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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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BALL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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BALL CORPORATION
10 Longs Peak Drive, Broomfield, Colorado 80021-2510
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 25, 2012
The Annual Meeting of Shareholders of Ball Corporation will be held at the Corporation's offices, 10 Longs Peak Drive, Broomfield, Colorado
80021-2510, on Wednesday, April 25, 2012, at 8:00
A.M.
(MDT) for the following purposes:
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1.
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To
elect three directors for three-year terms expiring at the Annual Meeting of Shareholders to be held in 2015;
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2.
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To
ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Corporation for 2012;
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3.
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To
approve, by non-binding advisory vote, the compensation of the named executive officers ("NEOs") as disclosed in the following Proxy
Statement; and
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4.
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To
consider any other business as may properly come before the meeting, although it is anticipated that no business will be conducted other than the matters
listed above.
Only
holders of common stock of record at the close of business on March 1, 2012, are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. A Proxy
Statement containing important information about the meeting and the matters being voted upon appears on the following pages.
Your vote is important.
You are urged to read the accompanying proxy materials carefully and
in their entirety and submit your proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. You have a choice of submitting your proxy by Internet
or by telephone, or, if you request a paper copy of the materials, by mail.
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By Order of the Board of Directors,
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Charles E. Baker
Corporate Secretary
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March 9, 2012
Broomfield, Colorado
Important Notice Regarding the Availability of Proxy Materials for the
Ball Corporation Annual Shareholder Meeting to be Held on Wednesday, April 25, 2012:
The Proxy Statement, Form 10-K and Annual Report of Ball Corporation are Available at
http://materials.proxyvote.com/058498
PLEASE NOTE:
The 2012 Annual Meeting of Shareholders will be held to tabulate the votes cast and
to report the results of voting on the items described above. No management presentations
or other business matters are planned for the meeting.
Ball and
are trademarks of Ball Corporation, Reg. U.S. Pat. & Tm. Office
BALL CORPORATION
10 Longs Peak Drive, Broomfield, Colorado 80021-2510
PROXY STATEMENT
March 9, 2012
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 25, 2012
Important Notice Regarding the Availability of Proxy Materials for the Annual
Shareholder Meeting to be Held on Wednesday, April 25, 2012:
The Proxy Statement, Form 10-K and Annual Report are Available at
http://materials.proxyvote.com/058498
To Shareholders of Ball Corporation:
This
Proxy Statement and the accompanying proxy are furnished to shareholders in connection with the solicitation by the Board of Directors of Ball Corporation (the "Corporation" or
"Ball") of proxies to be voted at the Annual Meeting of Shareholders (the "Annual Meeting") to be held April 25, 2012, for the purposes stated in the accompanying notice of the meeting. We are
first furnishing and making available to shareholders the proxy materials on March 9, 2012.
Please
submit your proxy as soon as possible so that your shares can be voted at the meeting. All properly completed proxies submitted by telephone or Internet, and all properly executed
written proxies returned by shareholders who request paper copies of the proxy materials, that are delivered pursuant to this solicitation, will be voted at the meeting in accordance with the
directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting. Only holders of record of shares of the Corporation's common stock as of the
close of business on March 1, 2012, the record date for the Annual Meeting, are entitled to notice of and to vote at the meeting, or at any adjournments or postponements of the meeting.
Any
Ball Corporation shareholder of record as of March 1, 2012, the record date, desiring to submit a proxy by telephone or via the Internet will be required to enter the unique
voter control number imprinted on the Ball Corporation proxy, and therefore should have the proxy for reference when initiating the process.
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To submit your proxy by telephone, call 1-800-690-6903 on a touch-tone
telephone and follow the menu instructions provided. There is no charge for this call.
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To submit your proxy over the Internet, log on to the Web site www.proxyvote.com and follow the instructions provided.
Similar
instructions are included on the enclosed proxy.
A
shareholder of record of the Corporation may revoke a proxy in writing at any time prior to the meeting by sending written notice of revocation to the Corporate Secretary; by voting
again by telephone; by voting via the Internet; by voting in writing if you requested your materials in paper copy; or by voting in person at the meeting.
1
ABOUT THE ANNUAL MEETING
Why am I receiving the Proxy Statement?
You are receiving the Proxy Statement because you owned shares of Ball Corporation
common stock on
March 1, 2012, the record date, and that entitles you to vote at the Annual Meeting. The Corporation's Board of Directors is soliciting your proxy to vote at the scheduled 2012 Annual Meeting
or at any later meeting should the scheduled Annual Meeting be adjourned or postponed for any reason.
Your proxy will authorize specified people (proxies) to vote on your behalf at the Annual Meeting in accordance with your written instructions. By use of a proxy, you can vote, whether or not you
attend the meeting.
What will I be voting on?
You will be voting on (1) the election of three director nominees named in this Proxy Statement
for terms expiring
in April 2015; (2) the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2012; and (3) an advisory vote to
approve named executive officer compensation.
What are the Board of Directors' recommendations?
The Board recommends a vote (1)
for
the
election of the three director nominees named in this Proxy Statement; (2)
for
the ratification of the appointment of
PricewaterhouseCoopers, LLP as the Corporation's independent registered public accounting firm for 2012; and (3)
for
the advisory vote on
executive officer compensation.
Could other matters be decided at the Annual Meeting?
We do not know of any other matters that will be raised at the Annual
Meeting. The Chairman
will allow presentation of a proposal or a nomination for the Board from the floor at the Annual Meeting only if the proposal or nomination was properly submitted. The proxies will have discretionary
authority, to the extent permitted by law, to vote for or against other matters that may properly come before the Annual Meeting as those persons deem advisable.
How many votes can be cast by all shareholders?
Each share of Ball Corporation common stock (other than 688 shares of common
stock that have been
granted as restricted stock without voting rights) is entitled to one vote on each of the three directors to be elected and one vote on each other matter that is properly presented at the Annual
Meeting.
How do I vote my shares if I am a record holder?
If you are a record holder of shares, that is the shares are registered in your
name and not the
name of your broker or other nominee, you are urged to submit your proxy as soon as possible, so that your shares can be voted at the meeting in accordance with your instructions. You may submit your
proxy by telephone or via the Internet as instructed on the first page of the Proxy Statement and on your proxy, or you can complete, sign, date and mail your proxy card if you request a paper copy of
the proxy materials. You may also vote by attending the Annual Meeting, or sending a personal representative to the Annual Meeting with an appropriate proxy, in order to vote. Unless you or a personal
representative plan to be in attendance and vote at the meeting, your vote must be received no later than 11:59
P.M.
(EDT) on Tuesday, April 24,
2012.
How do I vote my shares if I hold my shares under the Employee Stock Purchase Plan ("ESPP") or the 401(k) Plan?
Participants may
vote their shares in
the manner set forth above, however, shares held through the Plans must be voted by 11:59
P.M.
(EDT) on Sunday, April 22, 2012. Any unvoted
shares will be voted by the Trustee of
the 401(k) Plan and by the Administrator of the ESPP in accordance with the Plans and the Board of Directors' recommendations.
How do I vote my shares if I hold my shares in "street name" through a bank or broker?
If you hold your shares as a beneficial
owner through a bank,
broker or other nominee, you must provide voting instructions to your bank, broker or other nominee by the deadline provided in the materials you receive from your bank, broker or other nominee to
ensure your shares are voted in the way you would like at the meeting. Your bank, broker or other nominee will send you specific instructions in this regard to vote your shares. If you do not provide
instructions to your bank, broker or other nominee, whether your shares are voted depends on the type of item being considered for a vote. For example, under applicable stock exchange rules, brokers
are permitted to vote on "discretionary" items if they are not provided in a timely manner voting instructions from the beneficial owners of the shares, and they are not permitted to vote on
"nondiscretionary" items. The proposal to approve the appointment of independent auditors is considered a "discretionary" item. This means that brokerage firms may vote in their discretion on this
matter on behalf of clients who have not furnished voting instructions at least 10 days before the date of the meeting. In contrast, the election of directors and the advisory vote on executive
compensation are "nondiscretionary" items. This means brokerage firms that have not received voting instructions from their clients on these proposals may not vote on them. These so-called
"broker nonvotes" will be included in the calculation of the number of votes considered to be present at the meeting for purposes of determining a quorum, but will not be considered in determining the
number of votes necessary for
2
approval
and will have no effect on the outcome of the vote for Directors and the advisory vote on executive compensation.
Can I revoke my proxy or change my vote?
Shareholders of record may revoke their proxies or change their votes in writing at any
time prior to the
meeting by sending written notice of revocation to the Corporate Secretary; by voting again by telephone or via the Internet; by voting in writing if they requested their materials in paper copy; or
by voting in person at the meeting. Attendance in and of itself at the Annual Meeting will not revoke a proxy. For shares you hold beneficially but not of record, you may change your vote by
submitting new voting instructions to your broker or nominee or, if you have obtained a valid proxy from your broker or nominee giving you the right to vote your shares, by attending the meeting and
voting in person.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
At the close of business on March 1, 2012, there were outstanding 156,341,205 shares of common stock (together with the
associated preferred stock purchase rights under the Rights Agreement dated as of July 26, 2006, between the Corporation and Computershare Investor Services, LLC, as amended). Other than
688 shares of common stock granted as restricted stock without voting rights, each of the shares of common stock is entitled to one vote. Shareholders do not have cumulative voting rights with respect
to the election of directors.
Based
on Schedule 13G filings with the Securities and Exchange Commission ("SEC"), the following table indicates the beneficial owners of more than 5% of the Corporation's
outstanding common stock as of December 31, 2011:
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Name and Address
of Beneficial Owner
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Shares
Beneficially Owned
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Percent
of Class
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Janus Capital Management LLC
151 Detroit Street
Denver, Colorado 80206
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12,420,716
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(1)
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7.60
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The Vanguard Group
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
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8,787,590
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(2)
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5.40
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Blackrock Inc.
40 East 52nd Street
New York, New York 10022
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8,770,090
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(3)
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5.39
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(1)
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Janus
Capital has a direct 94.8% ownership stake in INTECH Investment Management ("INTECH") and a direct 77.8% ownership stake in Perkins Investment
Management LLC ("Perkins"). Due to the above ownership structure, holdings for Janus Capital, Perkins and INTECH are aggregated for purposes of this filing. Janus Capital, Perkins and INTECH
are registered investment advisers, each furnishing investment advice to various investment companies registered under Section 8 of the Investment Company Act of 1940 and to individual and
institutional clients (collectively referred to herein as "Managed Portfolios").
As
a result of its role as investment adviser or sub-adviser to the Managed Portfolios, Janus Capital may be deemed to be the beneficial owner of 8,991,985 shares or 5.5% of the shares
outstanding of Ball Corporation common stock held by such Managed Portfolios. However, Janus Capital does not have the right to receive any dividends from, or the proceeds from the sale of, the
securities held in the Managed Portfolios and disclaims any ownership associated with such rights.
As
a result of its role as investment adviser or sub-adviser to the Managed Portfolios, Perkins may be deemed to be the beneficial owner of 1,000 shares or 0.0% of the shares outstanding
of Ball Corporation common stock held by such Managed Portfolios. However, Perkins does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the
Managed Portfolios and disclaims any ownership associated with such rights. As a result of its role as investment adviser or sub-adviser to the Managed Portfolios, INTECH may be deemed to
be the beneficial owner of 3,427,731 shares or 2.1% of the shares outstanding of Ball
Corporation common stock held by such Managed Portfolios. However, INTECH does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed
Portfolios and disclaims any ownership associated with such rights.
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(2)
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229,624
shares with sole voting and shared dispositive power and 8,557,966 shares held with sole dispositive power.
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(3)
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8,770,090
shares are held with sole dispositive power.
3
BENEFICIAL OWNERSHIP
The following table lists the beneficial ownership of common stock of the Corporation of our director nominees, continuing directors,
all individuals who served as either our Chief Executive Officer ("CEO") or our Chief Financial Officer ("CFO") during the last fiscal year, the three other most highly compensated executive officers
of the Corporation and, as a group, all of such persons and our other executive officers as of the close of business on March 1, 2012.
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Included in Shares
Beneficially Owned
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Excluded from Shares
Beneficially Owned
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Title of
Class
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Name of
Beneficial Owner
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Shares
Beneficially
Owned
(1)
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Percent of
Class
(2)
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Number of Shares Which
Become Available or
Subject to Options
Exercisable or Which
Become Exercisable
Within 60 Days of
March 1, 2012
(3)
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Deferred Share
or Stock Unit
Equivalent
(4)
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Restricted
Stock
Shares or
Units
(5)
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Common
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Robert W. Alspaugh
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*
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15,869
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21,444
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Common
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Charles E. Baker
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211,647
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(6)
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*
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172,250
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37,506
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32,200
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Common
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Hanno C. Fiedler
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116,730
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*
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20,132
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Common
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John A. Hayes
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656,992
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*
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506,676
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193,744
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194,230
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Common
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R. David Hoover
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2,247,765
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(7)
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1.4
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1,665,088
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620,603
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96,108
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Common
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John F. Lehman
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159,030
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*
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52,067
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19,444
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Common
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Scott C. Morrison
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248,960
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(8)
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*
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138,248
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101,400
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66,000
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Common
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Georgia R. Nelson
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6,000
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*
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23,323
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19,444
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Common
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Jan Nicholson
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294,420
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*
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23,421
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19,444
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Common
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Lisa A. Pauley
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209,494
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(9)
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*
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97,025
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42,145
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23,400
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Common
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Raymond J. Seabrook
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642,558
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(10)
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*
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393,663
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311,274
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78,994
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Common
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George M. Smart
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34,442
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*
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12,735
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19,444
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Common
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Theodore M. Solso
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80,846
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*
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16,000
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48,141
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19,444
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Common
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Stuart A. Taylor II
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80,678
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*
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50,891
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19,444
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Common
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Erik H. van der Kaay
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51,266
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*
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41,681
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19,444
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Common
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David A. Westerlund
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631,303
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(11)
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*
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376,713
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106,966
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44,000
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Common
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All of the above and present executive officers as a group (21)
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5,996,709
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(12)
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3.8
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3,577,691
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1,784,612
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805,524
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(1)
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Full
voting and dispositive investment power, unless otherwise noted.
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(2)
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*
Indicates less than 1% ownership.
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(3)
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Includes
RSUs that may vest or options that may vest or be acquired upon exercise during the next 60 days.
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(4)
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These
deferred shares or stock units are equivalent to an equal number of shares of common stock that have been deferred to the Ball Deferred Compensation
Company Stock Plans, with no voting rights or dispositive investment power with respect to the underlying common stock prior to its issuance.
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(5)
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These
Restricted Stock Shares or RSUs have no voting rights or dispositive investment power.
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(6)
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Includes
1,040 shares owned by Mr. Baker's children, as to which he disclaims beneficial ownership.
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(7)
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Includes
366,002 shares held in trust for Mr. Hoover's spouse, as to which he disclaims beneficial ownership, and 74,708 shares held in trust for
Mr. Hoover.
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(8)
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Includes
50 shares owned by Mr. Morrison's child, as to which he disclaims beneficial ownership.
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(9)
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Includes
82,832 shares owned by Ms. Pauley's spouse, as to which she disclaims beneficial ownership.
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(10)
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Includes
9,750 shares owned by Mr. Seabrook's child, as to which he disclaims beneficial ownership.
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(11)
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Includes
6,156 shares owned by Mr. Westerlund's spouse, as to which he disclaims beneficial ownership; retired September 30, 2011.
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(12)
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Includes
540,538 shares to which beneficial ownership is disclaimed, and 3,577,691 shares that may be acquired during the next 60 days upon the
exercise of stock options. In addition, 7,299 shares have been pledged as security.
4
VOTING ITEM 1ELECTION OF DIRECTORS
Pursuant to our Amended Articles of Incorporation and the Indiana Business Corporation Law, our Board of Directors ("Board") is divided
into three classes, as nearly equal in number as possible, with directors serving staggered three-year terms. Amendments to the Indiana Business Corporation Law in 2009 made this
classified Board structure statutorily required for Ball Corporation, effective from and after July 31, 2009. On April 25, 2012, three persons are to be elected to serve as directors
until the 2015 Annual Meeting of Shareholders. Unless otherwise instructed on the accompanying proxy, the persons named in the proxy intend to vote for nominees Robert W. Alspaugh, R. David Hoover,
and Jan Nicholson to hold office as directors of the Corporation until the 2015 Annual Meeting of Shareholders (Class III), or, in each case, until his or her respective successor is elected
and qualified. All nominees have consented to be named as candidates in the Proxy Statement and have agreed to serve if elected. If, for any reason, any of the nominees becomes unavailable for
election, the shares represented by proxies will be voted for any substitute nominee or nominees designated by the Board. The Board has no reason to believe that any of the nominees will be unable to
serve.
In
accordance with the Indiana Business Corporation Law, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a
quorum is present. If more "withhold" than "for" votes are received, our Bylaws require the director to resign and our Nominating/Corporate Governance Committee must make a recommendation to the Board
for the Board to consider whether to accept the resignation. The relevant Bylaw provisions are set out in Exhibit A to this Proxy Statement. Abstentions and broker nonvotes are considered
neither votes "for" nor "against." Proxies may not be voted for a greater number of persons than the three named nominees.
Set
forth for each director nominee in Class III and for each continuing director in Classes I and II is the director's principal occupation and employment during the past
five years or, if longer, the period during which the director has served as a director, and certain other information, including his or her public company directorships during the past five years.
5
DIRECTOR NOMINEES AND CONTINUING DIRECTORS
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To Be Elected for a Term of Three Years Until the 2015 Annual Meeting (Class III)
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Robert W. Alspaugh
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Chief Executive Officer, KPMG International, 2002 to 2005. Age 65.
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Director since 2008. Member, Audit and Nominating/Corporate Governance Committees.
Mr. Alspaugh is a director of Autoliv, Inc., Stockholm, Sweden, and VeriFone Systems, Inc., San Jose, California.
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R. David Hoover
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Chairman, Ball Corporation since January 2011. Chairman and Chief Executive Officer January 2010 to January 2011; Chairman, President and Chief Executive Officer, April 2002 to January 2010; President and Chief
Executive Officer, January 2001 to April 2002; Vice Chairman, President and Chief Operating Officer, April 2000 to January 2001; Vice Chairman, President and Chief Financial Officer, January 2000 to April 2000; Vice Chairman and Chief Financial
Officer, 1998 to 2000; Executive Vice President and Chief Financial Officer, 1997 to 1998; Executive Vice President, Chief Financial Officer and Treasurer, 1996 to 1997. Age 66.
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Director since 1996.
Mr. Hoover is a director of Eli Lilly and Company, Indianapolis, Indiana, and Energizer Holdings, Inc., St. Louis, Missouri. In the past five years, Mr. Hoover served on the board of Irwin Financial Corporation, Columbus, Indiana,
and Qwest Communications International, Inc., Denver, Colorado.
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Jan Nicholson
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President, The Grable Foundation, Pittsburgh, Pennsylvania, since 1990; Managing Director, Strategic Risk Assessment, MBIA Insurance Corporation, Armonk, New York, 1998 to 2000; Managing Director, Research and
Development, Capital Markets Assurance Corporation (CapMAC), New York, New York, 1994 to 1998. Age 66.
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Director since 1994. Member, Audit and Finance Committees.
Ms. Nicholson is a director of Radian Group Inc., Philadelphia, Pennsylvania.
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The Board of Directors recommends that shareholders vote "FOR" the election of each nominee for Director named above.
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6
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To Continue in Office Until the 2013 Annual Meeting (Class I)
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Hanno C. Fiedler
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Executive Vice President, Ball Corporation, and Chairman and Chief Executive Officer, Ball Packaging Europe, December 2002 to December 2005; Chairman and Chief Executive Officer, Schmalbach-Lubeca AG, 1996 to 2002.
Age 66.
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Director since 2002. Member, Finance Committee.
Mr. Fiedler serves on the Supervisory Board of manroland AG, Offenbach, Germany. In the past five years, Mr. Fiedler has served on the Supervisory Boards of Pfleiderer AG, Neumarkt, Germany; Langmatz GmbH (now Langmatz AG),
Garmisch-Partenkirchen, Germany; Thyssenkrupp Steel AG, Duisburg, Germany; HowaldtswerkeDeutsche Werft AG, Kiel, Germany; and Pfleiderer Unternehmensverwaltung GmbH, Neumarkt, Germany.
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John F. Lehman
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Chairman, J.F. Lehman & Company, New York, New York, since 1990. Age 69.
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Director since 1987. Member, Finance and Nominating/Corporate Governance Committees.
Mr. Lehman is a director of EnerSys, Reading, Pennsylvania, and Verisk Analytics, Inc., Jersey City, New Jersey.
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Georgia R. Nelson
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President and Chief Executive Officer, PTI Resources, LLC, Chicago, Illinois, since June 2005; President, Midwest Generation EME LLC, Chicago, Illinois, April 1999 to June 2005; General Manager, Edison
Mission Energy Americas, Irvine, California, January 2002 to June 2005. Age 62.
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Director since 2006. Member, Human Resources and Nominating/Corporate Governance Committees.
Ms. Nelson is a director of Cummins Inc., Columbus, Indiana. In the past five years, Ms. Nelson has served on the board of Tower Automotive, Inc., Novi, Michigan, and Nicor Inc., Naperville, Illinois.
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Erik H. van der Kaay
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Chairman of the Board, Symmetricom, Inc., October 2002 to October 2003; President, Chief Executive Officer, and Chairman of the Board, Datum, Inc., Irvine, California, April 1998 to October 2002 upon
Symmetricom's acquisition of Datum. Age 71.
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Director since 2004. Member, Audit and Finance Committees.
Mr. van der Kaay is a director of RF Micro Devices, Inc., Greensboro, North Carolina, and Orolia, S.A., Sophia Antipolis, France. In the past five years, Mr. van der Kaay has served on the boards of Comarco, Inc., Irvine,
California, and TranSwitch Corporation, Shelton, Connecticut.
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7
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To Continue in Office Until the 2014 Annual Meeting (Class II)
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John A. Hayes
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President and Chief Executive Officer, Ball Corporation, since January 2011; President and Chief Operating Officer, January 2010 to January 2011; Executive Vice President and Chief Operating Officer 2008 to 2010;
President, Ball Packaging Europe and Senior Vice President, Ball Corporation 2007 to 2008; Executive Vice President, Ball Packaging Europe and Vice President, Ball Corporation 2005 to 2006; Vice President, Corporate Strategy, Marketing and
Development 2003 to 2005; Vice President, Corporate Planning and Development 2000 to 2003; Senior Director, Corporate Planning and Development 1999. Age 46.
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Director since 2010.
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George M. Smart
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President, Sonoco-Phoenix, Inc., North Canton, Ohio, a subsidiary of Sonoco Products Company, 2001 to 2004. Age 66.
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Director since 2005. Member, Audit and Human Resources Committees.
Mr. Smart is a director of FirstEnergy Corp., Akron, Ohio.
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Theodore M. Solso
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Chairman and Chief Executive Officer, Cummins Inc., Columbus, Indiana, 2000 to 2011. Retired December 31, 2011. Age 65.
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Director since 2003. Member, Audit and Human Resources Committees.
In the past five years, Mr. Solso has served on the board of Irwin Financial Corporation, Columbus, Indiana, and Ashland Inc., Covington, Kentucky.
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Stuart A. Taylor II
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Chief Executive Officer, The Taylor Group LLC, Chicago, Illinois, since June 2001; Senior Managing Director, Bear, Stearns & Co. Inc., Chicago, Illinois, 1999 to 2001. Age 51.
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Director since 1999. Member, Human Resources and Nominating/Corporate Governance Committees.
Mr. Taylor is a director of Hillenbrand, Inc., Batesville, Indiana, and United Stationers, Inc., Chicago, Illinois.
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8
DIRECTOR AND NOMINEE EXPERIENCE AND QUALIFICATIONS
Set out below are the specific experience, qualifications, attributes and skills of each of the Corporation's directors and director
nominees which led the Board to conclude that each person should serve as a director of the Corporation.
Robert W. Alspaugh
Mr. Alspaugh enjoyed a distinguished 35-year career with KPMG, with increasing responsibility, which culminated
in his acting as Deputy Chairman and Chief Operating Officer of KPMG-U.S. from 1998 to 2002 and Chief Executive Officer of KPMG International from 2002 to October 2005.
Mr. Alspaugh's extensive experience, qualifications and skills as a leader of one of the "big four" global accounting firms enhance his service on the Corporation's Audit Committee and he has
provided valuable input as a result. He also sits on two other public company boards, one in the U.S. and the other in Europe (where he chairs the audit committee), thus providing good
cross-functional background and experience, with an international component. Mr. Alspaugh's extensive professional experience as a leader of a major global accounting firm, advising and
supporting large international corporations, as well as his service on other company boards, make him well qualified to serve as a director.
Hanno C. Fiedler
After a successful career with TRW, Inc., in 1996 Mr. Fiedler became Chairman and Chief Executive Officer of
Schmalbach-Lubeca AG, one of the largest and most successful rigid packaging companies based in Europe. When Ball acquired the beverage can business of Schmalbach-Lubeca in December 2002,
Mr. Fiedler became Chairman and Chief Executive Officer of Ball Packaging Europe GmbH and also joined the Board of Ball Corporation. In that capacity, Mr. Fiedler provided
excellent leadership to our newly-acquired European business which generated strong earnings performance during his tenure, despite the adverse effects of the German mandatory deposit system for rigid
packaging which was initiated in 2003. Mr. Fiedler retired from active management of Ball Packaging Europe at the end of 2005, but has continued as the Chairman of its Supervisory Board to the
present. He also serves on the Supervisory Boards of three major German companies. His leadership experience within the rigid container industry worldwide, with specific emphasis on Europe, makes him
well qualified to serve as a director.
