SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 3, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________to___________
Commission File Number 0-6187
BANTA CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified on its charter)
Wisconsin 39-0148550
(State or other jurisdiction (IRS Employer
of incorporation or organization) I.D. Number)
225 Main Street, Menasha, Wisconsin 54952
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920) 751-7777
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
The registrant had outstanding on July 3, 1999, 27,172,961 shares of $.10
par value common stock.
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Quarter Ended July 3, 1999
INDEX
Page Number
-----------
PART I FINANCIAL INFORMATION:
Item 1-Financial Statements
Unaudited Consolidated Condensed Balance Sheets
July 3, 1999 and January 2, 1999............................... 3
Unaudited Consolidated Condensed Statements of Earnings
for the Three Months and Six Months Ended July 3, 1999
and July 4, 1998............................................... 4
Unaudited Consolidated Condensed Statements of Cash Flows
for the Three Months and Six Months Ended July 3, 1999
and July 4, 1998............................................... 5
Notes to Unaudited Consolidated Condensed
Financial Statements .......................................... 6-9
Item 2-Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................10-12
Item 3-Quantitative and Qualitative Disclosures about Market Risk...... 13
PART II OTHER INFORMATION
Item 4-Submission of Matters to a Vote of Security Holders............. 14
Item 6-Exhibits and Reports on Form 8-K................................ 14
Exhibit Index............................................................... 15
2
<PAGE>
PART I Item 1. Financial Statements
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
July 3, 1999 January 2, 1999
------------ ---------------
ASSETS
- ------
Current Assets
Cash and cash equivalents $ 19,264 $ 26,584
Receivables 206,084 233,200
Inventories 78,179 74,724
Other current assets 20,307 20,112
--------- ---------
Total Current Assets 323,834 354,620
--------- ---------
Plant and Equipment 783,451 758,440
Less: Accumulated Depreciation (470,857) (439,805)
--------- ---------
Plant and Equipment, net 312,594 318,635
Other Assets 21,066 20,989
Cost in Excess of Net Assets of
Subsidiaries Acquired 60,622 75,722
--------- ---------
$ 718,116 $ 769,966
========= =========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
Current Liabilities
Short-term debt $ 37,601 $ 36,140
Accounts payable 97,699 107,649
Accrued salaries and wages 29,394 25,085
Other accrued liabilities 17,523 20,706
Current maturities of long-term debt 8,423 6,911
--------- ---------
Total Current Liabilities 190,640 196,491
--------- ---------
Long-term Debt 117,123 120,628
Deferred Income Taxes 21,617 22,214
Other Non-Current Liabilities 29,166 20,702
Shareholders' Investment
Preferred stock-$10 par value;
authorized 300,000 shares; none issued 0 0
Common stock-$.10 par value;
Authorized 75,000,000 shares;
27,172,961 and 28,260,957 shares issued
and outstanding, respectively 2,717 2,826
Accumulated other comprehensive loss (6,045) (2,308)
Treasury stock, at cost (9,655) 0
Retained earnings 372,553 409,413
--------- ---------
Total Shareholders' Investment 359,570 409,931
--------- ---------
$ 718,116 $ 769,966
========= =========
See accompanying notes to consolidated financial statements
3
<PAGE>
<TABLE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
<CAPTION>
(Dollars in thousands, except per share amounts)
Three Months Ended Six Months Ended
July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $ 299,080 $ 316,000 $ 608,366 $ 646,810
Cost of goods sold 237,395 249,875 484,986 515,871
--------- --------- --------- ---------
Gross earnings 61,685 66,125 123,380 130,939
Selling and administrative expenses 39,039 41,041 81,343 84,541
Restructuring Charge 55,000 - 55,000 -
--------- --------- --------- ---------
Earnings (loss) from operations (32,354) 25,084 (12,963) 46,398
Interest expense (2,852) (2,769) (5,799) (5,687)
Other expense, net (321) (421) (753) (785)
--------- --------- --------- ---------
Earnings (loss) before income taxes (35,527) 21,894 (19,515) 39,926
Provision (benefit) for income taxes (8,800) 8,500 (2,500) 15,500
--------- --------- --------- ---------
Net earnings (loss) $ (26,727) $ 13,394 $ (17,015) $ 24,426
========= ========= ========= =========
Basic earnings (loss) per share of common stock $ (0.97) $ 0.45 $ (0.61) $ 0.82
========= ========= ========= =========
Diluted earnings (loss) per share of common stock $ (0.97) $ 0.45 $ (0.61) $ 0.82
========= ========= ========= =========
Cash dividends per common share $ 0.14 $ 0.13 $ 0.28 $ 0.26
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six Months Ended
July 3, 1999 July 4, 1998
------------ ------------
Cash Flows From Operating Activities
Net earnings (loss) $ (17,015) $ 24,426
Depreciation and amortization 33,718 33,862
Deferred income taxes (597) (1,291)
Restructuring charge 55,000 --
Restructuring charges paid (6,490) --
Change in assets and liabilities:
Decrease in receivables 26,216 31,248
Decrease in inventories 354 10,499
Increase in other current assets (945) (1,936)
Decrease in accounts payable
and accrued liabilities (22,153) (29,733)
Other, net (398) (640)
----------- ---------
Cash provided from operating activities 67,690 66,435
----------- ---------
Cash Flows From Investing Activities
Capital expenditures, net (33,974) (31,831)
Additions to long-term investments (8,095) (1,572)
----------- ---------
Cash used for investing activities (42,069) (33,403)
Cash Flows From Financing Activities
Proceeds from (repayment of) short-term debt, net 1,461 (6,355)
Repayment of long-term debt (1,993) (6,133)
Dividends paid (7,809) (7,442)
Proceeds from exercise of stock options 608 2,512
Repurchase of common stock (25,208) (12,998)
----------- ---------
Cash used for financing activities (32,941) (30,416)
----------- ---------
Net (decrease) increase in cash (7,320) 2,616
Cash and cash equivalents at beginning of period 26,584 16,432
----------- ---------
Cash and cash equivalents at end of period $ 19,264 $ 19,048
=========== =========
Cash payments for:
Interest, net of amount capitalized $ 4,901 $ 6,802
Income taxes 8,803 17,372
See accompanying notes to consolidated statements
5
<PAGE>
BANTA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1) Basis of Presentation
The condensed financial statements included herein have been prepared by
the Corporation, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Corporation believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these condensed
financial statements be read in conjunction with the financial statements
and the notes thereto included in the Corporation's latest Annual Report on
Form 10-K.
In the opinion of management, the aforementioned statements reflect all
adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the results for the interim periods. Results for the
three and six months ended July 3, 1999, are not necessarily indicative of
results that may be expected for the year ending January 1, 2000.
2) Inventories
The Corporation's inventories are stated at the lower of cost or market
using the first-in, first-out (FIFO) method. Until the current fiscal year,
approximately one-third of the Corporation's inventories were accounted for
at cost determined on a last-in, first-out (LIFO) basis. Effective January
3, 1999, these operations changed to the FIFO method. The change in
accounting principles was made to provide a better matching of revenue and
expenses. This accounting change was not material to the financial
statements on an annual or quarterly basis, and accordingly, no retroactive
restatement of prior years' financial statements was made. Inventories
include material, labor and manufacturing overhead.
Inventory amounts at July 3, 1999 and January 2, 1999 were as follows:
(Dollars in thousands)
July 3, 1999 January 2, 1999
------------ ---------------
Raw Materials and Supplies $ 39,088 $ 35,270
Work-In-Process and Finished Goods 39,091 43,963
--------- --------
FIFO value (current cost of all inventories) 78,179 79,233
LIFO reserve - (4,509)
--------- --------
Net Inventories $ 78,179 $ 74,724
======== ========
3) Earnings Per Share of Common Stock
Basic earnings per share of common stock is computed by dividing net
earnings by the weighted average number of common shares outstanding during
the period. Diluted earnings per share of common stock is computed by
dividing net earnings by the weighted average number of common shares and
common equivalent shares, which relate entirely to the assumed exercise of
stock options.
6
<PAGE>
The weighted average shares used in the computation of earnings per share
were as follows (in millions of shares):
Three Months Ended Six Months Ended
-------------------------- ---------------------------
July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
------------ ------------ ------------ ------------
Basic 27.4 29.7 27.7 29.7
Diluted 27.4 29.9 27.7 29.9
4) Comprehensive Income (Loss)
Total comprehensive income (loss), comprised of net earnings (loss) and
other comprehensive income (loss), was $(28,073,000) and $13,913,000 for
the second quarter of 1999 and 1998, respectively. For the first half of
1999 and 1998, comprehensive income (loss) was $(20,752,000) and
$23,786,000, respectively. Other comprehensive income (loss) was comprised
solely of foreign currency translation adjustments. The Corporation does
not provide U.S. income taxes on foreign currency translation adjustments
because it does not provide for such taxes on undistributed earnings of
foreign subsidiaries.
5) Segment Information
The Corporation operates in one primary business segment, print, with other
business operations in turnkey services and healthcare products. Summarized
segment data for the three months ended July 3, 1999 and July 4, 1998 are
as follows:
Dollars in thousands Printing All Other1 Total
------------------------------------------------------------------------
1999
Net sales $226,780 $72,300 $299,080
Intersegment sales 834 0 834
Loss from operations (22,853) (5,581) (28,434)
Earnings before restructuring 22,317 3,669 25,986
1998
Net sales $242,616 $73,384 $316,000
Intersegment sales 2,478 77 2,555
Earnings from operations 23,342 5,653 28,995
7
<PAGE>
Summarized segment data for the six months ended July 3, 1999 and July 4,
1998 are as follows:
Dollars in thousands Printing All Other1 Total
------------------------------------------------------------------------
1999
Net sales $463,200 $145,166 $608,366
Intersegment sales 2,135 4 2,139
Loss from operations (3,532) (1,408) (4,940)
Earnings before restructuring 41,638 7,842 49,480
1998
Net sales $497,083 $149,727 $646,810
Intersegment sales 2,808 409 3,217
Earnings from operations 44,565 10,118 54,683
1 "All Other" includes the operations within turnkey services and
healthcare products which have been aggregated.
The following table presents a reconciliation of segment earnings from
operations to the totals contained in the condensed financial statements
for the three and six months ended July 3, 1999 and July 4, 1998:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Dollars in thousands July 3, 1999 July 4, 1998 July 3, 1999 July 4, 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Reportable segment earnings (loss) $(22,853) $23,342 $ (3,532) $44,565
Other segment earnings (loss) (5,581) 5,653 (1,408) 10,118
Unallocated corporate expenses (3,920) (3,911) (8,023) (8,285)
Interest expense (2,852) (2,769) (5,799) (5,687)
Other expense (321) (421) (753) (785)
-------- ------- -------- --------
Earnings (loss) before income taxes $(35,527) $21,894 $(19,515) $39,926
======== ======= ======== =======
</TABLE>
6) Restructuring Charge
In the second quarter of 1999, the Corporation recorded a restructuring
charge, including related asset writedowns, of $55.0 million ($38.5 million
or $1.40 per diluted share, after tax). The restructuring primarily
involves the Corporation's print segment and resulted in three facility
closings and the elimination of certain underperforming business assets.
The restructuring also resulted in workforce reductions of approximately
650 employees (350 employees at the three facilities closed) and the
writedown of certain long-lived assets, including goodwill.
Actions within the print segment resulted in restructuring charges of
approximately $45.2 million and, most significantly, included the closure
of the mailing and fulfillment facility in Berkeley, Illinois, the prepress
facility in Charlotte, North Carolina and the printing plant in Kent,
Washington. These closings and the related asset writedowns were primarily
the result of volume shortfalls and unanticipated losses in early 1999.
Although the Corporation had taken action during 1998 to improve operating
results at these facilitates, these actions failed to result in the level
of improvement necessary to create profitability and positive shareholder
value. Initiatives within the turnkey services and healthcare products
business operations resulted in restructuring charges of $9.3 million and
primarily related to the elimination or realignment of manufacturing
capacity to meet future customer sourcing requirements. The remaining
portion of the charge (approximately $0.5 million) related to severance and
other restructuring costs at the corporate headquarters.
8
<PAGE>
The cash and noncash elements of the restructuring charge approximate $24.1
million and $30.9 million, respectively. Details of the restructuring
charge and second quarter activity are as follows (in thousands):
<TABLE>
<CAPTION>
Original July 3, 1999
Charge Used Balance
------ ---- -------
<S> <C> <C> <C>
Writedown of intangible assets, including goodwill $ 15,600 $ (15,600) $ -
Writedown of tangible assets 15,300 (15,300) -
Lease termination payments 11,500 (945) 10,555
Employee severance and termination benefit 8,300 (3,351) 4,949
Other facility exit costs 4,300 (2,194) 2,106
------- --------- -------
$55,000 $ (37,390) $ 17,610
======= ========= ========
</TABLE>
For facilities to be closed or operations with manufacturing capacity
eliminated, the tangible assets to be disposed of have been written down to
their estimated fair value, less cost of disposal. The fair value for
tangible assets written down approximates $3.4 million and was determined
through internal manufacturing valuation studies. Considerable management
judgement is applied in estimating fair value; accordingly, actual results
could vary from such estimates. All intangible asset carrying values
associated with the facility closings have been eliminated. As of July 3,
1999, cash outflows have been approximately $6.5 million and approximately
400 employees have separated from the Corporation. It is expected that the
restructuring actions will be substantially completed by mid-year of 2000.
7) Treasury Stock
At July 3, 1999, the Corporation held 427,800 shares of its common stock in
treasury. These shares were acquired during the second quarter of 1999
through the common stock repurchase program and may be reissued pursuant to
the stock option plan or for other purposes.
9
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESTRUCTURING
In the second quarter of 1999, the Corporation recorded a restructuring
charge of $55.0 million ($38.5 million or $1.40 per diluted share, after
tax). For additional details regarding the restructuring, see Note 6 of
Notes to Unaudited Consolidated Condensed Financial Statements and
"Restructuring Charge" below.
RESULTS OF OPERATIONS
Net Sales
---------
Sales for the second quarter of 1999 were $16.9 million (5.4%) lower than
the second quarter of 1998. The decrease in print segment sales was
primarily due to lower paper prices in the second quarter of 1999 as
compared with the second quarter of 1998 and lower volume in the trade book
market. The cost of paper is generally passed on to the Corporation's
customers and, as a result, as paper prices decreased from 1998 levels, the
Corporation's sales also decreased. As a result of the facility closings
related to the restructuring, second quarter sales were approximately $6.1
million lower than the prior year. Turnkey services sales were lower in the
second quarter of 1999 compared to the prior year second quarter due to
volume reductions from certain U.S. customers and lower material
pass-through as compared with the type of projects performed during the
current year quarter.
Sales for the first half of 1999 were $38.4 million or 5.9% lower than for
the first half of 1998. Trends in operating activity levels for the first
two quarters of 1999 and the effect of the facility closings were similar
to those described above for the second quarter.
Cost of Goods Sold
------------------
Cost of goods sold as a percentage of sales increased from 79.1% for the
second quarter of 1998 to 79.4% for the second quarter of 1999. Costs
associated with continued integration efforts within the healthcare
products area and strong product launches in the prior year for turnkey
services resulted in slightly lower overall margins in the 1999 quarter.
Print segment margins increased slightly due to the decrease in paper sales
since the sale of paper generally has lower margins than manufacturing
sales.
Cost of goods sold as a percentage of sales decreased slightly from 79.8%
for the second half of 1998 to 79.7% for the second half of 1999. Margin
improvements related to lower paper sales more than offset the lower
margins in healthcare products and turnkey services.
10
<PAGE>
Selling and Administrative Expenses
-----------------------------------
Selling and administrative expenses were $2.0 million lower for the second
quarter of 1999 than for the second quarter of 1998 and $3.2 million lower
for the first half of 1999 as compared to the first half of 1998. The
decrease is essentially due to lower sales volume in the current year
compared to the prior year. Selling and administrative expenses as a
percent of sales increased slightly for both the second quarter and the
first half of 1999 primarily as a result of the lower material pass-through
revenue.
Restructuring Charge
--------------------
Earnings from operations for the second quarter of 1999 include a
restructuring charge of $55.0 million. The restructuring initiatives
primarily involve the Corporation's print segment and include three
facility closings and the elimination of certain underperforming business
lines. These initiatives will result in workforce reductions of
approximately 650 employees and the writedown of certain long-lived assets,
including goodwill. The initiatives are expected to generate between $5
million and $7 million in cost savings primarily during the second half of
1999 and savings for the years 2000 and beyond of $18 million to $20
million annually. The cash portion of the charge is approximately $24
million and will be funded by the cost savings from the restructuring
initiatives.
Interest Expense
----------------
Interest expense for the both the second quarter and first half of 1999 was
comparable to the second quarter and first half of 1998.
Income Taxes
------------
As indicated below, the Corporation's 1999 second quarter and first half
effective income tax benefit was lower than the federal statutory rate due
to certain nondeductible expenses related to the restructuring charge.
Prior to the effect of the restructuring charge, the 1999 effective tax
rate was 39.5% for the second quarter and first half. The increase is
partially due to a decrease in tax-free interest income earned in 1999 as
compared to 1998.
Effective Tax Rate (Benefit)
1999 1998
---------- ----------
Second Quarter (24.8)% 38.8%
First Half (12.8)% 38.8%
FINANCIAL CONDITION
Liquidity and Capital Resources
The Corporation's net working capital decreased by approximately $24.9
million during the first half of 1999. Working capital was lower than the
year-end balance due to higher accrued liabilities partially related to the
restructuring charge. The decrease in receivables compared to the 1998
year-end balance was the result of seasonality in the Corporation's
business and a continued emphasis on asset management. The decrease in
payables compared to the 1998 year-end balances was primarily due to lower
sales volume. Also, during the first half of 1999, the Corporation
repurchased approximately 1.1 million shares of common stock at an
aggregate purchase price of $25.2 million pursuant to its common stock
repurchase program. Cash provided from operations funded these repurchases.
Future stock repurchases, if any will be funded by a combination of cash
provided from operations and short-term borrowings.
