largely dependent for the successful conduct of its operations.
It is anticipated that the acquisition of such proprietary interest and the
attainment of certain defined performance goals will increase the personal
interest of its key employees and directors in the continued success and
progress of the Corporation. It is also anticipated that the opportunity to
acquire such a proprietary interest will assist the Corporation in attracting
new key employees and directors.
2. Definitions. When used in this Plan, unless the context otherwise
requires:
A. "Award" means, individually or collectively, a grant under this
Incentive Plan of Stock Options, Stock Appreciation Rights, Restricted
Stock Performance Units or other Stock Incentives.
B. "Award Agreement" means an agreement entered into by the Corporation
and each Participant setting forth the terms and provisions applicable to
Awards granted under this Plan.
C. "Board of Directors" or "Board" means the Board of Directors of the
Corporation as constituted at any time.
D. "Change in Control," as used herein, shall be deemed to have occurred
if:
(i) any "Person," which shall mean a "person" as such term is used in
Sections 13(D) and 14(D) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (other than the Corporation, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Corporation, or any company owned, directly or indirectly, by the
shareholders of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 30
percent or more of the combined voting power of the Corporation's then
outstanding securities;
(ii) at any time during any period of two consecutive years,
individuals, who at the beginning of such period constitute the Board,
and any new director (other than a director designated by a Person who
has entered into an agreement with the Corporation to effect a
transaction described in clause (i), (iii) or (iv) of this Section)
whose election by the Board or nomination for election by the
Corporation's shareholders was approved by a vote of at least two-thirds
of the directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason
to constitute at least a majority thereof;
(iii) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other company, other than (1)
a merger or consolidation which would result in the voting securities of
the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50 percent of the
combined voting power of the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger or
consolidation, or (2) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in which no
Person acquires 50 percent or more of the combined voting power of the
Corporation's then outstanding securities; or
(iv) the shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
E. "Code" means the Internal Revenue Code of 1986, as amended.
F. "Committee" means the Committee appointed by the Board of Directors to
administer the Plan pursuant to the provisions of section 12(A) below.
G. "Corporation" means Ball Corporation.
H. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
I. "Fair Market Value" means the closing price of the Stock as published
in The Wall Street Journal report of the New York Stock Exchange-Composite
Transactions, corrected for any reporting errors, or if the Stock is not
traded on that day, on the first preceding day on which there was a sale of
such Stock.
A-1
<PAGE>
J. "General Counsel" means the General Counsel of the Corporation serving
from time to time or other legal counsel appointed by the Corporation to
render an opinion required by this Plan.
K. "Incentive Stock Option" means stock options which qualify under and
meet the requirements of Section 422 of the Code.
L. "Linked Stock Incentives" mean Stock Incentives linked to other Stock
Incentives as provided in Article 4C.
M. "Non-Qualified Stock Option" means stock options which do not qualify
under or meet the requirements of Section 422 of the Code.
N. "Option" means the Incentive Stock Options and the Non-Qualified Stock
Options issued pursuant to the Plan.
O. "Option Price" means the price at which a share of Stock may be
purchased by a Participant pursuant to an option.
P. "Participant" means an individual who has been granted a Stock
Incentive.
Q. "Performance Unit Award" means a number of shares of Stock or an
amount of money determined by reference to the Fair Market Value of shares
of Stock, or a combination of each, that will be distributed in the future
if continued employment and/or other performance objectives or
contingencies specified by the Committee are attained. Performance goals
underlying awards granted under the Plan that are intended to satisfy the
requirements of Section 162(m) of the Code shall be the performance goals
established by the Committee, which must be met during the applicable
performance period as a condition of the Participant's receipt of payment
(or, if applicable, the lapse of restrictions) with respect to an award,
and which are based on the attainment of thresholds with respect to one or
more objective business criteria, including, but not limited to: earnings
per share, return on equity, pretax profit, post-tax profit, consolidated
net income, stock price, market share, sales, unit sales volume, return on
assets, return on invested capital, cash flow, discounted cash flow,
economic value added, costs, production, unit production volume and total
shareholder return. Amounts in respect of awards granted under the Plan
that are intended to satisfy the applicable provisions of Section 162(m) of
the Code shall be paid after the end of the applicable performance period,
at such time as the Committee shall determine. Unless otherwise determined
by the Committee, such payments shall be made only after achievement of the
applicable performance goals has been certified by the Committee. The
Committee may require the Participant to deposit Stock with the
Corporation, or acquire or retain for stipulated time periods specified
amounts of Stock.
R. "Plan" means the Ball Corporation 1997 Stock Incentive Plan set forth
in these pages, as amended from time to time.