John A. Hayes
Prior to joining Ball Corporation in 1999, Mr. Hayes was a Vice President of Lehman Brothers Inc. and part of an
investment banking team which focused on merger and acquisition and financing advice to several major companies, including the Corporation. At Ball, Mr. Hayes initially headed our corporate
development and planning activities as Senior Director and then Vice President, Corporate Planning and Development, taking on the added responsibilities of marketing and new product development from
2003 to mid-2005. He then served as President of Ball Packaging Europe, which produced excellent financial results and strong revenue growth under his leadership. During 2008 and 2009,
Mr. Hayes served as Ball's Executive Vice President and Chief Operating Officer, successfully leading our key operating divisions through the economic and financial crisis. In January 2010 he
was named our President and Chief Operating Officer and joined the Ball Corporation Board. In January 2011, he became our President and Chief Executive Officer. Mr. Hayes' extensive investment
banking and leadership experience within Ball make him well qualified to serve as a director.
R. David Hoover
Mr. Hoover has enjoyed a varied and successful 42-year career with Ball, serving in multiple corporate and
divisional roles, including as Vice President and Treasurer from 1987 through 1992, Chief Financial Officer from 1993 to April 2000, and Chief Operating Officer for the balance of 2000. He was our
Chief Executive Officer from January 2001 to January 2011, and led the Corporation through an unprecedented period of growth in revenues, earnings per share and free cash flow. Mr. Hoover's
considerable working knowledge and leadership experience with respect to our Corporation make him uniquely qualified to serve as a director. He has been a Ball Board member for 16 years,
serving as Chairman since 2002, and serves as a director of two other major U.S.-based public companies. Mr. Hoover has also served on the Board of Trustees of DePauw University since 2002 and
on the Board of Boulder Community Hospital since 2006.
John F. Lehman
Mr. Lehman served as Secretary of the Navy in the Reagan Administration from 1981 to 1987, after which he was Managing Director
of Paine Webber Inc.'s Investment Banking Division from 1988 to 1990 where he led the firm's aerospace and defense advisory practice. He then established J.F. Lehman & Company, a New
York-based investment company, and has served as its Chairman since 1990. Mr. Lehman also serves as a director of two other public companies. In addition, Mr. Lehman is
Chairman of the Princess Grace Foundation and an Overseer of the School of Engineering at the University of Pennsylvania. He has a rare combination of extensive business experience, public service,
political acumen and global perspective. Mr. Lehman served as a member of the National Commission on Terrorist Attacks Upon the United States, also known as the 9/11 Commission, from 2002 to
2004. He has been an astute and valuable member of Ball's Board for 25 years and has chaired its Finance Committee for many years.
9
Mr. Lehman's
public service, financial industry experience and Ball Board experience make him well qualified to serve as a director.
Georgia R. Nelson
Ms. Nelson has enjoyed a successful career in the energy industry, serving as a senior executive for several U.S. and
international energy companies, including as President of Midwest Generation EME, LLC from April 1999 to June 2005 and General Manager of Edison Mission Energy Americas from January 2002 to
June 2005. She has had extensive international experience as well as environmental and policy experience on four continents. Ms. Nelson regularly lectures on business and corporate governance
matters, including at Northwestern University's Kellogg Graduate School of Management, and serves on the advisory committee of the Center for Executive Women at Northwestern. Ms. Nelson is a
National Association of Corporate Directors (NACD) Board Leadership Fellow. She also serves as a director of Cummins, Inc. and CH2MHILL Inc. Previously, Ms. Nelson served on three
other publicly traded company boards. Ms. Nelson's leadership roles in global businesses, as well as her service on other company boards, clearly qualify her to serve as a director of our
Corporation.
Jan Nicholson
Ms. Nicholson enjoyed a long and successful career in the financial services industry in New York, which, after an
18-year tenure at Citicorp, included positions as Managing Director, Research and Development for CapMAC from 1994 to 1998 and Managing Director, Strategic Risk Assessment for MBIA
Insurance Corporation from 1998 to 2000. She also served as a director of Rubbermaid, Inc. from 1992 until 1999, and chaired its audit committee from 1994 through 1998. In addition,
Ms. Nicholson is a director of Radian Group Inc., a public company, and has been President of The Grable Foundation since 1990. She has been a member of Ball's Board for 18 years
and has chaired our Audit Committee since 2004. Ms. Nicholson's career in the financial services industry and her service on the Rubbermaid Audit Committee and board, as well as her long
service in those capacities with Ball, make her well qualified to serve as a director.
George M. Smart
Mr. Smart's long career and success in the U.S. can manufacturing industry make him well qualified to serve as a director. He
steadily assumed increasing responsibility at Central States Can Co., a division of Van Dorn Company, culminating in his acting as its President and Chief Executive Officer from 1978 to 1993.
When Central States was acquired in 1993, Mr. Smart and his management team established a start-up company, Phoenix Packaging Corporation, to manufacture and sell
full-panel easy-open ends for food containers, including to Ball's food can division. Serving as Chairman and Chief Executive Officer for Phoenix, Mr. Smart led its
growth to a profitable company with revenues in excess of $80 million, when it was sold to Sonoco Products Company and became Sonoco-Phoenix, Inc. in 2001. Mr. Smart served as
President of Sonoco-Phoenix until 2004 and has been Chairman of the Board of FirstEnergy Corp. since 2004. Mr. Smart also previously served on the boards of Belden & Blake Corporation,
Commercial Intertech Corporation, Unizan Financial, Van Dorn Company, and as Chairman of the Can Manufacturers Institute.
Theodore M. Solso
Mr. Solso has had a successful 40-year career at Cummins Inc., a
Fortune 500 manufacturing company with operations around the world. This culminated with Mr. Solso becoming Chairman and Chief Executive Officer of Cummins in January 2000, a position he held
through 2011, for a total of 12 years. Under his leadership, Cummins increased revenues from $6.6 billion in 2000 to over $18 billion in 2011. During the same period, its earnings
per share and operating cash flow increased from $0.35 and $550 million, to $9.55 and $2.1 billion, respectively. Mr. Solso has been on our Board since 2003 and is a member of
both The Indiana Academy and the President's management advisory board, as well as being a trustee of Earth University in Costa Rica. Mr. Solso's long experience in leadership positions with a
major global manufacturing company make him well qualified to serve as a director.
Stuart A. Taylor II
Prior to starting his own private equity firm, Mr. Taylor spent 19 years in investment banking. The majority of that
time was spent at Morgan Stanley in its Corporate Finance Department. In that capacity he executed a number of mergers and acquisitions and financings, including working with Ball in 1993 on the
acquisition of Heekin Can Company. He also spent time at several other firms including Bear Stearns where he was a Senior Managing Director and Head of the Chicago office. In 2001, Mr. Taylor
established The Taylor Group LLC, of which he is Chief Executive Officer, a successful investment company that primarily invests in small to mid-market businesses. Mr. Taylor has been a
director of Ball since 1999, acted as our Presiding Director from 2004 to 2008 and chairs our Human Resources Committee. He is also a director of two other U.S.-based public companies.
Mr. Taylor's extensive experience as an investment banker, entrepreneurial investor and Ball Board member make him well qualified to serve as a director.
Erik H. van der Kaay
Mr. van der Kaay, a native of the Netherlands, had a long and successful career in the U.S. telecom industry, including
service as a senior executive with Allen Telecom throughout the 1990s, culminating as Executive Vice President, and as Chairman, President and Chief Executive Officer of Datum, Inc. from 1998
to 2002
10
and
as Chairman of Symmetricom, Inc. from 2002 to 2003. He has also served as the managing director of a Brazilian telecom company, as well as on the board of directors of several public
companies and is currently a board member of RF Micro Devices in the U.S. and Orolia, S.A. in Europe, providing good cross-functional background and experience, with an international component.
In addition, he has served since 2007 as a member of the South East Audit Committee Leadership Network convened by Ernst & Young and composed of audit committee members of leading public
companies. Mr. van der Kaay's experience as a leader and as a director of several other companies as well as his business and financial acumen, and his international perspective, make him well
qualified to serve as a director.
BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT
In January 2011, John A. Hayes became our President and Chief Executive Officer ("CEO") and R. David Hoover, our predecessor CEO,
continues to serve as Chairman of the Board. The decision
to split the position of Chairman and CEO was part of an orderly succession plan by which Mr. Hayes transitioned into his current role. Mr. Hayes rose to the position of CEO after more
than 11 years with Ball, most recently serving as President and Chief Operating Officer and a member of the Board. Mr. Hayes previously served as President of Ball Packaging Europe from
2006 to early 2008, and then as Executive Vice President and Chief Operating Officer of the Corporation. Splitting the role of Chairman and CEO has allowed Mr. Hayes the opportunity to focus on
his new executive responsibilities in managing the Corporation; while having Mr. Hoover as nonmanagement Chairman has provided continuity. Mr. Hayes and Mr. Hoover have worked
closely together for more than 12 years, and their continued collaboration in their respective roles has resulted in a smooth change in senior management that has been beneficial to
shareholders.
Our
Board of Directors is composed of Mr. Hoover, Mr. Hayes and nine other directors, eight of whom are independent directors. The Board has four standing
committeesAudit, Nominating/Corporate Governance, Human Resources and Finance. Each of the committees, except for Finance, is composed solely of independent directors (the Finance
Committee is primarily composed of independent directors), with each of the four committees having an independent director serving as chairman.
Pursuant
to SEC and New York Stock Exchange ("NYSE") rules, regularly scheduled executive sessions of nonmanagement directors are held. Executive sessions of independent directors are
also held at least annually. Such meetings promote open discussion by nonmanagement and independent directors, enabling them to serve as a check on management, if necessary. The meetings of the
independent directors are chaired by the Presiding Director, who is an independent director appointed by the Board.
In
accordance with NYSE requirements, our Audit Committee is responsible for overseeing the risk management function of the Corporation. While the Audit Committee has primary
responsibility for overseeing risk management, the entire Board is involved in overseeing risk management for the Corporation. Additionally, each Board committee considers the specific risks within
its area of responsibility. Our Internal Audit Department has, for many years, analyzed various areas of risk to the Corporation and has provided risk assessment and analysis to our Audit Committee.
In 2007, the Corporation established a comprehensive Enterprise Risk Management process which is now supervised by our Senior Vice President and Chief Financial Officer, whereby key corporate and
divisional risks are systematically identified and assessed on a quarterly basis. The results of this ongoing risk assessment are reported to our Audit Committee and to our Board at least annually.
One
of the responsibilities of our Board of Directors is to evaluate the effectiveness of the Board and make recommendations involving its organization and operation. We recognize that
different board leadership structures may be appropriate for different companies and at different times. We believe our current leadership structure, with Mr. Hayes serving as CEO,
Mr. Hoover as Chairman of the Board, a Board with a majority of independent directors, an independent chairman for each of our standing Board committees and separate meetings of nonmanagement
and independent directors, the latter led by the Presiding Director, provides the most effective form of leadership for our Corporation at this time. We believe that our directors provide effective
oversight of risk management through the Board's regular dialogue with Ball management, the Enterprise Risk Management process, and assessment of specific risks within each Board committee's areas of
responsibility.
11
BOARD DIVERSITY
Ball's Nominating/Corporate Governance Committee consistently applies the principles of diversity in its consideration of candidates
for Board positions. In addition to considering characteristics such as race, gender and national origin, the Committee considers a variety of other characteristics, such as business and professional
experience, education and skill, all leading to differences of viewpoint and other individual qualities that contribute to Board heterogeneity. This has resulted in a diverse group of talented and
capable Board members, as described in more detail under "Director and Nominee Experience and Qualifications" on pages 9-11.
GOVERNANCE OF THE CORPORATION
Corporate Governance Guidelines
The Board has established Corporate Governance Guidelines to comply with the relevant provisions of Section 303A of the NYSE
Listed Company Manual (the "NYSE Listing Standards"). The Corporate Governance Guidelines are set forth on the Corporation's Web site at www.ball.com under the "Investors" page, under the link,
"Corporate Governance." A copy may also be obtained upon request from the Corporation's Corporate Secretary.
Policies on Business Ethics and Conduct
Ball established a Corporate Compliance Committee in 1993 chaired by a designated Compliance Officer. The Committee publishes a code of
business ethics, which is in the form of the Business Ethics booklet. The Board has adopted a separate additional business ethics statement referred to as the Ball Corporation Executive Officers and
Directors Business Ethics Statement ("Executive Officers and Directors Ethics Statement") designed to establish principles requiring the highest level of ethical behavior toward achieving business
success within the requirements of the law and the Corporation's policies and ethical standards. The Business Ethics booklet and the Executive Officers and Directors Ethics Statement are set forth on
the Corporation's Web site at www.ball.com under the "Investors" page, under the link, "Corporate Governance." Copies may also be obtained upon request from the Corporation's Corporate Secretary.
Director Training
All new directors receive orientation training soon after being elected to the Board. Continuing education programs are made available
to directors including internal presentations, third-party presentations and externally offered programs. Five directors attended externally offered director training programs in 2011.
Communications With Directors
The Corporation has established means for shareholders or others to send communications to the Board. Persons interested in
communicating with the Board, its individual directors or its committees may send communications in writing to the Corporate Secretary or the Chairman of the Board. The communication should be sent in
care of the Corporate Secretary, Ball Corporation, by mail to P.O. Box 5000, Broomfield, Colorado 80038-5000 or facsimile transmission to
303-460-2691.
In
accordance with the NYSE and SEC requirements, the Corporation has established additional means for interested parties to send communications to the Board and selected committees,
which are described on the Corporation's Web site at www.ball.com under the "Investors" page, under the link, "Corporate Governance."
Shareholder
proposals for inclusion in the Corporation's proxy materials will continue to be handled and must be communicated as disclosed in this Proxy Statement on page 57.
Meetings of Nonmanagement and Independent Directors
The Board meets regularly and not less than four times per year. Nonmanagement directors meet regularly, usually in conjunction with a
regular Board meeting. Independent directors meet at least annually. Georgia R. Nelson served as Presiding Director for meetings of independent directors held in 2011.
12
Director Independence Standards
Pursuant to the NYSE Listing Standards, the Board has adopted a policy adhering to the director independence requirements of the NYSE
in determining the independence of directors. These standards are described on the Corporation's Web site at www.ball.com under the "Investors" page, under the link, "Corporate Governance."
The
Board has determined that a majority of the Board is independent, and that based upon the NYSE independence standards, during 2011 each of the members of the Board was and currently
is independent with the exception of Messrs. Fiedler, Hayes and Hoover.
CERTAIN COMMITTEES OF THE BOARD
The standing committees of the Board are the Audit, Nominating/Corporate Governance, Human Resources and Finance Committees.
Audit Committee:
The primary purpose of the Audit Committee is to assist the Board in fulfilling its responsibilities to oversee management's conduct
and the integrity of the Corporation's public financial reporting process including the overview of (1) accounting policies, (2) the system of internal accounting controls over financial
reporting, (3) disclosure controls and procedures, (4) the performance of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Corporation (the
"independent auditor"), (5) the Internal Audit Department, and (6) oversight of our risk management. The Audit Committee is responsible for engaging and evaluating the Corporation's
independent auditor, including the independent auditor's qualifications and independence; resolving any differences between management and the independent auditor regarding financial reporting;
preapproving all audit and non-audit services provided by the independent auditor; and establishing procedures for the receipt, retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters.
Members
of the Audit Committee are Ms. Nicholson and Messrs. Alspaugh, Smart, Solso and van der Kaay. The Board has determined that each member of the Audit Committee is
independent and financially literate, has accounting or financial management expertise and is an Audit Committee financial expert under the NYSE Listing Standards and the SEC regulations. The Audit
Committee met five times during 2011.
The
Report of the Audit Committee is set forth on page 54. The Committee has considered the non-audit services provided during 2011 and 2010 by the independent auditor
as disclosed below and determined the services were compatible with maintaining the auditor's independence. The Committee
believes the fees paid to the independent auditor in respect of the services were appropriate, necessary and cost efficient in the management of the business of the Corporation and are compatible with
maintaining the auditor's independence.
Audit Fees and Services
The following table represents fees for professional services rendered by PricewaterhouseCoopers LLP for the audit of the
Corporation's annual Consolidated Financial Statements and quarterly reports and the auditor's report under the Sarbanes-Oxley Act of 2002 for fiscal 2011 and fiscal 2010, together with fees for
audit-related services and tax services rendered by PricewaterhouseCoopers LLP during fiscal 2011 and fiscal 2010. Audit-related services for 2011 consisted of consultations related to
acquisitions and joint venture accounting and derivative transactions. Tax fees consisted principally of tax compliance, including tax compliance matters related to tax audits and return preparation
fees and fees for tax consultations, primarily related to the Corporation's relocation of its European headquarters. Other fees included fees primarily related to an external quality assessment of the
Corporation's internal audit function. Audit-related services for 2010 consisted of consultations related to a comfort letter for the Corporation's 2010 bond offering, advice related to the sale of a
business segment and discontinued operations presentation, derivative transactions, various local and special audits, joint venture consultations, including consolidation, audit of specific accounting
matters, and various consents related to SEC filings. Tax fees consisted principally of tax compliance, including tax compliance matters related to tax audits and return preparation fees and fees for
tax consultations. Other fees primarily
13
included
fees related to due diligence assistance on various acquisitions and advisory services related to consolidation and reporting process improvement initiatives.
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Fiscal 2011
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Fiscal 2010
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Audit Fees
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Attestation Report and Accounting Consultations
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$
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5,433,000
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$
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5,481,000
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Foreign Statutory Audits
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1,544,000
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1,209,000
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Audit-Related Fees
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Benefit Plans
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$
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25,000
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|
$
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29,000
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Consultations
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206,000
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|
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395,000
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Tax Fees
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Tax Compliance Matters
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$
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932,000
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$
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428,000
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Tax Consultations
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3,641,000
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1,413,000
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All Other Fees
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$
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62,000
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$
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1,330,000
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The Audit Committee's Charter requires management to submit for preapproval all audit, audit-related and non-audit-related services to
be performed by the independent auditor. Management and the independent auditor submit a report of fees for review and preapproval by the Committee on a quarterly basis. The Audit Committee requires
management and the independent auditor to submit a report at least annually regarding audit, audit-related, tax and all other fees paid by the Corporation to the independent auditor for services
rendered in the immediately preceding two fiscal years. The Committee considers whether the fees for non-audit and audit-related services are compatible with maintaining the auditor's
independence
and requires management and the independent auditor to confirm this as well. The Audit Committee preapproved 100% of all of the above-referenced fees paid in 2011 and 2010 for services that were
provided by PricewaterhouseCoopers LLP.
There
were no hours expended by persons other than the independent auditor's full-time, regular employees on the independent auditor's engagement to audit the Corporation's
financial statements.
A
copy of the Audit Committee Charter is set forth on the Corporation's Web site at www.ball.com under the "Investors" page, under the link, "Corporate Governance."
Nominating/Corporate Governance Committee:
The Nominating/Corporate Governance Committee is responsible for assisting the Board in fulfilling its responsibility to identify
qualified individuals to become Board members; recommending to the Board the selection of Board nominees for the next Annual Meeting of Shareholders; addressing the independence and effectiveness of
the Board by advising and making recommendations on matters involving the organization and operation of the Board, Corporate Governance Guidelines and directorship practices; overseeing the evaluation
of the Board and its committees; and reviewing and assessing the Corporation's sustainability activities and performance. The Nominating/Corporate Governance Committee utilizes the standards set forth
below for considering director nominees.
Members
of the Nominating/Corporate Governance Committee are Messrs. Alspaugh, Lehman and Taylor and Ms. Nelson. The Board has determined that the members of the Committee
are independent under the NYSE Listing Standards. The Nominating/Corporate Governance Committee met four times during 2011.
The
Board has established a process whereby nominees for the Board may be submitted by members of the Board, the CEO, shareholders and any other persons. The Committee considers these
recommended candidates in light of criteria set forth below.
The
Committee will seek candidates who meet at a minimum the following criteria: (1) have sufficient time to attend or otherwise be present at Board, relevant Board committee and
Shareholders' meetings; (2) will subscribe to Ball Corporation's Corporate Governance Guidelines and the Executive Officers and Directors Ethics Statement; (3) demonstrate credentials
and experience in a broad range of corporate matters; (4) have experience, qualifications, attributes and skills that would qualify them to serve as a director; (5) will subscribe to the
finalized strategic and operating plans of the Corporation as approved by the Board from time to time; (6) are not affiliated with special interest
14
groups
that represent major causes or constituents; and (7) meet the criteria, if any, for being a director of the Corporation as set forth in the Indiana Business Corporation Law, the Articles
of Incorporation and the Bylaws of the Corporation.
The
Committee will apply the principles of diversity in consideration of candidates. The Committee may utilize and pay third-party consultants to identify and screen candidates on a
confidential basis for service on the Board. The Committee will also determine candidates' qualifications in light of the standards set by the Committee and by evaluating the qualifications of all
candidates in an attempt to select the most qualified nominees suited to serve as a director while attempting to ensure that a majority of the Board is independent and, where needed, to meet the NYSE
and SEC requirements for financial literacy, accounting or financial management expertise or audit committee financial expert status.
The
Nominating/Corporate Governance Committee will consider candidates recommended by shareholders in accordance with the Corporation's Bylaws. Any such recommendation should be in
writing and addressed to the Chair, Nominating/Corporate Governance Committee, in care of the Corporate Secretary, Ball Corporation, by mail to P.O. Box 5000, Broomfield, Colorado
80038-5000.
The
Nominating/Corporate Governance Committee received no recommendations for candidates as nominees for the Board from a security holder or group of security holders that beneficially
owned more than 5% of the Corporation's voting common stock for at least one year as of the date of the recommendation.
A
copy of the Nominating/Corporate Governance Committee Charter is set forth on the Corporation's Web site at www.ball.com under the "Investors" page, under the link, "Corporate
Governance."
Human Resources Committee:
The primary purpose of the Human Resources Committee is to assist the Board in fulfilling its responsibilities related to the
evaluation and compensation of the CEO and overseeing the compensation of the other executive officers of the Corporation; reviewing and approving the schedule of salary ranges and grades for the
salaried employees of the Corporation; approving the Corporation's stock and cash incentive compensation programs including awards to executive officers and the number of shares to be optioned and/or
granted from time to time to employees of the Corporation; approving and receiving reports on major benefit plans, plan changes and determinations and discontinuations of benefit plans; discussing the
performance evaluation system and succession planning system of the Corporation, including discussions with the Chairman of the Board and the CEO about the succession plan for the Chairman of the
Board and the CEO; hiring experts, including executive compensation consultants, as deemed appropriate to advise the Committee; assessment of compensation-related risks; and authorizing the filing of
required reports with federal, state and local governmental agencies.
Members
of the Human Resources Committee are Messrs. Smart, Solso and Taylor and Ms. Nelson. The Board has determined that the members of the Committee are independent
under the NYSE Listing Standards. The Human Resources Committee met four times during 2011. A copy of the Human Resources Committee Charter is set forth on the Corporation's Web site at www.ball.com
under the "Investors" page, under the link, "Corporate Governance."
Finance Committee:
The Finance Committee assists the Board in fulfilling its responsibility to oversee management in the financing and related risk
management of the Corporation, the status of the Corporation's retirement plans and insurance policies and the Corporation's policies relating to interest rates, commodity hedging and currency
hedging. The Committee may hire experts as deemed appropriate to advise the Committee in the performance of its duties. The Committee reports to the Board concerning the financing of the Corporation
and the performance of the Committee.
The
members of the Finance Committee are Messrs. Fiedler, Lehman and van der Kaay and Ms. Nicholson. The Committee met four times during 2011. A copy of the Finance
Committee Charter is set forth on the Corporation's Web site at www.ball.com under the "Investors" page, under the link, "Corporate Governance."
15
BOARD MEETINGS AND ANNUAL MEETING
The members of the Board are expected to attend all meetings of the Board, relevant committee meetings and the Annual Meeting of
Shareholders. The Board held five meetings during 2011. Every director attended 75% or more of the aggregate of the total number of meetings of the Board and the total number of meetings held by all
committees of the Board on which the director served. All directors attended the 2011 Annual Meeting.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
Ball Corporation has adopted a policy with respect to transactions with related persons requiring its executive officers and directors
to comply with all SEC and NYSE requirements concerning transactions between the Corporation and "related persons," as defined in the applicable SEC and NYSE rules.
With respect to related persons, David L. Taylor currently serves as President and Chief Executive Officer of a wholly owned subsidiary of Ball Corporation, and is the spouse of Lisa A. Pauley, an
executive officer of the Corporation. For 2011, Mr. Taylor's base salary was approximately $405,000. To facilitate compliance with such policy, the Board adopted procedures for the review,
approval or ratification of any transaction required to be reported under the applicable rules. The policy provides that each executive officer and director will promptly report to the Chairman of the
Board any transaction with the Corporation undertaken or contemplated by such officer or director, by any beneficial owner of 5% or more of the Corporation's voting securities or by any immediate
family member. The Chairman of the Board will refer any transaction to the General Counsel for review and recommendation. Upon receipt of such review and recommendation, the matter will be brought
before the Nominating/Corporate Governance Committee to consider whether the transaction in question should be approved, ratified, suspended, revoked or terminated. This policy for transactions with
related persons is in writing and is part of the Ball Corporation Executive Officers and Directors Ethics Statement. The written form of the policy can be found on the Corporation's Web site as
indicated in the section "Policies on Business Ethics and Conduct" on page 12.