11
<PAGE>
During the second quarter of 1999, the Corporation acquired a 50 percent
equity interest in a newly formed joint venture for approximately $5.8
million. The joint venture, Banta G. Imagen S. de R.L. de C.V., based in
Queretaro, Mexico, provides a variety of products and services for the
commercial print market.
Capital expenditures were $34.0 million during the first half of 1999, an
increase of $2.1 million from the amount expended during the prior year
first half. Capital requirements for the full year are expected to be
approximately $90 million and will be funded by a combination of cash
provided from operations and short-term borrowings. Long-term debt as a
percentage of total capitalization increased to 24.6% compared to 22.7% at
year-end. The restructuring charge lowered total capitalization in the
second quarter of 1999, which resulted in the higher percentage.
OTHER MATTERS
During 1998, the Corporation completed an evaluation of its computer
software to determine its ability to handle dates beginning with the year
2000. It was determined that a significant portion of the Corporation's
software was already year-2000 compliant. This evaluation also resulted in
the development of detailed plans to replace certain software and to
reprogram other software. Banta also implemented a program to confirm that
business and manufacturing system hardware, control systems and software
supplied by significant third party vendors is year-2000 ready. Although
complete assurance cannot be given, management currently believes it is
devoting the necessary resources to resolve all significant year-2000
issues, both Information Technology ("IT") and non-IT related. The
Corporation has nearly completed the audits and operational readiness
testing as well as received certification of year-2000 readiness from
significant third party vendors.
The Corporation's contingency plan related to third party vendors is to
identify additional suppliers and alternate sources for essential
materials, primarily paper, in case one or more of its suppliers were not
year-2000 ready. The majority of the Corporation's internal IT-related
systems have been replaced with year-2000 compliant systems. Accordingly, a
contingency plan has not been developed for internal IT-related systems and
is not currently considered necessary. The Corporation is continuing to
test non-IT-related systems (HVAC, safety and security) and has developed a
contingency plan.
The risk of not being year-2000 compliant on a timely basis is that product
shipments could potentially be delayed, which could have an adverse impact
on, among other things, the Corporation's revenues and earnings. Additional
resources, which cannot be accurately estimated at this time, would be
required to process and fulfill customer orders.
During 1998, the Corporation spent approximately $3.5 million to upgrade
and replace its systems to ensure year-2000 readiness. The Corporation
estimates it will incur additional costs of $3 to $4 million in 1999. The
majority of the systems development costs will be capitalized.
12
<PAGE>
Item 3.
Qualitative and Quantitative disclosure about Market Risk
The Corporation is exposed to market risk from changes in interest rates
and foreign exchange rates. At July 3, 1999, the Corporation had notes
payable outstanding aggregating $37.6 million against lines of credit with
banks. These notes consist entirely of commercial paper and bear interest
at floating rates. Each 1% fluctuation in the interest rate will increase
or decrease interest expense for the Corporation by approximately $376,000
annually. Since essentially all long-term debt is at fixed interest rates,
exposure to interest rate fluctuations is minimal. Exposure to adverse
changes in foreign exchange rates is also considered minimal.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This document includes forward-looking statements. Statements that describe
future expectations, plans, results or strategies are considered
forward-looking. Such statements are subject to certain risks and
uncertainties which could cause actual results to differ materially from
those currently anticipated. Factors that could affect actual results
include, among others, changes in customers' demand for the Corporation's
products, changes in raw material costs and availability, success with
operational start-ups, seasonal or unanticipated changes in customer
orders, pricing actions by competitors, success in the implementation of
the Corporation's restructuring (including, without limitation, the
achievement of estimated cost savings), unanticipated events relating to
achieving year-2000 compliance, and general changes in economic conditions.
These factors should be considered in evaluating the forward-looking
statements, and undue reliance should not be placed on such statements. The
forward-looking statements included herein are made as of the date hereof,
and the Corporation undertakes no obligation to update publicly such
statements to reflect subsequent events or circumstances.
13
<PAGE>
PART II: OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of shareholders held on April 27, 1999, all of the
persons nominated as directors were elected for terms expiring at the 2000
annual meeting. The following table sets forth certain information with
respect to such election:
Shares
Shares Withholding
Name Voted For Authority
---- --------- ---------
Jameson A. Baxter 20,507,416 184,813
Donald D. Belcher 20,466,497 225,732
John F. Bergstrom 20,497,763 194,466
George T. Brophy 20,167,528 524,701
Henry T. DeNero 20,511,419 180,810
Richard L. Gunderson 20,500,140 192,089
Gerald A. Henseler 20,488,480 203,749
Bernard S. Kubale 20,356,379 335,850
Raymond C. Richelsen 20,510,029 182,200
Michael J. Winkler 20,509,459 182,770
In addition, at the annual meeting, shareholders approved the Banta
Corporation 1995 Equity Incentive Plan, as amended. With respect to
such matter, the number of shares voted for and against was 18,871,163
and 1,697,214, respectively. The number of shares abstaining was
123,852. There were no shares subject to broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
10.1 - 1995 Equity Incentive Plan, as amended
10.2 - Form of Agreement with Ronald D. Kneezel
10.3 - Form of Agreement with Dennis J. Meyer, John E. Tiffany
and Henry M. Wells, III
10.4 - Key Management Retention Plan
27 - Financial Data Schedule (EDGAR version only)
(b) No reports on Form 8-K were filed during the quarter for which
this report is filed
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BANTA CORPORATION
/S/GERALD A. HENSELER
---------------------
Gerald A. Henseler
Executive Vice President, Chief Financial Officer and Treasurer
Date August 17, 1999
---------------
14
<PAGE>
BANTA CORPORATION
EXHIBIT INDEX TO FORM 10-Q
For The Quarter Ended July 3, 1999
Exhibit Number Description
-------------- -----------
10.1 - 1995 Equity Incentive Plan, as amended
10.2 - Form of Agreement with Ronald D. Kneezel
10.3 - Form of Agreement with Dennis J. Meyer, John E.
Tiffany and Henry M. Wells, III
10.4 - Key Management Retention Plan
27 - Financial Data Schedule (EDGAR version only)
15
Exhibit 10.1
BANTA CORPORATION
1995 EQUITY INCENTIVE PLAN
As Amended
Section 1. Purpose
The purpose of the Banta Corporation 1995 Equity Incentive Plan (the
"Plan") is to promote the best interests of Banta Corporation (together with any
successor thereto, the "Company") and its shareholders by providing key
employees of the Company and its Affiliates (as defined below) and members of
the Company's Board of Directors who are not employees of the Company or its
Affiliates with an opportunity to acquire a proprietary interest in the Company.
It is intended that the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company by those key
employees who are primarily responsible for shaping and carrying out the
long-range plans of the Company and securing the Company's continued growth and
financial success. In addition, by encouraging stock ownership by directors who
are not employees of the Company or its Affiliates, the Company seeks to attract
and retain on its Board of Directors persons of exceptional competence and to
provide a further incentive to serve as a director of the Company.
Section 2. Definitions
As used in the Plan, the following terms shall have the respective
meanings set forth below:
(a) "Affiliate" shall mean any entity that, directly or through one or
more intermediaries, is controlled by, controls, or is under common control
with, the Company.
(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock or Performance Share granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Commission" shall mean the United States Securities and Exchange
Commission or any successor agency.
(f) "Committee" shall mean a committee of the Board of Directors of
the Company designated by such Board to administer the Plan and composed of not
less than two directors, each of whom is a "non-employee director for purposes
of Section 16" within the meaning of Rule 16b-3 and each of whom is an "outside
director" within the meaning of Section 162(m)(4)(C) of the Code (or any
successor provision thereto).
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
<PAGE>
(h) "Excluded Items" shall mean any items which the Committee
determines shall be excluded in fixing Performance Goals, such as any gains or
losses from discontinued operations, any extraordinary gains or losses and the
effects of accounting changes.
(i) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee.
(j) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of Section
422 of the Code (or any successor provision thereto).
(k) "Key Employee" shall mean any officer or other key employee of the
Company or of any Affiliate who is responsible for or contributes to the
management, growth or profitability of the business of the Company or any
Affiliate as determined by the Committee.
(l) "Non-Employee Director" shall mean any member of the Company's
Board of Directors who is not an employee of the Company or of any Affiliate.
(m) "Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option
and shall mean any option granted to a Non-Employee Director under Section 6(b)
of the Plan.
(n) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(o) "Participating Key Employee" shall mean a Key Employee designated
to be granted an Award under the Plan.
(p) "Performance Goals" shall mean the following (in all cases after
excluding the impact of applicable Excluded Items):
(i) Return on equity for the Performance Period for the
Company on a consolidated basis.
(ii) Return on investment for the Performance Period (aa)
for the Company on a consolidated basis, (bb) for any one or more
Affiliates or divisions of the Company and/or (cc) for any other
business unit or units of the Company as defined by the Committee at
the time of selection.
(iii) Return on net assets for the Performance Period (aa)
for the Company on a consolidated basis, (bb) for any one or more
Affiliates or divisions of the Company and/or (cc) for any other
business unit or units of the Company as defined by the Committee at
the time of selection.
(iv) Economic value added (as defined by the Committee at
the time of selection) for the Performance Period (aa) for the Company
on a consolidated basis, (bb)
-2-
<PAGE>
for any one or more Affiliates or divisions of the Company and/or (cc)
for any other business unit or units of the Company as defined by the
Committee at the time of selection.
(v) Earnings from operations for the Performance Period (aa)
for the Company on a consolidated basis, (bb) for any one or more
Affiliates or divisions of the Company and/or (cc) for any other
business unit or units of the Company as defined by the Committee at
the time of selection.
(vi) Pre-tax profits for the Performance Period (aa) for the
Company on a consolidated basis, (bb) for any one or more Affiliates
or divisions of the Company and/or (cc) for any other business unit or
units of the Company as defined by the Committee at the time of
selection.
(vii) Net earnings for the Performance Period (aa) for the
Company on a consolidated basis, (bb) for any one or more Affiliates
or divisions of the Company and/or (cc) for any other business unit or
units of the Company as defined by the Committee at the time of
selection.
(viii) Net earnings per Share for the Performance Period for
the Company on a consolidated basis.
(ix) Working capital as a percent of net sales for the
Performance Period (aa) for the Company on a consolidated basis, (bb)
for any one or more Affiliates or divisions of the Company and/or (cc)
for any other business unit or units of the Company as defined by the
Committee at the time of selection.
(x) Net cash provided by operating activities for the
Performance Period (aa) for the Company on a consolidated basis, (bb)
for any one or more Affiliates or divisions of the Company and/or (cc)
for any other business unit or units of the Company as defined by the
Committee at the time of selection.
(xi) Market price per Share for the Performance Period.
(xii) Total shareholder return for the Performance Period
for the Company on a consolidated basis.
(q) "Performance Period" shall mean, in relation to Performance
Shares, any period for which a Performance Goal or Goals have been established;
provided, however, that such period shall not be less than one year.
(r) "Performance Share" shall mean any right granted under Section
6(e) of the Plan that will be paid out as a Share (which, in specified
circumstances, may be a Share of Restricted Stock).
(s) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
-3-
<PAGE>
(t) "Released Securities" shall mean Shares of Restricted Stock with
respect to which all applicable restrictions have expired, lapsed, or been
waived.
(u) "Restricted Securities" shall mean Awards of Restricted Stock or
other Awards under which issued and outstanding Shares are held subject to
certain restrictions.
(v) "Restricted Stock" shall mean any Share granted under Section 6(d)
of the Plan or, in specified circumstances, a Share paid in connection with a
Performance Share under Section 6(e) of the Plan.
(w) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission under the Exchange Act, or any successor rule or regulation thereto.
(x) "Shares" shall mean shares of common stock of the Company, $.10
par value, and such other securities or property as may become subject to Awards
pursuant to an adjustment made under Section 4(b) of the Plan.
(y) "Stock Appreciation Right" shall mean any right granted under
Section 6(c) of the Plan.
Section 3. Administration
The Plan shall be administered by the Committee; provided, however,
that if at any time the Committee shall not be in existence, the functions of
the Committee as specified in the Plan shall be exercised by a committee
consisting of those members of the Board of Directors of the Company who qualify
as "non-employee directors for purposes of Section 16" under Rule 16b-3 and as
"outside directors" under Section 162(m)(4)(C) of the Code (or any successor
provision thereto). To the extent permitted by applicable law, the Committee may
delegate to one or more executive officers of the Company any or all of the
authority and responsibility of the Committee with respect to the Plan, other
than with respect to Persons who are subject to Section 16 of the Exchange Act.
To the extent the Committee has so delegated to one or more executive officers
the authority and responsibility of the Committee, all references to the
Committee herein shall include such officer or officers. Subject to the terms of
the Plan and without limitation by reason of enumeration, the Committee shall
have full power and authority to: (i) designate Participating Key Employees;
(ii) determine the type or types of Awards to be granted to each Participating
Key Employee under the Plan; (iii) determine the number of Shares to be covered
by (or with respect to which payments, rights, or other matters are to be
calculated in connection with) Awards granted to Participating Key Employees;
(iv) determine the terms and conditions of any Award granted to a Participating
Key Employee; (v) determine whether, to what extent, and under what
circumstances Awards granted to Participating Key Employees may be settled or
exercised in cash, Shares, other securities, other Awards, or other property,
and the method or methods by which Awards may be settled, exercised, cancelled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, and other amounts payable with respect
to an Award granted to Participating Key Employees under the Plan shall be
deferred either automatically or at the election of the holder thereof or of the
Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan (including, without
limitation, any Award Agreement); (viii) establish, amend, suspend, or waive
-4-
<PAGE>
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (ix) make any other determination
and take any other action that the Committee deems necessary or desirable for
the administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participating Key
Employee, any Non-Employee Director, any holder or beneficiary of any Award, any
shareholder, and any employee of the Company or of any Affiliate.
Notwithstanding the foregoing, Awards to Non-Employee Directors under the Plan
shall be automatic and the amount and terms of such Awards shall be determined
as provided in Section 6(b) of the Plan.
Section 4. Shares Available for Award
(a) Shares Available. Subject to adjustment as provided in Section
4(b):
(i) Number of Shares Available. The number of Shares with
respect to which Awards may be granted under the Plan shall be
2,500,000. If, after the effective date of the Plan, any Shares
covered by an Award granted under the Plan, or to which any Award
relates, are forfeited or if an Award otherwise terminates, expires or
is cancelled prior to the delivery of all of the Shares or of other
consideration issuable or payable pursuant to such Award, then the
number of Shares counted against the number of Shares available under
the Plan in connection with the grant of such Award, to the extent of
any such forfeiture, termination, expiration or cancellation, shall
again be available for granting of additional Awards under the Plan.
(ii) Limitations on Awards to Individual Participants. No
Participating Key Employee shall be granted, during any calendar year,
Options for more than 150,000 Shares, Stock Appreciation Rights with
respect to more than 50,000 Shares, more than 25,000 Shares of
Restricted Stock and/or more than 50,000 Performance Shares under the
Plan. Such number of Shares as specified in the preceding sentence
shall be subject to adjustment in accordance with the terms of Section
4(b) hereof. In all cases, determinations under this Section 4(a)(ii)
shall be made in a manner that is consistent with the exemption for
performance-based compensation provided by Section 162(m) of the Code
(or any successor provision thereto) and any regulations promulgated
thereunder.
(iii) Accounting for Awards. The number of Shares covered by
an Award under the Plan, or to which such Award relates, shall be
counted on the date of grant of such Award against the number of
Shares available for granting Awards under the Plan.
(iv) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Shares or of treasury Shares.
(b) Adjustments. In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of cash, Shares, other
securities, or other
-5-
<PAGE>
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee may, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of Shares subject to the Plan and
which thereafter may be made the subject of Awards under the Plan, (ii) the
number and type of Shares subject to outstanding Awards, and (iii) the grant,
purchase, or exercise price with respect to any Award, or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award; provided, however, in each case, that with respect to Awards of Incentive
Stock Options no such adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b) of the Code (or any
successor provision thereto); and provided further that the number of Shares
subject to any Award payable or denominated in Shares shall always be a whole
number. Notwithstanding the foregoing, Non-Qualified Stock Options subject to
grant or previously granted to Non-Employee Directors under Section 6(b) of the
Plan at the time of any event described in the preceding sentence shall be
subject to only such adjustments as shall be necessary to maintain the relative
proportionate interest represented thereby immediately prior to any such event
and to preserve, without exceeding, the value of such Options.
Section 5. Eligibility
Any Key Employee, including any executive officer or employee-director
of the Company or of any Affiliate, shall be eligible to be designated a
Participating Key Employee. All Non-Employee Directors shall receive Awards of
Non-Qualified Stock Options as provided in Section 6(b).
Section 6. Awards
(a) Option Awards to Key Employees. The Committee is hereby authorized
to grant Options to Key Employees with the terms and conditions as set forth
below and with such additional terms and conditions, in either case not
inconsistent with the provisions of the Plan, as the Committee shall determine.
(i) Exercise Price. The exercise price per Share of an
Option granted pursuant to this Section 6(a) shall be determined by
the Committee; provided, however, that such exercise price shall not
be less than 100% of the Fair Market Value of a Share on the date of
grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by
the Committee; provided, however, that in no event shall the term of
any Incentive Stock Option exceed a period of ten years from the date
of its grant.
(iii) Exercisability and Method of Exercise. An Option shall
become exercisable in such manner and within such period or periods
and in such installments or otherwise as shall be determined by the
Committee. The Committee also shall determine
-6-
<PAGE>
the method or methods by which, and the form or forms, including,
without limitation, cash, Shares, other securities, other Awards, or
other property, or any combination thereof, having a Fair Market Value
on the exercise date equal to the relevant exercise price, in which
payment of the exercise price with respect to any Option may be made
or deemed to have been made.
(iv) Incentive Stock Options. The terms of any Incentive
Stock Option granted under the Plan shall comply in all respects with
the provisions of Section 422 of the Code (or any successor provision
thereto) and any regulations promulgated thereunder. Notwithstanding
any provision in the Plan to the contrary, no Incentive Stock Option
may be granted hereunder after December 6, 2004.
