-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QwgMV3cpuV/MR7rKMDrMvMyuYrj4Pyk9LmOSpbIKKxu/PFygpkrihp7L4B+vxJOn 6i4K5H+2yRT/g4sR05pDcw== 0000950131-01-500329.txt : 20010328 0000950131-01-500329.hdr.sgml : 20010328 ACCESSION NUMBER: 0000950131-01-500329 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010327 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLTRISTA CORP CENTRAL INDEX KEY: 0000895655 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351828377 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-13665 FILM NUMBER: 1579974 BUSINESS ADDRESS: STREET 1: 5875 CASTLE CREEK PARKWAY, NORTH DRIVE STREET 2: SUITE 440 CITY: INDIANAPOLIS STATE: IN ZIP: 46250-4330 BUSINESS PHONE: 3175775000 MAIL ADDRESS: STREET 1: 5875 CASTLE CREEK PARKWAY, NORTH DRIVE STREET 2: SUITE 440 CITY: INDIANAPOLIS STATE: IN ZIP: 46250-4330 10-K405 1 d10k405.txt FORM 10K FISCAL YEAR ENDED 12/31/2000 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ---------------- FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [_] For the transition period from to Alltrista Corporation Indiana 0-21052 35-1828377 State of Incorporation Commission File Number IRS Identification Number 5875 Castle Creek Parkway, North Drive, Suite 440 Indianapolis, Indiana 46250-4330 Registrant's telephone number, including area code: (317) 577-5000 ---------------- Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which - ------------------------------------- registered Common Stock, without par value ------------------------------------- New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [_] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of voting stock held by non-affiliates of the registrant was $85.0 million based upon the closing market price on March 4, 2001. Number of shares outstanding as of the latest practicable date. Class Outstanding at March 4, 2001 - ------------------------------------- ------------------------------------- Common Stock, without par value 6,354,544 DOCUMENTS INCORPORATED BY REFERENCE 1. Proxy statement filed with the Commission dated April 2, 2001 to the extent indicated in Part III. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ALLTRISTA CORPORATION AND SUBSIDIARIES INDEX TO FORM 10-K
Page ---- Part I Item 1. Business................................................... 3 Item 2. Properties................................................. 8 Item 3. Legal Proceedings.......................................... 8 Item 4. Submission of Matters to a Vote of Security Holders........ 8 Part II Item 5. Market for Registrant's Common Stock and Related Shareholder Matters........................................ 9 Item 6. Selected Financial Data.................................... 9 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................. 10 Item 7a. Qualitative and Quantitative Disclosure About Market Risk.. 17 Item 8. Financial Statements and Supplementary Data................ 18 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure................................... 35 Part III Item 10. Directors and Executive Officers of the Registrant......... 36 Item 11. Executive Compensation..................................... 36 Item 12. Security Ownership of Certain Beneficial Owners and Management................................................. 36 Item 13. Certain Relationships and Related Transactions............. 36 Part IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K................................................... 37 Signatures.............................................................. 38 Financial Statement Schedule............................................ 39 Index to Exhibits....................................................... 40
2 PART I Item 1. Business The businesses comprising Alltrista Corporation (the "Company") have interests in metal and plastics products. In addition to the information included below in this Item 1, see Item 7 (Management's Discussion and Analysis of Financial Condition and Results of Operations) and Item 8, Note 1 (Significant Accounting Policies) and Note 2 (Business Segment Information) for financial and other information concerning the Company's operations. In April 1996, the Company sold its metal services plants, real estate, equipment and certain inventory ending the Company's involvement in metal coating and decorating for food packaging. On September 30, 1997, the Company sold the machine vision inspection equipment product line of LumenX. The sale consisted primarily of inventory, fixed assets and intangibles. Effective September 28, 1998, the Company sold the x-ray inspection equipment product line of LumenX, ending the Company's involvement in the capital goods market. Effective May 24, 1999, the Company sold its plastic packaging product line, which produced coextruded high-barrier plastic sheet and containers for the food processing industry. Metal Products Segment The Company's metal products segment includes consumer and zinc products. Consumer Products The Company markets a line of home food preservation and preparation products that includes Ball(R), Kerr(R), Bernardin(R) and Golden Harvest(R) brand home canning jars and jar closures and related food products (including fruit pectin, Fruit-Fresh(R) brand fruit protector, pickle mixes and tomato mixes). Jar closures are manufactured by the Company principally from decorated tin-plated steel sheet. Food products purchased from others for resale are manufactured and packaged to the Company's specifications. Beginning in 1999, the Company began marketing a line of housewares including tumblers, beverage tappers and other glassware. At the end of the first quarter of 1996, the Company acquired certain assets from Kerr Group, Inc. ("Kerr") related to their home food preservation products. The Company purchased the equipment, raw materials inventory and a license to use the Kerr(R) trade name. In October 1997, the Company entered into an agreement to market and distribute the Golden Harvest(R) line of home canning products, which includes jars and lids. The demand for home canning supplies is seasonal. Sales generally reflect the pattern of the growing season. Although home canning jars are reusable, the jar closures are replaced after use. Accordingly, a large portion of the segment's sales is represented by sales of new closures and related food products for use with home canning jars. The home canning market has declined over the past few decades. Management believes the decline has moderated based on its view that the home canning market has already adjusted for the lifestyle changes that occurred in the 1980s (i.e., two wage-earner families and trends toward fast food and convenience foods) and that a core base in this market will be maintained. In recent years, the trend to more health conscious eating habits has helped maintain the demand for home canning products. The demand for home canning supplies has historically been contra-cyclical relative to the macro-economy. The Company's line of home canning mixes simplify food preservation consistent with consumer preferences for convenience. Growth opportunities exist through new products and product line extensions as well as acquisitions. Sales are made through well-established distribution channels to approximately 1,800 wholesale and retail customers (principally food, hardware and mass merchants) in the United States and Canada. Sales to one large retail customer exceeded 10% of the Company's 2000 consumer product sales. 3 The Company continues to be a market leader in the sale of home canning supplies in the United States. Bernardin Ltd., acquired by the Company in 1994, markets home canning products and produces metal closures for home canning in Canada and provides a leadership position in the Canadian market. The Company competes with companies who specialize in other food preservation mediums such as freezing and dehydration. The food product portion of its business is much more segmented, with competitors ranging in size from very small to very large. Zinc Products The Company began the manufacture of closures for its home canning jars in 1885 using zinc as the primary material and expanded the zinc product line to include other products through internal development. The Company produces copper plated zinc penny blanks for the U.S. Mint and Royal Canadian Mint, cans for use in zinc/carbon batteries, zinc strip and a line of industrial zinc products, including various products used in the plumbing, automotive, electrical component markets and European architectural markets. The Company's largest zinc products customer is the U.S. Mint, which comprised approximately 50% of the Company's zinc product net sales and approximately 8% of the Company's consolidated net sales. The Company is affected by fluctuations in penny blank requirements of the United States Department of the Treasury and the Federal Reserve System. Although the future use of the penny as legal tender has been debated in recent years, the zinc penny is still considered a cost effective currency unit by the U.S. Mint. In September 1996, the U.S. Mint awarded the Company a five-year supply contract. In November 1998 this contract was extended two years, awarding the Company all the U.S. Mint requirements for penny blanks. The U.S. Mint supplies the zinc and copper used to produce the penny blanks under this contract. In January 2001, the Company entered into a contract with the Royal Canadian Mint to supply it with a minimum of one billion one-cent coin blanks over the next two years. The Company currently supplies all of this mint's requirements for the penny blanks. The Company is currently pursuing other coinage opportunities in the United States and abroad. Until the last few years, a significant portion of the Company's zinc product sales were battery cans sold to two manufacturers, which together account for a large percentage of the United States zinc/carbon battery production. One of the two manufacturers ceased to purchase cans from the Company in 1998. The other manufacturer ceased purchasing cans from the Company near the end of 2000. Battery can sales represented 6.9%, 8.9% and 11.3% of the Company's 2000, 1999 and 1998 zinc product sales, respectively. The domestic market for zinc/carbon batteries has declined in recent years and will continue to decline as U.S. manufacturers shift their emphasis toward the alkaline battery market. On December 21, 1999, the Company acquired a 51 percent equity interest in Microlin, LLC ("Microlin") from Elkem Metals Advanced Products Corporation. Microlin, located in Salt Lake City, Utah, is a developer of proprietary battery and fluid delivery technology. The Company is the operating shareholder of Microlin as it moves to commercialize this patented technology in consumer, healthcare, veterinary and industrial markets. The batteries will utilize zinc-based materials produced by the Company. In general, zinc offers superior performance and cost advantages relative to competing materials in the specific product applications in which the Company competes. Producers of other metals have not viewed zinc as a major competitor. Therefore, the Company has been able to target niche markets where a zinc-based product offers cost savings with little competitive reaction. Several new areas with potential high volume usage are being investigated as a result of product development programs and include counterpoise grounding of electrical transmission towers, electromagnetic interference shielding for electronic components and cathodic corrosion protection systems for bridges and other structures in coastal areas. The Company's anticorrosion zinc Lifejacket(R) is becoming increasingly recognized as a cost effective solution to arrest the corrosion of the reinforcement steel within poured concrete structures. The Company has entered into a licensing agreement with a unit of Bermah Castrol plc to market the Lifejacket(R). This agreement gives the Company a marketing presence in Europe and Asia. 4 The Company is the largest United States zinc strip producer. There is only one other zinc strip producer in North America and it does not have the physical facilities to compete for high volume customer requirements in close tolerance, high quality and specialty rolled products. Raw Materials Raw materials used by the Company's metal products segment include glass canning jars which are supplied under an agreement with Anchor Glass Container Corporation, tin-plated and decorated steel used to manufacture jar closures which is supplied under various supply agreements and zinc ingot which is readily available from a variety of sources. The Company's metal products segment is not experiencing any shortage of raw materials. Plastic Products Segment The plastic products segment includes thermoformed industrial parts and proprietary products and injection molded products, each of which is discussed briefly below. Thermoformed Industrial Parts and Proprietary Products The Company specializes in the design and manufacture of large part, heavy gauge single and twin sheet thermoformed plastic components for consumer and industrial applications. It supplies plastic components primarily to original equipment manufacturers in the agricultural, appliance, construction, heavy truck, material handling, manufactured housing, portable restroom, recreational vehicle and transportation industries. The Company has manufacturing plants in Arkansas, Florida, Iowa, Tennessee and Wisconsin. It also has a distribution center and a technical center in Iowa. On May 19, 1997, the Company purchased certain net assets of Viking Industries ("Viking"), a manufacturer of thermoformed plastic tubs, shower surrounds and other bath products sold to the manufactured housing, recreational vehicle, home, and marine industries under the "Capri Bath Products" name. These products are sold primarily through distributors to manufactured housing and recreational vehicle manufacturers. Historically, a large portion of the Company's bath products sales were to one distributor. As a result of the acquisition of Viking's largest competitor by this distributor, during 1998, the Company redirected the distribution of its bath products to various regional distributors and a direct sales strategy. Effective April 25, 1999, the Company acquired the net assets of Triangle Plastics, Inc. and its TriEnda subsidiary ("Triangle Plastics"), a designer and manufacturer of custom heavy gauge industrial thermoformed parts for original equipment manufacturers in a variety of industries, including the heavy truck, agricultural, portable restroom, recreational and construction markets, as well as a producer of plastic thermoformed products for material handling applications. This acquisition made the Company the largest industrial thermoformer in the United States. On June 1, 2000, the Company acquired the net assets of Synergy World, Inc. ("Synergy World"). Synergy World, who employs 15 people, is a St. Louis, Missouri based designer and marketer of portable restrooms sold to equipment rental companies, waste services companies and diversified sanitation firms. Prior to the acquisition, the Company was the exclusive supplier of the thermoformed plastic restrooms to Synergy World. The Company competes with numerous industrial thermoformers. Approximately 19% of the Company's 2000 industrial thermoformed part sales were to three heavy truck manufacturers. Increasingly, original equipment manufacturers are looking for fewer and higher quality suppliers. The Company has the capacity required for high volume and the ability to provide value-added services including design, engineering, tool making and assembly. Within the Company's technical center, customers, resin suppliers and extruders work together to develop new plastic compounds and design and test new product applications. These factors foster long-term relationships with the customer and give the Company a competitive advantage. 5 The Company is a leading designer and manufacturer of single and twin-sheet plastic pallets, custom dunnage and other material handling products, which are sold to customers in a wide variety of industries including automotive, government, grocery, printing and others. The Company extrudes sheet at its Portage, Wisconsin and Fort Smith, Arkansas facilities which is used in the manufacturing of products at various Company facilities. The Company sells its products through a direct sales force and approximately 40 manufacturer representatives who typically sell a broad line of material handling products. The material handling industry is highly competitive with wood pallets representing over 90% of the market. A growth opportunity exists as customers realize the benefits of plastic pallets, which are lighter, stronger, more durable and friendlier to the environment than wood. This opportunity should be realized as customers convert their logistic systems to ensure pallet returns. Engineering and developing creative material handling solutions is a point of competitive differentiation for the Company. Currently, the Company's patented pallet leg is the industry standard and is required for plastic pallets supplied to the United States Postal Service. In October 2000, the Company was awarded the contract to supply the United States Postal Service with their 2000-2001 postal pallet requirements. The Company's most recent pallet entry into the distribution market incorporates five different patented or trademarked features. The Company also manufactures thermoformed plastic door liners and evaporator trays for refrigerators in its Fort Smith, Arkansas facility. Approximately 20% of the Company's 2000 thermoformed product sales were to one customer in the home appliance industry. The Company is well established in serving this multi-location account based on its focus on providing a high level of customer service, such as product tooling design, high quality standards, proximity and just-in-time delivery. In addition, the Company has demonstrated the ability to supply 100% of the after market inner door liner service parts for this dominant customer. Therefore, it enjoys a sole source position with this customer. Effective January 1, 1999, the Company entered into a three-year supply agreement with this customer. In addition, sales of the Company's plastic tables continue to grow, and other products are being developed to reduce dependency on a single customer. Injection Molded Products The Company has plastic injection molding operations in three locations: Reedsville, Pennsylvania; Greenville, South Carolina; and Springfield, Missouri. The Springfield facility was constructed during 1995 with production beginning in early 1996. A major part of this facility is devoted to fulfilling supply agreements to produce internal components for shotgun shells for two major U.S. producers. The Company had operations in Arecibo, Puerto Rico. Due to limited growth potential as a result of the phase out of section 936 of the Internal Revenue Code, the Company ceased operations in this plant in January 1999. The Company manufactures precision custom injection molded components for major companies in the healthcare and consumer products industries. The Company also owns Yorker(R) Closures, a proprietary product line of plastic closures. Products for the healthcare industry, which include such items as intravenous harness components and surgical devices, comprised approximately 39% of the Company's 2000 injection molded product sales. Precision consumer products include components for retail items and accounted for approximately 48% of the Company's 2000 injection molded product sales. The remaining sales were primarily closures. Sales to each of three major customers were greater than 10% and in the aggregate 62% of the Company's total 2000 injection molded product sales. The market for injection molded plastics is highly competitive. The Company concentrates its marketing efforts in those markets that require high levels of precision, quality, engineering expertise and cleanliness. There is potential for continued growth in all product lines, especially in the healthcare market, where the Company's quality, service and "clean room" molding operations are critical competitive factors. The Company believes that the quality and cleanliness of these facilities provide a competitive advantage with respect to this market. Except for Yorker(R) Closures, molds used by the Company to manufacture its products are owned by its customers. 6 Raw Materials Raw materials used in the Company's plastic products segment consist primarily of plastic resins and extruded sheet, most of which are available from a variety of sources at competitive prices. Currently, the plastic products segment is not experiencing any shortage of raw materials. Capital Expenditures The Company's businesses generally are not significantly affected by rapid technological change. Consequently, capital spending derives from the need to replace existing assets, expand capacity, manufacture new products, improve quality and efficiency, facilitate cost reduction and meet regulatory requirements. Patents and Trademarks The Company believes that none of its active patents or trademarks is essential to the successful operation of its business as a whole. However, one or more patents or trademarks may be material in relation to individual products or product lines such as property rights to use the Kerr(R) brand, Ball(R) brand, and Fruit-Fresh(R) brand names, and the Bernardin(R) trade name in connection with certain goods to be sold, including home food preservation supplies, kitchen housewares and packaged foods for human consumption. In the event of a change of control of the Company which has not received the approval of a majority of the board of directors of the Company, Ball Corporation ("Ball") and Kerr have the option to require the re-transfer of the right to use the Ball(R) and Kerr(R) brand names, respectively. Government Contracts The Company enters into contracts with the United States Government which contain termination provisions customary for government contracts. See "-- Metal Products Segment--Zinc Products" and "--Plastic Products Segment-- Thermoformed Industrial Parts and Proprietary Products." The United States Government retains the right to terminate such contracts at its convenience. However, if the contract is terminated, the Company is entitled to be reimbursed for allowable costs and profits to the date of termination relating to authorized work performed to such date. The United States Government contracts are also subject to reduction or modification in the event of changes in government requirements or budgetary constraints. Since entering into a contract with the Company in 1981, the United States Government has not terminated the penny blank supply arrangement. Backlog The Company typically sells under supply contracts for minimum (generally exceeded) or indeterminate quantities and, accordingly, is unable to furnish backlog information. Research and Development Research and development costs are expensed as incurred in connection with the Company's internal programs for the development of products and processes and have not been significant in recent years. Environmental Matters Compliance with federal, state and local provisions, which have been enacted or adopted relating to protection of the environment, has not had a material adverse effect on the Company. In 1990, Congress passed amendments to the Clean Air Act, which imposed more stringent standards on air emissions. The Clean Air Act amendments primarily affect the operation of the Company's zinc products manufacturing facility. Environmental control and capture systems in place at the facility meet the amended standards. 7 The Environmental Protection Agency has designated the Company as a potentially responsible party, along with numerous other companies, for the clean up of several hazardous waste sites. Information at this time does not indicate that disposition of any of the environmental disputes the Company is currently involved in will have a material, adverse effect upon the financial condition, results of operations, cash flows or competitive position of the Company. Employees As of December 2000, the Company employed approximately 1,700 people. Approximately 286 union workers are covered by two collective bargaining agreements at the Company's zinc products and consumer products manufacturing facilities. These agreements expire at the consumer products facility (Muncie, Indiana) on October 14, 2001, and at the zinc products facility (Greeneville, Tennessee) on October 4, 2003. Approximately 197 union workers are covered by a collective bargaining agreement at the Company's two plastic products facilities located in Winthrop and Oelwein, Iowa. This agreement expires on December 1, 2001. The Company has not experienced a work stoppage during the past four years. Management believes that its relationships with the Company's collective bargaining units are good. Item 2. Properties The Company's properties are well maintained, considered adequate and being utilized for their intended purposes. The Company's corporate headquarters is located in Indianapolis, Indiana and is occupied under a lease agreement. Information regarding the approximate size of significant manufacturing and warehousing facilities is provided below. All major manufacturing facilities are owned or leased by the Company.