16
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Discussion and Analysis ("CD&A") portion of our proxy materials describes Ball Corporation's 2011 executive
compensation program and its strong alignment with our pay-for-performance philosophy.
EXECUTIVE SUMMARY
Ball Corporation experienced another excellent year in 2011including the successful transition to a new leadership team,
beginning with the election of John A. Hayes as the Corporation's President and Chief Executive Officer, upon the retirement of R. David Hoover, who remains as Chairman of the Board. In
addition, Ball's 2011 financial results were among the best in our Corporation's 132-year history, as more specifically described under the heading "Management's Discussion and Analysis"
in the Corporation's Annual Report on Form 10-K. The chart below summarizes certain key financial results for fiscal year 2011 compared to fiscal year 2010:
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2011
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2010
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% Growth
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Revenue (net sales)
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$8.6 billion
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$7.6 billion
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13.2%
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Net Earnings (comparable basis)*
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$460 million
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$433 million
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6.2%
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Free Cash Flow*
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$505 million
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$506 million
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-0.2%
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Stock Price
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$35.71
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$34.03
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4.9%
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Earnings Per Share (comparable basis)*
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$2.73
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$2.36
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15.7%
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-
*
-
These
financial measures are on a non-U.S. GAAP basis and should be considered in connection with the consolidated financial statements
contained within Item 8 of the 2011 Annual Report on Form 10-K (the "annual report"). Non-U.S. GAAP measures should not be considered in isolation and
should not be considered superior to, or a substitute for financial measures calculated in accordance with U.S. GAAP. A reconciliation of Non-GAAP measures to U.S. GAAP is
available in Item 7 of the annual report.
Ball's stock price closed the year at $35.71, an increase of 4.9% over the prior year compared to 5.2% for the Dow Jones Industrial Average and 0%
for the S&P 500. Including reinvested dividends, the Corporation generated a total return of 5.8% for the same period. Also during the year, the Corporation completed a
two-for-one split of our common stock, increased the quarterly cash dividend by 40% to 7 cents per share on a post-split basis, which provided annual
dividends of $46 million, and repurchased $474 million of the Corporation's common stock.
The
strong business performance in 2011 is a continuation of the performance we have delivered over the last decade. The graph below compares the cumulative 10-year total
return of holders of Ball Corporation's common stock with the cumulative total returns of the S&P 500 Index and the Dow Jones U.S. Containers & Packaging Index. The graph tracks the
performance of a $100 investment in our common stock (with the reinvestment of all dividends) and in each of the indexes from December 31, 2001, to December 31, 2011.
Copyright© 2012 Standard & Poor's, a division of The McGraw-Hill Companies Inc. All rights reserved. (www.researchdatagroup.com/S&P.htm)
Copyright© 2012 Dow Jones & Company. All rights reserved.
The stock price performance included in this graph is not necessarily indicative of future stock price
performance.
17
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Much of our financial success is attributable to the fact that we consistently focus on the key components of our financial strategy, which include:
Generating free cash flow;
Disciplined and balanced capital allocation;
Growing earnings before interest
and taxes ("EBIT") by maximizing value in existing businesses, expansion into new markets and products, and merger and acquisition activities; and
Generating incremental Economic Value Added ("EVA®") with returns in
excess of our weighted average cost of capital ("WACC"), which over time leads to a higher share price and shareholder returns.
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In
2011 we also developed and initiated our Drive for 10 strategy, which builds on Ball's strong foundation and emphasizes five key strategic levers that will allow us to achieve
continued growth over the next decade. During the year we had many operational successes that directly aligned with our Drive for 10 strategy, including:
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Successfully completing the acquisition and integration of Aerocan S.A.S. in Europe;
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Expanding our geographic reach by building new beverage can plants in Brazil, China and Vietnam;
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Strategically redeploying assets by relocating a metal beverage can production line originally intended for a plant in
Lublin, Poland, to our Belgrade, Serbia, plant;
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Aligning our North American manufacturing footprint to better meet changing market demand;
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Expanding specialty can production in our Forth Worth, Texas, plant by adding a new specialty can line capable of
producing both 16- and 24-ounce cans and adding an Alumi-tek Bottle line in our Golden, Colorado, plant; and
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Expanding Ball Aerospace's manufacturing center in Westminster, Colorado, and NASA's successful launch of the
Ball-built NPP satellite.
Pay-for-Performance Serves as the Foundation of our Executive Compensation Program
The design, governance and administration
of our executive compensation program is centered on the principle of aligning pay to performance, achieved by linking the majority of executive compensation opportunities to long-term
shareholder returns and the value-added financial performance of the Corporation. We believe this principle has directly contributed to the successful performance of the business
through:
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A management-as-owners culture that builds a management team with meaningful ownership in the
Corporation. Executives are closely aligned to shareholder interests through established ownership expectations, equity-settled long-term incentives and specialized opportunities that
encourage individuals to make meaningful, personal investments in Ball Corporation common stock.
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Incentive pay programs that utilize value-added financial performance metricsspecifically, EVA®,
return on average invested capital ("ROAIC"), and total shareholder return ("TSR")that are in our view most closely aligned with shareholder value generation by creating accountability
for both the efficient deployment of capital and strong earnings generation.
18
The
major compensation elements of Ball's pay-for-performance philosophy are shown in the table below, with the page in the CD&A that details the specifics of
each of these components:
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Compensation Element
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Basis for Performance Measurement
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Alignment with Principle of
Pay-for-Performance
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Page
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Short-Term Annual Cash Compensation
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Base Salary
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Individual performance and contribution based on primary duties and responsibilities
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Competitive compensation element required to recruit and retain top executive talent; pays for primary duties and responsibilities
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28
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Economic Value Added Annual Incentive Plan
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EVA® Growth
(net operating profit after-tax, less a cost of capital charge)
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Measures the increase in actual economic value generated by the business.
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28
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Long-Term Incentives (Cash)
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Long-Term Cash Incentive Plan ("LTCIP")
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ROAIC
Relative TSR vs. S&P 500 subset
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Rewards ROAIC performance above a target rate set above the Corporation's weighted average cost of capital and shareholder returns that outperform the market
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31
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Acquisition-Related Special Incentive Plan
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EBIT and Cash Flow (for Metal Beverage Packaging Division, Americas)
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Rewards the successful integration and performance of a business acquired in 2009
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32
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Long-Term Incentives (Equity)
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Stock Options/Stock-Settled Stock Appreciation Rights ("SARs")
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Stock Price Appreciation
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Rewards absolute stock price growth over time
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33
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Performance-Contingent Restricted Stock Units ("RSUs")
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ROAIC
Stock Price
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Builds executive ownership with stock unit awards that vest contingent upon ROAIC over a 3-year period exceeding the Corporation's weighted average cost of capital
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33
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Restricted Stock/RSUs
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Stock Price
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Granted from time-to-time, generally in connection with the promotion or recruitment of individuals to facilitate ownership and retention
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34
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Deposit Share Program ("DSP")
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Stock Price
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Promotes an executives-as-owners culture by making deposit share opportunities from time-to-time in the discretion of the Committee, in exchange for the recipient voluntarily investing in and holding shares of Ball
Corporation common stock
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34
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Our Heavy Weighting of Compensation to Performance Creates Pay-for-Performance Linkage
Consistent with our
management-as-owners, pay-for-performance philosophy described previously, the majority of the target total compensation for our executives is variable
based on performance, which constitutes pay at risk. The CEO is eligible to participate in the same executive programs as the CFO and the other NEOs; however, a larger portion of the CEO's target
total compensation is at risk. The following charts represent the mix of target total compensation awarded to the Corporation's CEO and other NEOs in 2011. As illustrated, 87% of the target total
compensation awarded to the CEO and 80% awarded to the other NEOs in 2011 was based on elements that may vary from year to year depending on business performance. Furthermore, 74% of the CEO's and 67%
of the other NEOs' target total compensation was based on long-term performance. This emphasis on longer-term compensation, through performance based long-term cash
and stock awards, ensures a strong continued alignment between Ball's executive ownership and shareholder value creation objectives.
19
Our Compensation Plans are Closely Linked to Business Performance
The Corporation's fiscal 2011 financial results and the resulting EVA®
improvement was directly linked to the pay outcome of our annual short-term incentive plan, since the payout factor is based on the amount of profits generated, in excess of both operating
and capital costs, resulting in EVA® in excess of targets, as shown below:
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Compensation Element
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2011 Performance Achievement
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2011 Pay Outcome
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Annual Cash Compensation
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Economic Value Added Annual Incentive
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The actual EVA® generated in excess of Ball's internal 9% after-tax hurdle rate for fiscal year 2011 of $142.3 million exceeded our $96.3 million EVA® incentive plan target by
$46.0 million
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Payout for our NEOs was at 188% of target
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Likewise, our success in fiscal year 2011 reflects a continuation of the successful execution of our business strategy and strong performance in
prior years; therefore, pay realized by our NEOs from long-term incentive performance cycles completed at 2011 year-end reflects our commitment to improved financial
performance and stock price growth, as shown below:
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Compensation Element
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2011 Performance Achievement
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2011 Pay Outcome
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Long-Term Incentives (Equity)
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Performance-Contingent RSUs
2009 to 2011 Period
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Actual 3-year average ROAIC of 11.66% exceeded the target weighted cost of capital of 6.8%
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All performance-contingent RSUs granted in 2009 fully vested for all NEOs on January 31, 2012
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20
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Compensation Element
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2011 Performance Achievement
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2011 Pay Outcome
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Long-Term Incentives (Cash)
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Long-Term Cash Incentive Plan
("LTCIP")
2009 to 2011 Cycle
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Relative TSR versus the S&P 500 subset fell into 86th percentile, which exceeded the target of 50th percentile (for 50% of payout)
Actual 3-year average ROAIC of 11.66% exceeded the target of 9.00% (for 50% of payout)
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All of our NEOs received LTCIP payout equal to 200% of target
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Acquisition-Related Special
Incentive Plan
2nd Interim Payout
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Cumulative 27-month EBIT was slightly above and cash flow was slightly below target
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The most recent 27-month period resulted in an interim award of 33.29% of the target award
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We Are Committed to Shareholder Oriented Corporate Governance
Our governance process ensures that the executive compensation program is appropriately
maintained and updated to always meet a standard of excellence in pay-for-performance alignment. Specifically, a number of practices and policies are in place to promote the
continuous improvement and accountability of our executive compensation program:
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A Human Resources Committee of the Board of Directors ("Committee") composed entirely of directors who meet the NYSE
independence standards
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An executive compensation consultant, engaged by and reporting directly to the Committee
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A review of total compensation via tally sheets
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External benchmarking of compensation levels and incentive design practices
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Dividend equivalents for performance-based awards which only vest when performance measures are achieved
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Perquisites that are of nominal value and are not grossed-up for taxes
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Ongoing assessment of the relationship between risk and compensation programs
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Executive stock ownership guidelines for executives and directors, which have been attained by all
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An anti-hedging policy for our executives and directors
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A shareholder-approved recoupment or "clawback" provision for cash incentive and stock compensation, which in the case of
fraud or intentional misconduct by any executive at a level of vice president or above, may result in full reimbursement to Ball of any incentive compensation or cancellation of any outstanding awards
to the executive
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Change in control agreements with multiples that do not exceed two times pay and that require a termination of employment
following a change in control ("double trigger") before severance benefits are triggered. Excise tax gross-ups have been eliminated for any new change in control agreements entered into
after January 1, 2010.
21
Composition of our NEOs in 2011
As mentioned previously, 2011 brought several planned changes to our executive team, based upon strategic succession
planning, talent management and transition execution. The most significant change was the retirement of Mr. Hoover as CEO, at which time the Board of Directors elected Mr. Hayes to the
position. The continued strong performance of the business and the leadership of the executive management team contributed to a smooth, successful transition of CEO responsibilities. Other changes
included the retirement of Mr. Westerlund, and the effective transition of his responsibilities to Mr. Baker and Ms. Pauley. Mr. Baker assumed the responsibilities of
Corporate Secretary. Ms. Pauley assumed full responsibility of Human Resources and Administration, adding additional functional departments to fit with existing administration strategies.
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Officers
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Title
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John A. Hayes
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President and CEO, elected on January 26, 2011
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Scott C. Morrison
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SVP and CFO since 2010
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Raymond J. Seabrook
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EVP and COO, Global Packaging since 2010
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Charles E. Baker
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VP and General Counsel since 2004, elected Corporate Secretary on July 27, 2011
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Lisa A. Pauley
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SVP, Human Resources and Administration, promoted on July 27, 2011
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Former Officers
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Title
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R. David Hoover
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Chairman and former CEO; retired as CEO on January 26, 2011
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David A. Westerlund
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Former EVP, Administration and Corporate Secretary; retired on September 30, 2011
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NEO Target Compensation Awarded in 2011
After review of competitive market data based on both general industry and peer group; the Corporation's
financial and operational performance; executive compensation consultant and CEO recommendations; tally sheet analysis; promotion actions leading to greater responsibility; executive individual
performance; and internal pay comparisons, the Committee authorized the following target total compensation elements for the CEO and other NEOs:
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Base pay increases to all NEOs, which incorporated promotional increases for Messrs. Hayes and Baker and
Ms. Pauley as a result of their promotions and substantial increase in responsibilities;
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Continued utilization of the short-term incentive EVA® plan. Target incentive opportunity
percentages remained the same for all NEOs except Mr. Hayes and Ms. Pauley, which increased as a result of their promotions;
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Continued utilization of the long-term cash incentive plan for all NEOs. Target incentive opportunity
percentages remained the same for all NEOs except Mr. Hayes and Ms. Pauley, which increased as a result of their promotions;
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The award of performance-contingent RSUs, SARs and stock options; and
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The Committee approved opportunities under the DSP to our NEOs and broader management team; under this program, we provide
grants of restricted stock units in exchange for the recipient buying and holding a matching number of common shares. These deposit share opportunities are made from
time-to-time in the discretion of the Committee, and are intended to support our commitment to have a management team of owners at Ball Corporation, with individuals
voluntarily investing in the Corporation.
The
Committee is confident that our executive compensation program, along with our management-as-owners culture and our
pay-for-performance philosophy, have directly contributed to the successful performance of the business and resulted in an executive team closely aligned with shareholders.
22
COMPENSATION OBJECTIVES AND PHILOSOPHY
The primary objective of Ball's executive compensation program is to attract and retain exceptional leaders and enable them to behave
like an ownerone of our key business values. When setting executive compensation, Ball applies a consistent approach for all executive officers and intends that the combination of
compensation elements closely aligns the executives' financial interest with those of the shareholders. The program is mainly designed to:
-
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Attract, motivate and retain a highly capable and performance-focused executive team;
-
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Promote a culture of management owners whose financial interests are aligned with those of the Corporation's shareholders;
-
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Pay for performance such that total compensation reflects the individual performance of executives and the absolute and
relative performance of Ball; and
-
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Efficiently manage the potential stock dilution, cash flow, tax and reported earnings implications of executive
compensation, consistent with the other objectives of the program.
Target
total compensation is composed of base salary, annual EVA® incentive compensation and long-term incentive compensation in the form of both cash and equity.
In support of Ball's emphasis on significant ownership by key executives, Ball delivers long-term incentive opportunities that encourage ownership. Generally, the amount of compensation
realized or potentially realizable does not directly impact the level at which future pay opportunities are set. However, when granting equity awards, the Committee reviews and considers both
individual performance and the number of outstanding and previously granted equity awards.
In
addition to promoting share ownership, the Corporation's executive compensation objectives and philosophy focus on rewarding performance. This means that shareholder returns along
with corporate performance, both short-term and long-term, comprise the largest portion of executive pay.
ROLE OF THE HUMAN RESOURCES COMMITTEE AND EXECUTIVE
COMPENSATION CONSULTANT
The Human Resources Committee (the "Committee") oversees the administration of the executive compensation program and determines the
compensation of the executive officers of the Corporation. The Committee is solely composed of nonmanagement directors, all of whom meet the independence requirements of the NYSE. Furthermore, the
Committee has retained an independent consultant (the "Consultant") to assist in discharging its responsibilities. The Consultant is employed by Pay Governance, LLC and is engaged by and
reports directly to the Committee. Specifically, the Consultant's role is to develop recommendations for the Committee related to all aspects of executive compensation programs and the Consultant
works with management to obtain information necessary to develop the recommendations. Pay Governance, LLC, an independent company that is not affiliated with us, provides no other services to
the Corporation.
PROCESS FOR DETERMINING EXECUTIVE COMPENSATION
The Committee reviews and adjusts executive target total compensation levels, including equity grants annually in January of each year.
The Corporation begins the annual process by reviewing each executive officer's target total compensation in relation to the 50th percentile of comparably sized companies based on general
industry data. The Corporation also takes into account, as an additional reference point, competitive compensation data from a selected group of peer companies consisting of leading container and
packaging,
distiller and brewer, food, household durable and nondurable goods companies ("Peer Group"). This general industry and Peer Group data is gathered by the Consultant and presented to the Corporation
and the Committee in reports that provide a comparative analysis of our executive officer compensation to this competitive market compensation. The Consultant works in collaboration with the
Corporation's Compensation Department when preparing such reports.
Additionally,
the Consultant creates tally sheets for each executive that outline each executive's annual target and actual pay in relation to competitive market information as well as
total accumulated pay under various corporate
23
performance
scenarios, both recent and projected. The tally sheets are used to analyze and determine executive officer pay recommendations and approvals. The Consultant also prepares for the Committee
an independent review and recommendation of the CEO's compensation. In its deliberations, the Committee meets with the CEO and other members of senior management, as appropriate, to discuss the
application of the competitive benchmarking (pay and performance) relative to the unique structure and needs of the Corporation.
The
CEO's target total compensation package is set by the Committee during an executive session based on the Committee's review of the competitive information and recommendation prepared
by the Consultant, assessment of the CEO's individual performance in conjunction with the financial and operating performance of the Corporation, and appropriate business judgment.
A
recommendation for the target total compensation of the Corporation's other executive officers, including the CFO and other NEOs, is made by the CEO after reviewing the executive's and
the Corporation's business performance in conjunction with the executive's responsibility and experience when compared to the competitive market information prepared by the Consultant. The
compensation package for the other executive officers is established by the Committee taking into consideration the recommendation of the CEO, the executive officer's individual job responsibilities,
experience and overall performance, along with appropriate business judgment.
The
Committee may also adjust an executive's compensation level during the year as a result of a promotion. Such adjustments take into consideration competitive market data and a
recommendation provided by the Consultant, as well as the recommendation of the CEO, which takes into account the additional responsibilities assigned and overall experience and performance of the
executive.
PEER GROUP
Our current Peer Group reflects changes adopted for executive compensation planning for the 2011 fiscal year. During the third quarter
of 2010, the Committee engaged the Consultant to assess whether the Peer Group required changes. This process was intended to ensure that the Corporation's Peer
Group was most reflective of our business type and competitive market for executive talentincorporating factors such as size, industry and organization typeas this is
important to creating a well-designed, performance-oriented executive pay program.
In
developing potential changes to our competitive group companies, the Consultant used both objective, quantitative financial and industry criteria, as well as qualitative criteria
regarding the nature of our business operations. Specifically, the Consultant used the following principles and criteria in identifying appropriate Peer Group companies:
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Design Principle
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Criteria
|
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Quantitative financial criteria to ensure organizations are comparable in terms of size and structure
|
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Revenue between
~$3-$15 billion (an approximate range of 0.5x-2x Ball's revenues)
Market capitalization between ~$3-$15 billion (used as a secondary reference)
Ratio of market capitalization to revenue between 0.5 and 2.0
Positive operating margins ranging from 5-20%
Three-year TSRs with no outlying
large declines, ideally outperforming the S&P 500
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Qualitative criteria regarding appropriate industry, business types and organizational complexity
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Ball's direct peers in
the containers and packaging industry
Nondurable consumer product companies with some or all of the following characteristics: containers and packaging are a critical element of the final product, there is a substantial business focus on meeting annual performance expectations,
and the individual consumer represents the ultimate purchaser of the product
Broader manufacturing companies within the aerospace, office services supplies, capital goods, chemical manufacturing, paper product, and steel industries
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24
Following
the Consultant's review, the Committee approved the modification of the Peer Group to include the following companies:
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|
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Avery Dennison Corporation
Bemis Company, Inc.
Campbell Soup Company
ConAgra Foods, Inc.
Crown Holdings Inc.
Eastman Chemical Company
Goodrich Corp.
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|
Greif, Inc.
H.J. Heinz Company
ITT Corporation
MeadWestvaco Corporation
Molson Coors Brewing Company
Owens-Illinois, Inc.
Pactiv Corp.
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PPG Industries, Inc.
Sara Lee Corp.
Sealed Air Corporation
Silgan Holdings, Inc.
Sonoco Products Company
United States Steel Corp.
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|
The
chart below compares certain criteria for the organizational scope of responsibility for Ball's executives to those of peer companies.
Ball Market Capitalization, Revenue and Net Income
as Compared to Peer Group
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NOTE: Financial statistics shown above were provided by the Consultant.
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*
|
|
As of September 15, 2011
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**
|
|
FY 2010
|
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25
ELEMENTS OF BALL'S EXECUTIVE COMPENSATION PROGRAM AND 2011 PERFORMANCE
The primary elements of Ball's executive compensation program are designed to be consistent with the compensation objectives described
previously. The elements are outlined in the following table. The purpose of each element is also provided to demonstrate how each fits with the overall compensation objectives, specifically, stock
ownership and pay-for-performance.
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Component
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Element
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Purpose
|
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Performance Measures
|
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2011 Performance Outcome
|
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Base CompensationCurrent Year
|
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Annual Base Salary
|
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Fixed element of pay based on an individual's primary duties and responsibilities.
|
|
Individual performance and contribution based on primary duties and responsibilities.
|
|
All NEOs received base pay increases, which included increases for promotions as applicable.
|
|
Annual IncentivePerformance Based Cash
|
|
Annual EVA® Incentive Compensation Plan
|
|
Designed to reward achievement of specified annual corporate and/or operating unit financial goals pursuant to EVA® principles.
|
|
Actual 2011 EVA® based on the amount of corporate net operating profit after-tax, less a charge for capital employed in the business based on Ball's after-tax internal hurdle rate, as compared to the 2011 EVA®
incentive plan target.
|
|
Resulted in an award of 188% of target for all NEOs. No amounts were banked.
|
|
Long-Term IncentivePerformance Based Cash
|
|
Long-Term Cash Incentive Plan
|
|
Designed to promote long-term creation of shareholder value in absolute terms (ROAIC) and relative terms (performance versus a group of companies in the S&P 500) and provide an executive retention
incentive.
|
|
50% based on TSR over 3 years relative to a group of S&P 500 companies and 50% based on ROAIC over 3 years, as compared to targets.
|
|
The 2009 to 2011 cycle resulted in an award payment of 200% of target for all NEOs based on performance above target for 3 years relative TSR (86th percentile) and ROAIC (11.66%).
|
|
|
|
|
|
Acquisition-Related Special Incentive Plan
|
|
Designed to promote the successful integration of a newly acquired business thereby enhancing financial returns and cash flow.
|
|
Cumulative EBIT and cumulative cash flow of the Metal Beverage Packaging Division, Americas.
|
|
The second 27-month cycle ended December 31, 2011, resulted in an interim award payment of 33.29% of the total target award.
|
|
Long-Term Incentive Performance Based Equity
|
|
Stock Options and Stock-Settled SARs
|
|
Designed to promote share ownership and long-term performance resulting in the creation of shareholder value.
|
|
Stock price performance relative to the grant date stock price (exercise price) of the stock options/SAR grants.
|
|
Stock price performance ending December 31, 2011, excluding dividends:
|
|
|
|
|
|
|
|
Restricted Stock/RSUs
|
|
Designed to promote share ownership, provide a retention incentive, and provide long-term incentive for the creation of shareholder value.
|
|
Stock price performance.
|
|
Ball vs. S&P 500 1-year:
4.94% vs.
0.00%.
Ball vs. S&P 500 3-year:
71.68% vs.
39.23%.
|
|
|
|
|
|
|
|
Deposit Shares
|
|
Designed to promote executive financial investment in the Corporation, promote share ownership and provide long-term incentive for performance resulting in the creation of shareholder value.
|
|
Attainment of required holding period and stock price performance.
|
|
|
|
|
|
|
|
Performance-
Contingent RSUs
|
|
Designed to promote share ownership through the achievement of financial returns in excess of the Corporation's weighted average cost of capital.
|
|
Actual ROAIC over 3 years, equal to or exceeding the Corporation's weighted average cost of capital established at the beginning of the performance period.
|
|
For all NEOs, resulted in 100% vesting of the 2009 to 2011 performance-contingent RSU award on January 31, 2012, based on actual ROAIC of 11.66% over the 3-year period exceeding the weighted average cost of capital
target of 6.8%.
|
|
26
|
|
|
|
|
|
|
|
|
|
Component
|
|
Element
|
|
Purpose
|
|
Performance Measures
|
|
2011 Performance Outcome
|
|
Benefits
|
|
Life and Pension Benefits
|
|
Supports basic life and retirement income security needs.