(b) Non-Qualified Stock Option Awards to Non-Employee Directors.
(i) Eligibility. Each Non-Employee Director shall
automatically be granted Non-Qualified Stock Options under the Plan in
the manner set forth in this Section 6(b). A Non-Employee Director may
hold more than one Non-Qualified Stock Option, but only on the terms
and subject to any restrictions set forth herein.
(ii) Grant of Options to Newly-Elected Non-Employee
Directors. Any Person who is first elected as a Non-Employee Director
after the effective date of the Plan shall, on the date of such
election, automatically be granted a Non-Qualified Stock Option to
purchase 4,500 Shares (which number of Shares shall be subject to
adjustment in the manner provided in Section 4(b) hereof).
(iii) Annual Option Grants to Non-Employee Directors. Each
Non-Employee Director (if he or she continues to serve in such
capacity) shall, on the day following the annual meeting of
shareholders in each year during the time the Plan is in effect,
automatically be granted a Non-Qualified Stock Option to purchase
1,500 Shares (which number of Shares shall be subject to adjustment in
the manner provided in Section 4(b) hereof); provided, however, that a
Person who is first elected as a Non-Employee Director on the date of
an annual meeting of shareholders and who receives on that date a
Non-Qualified Stock Option pursuant to Section 6(b)(ii) hereof shall
not be eligible to begin to receive grants pursuant to this Section
6(b)(iii) until the day following the next succeeding annual meeting
of shareholders.
(iv) Grant Limitation. Notwithstanding the provisions of
Sections 6(b)(ii) and 6(b)(iii) hereof, Non-Qualified Stock Options
shall be automatically granted to Non-Employee Directors under the
Plan only for so long as the Plan remains in effect and a sufficient
number of Shares are available hereunder for the granting of such
Options.
(v) Exercise Price. The exercise price per Share for a
Non-Qualified Stock Option granted to a Non-Employee Director under
the Plan shall be equal to 100% of the "market value" of a Share on
the date of grant of such Option. The "market value" of a Share on the
date of grant to the Non-Employee Director shall be the closing price
per Share for the Shares on the New York Stock Exchange on the trading
date next preceding the date of grant, or if no trading occurred on
the trading date next preceding the date on
-7-
<PAGE>
which the Non-Qualified Stock Option is granted, then the "market
value" per Share shall be determined with reference to the next
preceding date on which the Shares were traded.
(vi) Exercisability and Termination of Options.
Non-Qualified Stock Options granted to Non-Employee Directors under
the Plan shall become exercisable six months following the date of
grant; provided, however, that if a Non-Employee Director ceases to be
a director of the Company by reason of death, disability or retirement
within six months after the date of grant, the Option shall become
immediately exercisable in full. Non-Qualified Stock Options granted
to Non-Employee Directors shall terminate on the earlier of:
(A) ten years after the date of grant; or
(B) twelve months after the Non-Employee Director
ceases to be a director of the Company for any reason,
including as a result of the Non-Employee Director's death,
disability or retirement.
(vii) Exercise of Options. A Non-Qualified Stock Option
granted to a Non-Employee Director may be exercised, subject to its
terms and conditions and the terms and conditions of the Plan, in full
at any time or in part from time to time by delivery to the Secretary
of the Company at the Company's principal office in Menasha,
Wisconsin, of a written notice of exercise specifying the number of
shares with respect to which the Option is being exercised. Any notice
of exercise shall be accompanied by full payment of the exercise price
of the Shares being purchased (x) in cash or its equivalent; (y) by
tendering previously acquired Shares (valued at their "market value"
[as determined in accordance with Section 6(b)(v)] as of the date of
exercise); or (z) by any combination of the means of payment set forth
in subparagraphs (x) and (y). For purposes of subparagraphs (y) and
(z) above, the term "previously acquired Shares" shall only include
Shares owned by the Non-Employee Director prior to the exercise of the
Option for which payment is being made and shall not include Shares
which are being acquired pursuant to the exercise of said Option. No
shares will be issued until full payment therefor has been made.
(c) Stock Appreciation Rights. The Committee is hereby authorized to
grant Stock Appreciation Rights to Key Employees. Non-Employee Directors are not
eligible to be granted Stock Appreciation Rights under the Plan. Subject to the
terms of the Plan and any applicable Award Agreement, a Stock Appreciation Right
granted under the Plan shall confer on the holder thereof a right to receive,
upon exercise thereof, the excess of (i) the Fair Market Value of one Share on
the date of exercise over (ii) the grant price of the Stock Appreciation Right
as specified by the Committee, which shall not be less than 100% of the Fair
Market Value of one Share on the date of grant of the Stock Appreciation Right.
Subject to the terms of the Plan, the grant price, term, methods of exercise,
methods of settlement (including whether the Participating Key Employee will be
paid in cash, Shares, other securities, other Awards, or other property, or any
combination thereof), and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.
-8-
<PAGE>
(d) Restricted Stock Awards.
(i) Issuance. The Committee is hereby authorized to grant
Awards of Restricted Stock to Key Employees; provided, however, that
the aggregate number of Shares of Restricted Stock granted under the
Plan to all Participating Key Employees as a group shall not exceed
225,000 (such number of Shares subject to adjustment in accordance
with the terms of Section 4(b) hereof). Non-Employee Directors are not
eligible to be granted Restricted Stock under the Plan.
(ii) Restrictions. Shares of Restricted Stock granted to
Participating Key Employees shall be subject to such restrictions as
the Committee may impose (including, without limitation, any
limitation on the right to vote a Share of Restricted Stock or the
right to receive any dividend or other right or property), which
restrictions may lapse separately or in combination at such time or
times, in such installments or otherwise, as the Committee may deem
appropriate.
(iii) Registration. Any Restricted Stock granted under the
Plan to a Participating Key Employee may be evidenced in such manner
as the Committee may deem appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect
of Shares of Restricted Stock granted under the Plan to a
Participating Key Employee, such certificate shall be registered in
the name of the Participating Key Employee and shall bear an
appropriate legend (as determined by the Committee) referring to the
terms, conditions, and restrictions applicable to such Restricted
Stock.
(iv) Payment of Restricted Stock. At the end of the
applicable restriction period relating to Restricted Stock granted to
a Participating Key Employee, one or more stock certificates for the
appropriate number of Shares, free of restrictions imposed under the
Plan, shall be delivered to the Participating Key Employee, or, if the
Participating Key Employee received stock certificates representing
the Restricted Stock at the time of grant, the legends placed on such
certificates shall be removed.
(v) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment of a Participating Key
Employee (as determined under criteria established by the Committee)
for any reason during the applicable restriction period, all Shares of
Restricted Stock still subject to restriction shall be forfeited by
the Participating Key Employee; provided, however, that the Committee
may, when it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining restrictions
with respect to Shares of Restricted Stock held by a Participating Key
Employee.
(e) Performance Shares.
(i) Issuance. The Committee is hereby authorized to grant
Awards of Performance Shares to Participating Key Employees.
Non-Employee Directors are not eligible to be granted Performance
Shares under the Plan.
-9-
<PAGE>
(ii) Performance Goals and Other Terms. The Committee shall
determine the Performance Period, the Performance Goal or Goals (and
the performance level or levels related thereto) to be achieved during
any Performance Period, the proportion of payments, if any, to be made
for performance between the minimum and full performance levels for
any Performance Goal and, if applicable, the relative percentage
weighting given to each of the selected Performance Goals, the
restrictions applicable to Shares of Restricted Stock received upon
payment of Performance Shares if Performance Shares are paid in such
manner, and any other terms, conditions and rights relating to a grant
of Performance Shares. The Committee shall have sole discretion to
alter the selected Performance Goals set forth in Section 2(p),
subject to shareholder approval, to the extent required to qualify the
Award for the performance-based exemption provided by Section 162(m)
of the Code (or any successor provision thereto). Notwithstanding the
foregoing, in the event the Committee determines it is advisable to
grant Performance Shares which do not qualify for the
performance-based exemption under Section 162(m) of the Code (or any
successor provision thereto), the Committee may make such grants
without satisfying the requirements thereof.
(iii) Rights and Benefits During the Performance Period. The
Committee may provide that, during a Performance Period, a
Participating Key Employee shall be paid cash amounts, with respect to
each Performance Share held by such Participating Key Employee, in the
same manner, at the same time, and in the same amount paid, as a cash
dividend on a Share. Participating Key Employees shall have no voting
rights with respect to Performance Shares held by them.
(iv) Payment of Performance Shares. As soon as is reasonably
practicable following the end of the applicable Performance Period,
and subject to the Committee certifying in writing as to the
satisfaction of the requisite Performance Goal or Goals if such
certification is required in order to qualify the Award for the
performance-based exemption provided by Section 162(m) of the Code (or
any successor provision thereto), one or more certificates
representing the number of Shares equal to the number of Performance
Shares payable shall be registered in the name of and delivered to the
Participating Key Employee; provided, however, that any Shares of
Restricted Stock payable in connection with Performance Shares shall,
pending the expiration, lapse, or waiver of the applicable
restrictions, be evidenced in the manner as set forth in Section
6(d)(iii) hereof.
(f) General.
(i) No Consideration for Awards. Awards shall be granted to
Participating Key Employees for no cash consideration unless otherwise
determined by the Committee. Awards of Non-Qualified Stock Options
granted to Non-Employee Directors under Section 6(b) of the Plan shall
be granted for no cash consideration unless otherwise required by law.
(ii) Award Agreements. Each Award granted under the Plan
shall be evidenced by an Award Agreement in such form (consistent with
the terms of the Plan) as shall have been approved by the Committee.
-10-
<PAGE>
(iii) Awards May Be Granted Separately or Together. Awards
to Participating Key Employees under the Plan may be granted either
alone or in addition to, in tandem with, or in substitution for any
other Award or any award granted under any other plan of the Company
or any Affiliate. Awards granted in addition to or in tandem with
other Awards, or in addition to or in tandem with awards granted under
any other plan of the Company or any Affiliate, may be granted either
at the same time as or at a different time from the grant of such
other Awards or awards.
(iv) Forms of Payment Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers
to be made by the Company or an Affiliate upon the grant, exercise, or
payment of an Award to a Participating Key Employee may be made in
such form or forms as the Committee shall determine, and may be made
in a single payment or transfer, in installments, or on a deferred
basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of
interest on installment or deferred payments.
(v) Limits on Transfer of Awards. No Award (other than
Released Securities), and no right under any such Award, shall be
assignable, alienable, saleable, or transferable by a Participating
Key Employee or a Non-Employee Director otherwise than by will or by
the laws of descent and distribution (or, in the case of an Award of
Restricted Securities, to the Company); provided, however, that a
Participating Key Employee at the discretion of the Committee may, and
a Non-Employee Director shall, be entitled, in the manner established
by the Committee, to designate a beneficiary or beneficiaries to
exercise his or her rights, and to receive any property distributable,
with respect to any Award upon the death of the Participating Key
Employee or the Non-Employee Director, as the case may be. Each Award,
and each right under any Award, shall be exercisable, during the
lifetime of the Participating Key Employee or the Non-Employee
Director, only by such individual or, if permissible under applicable
law, by such individual's guardian or legal representative. No Award
(other than Released Securities), and no right under any such Award,
may be pledged, alienated, attached, or otherwise encumbered, and any
purported pledge, alienation, attachment, or encumbrance thereof shall
be void and unenforceable against the Company or any Affiliate.
(vi) Term of Awards. Except as otherwise provided in the
Plan, the term of each Award shall be for such period as may be
determined by the Committee.
(vii) Share Certificates; Representation. In addition to the
restrictions imposed pursuant to Section 6(d) and Section 6(e) hereof,
all certificates for Shares delivered under the Plan pursuant to any
Award or the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations, and other requirements of
the Commission, any stock exchange or other market upon which such
Shares are then listed or traded, and any applicable federal or state
securities laws, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such
restrictions. The Committee may require each Participating Key
Employee, Non-Employee Director or other Person who acquires Shares
under the Plan by means of an Award originally made to a
-11-
<PAGE>
Participating Key Employee or a Non-Employee Director to represent to
the Company in writing that such Participating Key Employee,
Non-Employee Director or other Person is acquiring the Shares without
a view to the distribution thereof.
Section 7. Amendment and Termination of the Plan; Correction of Defects and
Omissions
(a) Amendments to and Termination of the Plan. The Board of Directors
of the Company may at any time amend, alter, suspend, discontinue, or terminate
the Plan; provided, however, that the provisions of Section 6(b) of the Plan
shall not be amended more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules promulgated thereunder; and provided further that
shareholder approval of any amendment of the Plan shall also be obtained (i) if
such amendment (A) increases the number of Shares with respect to which Awards
may be granted under the Plan (other than increases related to adjustments made
as provided in Section 4(b) hereof), (B) expands the class of persons eligible
to participate under the Plan or (C) otherwise increases in any material respect
the benefits payable under the Plan; or (ii) if otherwise required by: (A) the
Code or any rules promulgated thereunder (in order to allow for Incentive Stock
Options to be granted under the Plan), or (B) the listing requirements of the
New York Stock Exchange or any principal securities exchange or market on which
the Shares are then traded (in order to maintain the listing of the Shares
thereon). Termination of the Plan shall not affect the rights of Participating
Key Employees or Non-Employee Directors with respect to Awards previously
granted to them, and all unexpired Awards shall continue in force and effect
after termination of the Plan except as they may lapse or be terminated by their
own terms and conditions.
(b) Correction of Defects, Omissions and Inconsistencies. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in any Award or Award Agreement in the manner and to the extent it
shall deem desirable to carry the Plan into effect.
Section 8. General Provisions
(a) No Rights to Awards. No Key Employee, Participating Key Employee
or other Person (other than a Non-Employee Director to the extent provided in
Section 6(b) of the Plan) shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment of Key Employees,
Participating Key Employees, or holders or beneficiaries of Awards under the
Plan. The terms and conditions of Awards need not be the same with respect to
each Participating Key Employee.
(b) Withholding. No later than the date as of which an amount first
becomes includible in the gross income of a Participating Key Employee for
federal income tax purposes with respect to any Award under the Plan, the
Participating Key Employee shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to such
amount. Unless otherwise determined by the Committee, withholding obligations
arising with respect to Awards to Participating Key Employees under the Plan may
be settled with Shares (other than Restricted Securities), including Shares that
are part of, or are received upon exercise of, the Award that gives rise to the
withholding requirement. The obligations of the Company under the
-12-
<PAGE>
Plan shall be conditional on such payment or arrangements, and the Company and
any Affiliate shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the Participating Key Employee.
The Committee may establish such procedures as it deems appropriate for the
settling of withholding obligations with Shares, including, without limitation,
the establishment of such procedures as may be necessary to satisfy the
requirements of Rule 16b-3.
(c) No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting or continuing
in effect other or additional compensation arrangements, and such arrangements
may be either generally applicable or applicable only in specific cases.
(d) Rights and Status of Recipients of Awards. The grant of an Award
shall not be construed as giving a Participating Key Employee the right to be
retained in the employ of the Company or any Affiliate. Further, the Company or
any Affiliate may at any time dismiss a Participating Key Employee from
employment, free from any liability, or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement. The grant of
an Award to a Non-Employee Director pursuant to Section 6(b) of the Plan shall
confer no right on such Non-Employee Director to continue as a director of the
Company. Except for rights accorded under the Plan and under any applicable
Award Agreement, Participating Key Employees and Non-Employee Directors shall
have no rights as holders of Shares as a result of the granting of Awards
hereunder.
(e) Unfunded Status of the Plan. Unless otherwise determined by the
Committee, the Plan shall be unfunded and shall not create (or be construed to
create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Participating Key Employee,
any Non-Employee Director or other Person. To the extent any Person holds any
right by virtue of a grant under the Plan, such right (unless otherwise
determined by the Committee) shall be no greater than the right of an unsecured
general creditor of the Company.
(f) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Wisconsin and applicable federal law.
(g) Severability. If any provision of the Plan or any Award Agreement
or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable
in any jurisdiction, or as to any Person or Award, or would disqualify the Plan,
any Award Agreement or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan,
any Award Agreement or the Award, such provision shall be stricken as to such
jurisdiction, Person, or Award, and the remainder of the Plan, any such Award
Agreement and any such Award shall remain in full force and effect.
(h) No Fractional Shares. No fractional Shares or other securities
shall be issued or delivered pursuant to the Plan, any Award Agreement or any
Award, and the Committee
-13-
<PAGE>
shall determine (except as otherwise provided in the Plan) whether cash, other
securities, or other property shall be paid or transferred in lieu of any
fractional Shares or other securities, or whether such fractional Shares or
other securities or any rights thereto shall be canceled, terminated, or
otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 9. Effective Date of the Plan
The Plan originally became effective on April 26, 1995.
-14-
Exhibit 10.2
KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT
THIS AGREEMENT, made and entered into as of the 7th day of May, 1999, by
and between Banta Corporation, a Wisconsin corporation (hereinafter referred to
as the "Company"), and Ronald D. Kneezel (hereinafter referred to as
"Executive").
W I T N E S S E T H :
WHEREAS, the Executive is employed by the Company and/or a subsidiary of
the Company (collectively, the "Employer") in a key executive capacity and the
Executive's services are valuable to the conduct of the business of the Company;
WHEREAS, the Company recognizes that circumstances may arise in which a
change in control of the Company occurs, through acquisition or otherwise,
thereby causing uncertainty about the Executive's future employment with the
Employer without regard to the Executive's competence or past contributions
which uncertainty may result in the loss of valuable services of the Executive
to the detriment of the Company and its shareholders, and the Company and the
Executive wish to provide reasonable security to the Executive against changes
in the Executive's relationship with the Employer in the event of any such
change in control;
WHEREAS, the Company and the Executive are desirous that any proposal for a
change in control or acquisition of the Company will be considered by the
Executive objectively and with reference only to the best interests of the
Company and its shareholders; and
WHEREAS, the Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which could
result from any such change in control or acquisition.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
<PAGE>
1. Definitions.
(a) Act. For purposes of this Agreement, the term "Act" means the
Securities Exchange Act of 1934, as amended.