S. "Restricted Stock Award" means shares of Stock which are issued or
transferred to a Participant under section 6 below and which will become
free of restrictions specified by the Committee or the Board of Directors
if continued employment or service on the Board of Directors and/or other
performance objectives or contingencies specified by the Committee or the
Board of Directors are attained. Such other performance objectives may
include, without limitation, corporate or business unit financial or
operating performance measures, and such other contingencies may include
the Participant's depositing with the Corporation, acquiring or retaining
for stipulated time periods specified amounts of Stock.
T. "SEC Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
Commission promulgated under the Exchange Act, as such rule or any
successor rule may be in effect from time to time.
U. "Section 16 Person" means a person subject to Section 16 of the
Exchange Act with respect to transactions involving equity securities of
the Corporation.
V. "Stock" means Common Stock, without par value, of the Corporation.
W. "Stock Appreciation Right" means a right granted under section 8
below, including, but not limited to, Linked Stock Appreciation Rights and
Free Standing Stock Appreciation Rights.
X. "Stock Bonus Award" means shares of Stock or an amount of money which
is determined by reference to the Fair Market Value of shares of Stock, or
a combination, which are distributed to a Participant or which the
Committee or the Board of Directors agrees to distribute in the future to a
Participant in lieu of, or as a supplement to, any other compensation that
may have been earned by services rendered prior to the date such
distribution is made. The amount of a Stock Bonus Award that is payable in
shares of Stock may but need not be determined by reference to the Fair
Market Value of shares of Stock. Performance Unit Awards and Restricted
Stock Awards are specific types of Stock Bonus Awards.
Y. "Stock Incentive" means an award granted under this Plan in one of the
forms provided for in section 4.
A-2
<PAGE>
Z. "Subsidiary" means a corporation or other form of business association
of which shares (or other ownership interests) having 50 percent or more of
the voting power are, or in the future become, owned or controlled,
directly or indirectly, by the Corporation.
3. Eligibility. Except as hereinafter provided, each employee or director of
the Corporation or a Subsidiary, who, in the judgment of the Committee or the
Board of Directors, serves the Corporation or a Subsidiary as a director or in
a key executive, administrative, professional or technical capacity, shall be
eligible to receive Stock Incentives under the Plan. The nonemployee directors
to whom Stock Incentives are to be granted under the Plan and the number of
Stock Incentives to be granted to each such director shall be determined by
the Board of Directors, at their sole discretion, subject to the terms and
conditions of the Plan. The employees (including directors who are also
employees) to whom Stock Incentives are to be granted under the Plan and the
number of Stock Incentives to be granted to each employee shall be determined
by the Committee, at its sole discretion, subject to the terms and conditions
of the Plan.
4. Grants of Stock Incentives.
A. Subject to the provisions of the Plan, the Committee or the Board of
Directors, as appropriate, may at any time, or from time to time, grant any
of the following Stock Incentives to employees or directors:
(i) Incentive Stock Options;
(ii) Non-Qualified Stock Options;
(iii) Stock Appreciation Rights; and
(iv) Stock Bonus Awards, which may (but need not) be Performance Unit
Awards or Restricted Stock Awards.
B. After a Stock Incentive has been granted:
(i) the Committee or the Board of Directors may waive any term or
condition thereof that could have been excluded from such Stock
Incentive when it was granted, and
(ii) with the written consent of the affected Participant, may amend
any Stock Incentive after it has been granted to include (or exclude)
any provision which could have been included in (or excluded from) such
Stock Incentive when it was granted,
and no additional consideration need be received by the Corporation in
exchange for such waiver or amendment.
C. The Committee or the Board of Directors may (but need not) grant any
Stock Incentive linked to another Stock Incentive. Linked Stock Incentives
may be granted as either alternatives or supplements to one another. The
terms and conditions of any such linked Stock Incentives shall be
determined by the Committee or the Board of Directors, subject to the
provisions of the Plan.
D. The Committee or the Board of Directors shall have the discretion to
decide the terms and conditions of each Award, including, but not limited
to, the number of Stock Incentives, the price, the time period that
installments (if any) shall vest, performance criteria rights, acceleration
of Stock Incentives and rights to exercise Stock Incentives upon
termination of a Participant's employment or service on the Board of
Directors.
5. Stock Subject to the Plan.
A. Subject to the provisions below of paragraph 5(C) and of section 8,
the maximum number of shares of Stock which may be issued or transferred
pursuant to Stock Incentives is three million (3,000,000) shares of Stock
and the maximum number of shares of Stock with respect to which Options,
Stock Appreciation Rights, Performance Units or Restricted Stock or other
Stock Bonus Awards may be granted to any employee or director in any five-
year period shall be 750,000 shares of Stock.