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Supplemental Executive Retirement Plan ("SERP")
|
|
Replicates benefits provided under the qualified pension plan, not otherwise payable due to IRS qualified plan limits.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Deferred Compensation
|
|
Provides eligible participants the ability to defer certain pretax compensation into a savings plan to support retirement income or other needs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites and Other Personal Benefits
|
|
Noncash compensation generally nominal in value ranging from 2-3% of total compensation, which may consist of financial planning, corporate contributions, aircraft usage and insurance premiums. The percent of total
compensation may exceed the nominal range for an executive on foreign assignment.
|
|
|
|
|
|
SPECIFICS RELATED TO THE 2011 EXECUTIVE COMPENSATION ELEMENTS
When determining our executive target total compensation decisions in January 2011, the Committee took into account the Corporation's
strong operating and financial performance in 2010, which resulted in a total return to shareholders of 32.6%, based on stock price appreciation plus reinvested dividends, compared to a 12.8% return
of the S&P 500 and the 11% return of the Dow Jones Industrial Average. The Corporation also generated significant free cash flow of $506 million and achieved EVA®
profitability greater than 2009 levels and an after-tax return on invested capital of 11%. The Committee also recognized that all NEOs contributed to many other 2010 successes of the
Corporation, including acquisitions in aluminum extruded container markets, expansion of our metal beverage packaging business in developing growth markets, divestiture of our plastic packaging
business, the integration of four metal beverage packaging plants acquired in October 2009, significant program wins in our aerospace business, execution of our stock repurchase plan, successful debt
refinancing and prudent balance sheet management. These results are due in large part to our focus on disciplined growth, operational excellence and talent management.
27
Base Salary
Base salary levels are set on the basis of factors such as job responsibilities, the CEO's subjective judgment of individual
performance and contributions to overall business performance, experience level, internal merit increase budgets, external market base salary movement, and market competitiveness as compared to
50th percentile data. The Committee reviewed base salary levels in late January 2011 and approved base salary increases for all NEOs, with changes becoming effective retroactively to
January 1, 2011. These increases were approximately 3.5%made as part of our merit increase processwith the exception of larger increases provided to
Messrs. Hayes and Baker and Ms. Pauley, upon their promotions and substantial changes in responsibilities, and to Mr. Morrison as we continue to move his compensation towards the
50th percentile of market survey data for comparable positions, following his promotion to SVP and CFO in 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Final Target
2010 Base
Salary
|
|
%
Increase
during
Fiscal
2011
|
|
Final Target
2011 Base
Salary
|
|
Rationale
|
|
John A. Hayes
|
|
$
|
725,000
|
|
|
24.1
|
%
|
$
|
900,000
|
|
Increase based on market data and to account for his promotion to CEO in January 2011, as well as his leadership and significant contributions to Ball's 2010 business performance outlined above.
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
$
|
400,000
|
|
|
12.50
|
%
|
$
|
450,000
|
|
Increase based on market data and includes action to move his compensation towards market following his promotion to SVP and CFO in 2010, as well as his contributions to the 2010 execution of our stock repurchase plan,
successful debt refinancing and prudent balance sheet management.
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond J. Seabrook
|
|
$
|
600,000
|
|
|
3.50
|
%
|
$
|
621,000
|
|
Increase based on market data, as well as his contributions to the oversight of the integration of acquisitions in aluminum extruded container and metal beverage packaging industries, expansion of our metal beverage
packaging business in developing growth markets, and divestiture of our plastic packaging business.
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. Baker
|
|
$
|
343,000
|
|
|
8.60
|
%
|
$
|
372,500
|
|
Increase based on market data and to account for the addition of Corporate Secretary responsibilities in July 2011, as well as his contributions to the legal/contractual elements of the acquisition, divestiture and debt
refinancing activities in 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
$
|
235,000
|
|
|
27.60
|
%
|
$
|
300,000
|
|
Increase based on market data and to account for her promotion to SVP Human Resources and Administration in July 2011, which added responsibility for a number of administrative areas, as well as her contributions during
2010 to the human resource elements of the acquisition and divestiture activities and the standardization of global human resources processes and systems.
|
|
|
|
|
|
|
|
|
|
|
|
|
R. David Hoover
|
|
$
|
1,155,000
|
|
|
0.00
|
%
|
$
|
1,155,000
|
|
No increase due to retirement. Actual amount received was $306,519.
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Westerlund
|
|
$
|
455,500
|
|
|
3.25
|
%
|
$
|
470,304
|
|
Increase based on market data, individual and business performance. Actual amount received was $379,576.
|
|
Annual Incentive
This short-term pay-for-performance incentive is used to encourage and reward the CEO and other
NEOs for making decisions that improve performance as measured by EVA®. It is designed to produce sustained shareholder value by establishing a direct link between EVA®
improvement and incentive compensation. EVA® was selected as the measure for Ball's Annual Incentive Compensation Plan because it has been demonstrated to correlate management's
28
incentive
with share price growth and shareholder returns. EVA® is computed by subtracting a charge for the use of invested capital from net operating profit after-tax as
illustrated below:
|
|
|
|
|
|
|
|
|
EVA®
|
|
=
|
|
Net Operating Profits After Taxes
("NOPAT")
|
|
minus
|
|
Capital Charge (the Amount of Capital Invested by Ball multiplied by Ball's After-Tax Hurdle Rate)
|
Generating
profits in excess of both operating and capital costs (debt and equity) creates EVA®. If EVA® improves, value has been created.
Performance Measures
Targets are established annually for each operating unit and for the Corporation as a whole based on prior performance. The
Plan
design motivates continuous improvement in order to achieve payouts at or above target over time.
The
Corporation's and/or operating unit's EVA® financial performance determines the amount, if any, of awards earned under the Annual Incentive Compensation Plan. Such awards
are based on actual EVA® performance relative to the established EVA® target. For any one year, the EVA® target is equal to the sum of the prior year's target
EVA® and one-half the amount of the prior year's EVA® gain or shortfall relative to the prior year's EVA® target and may be calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Year's
EVA® Target
|
|
=
|
|
Prior Year's
EVA® Target
|
|
plus
|
|
1/2
|
|
|
|
Prior Year's
Actual EVA®
|
|
minus
|
|
Prior Year's
EVA® Target
|
|
|
Improvement
in EVA® occurs when the amount of net operating profit after-tax less a charge for capital employed in the business increases over
time. It establishes a direct link between annual incentive compensation and continuous improvement of return on invested capital relative to a 9% after-tax "hurdle rate." The Corporation
has established 9% as the "hurdle rate" when evaluating capital expenditures and strategic initiatives in most regions in which we do business. This "hurdle rate" is above the Corporation's true cost
of capital.
For
a given year, a payout at 100% of target annual incentive compensation is achieved when actual EVA® is equal to the EVA® target. Actual annual incentive
payments each year can range from 0-200% of the targeted incentive opportunity based on corporate performance and/or the performance of the operating unit over which the executive has
responsibility. For the Corporation's consolidated plan, a payout of 0% is realized when actual EVA® is $104 million less than targeted EVA®. A payout of 200% or greater
may be achieved if actual EVA® is $52 million or higher than target EVA®. However any amounts over 200% of target are banked and remain at risk until paid over time in
one-third increments whenever actual performance under the Annual Incentive Plan results in a payout of less than 200% of target. When the bank balance falls below $7,500 it is paid
in full. All payments from the bank balance are made at the same time annual incentive payments are made. In 2011, Ball's actual EVA® performance exceeded our EVA® target by
$46 million and resulted in a payout of 188% of target, as shown below:
|
|
|
|
|
|
|
|
|
|
|
EVA®
Objectives for Fiscal 2011
|
|
|
|
Target
|
|
200% Payout
|
|
Actual
|
|
$
|
96.3 million
|
|
$
|
148.3 million
|
|
$
|
142.3 million
|
|
|
|
29
Target Incentive Percentages and 2011 Incentive Paid
A target incentive opportunity is established each year as a percentage of an executive's
annual
base salary and is targeted at approximately the 50th percentile of the competitive market with the opportunity to earn more for above-target performance or less for below-target performance.
Each NEO's 2011 target incentive opportunity was based on the Corporation's consolidated EVA® performance. The table below summarizes for each NEO the 2011 target incentive opportunity as
compared to the actual incentive paid as a result of the year's strong EVA® performance; the value paid may include a one-third increment of a prior bank balance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target Annual Incentive
|
|
Actual Annual Incentive
|
|
|
|
|
|
NEO
|
|
% of Base
|
|
$ Value
|
|
% of Base
|
|
$ Value Paid
|
|
|
|
John A. Hayes
|
|
100%
|
|
$
|
896,635
|
|
188%
|
|
$
|
1,703,243
|
|
Scott C. Morrison
|
|
65%
|
|
$
|
291,875
|
|
122%
|
|
$
|
548,725
|
|
Raymond J. Seabrook
|
|
75%
|
|
$
|
465,447
|
|
141%
|
|
$
|
879,104
|
|
Charles E. Baker
|
|
50%
|
|
$
|
181,021
|
|
94%
|
|
$
|
340,319
|
|
Lisa A. Pauley
|
|
52%
(50% Jan-Jul, 55% Aug-Dec)
|
|
$
|
141,471
|
|
98%
(90% Jan-Jul, 99% Aug-Dec)
|
|
$
|
265,966
|
|
R. David Hoover
|
|
110% (Jan-Mar)
|
|
$
|
337,171
|
|
207%
|
|
$
|
646,405
|
|
David A. Westerlund
|
|
70% (Jan-Sep)
|
|
$
|
265,703
|
|
132%
|
|
$
|
509,166
|
|
|
|
Certain executives including the CEO and the other NEOs may elect to defer the payment of all or a portion of their annual incentive compensation
into the 2005 Deferred Compensation Plan and/or the 2005 Deferred Compensation Company Stock Plan, as described in the "Non-Qualified Deferred Compensation" section on page 45.
Long-Term Incentives
This element of compensation is designed to provide ownership and cash opportunities to promote the achievement of longer term
financial performance goals and enhanced TSR. The Corporation's long-term incentive opportunity is generally provided through a combination of equity and cash awards, which the Committee
believes best matches the compensation principles for the program.
The
2011 total long-term incentive value awarded, and the corresponding mix of vehicles used to deliver this value, is summarized below. The majority of long-term
incentive awards provide value only if the Corporation achieves positive stock price and financial performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mix of Long-Term Vehicles
|
|
|
|
|
|
|
|
NEO
|
|
Total
Long-Term
Value
|
|
% LTCIP
(2011-2013 Cycle)
|
|
% Options/
SARs
|
|
% Performance-
Contingent RSUs
(2011-2013 Cycle)
|
|
% DSP
|
|
|
|
John A. Hayes
|
|
$
|
5,179,027
|
|
|
16
|
%
|
|
32
|
%
|
|
32
|
%
|
|
20
|
%
|
Scott C. Morrison
|
|
$
|
1,745,116
|
|
|
12
|
%
|
|
23
|
%
|
|
23
|
%
|
|
43
|
%
|
Raymond J. Seabrook
|
|
$
|
1,883,768
|
|
|
15
|
%
|
|
30
|
%
|
|
44
|
%
|
|
12
|
%
|
Charles E. Baker
|
|
$
|
934,859
|
|
|
12
|
%
|
|
28
|
%
|
|
28
|
%
|
|
32
|
%
|
Lisa A. Pauley
|
|
$
|
695,461
|
|
|
17
|
%
|
|
19
|
%
|
|
19
|
%
|
|
44
|
%
|
R. David Hoover
|
|
$
|
267,913
|
|
|
100
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
David A. Westerlund
|
|
$
|
1,645,935
|
|
|
10
|
%
|
|
28
|
%
|
|
41
|
%
|
|
21
|
%
|
|
|
This award mix was set to achieve the objectives described previously, in light of market practices and cost implications. The total amount of
long-term incentives, based on the grant date expected value, is generally established in relation to the 50th percentile of the competitive market, individual roles and
responsibilities, individual performance (as outlined in the preceding Base Salary section), and the Corporation's financial and operating performance. As a result of the leadership changes in 2011,
the Corporation also provided a DSP opportunity to our NEOs and broader management team to further their stock ownership and alignment with shareholder interests, which resulted in values above the
50th percentile. This emphasis on long-term compensation, through performance-based long-term cash and
30
equity
awards, ensures a strong continued alignment with Ball's executive ownership and shareholder value creation objectives.
Performance-Based Cash Awards
Ball's performance-based long-term cash incentive award, LTCIP, is intended to focus executives on the
achievement of multiyear performance goals that will enhance shareholder value. The Corporation's TSR and ROAIC are considered in determining the amount, if any, of awards earned under the
Corporation's LTCIP. Performance is measured on a cumulative basis over a three-year performance cycle. Awards pursuant to the LTCIP are generally made on an annual basis such that three
performance cycles overlap. Any actual award earned is paid at the end of the three-year performance cycle. During 2011, there were three overlapping cycles
underway:
-
-
2009 through 2011Awarded in 2009, completed at the end of 2011, payment early 2012 (included in Summary
Compensation Table)
-
-
2010 through 2012Awarded in 2010, in process, will complete at the end of 2012, payment early 2013 if
performance measures are attained
-
-
2011 through 2013Awarded in 2011, in process, will complete at the end of 2013, payment early 2014 if
performance measures are attained
The
LTCIP provides executives the opportunity to earn awards based on a combination of two performance measures. One-half of the award is based on the Corporation's
three-year TSR as measured against the TSRs of a group of companies in the S&P 500 excluding companies in the S&P 500 Index that are classified as being part of the Financial
or Utilities industry sectors or the Transportation industry group. Companies added to the S&P 500 during the performance cycle are also excluded. TSR is measured by comparing the average daily
closing price and dividends of the Corporation in the third year of the performance cycle with the average daily closing price and dividends prior to the start of the performance cycle relative to the
distribution of the equivalent TSRs during the performance cycle of the group of companies as described above. The target performance requirement for the TSR measure is the 50th percentile of
the S&P group described above. The other one-half of the award is based on ROAIC performance over the three-year period. ROAIC is calculated by dividing the average of the
Corporation's net operating profit after-tax over the relevant performance cycle by its average invested capital over such period. The target performance requirement for the ROAIC measure
is 9%, which is above the Corporation's estimated weighted average cost of capital. The target, minimum and maximum performance requirements are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Measure
|
|
Minimum
|
|
Target
|
|
Maximum
|
|
|
|
TSR
|
|
|
37.5th percentile
|
|
|
50th percentile
|
|
|
75th percentile
|
|
|
|
ROAIC (after-tax)
|
|
|
7%
|
|
|
9%
|
|
|
11%
|
|
|
|
For each measure, minimum performance results in a zero payout factor, target performance results in a 100% payout factor and maximum performance
results in a 200% payout factor for the respective one-half of the award. Performance between minimum, target and maximum is extrapolated to determine the payout factor.
Each
NEO's incentive opportunity is established by considering external long-term incentive market data and Ball internal pay equity and is set as a percentage of the
executive's average base salary plus target annual incentive over the three-year performance cycle (i.e., average target annual cash compensation during the performance cycle).
The
executive's award for any given performance cycle is calculated as follows:
Actual
payments at the end of the performance cycle for each factor (TSR and ROAIC) can range from 0-100% of the target opportunity based on actual
performance relative to the established performance measures described above.
31
For
the 2011 through 2013 performance cycle, the incentive opportunities awarded in early 2011 to the CEO and other NEOs, and reported in Grants of Plan-Based Awards Table,
are as follows:
|
|
|
|
|
|
|
|
|
NEO
|
|
Target Incentive Percentage
For the 2011 to 2013 Performance Cycle
|
|
Target $
Value
|
|
|
|
John A. Hayes
|
|
40%
|
|
$
|
809,283
|
|
Scott C. Morrison
|
|
25%
|
|
$
|
202,197
|
|
Raymond J. Seabrook
|
|
25%
|
|
$
|
279,907
|
|
Charles E. Baker
|
|
20%
|
|
$
|
114,479
|
|
Lisa A. Pauley
|
|
20%Jan 2011-Jul 2011
25%Aug 2011-Dec 2013
|
|
$
|
121,365
|
|
R. David Hoover
|
|
40%Jan 2011-Mar 2011
|
|
$
|
267,913
|
|
David A. Westerlund
|
|
25%Jan 2011-Sep 2011
|
|
$
|
167,859
|
|
|
|
For the 2009 through 2011 performance cycle, the incentive opportunities for the CEO and other NEOs were as follows:
|
|
|
|
NEO
|
|
Target Incentive Percentage
For the 2009 to 2011 Performance Cycle
|
|
John A. Hayes
|
|
25%2009
30%2010
40%2011
|
Scott C. Morrison
|
|
20%2009
25%2010-2011
|
Raymond J. Seabrook
|
|
25%Full cycle
|
Charles A. Baker
|
|
20%Full cycle
|
Lisa A. Pauley
|
|
20%Jan 2009-Jul 2011
25%Aug 2011-Dec 2011
|
R. David Hoover
|
|
40%Jan 2009-Mar 2011
|
David A. Westerlund
|
|
25%Jan 2009-Sep 2011
|
|
The target incentive percentage increases for Messrs. Hayes and Morrison and Ms. Pauley during the 2009-2011 and
2011-2013 performance cycles shown above were associated with the promotions each received at the time of the change.
As
a result of the Corporation's actual performance for the 2009 through 2011 performance cycle of 11.66% ROAIC and 86th percentile TSR, cash payouts (made in early 2012) for the
CEO and other NEOs are 200% of the target opportunities and reported in the Summary Compensation Table.
Special Acquisition Incentive Plan
In conjunction with the 2009 acquisition of certain beverage can manufacturing operations, the Corporation
implemented an Acquisition-Related Special Incentive Plan designed to motivate participating employees to successfully integrate the acquisition into the Corporation. Payouts under this Plan are based
on cumulative EBIT and cumulative cash flow over a 39-month period, with awards, if any, made at 15 months (December 31, 2010), 27 months (December 31, 2011)
and 39 months (December 31, 2012). Minimum, target and maximum values have been established for each performance measure; however, due to the competitive sensitive nature of the
financial metrics, these values have been excluded. The performance measures were based on financial metrics assumed in the acquisition valuation model, and the level of difficulty in achieving them
was moderate, thus a
32
payout
at or near target is the most likely outcome. This incentive opportunity is established as a percentage of an executive's average base salary over the 39-month performance period
and is provided below for each NEO.
|
|
|
|
NEO
|
|
Target Incentive Percentage
|
|
John A. Hayes
|
|
40%
|
Scott C. Morrison
|
|
40%
|
Raymond J. Seabrook
|
|
40%
|
Charles E. Baker
|
|
40%
|
Lisa A. Pauley
|
|
40%
|
R. David Hoover
|
|
40% (Oct 2009-Mar 2011)
|
David A. Westerlund
|
|
40% (Oct 2009-Sep 2011)
|
|
The executive's actual award will be calculated as follows:
Actual payments at the end of the performance period can range from 0-150% of the target opportunity based on actual performance
relative to the established performance measures. Actual performance between minimum (which results in zero payout), target (which results in 100% payout) and maximum (which results in 150% payout) is
extrapolated to determine the payout factor. The second 27-month cumulative period was completed on December 31, 2011, and based on performance, the NEOs each received an interim
payment equal to 33.29% of the total target amount.
Equity-Based Awards
The Corporation's equity awards may be provided through various forms (SARs, Incentive Stock Options ("ISOs"),
Non-Qualified Stock Options ("NQSOs"), performance-contingent RSUs, restricted stock and RSUs), all of which are tied to the price of Ball Corporation common stock. Annual equity awards
associated with target total compensation are typically granted in January on the date of the quarterly meeting of the Board; however, equity awards may be granted during the year as part of an
executive's promotion or for retention purposes. In the case of newly hired executives, equity awards may be granted upon the executive joining the Corporation. Equity-based awards are determined for
each NEO in order to bring target total direct compensation to the level deemed appropriate by the Committee in relation to the external market 50th percentile and each executive's roles and
responsibilities.
In
January 2011, the Committee approved the award of SARs, ISOs (on a basis limited to the Internal Revenue Code statutory maximum), and performance-contingent RSUs to the CEO and
other NEOs and executive officers. Each form of equity is described below. The awards were split with the value weighting of approximately 40-50% SARs/ISOs and 50-60%
Performance-Contingent RSUs. Additionally, the Corporation awarded opportunities under the DSP to our NEOs and broader management team in order to further the new leadership team's Ball Corporation
stock ownership. The number and/or value of the equity awarded in 2011 to the CEO and other NEOs is reported in the Summary Compensation Table and Grants of Plan-Based Awards Table. All
equity awards are pursuant to the provisions of the 2010 Stock and Cash Incentive Plan.
-
-
Stock-Settled SARs and Stock
Options:
SARs, ISOs and NQSOs are granted in order to reward executives for the creation of shareholder value, and will only provide
value to executives if the price of Ball's stock increases. Such awards generally vest at 25% per year for four years and expire in 10 years. The grant value of each SAR, ISO or NQSO is based
on the closing price of the Corporation's common stock on the date of grant.
-
-
Performance-Contingent
RSUs:
The performance-contingent RSUs are granted in order to encourage executives to ensure long-term return on the
Corporation's invested capital in excess of its current estimated weighted average cost of capital. The award of performance-contingent RSUs provides participants with the opportunity to receive the
Corporation's common stock if the Corporation's ROAIC, during a three-year period, is equal to or exceeds the Corporation's estimated weighted average cost of capital as established at the
beginning of the performance period.
33
The
performance period for the 2011 award is a 36-month period from January 2011 to December 2013 and the estimated weighted average cost of capital and required return for
the performance period is established at 6.2%. Vesting of the units is solely based on meeting or exceeding the established performance target. If the goal is met, the entire participant's awarded
units for that three-year period vest. If the target is not met, all of the participant's awarded units for that three-year period are forfeited.
For
the three-year performance period 2009 through 2011, the ROAIC target of 6.8% was exceeded; the actual ROAIC during the performance period was 11.66% and all granted units for that
three-year period vested for NEOs. The value realized on vesting is reported in the Option Exercises and Stock Vested Table.
-
-
Deposit Share
Program/RSUs:
The Corporation may grant restricted stock or RSUs pursuant to the DSP, which was introduced in 2001. The DSP is intended
to increase share ownership among certain executives who must make additional investments in the Corporation's stock in order to participate. Under this program, an executive receives one share of
restricted stock or one RSU for every newly acquired share by the participant (either in the market, through the exercise and holding of stock options or settlement of SARs, or deferral of annual
incentive compensation to the Deferred Compensation Company Stock Plan) during a specified acquisition period, up to a preestablished maximum number of shares. As long as the executive continues to
hold the newly acquired shares, the restricted stock or units granted cliff vest four years from the date of grant; or, if stock ownership guidelines are met, 30% of the shares or units will vest at
the end of the second year and third year and 40% will vest at the end of the fourth year. Restricted stock or units granted pursuant to the DSP are made on the 15th day of each month following
the executive's submission of adequate documentation to the Corporation detailing the acquisition of the newly acquired shares.
-
-
Restricted Stock or
RSUs:
The Committee or CEO may also grant restricted stock or RSUs not related to the DSP, which is generally associated with a
promotion, employment or retention action. Pursuant to the provisions of the 2010 Stock and Cash Incentive Plan, the Committee delegated to the CEO the authority to grant up to a maximum of 10,000
restricted shares or RSUs to any one individual in a calendar year, except the CEO may not make such grants to officers of the Corporation. Any such grant is ratified by the Committee at the first
Committee meeting following such grant. Grants made are generally effective at the closing stock price on the day of the grant or may be effective at the closing stock price on a specific day in the
future as defined by the Committee or the CEO. As an example, the future grant of a restricted stock award may be approved pending the effective date of a promotion, employment or a specific date.
These awards generally vest in either 20% or 25% increments on each anniversary of the grant date. These grants serve as a long-term incentive element, promote share ownership and may
provide an executive retention incentive.
Retirement Benefits
Ball strives for overall benefits to be competitive with the market. The CEO and other NEOs participate in the same benefit plans, with
two exceptions noted below, and on the same terms as provided to all U.S. salaried employees. Included in these benefits are the annual pension accruals under the qualified pension plan ("Salaried
Pension Plan") and contributions to the qualified 401(k) savings plan.
The
Corporation sponsors two qualified salaried defined benefit pension plans in the U.S., one covering its Aerospace subsidiary's employees and the other covering all other U.S.
salaried employees. Prior to January 1, 2007, the benefits were determined by final average salary, covered compensation and years of service. Beginning in 2007, the benefit in both plans is an
accumulated annual credit based on base salary, the Social Security Wage Base ("SSWB") and a multiplier that is based on service.
The
401(k) savings plan is a tax-qualified defined contribution plan that allows U.S. salaried employees, including the NEOs, to contribute to the plan 1%-55% of
their base salary up to IRS-determined limits on a before-tax basis. Prior to January 1, 2007, the Corporation matched 50% of the first 6% of base salary contributed to
the plan. Beginning in 2007, the Corporation matched 100% of the first 3% of base salary contributed, and 50% of the next 2% of base salary contributed, up to a maximum match of 4% of base salary
contributed.
Certain
executives, including the NEOs, also receive benefits under the non-qualified SERP, which replaces benefits otherwise available in the qualified pension plan but for
limits on covered compensation in the qualified plan set by the Internal Revenue Code of 1986, as amended (the "Code"). The SERP is designed to provide retirement benefits that are calculated on base
salary that exceeds the maximum amount of pay that can be included in the pension
34
calculation
under a pension plan that is tax qualified under the Code. Further information regarding the salaried pension plan and the SERP are provided in the "Pension Benefits" section on
page 46.
The
Corporation's pension plans and SERP provide pension benefits based on base salary only and do not include incentive compensation as part of the pension calculation.