(b) Affiliate and Associate. For purposes of this Agreement, the terms
"Affiliate" and "Associate" shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations of the Act.
(c) Beneficial Owner. For purposes of this Agreement, a Person shall be
deemed to be the "Beneficial Owner" of any securities:
(i) which such Person or any of such Person's Affiliates or Associates
has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial -------- ------- Owner of, or to
beneficially own, (A) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase, or (B) securities issuable upon exercise of Rights issued
pursuant to the terms of the Company's Rights Agreement with First
Wisconsin Trust Company (n/k/a Firstar Bank Milwaukee, N.A.) dated as of
October 29, 1991, as amended from time to time (or any successor to such
Rights Agreement), at any time before the issuance of such securities;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Act), including pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if the agreement,
-2-
<PAGE>
arrangement or understanding: (A) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations under the Act and (B) is not also then reportable on a
Schedule 13D under the Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in Subsection 1(c)(ii) above) or disposing of any voting
securities of the Company.
(d) Cause. "Cause" for termination by the Employer of the Executive's
employment after the Effective Date shall, for purposes of this Agreement, be
limited to (i) misappropriation by the Executive of funds of the Employer; (ii)
the Executive personally and secretly obtaining profits from dealings with the
Employer; (iii) the Executive's unreasonable neglect of, or refusal to perform,
his duties or responsibilities (unless significantly changed without the
Executive's consent); and (iv) conviction of a serious crime involving moral
turpitude.
(e) Change in Control of the Company. For purposes of this Agreement, a
"Change in Control of the Company" shall be deemed to occur if (i) any Person
becomes the Beneficial Owner of more than 30% of the outstanding voting stock of
the Company, (A) in whole or in part by means of an offer made to the holders of
any one or more classes of such voting stock to acquire such shares for cash,
securities, other property or any combination thereof, or (B) by any other
means; (ii) the Company sells, transfers or assigns all or substantially all of
its business and assets; (iii) the Company consolidates with or merges into any
other corporation, unless the Company or a subsidiary of the Company is the
continuing or surviving corporation; (iv) the Company acquires, whether through
purchase, merger or otherwise, all or substantially all of the operating assets
or capital stock of another entity and in connection with such acquisition
persons are elected or appointed to the Board of Directors of the Company who
are not directors immediately prior to such acquisition and such persons
-3-
<PAGE>
constitute a majority of the Board of Directors after such acquisition; or (v)
any Person succeeds in electing two or more directors of the Company in any one
election in opposition to those nominees proposed by management of the Company.
(f) Code. For purposes of this Agreement, the term "Code" means the
Internal Revenue Code of 1986, including any amendments thereto or successor tax
codes thereof.
(g) Covered Termination. For purposes of this Agreement, the term "Covered
Termination" means any termination of the Executive's employment during the
Employment Period where the Termination Date is any date on or prior to the end
of such Employment Period.
(h) Effective Date. For purposes of this Agreement, the term "Effective
Date" shall mean the first day on which a Change in Control of the Company
occurs. Anything in this Agreement to the contrary notwithstanding, if a Change
in Control of the Company occurs and if the Executive's employment with the
Employer is terminated (whether by the Employer, the Executive or otherwise)
during the period of 180 days prior to the date on which the Change in Control
of the Company occurs, and if it is reasonably demonstrated by the Executive
that such termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change in Control of the
Company or (ii) otherwise arose in connection with or in anticipation of a
Change in Control of the Company, then for all purposes of this Agreement, the
term "Effective Date" shall mean the date immediately prior to the date of such
termination of employment.
(i) Employment Period. For purposes of this Agreement, the term "Employment
Period" means a period commencing on the Effective Date, and ending at 11:59
p.m. Milwaukee Time on the earlier of the third anniversary of such date or the
Executive's Normal Retirement Date.
(j) Good Reason. For purposes of this Agreement, the Executive shall have a
"Good Reason" for termination of employment on or after the Effective Date in
the event of:
-4-
<PAGE>
(i) any breach of this Agreement by the Company, including
specifically any breach by the Company of its agreements contained in
Sections 4, 5 or 6 hereof;
(ii) the removal of the Executive from, or any failure to reelect or
reappoint the Executive to, any of the positions held with the Employer at
any time during the 180-day period prior to the Effective Date or any other
positions with the Employer to which the Executive shall thereafter be
elected, appointed or assigned, except in the event that such removal or
failure to reelect or reappoint (A) relates to the termination by the
Employer of the Executive's employment for Cause or by reason of disability
pursuant to Section 12 hereof, or (B) is consented to in writing by the
Executive;
(iii) a good faith determination by the Executive that there has been
a significant adverse change, without the Executive's written consent, in
the Executive's working conditions or status with the Employer from such
working conditions or status in effect during the 180-day period prior to
the Effective Date, including but not limited to (A) a significant change
in the nature or scope of the Executive's authority, powers, functions,
duties or responsibilities, or (B) a significant reduction in the level of
support services, staff, secretarial and other assistance, office space and
accoutrements; or
(iv) failure by the Company to obtain the Agreement referred to in
Section 18(a) hereof as provided therein.
(k) Normal Retirement Date. For purposes of this Agreement, the term
"Normal Retirement Date" means "Normal Retirement Date" as defined in the Banta
Corporation Employees Pension Plan, or any successor plan, as in effect on the
Effective Date.
(l) Notice of Termination. For purposes of this Agreement, the term "Notice
of Termination" means a written notice as contemplated by Section 14 hereof.
(m) Person. For purposes of this Agreement, the term "Person" shall mean
any individual, firm, partnership, corporation or other entity, including any
successor (by merger or otherwise) of such entity, or a group of any of the
foregoing acting in concert.
-5-
<PAGE>
(n) Termination Date. For purposes of this Agreement, except as otherwise
provided in Section 10(b) and Section 18(a) hereof, the term "Termination Date"
means (i) if the Executive's employment is terminated by the Executive's death,
the date of death; (ii) if the Executive's employment is terminated by reason of
voluntary early retirement, as agreed in writing by the Company and the
Executive, the date of such early retirement which is set forth in such written
agreement; (iii) if the Executive's employment is terminated for purposes of
this Agreement by reason of disability pursuant to Section 12 hereof, the
earlier of thirty days after the Notice of Termination is given or one day prior
to the end of the Employment Period; (iv) if the Executive's employment is
terminated by the Executive voluntarily (other than for Good Reason), the date
the Notice of Termination is given; and (v) if the Executive's employment is
terminated by the Company (other than by reason of disability pursuant to
Section 12 hereof) or by the Executive for Good Reason, the earlier of thirty
days after the Notice of Termination is given or one day prior to the end of the
Employment Period. Notwithstanding the foregoing,
(A) If termination is for Cause pursuant to Section 1(d)(iii) of this
Agreement and if the Executive has cured the conduct constituting such Cause as
described by the Company in its Notice of Termination within such thirty day or
shorter period, then the Executive's employment hereunder shall continue as if
the Company had not delivered its Notice of Termination.
(B) If the Company shall give a Notice of Termination for Cause or by
reason of disability and the Executive in good faith notifies the Company that a
dispute exists concerning the termination within the fifteen day period
following receipt thereof, then the Executive may elect to continue his
employment during such dispute and the Termination Date shall be determined
under this paragraph. If the Executive so elects and it is thereafter determined
that Cause or disability (as the case may be) did exist, the Termination Date
shall be the earlier of (1) the date on which the dispute is finally determined,
either (x) by mutual written agreement of the parties or (y) in accordance with
Section 23 hereof, (2) the date of the Executive's death, or (3) one day prior
to the end of the Employment Period. If the Executive so elects and it is
thereafter determined that Cause or disability (as the case may be) did not
exist, then the employment of the Executive hereunder shall continue after such
determination
-6-
<PAGE>
as if the Company had not delivered its Notice of Termination and there shall be
no Termination Date arising out of such Notice. In either case, this Agreement
continues, until the Termination Date, if any, as if the Company had not
delivered the Notice of Termination except that, if it is finally determined
that the Company properly terminated the Executive for the reason asserted in
the Notice of Termination, the Executive shall in no case be entitled to a
Termination Payment (as hereinafter defined) arising out of events occurring
after the Company delivered its Notice of Termination.
(C) If the Executive shall in good faith give a Notice of Termination for
Good Reason and the Company notifies the Executive that a dispute exists
concerning the termination within the fifteen day period following receipt
thereof, then the Executive may elect to continue his employment during such
dispute and the Termination Date shall be determined under this paragraph. If
the Executive so elects and it is thereafter determined that Good Reason did
exist, the Termination Date shall be the earlier of (1) the date on which the
dispute is finally determined, either (x) by mutual written agreement of the
parties or (y) in accordance with Section 23 hereof, (2) the date of the
Executive's death or (3) one day prior to the end of the Employment Period. If
the Executive so elects and it is thereafter determined that Good Reason did not
exist, then the employment of the Executive hereunder shall continue after such
determination as if the Executive had not delivered the Notice of Termination
asserting Good Reason and there shall be no Termination Date arising out of such
Notice. In either case, this Agreement continues, until the Termination Date, if
any, as if the Executive had not delivered the Notice of Termination except
that, if it is finally determined that Good Reason did exist, the Executive
shall in no case be denied the benefits described in Sections 8(b) and 9 hereof
(including a Termination Payment) based on events occurring after the Executive
delivered his Notice of Termination.
(D) If an opinion is required to be delivered pursuant to Section 9(b)(ii)
hereof and such opinion shall not have been delivered, the Termination Date
shall be the earlier of the date on which such opinion is delivered or one day
prior to the end of the Employment Period.
-7-
<PAGE>
(E) Except as provided in Paragraphs (B) and (C) above, if the party
receiving the Notice of Termination notifies the other party that a dispute
exists concerning the termination within the fifteen day period following
receipt thereof and it is finally determined that the reason asserted in such
Notice of Termination did not exist, then (1) if such Notice was delivered by
the Executive, the Executive will be deemed to have voluntarily terminated his
employment and (2) if delivered by the Company, the Company will be deemed to
have terminated the Executive other than by reason of death, disability or
Cause.
2. Termination or Cancellation Prior to the Effective Date. The Employer
and the Executive shall each retain the right to terminate the employment of the
Executive at any time prior to the Effective Date. In the event the Executive's
employment is terminated prior to the Effective Date, this Agreement shall be
terminated and cancelled and of no further force and effect and any and all
rights and obligations of the parties hereunder shall cease.
3. Employment Period. If the Executive is employed by the Company or a
subsidiary of the Company on the Effective Date, the Company will, or will cause
the Employer to, continue thereafter to employ the Executive during the
Employment Period, and the Executive will remain in the employ of the Employer,
in accordance with and subject to the terms and provisions of this Agreement.
Any termination of the Executive's employment during the Employment Period,
whether by the Company or a subsidiary of the Company, shall be deemed a
termination by the Company for purposes of this Agreement.
4. Duties. During the Employment Period, the Executive shall, in the most
significant capacities and positions held by the Executive at any time during
the 180-day period preceding the Effective Date or in such other capacities and
positions as may be agreed to by the Company and the Executive in writing,
devote the Executive's best efforts and all of the Executive's business time,
attention and skill to the business and affairs of the Employer, as such
business and affairs now exist and as they may hereafter be conducted. The
services which are to be performed by the Executive hereunder are to be rendered
in the same metropolitan area in which the Executive was principally employed
during the 180-day period prior to the Effective Date, or in such other place or
places as shall be mutually agreed upon in writing by the Executive and the
Company from time to time. Without the Executive's consent
-8-
<PAGE>
the Executive shall not be required to be absent from such metropolitan area
more than 60 days in any fiscal year of the Company.
5. Compensation. During the Employment Period, the Executive shall be
compensated as follows:
(a) The Executive shall receive, at reasonable intervals (but not less
often than monthly) and in accordance with such standard policies as may be in
effect immediately prior to the Effective Date, an annual base salary in cash
equivalent of not less than twelve times the Executive's highest monthly base
salary for the twelve-month period immediately preceding the month in which the
Effective Date occurs (which base salary shall, unless otherwise agreed in
writing by the Executive, include the current receipt by the Executive of any
amounts which, prior to the Effective Date, the Executive had elected to defer,
whether such compensation is deferred under Section 401(k) of the Code or
otherwise), subject to upward adjustment as provided in Section 6 hereof (such
salary amount as adjusted upward from time to time is hereafter referred to as
the "Annual Base Salary").
(b) The Executive shall receive fringe benefits at least equal in value to
those provided for the Executive at any time during the 180-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
those provided generally at any time after the Effective Date to executives of
the Employer of comparable status and position to the Executive. The Executive
shall be reimbursed, at such intervals and in accordance with such standard
policies that are most favorable to the Executive which were in effect at any
time during the 180-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time after the
Effective Date to executives of the Employer of comparable status and position
to the Executive, for any and all monies advanced in connection with the
Executive's employment for reasonable and necessary expenses incurred by the
Executive on behalf of the Employer, including travel expenses.
(c) The Executive shall be included, to the extent eligible thereunder
(which eligibility shall not be conditioned on the Executive's salary grade or
on any other requirement which excludes persons of comparable status and
position to the Executive unless such exclusion was in effect for such plan or
an equivalent plan immediately prior to the Effective
-9-
<PAGE>
Date), in any and all plans providing benefits for the Company's salaried
employees in general, including but not limited to group life insurance,
hospitalization, medical, dental, profit sharing and stock bonus plans;
provided, that, in no event shall the aggregate level of benefits under such
plans in which the Executive is included be less than the aggregate level of
benefits under plans of the Company and its subsidiaries of the type referred to
in this Section 5(c) in which the Executive was participating at any time during
the 180-day period immediately preceding the Effective Date.
(d) The Executive shall annually be entitled to not less than the amount of
paid vacation and not fewer than the number of paid holidays to which the
Executive was entitled annually at any time during the 180-day period
immediately preceding the Effective Date or such greater amount of paid vacation
and number of paid holidays as may be made available annually to other
executives of the Company and its subsidiaries of comparable status and position
to the Executive.
(e) The Executive shall be included in all plans providing additional
benefits to executives of the Company of comparable status and position to the
Executive, including but not limited to deferred compensation, split-dollar life
insurance, supplemental retirement, stock option, stock appreciation, stock
bonus, long-term incentive compensation and similar or comparable plans;
provided, that, in no event shall the aggregate level of benefits under such
plans be less than the aggregate level of benefits under plans of the Company of
the type referred to in this Section 5(e) in which the Executive was
participating at any time during the 180-day period immediately preceding the
Effective Date; and provided, further, that the Company's obligation to include
the Executive in annual bonus or incentive compensation plans shall be
determined by Subsection 5(f) hereof.
(f) To assure that the Executive will have an opportunity to earn incentive
compensation on an annual basis after the Effective Date, the Executive shall be
included in a bonus plan of the Company which shall satisfy the standards
described below (such plan, the "Bonus Plan"). Bonuses under the Bonus Plan
shall be payable with respect to achieving such financial or other goals
reasonably related to the business of the Company as the Company shall establish
(the "Goals"), all of which Goals shall be attainable, prior to the end of the
-10-
<PAGE>
Employment Period, with approximately the same degree of probability as the
goals under the Company's Economic Profit Incentive Compensation Plan, or the
successor to such plan, in the form most favorable to the Executive which was in
effect at any time during the 180-day period prior to the Effective Date (the
"EP Plan") and in view of the Company's existing and projected financial and
business circumstances applicable at the time. The amount of the bonus (the
"Bonus Amount") that the Executive is eligible to earn under the Bonus Plan
shall be no less than the amount of the Executive's maximum award provided in
such EP Plan (such bonus amount herein referred to as the "Targeted Bonus"), and
in the event the Goals are not achieved such that the entire Targeted Bonus is
not payable, the Bonus Plan shall provide for a payment of a Bonus Amount equal
to a portion of the Targeted Bonus reasonably related to that portion of the
Goals which were achieved. Payment of the Bonus Amount shall not be affected by
any circumstance occurring subsequent to the end of the Employment Period,
including termination of the Executive's employment.
6. Annual Compensation Adjustments. During the Employment Period, the Board
of Directors of the Company (or an appropriate committee thereof) will consider
and appraise, at least annually, the contributions of the Executive to the
Employer, and in accordance with the Company's practice prior to the Effective
Date, due consideration shall be given at least annually, to the upward
adjustment of the Executive's Annual Base Salary (i) commensurate with increases
generally given to other executives of the Employer of comparable status and
position to the Executive, and (ii) as the scope of the Employer's operations or
the Executive's duties expand.
7. Termination For Cause or Without Good Reason. If there is a Covered
Termination for Cause or due to the Executive's voluntarily terminating his
employment other than for Good Reason (any such terminations to be subject to
the procedures set forth in Section 14 hereof), then the Executive shall be
entitled to receive only Accrued Benefits pursuant to Section 9(a) hereof.
8. Termination Giving Rise to a Termination Payment. (a) If there is a
Covered Termination by the Executive for Good Reason, or by the Company other
than by reason of (i) death, (ii) disability pursuant to Section 12 hereof, or
(iii) Cause (any such
-11-
<PAGE>
terminations to be subject to the procedures set forth in Section 14 hereof),
then the Executive shall be entitled to receive, and the Company shall promptly
pay, Accrued Benefits and, in lieu of further base salary for periods following
the Termination Date, as liquidated damages and additional severance pay and in
consideration of the covenant of the Executive set forth in Section 15(a)
hereof, the Termination Payment pursuant to Section 9(b) hereof.