Approximate Floor Space Plant Location Business Segment/ Product Line in Square Feet -------------- ------------------------------ -------------- Greeneville, Tennessee.. Metal Products/Zinc Products 320,000 Muncie, Indiana......... Metal Products/Consumer Products 173,000 Toronto, Canada (leased)............... Metal Products/Consumer Products 48,000 Portage, Wisconsin...... Plastic Products/Industrial Thermoformed Parts 300,000 Winthrop, Iowa.......... Plastic Products/Industrial Thermoformed Parts 140,000 Fort Smith, Arkansas.... Plastic Products/Industrial Thermoformed Parts 140,000 Oelwein, Iowa (leased).. Plastic Products/Industrial Thermoformed Parts 135,000 Auburndale, Florida..... Plastic Products/Industrial Thermoformed Parts 90,000 Cookeville, Tennessee (leased)............... Plastic Products/Industrial Thermoformed Parts 41,000 Independence, Iowa (leased)............... Plastic Products/Industrial Thermoformed Parts 31,000 Reedsville, Pennsylvania........... Plastic Products/Injection Molded Products 73,000 Greenville, South Carolina............... Plastic Products/Injection Molded Products 48,000 Springfield, Missouri... Plastic Products/Injection Molded Products 43,000
In 1999, the Company ceased operations in two leased thermoforming facilities. The lease on the South Whitley, Indiana facility expired in 1999. The Company is seeking a sublessor for the El Dorado, Arkansas facility where the lease expires in May 2004. Item 3. Legal Proceedings The Company is involved in various legal disputes in the ordinary course of business. For information required by Item 3, see Item 8, Note 11 (Litigation Charges and Recoveries) and Note 12 (Contingencies). Item 4. Submission of Matters to Vote of Security Holders There were no matters submitted to the security holders during the fourth quarter of 2000. 8 PART II Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters Alltrista Corporation common stock is traded on the New York Stock Exchange under the symbol "ALC." There were 3,694 common shareholders of record on March 4, 2001. The Company currently does not and does not intend to pay cash dividends on its common stock in the foreseeable future. Cash generated from operations will be invested to support competitiveness and growth. The Company has repurchased its own common stock into treasury to offset the dilutive effect of shares issued under employee benefit plans. The Company has periodically repurchased additional shares as a flexible and tax efficient means of distributing excess cash to shareholders. For other information required by Item 5, see Item 8, Note 14 (Quarterly Stock Prices). Item 6. Selected Financial Data Six-Year Review of Selected Financial Data (thousands of dollars, except per share amounts)
Year ended December 31, --------------------------------------------------------- 2000 1999 1998 1997 1996 1995 -------- -------- -------- -------- -------- -------- Statement of Income Data Net sales (f)........... $348,556 $353,521 $252,464 $247,225 $215,574 $206,959 Operating earnings before depreciation and amortization (c)(d)(e). 40,045 56,179 40,752 40,485 38,372 36,834 Operating earnings (c)(d)(e).............. 18,734 38,482 30,204 30,100 27,803 24,018 Income from continuing operations (a)(b)(c)(d)(e)........ 4,922 30,307 17,597 17,241 15,404 12,623 Loss from discontinued operations............. -- (87) (1,870) (2,404) (894) (1,124) Extraordinary loss from early extinguishment of debt (net of income taxes)................. -- (1,028) -- -- -- -- -------- -------- -------- -------- -------- -------- Net income (a)(b)(c)(d)(e)........ $ 4,922 $ 29,192 $ 15,727 $ 14,837 $ 14,510 $ 11,499 ======== ======== ======== ======== ======== ======== Basic earnings per share: Cash operating earnings (g)......... $ 6.32 $ 8.34 $ 5.76 $ 5.46 $ 4.96 $ 4.72 Income from continuing operations........... .78 4.50 2.48 2.33 1.99 1.62 Loss from discontinued operations........... -- (.01) (.26) (.33) (.11) (.15) Extraordinary loss from early extinguishment of debt (net of income taxes)............... -- (.15) -- -- -- -- -------- -------- -------- -------- -------- -------- $ .78 $ 4.34 $ 2.22 $ 2.00 $ 1.88 $ 1.47 ======== ======== ======== ======== ======== ======== Diluted earnings per share: Cash operating earnings (g)......... $ 6.27 $ 8.24 $ 5.66 $ 5.36 $ 4.85 $ 4.61 Income from continuing operations........... .77 4.44 2.45 2.28 1.95 1.58 Loss from discontinued operations........... -- (.01) (.26) (.32) (.11) (.14) Extraordinary loss from early extinguishment of debt (net of income taxes)............... -- (.15) -- -- -- -- -------- -------- -------- -------- -------- -------- $ .77 $ 4.28 $ 2.19 $ 1.96 $ 1.84 $ 1.44 ======== ======== ======== ======== ======== ======== Balance Sheet Data (at end of year) Total assets............ $308,739 $338,751 $165,831 $166,577 $154,079 $162,650 Property, plant and equipment, net......... 89,052 89,866 46,856 45,010 45,660 56,083 Goodwill, net........... 114,138 115,276 24,548 24,947 20,549 7,534 Long-term debt.......... 95,065 121,060 21,429 25,714 30,000 30,000
- ------- (a) 2000 includes $1.6 million of pretax income associated with the reduction in long-term performance-based compensation and $1.4 million of pretax litigation charges, net of recoveries. (b) 1999 includes a $19.7 million pretax ($12.2 million after-tax) gain on the sale of the plastic packaging product line. (c) 1999 includes a $2.3 million pretax charge to exit a plastic thermoforming facility. (d) 1998 includes a $1.3 million pretax charge to exit a plastic injection molding facility. (e) 1995 includes a $2.4 million pretax charge to write-off assets related to a discontinued zinc product development project. (f) Net sales for all periods presented reflect a reclassification of freight expense on goods shipped to customers from Net Sales to Cost of Sales. (g) Operating earnings before depreciation and amortization divided by basic and diluted weighted average common shares outstanding, respectively. 9 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Significant Events The financial results for 2000 were impacted by a series of economic, operational and strategic events. Operating results for plastic products were negatively impacted by competitive pricing pressures and dramatically lower demand among thermoforming customers, chiefly in the heavy truck, manufactured housing and material handling markets. For metal products, orders for home canning products returned to more traditional levels as compared to 1999, which was influenced by Year 2000 fears. During the latter half of 2000, the Company realigned the plastics segment organization and its thermoforming operations to reduce costs and address capacity issues. As part of the reorganization, production of certain thermoformed plastic parts was moved from the Oelwein, Iowa facility to other Company locations in Iowa and Wisconsin. The Oelwein facility has been converted to a distribution center. This realignment, along with the transfer of the Company's thermoforming operations from El Dorado, Arkansas to Auburndale, Florida which was announced in late 1999 and completed in 2000, is expected to result in better overall capacity utilization. The Company recorded a $0.4 million charge in the third quarter for the write-down of fixed assets and severance cost relating to the realignment of the thermoforming operations. Approximately $0.9 million of costs were incurred during 2000 related to the transfer of production from Arkansas to Florida. Severance costs recorded in the fourth quarter associated with the plastics segment reorganization were approximately $0.8 million. The Company anticipates annual savings of approximately $7.5 million as a result of reductions in workforce. During the third quarter of 2000, the Company decided to discontinue the Central European home canning test market and recorded a $1.2 million pre-tax charge to write-down inventory. While the Company achieved good retail distribution, consumer sales volumes did not justify continuing this activity. The pre-tax net operating loss incurred in 2000 from this activity excluding the inventory write-down was $0.5 million. In September 2000, the Company reached settlements in two legal disputes, incurring $2.2 million in settlement and legal expenses in the aggregate. On May 19, 1997 the Company purchased certain assets and assumed certain liabilities of Viking Industries and, in accordance with the terms of the asset purchase agreement, agreed to pay up to an additional $4.0 million of purchase price based upon performance through May 2001. The settlement concluded arbitration proceedings initiated by the former owner in an effort to accelerate payment of the additional $4.0 million. No additional amounts are payable in connection with the acquisition. The Company had also been named a defendant in a lawsuit with respect to a royalty agreement, whereby the plaintiff (licensee) believed they were entitled to a paid-up royalty-free license to manufacture and sell products designed and patented by the Company. The Company reached a settlement and extended a paid-up royalty-free license to the plaintiff through October 9, 2001, the date the patent in question expires. In December 2000, the Company also received a cash payment, net of related legal expenses, of $0.9 million as settlement from a customer which had terminated a supply contract prior to its stated expiration date. On June 1, 2000, the Company acquired the net assets of Synergy World, Inc. ("Synergy World") for $6.9 million in cash plus acquisition costs. The transaction was accounted for as a purchase. Synergy World's operating results are included in the Company's financial statements beginning on June 1, 2000. Synergy World is a St. Louis, Missouri-based designer and marketer of portable restrooms sold to equipment rental companies, waste services companies and diversified sanitation firms. Prior to the acquisition, the Company was the exclusive supplier of the thermoformed plastic restrooms to Synergy World. Synergy World employs 15 people and had 1999 sales of $10.5 million. During the second quarter of 2000, the Company recorded a pre-tax gain of $1.6 million related to a reduction in long-term performance-based compensation. 10 A discussion of the results of operations follows. This discussion reflects the reclassification of freight expense on goods shipped to customers, which was previously a deduction in determining Net Sales, and now is included in Cost of Sales for all periods reported. This change had no effect on reported net income. Results of Operations--Comparing 2000 to 1999 The Company reported consolidated net sales of $348.6 million in 2000, a slight decrease from sales of $353.5 million in 1999. Despite the modest decline in sales, operating earnings decreased 51.3% from $38.5 million in 1999 to $18.7 million in 2000. The metal products segment reported lower sales and operating earnings, and the plastic products segment reported increased sales and lower operating earnings. Sales of consumer products decreased $12.7 million in 2000 as home canning sales volumes returned to more normal levels compared to the 1999 season, which was influenced by the Year 2000 phenomenon. Triangle Plastics and its wholly owned subsidiary, TriEnda, which were acquired on April 25, 1999, contributed $92.1 million to 2000 sales compared to $72.2 million for the eight-month period in 1999. In 2000, competitive pricing pressures and dramatically lower demand, chiefly in the heavy truck, manufactured housing and material handling markets, negatively impacted sales of thermoformed plastic parts. Prior year sales also included $13.0 million from the plastic packaging product line which was disposed of on May 24, 1999. Gross margin percentages decreased from 28.4% in 1999 to 23.2% in 2000. Both the metals and plastics segments experienced declines in gross margins. A decline in sales of traditional home canning products accompanied by slightly higher sales of a lower margin consumer product line, and lower coinage and battery can volumes contributed to the decrease in the metal products segment. Raw material price increases, reduced sales volumes and operating inefficiencies from several new customer programs for industrial thermoformed parts contributed to the decline within the plastic products segment. Selling, general and administrative expenses increased 1.6% from $54.9 million in 1999 to $55.8 million in 2000. Expenses within the metal products segment increased primarily due to higher depreciation expense on a new information system for consumer products and increased research and development costs related to zinc-based products. The acquisition of Triangle Plastics and disposal of the plastic packaging product line also contributed to the increase as Triangle Plastics maintains the personnel necessary to offer customers extensive design, engineering and development services, while the operations of the divested plastic packaging product line did not require this level of staffing. Additionally, the write-down of fixed assets and severance costs of $1.2 million associated with the realignment and consolidation of the Company's thermoforming operations also contributed to the increase. These increases were offset somewhat by a decrease in incentive compensation expense. Selling, general and administrative expenses as a percentage of sales increased from 15.5% in 1999 to 16.0% in 2000. Goodwill amortization increased from $4.6 million in 1999 to $6.4 million in 2000. This was the result of a full year of amortization being recorded in 2000 related to the 1999 acquisition of Triangle Plastics. Net interest expense in 2000 was $11.9 million compared to $8.4 million for 1999. The increase was due primarily to increased average borrowings driven by the Triangle Plastics acquisition. The Company's effective tax rate decreased from 39.1% in 1999 to 34.0% in 2000 due primarily to the recognition of a tax benefit from exiting the Central European home canning test market. Excluding the $1.1 million after-tax benefit from the reduction in long- term performance-based compensation and the $0.9 million after-tax charge for the settlement of legal disputes, income from continuing operations was $4.8 million for fiscal 2000. This represents a 75.5% decrease from comparable income from continuing operations of $19.6 million in 1999, which excludes the $12.2 million after-tax gain on the sale of the plastic packaging product line and the $1.4 million after-tax charge to exit the facility in El Dorado, Arkansas. Diluted earnings per share from continuing operations for 2000, as adjusted, was $0.75, a 73.8% decrease from the similarly adjusted $2.86 per share reported in 1999. 11 Diluted weighted average shares outstanding decreased from 6,819,000 in 1999 to 6,383,000 in 2000 as a result of the Company purchasing its common stock in the open market. The reduction in shares outstanding added $0.05 to reported diluted earnings per share. Metal Products Segment Net sales within the metal products segment decreased 7.3% from $194.0 million in 1999 to $179.8 million in 2000. Consumer product sales decreased $12.7 million primarily due to a decrease in sales of home canning jars and closures. In 2000, home canning product sales volumes returned to more normal levels and seasonal patterns compared to 1999 which was influenced by Year 2000 fears. Sales of home canning products in Canada were also negatively impacted due to an unusually cold and wet growing season. Partially offsetting the decline in sales of home canning jars and closures were higher sales of houseware products, a new liquid pectin product line and closures to commercial customers. Zinc product sales decreased $2.2 million. Coinage sales volumes were lower primarily due to a 36.9% decline in one-cent coin blank shipments to the Royal Canadian Mint versus 1999. Sales volumes to the U.S. Mint of one-cent coin blanks were approximately the same for 2000 as compared to the previous year. As expected, battery can sales volumes were 30.9% lower as battery manufacturers continue to move production of zinc carbon cells out of the United States. Zinc strip, other industrial products and cathodic protection system sales volumes all increased. The average price of zinc ingot increased 7.3% in 2000 compared to 1999, adding approximately $1.0 million to reported sales. The Company passes on fluctuations in zinc ingot prices to those customers who do not purchase their own zinc ingot. Gross margin percentages for the metal products segment decreased from 33.5% in 1999 to 31.2% in 2000. Consumer products margins decreased due to a relatively higher proportion of sales being derived from products generating lower margins and the impact of the $1.2 million inventory write-down related to the Central European test market. Gross margin percentages were also negatively impacted by lower coinage and battery can volumes, unfavorable currency exchange rates and higher costs for copper anodes and plating chemicals. Selling, general and administrative expenses as a percentage of net sales increased from 17.6% in 1999 to 19.1% in 2000. The increase is primarily attributable to higher depreciation expense on a new information system for consumer products and increased research and development costs related to zinc-based products. Lower sales for this segment in 2000 also contributed to the increased costs as a percentage of sales. The increase was offset somewhat by a decrease in incentive compensation expense. Operating earnings decreased from $29.7 million in 1999 to $19.9 million on lower sales and gross margins within the segment. Plastics Products Segment Net sales within the plastic products segment increased 6.0% from $160.1 million in 1999 to $169.8 million in 2000. Triangle Plastics and its wholly owned subsidiary, TriEnda, which were acquired on April 25, 1999, contributed $92.1 million to 2000 sales compared to $72.2 million for the eight-month period in 1999. In 2000, competitive pricing pressures and dramatically lower demand, chiefly in the heavy truck, manufactured housing and materials handling markets negatively impacted sales of thermoformed plastic parts. Sales of industrial thermoformed plastic parts to appliance manufacturers increased $3.0 million primarily on increased consumer demand. Synergy World contributed $1.4 million in incremental sales after accounting for the elimination of intercompany transactions. Bath product sales decreased $4.4 million, as the manufactured housing market remains depressed. The industry continues to carry significant inventories at its retail outlets and has been further aggravated by a curtailment of consumer financing. The supply of units has also grown as a result of repossessions. Sales of injection molded products increased by $1.4 million. New customers and increased sales to ammunition manufacturers accounted for the growth. Prior year sales included $13.0 million from the plastic packaging product line which was disposed of on May 24, 1999. Gross margin percentages decreased from 22.2% in 1999 to 15.3% in 2000 due to a number of factors. First, resin prices increased concurrent with petroleum price increases. In the majority of the Company's supply 12 agreements, raw material price increases can be passed on to customers. However, some contracts do not allow all increases to be passed on and others call for pass-through delays. Second, the Company experienced operating inefficiencies related to the transfer of bath product production from the El Dorado, Arkansas facility to the Auburndale, Florida facility. Third, during the second quarter of 2000, labor costs and material usage increased due to manufacturing inefficiencies and start-up costs associated with new customer programs. These operating inefficiencies were compounded further by the traditional heavy demand in the second quarter for portable restrooms. Fourth, margins on material handling products declined due to lower demand for the Company's higher margin proprietary products and competitive pricing pressures for pallets supplied to the U.S. Postal Service. Also, the U.S. Postal Service decided not to purchase hampers from the Company in 2000. Fifth, orders for Class 8 (heavy) truck parts have declined as manufacturers have slowed production in response to weak demand in the marketplace caused by higher fuel prices and interest rates, among other factors. Growth in the industry inventory of used trucks has compounded the problem. Smaller orders have reduced the length of production runs and, thus, diminished operating efficiencies. Finally, gross margins from the sales of the divested plastic packaging product line for the first five months of 1999 were extraordinarily high and not sustainable over the longer term. Selling, general and administrative expenses increased from 11.8% in 1999 to 12.2% in 2000 as a percentage of net sales. The acquisition of Triangle Plastics and disposal of the plastic packaging product line resulted in increased expenses as a percentage of net sales during 2000 compared to 1999. Triangle Plastics maintains a competitive sales force and the personnel necessary to offer customers extensive design, engineering and development services. The operations of the divested plastic packaging product line did not require this level of staffing. Additionally, the write-down of fixed assets and severance costs of $1.2 million associated with the realignment and consolidation of the Company's thermoforming operations also contributed to the increase. These increases were offset somewhat by a decrease in incentive compensation expense. Goodwill amortization increased from $3.5 million in 1999 to $5.3 million in 2000. This was the result of a full year of amortization being recorded in 2000 related to the 1999 acquisition of Triangle Plastics. Operating earnings decreased from $10.5 million in 1999 to ($0.5) million in 2000 primarily due to lower gross margins within the segment. Results of Operations--Comparing 1999 to 1998 The Company reported net sales of $353.5 million in 1999, an increase of 40.0% from sales of $252.5 million in 1998. Operating earnings of $38.5 million increased 27.4% from $30.2 million in 1998. Both the metal and plastic products segments reported increased sales and operating earnings. Triangle Plastics added $72.2 million in sales since the April 25, 1999 acquisition. Sales of consumer products increased $37.3 million due to increased demand for home canning products and the introduction of the housewares product line. The increase in sales was partially offset by the decrease in sales from the disposed plastic packaging product line. Sales from the disposed plastic packaging product line were $13.0 million prior to the sale compared to $28.3 million for 1998. Gross margin percentages increased from 27.6% in 1998 to 28.4% in 1999. Sales volume increases in coinage, injection molded products and industrial thermoformed parts contributed to the margin improvement. Selling, general and administrative expenses increased 48.9% from $36.9 million in 1998 to $54.9 million in 1999. Triangle Plastics accounted for approximately $9.8 million of the increase. Warehousing costs for the housewares product line, staff additions, training costs and other expenses in the expanding consumer products operations accounted for substantially all of the remaining increase. Selling, general and administrative expenses as a percentage of sales increased from 14.6% in 1998 to 15.5% in 1999. Goodwill amortization increased from $1.4 million in 1998 to $4.6 million in 1999 due to the acquisition of Triangle Plastics. 13 In October 1999, management initiated a plan to exit the Company's plastic thermoforming facility in El Dorado, Arkansas. Operations in this facility ceased in January 2000 and were moved to the Company's Auburndale, Florida facility. The Company recorded a one-time charge to exit the facility of $2.3 million, which included a $0.8 million loss on the sale and disposal of equipment, $0.6 million in future lease obligations net of assumed sublease revenue and $0.9 million in other costs consisting primarily of employee severance, consulting and employment obligations and other related fees. Net interest expense in 1999 was $8.4 million compared to $1.8 million for 1998. The increase was due to increased borrowings to finance the Triangle Plastics acquisition. The Company's effective tax rate increased from 38.0% in 1998 to 39.1% in 1999 due primarily to foreign losses for which a tax benefit was not recorded. Excluding the 1999 $12.2 million after-tax gain on the sale of the plastic packaging product line, the $1.4 million after-tax charge to exit the facility in El Dorado, Arkansas and the 1998 $0.8 million after tax charge to exit the facility in Arecibo, Puerto Rico, 1999 income from continuing operations of $19.6 million increased 6.5% from $18.4 million in 1998. Diluted earnings per share from continuing operations, as adjusted, was $2.86, an 11.7% increase from the $2.56 reported in 1998. Diluted weighted average shares outstanding decreased from 7,195,000 in 1998 to 6,819,000 in 1999 due to the Company purchasing its common stock in the open market. The reduction in shares outstanding added $0.22 to reported diluted earnings per share. Metal Products Segment Net sales within the metal products segment increased from $149.2 million in 1998 to $194.0 million in 1999, an improvement of 30.0%. Sales of home canning products increased $18.4 million due to good growing conditions throughout North America, new consumers taking up home canning and fears of food shortages resulting from Year 2000 computer failures. The introduction of the Golden Harvest(R) housewares and specialty glassware product lines added $11.5 million and $3.4 million in consumer product sales, respectively. In April 1999, the Company began test marketing home canning products in Central Europe. Market penetration in the initial year was lower than expected, due partially to in country retail sales of a considerable surplus of commercial glass containers which had been planned for export to Russia. Sales of copper- plated zinc coin blanks to both the U.S Mint and the Royal Canadian Mint increased over 1998 adding $7.4 million in sales compared to the previous year. An expected reduction in zinc battery can sales offset, in part, the increase in coinage sales. Gross margin percentages decreased slightly from 33.6% in 1998 to 33.5% in 1999. The increase in coinage and home canning product sales volume was offset by the introduction of a lower margin housewares product line. As a percentage of net sales, selling, general and administrative expenses increased slightly from 17.5% in 1998 to 17.6% in 1999. In 1999, the Company incurred approximately $1.2 million in selling, general and administrative expenses in the Central European home canning product test market. A portion of the Company's zinc product sales is on a tolling basis whereby the material cost is not included in sales. As tolling activity increases, selling, general and administrative costs increase disproportionately with net sales. Operating earnings increased from $23.0 million in 1998 to $29.7 million in 1999 on strong sales within the segment. Plastics Products Segment Net sales within the plastic products segment increased from $103.4 million in 1998 to $160.1 million in 1999. The late April acquisition of Triangle Plastics contributed $72.2 million of incremental sales. Sales of industrial thermoformed parts from the existing business were essentially the same as the previous year. Increased sales of refrigerator parts were offset by lower sales of bath and other products to the manufactured 14 housing and recreational vehicle industries. Sales of injection molded products increased by $2.4 million as the Company's growth strategy, launched in 1997, continues to foster sales gains. Excluding the 1998 sales from the closed Arecibo, Puerto Rico facility, injection molded product sales for 1999 increased $6.9 million or 22.0% compared to the previous year. Sales from the disposed plastic packaging product line were $13.0 million prior to the sale compared to $28.3 million for 1998. Gross margin percentages increased from 18.9% in 1998 to 22.2% in 1999. Capacity utilization in the Company's injection molding facilities improved in 1999. In addition, increased sales volumes of thermoformed components added to the margin improvements. Selling, general and administrative expenses increased from 10.6% in 1998 to 11.8% in 1999 as a percentage of net sales. This increase was driven by a change in cost structure with the segments' increased focus on thermoforming and the sale of the plastic packaging product line. Additional staffing in sales, engineering and product development to support the Company's growth objectives also increased expenses. Goodwill amortization expense increased from $0.3 million in 1998 to $3.5 million in 1999 due to the acquisition of Triangle Plastics. Operating earnings increased from $8.3 million in 1998 to $10.5 million in 1999. Outlook Within the metal products segment, consumer product sales are expected to be comparable to those levels achieved in 2000. The Company anticipates penny blank shipments to the U.S. Mint during 2001 to be at the same levels as 2000 and Royal Canadian Mint requirements to be lower. In January 2001, the Company entered into a contract with the Royal Canadian Mint to supply a minimum of one billion one-cent coin blanks over the next two years. The Company continues to explore international growth opportunities in the coinage area. With regard to the plastic products segment, the Company expects significantly lower demand among its thermoforming customers in the heavy truck, manufactured housing and materials handling markets to persist at least through the first half of 2001. In response to these difficult conditions, management has implemented certain initiatives to increase sales and reduce operating costs, including consolidation of certain thermoforming facilities, a reduction in workforce, and a realignment of the plastic segment's organization. Financial Condition, Liquidity and Capital Resources The Company financed the 1999 acquisition of Triangle Plastics with a $250 million credit facility consisting of a six-year $150 million term loan and a $100 million revolving credit facility. All borrowings mature on March 31, 2005. The agreement contains certain guarantees and financial covenants including minimum net worth requirements, minimum fixed charge coverage ratios and maximum financial leverage ratios. In February 2001, the Company entered into an agreement with its lenders to amend certain provisions of this agreement and waive violations of its minimum fixed charge ratio and maximum leverage ratio at December 31, 2000. The amendment reduces the revolving credit facility to $50 million, provides for the Company's accounts receivable and inventory to be pledged as collateral, and modifies certain financial covenants. The term loan requires quarterly payments of principal escalating from $15 million in the first year to $30 million in the fifth and sixth years. Interest on the term loan is based upon fixed increments over the adjusted London Interbank Offered Rate ("LIBOR") or the agent bank's alternate borrowing rate as defined in the agreement. Interest on borrowings under the revolving credit facility are based upon fixed increments over the adjusted LIBOR or the agent bank's alternate borrowing rate as defined in the agreement. The agreement also requires the payment of commitment fees on the unused balance. As of December 31, 2000, $16 million of borrowings were outstanding under this agreement. No such borrowings were outstanding as of December 31, 1999. 