Additionally,
the Corporation provides a deferred compensation benefit to certain employees. Under the terms of the deferred compensation program, participants are eligible to defer
current annual incentive compensation to be paid and/or RSUs to be issued in the future. When amounts are deferred, the participant becomes a general unsecured creditor of the Corporation and deferred
amounts become subject to claims on the same basis as other general unsecured creditors to the Corporation. The deferred compensation plans provide a means for participants to accumulate funds for
retirement or other purposes.
OTHER EXECUTIVE COMPENSATION POLICIES AND GUIDELINES
Plan Terms and Procedures
In 2011, the annual and long-term incentives awarded were established and paid pursuant to the terms of the Ball
Corporation 2010 Stock and Cash Incentive Plan and the Ball Corporation Annual EVA® Incentive Compensation Plan, which are administered by the Committee. This Plan permits grants of cash
awards, stock options, SARs or stock awards (e.g., shares, restricted stock and RSUs).
Risk Assessment
The Committee has reviewed the relationship between risk and our compensation programs and does not believe that these programs
encourage excessive or inappropriate risk. The Corporation's internal assessment of risk confirms that our compensation arrangements do not foster undue risk taking, because they are performance
driven and have strong governance and control mechanisms. In addition, the Committee's executive compensation Consultant conducted a thorough risk assessment of our executive compensation programs in
2010, reviewing a number of criteria regarding compensation design and governance and whether financial risks, operational risks or reputational risks may be generated through any of our programs,
policies or practices.
The Consultant reported to the Committee that Ball's executive compensation programs are low in risk. In reaching that conclusion, the Consultant noted that there is strong Committee involvement,
long-term incentives are predominantly risk-based equity and thus tied to shareholder returns, market comparisons are utilized, ownership requirements are applied, and Ball has
utilized EVA® principles in its compensation for many years. The Corporation also considers the relationship between risk and executive compensation on an ongoing basis as it reviews
executive compensation levels and program designs, with the Consultant providing periodic updates regarding pay and risk.
Stock Ownership Guidelines
Consistent with its stock ownership philosophy, Ball has established guidelines for senior management. The 2011 stock ownership
guidelines (minimum requirements) are as follows:
|
|
|
|
|
|
|
Executive
|
|
Ownership Multiple
(of Base Salary)
|
|
|
|
CEO
|
|
|
5 times
|
|
CFO, EVPs and SVPs
|
|
|
3 times
|
|
Other Executives
|
|
|
1 to 2 times
|
|
|
|
As of December 31, 2011, all executive officers including the CEO and the other NEOs have met their ownership guidelines. Furthermore, the
Corporation has established a 10,000 share stock ownership guideline for each nonmanagement director and all have met their ownership guidelines.
35
Anti-Hedging Policy
When the Corporation's share price appreciates, an executive or director may desire to lock in a portion of that appreciation, thereby
managing a portion of the economic risk associated with concentrated holdings of Ball Corporation common stock. The Corporation has evaluated the potential approaches that executives and directors can
use. As a result of this review, executives are permitted to use prepaid variable forward contracts or contracts to purchase or sell Ball Corporation common stock pursuant to SEC
Rule 10b5-1. Put and call options and other hedging transactions involving Corporation stock (including selling the stock "short") are not permitted.
Severance and Change in Control Benefits
The CEO and other NEOs are covered by arrangements that specify payments in the event the executive's employment is terminated. The
type and amount of payments vary by executive level and whether the termination is following a change in control of the Corporation. These severance benefits, which are competitive with general
industry practices, are payable only if the executive's employment is terminated as specified in each of the agreements. Further discussion is provided in the "Other Potential
Post-Termination Employment Benefits" section on page 49.
Accounting and Tax Considerations
When establishing pay elements or associated programs, the Committee reviews projections of the estimated pro forma expense and tax
impact of all material elements of the executive compensation program. Generally, an accounting expense is accrued over the requisite service period of the particular pay element, which in many cases
is equal to the performance cycle, and the Corporation realizes a tax deduction upon payment to and/or realization by the executive.
The
Plans are intended to meet the deductibility requirements of Code Section 162(m) as performance-based pay, resulting in amounts paid being tax deductible to the Corporation.
Code Section 162(m) generally provides that publicly-held corporations may not deduct in any one taxable year certain compensation in excess of $1 million paid to the CEO or
any other executive officer (other than the CFO as such) whose total compensation is required to be disclosed in the Summary Compensation Table by reason of being the next three most
highly-compensated executive officers. To the extent that any cash compensation for any NEO, otherwise deductible for a particular tax year, would not be deductible in that year because of the
limitations of Code Section 162(m), the Committee has mandated that such compensation will be deferred until retirement; however, the Committee, in its sole discretion, may approve payment of
nondeductible compensation from time to time if it deems circumstances warrant it.
Beginning
January 1, 2006, the Corporation began accounting for stock-based payments including current and prior year stock options, SARs, restricted stock and RSUs in accordance
with the requirements of FASB ASC Topic 718 ("Topic 718"), which addresses accounting for stock compensation.
In
December 2005, the Committee approved three new deferred compensation plans that incorporate rules applicable to non-qualified deferred compensation as provided by
Code Section 409A regulations. The Corporation has administered its non-qualified deferred compensation plans in good faith compliance with the Code Section 409A regulations.
In 2008, the Corporation reviewed and updated all plans and agreements to conform with Code Section 409A final regulations.
Code
Section 280G considerations related to tax reimbursements made to executives for taxes on amounts paid in the event of termination following a change in control are discussed
in the narrative to the "Other Potential Post-Termination Employment Benefits" section on page 49.
TABLES AND NARRATIVES
Set forth on pages 38 through 52 are tables showing, for the CEO, CFO, the three other highest paid executive officers and two
retired NEOs of the Corporation, the following: (1) fiscal year 2011 elements of compensation in summary form; (2) equity and non-equity incentives awarded in 2011;
(3) outstanding stock options and stock awards held as of December 31, 2011; (4) the value realized on stock options exercised and stock awards that vested during 2011;
(5) information regarding non-qualified deferred compensation; (6) projected pension benefit values; and (7) projections for other potential
post-termination benefits. On page 53 is a table summarizing the fiscal year 2011 elements of
compensation for the Corporation's nonemployee directors. Accompanying each table are narratives and/or footnotes intended to further the understanding of the information disclosed in the tables. The
tables should be read in
36
conjunction
with the CD&A beginning on page 17, which explains Ball's compensation objectives and philosophy, its process for determining executive compensation and a description of the
elements of compensation.
SUMMARY COMPENSATION TABLE
The Summary Compensation Table on page 38 represents all fiscal year 2011 elements of compensation for Ball's NEOs,
including:
-
-
Base salary earned
-
-
Awards earned under the Annual EVA® Incentive Compensation Plan for 2011 performance
-
-
Awards earned under the LTCIP for the three-year performance cycle ended in 2011
-
-
Fair value of RSU awards pursuant to the deposit share program ("DSP") and performance-contingent RSU awards granted in
2011, calculated in accordance with Topic 718, and
-
-
Fair value of stock option and SAR awards granted in 2011, calculated in accordance with Topic 718
The
2011 payout factors used to determine the amounts earned for the Annual EVA® Incentive Compensation Plan, Acquisition-Related Special Incentive Plan and LTCIP for the
CEO, CFO and the other NEOs are provided in the "2011 Performance Outcome" column on page 26.
In
addition to these elements of compensation, the table also presents the increase in 2011 in the value of pensions payable at age 65 for the NEOs as well as above-market
earnings associated with non-qualified deferred compensation. Certain of the Corporation's predecessor deferred compensation plans provide for an interest rate that is equal to the Moody's
Seasoned Corporate Bond Index ("Moody's") and in some plans, an interest rate that is 5 percentage points higher than Moody's, and in others, a fixed interest rate equal to 9%. No additional
deferrals are permitted into these plans. Any earnings credited to accounts within plans that provide the Moody's rate plus 5 percentage points and/or the 9% fixed interest that is in excess of
above-market earnings that would have been credited at a rate that is 120% of the applicable federal long-term rate have been classified as above-market earnings on deferred compensation.
The
All Other Compensation column represents the sum of the values of:
-
-
Perquisites and other personal benefits
-
-
Corporation contributions to defined contribution plans or deferred compensation plans
-
-
Corporation-paid insurance premiums
-
-
Company match of securities purchases pursuant to the Corporation's broad-based Employee Stock Purchase Plan ("ESPP"), and
-
-
Tax reimbursements made by the Corporation for foreign assignment tax equalization
The
individual values are disclosed in the All Other Compensation Table that follows the Summary Compensation Table.
Details
regarding post-termination compensation are discussed in the section entitled "Other Potential Post-Termination Employment Benefits" on page 49.
37
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal Position
|
|
Year
|
|
Salary
($)
|
|
Stock
Awards
($)
(1)
|
|
Option
Awards
($)
(2)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(3)
|
|
Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings ($)
(4)
|
|
All Other
Compensation
($)
(5)
|
|
Total ($)
|
|
|
|
John A. Hayes
|
|
|
2011
|
|
$
|
896,635
|
|
$
|
2,689,219
|
|
$
|
1,680,526
|
|
$
|
2,606,584
|
|
$
|
133,969
|
|
$
|
184,615
|
|
$
|
8,191,548
|
|
President and CEO
|
|
|
2010
|
|
$
|
725,000
|
|
$
|
1,463,050
|
|
$
|
1,463,760
|
|
$
|
1,885,640
|
|
$
|
73,873
|
|
$
|
75,868
|
|
$
|
5,687,191
|
|
|
|
|
2009
|
|
$
|
575,000
|
|
$
|
841,680
|
|
$
|
985,125
|
|
$
|
931,903
|
|
$
|
49,104
|
|
$
|
261,243
|
|
$
|
3,644,055
|
|
|
|
Scott C. Morrison
|
|
|
2011
|
|
$
|
449,039
|
|
$
|
1,146,145
|
|
$
|
396,774
|
|
$
|
884,656
|
|
$
|
74,359
|
|
$
|
45,516
|
|
$
|
2,996,489
|
|
SVP and CFO
|
|
|
2010
|
|
$
|
400,000
|
|
$
|
528,605
|
|
$
|
266,760
|
|
$
|
723,670
|
|
$
|
39,999
|
|
$
|
44,025
|
|
$
|
2,003,059
|
|
|
|
|
2009
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
Raymond J. Seabrook
|
|
|
2011
|
|
$
|
620,596
|
|
$
|
1,044,858
|
|
$
|
559,002
|
|
$
|
1,460,930
|
|
$
|
261,507
|
|
$
|
42,078
|
|
$
|
3,988,971
|
|
EVP and COO Global Packaging
|
|
|
2010
|
|
$
|
600,000
|
|
$
|
681,075
|
|
$
|
663,480
|
|
$
|
1,412,594
|
|
$
|
247,548
|
|
$
|
45,447
|
|
$
|
3,650,144
|
|
|
|
|
2009
|
|
$
|
490,500
|
|
$
|
581,160
|
|
$
|
681,600
|
|
$
|
802,136
|
|
$
|
172,491
|
|
$
|
51,586
|
|
$
|
2,779,473
|
|
|
|
Charles E. Baker
|
|
|
2011
|
|
$
|
362,041
|
|
$
|
556,516
|
|
$
|
263,865
|
|
$
|
597,502
|
|
$
|
128,635
|
|
$
|
34,600
|
|
$
|
1,943,159
|
|
VP, General Counsel and
|
|
|
2010
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Corporate Secretary
|
|
|
2009
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
Lisa A. Pauley
|
|
|
2011
|
|
$
|
270,481
|
|
$
|
440,210
|
|
$
|
133,887
|
|
$
|
454,073
|
|
$
|
94,065
|
|
$
|
37,378
|
|
$
|
1,430,094
|
|
SVP Human Resources
|
|
|
2010
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
and Administration
|
|
|
2009
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
R. David Hoover
(6)
|
|
|
2011
|
|
$
|
306,519
|
|
$
|
|
|
$
|
|
|
$
|
2,178,649
|
|
$
|
655,389
|
|
$
|
391,676
|
|
$
|
3,532,233
|
|
Chairman, Former CEO
|
|
|
2010
|
|
$
|
1,155,000
|
|
$
|
2,345,925
|
|
$
|
1,812,600
|
|
$
|
4,554,658
|
|
$
|
538,259
|
|
$
|
63,160
|
|
$
|
10,469,602
|
|
|
|
|
2009
|
|
$
|
1,130,000
|
|
$
|
2,244,480
|
|
$
|
2,130,000
|
|
$
|
3,215,872
|
|
$
|
824,558
|
|
$
|
70,365
|
|
$
|
9,615,275
|
|
|
|
David A. Westerlund
|
|
|
2011
|
|
$
|
379,576
|
|
$
|
1,022,665
|
|
$
|
455,411
|
|
$
|
928,677
|
|
$
|
463,560
|
|
$
|
48,374
|
|
$
|
3,298,263
|
|
Former EVP, Administration
|
|
|
2010
|
|
$
|
455,500
|
|
$
|
630,625
|
|
$
|
471,960
|
|
$
|
1,066,982
|
|
$
|
251,206
|
|
$
|
46,719
|
|
$
|
2,922,993
|
|
and Corporate Secretary
|
|
|
2009
|
|
$
|
445,500
|
|
$
|
521,040
|
|
$
|
639,000
|
|
$
|
728,526
|
|
$
|
245,719
|
|
$
|
47,349
|
|
$
|
2,627,134
|
|
|
|
-
(1)
-
Reflects
the fair value of performance-contingent equity awards granted for each reported year, calculated in accordance with Topic 718 assuming the
probable outcome. The assumptions used in the calculation of these amounts are included in the Corporation's Annual Report on Form 10-K in Notes 1 and 16 to the Consolidated
Financial Statements for fiscal year ended December 31, 2011.
-
(2)
-
Reflects
the fair value of ISO or SAR equity awards granted for each reported year, calculated in accordance with Topic 718. The assumptions used in
the calculation of these amounts are included in the Corporation's Annual Report on Form 10-K in Notes 1 and 16 to the Consolidated Financial Statements for fiscal year ended
December 31, 2011.
-
(3)
-
Includes
payouts from the Annual Incentive Compensation Plan and LTCIP, which were earned in 2011 and paid or deferred in 2012. The detail for each NEO is
as follows:
Mr. Hayes
Annual Incentive Compensation Plan = $1,703,243, LTCIP = $787,410, and Special Acquisition Incentive
Plan = $115,931; no portion of the annual incentive was deferred in February 2012.
Mr. Morrison
Annual Incentive Compensation Plan = $548,726, LTCIP = $277,156, and Special Acquisition Incentive
Plan = $58,774; and $274,363 of the annual incentive was deferred in February 2012.
Mr. Seabrook
Annual Incentive Compensation Plan = $879,104, LTCIP = $499,631, and Special Acquisition Incentive
Plan = $82,195; and $100,000 of the annual incentive was deferred in February 2012.
Mr. Baker
Annual Incentive Compensation Plan = $340,319, LTCIP = $209,357, and Special Acquisition Incentive
Plan = $47,826; and $200,000 of the annual incentive was deferred in February 2012.
Ms. Pauley
Annual Incentive Compensation Plan = $265,966, LTCIP = $152,801, and Special Acquisition Incentive
Plan = $35,306; no portion of the annual incentive was deferred in February 2012.
Mr. Hoover
Annual Incentive Compensation Plan = $646,405, LTCIP = $1,474,534, and Special Acquisition Incentive
Plan = $57,710; no portion of the annual incentive was deferred in February 2012.
Mr. Westerlund
Annual Incentive Compensation Plan = $509,166, LTCIP = $367,457, and Special Acquisition Incentive
Plan = $52,054; and $100,000 of the annual incentive was deferred in February 2012.
-
(4)
-
The
aggregate change in pension value and above-market earnings, on deferred compensation for each NEO, is as follows:
Mr. Hayes
$129,566 aggregate change in pension value and $4,403 above-market earnings on deferred compensation.
Mr. Morrison
$74,359 aggregate change in pension value.
Mr. Seabrook
$162,888 aggregate change in pension value and $98,619 above-market earnings on deferred compensation.
Mr. Baker
$106,258 aggregate change in pension value and $22,377 above-market earnings on deferred compensation.
Ms. Pauley
$93,391 aggregate change in pension value and $674 above-market earnings on deferred compensation.
Mr. Hoover
$377,827 aggregate change in pension value and $277,562 above-market earnings on deferred compensation.
Mr. Westerlund
$370,389 aggregate change in pension value and $93,171 above-market earnings on deferred compensation.
38
-
(5)
-
Includes
value of financial planning services, the incremental cost for the personal use of corporate aircraft, the value of executive physical
examinations, employer contributions to 401(k), employer contribution to the 2005 Deferred Compensation Company Stock Plan, employer paid disability insurance premiums, and the value of the
Corporation's match for the ESPP. The value for Mr. Hayes also includes employer paid expenses and tax equalization related to his foreign assignment. Additional information for all is included
in the All Other Compensation Table below.
-
(6)
-
Includes
Chairman of the Board/Director compensation as reported in the All Other Compensation Table and Directors Compensation Table; $202,500 Chairman and
Director Annual Fixed Retainers, $21,247 Directors Annual Incentive Retainer, a Director Annual RSU grant of 3,108 units with a calculated fair value of $115,027, and $2,880 for personal use of the
corporate aircraft, and $5,000 corporate match of donations made pursuant to the Corporation's Matching Gift Program; as also reported in the Directors Compensation Table.
All Other Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Perquisites
and Other
Personal
Benefits
(1)
(2)
|
|
Payments/
Accruals on
Termination
Plans
|
|
Registrant
Contributions
to Defined
Contribution
Plans
|
|
Insurance
Premiums
|
|
Discounted
Securities
Purchases
|
|
Registrant
Contributions
to Deferred
Compensation
Plans
|
|
Tax
Reimbursements
(3)
|
|
Other
Payments
(4)
|
|
|
|
John A. Hayes
|
|
$
|
15,493
|
|
$
|
|
|
$
|
9,800
|
|
$
|
2,234
|
|
$
|
1,200
|
|
$
|
20,000
|
|
$
|
135,888
|
|
$
|
|
|
Scott C. Morrison
|
|
$
|
12,375
|
|
$
|
|
|
$
|
9,800
|
|
$
|
2,141
|
|
$
|
1,200
|
|
$
|
20,000
|
|
$
|
|
|
$
|
|
|
Raymond J. Seabrook
|
|
$
|
7,343
|
|
$
|
|
|
$
|
9,800
|
|
$
|
3,735
|
|
$
|
1,200
|
|
$
|
20,000
|
|
$
|
|
|
$
|
|
|
Charles E. Baker
|
|
$
|
1,150
|
|
$
|
|
|
$
|
9,800
|
|
$
|
2,450
|
|
$
|
1,200
|
|
$
|
20,000
|
|
$
|
|
|
$
|
|
|
Lisa A. Pauley
|
|
$
|
5,150
|
|
$
|
|
|
$
|
9,800
|
|
$
|
2,428
|
|
$
|
|
|
$
|
20,000
|
|
$
|
|
|
$
|
|
|
R. David Hoover
|
|
$
|
15,903
|
|
$
|
|
|
$
|
6,025
|
|
$
|
2,772
|
|
$
|
323
|
|
$
|
20,000
|
|
$
|
|
|
$
|
346,654
|
|
David A. Westerlund
|
|
$
|
13,999
|
|
$
|
|
|
$
|
9,800
|
|
$
|
3,652
|
|
$
|
923
|
|
$
|
20,000
|
|
$
|
|
|
$
|
|
|
|
|
-
(1)
-
Represents
the value of $10,000 for financial planning services for Messrs. Hayes, Morrison, Hoover and Westerlund, $4,000 for Ms. Pauley, and
$2,500 for Mr. Seabrook; the incremental costs for the personal use of the corporate aircraft for Messrs. Hayes $3,693, Morrison $1,225, Seabrook $3,693, Hoover $5,903 and Westerlund
$2,849; and $1,150 for executive physical examinations for all NEOs, except Mr. Hoover. The amount for Mr. Hayes also includes the value of employer-paid expenses for tax
services resulting from his foreign assignment.
-
(2)
-
The
incremental cost of the personal use of the corporate aircraft was calculated based on the 2011 average direct operating cost apportioned among business
versus nonbusiness related passengers.
-
(3)
-
The
amount for Mr. Hayes includes tax equalization payments related to his foreign assignment as it is the Corporation's policy to neutralize the tax
effects by limiting the assignee's tax costs to what the assignee would have paid had the assignee not resided in the foreign location. Beginning in 2010, tax reimbursements for financial planning
services and spouse business travel were eliminated.
-
(4)
-
Includes
Chairman of the Board/Director compensation as reported in the All Other Compensation Table and Directors Compensation Table; $202,500 Chairman and
Director Annual Fixed Retainers, $21,247 Directors Annual Incentive Retainer, a Director Annual RSU grant of 3,108 units with a calculated fair value of $115,027, and $2,880 for personal use of the
corporate aircraft, and $5,000 corporate match of donations made pursuant to the Corporation's Matching Gift Program; as also reported in the Directors Compensation Table.
39
GRANTS OF PLAN-BASED AWARDS TABLE
The table on page 41 summarizes the plan-based awards granted by the Corporation to the NEOs during 2011, which
includes the following:
-
-
Annual cash incentives pursuant to the Annual Incentive Compensation Plan for the 2011 performance cycle
-
-
Cash-based long-term incentives under the LTCIP for the 2011 to 2013 three-year
performance cycle
-
-
Fair value of performance-contingent RSUs for the 2011-2013 three-year performance period,
calculated in accordance with Topic 718
-
-
Fair value of stock-settled SARs and/or Incentive Stock Options ("ISOs"), calculated in accordance with Topic 718
-
-
Fair value of RSUs granted pursuant to the deposit share program ("DSP"), calculated in accordance with Topic 718
Awards
made under the Annual EVA® Incentive Compensation Plan are determined based on EVA® performance. For the NEOs, awards can range from 0-200% of
target. Amounts earned in excess of 200% are banked and may be paid over time in one-third increments based on corporate and/or operating unit performance.
Awards
under the LTCIP are granted on an annual basis and are determined based on Ball's TSR relative to the group of S&P 500 companies described in the CD&A as well as Ball's
ROAIC. Each executive is eligible to receive a range of awards that is based on the executive's average base salary plus target incentive compensation during the three-year performance
cycle. The target and maximum award values shown in the table below reflect projected increases in target total compensation of 4% per year during the performance cycle. The actual target and maximum
award values may vary depending on future changes to target total compensation and on the Corporation's performance. The award made in 2011 is for the three-year performance cycle
beginning January 1, 2011, and ending December 31, 2013.
Performance-contingent
RSUs were granted to the NEOs in 2011. The awards will cliff vest after the performance cycle if the Corporation's ROAIC exceeds its weighted average cost of
capital of 6.2% as established at the beginning of the performance period.
SARs
were granted to the NEOs in 2011. The awards vest annually in 25% increments starting on the first anniversary of the date of grant. Should the price of Ball's stock increase during
the vesting period, each NEO would receive, upon exercise, a number of shares of Corporation stock that reflects the value of the appreciation over the original grant price. ISOs were also granted to
the NEOs in 2011, with a vesting schedule identical to that of the SARs.
A
DSP opportunity was provided to the NEOs in 2011. All NEOs acquired the preestablished number of shares provided by the opportunity and therefore were granted an equal amount of RSUs.
As long as the executive continues to hold the newly acquired shares, the restricted stock units will cliff vest four years from the date of grant; or, if stock ownership guidelines are met, 30% of
the shares or units will vest at the end of the second year and third year and 40% will vest at the end of the fourth year.
Dividends
or dividend equivalents are paid quarterly on the number of unlapsed restricted shares or RSUs accounted for on the record date used for determining dividends payable to
shareholders and at the same dividend rate as paid to shareholders. Dividend equivalents related to performance-contingent RSUs granted pursuant to the 2010 Stock and Cash Incentive Plan will be
accrued and paid only if the performance condition is achieved and the restrictions on the units lapse.
The
vesting of plan-based awards may be accelerated as described in the narrative to the Other Potential Post-Termination Employment Benefits Table.