(b) If there is a Covered Termination and the Executive is entitled to
Accrued Benefits and the Termination Payment, then the Executive shall be
entitled to the following additional benefits:
(i) The Executive will be entitled to pension benefits in addition to
the most favorable benefits provided for him under any version of the
Company's Salaried Employees Pension Plan and the Company's Supplemental
Retirement Plan (or any successors to such plans) in effect at any time
during the 180-day period prior to the Effective Date (the "Retirement
Plans"). The amount of additional pension benefits will be equal to the
difference between the amount the Executive (or in the event of the
Executive's death, the Executive's surviving spouse or other beneficiary)
would be actually entitled to receive upon retirement under the terms and
conditions of the Retirement Plans and the amount the Executive (or such
surviving spouse or beneficiary) would have been entitled to receive under
such terms and conditions if (A) the Executive's benefits under the
Retirement Plans had been fully vested on the Termination Date and (B) (1)
if the Executive is 50 years of age or less on the Termination Date the
Executive had continued to work for the remainder of the Employment Period
or (2) if the Executive is over 50 years of age on the Termination Date he
had continued to work until his 65th birthday, in each case at a salary
rate equal to the Executive's Annual Base Salary; provided, however, that
in no event will the assumed period of continued employment extend beyond
the date on which the Executive elects to begin receiving the additional
pension benefits. The Executive shall be entitled to elect to receive his
additional pension benefits in any form (e.g. joint and survivor) that
would have been available to him under the terms and conditions of the
Retirement Plans and (subject to reduction, if any, under such terms) at
any time after he has attained the age at which early retirement is
permitted. In addition, if the
-12-
<PAGE>
Executive starts to receive his additional pension benefits before the
earliest date on which he is eligible for unreduced Social Security
benefits, the Executive will receive an amount equal to the difference
between his estimated unreduced Social Security benefit and the actual
benefit to which he is entitled until he attains the age when he is
eligible for unreduced benefits.
(ii) Until the earlier of the end of the Employment Period or such
time as the Executive has obtained new employment and is covered by
benefits which in the aggregate are at least equal in value to the
following benefits, the Executive shall continue to be covered, at the
expense of the Company, by the most favorable life insurance,
hospitalization, medical and dental coverage provided to the Executive and
the Executive's family during the 180-day period immediately preceding the
Effective Date or, if more favorable to the Executive, the coverage in
effect generally at any time thereafter for executives of the Employer of
comparable status and position to the Executive and their families.
9. Payments Upon Termination.
(a) Accrued Benefits. For purposes of this Agreement, the Executive's
"Accrued Benefits" shall include the following amounts, payable as described
herein: (i) all base salary for the time period ending with the Termination
Date; (ii) reimbursement for any and all monies advanced in connection with the
Executive's employment for reasonable and necessary expenses incurred by the
Executive on behalf of the Employer for the time period ending with the
Termination Date; (iii) any and all other cash earned through the Termination
Date and deferred at the election of the Executive or pursuant to any deferred
compensation plan then in effect; (iv) a lump sum payment of the bonus or
incentive compensation otherwise payable to the Executive with respect to the
year in which termination occurs to the extent provided by all bonus or
incentive compensation plan or plans in which the Executive is a participant;
and (v) all other payments and benefits to which the Executive (or in the event
of the Executive's death, the Executive's surviving spouse or other beneficiary)
may be entitled as compensatory fringe benefits or under the terms of any
benefit plan of the Company, including severance payments under the Company's
severance policies and practices in the form most
-13-
<PAGE>
favorable to the Executive which was in effect at any time during the 180-day
period prior to the Effective Date. Payment of Accrued Benefits shall be made
promptly in accordance with the Company's prevailing practice with respect to
Subsections (i) and (ii) or, with respect to Subsections (iii), (iv) and (v),
pursuant to the terms of the benefit plan or practice establishing such
benefits.
(b) Termination Payment. (i) Subject to the limits set forth in Subsection
9(b)(ii) hereof, the Termination Payment shall be an amount equal to (A) the
Executive's Annual Base Salary, plus (B) the amount of the highest annual bonus
award (determined on an annualized basis for any bonus award paid for a period
of less than one year and excluding any year for which the Executive did not
participate in any bonus plan) paid to the Executive with respect to the three
years preceding the Termination Date (the aggregate amount set forth in (A) and
(B) hereof shall hereafter be referred to as "Annual Cash Compensation"), times
the number of years or fractional portion thereof remaining in the Employment
Period determined as of the Termination Date; provided, however, that such
amount shall not be less than the amount of the Executive's Annual Cash
Compensation. The Termination Payment shall be paid to the Executive in cash
equivalent ten business days after the Termination Date. The Executive shall not
be required to mitigate the amount of the Termination Payment by securing other
employment or otherwise, nor will such Termination Payment be reduced by reason
of the Executive securing other employment or for any other reason. The
Termination Payment shall be in addition to any other severance payments to
which the Executive is entitled under the Company's severance policies and
practices in the form most favorable to the Executive which were in effect at
any time during the 180-day period prior to the Effective Date.
(ii) Notwithstanding any other provision of this Agreement, if any
portion of the Termination Payment or any other payment under this
Agreement, or under any other agreement with or plan of the Company (in the
aggregate "Total Payments"), would constitute an "excess parachute
payment," then the Total Payments to be made to the Executive shall be
reduced such that the value of the aggregate Total Payments that the
Executive is entitled to receive shall be One Dollar ($1) less than the
maximum amount which the Executive may receive without becoming subject to
the tax imposed by Section 4999 of the Code (or any successor provision) or
which the
-14-
<PAGE>
Company may pay without loss of deduction under Section 280G(a) of the Code
(or any successor provision). For purposes of this Agreement, the terms
"excess parachute payment" and "parachute payments" shall have the meanings
assigned to them in Section 280G of the Code (or any successor provision),
and such "parachute payments" shall be valued as provided therein. Present
value for purposes of this Agreement shall be calculated in accordance with
Section 1274(b)(2) of the Code (or any successor provision). Within sixty
days following delivery of the Notice of Termination or notice by the
Company to the Executive of its belief that there is a payment or benefit
due the Executive which will result in an excess parachute payment as
defined in Section 280G of the Code (or any successor provision), the
Executive and the Company, at the Company's expense, shall obtain the
opinion (which need not be unqualified) of nationally recognized tax
counsel selected by the Company's independent auditors and acceptable to
the Executive in his sole discretion, which sets forth (A) the amount of
the Base Period Income, (B) the amount and present value of Total Payments
and (C) the amount and present value of any excess parachute payments
without regard to the limitations of this Subsection 9(b)(ii). As used in
this Subsection 9(b)(ii), the term "Base Period Income" means an amount
equal to the Executive's "annualized includible compensation for the base
period" as defined in Section 280G(d)(1) of the Code (or any successor
provision). For purposes of such opinion, the value of any noncash benefits
or any deferred payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code (or any successor provisions), which
determination shall be evidenced in a certificate of such auditors
addressed to the Company and the Executive. Such opinion shall be dated as
of the Termination Date and addressed to the Company and the Executive and
shall be binding upon the Company and the Executive. If such opinion
determines that there would be an excess parachute payment, the Termination
Payment hereunder or any other payment determined by such counsel to be
includible in Total Payments shall be reduced or eliminated as specified by
the Executive in writing delivered to the Company within thirty days of his
receipt of such opinion or, if the Executive fails to so notify the
Company, then as the Company shall reasonably determine, so that under the
bases of calculations set forth in such opinion there will be no excess
parachute
-15-
<PAGE>
payment. The provisions of this Subsection 9(b)(ii), including the
calculations, notices and opinions provided for herein, shall be based upon
the conclusive presumption that the following are reasonable: (1) the
compensation and benefits provided for in Section 5 hereof and (2) any
other compensation, including but not limited to the Accrued Benefits,
earned prior to the Termination Date by the Executive pursuant to the
Company's compensation programs if such payments would have been made in
the future in any event, even though the timing of such payment is
triggered by the Change in Control of the Company or the Termination Date.
(ii) (A) If, notwithstanding the provisions of Subsection (ii) of this
Section 9(b), but subject to paragraph (B), it is ultimately determined by
a court or pursuant to a final determination by the Internal Revenue
Service that any portion of Total Payments is subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code (or any successor
provision), the Company shall pay to the Executive an additional amount
(the "Gross-Up Payment") such that the net amount retained by the Executive
after deduction of any Excise Tax and any interest charges or penalties in
respect of the imposition of such Excise Tax (but not any federal, state or
local income tax) on the Total Payments, and any federal, state and local
income tax and Excise Tax upon the payment provided for by this Subsection
(iii), shall be equal to the Total Payments. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed to pay
federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rates of taxation
in the state and locality of the Executive's domicile for income tax
purposes on the date the Gross-Up Payment is made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes.
(B) If legislation is enacted that would require the Company's
shareholders to approve this Agreement, prior to a Change in Control of the
Company, due solely to the provision contained in paragraph (A) of this
Subsection 9(b)(iii), then
-16-
<PAGE>
(1) from and after such time as shareholder approval would be
required, until shareholder approval is obtained as required by such
legislation, paragraph (A) shall be of no force and effect;
(2) if the Company seeks shareholder approval of any other agreement
providing similar benefits to any other executive of the Company, the
Company shall seek shareholder approval of this Agreement at the same
shareholders meeting or meetings at which the shareholders consider any
such other agreement; and
(3) the Company and the Executive shall use their best efforts to
consider and agree in writing upon an amendment to this Subsection
9(b)(iii) such that, as amended, this Subsection would provide the
Executive with the benefits intended to be afforded to the Executive by
paragraph (A) without requiring shareholder approval.
10. Death. (a) Except as provided in Section 10(b) hereof, in the event of
a Covered Termination due to the Executive's death, the Executive's estate,
heirs and beneficiaries shall receive all the Executive's Accrued Benefits
through the Termination Date.
(b) In the event the Executive dies after a Notice of Termination is given
(i) by the Company or (ii) by the Executive for Good Reason, the Executive's
estate, heirs and beneficiaries shall be entitled to the benefits described in
Section 10(a) hereof and, subject to the provisions of this Agreement, to such
Termination Payment as the Executive would have been entitled to had the
Executive lived. For purposes of this Subsection 10(b), the Termination Date
shall be the earlier of thirty days following the giving of the Notice of
Termination, subject to extension pursuant to Section 1(n) hereof, or one day
prior to the end of the Employment Period.
11. Retirement. If, during the Employment Period, the Executive and the
Company shall execute an agreement providing for the early retirement of the
Executive from the Company, or the Executive shall otherwise give notice that he
is voluntarily choosing to retire early from the Company, the Executive shall
receive Accrued Benefits through the Termination Date; provided, that if the
Executive's employment is terminated by the Executive for Good Reason or by the
Company other than by reason of death, disability or Cause and the
-17-
<PAGE>
Executive also, in connection with such termination, elects voluntary early
retirement, the Executive shall also be entitled to receive a Termination
Payment pursuant to Section 8(a) hereof.
12. Termination for Disability. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or injury
(regardless of whether such illness or injury is job-related), the Executive
shall have been absent from the Executive's duties hereunder on a full-time
basis for a period of 180 days during any 194-day period and, within thirty days
after the Company notifies the Executive in writing that it intends to terminate
the Executive's employment (which notice shall not constitute the Notice of
Termination contemplated below), the Executive shall not have returned to the
performance of the Executive's duties hereunder on a full-time basis, the
Company may terminate the Executive's employment for purposes of this Agreement
pursuant to a Notice of Termination given in accordance with Section 14 hereof.
If the Executive's employment is terminated on account of the Executive's
disability in accordance with this Section, the Executive shall receive Accrued
Benefits in accordance with Section 9(a) hereof and shall remain eligible for
all benefits provided by any long term disability programs of the Company in
effect at the time of such termination.
13. Stock Options. Following a Change in Control of the Company, all stock
options held by the Executive as of the Effective Date (and not otherwise
exercised) will become exercisable in full notwithstanding any percentage
limitations on the exercise of the options and, notwithstanding any termination
of the Executive's employment, shall remain exercisable for a period of not less
than three months after the date of the Change in Control of the Company;
provided, however, that no option shall be exercisable after the expiration date
specified therefor in the applicable stock option agreement.
14. Termination Notice and Procedure. Any Covered Termination by the
Employer or the Executive (other than a termination of the Executive's
employment referenced in the last sentence of Section 1(h) hereof) shall be
communicated by written Notice of Termination to the Executive, if such Notice
is given by the Company, and to the Company, if
-18-
<PAGE>
such Notice is given by the Executive, all in accordance with the following
procedures and those set forth in Section 24 hereof:
(a) If such termination is for disability, Cause or Good Reason, the Notice
of Termination shall indicate in reasonable detail the facts and circumstances
alleged to provide a basis for such termination.
(b) Any Notice of Termination by the Company shall have been approved,
prior to the giving thereof to the Executive, by a resolution duly adopted by a
majority of the directors of the Company (or any successor corporation) then in
office.
(c) The Executive shall have thirty days, or such longer period as the
Company may determine to be appropriate, to cure any conduct or act, if curable,
alleged to provide grounds for termination of the Executive's employment for
Cause under this Agreement pursuant to Subsection 1(d)(iii) hereof.
(d) The recipient of any Notice of Termination shall personally deliver or
mail in accordance with Section 24 hereof written notice of any dispute relating
to such Notice of Termination to the party giving such Notice within fifteen
days after receipt thereof. After the expiration of such fifteen days, the
contents of the Notice of Termination shall become final and not subject to
dispute.
15. Further Obligations of the Executive.
(a) Competition. The Executive agrees that, in the event of any Covered
Termination where the Executive is entitled to Accrued Benefits and the
Termination Payment, the Executive shall not, during the balance of the
Employment Period, without the prior written approval of the Company's Board of
Directors, participate in the management of, be employed by, own or (other than
as an employee of or partner in a law firm with not less than fifty attorneys)
act as counsel for any business enterprise at a location within the United
States that engages in substantial competition with the Company or its
subsidiaries, where such enterprise's revenues from any printing services amount
to 10% or more of such enterprise's net revenues and sales for its most recently
completed fiscal year; provided, however, that nothing in this Section 15(a)
shall prohibit the Executive from owning stock or other securities
-19-
<PAGE>
of a competitor amounting to less than five percent of the outstanding capital
stock of such competitor.
(b) Confidentiality. During and following the Executive's employment by the
Employer, the Executive shall hold in confidence and not directly or indirectly
disclose or use or copy or make lists of any confidential information or
proprietary data of the Employer, except to the extent authorized in writing by
the Board of Directors of the Company or required by any court or administrative
agency, other than to an employee of the Employer or a person to whom disclosure
is reasonably necessary or appropriate in connection with the performance by the
Executive of duties as an executive of the Employer. Confidential information
shall not include any information known generally to the public or any
information of a type not otherwise considered confidential by persons engaged
in the same business or a business similar to that of the Employer. All records,
files, documents and materials, or copies thereof, relating to the business of
the Employer which the Executive shall prepare, or use, or come into contact
with, shall be and remain the sole property of the Employer and shall be
promptly returned to the Employer upon termination of employment with the
Employer.
16. Expenses and Interest. If, after the Effective Date, (i) a dispute
arises with respect to the enforcement of the Executive's rights under this
Agreement or (ii) any legal or arbitration proceeding shall be brought to
enforce or interpret any provision contained herein or to recover damages for
breach hereof, in either case so long as the Executive is not acting in bad
faith, the Executive shall recover from the Company any reasonable attorneys'
fees and necessary costs and disbursements incurred as a result of such dispute,
legal or arbitration proceeding ("Expenses"), and prejudgment interest on any
money judgment or arbitration award obtained by the Executive calculated at the
rate of interest announced by Firstar Bank Milwaukee, N.A., Milwaukee, Wisconsin
(or any successor bank thereto) from time to time as its prime or base lending
rate from the date that payments to him should have been made under this
Agreement. Within ten days after the Executive's written request therefor, the
Company shall pay to the Executive, or such other person or entity as the
Executive may designate in writing to the Company, the Executive's reasonable
Expenses in advance of the final disposition or conclusion of any such dispute,
legal or arbitration proceeding.
-20-
<PAGE>
17. Payment Obligations Absolute. The Company's obligation during and after
the Employment Period to pay the Executive the amounts and to make the benefit
and other arrangements provided herein shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
setoff, counterclaim, recoupment, defense or other right which the Company may
have against him or anyone else. Except as provided in Section 16 of this
Agreement, all amounts payable by the Company hereunder shall be paid without
notice or demand. Each and every payment made hereunder by the Company shall be
final, and the Company will not seek to recover all or any part of such payment
from the Executive, or from whomsoever may be entitled thereto, for any reason
whatsoever.
18. Successors. (a) If the Company sells, assigns or transfers all or
substantially all of its business and assets to any Person or if the Company
merges into or consolidates or otherwise combines (where the Company does not
survive such combination) with any Person (any such event, a "Sale of
Business"), then the Company shall assign all of its right, title and interest
in this Agreement as of the date of such event to such Person, and the Company
shall cause such Person, by written agreement in form and substance reasonably
satisfactory to the Executive, to expressly assume and agree to perform from and
after the date of such assignment all of the terms, conditions and provisions
imposed by this Agreement upon the Company. Failure of the Company to obtain
such agreement prior to the effective date of such Sale of Business shall be a
breach of this Agreement constituting "Good Reason" hereunder, except that for
purposes of implementing the foregoing, the date upon which such Sale of
Business becomes effective shall be deemed the Termination Date. In case of such
assignment by the Company and of assumption and agreement by such Person, as
used in this Agreement, "Company" shall thereafter mean such Person which
executes and delivers the agreement provided for in this Section 18 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law, and this Agreement shall inure to the benefit of, and be
enforceable by, such Person. The Executive shall, in his discretion, be entitled
to proceed against any or all of such Persons, any Person which theretofore was
such a successor to the Company (as defined in the first paragraph of this
Agreement) and the Company (as so defined) in any action to enforce any rights
of the Executive hereunder.
-21-
<PAGE>
Except as provided in this Subsection, this Agreement shall not be assignable by
the Company. This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company.
(b) This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. All amounts
payable to the Executive under Sections 7, 8, 9, 10, 11, 12 and 16 hereof if the
Executive had lived shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs and representatives; provided, however, that the
foregoing shall not be construed to modify any terms of any benefit plan of the
Company, as such terms are in effect on the Effective Date, that expressly
govern benefits under such plan in the event of the Executive's death.