15 In May 1999, the Company entered into a three-year interest rate swap with an initial notional value of $90 million. The swap effectively fixes the interest rate on approximately 60% of the Company's term debt at a maximum rate of 7.98% for the three-year period. In June 2000, the Company acquired the net assets of Synergy World for $6.9 million in cash plus acquisition costs. The Company may pay up to an additional $2.0 million based upon future performance through March 31, 2002. In October 1999, management initiated a plan to exit the Company's plastic thermoforming facility in El Dorado, Arkansas. Operations in this facility ceased in January 2000 and were moved to the Company's Auburndale, Florida facility. The total cost to exit the facility was $2.3 million and includes a $0.8 million loss on the sale and disposal of equipment, $0.6 million in future lease obligations net of assumed sublease revenue and $0.9 million in other costs consisting primarily of employee severance, consulting and employment obligations and other related fees. Of this $2.3 million charge, which was recorded in the fourth quarter of 1999, $1.8 million has been expended through December 31, 2000. During 2000, the Company repurchased 452,600 shares of the Company's stock for $10.5 million. In 1999, the Company's board of directors approved the repurchase of up to 500,000 shares. Under this program, 402,400 shares have been repurchased through December 31, 2000. In addition to this program, the Company has a policy to annually repurchase shares to offset the dilutive effect of shares issued under employee benefit plans. The Company repurchases shares as a flexible and tax effective means of distributing cash to shareholders. Dividends are not presently paid on the Company's common stock nor does the Company anticipate paying dividends in the foreseeable future. Working capital (excluding the current portion of long-term debt and notes payable) decreased $9.3 million from $74.3 million at December 31, 1999 to $65.0 million at December 31, 2000. Cash and cash equivalents declined $14.1 million due primarily to the Company's stock repurchase program, the investment in Synergy World, debt service payments and a decrease in cash provided by operations. Capital expenditures were $13.6 million in 2000 compared to $16.6 million in 1999 and are largely related to maintaining facilities and improving manufacturing efficiencies. Investments in 2000 included, among other items, new injection molding machines to support growth and an investment in a high precision slitting line for zinc products. The Company believes that existing funds, cash generated from operations and its debt facility are adequate to satisfy its working capital and capital expenditure requirements for the foreseeable future. However, the Company may raise additional capital from time to time to take advantage of favorable conditions in the capital markets or in connection with the Company's corporate development activities. Contingencies The Company is involved in various legal disputes in the ordinary course of business. In addition, the Environmental Protection Agency has designated the Company as a potentially responsible party, along with numerous other companies, for the clean up of several hazardous waste sites. Information at this time does not indicate that disposition of any of the legal or environmental disputes the Company is currently involved in will have a material, adverse effect upon the financial condition, results of operations, cash flows or competitive position of the Company. New Accounting Pronouncement Statement of Financial Accounting Standard 133 (SFAS 133), Accounting for Derivative Instruments and Hedging Activities (as amended by SFAS 137 and SFAS 138) provides accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging 16 activities. SFAS 133 is effective for the Company beginning with the first quarter of 2001, and its adoption will not have a material impact on the Company's results of operations or financial position. Item 7a. Qualitative and Quantitative Disclosure About Market Risk In general, business enterprises can be exposed to market risks including fluctuations in commodity prices, foreign currency values, and interest rates that can affect the cost of operating, investing, and financing. The Company's exposures to these risks are low. Over 90% of the Company's zinc business is conducted on a tolling basis whereby customers supply zinc to the Company for processing, or supply contracts provide for fluctuations in the price of zinc to be passed on to the customer. The Company from time to time invests in short-term financial instruments with original maturities usually less than thirty days. The Company is exposed to short-term interest rate variations with respect to the LIBOR on its term and revolving debt obligations. A portion of this risk has been managed through the use of an interest rate swap, completed in 1999, whereby the Company effectively pays a maximum interest rate of 7.98% on 60% of the outstanding term debt balance for a period of three years. Changes in LIBOR interest rates would affect the earnings of the Company either positively or negatively depending on the changes in short-term interest rates. Assuming that LIBOR rates increased 100 basis points over period end rates on the outstanding term and revolver debt, the Company's interest expense, after considering the effects of its interest rate swap, would have increased by approximately $620,000 and $385,000 for the years ended December 31, 2000 and 1999, respectively. The amount was determined by considering the impact of the hypothetical interest rates on the Company's borrowing cost, short-term investment rates, interest rate swap and estimated cash flow. Actual changes in rates may differ from the assumptions used in computing this exposure. The Company does not invest or trade in any derivative financial or commodity instruments, nor does it invest in any foreign financial instruments. 17 Item 8. Financial Statements and Supplementary Data ALLTRISTA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (thousands, except per share amounts)
Year ended December 31, ---------------------------- 2000 1999 1998 -------- -------- -------- Net sales........................................ $348,556 $353,521 $252,464 Costs and expenses Cost of sales.................................. 267,651 253,249 182,751 Selling, general and administrative expenses... 55,767 54,871 36,850 Goodwill amortization.......................... 6,404 4,605 1,399 Costs to exit facilities....................... -- 2,314 1,260 -------- -------- -------- Operating earnings............................... 18,734 38,482 30,204 Interest expense, net............................ (11,917) (8,395) (1,822) Gain on sale of plastic packaging product line... -- 19,678 -- Reduction in long-term performance-based compensation.................................... 1,600 -- -- Litigation charges, net of recoveries............ (1,352) -- -- -------- -------- -------- Income from continuing operations before taxes and minority interest........................... 7,065 49,765 28,382 Provision for income taxes....................... (2,402) (19,458) (10,785) Minority interest in loss of consolidated subsidiary...................................... 259 -- -- -------- -------- -------- Income from continuing operations................ 4,922 30,307 17,597 Discontinued operations: Loss from discontinued operations, net of income tax benefit of $557.................... -- -- (908) Loss on disposal of discontinued operations, net of income tax benefit of $54 and $589, respectively.................................. -- (87) (962) Extraordinary loss from early extinguishment of debt, net of income tax benefit of $635......... -- (1,028) -- -------- -------- -------- Net income....................................... $ 4,922 $ 29,192 $ 15,727 ======== ======== ======== Basic earnings per share: Income from continuing operations.............. $ .78 $ 4.50 $ 2.48 Discontinued operations........................ -- (.01) (.26) Extraordinary loss from early extinguishment of debt, net of income tax benefit............... -- (.15) -- -------- -------- -------- Net income..................................... $ .78 $ 4.34 $ 2.22 ======== ======== ======== Diluted earnings per share: Income from continuing operations.............. $ .77 $ 4.44 $ 2.45 Discontinued operations........................ -- (.01) (.26) Extraordinary loss from early extinguishment of debt, net of income tax benefit............... -- (.15) -- -------- -------- -------- Net income..................................... $ .77 $ 4.28 $ 2.19 ======== ======== ======== Weighted average shares outstanding: Basic.......................................... 6,338 6,734 7,079 Diluted........................................ 6,383 6,819 7,195
The accompanying notes are an integral part of the consolidated financial statements. 18 ALLTRISTA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (thousands of dollars)
December 31, ------------------ 2000 1999 -------- -------- Assets Current assets............................................. Cash and cash equivalents................................ $ 3,303 $ 17,394 Accounts receivable, net of reserve for doubtful accounts of $1,517 and $1,735.................................... 32,806 36,931 Inventories.............................................. 52,548 57,908 Deferred taxes on income................................. 4,621 6,794 Prepaid expenses......................................... 1,102 2,449 -------- -------- Total current assets................................... 94,380 121,476 -------- -------- Property, plant and equipment, at cost..................... Land..................................................... 1,998 1,197 Buildings................................................ 35,059 34,113 Machinery and equipment.................................. 149,405 138,716 -------- -------- 186,462 174,026 Accumulated depreciation................................. (97,410) (84,160) -------- -------- 89,052 89,866 -------- -------- Goodwill, net of accumulated amortization of $16,192 and $8,351.................................................... 114,138 115,276 Other assets............................................... 11,169 12,133 -------- -------- Total assets........................................... $308,739 $338,751 ======== ======== Liabilities and shareholders' equity Current liabilities........................................ Current portion of long-term debt........................ $ 25,995 $ 19,094 Notes payable............................................ 16,000 607 Accounts payable......................................... 17,842 26,895 Accrued salaries, wages and employee benefits............ 8,344 10,889 Other current liabilities................................ 3,224 9,380 -------- -------- Total current liabilities.............................. 71,405 66,865 -------- -------- Noncurrent liabilities..................................... Long-term debt........................................... 95,065 121,060 Deferred taxes on income................................. 13,068 11,865 Other noncurrent liabilities............................. 9,957 14,554 -------- -------- Total noncurrent liabilities........................... 118,090 147,479 -------- -------- Minority interest in subsidiary............................ 1,023 1,382 -------- -------- Contingencies.............................................. -- -- Shareholders' equity: Common stock, 25,000,000 shares authorized, 7,963,351 and 7,965,416 shares issued and 6,341,388 and 6,736,878 shares outstanding in 2000 and 1999, respectively....... 40,017 39,952 Retained earnings........................................ 118,153 113,231 Accumulated other comprehensive loss--cumulative translation adjustment.................................. (978) (419) -------- -------- 157,192 152,764 Less: treasury stock (1,621,963 and 1,228,538 shares, at cost)................................................... (38,971) (29,739) -------- -------- Total shareholders' equity............................. 118,221 123,025 -------- -------- Total liabilities and shareholders' equity............. $308,739 $338,751 ======== ========
The accompanying notes are an integral part of the consolidated financial statements. 19 ALLTRISTA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (thousands of dollars)
Year ended December 31, ----------------------------- 2000 1999 1998 -------- --------- -------- Cash flows from operating activities Net income..................................... $ 4,922 $ 29,192 $ 15,727 Reconciliation of net income to net cash provided by operating activities: Depreciation................................. 14,533 12,030 8,884 Amortization................................. 6,778 5,667 1,664 Loss on sale of assets....................... 338 152 71 Loss (gain) on disposal of product lines and discontinued operations..................... -- (19,678) 2,451 Costs to exit facilities..................... -- 2,314 1,260 Deferred taxes on income..................... 3,892 (4,215) 201 Reduction in long-term performance-based compensation................................ (1,600) -- -- Deferred employee benefits................... (40) 1,297 1,024 Minority interest............................ (259) -- -- Other, net................................... 450 (459) (861) Changes in working capital components excluding acquisitions and divestitures: Accounts receivable.......................... 6,678 1,760 (1,818) Inventories.................................. 5,952 (7,023) (6,970) Accounts payable............................. (12,613) (1,086) 2,559 Accrued salaries, wages and employee benefits.................................... (2,589) 510 1,506 Other current assets and liabilities......... (7,298) 1,863 1,690 -------- --------- -------- Net cash provided by operating activities.. 19,144 22,324 27,388 -------- --------- -------- Cash flows from financing activities Proceeds from revolving credit borrowings.... 57,332 37,260 4,431 Payments on revolving credit borrowings...... (41,940) (36,652) (4,431) Proceeds from issuance of long-term debt..... -- 150,995 -- Payments on long-term debt................... (19,094) (37,076) (4,286) Debt issue cost.............................. -- (2,262) -- Proceeds from issuance of common stock....... 1,219 1,672 1,283 Purchase of treasury stock................... (10,485) (3,146) (19,321) -------- --------- -------- Net cash provided by (used in) financing activities................................ (12,968) 110,791 (22,324) -------- --------- -------- Cash flows from investing activities Additions to property, plant and equipment... (13,637) (16,628) (11,909) Proceeds from sale of property, plant and equipment................................... 105 1,658 33 Acquisitions of businesses, net of cash acquired.................................... (6,930) (151,278) (1,000) Proceeds from divestitures of businesses and product lines............................... 220 29,305 3,463 Investments in insurance contracts........... -- (274) (685) Other, net................................... (25) 42 (153) -------- --------- -------- Net cash used in investing activities...... (20,267) (137,175) (10,251) -------- --------- -------- Net decrease in cash........................... (14,091) (4,060) (5,187) Cash and cash equivalents, beginning of year... 17,394 21,454 26,641 -------- --------- -------- Cash and cash equivalents, end of year......... $ 3,303 $ 17,394 $ 21,454 ======== ========= ========
The accompanying notes are an integral part of the consolidated financial statements. 20 ALLTRISTA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (thousands of dollars and shares)
Common Stock Treasury Stock Cumulative --------------- ---------------- Retained Translation Shares Amount Shares Amount Earnings Adjustment ------ ------- ------ -------- -------- ----------- Balance, December 31, 1997................... 7,977 $40,779 (515) $(11,479) $ 68,312 $(303) Net income.............. -- -- -- -- 15,727 -- Stock options exercised and stock plan purchases.............. 69 1,494 -- -- -- -- Shares reissued from treasury............... (79) (1,779) 79 1,779 -- -- Cumulative translation adjustment............. -- -- -- -- -- (316) Purchase of common stock.................. -- -- (767) (19,321) -- -- ----- ------- ------ -------- -------- ----- Balance, December 31, 1998................... 7,967 40,494 (1,203) (29,021) 84,039 (619) Net income.............. -- -- -- -- 29,192 -- Stock options exercised and stock plan purchases.............. 139 2,497 -- -- -- -- Shares reissued from treasury............... (141) (3,039) 141 3,039 -- -- Shares tendered for stock options and taxes.................. -- -- (23) (611) -- -- Cumulative translation adjustment............. -- -- -- -- -- 200 Purchase of common stock.................. -- -- (144) (3,146) -- -- ----- ------- ------ -------- -------- ----- Balance, December 31, 1999................... 7,965 39,952 (1,229) (29,739) 113,231 (419) Net income.............. -- -- -- -- 4,922 -- Stock options exercised and stock plan purchases.............. 63 1,449 -- -- -- -- Shares reissued from treasury............... (65) (1,384) 65 1,384 -- -- Shares tendered for stock options and taxes.................. -- -- (6) (131) -- -- Cumulative translation adjustment............. -- -- -- -- -- (559) Purchase of common stock.................. -- -- (452) (10,485) -- -- ----- ------- ------ -------- -------- ----- Balance, December 31, 2000................... 7,963 $40,017 (1,622) $(38,971) $118,153 $(978) ===== ======= ====== ======== ======== =====
ALLTRISTA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (thousands of dollars)
Year ended December 31, ----------------------- 2000 1999 1998 ------ ------- ------- Net income.............................................. $4,922 $29,192 $15,727 Foreign currency translation............................ (559) 200 (316) ------ ------- ------- Comprehensive income.................................... $4,363 $29,392 $15,411 ====== ======= =======
The accompanying notes are an integral part of the consolidated financial statements. 21 ALLTRISTA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in accordance with generally accepted accounting principles. The consolidated financial statements include the accounts of Alltrista Corporation and its wholly and majority owned subsidiaries (the Company). All significant intercompany transactions and balances have been eliminated upon consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. In accordance with Emerging Issues Task Force Item 00-10, the financial statements and related notes reflect a reclassification of freight expense on goods shipped to customers from Net Sales to Cost of Sales. This change had no effect on reported net income. The businesses comprising the Company have interests in metal and plastics products. See Business Segment Information (Note 2). Use of Estimates Preparation of the consolidated financial statements requires estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes. Actual results could differ from those estimates. Revenue Recognition Revenue from the sale of products is primarily recognized at the time product is shipped to customers. The Company allows customers to return defective or damaged products as well as certain other products for credit, replacement, or exchange. Revenue is recognized as the net amount to be received after deducting estimated amounts for product returns, discounts, and allowances. The Company provides credit, in the normal course of business, to its customers. The Company also maintains an allowance for doubtful customer accounts and charges actual losses when incurred to this allowance. In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements", which summarizes the SEC staff's views regarding the recognition and reporting of revenues in certain transactions. The adoption of SAB No. 101 in the fourth quarter of 2000 did not have a material impact on the Company's results of operations or financial position. Cash and Cash Equivalents Cash equivalents include financial investments with a maturity of three months or less when purchased. Inventories Inventories are stated at the lower of cost, determined on the first-in, first-out method, or market. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Maintenance and repair costs are charged to expense as incurred, and expenditures that extend the useful lives of the assets are capitalized. The Company reviews property, plant and equipment for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows, excluding interest cost. Depreciation Depreciation is provided on the straight-line method in amounts sufficient to amortize the cost of the assets over their estimated useful lives (buildings--30 to 50 years; machinery and equipment--5 to 15 years). 22 Goodwill Goodwill represents the excess of the purchase prices of acquired businesses over the estimated fair values of the net assets acquired. Goodwill is amortized on a straight-line basis over periods not to exceed 20 years. The Company evaluates these assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows, excluding interest costs. If facts and circumstances suggest that a subsidiary's net assets are impaired, the Company assesses the fair value of the underlying business and reduces goodwill to an amount that results in the book value of the operation approximating fair value. Taxes on Income Deferred taxes are provided for differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. Fair Value and Credit Risk of Financial Instruments The carrying values of cash and cash equivalents, accounts receivable, notes payable, accounts payable and accrued liabilities approximate their fair market value due to the short-term maturities of these instruments. Investments in life insurance contracts are carried at surrender value, which approximates fair market value. The fair market value of long-term debt was estimated using rates currently available to the Company for debt with similar terms and maturities. The Company enters into interest rate swaps to manage interest rate exposures. The Company designates the interest rate swaps as hedges of underlying debt. Interest expense is adjusted to include the payment made or received under the swap agreements. The fair market value of the swap agreements was estimated based on the current market value of similar instruments. Financial instruments that potentially subject the Company to credit risk consist primarily of trade receivables and interest-bearing investments. Trade receivable credit risk is limited due to the diversity of the Company's customers and the Company's ongoing credit review procedures. Collateral for trade receivables is generally not required. The Company places its interest- bearing cash equivalents with major financial institutions and limits the amount of credit exposure to any one financial institution. Stock Options The Company accounts for the issuance of stock options under the provisions of Accounting Principles Board No. 25, "Accounting for Stock Issued to Employees." Accordingly, for the Company's stock option plans, no compensation cost is recognized in the consolidated statement of income because the exercise price of the Company's stock options equals the market price of the underlying stock on the date of grant. Had compensation cost for the Company's stock option plans been determined based on the fair value at the grant dates for awards under those plans, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated.