B. Such shares may be authorized but unissued shares of Stock, shares of
Stock held in the treasury, whether acquired by the Corporation
specifically for use under this Plan or otherwise, or shares issued or
transferred to, or otherwise acquired by, a trust pursuant to paragraph
13(D) below, as the Committee or the Board of Directors may from time to
time determine; provided, however, that any shares acquired or held by the
Corporation for the purposes of this Plan shall, unless and until issued or
transferred to a trust pursuant to paragraph 13(D) below or to a
Participant in accordance with the terms and conditions of a Stock
Incentive, be and at all times remain authorized but unissued shares or
treasury shares (as the case may be), irrespective of whether such shares
are entered in a special account for purposes of this Plan, and shall be
available for any corporate purpose.
C. If any shares of Stock subject to a Stock Incentive shall not be
issued or transferred to a Participant and shall cease to be issuable or
transferable to a Participant because of the termination, expiration or
cancellation, in whole or in part, of such Stock Incentive or for any other
reason, or if any such shares shall, after issuance or
A-3
<PAGE>
transfer, be reacquired by the Corporation because of the Participant's
failure to comply with the terms and conditions of a Stock Incentive or for
any other reason, the shares not so issued or transferred, or the shares so
reacquired by the Corporation, as the case may be, shall no longer be
charged against the limitations provided for in paragraph (A) above of this
section 5 and may again be made subject to Stock Incentives; provided that
the number of shares not so issued or transferred and any such reacquired
shares may again be made subject to Stock Incentives for Section 16 Persons
only if the General Counsel determines that doing so would not jeopardize
any exemption from Section 16 of the Exchange Act (including without
limitation SEC Rule 16b-3) for which the Corporation intends transactions
by or with respect to Section 16 Persons to qualify.
6. Stock Bonus Awards, Performance Unit Awards and Restricted Stock Awards.
Stock Bonus Awards, Performance Unit Awards and Restricted Stock Awards shall
be subject to the following provisions:
A. An employee or director may be granted a Stock Bonus Award,
Performance Unit Award or Restricted Stock Award whether or not he is
eligible to receive similar or dissimilar incentive compensation under any
other plan or arrangement of the Corporation.
B. Shares of Stock subject to a Stock Bonus Award may be issued or
transferred to a Participant at the time such Award is granted, or at any
time subsequent thereto, or in installments from time to time, and subject
to such terms and conditions, as the Committee or the Board of Directors
shall determine. In the event that any such issuance or transfer shall not
be made to the Participant at the time such Award is granted, the Committee
or the Board of Directors may, but need not, provide for payment to such
Participant, either in cash or shares of Stock, from time to time or at the
time or times such shares shall be issued or transferred to such
Participant of amounts equal to the dividends which would have been payable
to such Participant in respect of such shares (as adjusted under section 9)
if such shares had been issued or transferred to such Participant at the
time such Award was granted.
C. Any Stock Bonus Award, Performance Unit Award or Restricted Stock
Award may, at the discretion of the Committee or the Board of Directors, be
settled in cash, on each date on which shares would otherwise have been
delivered or become unrestricted, in an amount equal to the Fair Market
Value on such date of the shares which would otherwise have been delivered
or become unrestricted; and the number of shares for which such cash
payment is made shall be added back to the maximum number of shares
available for use under the Plan, provided that the number of shares for
which such cash payment is made may be made subject to Stock Incentives for
Section 16 Persons only if the General Counsel determines that doing so
would not jeopardize any exemption from Section 16 of the Exchange Act
(including without limitation SEC Rule 16b-3) for which the Corporation
intends transactions by or with respect to Section 16 Persons to qualify.
D. Stock Bonus Awards, Performance Unit Awards and Restricted Stock
Awards shall be subject to such terms and conditions, including, without
limitation, restrictions on the sale or other disposition of the shares
issued or transferred pursuant to such Award, and conditions calling for
forfeiture of the Award or the shares issued or transferred pursuant
thereto in designated circumstances, as the Committee or the Board of
Directors shall determine; provided, however, that upon the issuance or
transfer of shares to a Participant pursuant to any such Award, the
recipient shall, with respect to such shares, be and become a shareholder
of the Corporation fully entitled to receive dividends, to vote and to
exercise all other rights of a shareholder except to the extent otherwise
provided in the Award. All or any portion of a Stock Bonus Award may, but
need not, be made in the form of a Performance Unit Award or a Restricted
Stock Award.
E. Each Stock Bonus Award, Performance Unit Award and Restricted Stock
Award shall be evidenced by a written instrument in such form as the
Committee or the Board of Directors shall determine, signed by a
representative of the Corporation duly authorized to do so, provided that
such instrument is consistent with this Plan and incorporates it by
reference.