19. Severability. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared invalid
or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
20. Amendment. This Agreement may not be amended or modified at any time
except by written instrument executed by the Company and the Executive.
21. Withholding. The Company shall be entitled to withhold from amounts to
be paid to the Executive hereunder any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold;
provided, that the amount so withheld shall not exceed the minimum amount
required to be withheld by law. The Company shall be entitled to rely on an
opinion of nationally recognized tax counsel if any question as to the amount or
requirement of any such withholding shall arise.
22. Certain Rules of Construction. No party shall be considered as being
responsible for the drafting of this Agreement for the purpose of applying any
rule construing ambiguities against the drafter or otherwise. No draft of this
Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an
-22-
<PAGE>
agreement in writing shall be deemed to require that the writing in question be
signed by the Executive and an authorized representative of the Company.
23. Governing Law; Resolution of Disputes. This Agreement and the rights
and obligations hereunder shall be governed by and construed in accordance with
the laws of the State of Wisconsin. Any dispute arising out of this Agreement
shall, at the Executive's election, be determined by arbitration under the rules
of the American Arbitration Association then in effect (in which case both
parties shall be bound by the arbitration award) or by litigation. Whether the
dispute is to be settled by arbitration or litigation, the venue for the
arbitration or litigation shall be Menasha, Wisconsin or, at the Executive's
election, if the Executive is no longer residing or working in the Menasha,
Wisconsin metropolitan area, in the judicial district encompassing the city in
which the Executive resides; provided, that, if the Executive is not then
residing in the United States, the election of the Executive with respect to
such venue shall be either Menasha, Wisconsin or in the judicial district
encompassing that city in the United States among the thirty cities having the
largest population (as determined by the most recent United States Census data
available at the Termination Date) which is closest to the Executive's
residence. The parties consent to personal jurisdiction in each trial court in
the selected venue having subject matter jurisdiction notwithstanding their
residence or situs, and each party irrevocably consents to service of process in
the manner provided hereunder for the giving of notices.
24. Notice. Notices given pursuant to this Agreement shall be in writing
and, except as otherwise provided by Section 14(c) hereof, shall be deemed given
when actually received by the Executive or actually received by the Company's
Secretary or any officer of the Company other than the Executive. If mailed,
such notices shall be mailed by United States registered or certified mail,
return receipt requested, addressee only, postage prepaid, if to the Company, to
Banta Corporation, Attention: Secretary (or President, if the Executive is then
Secretary), River Place, 225 Main Street, Menasha, WI 54952, or if to the
Executive, at the address set forth below the Executive's signature to this
Agreement, or to such other address as the party to be notified shall have
theretofore given to the other party in writing.
-23-
<PAGE>
25. No Waiver. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time.
26. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
27. Prior Agreement. This Agreement shall supersede the prior Key Executive
Employment and Severance Agreement, dated February 1, 1989, among the parties
hereto, which prior agreement shall be of no further force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
BANTA CORPORATION
(Corporate Seal)
By____________________________________
Donald D. Belcher
Chairman, President and
Chief Executive Officer
Attest: ______________________________
Gerald A. Henseler
Executive Vice President
and Chief Financial Officer
EXECUTIVE
---------------------------------------
Ronald D. Kneezel
19 Bracken Court
Appleton, WI 54911
-24-
Exhibit 10.3
KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT
THIS AGREEMENT, made and entered into as of the ___ day of ___, ____, by
and between Banta Corporation, a Wisconsin corporation (hereinafter referred to
as the "Company"), and _________________ (hereinafter referred to as
"Executive").
W I T N E S S E T H :
WHEREAS, the Executive is employed by the Company and/or a subsidiary of
the Company (collectively, the "Employer") in a key executive capacity and the
Executive's services are valuable to the conduct of the business of the Company;
WHEREAS, the Company recognizes that circumstances may arise in which a
change in control of the Company occurs, through acquisition or otherwise,
thereby causing uncertainty about the Executive's future employment with the
Employer without regard to the Executive's competence or past contributions
which uncertainty may result in the loss of valuable services of the Executive
to the detriment of the Company and its shareholders, and the Company and the
Executive wish to provide reasonable security to the Executive against changes
in the Executive's relationship with the Employer in the event of any such
change in control;
WHEREAS, the Company and the Executive are desirous that any proposal for a
change in control or acquisition of the Company will be considered by the
Executive objectively and with reference only to the best interests of the
Company and its shareholders; and
WHEREAS, the Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which could
result from any such change in control or acquisition.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
1. Definitions.
(a) Act. For purposes of this Agreement, the term "Act" means the
Securities Exchange Act of 1934, as amended.
(b) Affiliate and Associate. For purposes of this Agreement, the terms
"Affiliate" and "Associate" shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations of the Act.
(c) Beneficial Owner. For purposes of this Agreement, a Person shall be
deemed to be the "Beneficial Owner" of any securities:
(i) which such Person or any of such Person's Affiliates or Associates
has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, (A)
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase, or (B) securities
issuable upon exercise of Rights issued pursuant to the terms of the
Company's Rights Agreement with First Wisconsin Trust Company (n/k/a
Firstar Bank Milwaukee, N.A.) dated as of October 29, 1991, as amended from
time to time (or any successor to such Rights Agreement), at any time
before the issuance of such securities;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Act), including pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if the agreement,
-2-
<PAGE>
arrangement or understanding: (A) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations under the Act and (B) is not also then reportable on a
Schedule 13D under the Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in Subsection 1(c)(ii) above) or disposing of any voting
securities of the Company.
(d) Cause. "Cause" for termination by the Employer of the Executive's
employment after the Effective Date shall, for purposes of this Agreement, be
limited to (i) misappropriation by the Executive of funds of the Employer; (ii)
the Executive personally and secretly obtaining profits from dealings with the
Employer; (iii) the Executive's unreasonable neglect of, or refusal to perform,
his duties or responsibilities (unless significantly changed without the
Executive's consent); and (iv) conviction of a serious crime involving moral
turpitude.
(e) Change in Control of the Company. For purposes of this Agreement, a
"Change in Control of the Company" shall be deemed to occur if (i) any Person
becomes the Beneficial Owner of more than 30% of the outstanding voting stock of
the Company, (A) in whole or in part by means of an offer made to the holders of
any one or more classes of such voting stock to acquire such shares for cash,
securities, other property or any combination thereof, or (B) by any other
means; (ii) the Company sells, transfers or assigns all or substantially all of
its business and assets; (iii) the Company consolidates with or merges into any
other corporation, unless the Company or a subsidiary of the Company is the
continuing or surviving corporation; (iv) the Company acquires, whether through
purchase, merger or otherwise, all or substantially all of the operating assets
or capital stock of another entity and in connection with such acquisition
persons are elected or appointed to the Board of Directors of the Company who
are not directors immediately prior to such acquisition and such persons
-3-
<PAGE>
constitute a majority of the Board of Directors after such acquisition; or (v)
any Person succeeds in electing two or more directors of the Company in any one
election in opposition to those nominees proposed by management of the Company.
(f) Code. For purposes of this Agreement, the term "Code" means the
Internal Revenue Code of 1986, including any amendments thereto or successor tax
codes thereof.
(g) Covered Termination. For purposes of this Agreement, the term "Covered
Termination" means any termination of the Executive's employment during the
Employment Period where the Termination Date is any date on or prior to the end
of such Employment Period.
(h) Effective Date. For purposes of this Agreement, the term "Effective
Date" shall mean the first day on which a Change in Control of the Company
occurs. Anything in this Agreement to the contrary notwithstanding, if a Change
in Control of the Company occurs and if the Executive's employment with the
Employer is terminated (whether by the Employer, the Executive or otherwise)
during the period of 180 days prior to the date on which the Change in Control
of the Company occurs, and if it is reasonably demonstrated by the Executive
that such termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change in Control of the
Company or (ii) otherwise arose in connection with or in anticipation of a
Change in Control of the Company, then for all purposes of this Agreement, the
term "Effective Date" shall mean the date immediately prior to the date of such
termination of employment.
(i) Employment Period. For purposes of this Agreement, the term "Employment
Period" means a period commencing on the Effective Date, and ending at 11:59
p.m. Milwaukee Time on the earlier of the first anniversary of such date or the
Executive's Normal Retirement Date.
(j) Good Reason. For purposes of this Agreement, the Executive shall have a
"Good Reason" for termination of employment on or after the Effective Date in
the event of:
-4-
<PAGE>
(i) any breach of this Agreement by the Company, including
specifically any breach by the Company of its agreements contained in
Sections 4, 5 or 6 hereof;
(ii) the removal of the Executive from, or any failure to reelect or
reappoint the Executive to, any of the positions held with the Employer at
any time during the 180-day period prior to the Effective Date or any other
positions with the Employer to which the Executive shall thereafter be
elected, appointed or assigned, except in the event that such removal or
failure to reelect or reappoint (A) relates to the termination by the
Employer of the Executive's employment for Cause or by reason of disability
pursuant to Section 12 hereof, or (B) is consented to in writing by the
Executive;
(iii) a good faith determination by the Executive that there has been
a significant adverse change, without the Executive's written consent, in
the Executive's working conditions or status with the Employer from such
working conditions or status in effect during the 180-day period prior to
the Effective Date, including but not limited to (A) a significant change
in the nature or scope of the Executive's authority, powers, functions,
duties or responsibilities, or (B) a significant reduction in the level of
support services, staff, secretarial and other assistance, office space and
accoutrements; or
(iv) failure by the Company to obtain the Agreement referred to in
Section 18(a) hereof as provided therein.
(k) Normal Retirement Date. For purposes of this Agreement, the term
"Normal Retirement Date" means "Normal Retirement Date" as defined in the Banta
Corporation Employees Pension Plan, or any successor plan, as in effect on the
Effective Date.
(l) Notice of Termination. For purposes of this Agreement, the term "Notice
of Termination" means a written notice as contemplated by Section 14 hereof.
-5-
<PAGE>
(m) Person. For purposes of this Agreement, the term "Person" shall mean
any individual, firm, partnership, corporation or other entity, including any
successor (by merger or otherwise) of such entity, or a group of any of the
foregoing acting in concert.
(n) Termination Date. For purposes of this Agreement, except as otherwise
provided in Section 10(b) and Section 18(a) hereof, the term "Termination Date"
means (i) if the Executive's employment is terminated by the Executive's death,
the date of death; (ii) if the Executive's employment is terminated by reason of
voluntary early retirement, as agreed in writing by the Company and the
Executive, the date of such early retirement which is set forth in such written
agreement; (iii) if the Executive's employment is terminated for purposes of
this Agreement by reason of disability pursuant to Section 12 hereof, the
earlier of thirty days after the Notice of Termination is given or one day prior
to the end of the Employment Period; (iv) if the Executive's employment is
terminated by the Executive voluntarily (other than for Good Reason), the date
the Notice of Termination is given; and (v) if the Executive's employment is
terminated by the Company (other than by reason of disability pursuant to
Section 12 hereof) or by the Executive for Good Reason, the earlier of thirty
days after the Notice of Termination is given or one day prior to the end of the
Employment Period. Notwithstanding the foregoing,
(A) If termination is for Cause pursuant to Section 1(d)(iii) of this
Agreement and if the Executive has cured the conduct constituting such Cause as
described by the Company in its Notice of Termination within such thirty day or
shorter period, then the Executive's employment hereunder shall continue as if
the Company had not delivered its Notice of Termination.
(B) If the Company shall give a Notice of Termination for Cause or by
reason of disability and the Executive in good faith notifies the Company that a
dispute exists concerning the termination within the fifteen day period
following receipt thereof, then the Executive may elect to continue his
employment during such dispute and the Termination Date shall be determined
under this paragraph. If the Executive so elects and it is thereafter determined
that Cause or disability (as the case may be) did exist, the Termination Date
shall be the earlier of (1) the date on which the dispute is finally determined,
either (x) by mutual
-6-
<PAGE>
written agreement of the parties or (y) in accordance with Section 23 hereof,
(2) the date of the Executive's death, or (3) one day prior to the end of the
Employment Period. If the Executive so elects and it is thereafter determined
that Cause or disability (as the case may be) did not exist, then the employment
of the Executive hereunder shall continue after such determination as if the
Company had not delivered its Notice of Termination and there shall be no
Termination Date arising out of such Notice. In either case, this Agreement
continues, until the Termination Date, if any, as if the Company had not
delivered the Notice of Termination except that, if it is finally determined
that the Company properly terminated the Executive for the reason asserted in
the Notice of Termination, the Executive shall in no case be entitled to a
Termination Payment (as hereinafter defined) arising out of events occurring
after the Company delivered its Notice of Termination.
(C) If the Executive shall in good faith give a Notice of Termination for
Good Reason and the Company notifies the Executive that a dispute exists
concerning the termination within the fifteen day period following receipt
thereof, then the Executive may elect to continue his employment during such
dispute and the Termination Date shall be determined under this paragraph. If
the Executive so elects and it is thereafter determined that Good Reason did
exist, the Termination Date shall be the earlier of (1) the date on which the
dispute is finally determined, either (x) by mutual written agreement of the
parties or (y) in accordance with Section 23 hereof, (2) the date of the
Executive's death or (3) one day prior to the end of the Employment Period. If
the Executive so elects and it is thereafter determined that Good Reason did not
exist, then the employment of the Executive hereunder shall continue after such
determination as if the Executive had not delivered the Notice of Termination
asserting Good Reason and there shall be no Termination Date arising out of such
Notice. In either case, this Agreement continues, until the Termination Date, if
any, as if the Executive had not delivered the Notice of Termination except
that, if it is finally determined that Good Reason did exist, the Executive
shall in no case be denied the benefits described in Sections 8(b) and 9 hereof
(including a Termination Payment) based on events occurring after the Executive
delivered his Notice of Termination.
-7-
<PAGE>
(D) If an opinion is required to be delivered pursuant to Section 9(b)(ii)
hereof and such opinion shall not have been delivered, the Termination Date
shall be the earlier of the date on which such opinion is delivered or one day
prior to the end of the Employment Period.
(E) Except as provided in Paragraphs (B) and (C) above, if the party
receiving the Notice of Termination notifies the other party that a dispute
exists concerning the termination within the fifteen day period following
receipt thereof and it is finally determined that the reason asserted in such
Notice of Termination did not exist, then (1) if such Notice was delivered by
the Executive, the Executive will be deemed to have voluntarily terminated his
employment and (2) if delivered by the Company, the Company will be deemed to
have terminated the Executive other than by reason of death, disability or
Cause.
2. Termination or Cancellation Prior to the Effective Date. The Employer
and the Executive shall each retain the right to terminate the employment of the
Executive at any time prior to the Effective Date. In the event the Executive's
employment is terminated prior to the Effective Date, this Agreement shall be
terminated and cancelled and of no further force and effect and any and all
rights and obligations of the parties hereunder shall cease.
3. Employment Period. If the Executive is employed by the Company or a
subsidiary of the Company on the Effective Date, the Company will, or will cause
the Employer to, continue thereafter to employ the Executive during the
Employment Period, and the Executive will remain in the employ of the Employer,
in accordance with and subject to the terms and provisions of this Agreement.
Any termination of the Executive's employment during the Employment Period,
whether by the Company or a subsidiary of the Company, shall be deemed a
termination by the Company for purposes of this Agreement.
4. Duties. During the Employment Period, the Executive shall, in the most
significant capacities and positions held by the Executive at any time during
the 180-day period preceding the Effective Date or in such other capacities and
positions as may be agreed to by the Company and the Executive in writing,
devote the Executive's best efforts and all of the Executive's business time,
attention and skill to the business and affairs of the Employer, as
-8-
<PAGE>
such business and affairs now exist and as they may hereafter be conducted. The
services which are to be performed by the Executive hereunder are to be rendered
in the same metropolitan area in which the Executive was principally employed
during the 180-day period prior to the Effective Date, or in such other place or
places as shall be mutually agreed upon in writing by the Executive and the
Company from time to time. Without the Executive's consent the Executive shall
not be required to be absent from such metropolitan area for any number of days
in any fiscal year of the Company exceeding the average number of days per year
the Executive was absent from such metropolitan area during the two fiscal years
preceding the Effective Date.
5. Compensation. During the Employment Period, the Executive shall be
compensated as follows:
(a) The Executive shall receive, at reasonable intervals (but not less
often than monthly) and in accordance with such standard policies as may be in
effect immediately prior to the Effective Date, an annual base salary in cash
equivalent of not less than twelve times the Executive's highest monthly base
salary for the twelve-month period immediately preceding the month in which the
Effective Date occurs (which base salary shall, unless otherwise agreed in
writing by the Executive, include the current receipt by the Executive of any
amounts which, prior to the Effective Date, the Executive had elected to defer,
whether such compensation is deferred under Section 401(k) of the Code or
otherwise), subject to upward adjustment as provided in Section 6 hereof (such
salary amount as adjusted upward from time to time is hereafter referred to as
the "Annual Base Salary").
(b) The Executive shall receive fringe benefits at least equal in value to
those provided for the Executive at any time during the 180-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
those provided generally at any time after the Effective Date to executives of
the Employer of comparable status and position to the Executive. The Executive
shall be reimbursed, at such intervals and in accordance with such standard
policies that are most favorable to the Executive which were in effect at any
time during the 180-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time after the
Effective Date to executives of the
-9-
<PAGE>
Employer of comparable status and position to the Executive, for any and all
monies advanced in connection with the Executive's employment for reasonable and
necessary expenses incurred by the Executive on behalf of the Employer,
including travel expenses.
(c) The Executive shall be included, to the extent eligible thereunder
(which eligibility shall not be conditioned on the Executive's salary grade or
on any other requirement which excludes persons of comparable status and
position to the Executive unless such exclusion was in effect for such plan or
an equivalent plan immediately prior to the Effective Date), in any and all
plans providing benefits for the Company's salaried employees in general,
including but not limited to group life insurance, hospitalization, medical,
dental, profit sharing and stock bonus plans; provided, that, in no event shall
the aggregate level of benefits under such plans in which the Executive is
included be less than the aggregate level of benefits under plans of the Company
and its subsidiaries of the type referred to in this Section 5(c) in which the
Executive was participating at any time during the 180-day period immediately
preceding the Effective Date.