40
Grants of Plan-Based Awards Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
or Base
Price of
Equity
Incentive
Plan
Awards
or Option
Awards
($ per
Share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Future
Payouts
Under
Equity
Incentive
Plan
Awards
Target
#
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)
|
|
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
Grant Date
Fair Value of
Equity
Incentive
Plan Awards
and Stock
and Option
Awards
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
per Share
Fair Value
of All Other
Stock
Awards
|
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
|
|
NEO
|
|
Grant Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
|
|
|
|
John A. Hayes
|
|
|
01-Jan-11
|
(2)
|
$
|
404,641
|
|
$
|
809,283
|
|
$
|
1,618,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01-Jan-11
|
(3)
|
$
|
0
|
|
$
|
896,635
|
|
$
|
1,793,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Jan-11
|
|
|
|
|
|
|
|
|
|
|
|
46,430
|
|
|
|
|
|
|
|
|
|
|
$
|
35.835
|
|
$
|
1,663,819
|
|
|
|
|
26-Jan-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
171,960
|
|
$
|
35.835
|
|
$
|
1,680,526
|
|
|
|
|
15-Mar-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
$
|
34.180
|
|
|
|
|
|
|
|
$
|
1,025,400
|
|
Scott C. Morrison
|
|
|
01-Jan-11
|
(2)
|
$
|
97,054
|
|
$
|
202,197
|
|
$
|
404,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01-Jan-11
|
(3)
|
$
|
0
|
|
$
|
291,875
|
|
$
|
583,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Jan-11
|
(4)
|
|
|
|
|
|
|
|
|
|
|
11,000
|
|
|
|
|
|
|
|
|
|
|
$
|
35.835
|
|
$
|
394,185
|
|
|
|
|
26-Jan-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,600
|
|
$
|
35.835
|
|
$
|
396,774
|
|
|
|
|
15-Mar-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,000
|
(6)
|
$
|
34.180
|
|
|
|
|
|
|
|
$
|
751,960
|
|
|
|
Raymond J. Seabrook
|
|
|
01-Jan-11
|
(2)
|
$
|
134,355
|
|
$
|
279,907
|
|
$
|
559,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01-Jan-11
|
(3)
|
$
|
0
|
|
$
|
465,447
|
|
$
|
930,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Jan-11
|
(4)
|
|
|
|
|
|
|
|
|
|
|
23,000
|
|
|
|
|
|
|
|
|
|
|
$
|
35.835
|
|
$
|
824,205
|
|
|
|
|
26-Jan-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,200
|
|
$
|
35.835
|
|
$
|
559,002
|
|
|
|
|
15-Feb-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,250
|
|
$
|
36.865
|
|
|
|
|
|
|
|
$
|
82,946
|
|
|
|
|
15-Mar-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,469
|
|
$
|
34.180
|
|
|
|
|
|
|
|
$
|
50,210
|
|
|
|
|
13-May-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,275
|
|
$
|
38.460
|
|
|
|
|
|
|
|
$
|
87,497
|
|
Charles E. Baker
|
|
|
01-Jan-11
|
(2)
|
$
|
57,239
|
|
$
|
114,479
|
|
$
|
228,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01-Jan-11
|
(3)
|
$
|
0
|
|
$
|
181,021
|
|
$
|
362,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Jan-11
|
(4)
|
|
|
|
|
|
|
|
|
|
|
7,300
|
|
|
|
|
|
|
|
|
|
|
$
|
35.835
|
|
$
|
261,596
|
|
|
|
|
26-Jan-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,000
|
|
$
|
35.835
|
|
$
|
263,865
|
|
|
|
|
15-Feb-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
$
|
36.865
|
|
|
|
|
|
|
|
$
|
294,920
|
|
|
|
Lisa A. Pauley
|
|
|
01-Jan-11
|
(2)
|
$
|
58,636
|
|
$
|
121,365
|
|
$
|
242,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01-Jan-11
|
(3)
|
$
|
0
|
|
$
|
141,471
|
|
$
|
282,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Jan-11
|
(4)
|
|
|
|
|
|
|
|
|
|
|
3,700
|
|
|
|
|
|
|
|
|
|
|
$
|
35.835
|
|
$
|
132,590
|
|
|
|
|
26-Jan-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,700
|
|
$
|
35.835
|
|
$
|
133,887
|
|
|
|
|
15-Mar-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
$
|
34.180
|
|
|
|
|
|
|
|
$
|
307,620
|
|
R. David Hoover
|
|
|
01-Jan-11
|
(2)
|
$
|
133,956
|
|
$
|
267,913
|
|
$
|
535,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01-Jan-11
|
(3)
|
$
|
0
|
|
$
|
337,171
|
|
$
|
674,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27-Apr-11
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,108
|
|
$
|
37.010
|
|
|
|
|
|
|
|
$
|
115,027
|
|
|
|
David A. Westerlund
|
|
|
01-Jan-11
|
(2)
|
$
|
80,572
|
|
$
|
167,859
|
|
$
|
335,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01-Jan-11
|
(3)
|
$
|
0
|
|
$
|
265,703
|
|
$
|
531,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26-Jan-11
|
(4)
|
|
|
|
|
|
|
|
|
|
|
19,000
|
|
|
|
|
|
|
|
|
|
|
$
|
35.835
|
|
$
|
680,865
|
|
|
|
|
26-Jan-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,600
|
|
$
|
35.835
|
|
$
|
455,411
|
|
|
|
|
15-Mar-11
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
$
|
34.180
|
|
|
|
|
|
|
|
$
|
341,800
|
|
|
|
-
(1)
-
The
grant date fair value of equity incentive plan awards, based on the probable outcome of the performance condition, and stock and option awards all
calculated in accordance with Topic 718, and as referenced in the Corporation's Annual Report on Form 10-K in Notes 1 and 16 to the Consolidated Financial Statements
for the fiscal year ended December 31, 2011.
-
(2)
-
Represents
grants made under the LTCIP. Payout levels are based on projected average base salary plus target incentive compensation over the
three-year period ending December 31, 2013 (utilizing actual base salary for 2011 and 2012, and a 4% increase in base salary for 2013).
-
(3)
-
Represents
grants made under the Annual Incentive Compensation Plan.
-
(4)
-
Represents
performance-contingent RSUs granted January 26, 2011, at a value of $35.835 per unit, with an assumption of probable outcome if the
performance measurements are met.
-
(5)
-
Represents
grants made under the DSP.
-
(6)
-
Mr. Morrison's
DSP grants include 6,000 shares awarded from the 2010 DSP Opportunity fulfilled in 2011, and 16,000 shares awarded from the 2011 DSP
Opportunity fulfilled in 2011.
-
(7)
-
Represents
Mr. Hoover's annual restricted stock award made to Directors.
OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2011
The following table outlines the outstanding option awards and stock awards held by the NEOs as of December 31, 2011. The
outstanding option awards and stock awards represented in the table were granted to the NEOs over a period of several years, including 2011.
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
NEO
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1)
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration
Date
|
|
Number
of Shares or
Units of Stock
That Have Not
Vested (#)
(2)
|
|
Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)
(3)
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#)
(4)
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($)
(3)
|
|
|
|
|
|
John A. Hayes
|
|
|
8,000
|
|
|
|
|
|
|
|
$
|
11.8725
|
|
|
4/23/2012
|
|
|
38,000
|
|
$
|
1,356,980
|
|
|
146,430
|
|
$
|
5,229,015
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
$
|
14.0775
|
|
|
4/22/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,936
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
4/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,000
|
(5)
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,464
|
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,536
|
(5)
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,250
|
(5)
|
|
20,750
|
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,500
|
(5)
|
|
91,500
|
(5)
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,700
|
|
|
5,100
|
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,800
|
(5)
|
|
155,400
|
(5)
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
171,960
|
(5)
|
|
|
|
$
|
35.8350
|
|
|
1/26/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
|
10,000
|
|
|
|
|
|
|
|
$
|
14.0775
|
|
|
4/22/2013
|
|
|
28,000
|
|
$
|
999,880
|
|
|
33,600
|
|
$
|
1,199,856
|
|
|
|
|
8,520
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
4/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,828
|
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
(5)
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,328
|
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,672
|
(5)
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,500
|
(5)
|
|
4,500
|
(5)
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,700
|
|
|
1,700
|
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,800
|
(5)
|
|
15,800
|
(5)
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,700
|
|
|
5,100
|
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,050
|
(5)
|
|
24,150
|
(5)
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,600
|
(5)
|
|
|
|
$
|
35.8350
|
|
|
1/26/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond J. Seabrook
|
|
|
48,000
|
|
|
|
|
|
|
|
$
|
11.8725
|
|
|
4/23/2012
|
|
|
5,994
|
|
$
|
214,046
|
|
|
79,000
|
|
$
|
2,821,090
|
|
|
|
|
17,088
|
|
|
|
|
|
|
|
$
|
14.0775
|
|
|
4/22/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,000
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
4/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,000
|
(5)
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,000
|
(5)
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
275
|
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,175
|
(5)
|
|
15,725
|
(5)
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,000
|
(5)
|
|
64,000
|
(5)
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,100
|
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,550
|
(5)
|
|
67,650
|
(5)
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,200
|
(5)
|
|
|
|
$
|
35.8350
|
|
|
1/26/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. Baker
|
|
|
14,000
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
4/27/2015
|
|
|
8,000
|
|
$
|
285,680
|
|
|
28,900
|
|
$
|
1,032,019
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
(5)
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,680
|
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,320
|
(5)
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,500
|
(5)
|
|
6,500
|
(5)
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,900
|
|
|
3,900
|
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,100
|
(5)
|
|
24,100
|
(5)
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,750
|
|
|
5,250
|
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
(5)
|
|
24,000
|
(5)
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,000
|
(5)
|
|
|
|
$
|
35.8350
|
|
|
1/26/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
|
5,000
|
|
|
|
|
|
|
|
$
|
14.0775
|
|
|
4/22/2013
|
|
|
9,000
|
|
$
|
321,390
|
|
|
14,900
|
|
$
|
532,079
|
|
|
|
|
2,800
|
|
|
|
|
|
|
|
$
|
17.0550
|
|
|
4/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
$
|
17.0550
|
|
|
4/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,250
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
4/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,250
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
4/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,500
|
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,500
|
(5)
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,152
|
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,848
|
(5)
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,040
|
|
|
680
|
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,460
|
(5)
|
|
2,820
|
(5)
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,100
|
|
|
2,100
|
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,900
|
(5)
|
|
11,900
|
(5)
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,150
|
|
|
3,450
|
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,500
|
(5)
|
|
10,500
|
(5)
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,700
|
(5)
|
|
|
|
$
|
35.8350
|
|
|
1/26/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. David Hoover
|
|
|
222,000
|
|
|
|
|
|
|
|
$
|
11.8725
|
|
|
4/23/2012
|
|
|
3,108
|
|
$
|
110,987
|
|
|
205,000
|
|
$
|
7,320,550
|
|
|
|
|
105,088
|
|
|
|
|
|
|
|
$
|
14.0775
|
|
|
4/22/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
164,000
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
4/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
232,000
|
(5)
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
4/26/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262,000
|
(5)
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
4/25/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,100
|
|
|
|
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
244,900
|
(5)
|
|
|
|
|
|
|
$
|
25.0550
|
|
|
4/23/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
(5)
|
|
|
|
|
|
|
$
|
20.0400
|
|
|
1/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,800
|
|
|
|
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
258,200
|
(5)
|
|
|
|
|
|
|
$
|
25.2250
|
|
|
1/27/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Westerlund
|
|
|
18,000
|
|
|
|
|
|
|
|
$
|
11.8725
|
|
|
4/23/2012
|
|
|
|
|
|
|
|
|
70,000
|
|
$
|
2,499,700
|
|
|
|
|
17,088
|
|
|
|
|
|
|
|
$
|
14.0775
|
|
|
4/22/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,000
|
|
|
|
|
|
|
|
$
|
19.8700
|
|
|
9/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,000
|
(5)
|
|
|
|
|
|
|
$
|
21.8450
|
|
|
9/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,000
|
(5)
|
|
|
|
|
|
|
$
|
24.6600
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
275
|
|
|
|
|
$
|
25.0550
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,175
|
(5)
|
|
14,725
|
(5)
|
|
|
|
$
|
25.0550
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(5)
|
|
60,000
|
(5)
|
|
|
|
$
|
20.0400
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,100
|
|
|
|
|
$
|
25.2250
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,550
|
(5)
|
|
46,650
|
(5)
|
|
|
|
$
|
25.2250
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,600
|
(5)
|
|
|
|
$
|
35.8350
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42
-
(1)
-
The
vesting schedule for the unexercisable stock options and SARs become exercisable in 25% annual increments on the anniversary of the grant date,
beginning on the first anniversary.
-
(2)
-
The
vesting schedule for units not yet vested for each NEO is as follows:
Mr. Hayes
4,000 on January 23 in years 2012 and 2013, and 9,000 on March 15 in years 2013 and 2014, and 12,000 on
March 15, 2015.
Mr. Morrison
1,800 on June 15 in years 2012 and 2013, and 2,400 on June 15, 2014, and 6,600 on March 15 in years
2013 and 2014, and 8,800 on March 15, 2015.
Mr. Seabrook
1,116 on March 15 in years 2013 and 2014, and 1,487 on March 15, 2015, and 682 on June 15, 2013, and
683 on June 15, 2014, and 910 on June 15, 2015.
Mr. Baker
2,400 on March 15 in years 2013 and 2014, and 3,200 on March 15, 2015.
Ms. Pauley
2,700 on March 15 in years 2013 and 2014, and 3,600 on March 15, 2015.
-
(3)
-
The
market value of shares is based on $35.71, the closing price of Ball Corporation common stock on December 31, 2011.
-
(4)
-
The
vesting date for the units not yet vested for each NEO is as follows:
Mr. Hayes
42,000 on January 31, 2012, contingent on meeting the performance goal for the period ending December 31, 2011;
and 58,000 on January 31, 2013, contingent on meeting the performance goal for the period ending December 31, 2012; and 46,430 on January 31, 2014, contingent on meeting the
performance goal for the period ending December 31, 2013.
Mr. Morrison
8,000 on January 31, 2012, contingent on meeting the performance goal for the period ending December 31,
2011; and 14,600 on January 31, 2013, contingent on meeting the performance goal for the period ending December 31, 2012; and 11,000 on January 31, 2014, contingent on meeting the
performance goal for the period ending December 31, 2013.
Mr. Seabrook
29,000 on January 31, 2012, contingent on meeting the performance goal for the period ending December 31,
2011; and 27,000 on January 31, 2013, contingent on meeting the performance goal for the period ending December 31, 2012; and 23,000 on January 31, 2014, contingent on meeting the
performance goal for the period ending December 31, 2013.
Mr. Baker
12,000 on January 31, 2012, contingent on meeting the performance goal for the period ending December 31, 2011;
and 9,600 on January 31, 2013, contingent on meeting the performance goal for the period ending December 31, 2012; and 7,300 on January 31, 2014, contingent on meeting the
performance goal for the period ending December 31, 2013.
Ms. Pauley
6,000 on January 31, 2012, contingent on meeting the performance goal for the period ending December 31, 2011;
and 5,200 on January 31, 2013, contingent on meeting the performance goal for the period ending December 31, 2012; and 3,700 on January 31, 2014, contingent on meeting the
performance goal for the period ending December 31, 2013.
Mr. Hoover
112,000 on January 31, 2012, contingent on meeting the performance goal for the period ending December 31,
2011; and 93,000 on January 31, 2013, contingent on meeting the performance goal for the period ending December 31, 2012.
Mr. Westerlund
26,000 on January 31, 2012, contingent on meeting the performance goal for the period ending December 31,
2011; and 25,000 on January 31, 2013, contingent on meeting the performance goal for the period ending December 31, 2012; and 19,000 on January 31, 2014, contingent on meeting the
performance goal for the period ending December 31, 2013.
-
(5)
-
Represents
a grant of stock-settled SARs.
OPTION EXERCISES AND STOCK VESTED IN 2011
The following table summarizes for each NEO the options exercised and the stock awards vested during 2011. The options that were
exercised by each NEO were granted in prior years and became exercisable pursuant to a prescribed vesting schedule. The value realized on exercise reflects the appreciation in the stock price from the
option base price on grant date to the exercise date and is reported on a before-tax basis. The shares acquired upon vesting for each NEO were for restricted stock/units granted in prior
years that vested pursuant to a prescribed vesting schedule. The value realized reflects the closing stock price on the vesting date and is also reported on a before-tax basis. NEOs can
defer the receipt of units of certain awards into the Ball Corporation 2005 Deferred Compensation Company Stock Plan, pursuant to which distributions may take place no earlier than the participant's
separation from service. Information regarding the 2005 Deferred Compensation Company Stock Plan is provided in the "Non-Qualified Deferred Compensation" section that follows. Footnotes
are provided to detail circumstances when amounts realized upon vesting were
43
deferred.
The value realized on vesting also includes the vested value of dividend equivalents paid during 2011 on outstanding restricted stock or RSUs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
NEO
|
|
Number of
Shares
Acquired on
Exercise
|
|
Value
Realized on
Exercise ($)
|
|
Number of
Shares
Acquired on
Vesting
(2)
|
|
Value
Realized on
Vesting
($)
(1)
(2)
(3)
|
|
|
|
|
|
John A. Hayes
|
|
|
18,064
|
|
$
|
309,086
|
|
|
56,000
|
|
$
|
2,025,000
|
|
Scott C. Morrison
|
|
|
17,592
|
|
$
|
593,093
|
|
|
10,000
|
|
$
|
368,278
|
|
|
|
Raymond J. Seabrook
|
|
|
20,525
|
|
$
|
424,773
|
|
|
40,000
|
|
$
|
1,439,696
|
|
Charles E. Baker
|
|
|
8,000
|
|
$
|
133,880
|
|
|
17,600
|
|
$
|
631,048
|
|
|
|
Lisa A. Pauley
|
|
|
10,796
|
|
$
|
273,614
|
|
|
9,600
|
|
$
|
350,306
|
|
R. David Hoover
|
|
|
122,000
|
|
$
|
3,109,863
|
|
|
135,500
|
|
$
|
4,877,110
|
|
|
|
David A. Westerlund
|
|
|
66,417
|
|
$
|
1,903,120
|
|
|
37,357
|
|
$
|
1,338,114
|
|
|
|
-
(1)
-
Value
realized on vesting is based on the closing stock price on the day the RSUs vested.
-
(2)
-
Amounts
deferred to the 2005 Deferred Compensation Company Stock Plan upon vesting of stock awards for each NEO is as follows:
Mr. Hayes
Deferred 26,000 vested RSUs valued at $924,820.
Mr. Morrison
Deferred 5,000 vested RSUs valued at $177,850.
Mr. Seabrook
Deferred 13,000 vested RSUs valued at $462,410.
Mr. Baker
Deferred 9,600 vested RSUs valued at $338,056.
Ms. Pauley
Deferred 7,680 vested RSUs valued at $273,178.
Mr. Hoover
Deferred 5,500 vested RSUs valued at $195,635.
-
(3)
-
Value
realized on vesting also includes the value of dividend equivalents vested and paid during 2011 on outstanding restricted stock or RSU balances
eligible for dividend equivalents on the record date at a dividend rate equal to that paid to the Corporation's common shareholders. Dividend equivalents paid during 2011 for each NEO is as follows:
Mr. Hayes
$36,540
Mr. Morrison
$12,628
Mr. Seabrook
$17,096
Mr. Baker
$8,512
Ms. Pauley
$5,250
Mr. Hoover
$58,053
Mr. Westerlund
$15,680
44
NON-QUALIFIED DEFERRED COMPENSATION
The Corporation has three active deferred compensation plans to which eligible participants may make contributions: the 2005 Ball
Corporation Deferred Compensation Plan, the 2005 Ball Corporation Deferred Compensation Company Stock Plan, and the 2005 Ball Corporation Deferred Compensation Plan for Directors.
-
-
2005 Deferred Compensation Plan and Deferred Compensation Plan for
Directors
Eligible employee participants may defer payment of a portion or all of their annual incentive compensation, and nonemployee members of the Corporation's
Board may defer a portion or all of their annual director fees; and may also include the deferral of payments of other forms of a NEO's cash compensation, as mandated by the Committee, to the extent
that such compensation would not be deductible in a given year as a result of the limitations of Code Section 162(m). Amounts deferred or credited are notionally invested among various
investment funds where the balance is not actually invested in investment funds, but the return on the participant's balance is determined as if the amounts were invested in those funds. The menu of
investment funds consists of 14 mutual fund-like investments. The one-year annual rate of return of the funds ranged from -14.34% to 12.15%, and the
three-year average annual rate of return of the funds ranged from a 0.2% to 21.13%. Distributions are based on the payment schedule elected by the participant, and may occur in service or
commence at a defined point no sooner than six months following separation of service, in the form of either a lump sum and/or annual installments ranging between two and fifteen years.
-
-
2005 Deferred Compensation Company Stock Plan
Eligible
employee participants may defer payment of a portion or all of their annual incentive compensation, and nonemployee members of the Corporation's Board as participants may defer payment of a portion or
all of their annual director fees. Elections to defer annual incentive compensation or director fees are made annually. Participants may also elect to defer the issuance of RSUs. Amounts are deferred
or credited to a participant account as stock units with each unit having the value equivalent to one share of Ball Corporation common stock, and also receive a 20% Corporation match with a maximum
match of $20,000 per year. Pursuant to specified timing rules, participants may reallocate a prescribed percentage of units to other mutual fund-like investments; however, at least 50% of
the balance will remain in stock units until retirement. Dividend equivalents, applicable to any balance denominated in units, are credited to participant accounts as of each dividend payment date for
the Corporation's common stock. Distributions follow the payment schedule elected by the participant and may commence at a defined point no sooner than six months following separation of service, in
the form of a lump sum and/or annual installments ranging between two and fifteen years.
The
basis for investment earnings on prior plans varies as follows:
-
-
2001 Deferred Compensation Plan and 2002 Deferred Compensation Plan for
Directors
Balance is notionally invested in mutual fund-like investments.
-
-
2000 Deferred Compensation Company Stock Plan
Balance is
represented in the form of stock units, with each unit having a value equivalent to one share of Ball Corporation common stock. Dividend equivalents are credited to the account as of each dividend
payment date for the Corporation's common stock.
-
-
1989 Deferred Compensation Plan
Provides for an annual return
equal to the average composite yield on Moody's for the 12 months ending October 31.
-
-
1986 Deferred Compensation Plan and 1986 Deferred Compensation Plan for Directors and 1988
Deferred Compensation Plan
Provides for an annual return equal to the average composite yield on Moody's for the 12 months ending October 31 plus
5 percentage points; additionally, the 1988 Deferred Compensation Plan includes a fixed rate set by the Corporation at 9% for company directed deferrals.
-
-
Ball-InCon Deferred Compensation Plan
Depending on
the time of the initial deferral, the plan provides for an annual return equal to the average composite yield on Moody's for the 12 months ending October 31 or the Moody's rate plus
5 percentage points.
The
following table provides information related to the Corporation's deferred compensation plans. The Aggregate Balance at Last FYE column represents compensation earned, deferred and
accumulated by the NEOs over many years and does not represent current year compensation.
45
Non-Qualified Deferred Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Executive
Contributions in
Last FY ($)
|
|
Registrant
Contributions in
Last FY ($)
|
|
Aggregate
Earnings in
Last FY ($)
|
|
Aggregate
Withdrawals/
Distributions ($)
|
|
Aggregate
Balance at
Last FYE ($)
|
|
|
|
John A. Hayes
|
|
$
|
1,847,279
|
|
$
|
20,000
|
|
$
|
274,174
|
|
$
|
|
|
$
|
8,691,166
|
|
Scott C. Morrison
|
|
$
|
327,825
|
|
$
|
20,000
|
|
$
|
165,600
|
|
$
|
|
|
$
|
4,177,746
|
|
Raymond J. Seabrook
|
|
$
|
587,345
|
|
$
|
20,000
|
|
$
|
677,843
|
|
$
|
|
|
$
|
14,211,299
|
|
Charles E. Baker
|
|
$
|
545,753
|
|
$
|
20,000
|
|
$
|
107,458
|
|
$
|
|
|
$
|
2,637,246
|
|
Lisa A. Pauley
|
|
$
|
391,698
|
|
$
|
20,000
|
|
$
|
79,453
|
|
$
|
|
|
$
|
1,980,081
|
|
R. David Hoover
|
|
$
|
195,608
|
|
$
|
20,000
|
|
$
|
1,356,949
|
|
$
|
|
|
$
|
56,351,109
|
|
David A. Westerlund
|
|
$
|
100,000
|
|
$
|
20,000
|
|
$
|
444,121
|
|
$
|
|
|
$
|
13,792,392
|
|
|
|
Mr. Hayes
$20,000 of the Registrant Contributions and $4,403 of the Aggregate Earnings are reported as compensation in the Summary
Compensation Table for fiscal year 2011 and $2,056,110 of the Aggregate Balance was reported as compensation in the Summary Compensation Table since 2006. The Aggregate Earnings reflects $(63,648)
from cash accounts composed of $6,408 based on Moody's rate plus 5 percentage points and $(70,056) based on notional investment in investment funds, plus $337,822 based on an increase in value
and dividend equivalents on equity accounts.
Mr. Morrison
$20,000 of the Registrant Contributions is reported as compensation in the Summary Compensation Table for fiscal year 2011
and $367,850 of the Aggregate Balance was reported as compensation in the Summary Compensation Table since 2010. The Aggregate Earnings reflects $(12,230) from cash accounts composed of notional
investment in investment funds, plus $177,830 based on an increase in value and dividend equivalents on equity accounts.
Mr. Seabrook
$20,000 of the Registrant Contributions and $95,619 of the Aggregate Earnings are reported as compensation in the Summary
Compensation Table for fiscal year 2011 and $2,270,622 of the Aggregate Balance has been reported as compensation in the Summary Compensation Table since 2006. The Aggregate Earnings reflects $130,348
from cash accounts composed of $139,157 based on Moody's rate plus 5 percentage points, $8,277 based on Moody's rate and $(17,086) based on notional investment in investment funds, plus
$547,495 based on an increase in value and dividend equivalents on equity accounts.
Mr. Baker
$20,000 of the Registrant Contributions and $22,377 of the Aggregate Earnings are reported as compensation in the Summary
Compensation Table for fiscal year 2011. The Aggregate Earnings reflects $53,170 from cash accounts composed of $32,566 based on Moody's rate plus 5 percentage points, $1,777 based on Moody's
rate and $18,827 based on notional investment in investment funds, plus $54,288 based on an increase in value and dividend equivalents on equity accounts.
Ms. Pauley
$20,000 of the Registrant Contributions and $674 of the Aggregate Earnings are reported as compensation in the Summary
Compensation Table for fiscal year 2011. The Aggregate Earnings reflects $9,762 from cash accounts composed of $981 based on Moody's rate plus 5 percentage points and $8,781 based on notional
investment in investment funds, plus $69,691 based on an increase in value and dividend equivalents on equity accounts.