2000 1999 1998 ------ ------- ------- (thousands of dollars, except per share amounts) Net income As reported..................................... $4,922 $29,192 $15,727 Pro forma....................................... 4,624 28,899 15,464 Basic earnings per share As reported..................................... $ .78 $ 4.34 $ 2.22 Pro forma....................................... .73 4.29 2.18 Diluted earnings per share As reported..................................... $ .77 $ 4.28 $ 2.19 Pro forma....................................... .72 4.24 2.15
The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted- average assumptions used for grants in 2000, 1999 and 1998, 23 respectively: no dividend yield for all years, expected volatility of 36, 25 and 23 percent, risk-free interest rates of 5.1, 5.4 and 4.7 percent and expected lives of 7.5 years for all periods. The average fair value of each option granted in 2000, 1999 and 1998 was $8.26, $8.62 and $10.96, respectively. Earnings Per Share Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated based on the weighted average number of outstanding common shares plus the dilutive effect of stock options as if they were exercised. A computation of earnings per share is as follows for the years ended December 31:
2000 1999 1998 ------ ------- ------- (thousands of dollars, except per share amounts) Income from continuing operations................... $4,922 $30,307 $17,597 Discontinued operations............................. -- (87) (1,870) Extraordinary loss from early extinguishment of debt............................................... -- (1,028) -- ------ ------- ------- Net income.......................................... $4,922 $29,192 $15,727 ====== ======= ======= Weighted average shares outstanding................. 6,338 6,734 7,079 Additional shares assuming conversion of stock options............................................ 45 85 116 ------ ------- ------- Weighted average shares outstanding assuming conversion......................................... 6,383 6,819 7,195 ====== ======= ======= Basic earnings per share: Income from continuing operations................. $ .78 $ 4.50 $ 2.48 Discontinued operations........................... -- (.01) (.26) Extraordinary loss from early extinguishment of debt.............................................. -- (.15) -- ------ ------- ------- Net income........................................ $ .78 $ 4.34 $ 2.22 ====== ======= ======= Diluted earnings per share--assuming conversion: Income from continuing operations................. $ .77 $ 4.44 $ 2.45 Discontinued operations........................... -- (.01) (.26) Extraordinary loss from early extinguishment of debt.............................................. -- (.15) -- ------ ------- ------- Net income........................................ $ .77 $ 4.28 $ 2.19 ====== ======= =======
2. Business Segment Information The Company is organized into two distinct segments: metal products and plastic products. The Company's operating segments are managed by the Company President and, with respect to the metals segment, the Metals Group Vice President as well. They are responsible for the segments' performance and are also part of the Company's operating decision-making group. The metal products segment includes sales of zinc and consumer products. This segment provides cast zinc strip and fabricated zinc products primarily for zinc coinage and industrial applications. It also markets a line of home food preservation products, including Ball(R), Kerr(R), Bernardin(R) and Golden Harvest(R) brand home canning jars which are sourced from major commercial glass container manufacturers, home canning metal closures, and related food products, which are distributed through a wide variety of retail outlets. The plastic products segment produces injection molded plastic products used in medical, pharmaceutical and consumer products and industrial thermoformed plastic parts for appliances, manufactured housing, recreational vehicles, heavy trucking, agricultural, portable toilet, recreational and construction products. Effective May 24, 1999, the multi-layer plastic sheet and formed container product lines were sold (see Note 4.) Net sales, operating earnings, assets employed in operations, capital expenditures, and depreciation and amortization by segment are summarized as follows: 24
2000 1999 1998 -------- -------- -------- (thousands of dollars) Net sales: Metal products: Consumer products......................... $120,381 $133,074 $ 95,728 Zinc products............................. 58,773 60,927 53,448 Other..................................... 687 -- -- -------- -------- -------- Total metal products.................... 179,841 194,001 149,176 -------- -------- -------- Plastic products: Industrial thermoformed parts (3)......... 129,855 108,621 38,983 Injection molded products................. 39,932 38,511 36,100 Plastic packaging (4)..................... -- 13,015 28,307 -------- -------- -------- Total plastic products.................. 169,787 160,147 103,390 -------- -------- -------- Intercompany................................ (1,072) (627) (102) -------- -------- -------- Total net sales......................... $348,556 $353,521 $252,464 ======== ======== ======== Operating earnings: Metal products.............................. $ 19,887 $ 29,654 $ 23,037 Plastic products (1)........................ (497) 10,494 8,338 Intercompany................................ 39 (69) -- Unallocated corporate expenses.............. (695) (1,597) (1,171) -------- -------- -------- Total operating earnings................ 18,734 38,482 30,204 Interest expense, net......................... (11,917) (8,395) (1,822) Gain on sale of plastic packaging product line......................................... -- 19,678 -- Reduction in long-term performance-based compensation................................. 1,600 -- -- Litigation charges, net of recoveries......... (1,352) -- -- -------- -------- -------- Income from continuing operations before taxes and minority interest........................ $ 7,065 $ 49,765 $ 28,382 ======== ======== ======== Assets employed in operations: Metal products.............................. $ 84,755 $ 96,588 $ 76,249 Plastic products............................ 207,914 207,656 55,171 -------- -------- -------- Total assets employed in operations..... 292,669 304,244 131,420 Corporate (2)............................... 16,070 34,507 34,411 -------- -------- -------- Total assets............................ $308,739 $338,751 $165,831 ======== ======== ======== Capital expenditures: Metal products.............................. $ 3,515 $ 9,600 $ 5,974 Plastic products............................ 9,835 6,770 5,674 Corporate................................... 287 258 261 -------- -------- -------- Total capital expenditures.............. $ 13,637 $ 16,628 $ 11,909 ======== ======== ======== Depreciation and amortization: Metal products.............................. $ 5,931 $ 4,561 $ 3,439 Plastic products............................ 15,146 12,316 6,540 Discontinued operations..................... -- -- 283 Corporate................................... 234 820 286 -------- -------- -------- Total depreciation and amortization..... $ 21,311 $ 17,697 $ 10,548 ======== ======== ========
- -------- (1) Operating earnings for 1999 and 1998 include pre-tax charges of $2.3 million and $1.3 million, respectively, to exit plants. (2) Corporate assets primarily include cash and cash equivalents, amounts relating to benefit plans, deferred tax assets and corporate facilities and equipment. (3) Includes the net sales of Triangle Plastics effective April 25, 1999. (4) Effective May 24, 1999, the Company sold its plastic packaging product line. 25 The Company's major customers are located within the United States and Canada. Net sales of the Company's products in Canada, including home food preservation products, coinage and thermoformed plastic truck components were $35.3 million, $35.7 million and $20.1 million in 2000, 1999 and 1998, respectively. Long-lived assets located outside the United States and net sales outside of the United States and Canada are not material. 3. Inventories Inventories were comprised of the following at December 31:
2000 1999 ------- ------- (thousands of dollars) Raw materials and supplies............................... $14,311 $17,155 Work in process.......................................... 10,253 9,400 Finished goods........................................... 27,984 31,353 ------- ------- Total inventories...................................... $52,548 $57,908 ======= =======
4. Acquisitions and Divestitures On June 1, 2000, the Company acquired the net assets of Synergy World, Inc. ("Synergy World") for $6.9 million in cash plus acquisition costs. The Company may pay up to an additional $2.0 million based upon future performance through March 31, 2002. The transaction was accounted for as a purchase, and accordingly, the purchase price was allocated to the assets purchased and liabilities assumed based on their estimated fair values as of the date of acquisition. The purchase price in excess of the fair value of assets purchased and liabilities assumed has been allocated to goodwill and is being amortized over a 20-year period on a straight-line basis. Any additional payments made by the Company would be recorded as goodwill. Synergy World is a St. Louis, Missouri-based designer and marketer of portable restrooms sold to equipment rental companies, waste services companies and diversified sanitation firms. Prior to the acquisition, the Company was the exclusive supplier of the thermoformed plastic restrooms to Synergy World. Synergy World employs 15 people and had 1999 sales of $10.5 million. Synergy World's operating results are included in the Company's financial statements beginning on June 1, 2000. The impact of including the financial results of Synergy World on a pro forma basis would not have been material. Effective April 25, 1999, the Company acquired the net assets of Triangle Plastics, Inc. and its TriEnda subsidiary ("Triangle Plastics") for $148.0 million in cash plus acquisition costs. The transaction was accounted for as a purchase. The purchase price was allocated to the assets purchased and liabilities assumed based on their estimated fair values as of the date of acquisition. The purchase price in excess of the fair value of assets purchased and liabilities assumed of $95.9 million has been allocated to goodwill and is being amortized over a 20-year period. Triangle Plastics manufactures heavy gauge industrial thermoformed parts for original equipment manufacturers in a variety of industries, including the heavy trucking, agricultural, portable toilet, recreational and construction markets. Triangle Plastics also produces plastic thermoformed products for material handling applications. Triangle Plastics had net sales of $114.1 million in 1998. The consolidated financial statements include Triangle Plastics' operating results from the date of acquisition. On December 21, 1999, the Company acquired a 51 percent equity interest in Microlin, LLC ("Microlin") from Elkem Metals Advanced Products Corporation. Microlin, located in Salt Lake City, Utah, is a developer of proprietary battery technology. The initial cash outlay for this investment was $1.5 million, with the purchase price and agreement to fund working capital needs over the next several years not expected to exceed $4 million. The Company is the operating shareholder of Microlin as it moves to commercialize patented battery technology in consumer, healthcare, veterinary and industrial markets. The batteries will utilize zinc-based materials produced by the Company. 26 Effective May 24, 1999, the Company sold its plastic packaging product line, which produced coextruded high-barrier plastic sheet and containers for the food processing industry, for $28.7 million in cash. This transaction resulted in a gain of $19.7 million. Proceeds from the sale were used for debt repayment. The Company's sales from this product line were $13.0 million and $28.3 million in 1999 and 1998, respectively. Effective September 28, 1998, the Company sold the assets of LumenX, its x- ray inspection equipment business, for $3.2 million. As a result of the sale, the Company's consolidated financial statements and the notes thereto report this business as a discontinued operation. LumenX had net sales of $7.2 million in 1998. 5. Debt and Interest The Company financed the 1999 acquisition of Triangle Plastics with a new $250 million credit facility consisting of a six-year $150 million term loan and a $100 million revolving credit facility. All borrowings mature on March 31, 2005. The agreement contains certain guarantees and financial covenants including minimum net worth requirements, minimum fixed charge coverage ratios and maximum financial leverage ratios. In February 2001, the Company entered into an agreement with its lenders to amend certain provisions of its existing debt agreement and waive violations of its minimum fixed charge ratio and maximum leverage ratio at December 31, 2000. The amendment reduces the revolving credit facility to $50 million, provides for collateral of accounts receivable and inventory, and modifies certain financial covenants. The term loan requires quarterly payments of principal escalating from $15 million in the first year to $30 million in the fifth and sixth years. Interest on the term loan is based upon fixed increments over the adjusted London Interbank Offered Rate or the agent bank's alternate borrowing rate as defined in the agreement. The Company's weighted average interest rate on the term loan outstanding borrowings at December 31, 2000 was 7.9%, exclusive of the effects of the interest rate swap (see below). Because the interest rates applicable to the term loan are based on floating rates identified by reference to market rates, the fair market value of the long-term debt as of December 31, 2000 and 1999 approximates its carrying value. Interest on borrowings under the revolving credit facility are based upon fixed increments over the adjusted London Interbank Offered Rate or the agent bank's alternate borrowing rate as defined in the agreement. The agreement also requires the payment of commitment fees on the unused balance. As of December 31, 2000, $16 million of borrowings were outstanding under this agreement with a weighted average interest rate of 8.1%. No such borrowings were outstanding as of December 31, 1999. As part of the new financing in 1999, the Company paid off $25.7 million of existing debt. The Company incurred a $1.7 million pretax ($1.0 million after- tax) prepayment charge in connection with the payoff. The charge is reported as an extraordinary loss on the Consolidated Statement of Income. In May 1999, the Company entered into a three-year interest rate swap with an initial notional value of $90 million. The swap effectively fixes the interest rate on approximately 60% of the Company's term debt at a maximum rate of 7.98% for the three-year period. The fair market value of the swap as of December 31, 2000 and 1999 was approximately $45,000 and $1.4 million, respectively. The Company assumed $521,000 of low interest rate loans in connection with the Triangle acquisition. These loans fully amortize by December 2002. In December 1999, the Company borrowed an additional $995,000 under the same low- interest rate loan program for a period of five years. Maturities on long-term debt over the next five years are $26.0 million in 2001, $27.8 million in 2002, $29.6 million in 2003, $30.2 million in 2004 and $7.5 million in 2005. Interest paid on the Company's borrowings during the years ended December 31, 2000, 1999 and 1998 was $11.4 million, $8.3 million and $2.4 million, respectively. 27 6. Costs to Exit Facilities In October 1999, management initiated a plan to exit the Company's plastic thermoforming facility in El Dorado, Arkansas. Operations in this facility ceased in January 2000 and were moved to the Company's Auburndale, Florida facility. The total cost to exit the facility was $2.3 million and includes a $0.8 million loss on the sale and disposal of equipment, $0.6 million in future lease obligations, net of assumed sublease revenue and $0.9 million in other costs consisting primarily of employee severance, consulting and employment obligations and other related fees. Of this $2.3 million charge, which was recorded in the fourth quarter of 1999, $1.8 million has been expended through December 31, 2000. In July 1998, management initiated a plan to exit the Company's plastic injection molding facility in Arecibo, Puerto Rico. Operations in this facility ended in January 1999. The total cost to exit the facility was $1.3 million which included a $0.7 million write down of equipment and $0.6 million in other costs consisting primarily of employee severance and costs to return the leased facility to its original condition. 7. Taxes on Income The components of the provision for income taxes attributable to continuing operations were as follows for the years ended December 31:
2000 1999 1998 ------ ------- ------- (thousands of dollars) Current income tax expense (benefit): U.S. federal.................................. $ (166) $19,233 $ 8,562 Foreign....................................... 462 960 1,137 State and local............................... (59) 2,880 1,287 ------ ------- ------- Total....................................... 237 23,073 10,986 ------ ------- ------- Deferred income tax expense (benefit): U.S. federal.................................. 1,135 (3,635) (148) State, local and other........................ 187 (580) (53) ------ ------- ------- Total....................................... 1,322 (4,215) (201) ------ ------- ------- Income tax benefit applied to goodwill.......... 843 600 -- ------ ------- ------- Total provision for income taxes............ $2,402 $19,458 $10,785 ====== ======= =======
Foreign pre-tax income was $2.5 million, $1.0 million and $2.8 million in 2000, 1999 and 1998, respectively. Deferred tax liabilities (assets) are comprised of the following at December 31:
2000 1999 ------- ------- (thousands of dollars) Property, equipment and intangibles..................... $17,559 $17,448 Other................................................... 346 357 ------- ------- Gross deferred tax liabilities.......................... 17,905 17,805 ------- ------- Accounts receivable allowances.......................... (580) (663) Inventory valuation..................................... (1,312) (1,978) Compensation and benefits............................... (5,352) (6,191) Other................................................... (2,214) (3,902) ------- ------- Gross deferred tax assets............................... (9,458) (12,734) ------- ------- Net deferred tax liability.............................. $ 8,447 $ 5,071 ======= =======
28 At December 31, 2000 and 1999, there were no valuation allowances for deferred tax assets as management believes it is more likely than not that they will be realized through future taxable earnings or alternative tax strategies. The difference between the federal statutory income tax rate and the Company's effective income tax rate as a percentage of income from continuing operations is reconciled as follows:
2000 1999 1998 ---- ---- ---- Federal statutory tax rate.............................. 35.0% 35.0% 35.0% Increase (decrease) in rates resulting from: State and local taxes, net............................ 1.0 3.0 2.9 Foreign............................................... (2.2) 1.2 .5 Other................................................. .2 (.1) (.4) ---- ---- ---- Effective income tax rate............................... 34.0% 39.1% 38.0% ==== ==== ====
In 1999 and 1998, the income tax expense or benefit from discontinued operations differed from an expense or benefit calculated using the federal statutory tax rate primarily due to state income taxes and the amortization of intangible assets. Total income tax payments made by the Company during the years ended December 31, 2000, 1999 and 1998 were $1.7 million, $23.2 million and $8.2 million, respectively. As of December 31, 2000, the Company's foreign subsidiaries had $2.4 million of distributable earnings, exclusive of amounts that if remitted in the future would result in little or no tax under current laws. No provision for U.S. or state income taxes has been made for these earnings as the Company considers these earnings to be indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability on these undistributed earnings is not practicable. 8. Retirement and Other Employee Benefit Plans The Company has multiple defined contribution retirement plans that qualify under section 401(k) of the Internal Revenue Code. The Company's contributions to these retirement plans were $1.5 million, $1.9 million and $1.8 million, respectively, in the years ended December 31, 2000, 1999 and 1998. The Company also maintains a defined benefit pension plan for certain of its hourly employees. The components of net periodic pension expense for the years ended December 31, 2000, 1999 and 1998 are as follows:
2000 1999 1998 ------ ------ ------ (thousands of dollars) Service cost of benefits earned during the period......................................... $ 280 $ 291 $ 253 Interest cost on projected benefit obligation... 853 807 727 Investment gain on plan assets.................. (1,648) (1,670) (1,192) Net amortization and deferral................... 630 802 368 ------ ------ ------ Net periodic pension expense.................... $ 115 $ 230 $ 156 ====== ====== ======
29 The following table is a reconciliation of the benefit obligation and the fair value of plan assets as of December 31, 2000 and 1999:
2000 1999 ------- ------- (thousands of dollars) Change in benefit obligation: Benefit obligation at beginning of year.............. $11,541 $12,100 Service cost......................................... 280 291 Interest cost........................................ 853 807 Actuarial gain....................................... (58) (1,397) Benefits paid........................................ (312) (260) ------- ------- Benefit obligation at end of year.................... 12,304 11,541 ------- ------- Change in plan assets: Fair value of plan assets at beginning of year....... 12,087 10,739 Actual return on plan assets......................... 1,648 1,670 Benefits paid........................................ (415) (322) ------- ------- Fair value of plan assets at end of year............. 13,320 12,087 ------- ------- Funded status........................................ 1,016 546 Unrecognized net transitional asset.................. (1) (10) Unrecognized prior service cost...................... 745 840 Unrecognized net gain................................ (2,098) (1,598) ------- ------- Accrued benefit cost................................. $ (338) $ (222) ======= =======
The actuarial assumptions used to compute the funded status of the plan for 2000 and 1999 include a discount rate of 7.50% and an expected long-term rate of return on assets of 9.0%. The Company also provides certain postretirement medical and life insurance benefits for a portion of its non-union employees. The components of net periodic postretirement benefit expense for the years ended December 31, 2000, 1999 and 1998 are as follows:
2000 1999 1998 ---- ---- ---- (thousands of dollars) Service cost of benefits earned.......................... $ 60 $ 67 $ 74 Interest cost on liability............................... 105 105 111 Net amortization and deferral............................ (14) 2 (4) ---- ---- ---- Net postretirement benefit cost........................ $151 $174 $181 ==== ==== ====
The status of the Company's unfunded postretirement benefit obligation at December 31, 2000 and 1999 follows:
2000 1999 ----------- ----------- (thousands of dollars) Change in benefit obligation: Benefit obligation at beginning of year....... $ 1,446 $ 1,805 Service cost.................................. 60 67 Interest cost................................. 105 105 Curtailment adjustment........................ -- (271) Actuarial gain................................ (9) (213) Benefits paid................................. (49) (47) ----------- ----------- Benefit obligation at end of year............. 1,553 1,446 Unrecognized prior service cost............... (49) (53) Unrecognized net gain......................... 443 430 ----------- ----------- Accrued benefit cost.......................... $ 1,947 $ 1,823 =========== ===========
30 The assumed discount rate used to measure the benefit obligation was 7.50% as of December 31, 2000 and 1999. Increases in health care costs would not materially impact the benefit obligation or the annual service and interest costs recognized as benefits under the medical plan consist of a defined dollar monthly subsidy toward the retiree's purchase of medical insurance for the majority of employees covered. The Company has a deferred compensation plan that permits eligible employees to defer a specified portion of their compensation. The deferred compensation earns rates of return as specified in the plan. As of year-end 2000 and 1999, the Company had accrued $6.4 million and $6.5 million, respectively, for its obligations under this plan. Interest expense on this obligation was $0.3 million, $0.7 million and $0.5 million in 2000, 1999 and 1998, respectively. To effectively fund this obligation, in December 1996 the Company purchased variable rate life insurance contracts. Proceeds from the insurance contracts are payable to the Company upon the death of the participants. The cash surrender value of these contracts included in Other Assets was $6.6 million and $6.7 million as of December 31, 2000 and 1999, respectively. 9. Stock Plans The Company maintains a long-term equity plan that allows for grants of stock options, restricted stock, stock equivalent units, stock appreciation rights and other stock-related forms of incentive compensation. As of December 31, 2000, there were 93,184 shares available for grant under the long-term equity plan. Stock options are granted to key employees and non-employee directors. The stock option price will not be less than the fair market value of the Company's common stock on the date of grant. Payment must be made at the time of exercise in cash or with shares of stock owned by the option holder (which are valued at fair market value on the exercise date). Options granted to employees terminate ten years from date of grant and become exercisable in four equal installments commencing one year from grant. Options granted to non-employee directors terminate ten years from date of grant and become exercisable one year from the grant date. A summary of stock option activity for the years ended December 31, 2000 and 1999 is as follows:
2000 1999 ----------------------------------- ----------------------------------- Weighted Avg. Weighted Avg. ----------------------------------- ----------------------------------- Shares Option Price Price Range Shares Option Price Price Range ------- ------------ ------------- ------- ------------ ------------- Outstanding at beginning of year................ 276,110 $18.81 $10.89-$27.94 358,840 $17.44 $10.70-$27.94 New options granted..... 80,750 16.54 12.50- 23.75 28,000 20.20 19.75- 21.25 Exercised............... (20,890) 12.38 10.89- 19.63 (95,265) 13.77 10.70- 27.00 Canceled................ (29,800) 23.53 19.63- 27.94 (15,465) 20.69 10.70- 27.94 ------- ------- Outstanding at end of year................... 306,170 18.27 10.89- 27.94 276,110 18.81 10.89- 27.94 Exercisable at end of year................... 213,650 $18.70 $10.89-$27.94 211,435 $17.78 $10.89-$27.94 Reserved for future grants................. 77,497 -- -- 128,447 -- --
Significant option groups outstanding at December 31, 2000 and related weighted average price and life information follows:
Exercise Options Weighted average Options Weighted average Weighted average Price outstanding exercise price exercisable exercise price remaining life (years) -------- ----------- ---------------- ----------- ---------------- ---------------------- $22.25-$27.94 62,750 $24.07 44,254 $23.48 6.08 18.75- 21.50 122,499 20.87 98,475 20.87 5.80 10.89- 13.25 120,921 12.62 70,921 12.70 5.10
The Company also grants restricted stock to key employees. Restrictions under the plan lapse at a rate of 20% per year commencing one year from grant. The company granted 3,250, 6,950 and 9,500 shares in 2000, 1999 and 1998, respectively. 31 The Company also maintains an employee stock purchase plan whereby the Company contributes 20% of each participating employee's monthly payroll deduction, up to $500. The Company contributed $144,000, $166,000 and $156,000 to the plan in 2000, 1999 and 1998, respectively. Additionally, the Company maintains a performance share plan designed to reward key employees for their contributions to the Company's growth and success. Performance awards are in the form of stock equivalent units, which entitle the participant to receive a specified number of common shares, contingent on the attainment of specified performance objectives for the applicable multi-year performance period and the satisfaction of other criteria. As of December 31, 2000, 51,290 stock equivalent units were outstanding that could become issuable in the form of shares should target performance levels be achieved. As of December 31, 2000, no common shares have been issued under this plan and no liability has been recorded for possible future payouts. 10. Lease Commitments The Company has commitments under operating leases, certain of which extend through 2008. These commitments total $3.4 million in 2001, $3.2 million in 2002, $3.1 million in 2003, $2.5 million in 2004, $2.2 million in 2005 and $2.6 million in total for all later years. Total lease expense was $4.1 million in 2000, $3.5 million in 1999 and $1.6 million in 1998. 11. Litigation Charges and Recoveries In September 2000, the Company reached settlements in two legal disputes incurring $2.2 million in settlement and legal expenses in the aggregate. On May 19, 1997 the Company purchased certain assets and assumed certain liabilities of Viking Industries and, in accordance with the terms of the asset purchase agreement, could pay up to an additional $4.0 million of purchase price based upon performance through May 2001. The settlement was the result of arbitration proceedings initiated by the former owner in an effort to accelerate payment of the additional $4.0 million. No additional amounts are payable in connection with the acquisition. The Company had also been named a defendant in a lawsuit with respect to a royalty agreement, whereby the plaintiff (licensee) believed the Company was obligated to extend a paid- up royalty-free license to the plaintiff. The Company reached a settlement and extended a paid-up royalty-free license to the plaintiff through October 9, 2001, the date the patent in question expires. In December 2000, the Company received a cash payment, net of related legal expenses, of $0.9 million as settlement for a customer terminating a supply contract prior to its expiration date. 12. Contingencies The Company is involved in various legal disputes in the ordinary course of business. In addition, the Environmental Protection Agency has designated the Company as a potentially responsible party, along with numerous other companies, for the clean up of several hazardous waste sites. Information at this time does not indicate that disposition of any of the legal or environmental disputes the Company is currently involved in will have a material, adverse effect upon the financial condition, results of operations, cash flows or competitive position of the Company. 13. New Accounting Pronouncements Statement of Financial Accounting Standard 133 (SFAS 133), Accounting for Derivative Instruments and Hedging Activities (as amended by SFAS 137 and SFAS 138) provides accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. SFAS 133 is effective for the Company beginning with the first quarter of 2001, and its adoption will not have a material impact on the Company's results of operations or financial position. 32 14. Quarterly Stock Prices (Unaudited) Quarterly sales prices for the Company's common stock, as reported on the composite tape, were as follows:
First Second Third Fourth Quarter Quarter Quarter Quarter -------- ------- ------- -------- 2000 High....................................... 25 25 1/2 23 1/2 20 15/16 Low........................................ 21 20 20 3/4 10 1999 High....................................... 25 15/16 34 33 5/8 26 3/8 Low........................................ 19 1/2 19 7/16 24 5/8 20 9/16
33 Quarterly Results of Operations (Unaudited)
First Second Third Fourth Quarter Quarter Quarter Quarter Total ------- -------- -------- ------- -------- (thousands of dollars, except per share amounts) 2000 Net sales (7)............. $83,325 $112,098 $ 95,496 $57,637 $348,556 ------- -------- -------- ------- -------- Gross profit.............. 18,695 30,534 22,963 8,713 80,905 ------- -------- -------- ------- -------- Net income from continuing operations............... 444 6,210(1) 1,641(2) (3,373)(3) 4,922 ------- -------- -------- ------- -------- Net income (loss)......... 444 6,210 1,641 (3,373) 4,922 ------- -------- -------- ------- -------- Basic earnings (loss) per share: Income (loss) from continuing operations.. $ .07 $ .99 $ .26 $ (.53) $ .78 ------- -------- -------- ------- -------- Net income (loss)....... $ .07 $ .99 $ .26 $ (.53) $ .78 ------- -------- -------- ------- -------- Diluted earnings (loss) per share: Income (loss) from continuing operations.. $ .07 $ .98 $ .26 $ (.53) $ .77 ------- -------- -------- ------- -------- Net income (loss)....... $ .07 $ .98 $ .26 $ (.53) $ .77 ======= ======== ======== ======= ======== 1999 Net sales (7)............. $53,161 $112,913 $111,578 $75,869 $353,521 ------- -------- -------- ------- -------- Gross profit.............. 12,293 33,605 33,697 20,677 100,272 ------- -------- -------- ------- -------- Net income from continuing operations............... 1,963 20,364(4) 7,813 167(5) 30,307 ------- -------- -------- ------- -------- Net income (loss)......... 2,099 19,336 7,813 (56) 29,192 ------- -------- -------- ------- -------- Basic earnings (loss) per share: Income from continuing operations............. $ .29 $ 3.03 $ 1.16 $ .02 $ 4.50 ------- -------- -------- ------- -------- Net income (loss)....... $ .31 $ 2.88 $ 1.16 $ (.01) $ 4.34 ------- -------- -------- ------- -------- Diluted earnings (loss) per share: Income from continuing operations............. $ .29 $ 2.99 $ 1.14 $ .02 $ 4.44 ------- -------- -------- ------- -------- Net income (loss)....... $ .31 $ 2.84 $ 1.14 $ (.01) $ 4.28 ======= ======== ======== ======= ======== 1998 Net sales (7)............. $44,088 $ 85,765 $ 74,796 $47,815 $252,464 ------- -------- -------- ------- -------- Gross profit.............. 10,153 25,084 23,182 11,294 69,713 ------- -------- -------- ------- -------- Net income from continuing operations............... 1,587 6,844 7,177(6) 1,989 17,597 ------- -------- -------- ------- -------- Net income................ 1,656 6,581 5,501 1,989 15,727 ------- -------- -------- ------- -------- Basic earnings per share: Income from continuing operations............. $ .22 $ .94 $ 1.03 $ .30 $ 2.48 ------- -------- -------- ------- -------- Net income.............. $ .23 $ .90 $ .79 $ .30 $ 2.22 ------- -------- -------- ------- -------- Diluted earnings per share: Income from continuing operations............. $ .21 $ .93 $ 1.01 $ .29 $ 2.45 ------- -------- -------- ------- -------- Net income.............. $ .22 $ .89 $ .78 $ .29 $ 2.19 ======= ======== ======== ======= ========
- -------- (1) Includes $1.1 million of income (net of tax) associated with the reduction in long-term performance-based compensation. (2) Includes $1.5 million of costs (net of tax) related to litigation. (3) Includes $0.6 million of income (net of tax) related to litigation. (4) Includes a $12.2 million gain (net of tax) on the sale of the Company's plastic packaging product line. (5) Includes $1.4 million of costs (net of tax) associated with the exit of a plastics thermoforming facility. (6) Includes $0.8 million of costs (net of tax) associated with the exit of a plastics injection molding facility. (7) Net sales for all periods presented reflect a reclassification of freight expense on goods shipped to customers from Net Sales to Cost of Sales. Note: Earnings per share calculations for each quarter are based on the weighted average number of shares outstanding for each period, and the sum of the quarterly amounts may not necessarily equal the annual earnings per share amounts. 34 Report of Independent Auditors Board of Directors and Shareholders Alltrista Corporation and Subsidiaries We have audited the accompanying consolidated balance sheets of Alltrista Corporation and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2000. Our audits also included the financial statement schedule listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Alltrista Corporation and subsidiaries at December 31, 2000 and 1999, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ Ernst & Young LLP Indianapolis, Indiana January 26, 2001 Except for Note 5, as to which the date is February 9, 2001 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure No disclosure required under Item 9. 35 PART III Item 10. Directors and Executive Officers of the Registrant The executive officers of the company are as follows: Thomas B. Clark, age 55, is chairman, president and chief executive officer of the Company. Mr. Clark became chairman effective May 5, 2000. Mr. Clark has been president since March 1994 and became chief executive officer on January 1, 1995. From April 1993 to March 1994, Mr. Clark served as senior vice president and chief financial officer. Mr. Clark served as vice president of Ball from August 1992 until April 1993. Mr. Clark joined Ball in August 1976 as director of planning, was elected vice president, planning and development in April 1985 and served as vice president, communications, planning and development from May 1989 until August 1992. Mr. Clark also serves as a director of First Merchants Corporation, Muncie, Indiana. Kevin D. Bower, age 42, is senior vice president and chief financial officer of the Company. From March 1994 to April 1997 Mr. Bower served as vice president of finance and controller of the Company. From April 1993 to March 1994 Mr. Bower served as vice president and controller of the Company. Mr. Bower joined Ball in November 1992. Prior to that time, he served as a senior manager with the public accounting firm of Price Waterhouse. Jerry T. McDowell, age 59, is group vice president, metal products, of the Company. From December 1994 to March 1998 Mr. McDowell served as senior vice president and chief operating officer of the Company. Mr. McDowell served as president of Zinc Products Company from April 1993 to December 1994. Since joining Ball in 1970, Mr. McDowell served in various operating positions within the Company's Zinc Products division. From July 1979 to April 1993, Mr. McDowell served as president of Ball's Zinc Products division. Angela K. Knowlton, age 38, is vice president, finance and treasurer of the Company. From April 1997 to February 2000 Ms. Knowlton served as vice president and treasurer of the Company. From August 1994 to April 1997 Ms. Knowlton served as director, taxation. From August 1993 to August 1994 Ms. Knowlton served as manager, taxation. Prior to joining the Company in August 1993, Ms. Knowlton served as a manager with the public accounting firm of Price Waterhouse. J. David Tolbert, age 40, is vice president, human resources and administration of the Company. From April 1997 to October 1998 Mr. Tolbert served as vice president, human resources and corporate risk of the Company. From October 1993 to April 1997 Mr. Tolbert served as director of human resources of the Company. Since joining Ball in 1987, Mr. Tolbert served in various human resource and operating positions of Ball's and the Company's former Plastic Packaging division. Other information required by Item 10 appearing under the caption "Director Nominees and Continuing Directors" of the Company's proxy statement filed pursuant to Regulation 14A, dated April 2, 2001, is incorporated herein by reference. The proxy statement will be filed with the Commission on or about April 2, 2001. Item 11. Executive Compensation The information required by Item 11 appearing under the caption "Executive Compensation" of the Company's proxy statement filed pursuant to Regulation 14A dated April 2, 2001 is incorporated herein by reference. The proxy statement will be filed with the Commission on or about April 2, 2001. Item 12. Security Ownership of Certain Beneficial Owners and Management The information required by Item 12 appearing under the captions "Voting Securities and Principal Shareholders" and "Security Ownership by Management and Directors" of the Company's proxy statement filed pursuant to Regulation 14A dated April 2, 2001, is incorporated herein by reference. The proxy statement will be filed with the Commission on or about April 2, 2001. Item 13. Certain Relationships and Related Transactions No disclosure required under Item 13. 36 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) The following documents are filed as part of this report: (1) Financial Statements
Location In 10-K -------- Consolidated statements of income--Years ended December 31, 2000, 1999 and 1998............................................................. Item 8 Consolidated balance sheets--December 31, 2000 and 1999............... Item 8 Consolidated statements of cash flows--Years ended December 31, 2000, 1999 and 1998........................................................ Item 8 Consolidated statements of changes in shareholders' equity--Years ended December 31, 2000, 1999 and 1998............................... Item 8 Consolidated statements of comprehensive income--Years ended December 31, 2000, 1999 and 1998.............................................. Item 8 Notes to consolidated financial statements............................ Item 8 Report of independent auditors........................................ Item 8
(2) Financial Statement Schedule: See Schedule II on page 39 of this Form 10-K. (3) Exhibits: See the Index to Exhibits on pages 40 and 41 of this Form 10-K. (b) Reports on Form 8-K In a Form 8-K (Commission File number 0-21052) dated October 10, 2000, the Company filed two press releases addressing the Company's expectations for earnings for the year ended December 31, 2000 and clarifying the status of the Company's review of its strategic options. 37 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Alltrista Corporation (Registrant) /s/ Thomas B. Clark By: _________________________________ Thomas B. Clark Chairman, President and Chief Executive Officer March 26, 2001 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated below. (1) Principal Executive Officer: /s/ Thomas B. Clark Chairman, President and Chief Executive Officer ___________________________________________ March 26, 2001 Thomas B. Clark (2) Principal Financial Accounting Officer: /s/ Kevin D. Bower Senior Vice President and Chief Financial Officer ___________________________________________ March 26, 2001 Kevin D. Bower (3) Board of Directors: /s/ Thomas B. Clark Chairman, President and Chief Executive Officer ___________________________________________ March 26, 2001 Thomas B. Clark /s/ Douglas W. Huemme Director ___________________________________________ March 26, 2001 Douglas W. Huemme /s/ Richard L. Molen Director ___________________________________________ March 26, 2001 Richard L. Molen /s/ Lynda Watkins Popwell Director ___________________________________________ March 26, 2001 Lynda Watkins Popwell /s/ Patrick W. Rooney Director ___________________________________________ March 26, 2001 Patrick W. Rooney /s/ David L. Swift Director ___________________________________________ March 26, 2001 David L. Swift /s/ Robert L. Wood Director ___________________________________________ March 26, 2001 Robert L. Wood
38 Schedule II ALLTRISTA CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (thousands of dollars)
Balance at Charges to Deductions Balance at beginning costs and from end of of period expense reserves Other(1) period ---------- ---------- ---------- -------- ---------- Reserves against accounts receivable: 2000................... $(1,735) $(746) $964 $ -- $(1,517) 1999................... $(1,081) $(578) $ 48 $(124) $(1,735) 1998................... $(1,023) $(400) $342 $ -- $(1,081)
- -------- (1) Effective April 25, 1999, the Company acquired the net assets of Triangle Plastics, Inc. and its TriEnda subsidiary. 39 ALLTRISTA CORPORATION AND SUBSIDIARIES ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000 Index to Exhibits
Exhibit Number Description of Exhibit ------- ---------------------- 3.1 Form of Amended Articles of Incorporation (filed as Exhibit 3.1 to the Company's Registration Statement on Form 10, Filing No. 0-21052, and incorporated herein by reference), filed October 20, 1992 3.2 Form of Bylaws of Alltrista Corporation as amended and restated as of February 2, 2001, filed herewith 4.1 Form of Common Stock Certificate of Alltrista Corporation (filed as Exhibit 4.1 to the Company's Registration Statement on Form 10, Filing No. 0-21052, and incorporated herein by reference), filed March 17, 1993 4.2 Form of Rights Agreement (filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q, Filing No. 0-21052, and incorporated herein by reference), filed May 12, 1999 10.1 Form of Alltrista Corporation 1999 Economic Value Added and Growth Incentive Compensation Plan for Key Members of Management (filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K, Filing No. 0-21052, and incorporated herein by reference), filed March 30, 2000 10.2 Amendment to the Alltrista Corporation Economic Value Added and Growth Incentive Compensation Plan for Key Members of Management, filed herewith 10.3 Form of Alltrista Corporation 1993 Stock Option Plan for Nonemployee Directors (filed as Exhibit 10.2 to the Company's Registration Statement on Form 10, Filing No. 0-21052, and incorporated herein by reference), filed March 17, 1993 10.4 Form of Alltrista Corporation 1993 Stock Option Plan (filed as Exhibit 10.3 to the Company's Registration Statement on Form 10, Filing No. 0-21052, and incorporated herein by reference), filed March 17, 1993 10.5 Form of Alltrista Corporation 1996 Stock Option Plan for Nonemployee Directors (filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K, Filing No. 0-21052, and incorporated herein by reference), filed March 27, 1997 10.6 Form of Alltrista Corporation 1993 Restricted Stock Plan (filed as Exhibit 10.4 to the Company's Registration Statement on Form 10, Filing No. 0-21052, and incorporated herein by reference), filed March 17, 1993 10.7 Form of Change of Control Agreement (filed as Exhibit 10.6 to the Company's Annual Report on Form 10-K, Filing No. 0-21052, and is incorporated herein by reference), filed March 29, 1999 10.8 List of Alltrista Corporation officers party to Exhibit 10.7, filed herewith 10.9 Form of Distribution Agreement between Ball Corporation and Alltrista Corporation (filed as Exhibit 10.7 to the Company's Registration Statement on Form 10, Filing No. 0-21052, and incorporated herein by reference), filed March 17, 1993 10.10 Form of Tax Sharing and Indemnification Agreement between Ball Corporation and Alltrista Corporation (filed as Exhibit 10.10 to the Company's Registration Statement on Form 10, Filing No. 0-21052, and incorporated herein by reference), filed March 17, 1993
40
Exhibit Number Description of Exhibit ------- ---------------------- 10.11 Form of Indemnification Agreement (filed as Exhibit 10.13 to the Company's Registration Statement on Form 10, Filing No. 0- 21052, and incorporated herein by reference), filed March 17, 1993 10.12 List of Directors and Executive Officers party to Exhibit 10.11 (filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K, Filing No. 0-21052, and incorporated herein by reference), filed March 31, 1996 10.13 Alltrista Corporation 1993 Deferred Compensation Plan for Selected Key Employees as Amended on February 1, 2001, filed herewith 10.14 Alltrista Corporation 1993 Deferred Compensation Plan as Amended and Restated in its Entirety, November 21, 1996 and Further Amended on February 1, 2001, filed herewith 10.15 Alltrista Corporation 1997 Deferred Compensation Plan for Directors as Amended on February 1, 2001, filed herewith 10.16 Alltrista Corporation Excess Savings and Retirement Plan as Amended on February 1, 2001, filed herewith 10.17 Alltrista Corporation 1998 Long Term Equity Incentive Plan (filed as Appendix A to the Company's Proxy Statement dated April 8, 1998, Filing No. 0-21052, and incorporated herein by reference), filed April 6, 1998 21.1 Subsidiaries of Alltrista Corporation, filed herewith 23.1 Consent of Independent Auditors, filed herewith 99.1 Forward-Looking Statements, filed herewith