7. Stock Options. Options shall be subject to the following provisions:
A. Subject to the provisions of section 10, the purchase price of each
share subject to an Incentive Stock Option shall be not less than 100
percent of the Fair Market Value of a share of Stock on the date the
Incentive Stock Option is granted (or in the case of any optionee who, at
the time such Incentive Stock Option is granted, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock
of his employer corporation or of its parent or subsidiary corporation, not
less than 110 percent of the Fair Market Value of a share of Stock on the
date the Incentive Stock Option is granted) and the purchase price of each
share subject to a Non-Qualified Stock Option shall be not less than the
Fair Market Value of a share of Stock on the date the Non-Qualified Stock
Option is granted. Subject to the foregoing limitations, the purchase price
per share may, if the Committee or the Board of Directors so provides at
the time of grant of an Option, be indexed to the increase or decrease in
an index specified by the Committee or the Board of Directors.
A-4
<PAGE>
B. The purchase price of shares subject to an Option may be paid in whole
or in part (i) in cash, (ii) by bank-certified, cashier's or personal check
subject to collection, or (iii) in shares of Stock. Stock which is tendered
by Section 16 Persons must have been held by the Participant for at least
six months prior to its tender to satisfy the Option Price. Shares of Stock
thus surrendered shall be valued at their Fair Market Value on the date of
exercise.
C. Options may be granted for such lawful consideration, including money
or other property, tangible or intangible, or labor or services received or
to be received by the Corporation, as the Committee or the Board of
Directors may determine when the Option is granted. Subject to the
foregoing and the other provisions of this section 7, each Option may be
exercisable in full at the time of grant or may become exercisable in one
or more installments, at such time or times and subject to satisfaction of
such terms and conditions as the Committee or the Board of Directors may
determine. The Committee or the Board of Directors may at any time
accelerate the date on which an Option becomes exercisable, and no
additional consideration need be received by the Corporation in exchange
for such acceleration. Unless otherwise provided in the Option, an Option,
to the extent it becomes exercisable, may be exercised at any time in whole
or in part until the expiration or termination of the Option.
D. Each Option shall be exercisable during the lifetime of the optionee
only by him or his guardian or legal representative, and after death only
by the person or persons to whom his rights to it shall pass by his will or
by the applicable laws of descent and distribution, by his estate or by a
person who acquired the right to exercise the Option by will or the laws of
descent and distribution. Each Option shall expire at such time or times as
the Committee or the Board of Directors may determine, provided that
notwithstanding any other provision of this Plan, (i) no Option shall be
exercisable after the tenth anniversary of the date on which the Option was
granted, and (ii) no Incentive Stock Option which is granted to any
optionee who, at the time such Option is granted, owns stock possessing
more than 10 percent of the total combined voting power of all classes of
stock of his employer corporation or of its parent or subsidiary
corporation, shall be exercisable after the expiration of five (5) years
from the date such Option is granted. If an Option is granted for a term of
less than ten (10) years, the Committee or the Board of Directors may, at
any time prior to the expiration of the Option, extend its term for a
period ending not later than on the tenth anniversary of the date on which
the Option was granted, and no additional consideration need be received by
the Corporation in exchange for such extension. The Committee or the Board
of Directors may, but need not, provide for an Option to be exercisable
after termination of employment or termination of a director's services
until its fixed expiration date (or until an earlier date or specified
event occurs).
E. An Option may, but need not, be an Incentive Stock Option. All shares
of Common Stock which may be made subject to Stock Incentives under this
Plan may be made subject to Incentive Stock Options; provided that the
aggregate Fair Market Value (determined as of the time the Option is
granted) of the Stock with respect to which Incentive Stock Options may be
exercisable for the first time by any employee during any calendar year
(under all plans, including this Plan, of his employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000 or such other
amount as may apply under the Code.
F. Each Option shall be evidenced by a written instrument, signed by a
representative of the Corporation duly authorized to do so, which shall
contain such terms and conditions, and shall be in such form, as the
Committee or the Board of Directors shall determine, provided the
instrument is consistent with this Plan and incorporates it by reference.
An Option, if so approved by the Committee or the Board of Directors, may
include terms, conditions, restrictions and limitations in addition to
those provided for in this Plan including, without limitation, terms and
conditions providing issuance of shares, on exercise of an Option, which
may be nontransferable and forfeitable to the Corporation in designated
circumstances.
G. No option shall be exercisable unless and until the Corporation (i)
obtains the approval of all regulatory bodies whose approval the General
Counsel may deem necessary or desirable, and (ii) complies with all legal
requirements deemed applicable by the General Counsel.
H. An Option shall be considered exercised if and when written notice,
signed by the person exercising the Option and stating the number of shares
with respect to which the Option is being exercised, is received by the
Corporate Secretary's Department accompanied by full payment of the Option
exercise price in one or more of the forms authorized by the Committee or
the Board of Directors and described in section 7(B) above for the number
of shares to be purchased. No Option may at any time be exercised with
respect to a fractional share.