Mr. Hoover
$20,000 of the Registrant Contributions and $277,562 of the Aggregate Earnings are reported as compensation in the Summary
Compensation Table for fiscal year 2011 and $3,451,048 of the Aggregate Balance has been reported as compensation in the Summary Compensation Table since 2006. The Aggregate Earnings reflects
$(264,489) from cash accounts composed of $257,210 based on Moody's rate plus 5 percentage points, $156,721 based on a 9% fixed rate and $(678,422) based on notional investment in investment
funds, plus $1,621,438 based on an increase in value and dividend equivalents on equity accounts.
Mr. Westerlund
$20,000 of the Registrant Contributions and $93,171 of the Aggregate Earnings are reported as compensation in the
Summary Compensation Table for fiscal year 2011 and $1,307,912 of the Aggregate Balance has been reported as compensation in the
Summary Compensation Table since 2006. The Aggregate Earnings reflects $(50,965) from cash accounts composed of $135,593 based on Moody's rate plus 5 percentage points, $5,000 based on Moody's
rate and $(191,558) based on notional investment in investment funds and $495,086 based on an increase in value and dividend equivalents on equity accounts.
PENSION BENEFITS
Retirement benefits are provided to the NEOs under a qualified salaried defined benefit pension plan and a non-qualified
Supplemental Executive Retirement Plan ("SERP"). The Pension Benefits Table on page 49 shows each NEO's number of years of credited service, present value of accumulated benefits and payments
during fiscal year 2011 for the qualified plan and the SERP. The present value of the accumulated benefit is the December 31, 2011, value of the annual benefit that was earned as of
December 31, 2011.
46
The
Corporation offers two qualified salaried defined benefit pension plans in the U.S. that provide the same benefits. One plan covers its Aerospace subsidiary's salaried employees and
the other covers all other U.S. salaried employees. The NEOs are covered under the latter. The qualified plans were designed to provide tax-qualified pension benefits that are generally
available to all U.S. salaried employees. Effective January 1, 2007, the Corporation changed the formula by which the accrued pension benefit under the plans is determined. Prior to
January 1, 2007, the accrued pension benefit expressed as a monthly annuity payable at age 65 was based on final average salary, covered compensation and years of service. After
January 1, 2007, the accrued pension benefit is a monthly annuity that is equivalent to a lump sum payable when the participant reaches age 65 calculated on base salary each year, the Social
Security Wage Base ("SSWB") and a multiple based on years of service. Payments of accrued benefits earned may be in the form of an annuity, lump sum or a combination of both, depending on the election
of the participant at retirement. The Corporation also sponsors a non-qualified SERP that mirrors the pension plans and is designed to replace the benefits that would have been provided
under the pension plans if they were not subject to IRS-imposed limits. Under the Code, the maximum permissible benefit from the qualified plans for retirement in 2011 is $195,000 and
annual compensation exceeding $245,000 in 2011 cannot be considered in computing the maximum permissible benefit under the plans.
Terms for Accrued Benefits Prior to January 1, 2007
The monthly accrued benefit for benefits earned prior to January 1, 2007, was determined according to the following
formula:
-
-
1%
times
Final Monthly Average Salary
plus
0.5%
times
Final Monthly Average Salary in excess of Covered Compensation
times
Benefit Service through December 31, 2006, up to a maximum of 35 years, where
-
-
Salary
is defined to be a NEO's monthly base salary excluding bonus and
incentive compensation.
Final Monthly Average Salary
is calculated based on the highest average for any 60 consecutive months out of the last 120 months,
through December 31, 2006.
Covered Compensation
is an average of the SSWB in effect during a NEO's career. The SSWB is the maximum monthly amount of income on which
FICA taxes are due. The years included in the average are the 35 years ending in the year the NEO is eligible for an unreduced social security benefit. This portion of the benefit formula
accounts for the fact that social security does not cover earnings over a certain level.
Benefit Service
is a NEO's service as a salaried employee with the Corporation plus any service with a predecessor plan as appropriate.
Participants are 100% vested in their benefit at the time they are credited with five or more years of service with the Corporation.
Normal
retirement age under the plan is 65 with a minimum of five years of benefit service, but a participant may elect to receive payment upon termination or at any time after reaching
age 55. Benefits paid before age 65 are subject to reduction based on the age and service at termination. Participants who terminate employment after age 55 with at least 10 years of vesting
service will receive a reduction of benefit equal to 4% for each year that benefit commencement age precedes age 65 but is greater than age 60, and a 6% reduction for each year that benefit
commencement age precedes age 60. Benefits for participants not meeting these requirements are reduced for payment prior to age 65 on an actuarial equivalent basis.
Terms for Accrued Benefits Beginning January 1, 2007
The monthly annuity, which is the equivalent of a lump sum benefit payable at age 65, is based on a percentage of the participant's
base pay each year as follows:
|
|
|
|
If, at the beginning of the year, benefit service is:
|
|
Annual lump sum benefit accrued and payable at age 65
|
|
0 to 9 full years of benefit service
|
|
11.5% of base pay + 5% of base pay over 50% of SSWB
(1)
|
|
10 to 19 full years of benefit service
|
|
13.0% of base pay + 5% of base pay over 50% of SSWB
(1)
|
|
20 or more full years of benefit service
|
|
15.0% of base pay + 5% of base pay over 50% of SSWB
(1)
|
|
-
(1)
-
SSWB
is the maximum earnings on which the participant pays FICA tax each year. This portion of the pension formula accounts for the fact that social
security does not cover earnings over a certain level.
47
Base pay is the NEO's base salary during the calendar year excluding incentive compensation, severance pay or vacation payouts.
Upon
termination or retirement, the vested pension benefit accrued beginning January 1, 2007, may be paid to the participant in either a lump sum or annuity. If the benefit is
paid prior to age 65, the benefit will be reduced 5% compounded annually for each year the payment is made before such age.
Terms for SERP Accrued Benefits
Since the SERP mirrors the qualified pension plan, the formulas for deriving the SERP accrued benefits are the same as those described
above for the pension plans; however, the amount of retirement benefit the participants receive is equal to the difference between the benefit calculated without IRS limits and the benefits calculated
using the IRS limits. Effective January 1, 2007, the SERP was amended by the Committee to provide participants with benefits accrued as of December 31, 2006, a one-time
option to elect the form of payment under which the participant will receive benefits in the future. The payment options available consist of various annuities and a lump sum. For all SERP benefits
accrued beginning January 1, 2007, participants will receive benefits only in the form of a lump sum. In accordance with Code Section 409A, payments from the SERP will commence six
months after termination of employment. The SERP was also amended to provide that when determining lump sum payments, the SERP would use the same assumptions that exist in the salaried retirement
plans except that the interest rate used shall be equal to four-fifths of the interest rate used to determine lump sum benefits under those salaried retirement plans in recognition that
payments from the SERP cannot be rolled into a tax-deferred account such as an IRA.
Present Value Assumptions
The Present Value of Accumulated Benefit reported in the table below is based on the following assumptions, which are consistent with
those used for the Corporation's Consolidated Financial Statements for fiscal year ending December 31, 2011:
|
|
|
|
Discount Rate
|
|
4.75%
|
|
Mortality
|
|
RP-2000 Mortality Tableprojected 15 years
|
|
Preretirement Decrements
|
|
None
|
|
Form of Pension Payment
|
|
Life Only Annuity50%
Lump Sum50%
|
|
48
Pension Benefits Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Plan Name
|
|
Number
of Years
Credited
Service
|
|
Present
Value of
Accumulated
Benefit ($)
|
|
Payments
During
Last
Fiscal
Year ($)
|
|
|
|
John A. Hayes
|
|
Qualified
|
|
|
12.9
|
|
$
|
182,963
|
|
$
|
|
|
|
|
SERP
|
|
|
12.9
|
|
$
|
181,537
|
|
$
|
|
|
Scott C. Morrison
|
|
Qualified
|
|
|
11.3
|
|
$
|
185,106
|
|
$
|
|
|
|
|
SERP
|
|
|
11.3
|
|
$
|
39,277
|
|
$
|
|
|
Raymond J. Seabrook
|
|
Qualified
|
|
|
19.2
|
|
$
|
571,299
|
|
$
|
|
|
|
|
SERP
|
|
|
19.2
|
|
$
|
206,120
|
|
$
|
|
|
Charles E. Baker
|
|
Qualified
|
|
|
18.5
|
|
$
|
372,056
|
|
$
|
|
|
|
|
SERP
|
|
|
18.5
|
|
$
|
80,721
|
|
$
|
|
|
Lisa A. Pauley
|
|
Qualified
|
|
|
24.0
|
|
$
|
366,051
|
|
$
|
|
|
|
|
SERP
|
|
|
24.0
|
|
$
|
2,791
|
|
$
|
|
|
R. David Hoover
|
|
Qualified
|
|
|
40.8
|
|
$
|
|
|
$
|
1,439,761
|
|
|
|
SERP
|
|
|
40.8
|
|
$
|
|
|
$
|
5,322,965
|
|
David A. Westerlund
|
|
Qualified
|
|
|
36.1
|
|
$
|
941,321
|
|
$
|
177,329
|
|
|
|
SERP
|
|
|
36.1
|
|
$
|
679,129
|
|
$
|
|
|
|
|
OTHER POTENTIAL POST-TERMINATION EMPLOYMENT BENEFITS
This section provides information related to the potential post-termination employment benefits that could be payable or
due to the CEO and other NEOs
under various termination scenarios. Such potential benefits payable or due may result from the Corporation's obligation to the executive under (1) any existing compensation and benefit plan,
policy, practice or program of the Corporation that is generally available to all participants, or (2) under any agreement specifically entered into by the Corporation and the executive.
In
general, the compensation and benefit elements provided to employees, including the CEO and other NEOs, are governed by provisions, terms or procedures of plan documents, policies and
practices that define the rights of and the obligations due to the participant in the case of termination of employment. These provisions, terms or procedures apply to all employees, including the CEO
and other NEOs receiving such compensation or benefit. Such compensation and benefit elements would include annual incentive compensation, long-term cash incentives, long-term
equity incentives, retirement benefits and deferred compensation.
Ball
has entered into certain severance benefit and change in control agreements with the CEO and other NEOs which contain provisions that require Ball to provide
post-termination payments or benefits to each executive in the event of termination of employment without cause or termination following a change in control of the Corporation. The
Corporation does not have employment agreements with any of these executives. The respective agreements with the NEOs contain customary non-compete provisions, non-solicitation
provisions, non-disparagement provisions and confidentiality covenants, and were amended and restated in 2008 to conform with the Code Section 409A.
49
The
key provisions, terms or procedures that would apply to the CEO and other NEOs for the various compensation and benefit elements under various termination scenarios are summarized in
the table below. It is followed by another table containing an estimate of the compensation payable or the value of compensation elements due to the CEO and other NEOs under the various termination
scenarios assuming termination was effective at the end of the fiscal year 2011.
Post-Termination Employment Benefits Summary
|
|
|
|
|
|
|
|
|
|
|
|
Component
|
|
Voluntary or
Termination
for Cause
|
|
Death
|
|
Disability
|
|
Termination
Without Cause
|
|
Termination
Following a
Change in Control
|
|
Cash Severance
|
|
No additional benefits received.
|
|
No additional benefits received.
|
|
No additional benefits received.
|
|
CEO2 times base salary plus target annual incentive.
All Other NEOs1.25 to 1.5 times base salary plus target annual incentive.
Form of payment to all NEOs is a lump sum.
|
|
All NEOs2 times base salary plus target annual incentive, which is paid in a lump sum.
|
|
Treatment of Annual Incentives
|
|
If terminated mid- performance cycle, NEOs age 55 or above receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
If death occurs mid- performance cycle, NEOs' beneficiaries receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
If disability occurs mid-performance cycle, NEOs receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
If terminated mid- performance cycle, NEOs receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
If terminated mid- performance cycle, NEOs receive a prorated portion of the target award.
|
|
Treatment of Long-Term Cash Incentives
|
|
If terminated mid- performance cycle, NEOs age 55 or above receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
If death occurs mid- performance cycle, NEOs' beneficiaries receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
If disability occurs mid-performance cycle, NEOs receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
If terminated mid- performance cycle, NEOs age 55 or above receive a prorated portion of the award at the end of the performance cycle contingent on meeting the performance goal.
|
|
LTCIPNEOs receive a lump sum payment based on the performance at the end of the calendar year immediately preceding the change in control.
Special AcquisitionNEOs receive a prorated portion of the target award.
|
|
Treatment of Restricted Stock/ Deposit Shares
|
|
Restricted Stock/UnitsAll unvested stock/units are forfeited.
Deposit SharesNEOs age 55 or above receive a prorated portion of unvested stock/units. All other NEOs forfeit unvested stock/units.
|
|
Restricted Stock/UnitsAll unvested stock/units vest.
Deposit SharesAll unvested stock/units vest.
|
|
Restricted Stock/UnitsAll unvested stock/units vest.
Deposit SharesAll unvested stock/units vest.
|
|
Restricted Stock/UnitsAll unvested stock/units are forfeited.
Deposit SharesNEOs age 55 or above receive a prorated portion of unvested stock/units. All other NEOs forfeit unvested stock/units.
|
|
Restricted Stock/UnitsAll unvested stock/units vest.
Deposit SharesAll unvested stock/units vest.
|
|
Treatment of Performance- Contingent RSUs
|
|
For NEOs age 55 or above with 15 years of service or age 60 or above with 10 years of service and who have signed a noncompetition agreement, unvested units will cliff vest on the vest date if the performance
measure is achieved. For all other NEOs, the unvested units are forfeited.
|
|
All unvested units vest.
|
|
All unvested units vest.
|
|
For NEOs age 55 or above with 15 years of service or age 60 or above with 10 years of service and who have signed a noncompetition agreement, unvested units will cliff vest on the vest date if the performance
measure is achieved. For all other NEOs, the unvested units are forfeited.
|
|
All unvested units vest.
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
Component
|
|
Voluntary or
Termination
for Cause
|
|
Death
|
|
Disability
|
|
Termination
Without Cause
|
|
Termination
Following a
Change in Control
|
|
Treatment of Stock Options
|
|
Stock Options Granted Prior to 2007Unvested shares are forfeited. For NEOs age 55 or above, options remain exercisable for a maximum of 2 years (90 days for ISOs). For all other NEOs, the options
remain exercisable for 30 days.
Stock Options Granted in 2007 or AfterFor NEOs age 55 or above with 15 years of service or age 60 or above with 10 years of service and who have signed a non competition agreement, unvested options will continue to vest under the
normal schedule and options will remain exercisable for a maximum of 5 years (90 days for ISOs). For all other NEOs, the same provisions as those described above for grants made prior to 2007 are applicable.
|
|
Stock OptionsAll options vest.
|
|
Stock OptionsShares continue to vest pursuant to the original vesting schedule.
|
|
Stock Options Granted Prior to 2007Unvested shares are forfeited. For NEOs age 55 or above, options remain exercisable for a maximum of 2 years (90 days for ISOs). For all other NEOs, the options
remain exercisable for 30 days.
Stock Options Granted in 2007 or AfterFor NEOs age 55 or above with 15 years of service or age 60 or above with 10 years of service and who have signed a non competition agreement, unvested options will continue to vest under the
normal schedule and options will remain exercisable for a maximum of 5 years (90 days for ISOs). For all other NEOs, the same provisions as those described above for grants made prior to 2007 are applicable.
|
|
Stock OptionsAll options vest and in lieu of common stock issuable upon exercise, the NEOs are paid a lump sum amount equal to the number of outstanding shares underlying the options times the excess of the
closing stock price on the date of termination over the exercise price.
|
|
Retirement Benefits
|
|
No additional benefits received.
|
|
No additional benefits received.
|
|
No additional benefits received.
|
|
CEOPaid a lump sum amount equal to an additional 2 years of service credited.
All Other NEOsPaid a lump sum amount equal to an additional 1.25 to 1.5 years of service credited.
|
|
All NEOsPaid a lump sum amount equal to an additional 2 years of service credited.
|
|
Health and Welfare Benefits
|
|
No additional benefits received.
|
|
No additional benefits received.
|
|
Continue for period of disability.
|
|
CEOContinued for 2 years.
All Other NEOsContinued for 1.25 to 1.5 years.
|
|
All NEOsContinued for 2 years.
|
|
Other Benefits
|
|
Financial planning services valued at $10,000 per year for 2 years.
|
|
No additional benefits received.
|
|
No additional benefits received.
Long-term disability payment of up to $15,000 per month.
|
|
Outplacement benefits valued at $20,000.
Financial planning services valued at $10,000 per year for 2 years.
|
|
Outplacement benefits valued at $20,000.
Payment for excise taxes incurred as a result of Code Section 280G excess payments, if applicable.
|
|
A termination without cause will be triggered if the NEO is terminated in either an Actual Termination not for cause or a Constructive
Termination. An Actual Termination is any termination by the Corporation for reasons other than death or disability or for cause or by the executive for reasons other than Constructive Termination. A
Constructive Termination means, in general terms, any significant reduction in duties, compensation or benefits or change of office location from those in effect immediately prior to the change in
control, unless agreed to by the executive.
51
Payments
associated with a termination following a change in control will be triggered if both of the following two events occur:
-
1.
-
A
change in control occurs. A "change in control" can occur by virtue, in general terms, of an acquisition by any person of 30% or more of the Corporation's
voting shares, a merger in which the shareholders of the Corporation before the merger own 50% or less of the Corporation's voting shares after the merger, shareholder approval of a plan of
liquidation or a plan to sell or dispose of substantially all of the assets of the Corporation, and if, during any two-year period, directors at the beginning of the period fail to
constitute a majority of the Board.
-
2.
-
The
executive is terminated in either an Actual Termination or a Constructive Termination not for cause.
With
respect to change in control agreements executed prior to 2010, in the event benefits are paid because of a change in control and such benefits are subject to Code
Section 280G, the Corporation would reimburse the
executive for such excise taxes paid, together with taxes incurred as a result of such reimbursement. Beginning in 2010, all newly executed change in control agreements do not include excise tax
reimbursement.
The
table below represents the amounts potentially payable to the NEOs under various termination scenarios. The values assume termination on December 31, 2011, with stock awards
and unexercisable stock options benefit values based on the Corporation's December 31, 2011, stock price of $35.71.
Estimated Post-Termination Employment Benefits Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
|
|
Voluntary
or for
Cause
|
|
Death
|
|
Disability
|
|
Without Cause
|
|
Change
in
Control
|
|
|
|
John A. Hayes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
3,586,538
|
|
|
3,586,538
|
|
|
|
Long-Term Cash Incentive
|
|
|
|
|
|
705,552
|
|
|
705,552
|
|
|
|
|
|
1,235,821
|
|
|
|
Outstanding Stock Awards
|
|
|
|
|
|
1,356,980
|
|
|
1,356,980
|
|
|
|
|
|
1,356,980
|
|
|
|
Outstanding Performance Awards
|
|
|
|
|
|
5,229,015
|
|
|
5,229,015
|
|
|
|
|
|
5,229,015
|
|
|
|
Unexercisable Stock Options
|
|
|
|
|
|
3,353,409
|
|
|
3,353,409
|
|
|
|
|
|
3,353,409
|
|
|
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
153,561
|
|
|
153,561
|
|
|
|
Health & Welfare
|
|
|
|
|
|
|
|
|
|
|
|
36,194
|
|
|
39,920
|
|
|
|
Perquisites
|
|
|
20,000
|
|
|
|
|
|
|
|
|
40,000
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,000
|
|
$
|
10,644,956
|
|
$
|
10,644,956
|
|
$
|
3,816,293
|
|
$
|
14,975,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Morrison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
1,111,371
|
|
|
1,481,828
|
|
|
|
Long-Term Cash Incentive
|
|
|
|
|
|
200,453
|
|
|
200,453
|
|
|
|
|
|
342,517
|
|
|
|
Outstanding Stock Awards
|
|
|
|
|
|
999,880
|
|
|
999,880
|
|
|
|
|
|
999,880
|
|
|
|
Outstanding Performance Awards
|
|
|
|
|
|
1,199,856
|
|
|
1,199,856
|
|
|
|
|
|
1,199,856
|
|
|
|
Unexercisable Stock Options
|
|
|
|
|
|
628,859
|
|
|
628,859
|
|
|
|
|
|
628,859
|
|
|
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
60,859
|
|
|
85,697
|
|
|
|
Health & Welfare
|
|
|
|
|
|
|
|
|
|
|
|
28,397
|
|
|
42,360
|
|
|
|
Perquisites
|
|
|
20,000
|
|
|
|
|
|
|
|
|
40,000
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,000
|
|
$
|
3,029,048
|
|
$
|
3,029,048
|
|
$
|
1,240,627
|
|
$
|
4,800,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond J. Seabrook
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
1,629,065
|
|
|
2,172,087
|
|
|
|
Long-Term Cash Incentive
|
|
|
300,189
|
|
|
300,189
|
|
|
300,189
|
|
|
300,189
|
|
|
515,381
|
|
|
|
Outstanding Stock Awards
|
|
|
39,388
|
|
|
214,046
|
|
|
214,046
|
|
|
39,388
|
|
|
214,046
|
|
|
|
Outstanding Performance Awards
|
|
|
2,821,090
|
|
|
2,821,090
|
|
|
2,821,090
|
|
|
2,821,090
|
|
|
2,821,090
|
|
|
|
Unexercisable Stock Options
|
|
|
1,936,144
|
|
|
1,936,144
|
|
|
1,936,144
|
|
|
1,936,144
|
|
|
1,936,144
|
|
|
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
154,732
|
|
|
219,989
|
|
|
|
Health & Welfare
|
|
|
|
|
|
|
|
|
|
|
|
28,530
|
|
|
44,196
|
|
|
|
Perquisites
|
|
|
20,000
|
|
|
|
|
|
|
|
|
40,000
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,116,811
|
|
$
|
5,271,469
|
|
$
|
5,271,469
|
|
$
|
6,949,138
|
|
$
|
7,942,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. Baker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
678,827
|
|
|
1,086,124
|
|
|
|
Long-Term Cash Incentive
|
|
|
|
|
|
242,702
|
|
|
242,702
|
|
|
|
|
|
242,702
|
|
|
|
Outstanding Stock Awards
|
|
|
|
|
|
285,680
|
|
|
285,680
|
|
|
|
|
|
285,680
|
|
|
|
Outstanding Performance Awards
|
|
|
|
|
|
1,032,019
|
|
|
1,032,019
|
|
|
|
|
|
1,032,019
|
|
|
|
Unexercisable Stock Options
|
|
|
|
|
|
814,704
|
|
|
814,704
|
|
|
|
|
|
814,704
|
|
|
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
51,703
|
|
|
88,677
|
|
|
|
Health & Welfare
|
|
|
|
|
|
|
|
|
|
|
|
23,542
|
|
|
43,368
|
|
|
|
Perquisites
|
|
|
20,000
|
|
|
|
|
|
|
|
|
40,000
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,000
|
|
$
|
2,375,105
|
|
$
|
2,375,105
|
|
$
|
794,072
|
|
$
|
3,613,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa A. Pauley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
|
|
|
|
|
|
|
|
|
514,940
|
|
|
823,904
|
|
|
|
Long-Term Cash Incentive
|
|
|
|
|
|
212,431
|
|
|
212,431
|
|
|
|
|
|
212,431
|
|
|
|
Outstanding Stock Awards
|
|
|
|
|
|
321,390
|
|
|
321,390
|
|
|
|
|
|
321,390
|
|
|
|
Outstanding Performance Awards
|
|
|
|
|
|
532,079
|
|
|
532,079
|
|
|
|
|
|
532,079
|
|
|
|
Unexercisable Stock Options
|
|
|
|
|
|
402,938
|
|
|
402,938
|
|
|
|
|
|
402,938
|
|
|
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
36,524
|
|
|
62,657
|
|
|
|
Health & Welfare
|
|
|
|
|
|
|
|
|
|
|
|
23,542
|
|
|
42,828
|
|
|
|
Perquisites
|
|
|
20,000
|
|
|
|
|
|
|
|
|
40,000
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,000
|
|
$
|
1,468,838
|
|
$
|
1,468,838
|
|
$
|
615,006
|
|
$
|
2,418,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
DIRECTOR COMPENSATION
The table set forth below summarizes the 2011 compensation paid to each of the Corporation's nonemployee directors. The elements of the
nonemployee director compensation program are evaluated and determined by the Nominating/Corporate Governance Committee, which takes into account market data provided by the Consultant. Effective
January 1, 2011, the director compensation program consisted of a $70,000 annual fixed cash retainer, a $15,000 target annual incentive cash retainer, an annual restricted stock award valued at
$115,000, an $8,000 annual committee chair cash retainer, and a $200,000 annual chairman of board cash retainer. The annual incentive retainer is subject to the Corporation's performance under the
same performance measures as the Annual EVA® Incentive Compensation Plan, which is based on EVA® principles. The actual amount paid may range from $0-$30,000.
Additionally, a newly elected director will be awarded a one-time grant of 3,000 RSUs upon joining the Board. The elements of deferral for nonemployee directors are detailed in the
"Non-Qualified Deferred Compensation" section. The table below sets out the compensation earned for 2011, with any other compensation payments noted. The Corporation has established a
10,000 share stock ownership guideline for each nonemployee director.