Copies of exhibits incorporated by reference can be obtained from the SEC and are located in SEC File No. 0-21052. 41 EX-3.2 2 dex32.txt FORM OF BYLAWS OF ALLTRISTA CORPORATION EXHIBIT 3.2 Adopted on March 22,1993, Amended May 11, 1993, Amended September 15, 1994 Amended October 23, 1995 Amended September 18, 1997 Amended January 29, 1999 Amended February 2, 2001 Bylaws of Alltrista Corporation Article One Capital Stock Section A. Classes of Stock. The capital stock of the corporation shall consist of shares of such kinds and classes, with such designations and such relative rights, preferences, qualifications, limitations and restrictions, including voting rights, and for such consideration as shall be stated in or determined in accordance with the Amended Articles of Incorporation and any amendment or amendments thereof, or the Indiana Business Corporation Law. Consistent with the Indiana Business Corporation Law, capital stock of the corporation owned by the corporation may be referred to and accounted for as treasury stock. Section B. Certificates for Shares. All share certificates shall be consecutively numbered as issued and shall be signed by the president or a vice president and the corporate secretary or any assistant secretary of the corporation. Section C. Transfer of Shares. The shares of the capital stock of the corporation shall be transferred only on the books of the corporation by the holder thereof, or by his attorney, upon the surrender and cancellation of the stock certificate, whereupon a new certificate shall be issued to the transferee. The transfer and assignment of such shares of stock shall be subject to the laws of the State of Indiana. The board of directors shall have the right to appoint and employ one or more stock registrars and/or transfer agents in the State of Indiana or in any other state. Section D. Control Share Acquisition Statute Inapplicable. Chapter 42 of the Indiana Business Corporation Law (IC 23-1-42) shall not apply to control share acquisitions of shares of the Corporation. Article Two Shareholders Section A. Annual Meetings. The regular annual meeting of the shareholders of the corporation shall be held on the fourth Wednesday in April of each year, or on such other date within a reasonable interval after the close of the corporation's last fiscal year as may be designated from time to time by the board of directors, for the election of the directors of the corporation, and for the transaction of such other business as is authorized or required to be transacted by the shareholders. Section B. Special Meetings. Special meetings of the shareholders may be called by the president or by the board of directors or as otherwise may be required by law. Section C. Time and Place of Meetings. All meetings of the shareholders shall be held at the principal office of the corporation or at such other place within or without the State of Indiana and at such time as may be designated from time to time by the board of directors. Rider 1. Section D. Notice of Business. No business may be transacted at an Annual Meeting of Shareholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting by or at the direction of the board of directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the Annual Meeting by any shareholder of the corporation (i) who is a shareholder of record on the date of the giving of the notice provided for in this Section D of this Article Two and on the record date for the determination of shareholders entitled to vote at such annual meeting and (ii) who complied with the notice procedures set forth in this Section D of this Article Two. In addition to any other applicable requirements, for business to be properly brought before an Annual Meeting by a shareholder, such shareholder must have given timely notice thereof in proper written form to the secretary of the corporation. To be timely, a shareholder's notice to the secretary must be delivered to or mailed and received at the principal executive offices of the corporation not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of shareholders; provided, however, that in the event that the Annual Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the shareholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was made, whichever first occurs. In no event shall the public announcement of an adjournment of an Annual Meeting commence a new time period for the giving of a shareholder's notice as described above. To be in proper written form, a shareholder's notice to the secretary must set forth as to each matter such shareholder proposes to bring before the Annual Meeting (i) a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting, (ii) the name and record address of such shareholder, (iii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by such shareholders, (iv) a description of all arrangements or understandings between such shareholder and any other person or persons (including their names) in connection with the proposal, and (v) a representation that such shareholder intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting. No business shall be conducted at the Annual Meeting of Shareholders except business brought before the Annual Meeting in accordance with the procedure set forth in this Section D of this Article Two, provided, however, that, once business has been properly brought before the Annual Meeting in accordance with such procedures, nothing in this Section D of this Article Two shall be deemed to preclude discussion by any shareholder of any such business. If the chairman of an Annual Meeting determines that business was not properly brought before the Annual Meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted. Article Three Directors Section A. Number and Terms of Office. The business of the corporation shall be controlled and managed in accordance with the Indiana Business Corporation Law by a board of seven directors, divided into classes as provided in the Amended Articles of Incorporation. Rider 2. Section B. Nomination of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the corporation, except as may be otherwise provided in the Amended Certificate of Incorporation including the right of holders of preferred stock of the corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any Annual Meeting of Shareholders, or at any Special Meeting of Shareholders called for the purpose of electing directors, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (b) by any shareholder of the corporation (I) who is a shareholder of record on the date of the giving of the notice provided for in this Section B of this Article Three and on the record date for the determination of shareholders entitled to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section B of this Article Three. 2 In addition to any other applicable requirements, for a nomination to be made by a shareholder, such shareholder must have given timely notice thereof in proper written form to the secretary of the corporation. To be timely, a shareholder's notice to the secretary must be delivered to or mailed and received at the principal executive offices of the corporation (a) in the case of an Annual Meeting, not less than ninety (90) days nor more than one hundred and twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of Shareholders; provided, however, that in the event that the Annual Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the shareholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs; and (b) in the case of a Special Meeting of Shareholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the Special Meeting was mailed or public disclosure of the date of the Special Meeting was made, whichever first occurs. In no event shall the public announcement of an adjournment of an Annual Meeting or Special Meeting commence a new time period for the giving of a shareholder's notice as described above. To be in proper written form, a shareholder's notice to the secretary must set forth (a) as to each person whom the shareholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder; and (b) as to the shareholder giving the notice (i) the name and record address of such shareholder, (ii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by such shareholder, (iii) a description of all arrangements or understandings between such shareholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder, (iv) a representation that such shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section B of this Article Three, except as may be otherwise provided in the Amended Certificate of Incorporation of the Corporation. If the chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded. Section B. Eligibility. No person shall be eligible for election or reelection as a director after having attained the age of seventy prior to or on the day of election or reelection. A director who attains the age of seventy during his term of office shall be eligible to serve only until the annual meeting of shareholders of the corporation next following such director's seventieth birthday. An employee director, other than the chief executive officer, shall resign from the board of directors at the time of any reduction in responsibility or upon termination of employment for whatever reason. A director who was chief executive officer of the corporation and whose employment was terminated for whatever reason, other than retirement, shall resign from the board of directors upon such termination. A director who is a past chief executive officer of the corporation shall resign from the board of directors if another director who is the then current chief executive officer ceases to be such officer but continues as a director. The board of directors may, at its option, accept or reject such resignations. 3 A non-employee director shall advise the board of directors on a timely basis of any reduction in responsibility with the director's then current employer, except for retirement, or change in employer for which such director was engaged when most recently appointed, elected or reelected as a director and shall resign from the board of directors. The board of directors may, at its option, accept or reject such resignation. Section C. Chairman of the Board. The chairman of the board shall be chosen from among the directors and shall preside at all meetings of the board of directors and shareholders. He shall confer from time to time with members of the board and the officers of the corporation and shall perform such other duties as may be assigned to him by the board. Except where by law the signature of the president is required, the chairman of the board shall possess the same power as the president to sign all certificates, contracts, and other instruments of the corporation which may be authorized by the board of directors. Section D. Regular Meetings. The regular annual meeting of the board of directors shall be held immediately after the adjournment of each annual meeting of the shareholders. Regular quarterly meetings of the board of directors shall be held on the third Thursday of January, April, July and October of each year, or on such date as may be designated from time to time by the board of directors. Section E. Special Meetings. Special meetings of the board of directors may be called at any time by the chairman of the board or by the board, by giving to each director an oral or written notice setting the time, place and purpose of holding such meetings. Section F. Time and Place of Meetings. All meetings of the board of directors shall be held at the principal office of the corporation, or at such other place within or without the State of Indiana and at such time as may be designated from time to time by the board of directors. Section G. Notices. Any notice, of meetings or otherwise, which is given or is required to be given to any director may be in the form of oral notice. Section H. Committees. The board of directors is expressly authorized to create committees and appoint members of the board of directors to serve on them, as follows: (1) Temporary and standing committees, including an executive committee, and the respective chairmen thereof, may be appointed by the board of directors, from time to time. The board of directors may invest such committees with such powers and limit the authority of such committees as it may see fit, subject to conditions as it may prescribe. The executive committee shall consist of three or more members of the board. All other committees shall consist of one or more members of the board. All committees so appointed shall keep regular minutes of the transactions of their meetings, shall cause them to be recorded in books kept for that purpose in the office of the corporation, and shall report the same to the board of directors at its next meeting. Within its area of responsibility, each committee shall have and exercise all of the authority of the board of directors, except as limited by the board of directors or by law, and shall have the power to authorize the execution of an affixation of the seal of the corporation to all papers or documents which may require it. (2) Neither the designation of any of the foregoing committees or the delegation thereto of authority shall operate to relieve the board of directors, or any member thereof, of any responsibility imposed by law. Section I. Loans to Directors. Except as consistent with the Indiana Business Corporation Law, the corporation shall not lend money to or guarantee the obligation of any director of the corporation. Article Four Officers Section A. Election and Term of Office. The officers of the corporation shall be elected by the board of directors at the regular annual meeting of the board, unless the board shall otherwise determine, 4 and shall consist of a president, one or more vice presidents (any one or more of whom may be designated "corporate," "executive," "senior," "group" or other functionally described vice president), a corporate secretary, a treasurer and, if so elected by the board, may include a vice-chairman of the board of directors and one or more assistant secretaries and assistant treasurers. The board of directors shall, from time to time, designate the president or, if elected, the vice chairman of the board of directors, as the chief executive officer of the corporation, who shall have general supervision of the affairs of the corporation. The board of directors may, from time to time, designate a chief operating officer and a chief financial officer from among the officers of the corporation. Each officer shall continue in office until his successor shall have been duly elected and qualified or until removed in the manner hereinafter provided. Vacancies occasioned by any cause in any one or more of such offices may be filled for the unexpired portion of the term by the board of directors at any regular or special meeting of the board. Section B. Vice-Chairman of the Board. The vice-chairman of the board, if elected, shall be chosen from among the directors and shall, in the absence of the chairman of the board, preside at all meetings of the shareholders and directors. He shall have and exercise the powers and duties of the chairman of the board in the event of the chairman's absence or inability to act or during a vacancy in the office of chair man of the board. He shall possess the same power as the chairman to sign all certificates, contracts, and other instruments of the corporation which may be authorized by the board of directors. He shall also have such other duties and responsibilities as shall be assigned to him by the board of directors or chairman. During the absence or disability of the president, if the president has been designated chief executive officer, the vice chairman of the board shall act as the chief executive officer of the corporation and shall exercise all the powers and discharge all the duties of the president. Section C. The President. The president and his duties shall be subject to the control of the board of directors and, if the chairman of the board has been designated chief executive officer, to the control of the chairman of the board. The president shall have the power to sign and execute all deeds, mortgages, bonds, contracts and other instruments of the corporation as authorized by the board of directors, except in cases where the signing and execution thereof shall be expressly designated by the board of directors or by these bylaws to some other officer, official or agent of the corporation. The president shall perform all duties incident to the office of president and such other duties as are properly required of him by the bylaws. During the absence or disability of the chairman of the board and the vice-chairman of the board, the president shall exercise all the powers and discharge all the duties of the chairman of the board. Section D. The Vice Presidents. The vice presidents shall possess the same power as the president to sign all certificates, contracts and other instruments of the corporation which may be authorized by the board of directors, except where by law the signature of the president is required. All vice presidents shall perform such duties as may from time to time be assigned to them by the board of directors, the chairman of the board and the president. In the event of the absence or disability of the president, and at the request of the chairman of the board, or in his absence or disability, at the request of the vice-chairman of the board, or in his absence or disability at the request of the board of directors, the vice presidents in the order designated by the chairman of the board, or in his absence or disability by the vice-chairman of the board, or in his absence or disability by the board of directors, shall perform all of the duties of the president, and when so acting they shall have all of the powers of and be subject to the restrictions upon the president and shall act as a member of, or as a chairman of, any standing or special committee of which the president is a member or chairman by designation or ex officio. Section E. The Corporate Secretary. The corporate secretary of the corporation shall: (1) Keep the minutes of the meetings of the shareholders and the board of directors in books provided for that purpose. (2) See that all notices are duly given in accordance with the provisions of these bylaws and as required by law. (3) Be custodian of the records and of the seal of the corporation and see that the seal is affixed to all documents, the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these bylaws. 5 (4) Keep a register of the post office address of each shareholder, which shall be furnished to the corporate secretary at his request by such shareholder, and make all proper changes in such register, retaining and filing his authority for all such entries. (5) See that the books, reports, statements, certificates and all other documents and records required by law are properly kept, filed and authenticated. (6) In general, perform all duties incident to the office of corporate secretary and such other duties as may from time to time be assigned to him by the board of directors. (7) In case of absence or disability of the corporate secretary, the assistant secretaries, in the order designated by the chief executive officer, shall perform the duties of corporate secretary. Section F. The Treasurer. The treasurer of the corporation shall: (1) Give bond for the faithful discharge of his duties if required by the board of directors. (2) Have the charge and custody of, and be responsible for, all funds and securities of the corporation, and deposit all such funds in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of these bylaws. (3) At all reasonable times, exhibit his books of account and records, and cause to be exhibited the books of account and records of any corporation a majority of whose stock is owned by the corporation, to any of the directors of the corporation upon application during business hours at the office of this corporation or such other corporation where such books and records are kept. (4) Render a statement of the conditions of the finances of the corporation at all regular meetings of the board of directors, and a full financial report at the annual meeting of the shareholders, if called upon so to do. (5) Receive and give receipts for monies due and payable to the corporation from any source whatsoever (6) In general, perform all of the duties incident to the office of treasurer and such other duties as may from time to time be assigned to him by the board of directors. (7) In case of absence or disability of the treasurer, the assistant treasurers, in the order designated by the chief executive officer, shall perform the duties of treasurer. Article Five Corporate Seal The corporate seal of the corporation shall be a round, metal disc with the words "Alltrista Corporation" around the outer margin thereof, and the words "Incorporated -January 10, 1991", in the center thereof, so mounted that it may be used to impress words in raised letters upon paper. Article Six Amendment These bylaws may be altered, added to, amended or repealed by the board of directors of the corporation at any regular or special meeting thereof. 6 Article Seven Indemnification Section A. Indemnification. The corporation shall indemnify each person who is or was a director, officer or employee of the corporation, or of any other corporation, partnership, joint venture, trust or other enterprise which he is serving or served in any capacity at the request of the corporation, against any and all liability and reasonable expense that may be incurred by him in connection with or resulting from any claim, actions, suit or proceeding (whether actual or threatened, brought by or in the right of the corporation or such other corporation, partnership, joint venture, trust or other enterprise, or otherwise, civil, criminal, administrative, investigative, or in connection with an appeal relating thereto), in which he may become involved, as a party or otherwise, by reason of his being or having been a director, officer or employee of the corporation or of such other corporation, partnership, joint venture, trust or other enterprise or by reason of any past or future action taken or not taken in his capacity as such director, officer or employee, whether or not he continues to be such at the time such liability or expense is incurred, to the fullest extent permitted by the Indiana Business Corporation Law ("EBCL") as the same now exists or may hereafter be amended (but in the case of any such amendment only to the extent that such amendment permits the corporation to provide broader indemnification rights than the EBCL permitted the corporation to provide prior to such amendment). Any indemnification pursuant to this Article Five shall be (unless ordered by a court) paid by the corporation within sixty (60) days of such request unless the corporation shall have determined by (a) the Board of Directors, acting by a quorum consisting of directors who are not parties to or who have been wholly successful with respect to such claim, action, suit or proceeding, (b) outside legal counsel engaged by the corporation (who may be regular counsel of the corporation) and who delivers to the corporation its written opinion, or (c) a court of competent jurisdiction, that indemnification is not proper under the circumstances because such person has not met the necessary standard of conduct in accordance with IBCL; provided, however, that -------- ------- following a Change in Control of the Corporation, with respect to all matters thereafter arising out of acts, omissions or events prior to the Change in Control of the Corporation concerning the rights of any person seeking indemnification hereunder, such determination shall be made by special independent counsel selected by such person and approved by the corporation (which approval shall not be unreasonably withheld), which counsel has not otherwise performed services (other than in connection with similar matters) within the five years preceding its engagement to render such opinion for such person or for the corporation or any affiliates (as such term is defined in Rule 405 under the Securities Act of 1933, as amended) of the corporation (whether or not they were affiliates when services were so performed) ("Independent Counsel"). Unless such person has theretofore selected Independent Counsel pursuant to this Section A and such Independent Counsel has been approved by the corporation, legal counsel approved by a resolution or resolutions of the Board of Directors prior to a Change in Control of the corporation shall be deemed to have been approved by the corporation as required. Such Independent Counsel shall determine as promptly as practicable whether and to what extent such person would be permitted to be indemnified under applicable law and shall render its written opinion to the corporation and such person to such effect; provided that such independent counsel shall find that the standard for indemnification has been met by such person unless indemnification is clearly precluded under these Bylaws or the IBCL. The corporation agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such Independent Counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Article or its engagement pursuant hereto. For purposes of this Article, a "Change in Control of the Corporation" shall be deemed to have occurred upon the first to occur of the following events: i) any "person," as such term is used in Sections 13 (d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than the corporation, any trustee or other fiduciary holding securities under an employee benefit plan of the corporation or any subsidiary of the corporation, or any corporation owned, directly or 7 indirectly, by the stockholders of the corporation in substantially the sairne proportions as their ownership of stock of the corporation), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the corporation representing 30 percent or more of the combined voting power of the corporation's then outstanding securities; ii) at any time during any period of two consecutive years, individuals, who at the beginning of such period constitute. the Board, and. any new director (other than a director designated by a person who has entered into an agreement with the corporation to effect a transaction described in Subsection (i), (iii) or (iv) of this Section) whose election by the Board or nomination for election by the corporation's stockholders was approved by a vote of at least two-thirds (2/3) of the directors at the beginning of the period or whose election or nomination for election was previously so approved cease for any reason to constitute at least a majority thereof, iii) the stockholders of the corporation approve a merger or consolidation of the corporation with any other corporation, other than (1) a merger or consolidation which would result in the voting securities of the corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50 percent of the combined voting power of the voting securities of the corporation or such surviving entity outstanding immediately after such merger or consolidation or (2) a merger or consolidation effected to implement a recapitalization of the corporation (or similar transaction) in which no person acquires 50 percent or more of the combined voting power of the corporation's then outstanding securities, or iv) the stockholders of the corporation approve a plan of complete liquidation of the corporation or an agreement for the sale or disposition by the corporation of all or substantially all of the corporation's assets. Section B. Expenses. Expenses, including attorneys' fees, incurred by a person referred to in Section A of this Article in defending or otherwise being involved in a proceeding shall be paid by the corporation in advance of the final disposition of such proceeding, including any appeal therefrom, upon receipt of an undertaking (the "Undertaking") by or on behalf of such person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Section C. Right of Claimant to Bring Suit. If a claim for indemnification is not paid in full by the corporation within sixty (60) days after a written claim has been received by the corporation or if expenses pursuant to Section B hereof have not been advanced within ten (10) days after a written request for such advancement accompanied by the Undertaking has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim or the advancement of expenses. (If the claimant is successful, in whole or in part, in such suit or any other suit to enforce a right for expenses or indemnification against the corporation or any other party under any other agreement, such claimant shall also be entitled to be paid the reasonable expense of prosecuting such claim.) It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required Undertaking has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the IBCL for the corporation to indemnify the claimant for the amount claimed. After a Change in Control, the burden of proving such defense shall be on the corporation, and any determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant had not met the applicable standard of conduct required under the IBCL shall not be a defense to the action nor create a presumption that claimant had not met such applicable standard of conduct, 8 Section D. Non-Exclusivity of Rights. The rights conferred on any person by this Article shall not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement vote of stockholders or disinterested directors or otherwise. The Board of Directors shall have the authority, by resolution, to provide for such other indemnification of directors, officers, employees or agents as it shall deem appropriate. Section E. Insurance. The corporation may purchase and maintain insurance to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expenses, liabilities or losses, whether or not the corporation would have the power to indemnify such person against such expenses, liabilities or losses under the IBCL. Section F. Enforceability. The provisions of this Article shall be applicable to all proceedings commenced after its adoption, whether such arise out of events, acts, omissions or circumstances which occurred or existed prior or subsequent to such adoption, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. This Article shall be deemed to grant each person who, at any time that this Article is in effect, serves or agrees to serve in any capacity which entitles him to indemnification hereunder rights against the corporation to enforce the provisions of this Article, and any repeal or other modification of this Article or any repeal or modification of the IBCL or any other applicable law shall not limit any rights of indemnification then existing or arising out of events, acts, omissions, circumstances occurring or existing prior to such repeal or modification, including, without limitation, the right to indemnification for proceedings commenced after such repeal or modification to enforce this Article with regard to acts, omissions, events or circumstances occurring or existing prior to such repeal or modification. Section G. Severability. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and officer of the corporation as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the corporation, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the full extent permitted by applicable law. 9 EX-10.2 3 dex102.txt AMENDMENT TO ALLTRISTA GROWTH INCENTIVE COMP PLAN EXHIBIT 10.2 AMENDMENT TO THE ALLTRISTA CORPORATION ECONOMIC VALUE ADDED AND GROWTH INCENTIVE COMPENSATION PLAN FOR KEY MEMBERS OF MANAGEMENT This Amendment is made to the Alltrista Corporation Economic Value Added and Growth Incentive Compensation Plan for Key Members of Management, which was effective January 1, 1999 (the "Plan). This Amendment shall be effective as of October 19, 2000. Capitalized terms used but not defined Herein shall have the meanings ascribed to them in the Plan. The Plan is amended as follows: 1. Section 2 of the Plan is amended by adding the following definition as Subsection 2.8 and renumbering the following Subsections of Section 2 accordingly: "2.8 Change in Control - "Change in Control" shall have the meaning ----------------- ascribed to such term in the Company's 1998 Long-term Equity Incentive Plan." 2. Section 5 of the Plan is amended by adding new Subsection 5.10 to read as follows: "5.10. Effect of a Change in Control ----------------------------- Notwithstanding the preceding provisions of this Section 5, in the event of a Change of Control, a pro rata cash payment, in cancellation of the outstanding Award in respect of the Year in which the Change in Control occurs, shall be made to each Participant within thirty (30) business days following the Change of Control. The pro rata payment to such Participant with respect to such Year shall be calculated by multiplying (X) and (Y), where (X) equals the amount to which the Participant would have been entitled to receive had the Year been completed, assuming for this purpose that the Performance factor applicable to the Participant was achieved at a level of performance based on actual financial results through the date of the Change of Control, and (Y) equals a fraction the numerator of which is the number of full and partial months in such Year that have elapsed as of the date of the Change in Control and the denominator of which is 12." 3. Except as herein modified, the Plan shall remain in full force and effect. EX-10.8 4 dex108.txt OFFICERS WITH CHANGE OF CONTROL AGREEMENTS Exhibit 10.8 LIST OF ALLTRISTA CORPORATION OFFICERS WHO HAVE EXECUTED CHANGE OF CONTROL AGREEMENTS Elected Corporate Officers - -------------------------- Thomas B. Clark Chairman, President and Chief Executive Officer Jerry T. McDowell Group Vice President, Metal Products Kevin D. Bower Senior Vice President and Chief Financial Officer Garnet E. King Corporate Secretary and Director, Executive Services Angela K. Knowlton Vice President, Finance and Treasurer J. David Tolbert Vice President, Human Resources and Administration Appointed Officers - ------------------ Albert H. Giles President - Zinc Products Company Charles W. Orth President - Unimark Plastics Company John A. Metz President - Consumer Products Company A. Bruce Buchholz President - Thermoformed Products Division EX-10.13 5 dex1013.txt 1993 DEFERRED COMPENSATION PLAN SELECTED EMPLOYEES Exhibit 10.13 ALLTRISTA CORPORATION 1993 DEFERRED COMPENSATION PLAN FOR SELECTED KEY EMPLOYEES ALLTRISTA CORPORATION 1993 DEFERRED COMPENSATION PLAN FOR SELECTED KEY EMPLOYEES (Amended on February 1, 2001) 1. Statement of Purpose The purpose of the 1993 Deferred Compensation Plan for Selected Key Employees (the "Plan") is to aid Alltrista Corporation (the "Company") and its subsidiaries in retaining key employees by providing a vehicle for continuation of the 1986 and 1988 Ball Corporation Deferred Compensation Plans which are nonqualified deferred compensation plans of the predecessor company. 2. Definitions 2.1. Beneficiary - "Beneficiary" means the person or persons designated as ----------- such in accordance with Section 8. 2.2. Class Year - "Class Year" means the year in respect of which ---------- compensation is deferred under the Plan. 2.3. Compensation - "Compensation" means the Participant's compensation ------------ for the Class Year. 2.4. Committee - "Committee" (also referred to as the "Executive --------- Compensation Committee") means the committee appointed by the Board of Directors who will administer the Plan. 2.5. Deferral Amount - "Deferral Amount" means the amount of Elective --------------- Deferred Compensation deferred by the Participant for each Class Year. 2.6. Deferred Compensation Account - "Deferred Compensation Account" means ----------------------------- the account for each Class Year maintained by the Company for each Participant pursuant to Section 6 that has been established pursuant to the Transfer and Consent Form 2.7. Disability - "Disability" means the Participant is receiving benefits ---------- under the long term disability benefit plan sponsored by the Employer or one of its subsidiaries. 2.8. Distribution Date - "Distribution Date" means the date on which the ----------------- Employer makes distributions from the Participant's Deferred Compensation Account. 2.9. Effective Date - "Effective Date" means January 1, 1993, the date on -------------- which the Plan commences. 2.10. Election Form - "Election Form" means the form attached to this Plan ------------- and filed with the Executive Compensation Committee of Ball Corporation by the Participant pursuant to participation in the 1986 or 1988 Ball Corporation Deferred 1 Compensation Plans. The terms and conditions specified in the Election Form(s) are incorporated by reference herein and form a part of the Plan. 2.11. Elective Deferred Compensation - "Elective Deferred Compensation" ------------------------------ means the amount elected to be deferred by an Eligible Employee in his Election Form. 2.12. Eligible Employee - "Eligible Employee" means those selected key ----------------- employees of the Company who were participants in the 1986 and 1988 Ball Corporation Deferred Compensation Plans and who have been chosen by the Executive Compensation Committee and offered participation in the Plan. 2.13. Employer - "Employer" means Alltrista Corporation and any of its -------- fifty percent (50%) or more owned subsidiaries. 2.14. Executive Compensation Committee - "Executive Compensation -------------------------------- Committee" (also referred to as the "Committee") means the committee appointed by the Board of Directors who will administer the Plan. 2.15. Moody's - "Moody's" means the annual average composite yield on ------- Moody's Seasoned Corporate Bond Yield Index for the twelve (12) months ending October 31 immediately preceding the Valuation Date, as determined from Moody's Bond Record published by Moody's Investors Service, Inc. (or any successors thereto), or, if such yield is no longer published, a substantially similar average selected by the Company. 2.16. Participant - "Participant" means an Eligible Employee participating ----------- in the Plan in accordance with the provisions of Section 4. 2.17. Substantially Equal Installments - "Substantially Equal -------------------------------- Installments" means a series of annual payments, such that equal payments over the remaining payment period would exactly amortize the Deferred Compensation Account balance as of the Distribution Date if the credited interest rate remained constant at the level credited as of the Valuation Date immediately preceding the Distribution Date for the remainder of the payment period. 2.18. Termination of Employment - "Termination of Employment" means the ------------------------- termination of a Participant's employment with the Employer for any reason other than Disability. 2.19. Transfer and Consent Form - "Transfer and Consent Form" means the ------------------------- Transfer and Consent Form attached to this Plan and filed with the Executive Compensation Committee of Alltrista Corporation. The terms and conditions specified in the Transfer and Consent Form are incorporated by reference herein and form a part of the Plan. 2.20. Valuation Date - "Valuation Date" means the date on which the value -------------- of a Participant's Deferred Compensation Account for each Class Year is determined as provided in Section 6 hereof. Unless and until changed by the Committee, the Valuation Date shall be the last day of each calendar year. 2 3. Administration of the Plan The Executive Compensation Committee, by appointment of the Board of Directors of the Company, shall be the sole administrator of the Plan. The Committee shall have full power to formulate additional details and regulations for carrying out this Plan. The Committee shall also be empowered to make any and all of the determinations not herein specifically authorized which may be necessary or desirable for the effective administration of the Plan. Any decision or interpretation of any provision of this Plan adopted by the Committee shall be final and conclusive. 4. Participation Participation in the Plan shall be limited to selected key Eligible Employees who participated in the 1986 or 1988 Ball Corporation Deferred Compensation Plans. Such selected key Eligible Employee upon selection by the Committee may consent to transfer 100 percent of each of his Deferred Compensation Accounts, effective December 31, 1992, or if later, the December 31 of the calendar year preceding the year in which he becomes a selected key Eligible Employee, to this Plan with respect to the dollar value of all his Deferred Compensation Accounts in the 1986 and 1988 Ball Corporation Deferred Compensation Plans. 5. Vesting of Deferred Compensation Account A Participant's interest in his Deferred Compensation Account and interest credited thereto shall vest immediately. 6. Accounts and Valuations 6.1. Deferred Compensation Accounts. The Committee shall establish and ------------------------------ maintain a separate Deferred Compensation Account for each Participant for each Class Year in the Ball Corporation 1986 and/or 1988 Plans. Elective Deferred Compensation shall be deemed credited to the Deferred Compensation Account of this Plan as of the close of business on December 31, 1992, or if later, the December 31 of the calendar year preceding the year in which the Participant becomes a selected key Eligible Employee, and no interest shall be earned for that calendar year. 6.2. Interest Credited. Each Deferred Compensation Account of each ----------------- Participant shall be credited with interest on each Valuation Date, as provided hereinafter, at an annual rate equal to Moody's plus five (5) percentage points, except as may otherwise be provided under Section 7.5., for calendar years 1993 and beyond. 6.3. Timing of Crediting of Interest. Each Deferred Compensation Account ------------------------------- of each Participant shall be revalued as of each Valuation Date. As of each Valuation Date, the value of each Deferred Compensation Account shall consist of the balance of such Deferred Compensation Account as of the immediately preceding Valuation Date minus the amount of all distributions, if any, made from such Deferred Compensation Account since the preceding Valuation Date, plus interest credited on the net balance after deducting said distributions. Normal benefit distributions 3 (under Section 7.1) made on or before February 15 of the year of payment will be considered to have been made from the account and deducted from the account balance as of January 1 of such year for the purpose of crediting interest under this Section 6.3. Interest on Hardship Benefits distributed will be prorated to the date of distribution for the purpose of crediting interest under this Section 6.3. 7. Benefits 7.1. Normal Benefit -------------- a. A Participant's Deferred Compensation Account shall be paid to the Participant as requested in his Election Form, subject to the terms and conditions set forth in the Plan, including the Election Form. If a Participant elects to receive payment of his Deferred Compensation Account in installments, payments shall be made in Substantially Equal Installments. Unless the Executive Compensation Committee determines otherwise, and subject to the provisions of Section 7.4. as to when payments shall commence, distribution payments, whether lump sum or installment, shall be made on or before the fifteenth (15th) day of February of each year. A Participant may elect different payment schedules for different Class Year Deferred Compensation Accounts. b. If a Participant dies before receiving his total Deferred Compensation Account balances, whether or not distributions have earlier commenced, his Beneficiary shall be entitled to the remaining account balances in accordance with the payment elections in the Election Form, except that such payments, if not already commenced, shall commence on or before February 15 next following the date of the Participant's death. 7.2. Hardship Benefit. In the event that the Executive Compensation ---------------- Committee, upon written request of a Participant or Beneficiary of a deceased Participant, determines in its sole discretion, that such person has suffered an unforeseeable financial emergency, the Company shall pay to such person, from the Deferred Compensation Account designated by the Participant or Beneficiary, as soon as practicable following such determination, an amount necessary to meet the emergency, not in excess of the amount of the Deferred Compensation Account. The Deferred Compensation Account of the Participant shall thereafter be reduced to reflect the payment as of the date paid of a Hardship Benefit. 7.3. Request to Committee for Delay in Payment. A Participant shall have ------------------------------------------ no right to modify in any way the schedule for the distribution of amounts from his Deferred Compensation Account which he has specified in his Election Form. However, upon a written request submitted by the Participant to the Committee, the Committee may, in its sole discretion, for each Class Year: . Postpone one time the date on which payment shall commence, but not beyond the year in which he will attain age seventy-one (71); and 4 . At the same time increase the number of installments to a number not to exceed fifteen (15). Any such request(s) must be made prior to the earlier of (a) the beginning of the year which the Participant has elected for distributions to commence, or (b) the Termination of Employment. 7.4. Date of Payments. Except as otherwise provided in this plan, ---------------- payments under this Plan shall begin on or before the fifteenth (15th) day of February of the calendar year following receipt of notice by the Executive Compensation Committee of an event which entitles a Participant (or Beneficiary) to payments under the Plan, or at such earlier date after receipt of such notice as may be determined by the Executive Compensation Committee. 7.5. Termination of Employment Before Age 55. In the event a Participant ---------------------------------------- has a Termination of Employment prior to his attaining age fifty-five (55) (other than by death, for which benefits and/or accounts will be paid in accordance with Section 7.1.b.), then, whether or not distributions have earlier commenced, the Participant's Deferred Compensation Account will be paid to him in a lump sum on or before the fifteenth (15th) day of February in the year following the year in which the Termination of Employment occurred, unless otherwise determined by the Committee. Upon written request of the Participant made within thirty (30) days following Termination of Employment, the Committee may in its sole discretion, determine that, in lieu of a lump sum, payments shall be made to the Participant in not more than five (5) Substantially Equal Installments, commencing on or before such next fifteenth (15th) day of February following the date of Termination of Employment. The interest credited to the Participant's Deferred Compensation Account on the Valuation Date next following the Termination of Employment shall be as provided in Section 6., above. If payments are to be made in installments, the interest rate credited to the Participant's Deferred Compensation Account on all Valuation Dates subsequent to the Valuation Date next following Termination of Employment (and to be considered as the interest rate on such Valuation Date next Following Termination of Employment for the Sole purpose of Calculation Substantially Equal Installments under Section 2.17., above) shall be limited to the daily weighted average borrowing rate paid by the Company during the then calendar year for total borrowing. 7.6. Taxes: Withholding. To the extent required by law, the Company shall ------------------ withhold from payments made hereunder any amount required to be withheld by the federal or any state or local government. 7.7. Liquidating Distributions. Notwithstanding any provisions of the ------------------------- Plan or the Participant's Election Form to the contrary, upon written request for a Liquidating Distribution submitted by the Participant (or Beneficiary) to the Executive Compensation Committee, the Committee may, in its sole discretion, (or, following a Change in Control, the Committee must) pay to the Participant (or 5 Beneficiary) the Participant's (or Beneficiary's) Liquidating Distribution Account Balance in a lump sum as soon as practicable (but no later than 60 days) following the request. "Liquidating Distribution" shall mean a distribution requested by the Participant (or Beneficiary following the Death of the Participant) in writing directed to the Committee and specifically referencing this section. If the Participant requesting the Liquidating Distribution is, at the time of the request, an active employee of the Employer, "Liquidating Distribution Account Balance" shall mean all of the Deferred Compensation Accounts under the Plan in which the Participant has an undistributed balance, increased by interest credited on the account(s) to the date of distribution from the preceding Valuation Date (based upon the interest rate credited on the preceding Valuation Date), and decreased by a forfeiture penalty equal to six percent (6%) of the value of the Participant's Deferred Compensation Account(s) as of the date of distribution. If the Participant requesting the Liquidating Distribution is, at the time of the request, no longer an active employee of the Employer, or in the case of a request made by a Participant's Beneficiary, "Liquidating Distribution Account Balance" shall mean all of the Deferred Compensation Accounts under the Plan in which the Participant (or Beneficiary) has an undistributed balance and all of the Deferred Compensation Accounts under any Comparable Plans maintained by the Employer in which the Participant (or Beneficiary) has an undistributed balance, increased by interest credited on the account(s) to the date of distribution from the preceding Valuation Date (based upon the interest rate credited on the preceding Valuation Date), and decreased by a forfeiture penalty equal to six percent (6%) of the value of the Participant's (or Beneficiary's) Deferred Compensation Account(s) as of the date of distribution. "Comparable Plans" shall mean the Alltrista Corporation 1993 Deferred Compensation Plan, the Alltrista Corporation 1993 Deferred Compensation Plan for Selected Key Employees, and any comparable successor plans so designated by the Committee. Notwithstanding any provisions of the Plan to the contrary, if a Participant requests a Liquidating Distribution within sixty (60) days following the effective date of a Change in Control, the Liquidating Distribution Account Balance shall be paid as set forth above except that the forfeiture penalty of six percent (6%) of the value of the Participant's (or Beneficiary's) Deferred Compensation Account(s) as of the date of distribution shall not be applied. Notwithstanding any provisions of the Plan or the Participant's Election Form to the contrary, if the Participant requesting the Liquidating Distribution is, at the time of the request, an active employee of the Employer, then the Participant shall, for a period of two (2) Class Years beginning with the Class Year during which the request for Liquidating Distribution is made, be ineligible to participate in the Plan or any Comparable Plans with respect to any Compensation not yet deferred. For purposes of this Section, a "Change in Control" shall be deemed to have occurred if: 6 (a) any "Person", which shall mean a "person" as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company's then outstanding securities; (b) at any time during any period of two consecutive years, individuals, who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this Section) whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds of the directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; (c) the shareholders of the Company approved a merger or consolidation of the Company with any other company, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50 percent of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquired 50 percent or more of the combined voting power of the Company's then outstanding securities; or (d) the shareholders of the Company approve a plan of complete liquidation of the Company of an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. 8. Beneficiary Designation A Participant's Beneficiary or Beneficiaries (both principal and contingent) shall be as designated under the terms of the 1986 and 1988 Ball Corporation Deferred Compensation Plans, unless and until a new beneficiary form is filed with the Committee or the then existing Beneficiary is revoked by divorce. 7 A Participant shall have the right at any time, and from time to time, to designate and/or change or cancel any person, persons, or entity as his Beneficiary or Beneficiaries (both principal and contingent) to whom payment under this Plan shall be paid in the event of his death prior to complete distribution to Participant of the benefits due him under the Plan. Each beneficiary change or cancellation shall become effective only when filed in writing with the Executive Compensation Committee during the Participant's lifetime on a form provided by the Committee. The filing of a new Beneficiary designation form will cancel all Beneficiary designations previously filed. Any finalized divorce of a Participant subsequent to the date of filing of a Beneficiary designation form shall revoke such designation. The spouse of a married Participant domiciled in a community property jurisdiction shall be required to join in any designation of Beneficiary or Beneficiaries other than the spouse in order for the Beneficiary designation to be effective. If a Participant fails to designate a Beneficiary as provided above, or, if his beneficiary designation is revoked by divorce, or otherwise, without execution of a new designation, or if all designated Beneficiaries predecease the Participant, then the distribution of such benefits shall be made in a lump sum to the Participant's estate. If any installment distribution has commenced to a Beneficiary and the Beneficiary dies before receiving all installments, any remaining installments shall be paid in a lump sum to the estate of the Beneficiary. 9. Amendment and Termination of Plan 9.1. Amendment. The Board of Directors may at any time amend the Plan in --------- whole or in part, provided, however, that no amendment shall be effective to reduce the value of any Participant's Deferred Compensation Account or to affect the Participant's vested right therein, and, except as provided in 9.2. or 9.3., no amendment shall be effective to decrease the future benefits under the Plan payable to any Participant or Beneficiary with respect to any Elective Deferred Compensation which was deferred prior to the date of the amendment. Written notice of any amendments shall be given promptly to each Participant. 9.2. Termination of Plan ------------------- a. Employer's Right to Terminate. The Board of Directors may at any ------------- --------------- time terminate the Plan as to prospective contributions and credits of interest, if it determines in good faith that the economic acceptability of the Plan has been substantially impaired and that the resulting cost to the Company is substantially and unacceptably greater than the cost anticipated at the Effective Date. No such termination of the Plan shall reduce the balance in a Participant's Deferred Compensation Account or affect the Participant's vested right therein. b. Payments Upon Termination of Plan. Upon termination of the Plan --------------------------------- under this Section 9.2., Compensation for additional Class Years shall not be deferred under the Plan. With respect to then- existing Deferred 8 Compensation Accounts, the Employer will, depending upon the Participant's election at that time: (i) pay to the Participant, in a lump sum, the value of each of his Deferred Compensation Accounts; (ii) continue to defer the Compensation under the Plan, but with the interest rate credited on all future Valuation Dates to be equal to the daily average of the best interest rate available to the Company during the then calendar year for short- term borrowings; or (iii) make such other arrangement as the Committee determines appropriate. 