8. Stock Appreciation Rights. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the Plan, as shall from time
to time be determined by the Committee and to the following terms and
conditions:
A. Stock Appreciation Rights may be granted in connection with all or any
part of an Option, either at the time of the grant of such Option or at any
time thereafter during the term of the Option (in either case, "Linked
Stock Appreciation Rights"), or may be granted without reference to an
Option ("Free-Standing Stock Appreciation Rights").
A-5
<PAGE>
B. Linked Stock Appreciation Rights may be granted either as an
alternative or a supplement to a specified Option (the "related" Option).
Each Linked Stock Appreciation Right that is granted as an alternative to
an Option shall entitle the holder to receive the amount determined
pursuant to section 8(E) below if and when the holder surrenders a related
Option to purchase one share of Common Stock that is then exercisable. Each
Linked Stock Appreciation Right that is granted as a supplement to an
Option shall entitle the holder to receive the amount determined pursuant
to section 8(E) below if and when the holder purchases a share under the
related Option.
C. Stock Appreciation Rights may be granted for such lawful
consideration, including money or other property, tangible or intangible,
or labor or services received or to be received by the Corporation, as the
Committee or the Board of Directors may determine when the Rights are
granted. Subject to the foregoing and the other provisions of this section
8, Stock Appreciation Rights may be exercisable in full at the time of
grant or may become exercisable in one or more installments and at such
time or times as the Committee or the Board of Directors may determine. The
Committee or the Board of Directors may at any time accelerate the date on
which Stock Appreciation Rights become exercisable, and no additional
consideration need be received by the Corporation in exchange for such
acceleration. Unless otherwise provided in the Stock Appreciation Rights,
Stock Appreciation Rights, to the extent they become exercisable, may be
exercised at any time in whole or in part until they expire or terminate.
D. No Free-Standing Stock Appreciation Right shall be exercisable after
the tenth anniversary of the date it was granted, and no Linked Stock
Appreciation Right shall be exercisable after the related Option ceases to
be exercisable. If the Committee or the Board of Directors grants a Stock
Appreciation Right for a lesser term than that permitted by the preceding
sentence, the Committee or the Board of Directors may, at any time prior to
its expiration, extend its term to the maximum term permitted by the
preceding sentence, and no additional consideration need be received by the
Corporation in exchange for such extension. The Committee or the Board of
Directors may, but need not, provide for Stock Appreciation Rights to be
exercisable after termination of employment or termination of a director's
services until they expire pursuant to the first sentence of this paragraph
8(D) (or until an earlier date or specified event occurs).
E. Upon exercise of Stock Appreciation Rights, the holder thereof shall
be entitled to receive cash or shares of Common Stock or a combination of
each, as the Committee or the Board of Directors at their sole discretion
may determine, equal to the amount by which the Fair Market Value of a
share of Common Stock on the date of such exercise exceeds the Base Price
of the Stock Appreciation Rights, multiplied by the number of Stock
Appreciation Rights exercised; provided that in no event shall a fractional
share be issued. In the case of Linked Stock Appreciation Rights, the Base
Price shall be the price at which shares may be purchased under the related
Option, unless the Committee or the Board of Directors specified a
different price when the Rights were granted (which shall not be less than
the lowest price at which the related Option could have been granted under
section 7 above). In the case of Free-Standing Stock Appreciation Rights,
the Base Price shall be the Fair Market Value of a share of Stock on the
date the Rights were granted, unless the Committee or the Board of
Directors specified a different price when the Rights were granted.
F. The maximum number of shares available for use under the Plan shall be
charged only for the number of shares which are actually issued or
transferred in settlement of Stock Appreciation Rights. In the case of an
exercise of a Linked Stock Appreciation Right that is granted as an
alternative to an Option, if the number of shares of Stock previously
charged against the maximum number of shares available for use under the
Plan on account of the surrendered portion of the Option exceeds the number
of shares (if any) actually issued or transferred pursuant to such
surrender, the excess shall be added back to the number of shares available
for use under the Plan.
G. Stock Appreciation Rights shall be exercisable during the life of the
Participant only by him or his guardian or legal representative, and after
death only by the person or persons to whom his rights to it shall pass by
his will or by the applicable laws of descent and distribution.
H. Each Stock Appreciation Right shall be evidenced by a written
instrument, which shall contain such terms and conditions, and shall be in
such form, as the Committee or the Board of Directors shall determine,
provided the instrument is consistent with the Plan and incorporates it by
reference.