(d) The Executive shall annually be entitled to not less than the amount of
paid vacation and not fewer than the number of paid holidays to which the
Executive was entitled annually at any time during the 180-day period
immediately preceding the Effective Date or such greater amount of paid vacation
and number of paid holidays as may be made available annually to other
executives of the Company and its subsidiaries of comparable status and position
to the Executive.
(e) The Executive shall be included in all plans providing additional
benefits to executives of the Company of comparable status and position to the
Executive, including but not limited to deferred compensation, split-dollar life
insurance, supplemental retirement, stock option, stock appreciation, stock
bonus, long-term incentive compensation and similar or comparable plans;
provided, that, in no event shall the aggregate level of benefits under such
plans be less than the aggregate level of benefits under plans of the Company of
the type referred to in this Section 5(e) in which the Executive was
participating at any time during the 180-day period immediately preceding the
Effective Date; and provided, further, that the
-10-
<PAGE>
Company's obligation to include the Executive in annual bonus or incentive
compensation plans shall be determined by Subsection 5(f) hereof.
(f) To assure that the Executive will have an opportunity to earn incentive
compensation on an annual basis after the Effective Date, the Executive shall be
included in a bonus plan of the Company which shall satisfy the standards
described below (such plan, the "Bonus Plan"). Bonuses under the Bonus Plan
shall be payable with respect to achieving such financial or other goals
reasonably related to the business of the Company as the Company shall establish
(the "Goals"), all of which Goals shall be attainable, prior to the end of the
Employment Period, with approximately the same degree of probability as the
goals under the Company's Economic Profit Incentive Compensation Plan, or the
successor to such plan, in the form most favorable to the Executive which was in
effect at any time during the 180-day period prior to the Effective Date (the
"EP Plan") and in view of the Company's existing and projected financial and
business circumstances applicable at the time. The amount of the bonus (the
"Bonus Amount") that the Executive is eligible to earn under the Bonus Plan
shall be no less than the amount of the Executive's maximum award provided in
such EP Plan (such bonus amount herein referred to as the "Targeted Bonus"), and
in the event the Goals are not achieved such that the entire Targeted Bonus is
not payable, the Bonus Plan shall provide for a payment of a Bonus Amount equal
to a portion of the Targeted Bonus reasonably related to that portion of the
Goals which were achieved. Payment of the Bonus Amount shall not be affected by
any circumstance occurring subsequent to the end of the Employment Period,
including termination of the Executive's employment.
6. Annual Compensation Adjustments. During the Employment Period, the Board
of Directors of the Company (or an appropriate committee thereof) will consider
and appraise, at least annually, the contributions of the Executive to the
Employer, and in accordance with the Company's practice prior to the Effective
Date, due consideration shall be given at least annually, to the upward
adjustment of the Executive's Annual Base Salary (i) commensurate with increases
generally given to other executives of the Employer of comparable status and
position to the Executive, and (ii) as the scope of the Employer's operations or
the Executive's duties expand.
-11-
<PAGE>
7. Termination For Cause or Without Good Reason. If there is a Covered
Termination for Cause or due to the Executive's voluntarily terminating his
employment other than for Good Reason (any such terminations to be subject to
the procedures set forth in Section 14 hereof), then the Executive shall be
entitled to receive only Accrued Benefits pursuant to Section 9(a) hereof.
8. Termination Giving Rise to a Termination Payment. (a) If there is a
Covered Termination by the Executive for Good Reason, or by the Company other
than by reason of (i) death, (ii) disability pursuant to Section 12 hereof, or
(iii) Cause (any such terminations to be subject to the procedures set forth in
Section 14 hereof), then the Executive shall be entitled to receive, and the
Company shall promptly pay, Accrued Benefits and, in lieu of further base salary
for periods following the Termination Date, as liquidated damages and additional
severance pay and in consideration of the covenant of the Executive set forth in
Section 15(a) hereof, the Termination Payment pursuant to Section 9(b) hereof.
(b) If there is a Covered Termination and the Executive is entitled to
Accrued Benefits and the Termination Payment, then the Executive shall be
entitled to the following additional benefits:
(i) The Executive will be entitled to pension benefits in addition to
the most favorable benefits provided for him under any version of the
Company's Salaried Employees Pension Plan and the Company's Supplemental
Retirement Plan (or any successors to such plans) in effect at any time
during the 180-day period prior to the Effective Date (the "Retirement
Plans"). The amount of additional pension benefits will be equal to the
difference between the amount the Executive (or in the event of the
Executive's death, the Executive's surviving spouse or other beneficiary)
would be actually entitled to receive upon retirement under the terms and
conditions of the Retirement Plans and the amount the Executive (or such
surviving spouse or beneficiary) would have been entitled to receive under
such terms and conditions if (A) the Executive's benefits under the
Retirement Plans had been fully vested on the Termination Date and (B) the
Executive had continued to work for the remainder of the Employment Period
at a salary rate equal to the Executive's Annual Base Salary;
-12-
<PAGE>
provided, however, that in no event will the assumed period of continued
employment extend beyond the date on which the Executive elects to begin
receiving the additional pension benefits. The Executive shall be entitled
to elect to receive his additional pension benefits in any form (e.g. joint
and survivor) that would have been available to him under the terms and
conditions of the Retirement Plans and (subject to reduction, if any, under
such terms) at any time after he has attained the age at which early
retirement is permitted. In addition, if the Executive starts to receive
his additional pension benefits before the earliest date on which he is
eligible for unreduced Social Security benefits, the Executive will receive
an amount equal to the difference between his estimated unreduced Social
Security benefit and the actual benefit to which he is entitled until he
attains the age when he is eligible for unreduced benefits.
(ii) Until the earlier of the end of the Employment Period or such
time as the Executive has obtained new employment and is covered by
benefits which in the aggregate are at least equal in value to the
following benefits, the Executive shall continue to be covered, at the
expense of the Company, by the most favorable life insurance,
hospitalization, medical and dental coverage provided to the Executive and
the Executive's family during the 180-day period immediately preceding the
Effective Date or, if more favorable to the Executive, the coverage in
effect generally at any time thereafter for executives of the Employer of
comparable status and position to the Executive and their families.
9. Payments Upon Termination.
(a) Accrued Benefits. For purposes of this Agreement, the Executive's
"Accrued Benefits" shall include the following amounts, payable as described
herein: (i) all base salary for the time period ending with the Termination
Date; (ii) reimbursement for any and all monies advanced in connection with the
Executive's employment for reasonable and necessary expenses incurred by the
Executive on behalf of the Employer for the time period ending with the
Termination Date; (iii) any and all other cash earned through the Termination
Date and deferred at the election of the Executive or pursuant to any deferred
compensation plan then in effect; (iv) a lump sum payment of the bonus or
incentive compensation otherwise
-13-
<PAGE>
payable to the Executive with respect to the year in which termination occurs to
the extent provided by all bonus or incentive compensation plan or plans in
which the Executive is a participant; and (v) all other payments and benefits to
which the Executive (or in the event of the Executive's death, the Executive's
surviving spouse or other beneficiary) may be entitled as compensatory fringe
benefits or under the terms of any benefit plan of the Company, including
severance payments under the Company's severance policies and practices in the
form most favorable to the Executive which was in effect at any time during the
180-day period prior to the Effective Date. Payment of Accrued Benefits shall be
made promptly in accordance with the Company's prevailing practice with respect
to Subsections (i) and (ii) or, with respect to Subsections (iii), (iv) and (v),
pursuant to the terms of the benefit plan or practice establishing such
benefits.
(b) Termination Payment. (i) Subject to the limits set forth in Subsection
9(b)(ii) hereof, the Termination Payment shall be an amount equal to (A) the
Executive's Annual Base Salary, plus (B) the amount of the highest annual bonus
award (determined on an annualized basis for any bonus award paid for a period
of less than one year and excluding any year for which the Executive did not
participate in any bonus plan) paid to the Executive with respect to the three
years preceding the Termination Date (the aggregate amount set forth in (A) and
(B) hereof shall hereafter be referred to as "Annual Cash Compensation"). The
Termination Payment shall be paid to the Executive in cash equivalent ten
business days after the Termination Date. The Executive shall not be required to
mitigate the amount of the Termination Payment by securing other employment or
otherwise, nor will such Termination Payment be reduced by reason of the
Executive securing other employment or for any other reason. The Termination
Payment shall be in addition to any other severance payments to which the
Executive is entitled under the Company's severance policies and practices in
the form most favorable to the Executive which were in effect at any time during
the 180-day period prior to the Effective Date.
(ii) Notwithstanding any other provision of this Agreement, if any
portion of the Termination Payment or any other payment under this
Agreement, or under any other agreement with or plan of the Company (in the
aggregate "Total
-14-
<PAGE>
Payments"), would constitute an "excess parachute payment," then the Total
Payments to be made to the Executive shall be reduced such that the value
of the aggregate Total Payments that the Executive is entitled to receive
shall be One Dollar ($1) less than the maximum amount which the Executive
may receive without becoming subject to the tax imposed by Section 4999 of
the Code (or any successor provision) or which the Company may pay without
loss of deduction under Section 280G(a) of the Code (or any successor
provision). For purposes of this Agreement, the terms "excess parachute
payment" and "parachute payments" shall have the meanings assigned to them
in Section 280G of the Code (or any successor provision), and such
"parachute payments" shall be valued as provided therein. Present value for
purposes of this Agreement shall be calculated in accordance with Section
1274(b)(2) of the Code (or any successor provision). Within sixty days
following delivery of the Notice of Termination or notice by the Company to
the Executive of its belief that there is a payment or benefit due the
Executive which will result in an excess parachute payment as defined in
Section 280G of the Code (or any successor provision), the Executive and
the Company, at the Company's expense, shall obtain the opinion (which need
not be unqualified) of nationally recognized tax counsel selected by the
Company's independent auditors and acceptable to the Executive in his sole
discretion, which sets forth (A) the amount of the Base Period Income, (B)
the amount and present value of Total Payments and (C) the amount and
present value of any excess parachute payments without regard to the
limitations of this Subsection 9(b)(ii). As used in this Subsection
9(b)(ii), the term "Base Period Income" means an amount equal to the
Executive's "annualized includible compensation for the base period" as
defined in Section 280G(d)(1) of the Code (or any successor provision). For
purposes of such opinion, the value of any noncash benefits or any deferred
payment or benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4)
of the Code (or any successor provisions), which determination shall be
evidenced in a certificate of such auditors addressed to the Company and
the Executive. Such opinion shall be dated as of the Termination Date and
addressed to the Company and the Executive and shall be binding upon the
Company and the Executive. If such opinion determines that there would be
an excess parachute payment, the Termination Payment hereunder or
-15-
<PAGE>
any other payment determined by such counsel to be includible in Total
Payments shall be reduced or eliminated as specified by the Executive in
writing delivered to the Company within thirty days of his receipt of such
opinion or, if the Executive fails to so notify the Company, then as the
Company shall reasonably determine, so that under the bases of calculations
set forth in such opinion there will be no excess parachute payment. The
provisions of this Subsection 9(b)(ii), including the calculations, notices
and opinions provided for herein, shall be based upon the conclusive
presumption that the following are reasonable: (1) the compensation and
benefits provided for in Section 5 hereof and (2) any other compensation,
including but not limited to the Accrued Benefits, earned prior to the
Termination Date by the Executive pursuant to the Company's compensation
programs if such payments would have been made in the future in any event,
even though the timing of such payment is triggered by the Change in
Control of the Company or the Termination Date.
(iii) (A) If, notwithstanding the provisions of Subsection (ii) of
this Section 9(b), but subject to paragraph (B), it is ultimately
determined by a court or pursuant to a final determination by the Internal
Revenue Service that any portion of Total Payments is subject to the tax
(the "Excise Tax") imposed by Section 4999 of the Code (or any successor
provision), the Company shall pay to the Executive an additional amount
(the "Gross-Up Payment") such that the net amount retained by the Executive
after deduction of any Excise Tax and any interest charges or penalties in
respect of the imposition of such Excise Tax (but not any federal, state or
local income tax) on the Total Payments, and any federal, state and local
income tax and Excise Tax upon the payment provided for by this Subsection
(iii), shall be equal to the Total Payments. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed to pay
federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rates of taxation
in the state and locality of the Executive's domicile for income tax
purposes on the date the Gross-Up Payment is made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes.
-16-
<PAGE>
(B) If legislation is enacted that would require the Company's shareholders
to approve this Agreement, prior to a Change in Control of the Company, due
solely to the provision contained in paragraph (A) of this Subsection 9(b)(iii),
then
(1) from and after such time as shareholder approval would be
required, until shareholder approval is obtained as required by such
legislation, paragraph (A) shall be of no force and effect;
(2) if the Company seeks shareholder approval of any other agreement
providing similar benefits to any other executive of the Company, the
Company shall seek shareholder approval of this Agreement at the same
shareholders meeting or meetings at which the shareholders consider any
such other agreement; and
(3) the Company and the Executive shall use their best efforts to
consider and agree in writing upon an amendment to this Subsection
9(b)(iii) such that, as amended, this Subsection would provide the
Executive with the benefits intended to be afforded to the Executive by
paragraph (A) without requiring shareholder approval.
10. Death. (a) Except as provided in Section 10(b) hereof, in the event of
a Covered Termination due to the Executive's death, the Executive's estate,
heirs and beneficiaries shall receive all the Executive's Accrued Benefits
through the Termination Date.
(b) In the event the Executive dies after a Notice of Termination is given
(i) by the Company or (ii) by the Executive for Good Reason, the Executive's
estate, heirs and beneficiaries shall be entitled to the benefits described in
Section 10(a) hereof and, subject to the provisions of this Agreement, to such
Termination Payment as the Executive would have been entitled to had the
Executive lived. For purposes of this Subsection 10(b), the Termination Date
shall be the earlier of thirty days following the giving of the Notice of
Termination, subject to extension pursuant to Section 1(n) hereof, or one day
prior to the end of the Employment Period.
11. Retirement. If, during the Employment Period, the Executive and the
Company shall execute an agreement providing for the early retirement of the
Executive from
-17-
<PAGE>
the Company, or the Executive shall otherwise give notice that he is voluntarily
choosing to retire early from the Company, the Executive shall receive Accrued
Benefits through the Termination Date; provided, that if the Executive's
employment is terminated by the Executive for Good Reason or by the Company
other than by reason of death, disability or Cause and the Executive also, in
connection with such termination, elects voluntary early retirement, the
Executive shall also be entitled to receive a Termination Payment pursuant to
Section 8(a) hereof.
12. Termination for Disability. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or injury
(regardless of whether such illness or injury is job-related), the Executive
shall have been absent from the Executive's duties hereunder on a full-time
basis for a period of 180 days during any 194-day period and, within thirty days
after the Company notifies the Executive in writing that it intends to terminate
the Executive's employment (which notice shall not constitute the Notice of
Termination contemplated below), the Executive shall not have returned to the
performance of the Executive's duties hereunder on a full-time basis, the
Company may terminate the Executive's employment for purposes of this Agreement
pursuant to a Notice of Termination given in accordance with Section 14 hereof.
If the Executive's employment is terminated on account of the Executive's
disability in accordance with this Section, the Executive shall receive Accrued
Benefits in accordance with Section 9(a) hereof and shall remain eligible for
all benefits provided by any long term disability programs of the Company in
effect at the time of such termination.
13. Stock Options. Following a Change in Control of the Company, all stock
options held by the Executive as of the Effective Date (and not otherwise
exercised) will become exercisable in full notwithstanding any percentage
limitations on the exercise of the options and, notwithstanding any termination
of the Executive's employment, shall remain exercisable for a period of not less
than three months after the date of the Change in Control of the Company;
provided, however, that no option shall be exercisable after the expiration date
specified therefor in the applicable stock option agreement.
-18-
<PAGE>
14. Termination Notice and Procedure. Any Covered Termination by the
Employer or the Executive (other than a termination of the Executive's
employment referenced in the last sentence of Section 1(h) hereof) shall be
communicated by written Notice of Termination to the Executive, if such Notice
is given by the Company, and to the Company, if such Notice is given by the
Executive, all in accordance with the following procedures and those set forth
in Section 24 hereof:
(a) If such termination is for disability, Cause or Good Reason, the Notice
of Termination shall indicate in reasonable detail the facts and circumstances
alleged to provide a basis for such termination.
(b) Any Notice of Termination by the Company shall have been approved,
prior to the giving thereof to the Executive, by a resolution duly adopted by a
majority of the directors of the Company (or any successor corporation) then in
office.
(c) The Executive shall have thirty days, or such longer period as the
Company may determine to be appropriate, to cure any conduct or act, if curable,
alleged to provide grounds for termination of the Executive's employment for
Cause under this Agreement pursuant to Subsection 1(d)(iii) hereof.
(d) The recipient of any Notice of Termination shall personally deliver or
mail in accordance with Section 24 hereof written notice of any dispute relating
to such Notice of Termination to the party giving such Notice within fifteen
days after receipt thereof. After the expiration of such fifteen days, the
contents of the Notice of Termination shall become final and not subject to
dispute.
15. Further Obligations of the Executive.
(a) Competition. The Executive agrees that, in the event of any Covered
Termination where the Executive is entitled to Accrued Benefits and the
Termination Payment, the Executive shall not, during the balance of the
Employment Period, without the prior written approval of the Company's Board of
Directors, participate in the management of, be employed by or own any business
enterprise at a location within the United States that engages
-19-
<PAGE>
in substantial competition with the Company or its subsidiaries, where such
enterprise's revenues from any printing services amount to 10% or more of such
enterprise's net revenues and sales for its most recently completed fiscal year;
provided, however, that nothing in this Section 15(a) shall prohibit the
Executive from owning stock or other securities of a competitor amounting to
less than five percent of the outstanding capital stock of such competitor.