Director Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees
Earned or
Paid in
Cash
($)
(1)
|
|
Stock Awards
($)
(2)
|
|
Option Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(3)
|
|
Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings ($)
|
|
All Other
Compensation
($)
(4)
|
|
Total
($)
|
|
|
|
Robert W. Alspaugh
|
|
$
|
70,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
26,500
|
|
$
|
239,727
|
|
Hanno C. Fiedler
|
|
$
|
70,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
33,161
|
|
$
|
246,388
|
|
R. David Hoover
(5)
|
|
$
|
202,500
|
|
$
|
115,027
|
|
$
|
|
|
$
|
21,247
|
|
$
|
|
|
$
|
3,193,460
|
|
$
|
3,532,234
|
|
John F. Lehman
|
|
$
|
78,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
20,000
|
|
$
|
241,227
|
|
Georgia R. Nelson
|
|
$
|
78,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
20,000
|
|
$
|
241,227
|
|
Jan Nicholson
|
|
$
|
78,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
|
|
$
|
221,227
|
|
George M. Smart
|
|
$
|
70,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
5,000
|
|
$
|
218,227
|
|
Theodore M. Solso
|
|
$
|
70,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
20,000
|
|
$
|
233,227
|
|
Stuart A. Taylor II
|
|
$
|
78,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
20,000
|
|
$
|
241,227
|
|
Erik H. van der Kaay
|
|
$
|
70,000
|
|
$
|
115,027
|
|
$
|
|
|
$
|
28,200
|
|
$
|
|
|
$
|
11,600
|
|
$
|
224,827
|
|
|
|
-
(1)
-
Values represent fees for annual fixed retainer meetings and chair fees under the nonemployee director compensation
program. All nonemployee directors except Messrs. Fiedler, Hoover and Smart, and Ms. Nicholson deferred payment of their cash fees to the 2005 Deferred Compensation Plan for Directors or
the 2005 Deferred Compensation Company Stock Plan. Mr. van der Kaay deferred $28,000 of the annual fixed retainer payment.
-
(2)
-
Reflects the fair value of restricted stock awards granted in 2011, calculated in accordance with Topic 718.
-
(3)
-
Values represent the annual incentive retainer achieved for 2011, which was paid in February 2011, based on a
performance factor of 188% applied to the $15,000 target for all nonemployee directors. All nonemployee directors except for Messrs. Fiedler and Smart, and Ms. Nicholson deferred payment
of their 2011 annual incentive retainer in February 2012 to the 2005 Deferred Compensation Company Stock Plan.
-
(4)
-
The value for all directors except for Mr. Fiedler reflects corporate contributions for the 20% corporate
match up to a maximum of $20,000 available under the 2005 Deferred Compensation Company Stock Plan as described in the "Non-Qualified Deferred Compensation" section. The values for
Messrs. Alspaugh, Hoover and Smart also include a $6,500, $5,000 and $5,000 corporate match, respectively, of donations made pursuant to the Corporation's Matching Gift Program. The value of
$33,161 for Mr. Fiedler reflects payments made to Mr. Fiedler for serving as chair of the Supervisory Board of Ball Packaging Europe GmbH. The amount was originally paid in euros
and has been converted to dollars based on a conversion rate of 1.29 dollars/euros as of December 31, 2011.
-
(5)
-
Includes Mr. Hoover's CEO compensation as reported in the Summary Compensation Table, Other Compensation
Table, Non-Qualified Deferred Compensation Table; Base Salary $306,519, Annual Incentive Compensation Plan = $646,405, LTCIP = $1,474,534, and Special Acquisition Incentive
Plan = $57,710; no portion of the annual incentive was deferred in February 2012; $377,827 aggregate change in pension
53
value
and $277,562 above-market earnings on deferred compensation; the value of $10,000 for financial planning services; and the incremental costs for the personal use of the corporate aircraft of
$5,903.
-
(a)
-
The following represents the total value of plan-based awards granted to nonemployee directors during
2011: All nonemployee directors received an annual restricted stock award of 3,108 RSUs, using the closing price of Ball common stock on April 27, 2011, at $37.01 per unit resulting in a total
award value of $115,027 for each director.
-
(b)
-
The aggregate number of outstanding stock awards and stock options for each nonemployee director as of
December 31, 2011, are as follows:
Mr. Alspaugh
Stock awards of 21,444
Mr. Fiedler
Stock awards of 20,132
Mr. Hoover
Stock awards of 208,108; stock options of 1,912,088
Mr. Lehman
Stock awards of 114,474; stock options of 16,000
Ms. Nelson
Stock awards of 25,444
Ms. Nicholson
Stock awards of 94,738; stock options of 16,000
Mr. Smart
Stock awards of 41,278
Mr. Solso
Stock awards of 48,290; stock options of 16,000
Mr. Taylor
Stock awards of 68,122
Mr. van der Kaay
Stock awards of 38,710
REPORT OF THE HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS
The Committee has reviewed the above CD&A and discussed its contents with members of the Corporation's management. Based on this review
and discussion, the Committee has recommended that this CD&A be incorporated by reference in the Corporation's Annual Report on Form 10-K and as set out in this Proxy Statement.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Corporation's Board consists of nonemployee directors who are independent under the NYSE Listing Standards
and SEC rules.
Management
is responsible for the Corporation's (1) accounting policies, (2) the system of internal accounting controls over financial reporting, (3) disclosure
controls and procedures, (4) the performance of PricewaterhouseCoopers LLP, the independent auditor, (5) the Internal Audit Department and (6) compliance with laws and
regulations and applicable ethical business standards. The independent auditor is responsible for performing an audit of the Corporation's Consolidated Financial Statements in accordance with the
standards of the Public Company Accounting Oversight Board ("PCAOB") and issuing a report thereon as well as issuing an opinion on the effectiveness of the Corporation's internal control over
financial reporting.
The
Committee is responsible to monitor and oversee the internal controls over financial reporting and disclosure controls and procedures and to engage and evaluate the independent
auditor. Management has represented to the Committee that the financial statements for the Corporation for the year ended December 31, 2011, were prepared in accordance with generally accepted
accounting principles of the U.S., and the Committee has reviewed and discussed those financial statements with management and the independent auditor. The Committee has also discussed with the
independent auditor the matters required to be discussed by the Statement of Auditing Standards, as amended, the PCAOB Auditing Standards and the NYSE Listing Standards.
The
Corporation's independent auditor provided to the Committee on a quarterly basis the written disclosures and letter required by PCAOB Rule 3526, Communication with Audit
Committees Concerning Independence. The Committee has discussed with the independent auditor that firm's independence and that firm's internal quality control
54
procedures,
peer reviews and the investigations or inquiries by governmental or professional authorities disclosed by the independent auditor.
Based
upon the Committee's review and discussion with management and the independent auditor, the representations of management and the disclosures and letter of the independent auditor
(as required by PCAOB Rule 3526), the Committee recommended to the Board that the audited Consolidated Financial Statements in the Corporation's Annual Report on Form 10-K,
including management's and the independent auditor's opinion of the Corporation's effectiveness of internal control over financial reporting as of December 31, 2011, be filed with the SEC.
The
foregoing report has been furnished by the following members of the Audit Committee:
VOTING ITEM 2RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITOR
The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP as the Corporation's independent
registered public accounting firm for the fiscal year ending December 31, 2012. As disclosed in this Proxy Statement, during 2011 PricewaterhouseCoopers LLP rendered audit and
non-audit services to the Corporation.
We
are asking our shareholders to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm. Although ratification is not required by
our Bylaws or otherwise, the Board of Directors is submitting the selection of PricewaterhouseCoopers LLP to our shareholders for ratification as a matter of good corporate practice.
Representatives
of PricewaterhouseCoopers LLP will be present at the 2012 Annual Meeting of Shareholders and will have an opportunity to make a statement, if desired, as well as
to respond to appropriate questions.
The
affirmative vote of the holders of a majority of shares represented in person or by proxy and entitled to vote on this item will be required for approval. Abstentions will be counted
as represented and entitled to vote and will therefore have the effect of a negative vote.
The Board of Directors recommends that shareholders vote "FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as the
Corporation's independent registered public accounting firm for 2012.
In
the event shareholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee. Even if the selection is ratified, the Audit Committee in its
discretion may select a different registered independent public accounting firm at any time during the year if it determines that such a change would be in the best interests of Ball and our
shareholders.
VOTING ITEM 3ADVISORY (NON-BINDING) VOTE TO APPROVE EXECUTIVE COMPENSATION
We are asking our shareholders to provide advisory approval of the compensation of our NEOs, as we have described it in the "Executive
Compensation" section of this Proxy Statement, beginning on page 17. We are seeking this approval pursuant to the Securities and Exchange Commission Act of 1934, as amended. While this vote is
advisory and is not binding on the Corporation, it will provide useful information to our management and our Human Resources Committee regarding our shareholders' views about our executive
compensation philosophy, policies and practices, which the Committee will be able to consider when determining executive compensation for the balance of 2012 and beyond. Following is a summary of some
of the key points for our 2011 executive compensation program. Please see the "Executive Compensation" section above for more information.
55
Our
executive compensation program has been designed to implement certain core compensation principles, including alignment of management's interests with our shareholders' interests to
support long-term value creation and pay for performance. In the course of establishing the 2011 compensation program and awarding compensation, our management and our Human Resources
Committee determined the use of performance-based incentives to motivate our NEOs to achieve current and long-term business goals, after reviewing data and analyses regarding comparable
market compensation. Management and the Committee received advice and counsel on the program from its independent Consultant, which provided no other services to the Corporation other than those
provided directly to or on behalf of the Committee.
At
the April 2011 annual meeting, shareholders were asked to approve the Corporation's fiscal 2010 executive compensation programs. Of those votes included in the tabulation, over 95%
voted to approve the proposal. In light of these results, and in consideration of shareholder input obtained from outreach efforts taken in connection with the 2011 meeting, the Human Resources
Committee carefully reviewed the Corporation's executive compensation practices. The Human Resources Committee concluded that the Corporation's existing executive compensation programs continue to be
the most appropriate for the Corporation and effective in rewarding executives commensurate with business results.
Summary of 2011 Named Executive Officer Compensation
Our NEOs' 2011 compensation consisted primarily of the following components, which we refer to as "total direct annual compensation"
and which includes base salary, annual economic value added incentive plan awards, acquisition-related special incentive plan, LTCIP and awarded value of stock options and RSUs (in addition to the
retirement, health and welfare plans and programs in which all of our full-time U.S. employees participate and limited perquisites).
|
|
|
|
|
|
|
|
Compensation
Component
|
|
Key Features
|
|
Purpose
|
|
2011 Actions
|
|
Current Year
|
|
Annual Base Salary
|
|
Fixed element of pay based on an individual's primary duties and responsibilities.
|
|
Adjustments were minimal, except to reflect promotions. Competitive benchmarking applied.
|
|
|
|
|
|
Annual Economic Value Added Incentive Compensation Plan
|
|
Rewards achievement of specified annual corporate and/or operating unit financial goals pursuant to economic value added principles.
|
|
Payments reflect excellent financial results achieved in 2011.
|
|
Long-Term
IncentiveCash
|
|
Acquisition-Related Special Incentive Plan
|
|
Promotes the successful integration of newly acquired businesses thereby enhancing financial returns and cash flow.
|
|
Payments reflect successful initial integration of four plants and associated business acquired in 2009.
|
|
|
|
|
|
LTCIP
|
|
Promotes long-term creation of shareholder value in absolute terms (ROAIC) and relative terms (performance versus a group of companies in the S&P 500) and provide an executive retention incentive.
|
|
Payments reflect excellent ROAIC and stock performance over the 3-year cycle ending December 31, 2011.
|
|
Long-Term
IncentiveEquity
|
|
Stock Options and Stock-Settled SARs
|
|
Promotes executive share ownership and long-term corporate performance resulting in the creation of shareholder value.
|
|
Competitive benchmarking applied.
|
|
|
|
|
|
Performance-Contingent RSUs
|
|
Promotes share ownership through the achievement of financial returns in excess of the Corporation's estimated weighted average cost of capital.
|
|
Competitive benchmarking applied.
|
|
|
|
|
|
Deposit Shares
|
|
Promotes executive financial investment in the Corporation, promotes share ownership and provides long-term incentive for performance resulting in the creation of shareholder value.
|
|
Awarded to all NEOs and certain other members of management in 2011.
|
|
|
|
|
|
Time Vested Restricted Stock/RSUs
|
|
Promotes share ownership, provides a retention incentive and provides long-term incentive for the creation of shareholder value.
|
|
Not awarded to NEOs in 2011.
|
|
56
We believe that our 2011 executive compensation program reflects best practices and was designed to balance risk and reward. We focus on pay for
performance in establishing our executive compensation programs and setting the plans' performance metrics. With input from the independent Consultant, our Human Resources Committee continued to apply
competitive benchmarking (pay and performance) in 2011 relative to the unique structure and needs of the Corporation. Our program seeks to mitigate risks related to compensation and align management's
interests with shareholders' interests in long-term value creation.
Vote requested.
We believe that the information we have provided above and within the "Executive Compensation" section of this Proxy
Statement
demonstrates that our executive compensation program in respect of our NEOs was designed appropriately and is working to ensure that management's interests are aligned with our shareholders' interests
to support long-term value creation. Accordingly, the Board of Directors recommends that shareholders approve the program by approving the following advisory resolution, the results of
which will be counted and considered in accordance with the Indiana Business Corporation Law (with abstentions and broker nonvotes not being counted or considered):
RESOLVED:
That the shareholders of Ball Corporation hereby approve, on an advisory basis, the compensation of the individuals identified in the Summary Compensation Table, as disclosed
in the Ball Corporation 2012 Proxy Statement pursuant to Item 402 of Regulation S-K, which disclosure includes the Compensation Discussion and Analysis section, the
compensation tables and the accompanying footnotes and narratives within the "Executive Compensation" section of such Proxy Statement.
The Board of Directors recommends a vote "FOR" the Advisory (Non-Binding) Vote Approving Executive Officer
Compensation.
SHAREHOLDER PROPOSALS FOR 2013 ANNUAL MEETING
To be eligible for inclusion in the Corporation's Proxy Statement for the 2013 Annual Meeting of Shareholders, proposals of
shareholders must be in writing and be received by the Corporate Secretary at the Corporation's principal executive offices, 10 Longs Peak Drive, Broomfield, Colorado 80021-2510, by
November 9, 2012.
If
a shareholder desires to bring business before the 2013 Annual Meeting of Shareholders, which is not the subject of a proposal submitted for inclusion in the Proxy Statement, the
shareholder must notify the Corporation of the shareholder's proposal, which must be delivered to or mailed and received at the principal executive offices of the Corporation between
December 26, 2012, and January 25, 2013, or the proposal may be considered untimely. The appointed proxies may exercise their discretionary authority to vote previously solicited proxies
against such proposal if it is raised at the 2013 Annual Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To our knowledge, based solely upon a review of the copies of the forms furnished to the Corporation, and/or written representations
from certain reporting persons, the Corporation believes that all filing requirements under Section 16(a) applicable to its officers and directors were met during the fiscal year ended
December 31, 2011, except as set forth herein. As a result of an administrative error, a Form 4 regarding 2,805 shares of common stock purchased by Mr. James N. Peterson on
March 2, 2011, was not timely reported, and was subsequently reported on April 14, 2011.
HOUSEHOLDING
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for
proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single Proxy Statement addressed to those stockholders. This process, which is
commonly referred to as "householding," potentially means extra convenience for shareholders and cost savings for companies. This could be applicable to you if you request a paper copy of these proxy
materials after you receive notice of Internet access to our proxy materials.
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A
number of brokers with account holders who are shareholders may be householding our proxy materials, to the extent such shareholders have given their prior express or implied consent
in accordance with SEC rules. A single Proxy Statement and summary Annual Report will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the
affected shareholders. Once you have received notice from your broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until
you revoke your consent, which is deemed to be given unless you inform the broker otherwise when you receive the original notice of householding. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate Proxy Statement and summary Annual Report, please notify your broker to discontinue householding and direct your written request to receive a
separate Proxy Statement and summary Annual Report to the Corporation at: Ball Corporation, Attention: Investors Relations, 10 Longs Peak Drive, Broomfield, Colorado 80021. Shareholders who currently
receive multiple copies of the Proxy Statement and summary Annual Report at their address and would like to request householding of their communications should contact their broker.
SOLICITATION AND OTHER MATTERS
The Corporation will pay the cost of soliciting proxies. Georgeson Inc. has been retained to assist in the solicitation of
proxies for a fee of $8,000. In addition to solicitations by mail, proxies also may be solicited personally, or by telephone or electronic means by some directors, officers and regular employees of
the Corporation, without additional compensation, as well as by employees of Georgeson Inc. The Corporation will reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy material, Annual Report and other shareholder materials to the beneficial owners of common stock, where those owners request such materials.
As
of the date of this Proxy Statement, the Board of the Corporation has no knowledge of any matters to be presented for consideration at the Annual Meeting other than those referred to
above. However, the persons named in the accompanying proxy shall have authority to vote such proxy as to any other matters that properly come before the meeting and as to matters incidental to the
conduct of the meeting, according to their discretion.
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By Order of the Board of Directors,
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Charles E. Baker
Corporate Secretary
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March 9, 2012
Broomfield, Colorado
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Exhibit A
Ball Corporation Bylaws
In an uncontested election of directors of the corporation, any nominee who receives a greater number of votes "withheld" from his or
her election than votes "for" his or her election will, within ten (10) days following the certification of the shareholder vote, tender his or her written resignation to the chairman of the
board for consideration by the Nominating/Corporate Governance Committee (the "Committee"). As used in this Section C, an "uncontested election of directors of the corporation" is an election
in which the only nominees are persons nominated by the board of directors of the corporation.
The
Committee will consider such tendered resignation and, within sixty (60) days following the certification of the shareholder vote, will make a recommendation to the board of
directors concerning the acceptance or rejection of
such resignation. In determining its recommendation to the board, the Committee will consider all factors deemed relevant by the members of the Committee.
The
Committee also will consider a range of possible alternatives concerning the director's tendered resignation as the members of the Committee deem appropriate, including, without
limitation, acceptance of the resignation, rejection of the resignation or rejection of the resignation coupled with a commitment to seek to address and cure the underlying reasons reasonably believed
by the Committee to have substantially resulted in the "withheld" votes.
The
board of directors of the corporation will take formal action on the Committee's recommendation no later than ninety-five (95) days following the certification of
the shareholder vote. In considering the Committee's recommendation, the board will consider the information, factors and alternatives considered by the Committee and such additional information,
factors and alternatives as the board deems relevant.
Following
the board's decision on the Committee's recommendation, the corporation, within four (4) business days after such decision is made, will publicly disclose, in a Current
Report on Form 8-K filed with the Securities and Exchange Commission, the board's decision, together with an explanation of the process by which the decision was made and, if
applicable, the board's reason or reasons for its decision.
No
director who, in accordance with this Section C, is required to tender his or her resignation, shall participate in the Committee's deliberations or recommendation, or in the
board's deliberations or determination, with respect to accepting or rejecting his or her resignation as a director. If a majority of the members of the Committee received a greater number of votes
"withheld" from their election than votes "for" their election, then the independent directors then serving on the board of directors who received a greater number of votes "for" their election than
votes "withheld" from their election, and the directors, if any, who were not standing for election, will appoint an ad hoc board committee from among themselves (the "Ad Hoc Committee"), consisting
of such number of directors as they may determine to be appropriate, solely for the purpose of considering and making a recommendation to the board with respect to the tendered resignations. The Ad
Hoc Committee shall serve in place of the Committee and perform the Committee's duties for purposes of this Section C. Notwithstanding the foregoing, if an Ad Hoc Committee would have been
created but fewer than three directors would be eligible to serve on it, the entire board of directors (other than the director whose resignation is being considered) will make the determination to
accept or reject the tendered resignation without any recommendation from the Committee and without the creation of an Ad Hoc Committee.
A-1
BALL CORPORATION
10 LONGS PEAK DRIVE
BROOMFIELD, COLORADO 80021-2510
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THIS PROXY CARD
IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR
BLACK INK AS FOLLOWS: Signature (Joint Owners) Signature [PLEASE SIGN WITHIN
BOX] Date Date To withhold authority to vote for any individual nominee(s),
mark For All Except and write the number(s) of the nominee(s) on the line
below. 0 0 0 0 0 0 0 0 0 0 0 0 0000127488_1 R1.0.0.11699 For Withhold For All
All All Except The Board of Directors recommends you vote FOR the following:
1. Election of Directors Nominees 01 Robert W. Alspaugh 02 R. David Hoover 03
Jan Nicholson BALL CORPORATION ATTN: CHARLES E. BAKER 10 LONGS PEAK DRIVE
BROOMFIELD, CO 80021-2510 VOTE BY INTERNET - www.proxyvote.com Use the
Internet to transmit your voting instructions and for electronic delivery of
information up until 11:59 P.M. Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in hand when you access the web site
and follow the instructions to obtain your records and to create an
electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY
MATERIALS If you would like to reduce the costs incurred by our company in
mailing proxy materials, you can consent to receiving all future proxy
statements, proxy cards and annual reports/10-Ks electronically via e-mail or
the Internet. To sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when prompted, indicate
that you agree to receive or access proxy materials electronically in future
years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to
transmit your voting instructions up until 11:59 P.M. Eastern Time the day
before the cut-off date or meeting date. Have your proxy card in hand when
you call and then follow the instructions. VOTE BY MAIL Mark, sign and date
your proxy card and return it in the postage-paid envelope we have provided
or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,
NY 11717. The Board of Directors recommends you vote FOR proposals 2. and 3.
For Against Abstain 2. To ratify the appointment of PricewaterhouseCoopers
LLP as the independent registered public accounting firm for the Corporation
for 2012. 3. Advisory vote to approve named executive officer compensation.
NOTE: The proxies will have discretionary authority, to the extent permitted
by law, to act and vote upon such other matters that may properly come before
the meeting or any adjournment or adjournments thereof. Please sign exactly
as your name(s) appear(s) hereon. When signing as attorney, executor,
administrator, or other fiduciary, please give full title as such. Joint
owners should each sign personally. All holders must sign. If a corporation
or partnership, please sign in full corporate or partnership name, by
authorized officer. For address change/comments, mark here. (see reverse for
instructions) Yes No Please indicate if you plan to attend this meeting
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0000127488_2
R1.0.0.11699 Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting: The Notice & Proxy Statement, Annual Report/10-K
is/are available at www.proxyvote.com . BALL CORPORATION Annual Meeting of
Shareholders April 25, 2012 This proxy is solicited by the Board of Directors
The shareholder(s) hereby appoint(s) Stuart L. Taylor II, John F. Lehman and
Georgia R. Nelson, or any one of them, as proxies, each with the power to
appoint his or her substitute, and hereby authorizes them to represent and to
vote, as designated on the reverse side of this proxy, all of the shares of
Common Stock of Ball Corporation that the shareholder is entitled to vote at
the Annual Meeting of Shareholders to be held at 8:00 A.M. MDT on April 25,
2012, at the Ball Corporation headquarters, 10 Longs Peak Drive, Broomfield,
Colorado 80021-2510 and any adjournment or postponement thereof. THIS PROXY,
WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDERS. IF NO
SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS IN ITEM 1, AND
FOR EACH PROPOSAL IN ITEMS 2 AND 3. (If you noted any Address Changes and/or
Comments above, please mark corresponding box on the reverse side.) Address
change/comments: Continued and to be signed on reverse side
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QuickLinks
ABOUT THE ANNUAL MEETING
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
BENEFICIAL OWNERSHIP
VOTING ITEM 1ELECTION OF DIRECTORS
DIRECTOR NOMINEES AND CONTINUING DIRECTORS
DIRECTOR AND NOMINEE EXPERIENCE AND QUALIFICATIONS
BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT
BOARD DIVERSITY
GOVERNANCE OF THE CORPORATION
CERTAIN COMMITTEES OF THE BOARD
BOARD MEETINGS AND ANNUAL MEETING
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
COMPENSATION OBJECTIVES AND PHILOSOPHY
ROLE OF THE HUMAN RESOURCES COMMITTEE AND EXECUTIVE COMPENSATION CONSULTANT
PROCESS FOR DETERMINING EXECUTIVE COMPENSATION
PEER GROUP
Ball Market Capitalization, Revenue and Net Income as Compared to Peer Group
ELEMENTS OF BALL 'S EXECUTIVE COMPENSATION PROGRAM AND 2011 PERFORMANCE
SPECIFICS RELATED TO THE 2011 EXECUTIVE COMPENSATION ELEMENTS
OTHER EXECUTIVE COMPENSATION POLICIES AND GUIDELINES
TABLES AND NARRATIVES
SUMMARY COMPENSATION TABLE
GRANTS OF PLAN-BASED AWARDS TABLE
OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2011
OPTION EXERCISES AND STOCK VESTED IN 2011
NON-QUALIFIED DEFERRED COMPENSATION
PENSION BENEFITS
OTHER POTENTIAL POST-TERMINATION EMPLOYMENT BENEFITS
DIRECTOR COMPENSATION
REPORT OF THE HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS
REPORT OF THE AUDIT COMMITTEE
VOTING ITEM 2RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITOR
VOTING ITEM 3ADVISORY (NON-BINDING) VOTE TO APPROVE EXECUTIVE COMPENSATION
Summary of 2011 Named Executive Officer Compensation
SHAREHOLDER PROPOSALS FOR 2013 ANNUAL MEETING
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
HOUSEHOLDING
SOLICITATION AND OTHER MATTERS
Exhibit A Ball Corporation Bylaws
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