9. Certain Change in Control, Termination of Employment and Disability
Provisions. Notwithstanding any other provision of the Plan to the contrary,
if, while any Awards remain outstanding under the Plan, a Change in Control of
the Corporation shall occur, all Options and freestanding SARs granted under
the Plan that are outstanding at the time of such Change in Control shall
become immediately exercisable in full, without regard to the years that have
A-6
<PAGE>
elapsed from the date of grant. The Committee or the Board of Directors may at
any time and subject to the terms and conditions as it may impose:
A. authorize the holder of an Option to exercise the Option following the
termination of the Participant's employment or termination of a director's
services with the Corporation and its Subsidiaries, or following the
Participant's disability, whether or not the Option would otherwise be
exercisable following such event, provided that in no event may an Option
be exercised after the expiration of its term;
B. grant Options which become exercisable only in the event of a Change
in Control;
C. authorize a Stock Bonus Award, Performance Unit Award or Restricted
Stock Award to become nonforfeitable, fully earned and payable upon or
following (i) the termination of the Participant's employment or
termination of a director's services with the Corporation and its
Subsidiaries, or (ii) the Participant's disability, whether or not the
Award would otherwise become nonforfeitable, fully earned and payable upon
or following such event; and
D. grant Stock Bonus Awards, Performance Unit Awards and Restricted Stock
Awards which become nonforfeitable, fully earned and payable only in the
event of a Change in Control.
Subject to applicable law, the Committee or the Board of Directors shall
establish terms at the time of any Award as to the Participant's right to
receive an Award upon the termination of the Participant's employment or
termination of a director's services for any reason with the Corporation and
its Subsidiaries.
10. Adjustment Provisions. In the event that any recapitalization,
reclassification, split-up or consolidation of shares of Stock shall be
effected, or the outstanding shares of Stock shall be, in connection with a
merger or consolidation of the Corporation or a sale by the Corporation of all
or a part of its assets, exchanged for a different number or class of shares
of stock or other securities or property of the Corporation or any other
entity or person, or a record date for determination of holders of Stock
entitled to receive a dividend or other distribution payable in Stock or other
property (other than normal cash dividends) shall occur, (A) the number and
class of shares or other securities or property that may be issued or
transferred pursuant to Stock Incentives thereafter granted or that may be
optioned or awarded under the Plan to any Participant, (B) the number and
class of shares or other securities or property that may be issued or
transferred under outstanding Stock Incentives, (C) the purchase price to be
paid per share under outstanding and future Stock Incentives, and (D) the
price to be paid per share by the Corporation or a Subsidiary for shares or
other securities or property issued or transferred pursuant to Stock
Incentives which are subject to a right of the Corporation or a Subsidiary to
reacquire such shares or other securities or property, shall in each case be
equitably adjusted; provided that with respect to Incentive Stock Options any
such adjustments shall comply with Sections 422 and 424 of the Code.
11. Effective Date and Duration of Plan. The Plan shall be effective when it
is approved by the Board of Directors, provided that the shareholders of the
Corporation thereafter approve it within one year of that date. If the Plan is
not so approved by the shareholders, the Plan (and any Stock Incentive granted
thereunder) shall be null, void and of no force or effect. If so approved, the
Plan shall remain in effect, and Stock Incentives may be granted, until Stock
Incentives have been granted with respect to all shares authorized to be
issued or transferred hereunder or until the Plan is sooner terminated by the
Board of Directors, and shall continue in effect thereafter with respect to
any Stock Incentives outstanding at that time. In no event shall an Incentive
Stock Option be granted under the Plan more than ten (10) years from the date
the Plan is adopted by the Board, or the date the Plan is approved by the
shareholders of the Corporation, whichever is earlier.
12. Administration.
A. The Plan as it relates to awards to employees of the Corporation shall
be administered by a Committee of the Board consisting of two or more
directors appointed from time to time by the Board. The Committee shall be
composed solely of "outside directors" within the meaning of Section
162(m)(4)(C)(i) of the Code and "nonemployee directors" within the meaning
of SEC Rule 16b-3. The Plan as it relates to awards to nonemployee
directors shall be administered by the Board of Directors.
B. The Committee or the Board of Directors may establish such rules and
regulations, not inconsistent with the provisions of the Plan, as it may
deem necessary for the proper administration of the Plan, and may amend or
revoke any rule or regulation so established. The Committee or the Board of
Directors shall, subject to the provisions of the Plan, have full power to
interpret, administer and construe the Plan and any instruments issued
under the Plan and full authority to make all determinations and decisions
thereunder including, without limitation, the authority to (i) select the
Participants in the Plan, (ii) determine when Stock Incentives shall be
granted, (iii) determine the number of shares to be made subject to each
Stock Incentive, (iv) determine the type of Stock Incentive to grant, and
(v) determine the terms and conditions of each Stock Incentive, including
A-7
<PAGE>
the exercise price, in the case of an Option. The interpretation by the
Committee or the Board of Directors of the terms and provisions of the Plan
and any instrument issued thereunder, and its administration thereof, and
all action taken by the Committee or the Board of Directors, shall be
final, binding and conclusive on the Corporation, its shareholders,
Subsidiaries, all Participants and employees, and upon their respective
successors and assigns, and upon all other persons claiming under or
through any of them.
C. Each person who is or shall have been a member of the Committee or the
Board of Directors shall be indemnified by the Corporation against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action,
suit or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan.