(b) Confidentiality. During and following the Executive's employment by the
Employer, the Executive shall hold in confidence and not directly or indirectly
disclose or use or copy or make lists of any confidential information or
proprietary data of the Employer, except to the extent authorized in writing by
the Board of Directors of the Company or required by any court or administrative
agency, other than to an employee of the Employer or a person to whom disclosure
is reasonably necessary or appropriate in connection with the performance by the
Executive of duties as an executive of the Employer. Confidential information
shall not include any information known generally to the public or any
information of a type not otherwise considered confidential by persons engaged
in the same business or a business similar to that of the Employer. All records,
files, documents and materials, or copies thereof, relating to the business of
the Employer which the Executive shall prepare, or use, or come into contact
with, shall be and remain the sole property of the Employer and shall be
promptly returned to the Employer upon termination of employment with the
Employer.
16. Expenses and Interest. If, after the Effective Date, (i) a dispute
arises with respect to the enforcement of the Executive's rights under this
Agreement or (ii) any legal or arbitration proceeding shall be brought to
enforce or interpret any provision contained herein or to recover damages for
breach hereof, in either case so long as the Executive is not acting in bad
faith, the Executive shall recover from the Company any reasonable attorneys'
fees and necessary costs and disbursements incurred as a result of such dispute,
legal or arbitration proceeding ("Expenses"), and prejudgment interest on any
money judgment or arbitration award obtained by the Executive calculated at the
rate of interest announced by Firstar Bank Milwaukee, N.A., Milwaukee, Wisconsin
(or any successor bank thereto) from time to time as its prime or base lending
rate from the date that payments to him should have been made under this
Agreement. Within ten days after the Executive's written request
-20-
<PAGE>
therefor, the Company shall pay to the Executive, or such other person or entity
as the Executive may designate in writing to the Company, the Executive's
reasonable Expenses in advance of the final disposition or conclusion of any
such dispute, legal or arbitration proceeding.
17. Payment Obligations Absolute. The Company's obligation during and after
the Employment Period to pay the Executive the amounts and to make the benefit
and other arrangements provided herein shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
setoff, counterclaim, recoupment, defense or other right which the Company may
have against him or anyone else. Except as provided in Section 16 of this
Agreement, all amounts payable by the Company hereunder shall be paid without
notice or demand. Each and every payment made hereunder by the Company shall be
final, and the Company will not seek to recover all or any part of such payment
from the Executive, or from whomsoever may be entitled thereto, for any reason
whatsoever.
18. Successors. (a) If the Company sells, assigns or transfers all or
substantially all of its business and assets to any Person or if the Company
merges into or consolidates or otherwise combines (where the Company does not
survive such combination) with any Person (any such event, a "Sale of
Business"), then the Company shall assign all of its right, title and interest
in this Agreement as of the date of such event to such Person, and the Company
shall cause such Person, by written agreement in form and substance reasonably
satisfactory to the Executive, to expressly assume and agree to perform from and
after the date of such assignment all of the terms, conditions and provisions
imposed by this Agreement upon the Company. Failure of the Company to obtain
such agreement prior to the effective date of such Sale of Business shall be a
breach of this Agreement constituting "Good Reason" hereunder, except that for
purposes of implementing the foregoing, the date upon which such Sale of
Business becomes effective shall be deemed the Termination Date. In case of such
assignment by the Company and of assumption and agreement by such Person, as
used in this Agreement, "Company" shall thereafter mean such Person which
executes and delivers the agreement provided for in this Section 18 or which
otherwise becomes bound by all the terms
-21-
<PAGE>
and provisions of this Agreement by operation of law, and this Agreement shall
inure to the benefit of, and be enforceable by, such Person. The Executive
shall, in his discretion, be entitled to proceed against any or all of such
Persons, any Person which theretofore was such a successor to the Company (as
defined in the first paragraph of this Agreement) and the Company (as so
defined) in any action to enforce any rights of the Executive hereunder. Except
as provided in this Subsection, this Agreement shall not be assignable by the
Company. This Agreement shall not be terminated by the voluntary or involuntary
dissolution of the Company.
(b) This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. All amounts
payable to the Executive under Sections 7, 8, 9, 10, 11, 12 and 16 hereof if the
Executive had lived shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs and representatives; provided, however, that the
foregoing shall not be construed to modify any terms of any benefit plan of the
Company, as such terms are in effect on the Effective Date, that expressly
govern benefits under such plan in the event of the Executive's death.
19. Severability. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared invalid
or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
20. Amendment. This Agreement may not be amended or modified at any time
except by written instrument executed by the Company and the Executive.
21. Withholding. The Company shall be entitled to withhold from amounts to
be paid to the Executive hereunder any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold;
provided, that the amount so withheld shall not exceed the minimum amount
required to be withheld by law. The Company shall be entitled to rely on an
opinion of nationally recognized tax counsel if any question as to the amount or
requirement of any such withholding shall arise.
-22-
<PAGE>
22. Certain Rules of Construction. No party shall be considered as being
responsible for the drafting of this Agreement for the purpose of applying any
rule construing ambiguities against the drafter or otherwise. No draft of this
Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company.
23. Governing Law; Resolution of Disputes. This Agreement and the rights
and obligations hereunder shall be governed by and construed in accordance with
the laws of the State of Wisconsin. Any dispute arising out of this Agreement
shall, at the Executive's election, be determined by arbitration under the rules
of the American Arbitration Association then in effect (in which case both
parties shall be bound by the arbitration award) or by litigation. Whether the
dispute is to be settled by arbitration or litigation, the venue for the
arbitration or litigation shall be Menasha, Wisconsin or, at the Executive's
election, if the Executive does not then reside or work in the Menasha,
Wisconsin metropolitan area, in the judicial district encompassing the city in
which the Executive resides; provided, that, if the Executive is not then
residing in the United States, the election of the Executive with respect to
such venue shall be either Menasha, Wisconsin or in the judicial district
encompassing that city in the United States among the thirty cities having the
largest population (as determined by the most recent United States Census data
available at the Termination Date) which is closest to the Executive's
residence. The parties consent to personal jurisdiction in each trial court in
the selected venue having subject matter jurisdiction notwithstanding their
residence or situs, and each party irrevocably consents to service of process in
the manner provided hereunder for the giving of notices.
24. Notice. Notices given pursuant to this Agreement shall be in writing
and, except as otherwise provided by Section 14(c) hereof, shall be deemed given
when actually received by the Executive or actually received by the Company's
Secretary or any officer of the Company other than the Executive. If mailed,
such notices shall be mailed by United States registered or certified mail,
return receipt requested, addressee only, postage prepaid, if to the Company, to
Banta Corporation, Attention: Secretary (or President, if the
-23-
<PAGE>
Executive is then Secretary), River Place, 225 Main Street, Menasha, WI 54952,
or if to the Executive, at the address set forth below the Executive's signature
to this Agreement, or to such other address as the party to be notified shall
have theretofore given to the other party in writing.
25. No Waiver. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time.
26. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
27. Prior Agreement. This Agreement shall supersede the prior Key Executive
Employment and Severance Agreement, dated February 1, 1994, among the parties
hereto, which prior agreement shall be of no further force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first written above.
BANTA CORPORATION
(Corporate Seal)
By:____________________________________
Donald D. Belcher
Chairman, President and
Chief Executive Officer
Attest:________________________________
Ronald D. Kneezel
Secretary
EXECUTIVE
-24-
Exhibit 10.4
BANTA CORPORATION
KEY MANAGEMENT RETENTION PLAN
1. Establishment. BANTA CORPORATION (the "Company") hereby establishes an
incentive compensation plan for certain key employees, as described herein,
which shall be known as the BANTA CORPORATION KEY MANAGEMENT RETENTION PLAN
(the "Plan").
2. Purpose. The purpose of the Plan is to provide additional incentives for
certain key employees to remain employed by the Company and/or a subsidiary
of the Company for a minimum of two years following the effective date of
the Plan.
3. Effective Date of the Plan. The effective date of the Plan is April 30,
1999.
4. Maximum Payout. The maximum aggregate amount that may be paid to
Participants (as defined below) under the Plan is $5,200,000.
5. Administration.
(a) The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company or any successor committee thereto
(the "Committee").
(b) Subject to the express provisions of the Plan, the Committee shall
have authority to establish such rules and regulations (including,
without limitation, rules relating to the deferral of the payout of
Awards earned under the Plan) as it deems necessary or advisable for
the proper administration of the Plan.
(c) Subject to the express provisions of the Plan, the Committee shall
also have complete authority to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan and to
make all other determinations necessary or advisable for the
administration of the Plan. The Committee's determinations on the
matters referred to in this Paragraph 5 shall be conclusive and
binding upon all parties.
6. Eligibility. A limited number of key management employees of the Company
and its subsidiaries shall be eligible to participate in the Plan. The
persons entitled to participate in the Plan ("Participants") and the
maximum award payable to each individual Participant ("Award") shall be
determined by the Chief Executive Officer of the Company. The Chief
Executive Officer of the Company shall not be entitled to participate in
the Plan.
7. Rights of Employees. Nothing in this Plan or in any Award shall interfere
with or limit in any way the right of the Company or any of its
subsidiaries to terminate any Participant's employment at any time, nor
confer upon any Participant any right to continue in the employ of the
Company and/or its subsidiaries.
<PAGE>
8. Award Agreements. All Awards under the Plan shall be evidenced by written
agreements (an "Award Agreement") in such form as the Committee shall
determine.
9. Grant. In accordance with the provisions of the Plan, the Chief Executive
Officer of the Company shall select key management employees to whom Awards
shall be made and shall determine the maximum amount payable under any such
Award. Awards granted under the Plan and subsequently forfeited shall not
be available for regrant hereunder.
10. Payout of Awards. Payout of Awards granted under the Plan will be based on
the Company's two-year cumulative earnings per share on a fully diluted
basis (without giving effect to the Company's restructuring charge incurred
in the quarter ending July 3, 1999 and subject to such exclusions as the
Committee may deem appropriate, such as gains or losses from discontinued
operations, any extraordinary gains or losses and the effects of accounting
charges) ("EPS") during the Measurement Period (as defined below). The
Measurement Period shall consist of the period commencing April 4, 1999 and
ending March 31, 2001 inclusive. For any Award to be paid under the Plan,
EPS must exceed $3.60 during the Measurement Period. For each full cent of
EPS during the Measurement Period greater than $3.60, a Participant will be
entitled to be paid 1.25% of his or her maximum Award up to and including
100% of the Award at an EPS during the Measurement Period equal to or
greater than $4.40. In determining EPS for the Measurement Period, the
expense associated with the payout of the Awards shall be included. Awards,
if any, earned under the Plan will be paid out no later than May 15, 2001.
Except as otherwise provided below, Participants must be employed by the
Company and/or any subsidiary on March 31, 2001 to receive a payout of an
Award, and no pro rata payout with respect to any Award shall be made.
11. Transferability of Awards. No Awards granted hereunder shall be
transferable other than by will or by the laws of descent and distribution.
A Participant's rights to payments under the Plan are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of the Participant or
the Participant's beneficiary, and any such attempted anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment shall be null and void and not recognized by or be binding upon
the Company and its subsidiaries.
12. Withholding. The Company may deduct and withhold from any cash otherwise
payable to a Participant such amount as may be required for the purpose of
satisfying the Company's obligation to withhold foreign, federal, state,
local or other taxes.
13. Termination of Employment.
(a) In the event a Participant's employment with the Company and its
subsidiaries shall be terminated on or before March 31, 2001 for any
reason, except death or total and permanent disability, all rights to
receive a payout pursuant to an Award shall terminate immediately.
-2-
<PAGE>
(b) If the Participant shall die while employed by the Company or any
subsidiary prior to the payout of an Award, the Award will be paid out
on the regular payout date specified in Paragraph 10 (as though the
Participant had remained employed through such payout date) to the
person to whom the Award has been transferred by will or by the
applicable laws of descent and distribution.
(c) In the event of termination of employment with the Company or any
subsidiary due to total and permanent disability prior to the payout
of an Award, the Award will be paid out on the regular payout date
specified in Paragraph 10 as though the Participant had remained
employed through such payout date. For purposes hereof, a
Participant's employment shall be deemed to have terminated due to
total and permanent disability if he or she is permanently disabled
within the meaning of the Banta Corporation Group Long Term Disability
Plan.
For purposes of the Plan: (A) a transfer of an employee from the
Company to a 50% or more owned subsidiary, partnership, joint venture
or other affiliate (whether or not incorporated) or vice versa, or
from one subsidiary, partnership, joint venture or other affiliate to
another or (B) a leave of absence duly authorized in writing by the
Company, shall not be deemed a termination of employment under the
Plan.
14. Adjustment Provisions. In the event of any change in the shares of the
Company's common stock by reason of a declaration of a stock dividend
(other than a stock dividend declared in lieu of an ordinary cash
dividend), spin-off, merger, consolidation, recapitalization, or split-up,
combination or exchange of shares, or otherwise, the EPS thresholds
referenced in Paragraph 10 shall be appropriately adjusted by the
Committee, whose determination shall be conclusive.
15. Amendment of Plan. The Board of Directors may at any time amend the Plan as
it shall deem advisable. No amendment of the Plan may, without the consent
of the Participant to whom any Award shall have been granted, adversely
affect the rights of such Participant under such Award.
16. Change of Control. Notwithstanding any provision in the Plan to the
contrary, all previously granted Awards which immediately prior to a Change
of Control (as defined below) have not been paid out or cancelled shall be
immediately paid out at the maximum level upon the occurrence of a Change
of Control. For purposes of the Plan, a "Change of Control" shall be deemed
to occur if (i) any individual, entity or group (within the meaning of
Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 30%
of the outstanding voting stock of the Company, (A) in whole or in part by
means of an offer made to the holders of any one or more classes of such
voting stock to acquire such shares for cash, securities, other property or
any combination thereof, or (B) by any other means; (ii) the Company sells,
transfers or assigns all or substantially all of its business and assets;
(iii) the Company consolidates with or merges into any other
-3-
<PAGE>
corporation, unless the Company or a subsidiary of the Company is the
continuing or surviving corporation; (iv) the Company acquires, whether
through purchase, merger or otherwise, all or substantially all of the
operating assets or capital stock of another entity and in connection with
such acquisition persons are elected or appointed to the Board of Directors
of the Company who are not directors immediately prior to such acquisition
and such persons constitute a majority of the Board of Directors after such
acquisition; or (v) any individual, entity or group succeeds in electing
two or more directors of the Company in any one election in opposition to
those nominees proposed by management of the Company.
17. Governing Law. The Plan, all Awards hereunder and all determinations made
and actions taken pursuant to the Plan shall be governed by the laws of the
State of Wisconsin and construed in accordance therewith, to the extent not
otherwise governed by the laws of the United States.
18. Unfunded Plan; Nature of Awards. The Plan shall be unfunded, all amounts at
any time credited to the Participant shall be and remain the sole property
of the Company and its subsidiaries, and the Participant shall have no
ownership rights with respect thereto. Participants have the status of
general unsecured creditors of the Company and its subsidiaries and the
Plan constitutes a mere promise by the Company and its subsidiaries to make
benefit payments in the future if such payments become due and owing. It is
the intention of the parties that the arrangements be unfunded for tax
purposes and for purposes of Title I of ERISA.
-4-
<PAGE>
Banta Corporation
Key Management Retention Plan Agreement
_________________, 1999
TO: ___________________________
Congratulations on your selection as a Participant in the Banta Corporation Key
Management Retention Plan (the "Plan"). This Agreement provides a brief summary
of your Award.
The attached Plan document provides the complete details of your rights under
the Plan as well as the conditions and limitations affecting such rights. All
capitalized terms appearing in this Agreement shall have the meanings defined in
the Plan.
OVERVIEW OF YOUR AWARD
1. Maximum Award Payable: $_______________
2. Grant Date: ___________________________
3. Payout Date: __________________________
IN WITNESS WHEREOF, the Company has caused this Key Management Retention Plan
Agreement to be executed by one of its duly authorized officers as of the Grant
Date specified above.
BANTA CORPORATION
By:_________________________________
Please acknowledge your agreement to participate in the Plan and this Agreement,
and to abide by all of the governing terms and provisions, by signing the
following representation:
Agreement to Participate
By signing a copy of this Agreement and returning it to Henry M. Wells, III, I
acknowledge that I have read the Plan, and that I fully understand all of my
rights under the Plan, as well as all of the terms and conditions of my Award.
Without limiting the generality of the preceding sentence, I understand that the
payout of my Award is conditioned upon my continued employment with the Company
and/or a subsidiary thereof and Company performance during the Measurement
Period. I agree to keep my participation in, and the existence of, this Plan
confidential.
______________________________________
Participant
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED FINANCIAL STATEMENTS OF BANTA CORPORATION AS OF AND
FOR THE SIX MONTHS ENDED JULY 3, 1999 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-START> JAN-03-1999
<PERIOD-END> JUL-03-1999
<CASH> 0
<SECURITIES> 19,747
<RECEIVABLES> 210,273
<ALLOWANCES> 4,189
<INVENTORY> 78,179
<CURRENT-ASSETS> 323,834
<PP&E> 783,451
<DEPRECIATION> 470,857
<TOTAL-ASSETS> 718,116
<CURRENT-LIABILITIES> 190,640
<BONDS> 117,123
0
0
<COMMON> 2,717
<OTHER-SE> 356,836
<TOTAL-LIABILITY-AND-EQUITY> 718,116
<SALES> 608,366
<TOTAL-REVENUES> 608,366
<CGS> 484,986
<TOTAL-COSTS> 484,986
<OTHER-EXPENSES> 136,343
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,799
<INCOME-PRETAX> (19,515)
<INCOME-TAX> (2,500)
<INCOME-CONTINUING> (17,015)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,015)
<EPS-BASIC> (0.61)<F1>
<EPS-DILUTED> (0.61)
<FN>
THE EPS UNDER THE "EPS-PRIMARY" TAG REPRESENTS BASIC EARNINGS
PER SHARE
</FN>
</TABLE>