Such person shall be indemnified by the Corporation for all amounts paid by
him in settlement thereof, with the Corporation's approval, or paid by him
in satisfaction of any judgment in any such action, suit or proceeding
against him, provided he shall give the Corporation an opportunity, at its
own expense, to handle and defend the same before he undertakes to handle
and defend it on his own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Corporation's Amended Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power
that the Corporation may have to indemnify them or hold them harmless.
13. General Provisions.
A. Any provision of the Plan to the contrary notwithstanding, any
derivative security issued under the Plan (within the meaning of SEC Rule
16a-1, 17 CFR Section 240.16a-1), including, without limitation, any Option
or Stock Appreciation Right, shall not be transferable by the Participant
other than by will or the laws of descent and distribution or in accordance
with the Plan. Stock Incentives, including, but not limited to, Stock
Options, Stock Appreciation Rights, Performance Units or other Stock Bonus
Awards, may not be sold, transferred, pledged, assigned or otherwise
donated or hypothecated, other than by will or the laws of descent and
distribution and shall be exercisable during the Participant's lifetime
only by the Participant. Any attempt of assignment, transfer, pledge,
hypothecation or other disposition of any Stock Incentive granted hereunder
which is contrary to the provisions of the Plan or the levy of any
attachment or similar proceedings upon the Plan or any Stock Incentive
shall be null and void.
Shares of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated until the end of
the applicable period of restriction established by the Committee or the
Board of Directors and specified in the Restricted Stock Award Agreement,
or upon earlier satisfaction of any other conditions, as specified by the
Committee or the Board of Directors at their sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be available
during his lifetime only to such Participant. Any levy of any attachment or
similar proceedings upon any Restricted Stock shall be null and void.
B. Nothing in this Plan or in any instrument executed pursuant hereto
shall confer upon any person any right to continue in the employment of the
Corporation or a Subsidiary, or shall affect the right of the Corporation
or a Subsidiary to terminate the employment of any person at any time with
or without cause.
C. No shares of Stock shall be issued or transferred pursuant to a Stock
Incentive unless and until all legal requirements applicable to the
issuance or transfer of such shares have, in the opinion of the General
Counsel, been satisfied. Any such issuance or transfer shall be contingent
upon the person acquiring the shares giving the Corporation any assurances
the General Counsel may deem necessary or desirable to assure compliance
with all applicable legal requirements.
D. No person (individually or as a member of a group), or other person
claiming under or through him, shall have any right, title or interest in
or to any shares of Stock (i) issued or transferred to, or acquired by, a
trust, (ii) allocated, or (iii) reserved for the purposes of this Plan, or
subject to any Stock Incentive, except as to such shares of Stock, if any,
as shall have been issued or transferred to him. The Committee or the Board
of Directors may, but need not, provide at any time or from time to time
(including, without limitation, upon or in contemplation of a Change in
Control) for a number of shares of Stock, equal to the number of such
shares subject to Stock Incentives then outstanding, to be issued or
transferred to, or acquired by, a trust (including, but not limited to, a
grantor trust) for the purpose of satisfying the Corporation's obligations
under such Stock Incentives, and, unless prohibited by applicable law, such
shares held in trust shall be considered authorized and issued shares with
full dividend and voting rights, notwithstanding that the Stock Incentives
to which such shares relate shall not have been exercised or may not be
exercisable or vested at that time.
E. The Corporation and its Subsidiaries may make such provisions as they
may deem appropriate for the withholding of any taxes which they determine
they are required to withhold in connection with any Stock Incentive.
Without limiting the foregoing, the Committee or the Board of Directors
may, subject to such terms
A-8
<PAGE>
and conditions as it may impose, permit or require any withholding tax
obligation arising in connection with the grant, exercise, vesting,
distribution or payment of any Stock Incentive to be satisfied in whole or
in part, with or without the consent of the Participant, by having the
Corporation withhold all or any part of the shares of Stock that vest or
would otherwise be distributed at such time. Any shares so withheld shall
be valued at their Fair Market Value on the date of such withholding.
F. Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or fringe benefits
to directors, officers or employees generally, or to any class or group of
such persons, which the Corporation or any Subsidiary now has or may
hereafter lawfully put into effect, including, without limitation, any
incentive compensation, retirement, pension, group insurance, stock
purchase, stock bonus or stock option plan.
G. Any provision of the Plan to the contrary notwithstanding: (i) the
Committee or the Board of Directors may impose such conditions on any Stock
Incentive as they may determine, on the advice of counsel, are necessary or
desirable to satisfy any exemption from Section 16 of the Exchange Act for
which the Corporation intends transactions by or with respect to Section 16
Persons to qualify, including, without limitation, SEC Rule 16b-3; (ii)
transactions by or with respect to Section 16 Persons shall comply with any
applicable conditions of SEC Rule 16b-3 unless the Committee or the Board
of Directors determines otherwise; (iii) transactions by or with respect to
persons whose remuneration would not be deductible by the Corporation but
for compliance with the provisions of Section 162(m)(4)(C) of the Code
shall conform to the requirements of Section 162(m)(4)(C) of the Code
unless the Committee or the Board of Directors determines otherwise; (iv)
the Plan is intended to give the Committee or the Board of Directors the
authority to grant awards that qualify as performance-based compensation
under Code Section 162(m)(4)(C) as well as awards that do not so qualify;
and (v) any provision of the Plan that would prevent the Committee or the
Board of Directors from exercising the authority referred to in clause (iv)
above or that would prevent an award that the Committee or the Board of
Directors intends to qualify as performance-based compensation under Code
Section 162(m)(4)(C) from so qualifying or that would prevent any
transaction by or with respect to a Section 16 Person from qualifying for
any exemption from Section 16 of the Exchange Act for which the Corporation
intends such transaction to qualify (including SEC Rule 16b-3), shall be
administered, interpreted and construed to carry out such intention and any
provision that cannot be so administered, interpreted and construed shall
to that extent be disregarded. With respect to Awards granted under the
Plan that are intended to satisfy the applicable provisions of Section
162(m) of the Code, the Committee or the Board of Directors shall have full
power and discretion to establish and administer performance goals,
establish performance periods and to certify that performance goals have
been attained, to the fullest extent required to comply with Section 162(m)
of the Code.
H. By accepting any benefits under the Plan, each Participant, and each
person claiming under or through him, shall be conclusively deemed to have
indicated his acceptance and ratification of, and consent to, all
provisions of the Plan and any action or decision under the Plan by the
Corporation, its agents and employees, the Board of Directors and the
Committee.
I. The validity, construction, interpretation and administration of the
Plan and of any determinations or decisions made thereunder, and the rights
of all persons having or claiming to have any interest therein or
thereunder, shall be governed by, and determined exclusively in accordance
with, the laws of the State of Indiana, but without giving effect to the
principles of conflicts of laws thereof. Without limiting the generality of
the foregoing, the period within which any action arising under or in
connection with the Plan must be commenced shall be governed by the laws of
the State of Indiana, without giving effect to the principles of conflicts
of laws thereof, irrespective of the place where the act or omission
complained of took place and of the residence of any party to such action
and irrespective of the place where the action may be brought.
J. The use of the masculine gender shall also include within its meaning
the feminine. The use of the singular shall include within its meaning the
plural and vice versa.
14. Amendment and Termination. The Plan may be amended by the Board of
Directors, without shareholder approval, at any time and in any respect,
unless shareholder approval of the amendment in question is required under
Indiana law, the Code (including, without limitation, Code Section 162(m)(4)
and Code Section 422, including Proposed Treasury Regulation Section
1.422A(B)(iv)), any applicable exemption from Section 16 of the Exchange Act
(including, without limitation, SEC Rule 16b-3) for which the Corporation
intends transactions by or with respect to Section 16 Persons to qualify, any
national securities exchange or system on which shares of Stock are then
listed or reported, by any regulatory body having jurisdiction with respect to
the Plan, or under any other applicable laws, rules or regulations. The Plan
may also be terminated at any time by the Board of Directors. No amendment or
termination of this Plan shall adversely affect any Stock Incentive granted
prior to the date of such amendment or termination without the written consent
of the Participant.
A-9
<PAGE>
LOGO
LOGO
<PAGE>
BALL CORPORATION PROXY/VOTING INSTRUCTION CARD
345 SOUTH HIGH STREET, MUNCIE, INDIANA 47305
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON APRIL 23, 1997.
The undersigned hereby appoints Edmund F. Ball, John W. Fisher and Alvin 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 the under-
signed for the election of directors and on Proposals 2 and 3 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 Share-
holders on Wednesday, April 23, 1997, or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR ITEMS 1, 2 AND 3.
Election of four directors for three-year terms. Nominees are:
Howard M. Dean, John T. Hackett, R. David Hoover and Jan Nicholson
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.
P R O X Y
3101
----
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
X
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2 AND 3.
FOR
WITHHOLD AUTHORITY FOR ALL NOMINEES
FOR
AGAINST
ABSTAIN
1. Election of Directors (see reverse)
To withhold authority to vote for any specific nominee(s), mark the "FOR" box
and write the name of each such nominee for whom you are withholding authority
to vote on the line provided below.
2. Proposal to ratify the appointment of Price Waterhouse LLP as the
independent public accountants of the Corporation.
- --------------------------------------------------------------------------------
3. Proposal to approve the 1997 Stock Incentive Plan.
4. At their discretion, the proxies are authorized to vote upon such other
business as properly may come before the meeting or any adjournment thereof.
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