9.3. Successors and Mergers, Consolidations or Change in Control. The ----------------------------------------------------------- terms and conditions of this Plan and Election Form shall enure to the benefit of and bind the Company, the Participants, their successors, assigns, and personal representatives. If substantially all of the stock or assets of the Company are acquired by another corporation or entity or if the Company is merged into, or consolidated with, another corporation or entity, then the obligations created hereunder shall be obligations of the acquiror or successor corporation or entity. 10. Miscellaneous 10.1. Unsecured General Creditor. Participants and their beneficiaries, -------------------------- heirs, successors and assigns shall have no legal or equitable rights, interests, or other claims in any property or assets of the Employer, nor shall they be beneficiaries of, or have any rights, claims, or interests in any life insurance policies, annuity contracts, or the policies therefrom owned or which may be acquired by the Company ("policies"). Such policies or other assets shall not be held under any trust for the benefit of Participants, their beneficiaries, heirs, successors, or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of such assets and policies shall be and remain general, unpledged, unrestricted assets of the Employer. The Company's obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future. 10.2. Obligations to the Employer. If a Participant becomes entitled to a --------------------------- distribution of benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation, or other liability representing an amount owed to the Employer, then the Employer may offset such amounts owing it or an affiliate against the amount of benefits otherwise distributable. Such determination shall be made by the Committee. 10.3. Non-Assignability. Neither a Participant nor any other person shall ----------------- have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency. 9 10.4. Employment or Future Eligibility to Participant Not Guaranteed. -------------------------------------------------------------- Nothing contained in this Plan nor any action taken hereunder shall be construed as a contract of employment or as giving an Eligible Employee any right to be retained in the employ of the Employer. Designation as an Eligible Employee may be revoked at anytime by the Executive Compensation Committee with respect to any Compensation not yet deferred. 10.5. Gender Singular and Plural. All pronouns and any variations thereof -------------------------- shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular. 10.6. Captions. The captions to the articles, sections, and paragraphs of -------- this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 10.7. Applicable Law. This Plan shall be governed and construed in -------------- accordance with the laws of the State of Indiana. 10.8. Validity. In the event any provision of this Plan is held invalid, -------- void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of this Plan. 10.9. Notice. Any notice or filing required or permitted to be given to ------ the Executive Compensation Committee shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company, directed to the attention of the President of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 10 EX-10.14 6 dex1014.txt 1993 DEFERRED COMPENSATION PLAN EXHIIBIT 10.14 ALLTRISTA CORPORATION 1993 DEFERRED COMPENSATION PLAN ALLTRISTA CORPORATION 1993 DEFERRED COMPENSATION PLAN (Amended and Restated in its Entirety, November 21, 1996 and Further Amended on February 1, 2001) 1. Statement of Purpose The purpose of the 1993 Deferred Compensation Plan, as amended November 1996 and February 2001, (the "Plan") is to aid Alltrista Corporation (the "Company") and its subsidiaries in attracting and retaining key employees by providing a non-qualified deferred compensation vehicle. 2. Definitions 2.1. Beneficiary - "Beneficiary" means the person or persons designated as ----------- such in accordance with Section 8. 2.2. Class Year - "Class Year" means the year in respect of which ---------- compensation is deferred under the Plan. 2.3. Committee - "Committee" (also referred to as the "Executive --------- Compensation Committee") means the committee appointed by the Board of Directors that will administer the Plan. 2.4. Compensation - "Compensation" means the Participant's incentive ------------ compensation for the Class Year. 2.5. Declining Balance Installments - "Declining Balance Installments" ------------------------------ means a series of annual payments such that each payment is determined by taking that portion of the Participant's Deferred Compensation Account in the Equity Index Account as of the Distribution Date and dividing by the number of years of distributions remaining. 2.6. Deferral Amount - "Deferral Amount" means the amount of Elective --------------- Deferred Compensation deferred by the Participant for each Class Year. 2.7. Deferred Compensation Account - "Deferred Compensation Account" means ----------------------------- the account for each Class Year maintained by the Company for each Participant pursuant to Section 6 or the account that has been established pursuant to the Transfer and Consent Form. 2.8. Disability - "Disability" means the Participant is receiving ---------- disability benefits under the long term disability benefit plan sponsored by the Employer or one of its subsidiaries. 2 2.9. Distribution Date - "Distribution Date" means the date on which the ----------------- Employer makes distributions from the Participant's Deferred Compensation Account. 2.10. Effective Date - "Effective Date" means January 1, 1993, the date on -------------- which the Plan commenced. 2.11. Election Form - "Election Form" means the form or forms attached to ------------- this Plan and filed with the Executive Compensation Committee of Alltrista Corporation, or in the event such Deferred Compensation Account was established pursuant to the Transfer and Consent Form, then the form filed with the Executive Compensation Committee of Ball Corporation by the Participant in order to participate in the 1989 Ball Corporation Deferred Compensation Plan. The terms and conditions specified in the Election Form(s) are incorporated by reference herein and form a part of the Plan. 2.12. Elective Deferred Compensation - "Elective Deferred Compensation" ------------------------------ means the amount elected to be deferred by an Eligible Employee in his/her Election Form. 2.13. Eligible Employee - "Eligible Employee" means any employee of the ----------------- Company who has been selected by the Executive Compensation Committee. 2.14. Employer - "Employer" means Alltrista Corporation and any of its fifty -------- percent (50%) or more owned subsidiaries. 2.15. Equity Index Account - "Equity Index Account" means an investment -------------------- option providing for a return based upon the hypothetical investment of the Deferral Amount, or a portion thereof, in the S&P 500 Index. 2.16. Executive Compensation Committee - "Executive Compensation Committee" -------------------------------- (also referred to as the "Committee") means the committee appointed by the Board of Directors that will administer the Plan. 2.17. Fixed Account - "Fixed Account" means an investment option providing ------------- for a stated amount of interest to be credited to the Deferral Amount, or a portion thereof, based on Moody's. 2.18. Investment Allocation Change Form - "Investment Allocation Change --------------------------------- Form" means the form attached to this Plan and filed with the Committee by the Participant in order to request a change in the allocation of the Participant's Deferred Compensation Account(s) between the Fixed Account and the Equity Index Account. The terms and conditions specified in the Investment Allocation Change Form are incorporated by reference herein and form a part of the Plan. 2.19. Moody's - "Moody's" means the annual average composite yield on ------- Moody's Seasoned Corporate Bond Yield Index for the twelve (12) months ending the October 31st immediately preceding the Valuation Date, as determined from Moody's Bond Record published by Moody's Investors Service, Inc. (or any 3 successors thereto), or, if such yield is no longer published, a substantially similar average selected by the Company. 2.20. Participant - "Participant" means an Eligible Employee participating ----------- in the Plan in accordance with the provisions of Section 4. 2.21. S&P 500 Investment Return - "S&P 500 Investment Return" means the ------------------------- return used to determine the amount of gain or loss credited to that portion of a Participant's Deferred Compensation Account in the Equity Index Account under Sections 6.5 and 6.6. The return for a Class Year shall be determined by using a hypothetical investment in the Standard & Poor's 500 Composite Stock Index inclusive of reinvested dividends less management fees (currently 25 basis points a year, but may be changed by the Committee to no more than 50 basis points). 2.22. Substantially Equal Installments - "Substantially Equal Installments" --------------------------------- means a series of annual payments such that equal payments over the remaining payment period would exactly amortize the Deferred Compensation Account balance in the Fixed Account as of the Distribution Date if the credited interest rate remained constant at the level credited as of the Valuation Date immediately preceding the Distribution Date for the remainder of the payment period. 2.23. Termination of Employment - "Termination of Employment" means the ------------------------- termination of a Participant's employment with the Employer for any reason other than Disability. 2.24. Transfer and Consent Form - "Transfer and Consent Form" means the ------------------------- Transfer and Consent Form attached to this Plan and filed with the Executive Compensation Committee of Alltrista Corporation. The terms and conditions specified in the Transfer and Consent Form are incorporated by reference herein and form a part of the Plan. 2.25. Valuation Date - "Valuation Date" means the date on which the value of -------------- a Participant's Deferred Compensation Account for each Class Year is determined as provided in Section 6 hereof. Unless and until changed by the Committee, the Valuation Date shall be the last day of each calendar year. 3. Administration of the Plan The Executive Compensation Committee, by appointment of the Board of Directors of the Company, shall be the sole administrator of the Plan. The Committee shall have full power to formulate additional details and regulations for carrying out this Plan. The Committee also shall be empowered to make any and all of the determinations not authorized specifically herein that may be necessary or desirable for the effective 4 administration of the Plan. Any decision or interpretation of any provision of this Plan adopted by the Committee shall be final and conclusive. 4. Participation Participation in the Plan shall be limited to Eligible Employees who elect to participate in the Plan by filing an Election Form with the Committee prior to the commencement of the Class Year to which the Election Form applies, or at such earlier time as determined by the Committee. Notwithstanding the foregoing, an employee who first becomes an Eligible Employee during any Class Year may elect to participate in the Plan for such Class Year by filing an Election Form within thirty (30) days after becoming an Eligible Employee. The minimum annual deferral shall be $1,000, and the maximum deferral shall be one hundred percent (100%) of the Participant's Compensation. An Eligible Employee, who also has elected to defer incentive compensation attributable to prior years under the Ball Corporation 1989 Deferred Compensation Plan, may elect to transfer, the December 31 of the calendar year preceding the year in which the Participant becomes an Eligible Employee, to this Plan the dollar value, including any interest thereon, of all his/her deferred compensation account as of December 31 of the calendar year preceding the year in which the Participant becomes an Eligible Employee. Such amounts, including interest, shall be deemed to be Deferral Amounts under this Plan as of the close of business on December 31 of the calendar year preceding the year in which the Participant becomes an Eligible Employee, and no interest shall be earned for that calendar year. 5. Vesting of Deferred Compensation Account A Participant's interest in his/her Deferred Compensation Account and interest credited thereto shall vest immediately. 6. Accounts and Valuations 6.1. Deferred Compensation Accounts. The Committee shall establish and ------------------------------ maintain a separate Deferred Compensation Account for each Participant for each Class Year. Elective Deferred Compensation, except for transfers from the Ball Corporation 1989 Deferred Compensation Plan as described in Section 4, shall be deemed credited to the Deferred Compensation Account as of the close of business on December 31 of the Class Year, and no interest or gain/loss shall be earned for that calendar year. 6.2. Investment Allocation of Deferred Compensation Account. The ------------------------------------------------------- Participant's Deferral Amount shall be deemed to be invested in either the Fixed Account or the Equity Index Account in accordance with the Participant's election. 5 6.3. Interest Rate Credited. That portion of the Participant's Deferred ---------------------- Compensation Account in the Fixed Account shall be credited with interest on each Valuation Date, as provided hereinafter, at an annual rate equal to Moody's. 6.4. Timing of Crediting of Interest. That portion of the Participant's ------------------------------- Deferred Compensation Account in the Fixed Account shall be revalued and credited with interest as of each Valuation Date. As of each Valuation Date, the value of that portion of the Participant's Deferred Compensation Account in the Fixed Account shall consist of the balance of such Deferred Compensation Account as of the immediately preceding Valuation Date plus the amount of any Elective Deferred Compensation credited to the Fixed Account and any transfers from the Equity Index Account, if any, made to such Deferred Compensation Account since the preceding Valuation Date, minus the amount of all distributions and transfers to the Equity Index Account, if any, made from such Deferred Compensation Account since the preceding Valuation Date. As of each Valuation Date, interest shall be credited on that portion of the Participant's Deferred Compensation Account in the Fixed Account since the immediately preceding Valuation Date after adjustment for any additions thereto or distributions or transfers therefrom. Normal benefit distributions (under Section 7.1) from the Fixed Account made on or before February 15 of the year of payment will be considered to have been made from the account and deducted from the account balance as of January 1 of such year for the purpose of crediting interest under this Section 6.4. Interest on Hardship Benefits distributed from the Fixed Account will be prorated to the date of distribution for the purpose of crediting interest under this Section 6.4. 6.5. Investment Return Credited. That portion of the Participant's Deferred -------------------------- Compensation Account in the Equity Index Account shall be credited annually with an investment return at a rate equal to the S&P 500 Investment Return 6.6. Timing of Crediting of Investment Return. That portion of the ----------------------------------------- Participant's Deferred Compensation Account in the Equity Index Account shall be revalued and credited with investment return as of each Valuation Date. As of each Valuation Date, the value of that portion of the Participant's Deferred Compensation Account in the Equity Index Account shall consist of the balance of such Equity Index Account as of the immediately preceding Valuation Date, plus any Elective Deferred Compensation credited to the Equity Index Account and any transfers from the Fixed Account since the preceding Valuation Date, minus the amount of all distributions and transfers to the Fixed Account, if any, made from such Equity Index Account since the preceding Valuation Date. As of each Valuation Date, the investment return shall be credited on that portion of the Participant's Deferred Compensation Account in the Equity Index Account since the immediately preceding Valuation Date after adjustment for any additions thereto or distributions or transfers therefrom. Benefit distributions (under Section 7) from the Equity Index Account made on or before February 15 of the year of payment will be considered to have been made and deducted from the account balance as of January 1 of such year for the purpose of crediting investment return under this Section 6.6. The investment return on Hardship 6 Benefits distributed from the Equity Index Account will be calculated to the date of distribution for the purpose of crediting the investment return under this Section 6.6. 6.7. Change of Investment Allocation by a Participant. A Participant may ------------------------------------------------- make different investment allocations for each Class Year, and may change a Class Year's investment allocation once a year. Any change will be effective as of January 1 of the next year if the Participant submits an Investment Allocation Change Form to the Committee by December 15 of any Plan year. 7. Benefits 7.1. Normal Benefit -------------- a. A Participant's Deferred Compensation Account shall be paid to the Participant as requested in his/her Election Form, subject to the terms and conditions set forth in the Plan, including the Election Form. If a Participant elects to receive payment of his/her Deferred Compensation Account in the Fixed Account in installments, payments shall be made in Substantially Equal Installments. If a Participant elects to receive payment of his/her Deferred Compensation Account in the Equity Index Account in installments, payments shall be made in Declining Balance Installments. Unless the Executive Compensation Committee determines otherwise, and subject to the provisions of Section 7.4. as to when payments shall commence, distribution payments, whether lump sum or installment, shall be made on or before the fifteenth (15th) day of February of each year. A Participant may elect different payment schedules for different Class Year Deferred Compensation Accounts. b. If a Participant dies before receiving his/her total Deferred Compensation Account balances, whether distributions have commenced earlier or not, his/her Beneficiary shall be entitled to the remaining account balances in accordance with the payment elections in the Election Form, except that such payments, if not already commenced, shall commence on or before February 15 next following the date of the Participant's death. 7.2. Hardship Benefit. In the event that the Executive Compensation ---------------- Committee, upon written request of a Participant or Beneficiary of a deceased Participant, determines in its sole discretion, that such person has suffered an unforeseeable financial emergency, the Company shall pay to such person, from the Deferred Compensation Account designated by the Participant or Beneficiary, as soon as practicable following such determination, an amount necessary to meet the emergency, not in excess of the amount of the Deferred Compensation Account. The Deferred Compensation Account of the Participant shall thereafter be reduced to reflect the payment as of the date paid of a Hardship Benefit. 7 7.3. Request to Committee for Delay in Payment. A Participant shall have ------------------------------------------ no right to modify in any way the schedule for the distribution of amounts from his/her Deferred Compensation Account that he/she has specified in his/her Election Form. However, upon a written request submitted by the Participant to the Committee, the Committee may, in its sole discretion, for each Class Year: . Postpone one time the date on which payment shall commence, but not beyond the year in which he/she will attain age seventy-one (71); and . At the same time, increase the number of installments to a number not to exceed fifteen (15). Any such request(s) must be made prior to the earlier of (a) the beginning of the year that the Participant has elected for distributions to commence, or (b) the Termination of Employment. 7.4. Date of Payments. Except as otherwise provided in this plan, ---------------- payments under this Plan shall begin on or before the fifteenth (15th) day of February of the calendar year following receipt of notice by the Executive Compensation Committee of an event that entitles a Participant (or Beneficiary) to payments under the Plan, or at such earlier date after receipt of such notice as may be determined by the Executive Compensation Committee. 7.5. Termination of Employment Before Age 55. In the event that a ---------------------------------------- Participant has a Termination of Employment prior to his/her attaining age fifty-five (55) (other than by death, for which benefits and/or accounts will be paid in accordance with Section 7.1.b.), then, whether or not distributions have earlier commenced, the Participant's Deferred Compensation Account will be paid to him/her in a lump sum on or before the fifteenth (15th) day of February in the year following the year in which the Termination of Employment occurred, unless otherwise determined by the Committee. Upon written request of the Participant made within thirty (30) days following Termination of Employment, the Committee may, in its sole discretion, determine that, in lieu of a lump sum, payments shall be made to the Participant in not more than five (5) Substantially Equal Installments, commencing on or before such next fifteenth (15th) day of February following the date of Termination of Employment. The interest or investment return credited to the Participant's Deferred Compensation Account on the Valuation Date next following the Termination of Employment shall be as provided in Section 6., above. If payments are to be made in installments, all Class Years including both Fixed and Equity Index Accounts will be combined into one amount that will be the Participant's Deferred Compensation Account going forward and the interest rate credited to the Participant's Deferred Compensation Account on all Valuation Dates subsequent to the Valuation Date next following Termination of Employment (and to be considered as the interest rate on such Valuation Date next following Termination of Employment for the sole purpose of calculation Substantially Equal Installments under Section 2.22., 8 above) shall be limited to the daily weighted average borrowing rate paid by the Company during the then calendar year for total borrowing. 7.6. Taxes: Withholding. To the extent required by law, the Company shall ------------------ withhold from payments made hereunder any amount required to be withheld by the federal government, or any state or local government. 7.7. Liquidating Distributions. Notwithstanding any provisions of the ------------------------- Plan or the Participant's Election Form to the contrary, upon written request for a Liquidating Distribution submitted by the Participant (or Beneficiary) to the Executive Compensation Committee, the Committee may, in its sole discretion, (or, following a Change in Control, the Committee must) pay to the Participant (or Beneficiary following the death of Participant) the Participant's (or Beneficiary's) Liquidating Distribution Account Balance in a lump sum as soon as practicable, but no later than 60 days, following the request. "Liquidating Distribution" shall mean a distribution requested by the Participant (or Beneficiary) in writing directed to the Committee and specifically referencing this section. If the Participant requesting the Liquidating Distribution is, at the time of the request, an active employee of the Employer, "Liquidating Distribution Account Balance" shall mean all of the Deferred Compensation Accounts under the Plan in which the Participant has an undistributed balance, increased by interest credited or investment return credited or debited on the account(s) to the date of distribution from the preceding Valuation Date, and decreased by a forfeiture penalty equal to six percent (6%) of the value of the Participant's Deferred Compensation Account(s) as of the date of distribution. If the Participant requesting the Liquidating Distribution is, at the time of the request, no longer an active employee of the Employer, or in the case of a request made by a Participant's Beneficiary, "Liquidating Distribution Account Balance" shall mean all of the Deferred Compensation Accounts under the Plan in which the Participant (or Beneficiary) has an undistributed balance and all of the Deferred Compensation Accounts under any Comparable Plans maintained by the Employer in which the Participant (or Beneficiary) has an undistributed balance, increased by interest credited or investment return credited or debited on the account(s) to the date of distribution from the preceding Valuation Date, and decreased by a forfeiture penalty equal to six percent (6%) of the value of the Participant's (or Beneficiary's) Deferred Compensation Account(s) as of the date of distribution. "Comparable Plans" shall mean the Alltrista Corporation 1993 Deferred Compensation Plan, the Alltrista Corporation 1993 Deferred Compensation Plan for Selected Key Employees, and any comparable successor plans so designated by the Committee. Notwithstanding any provisions of the Plan to the contrary, if a Participant requests a Liquidating Distribution within sixty (60) days following the effective date of a Change in Control, the Liquidating Distribution Account Balance shall be paid as set forth above except that the forfeiture penalty of six percent (6%) of 9 the value of the Participant's (or Beneficiary's) Deferred Compensation Account(s) as of the date of distribution shall not be applied. Notwithstanding any provisions of the Plan or the Participant's Election Form to the contrary, if the Participant requesting the Liquidating Distribution is, at the time of the request, an active employee of the Employer, then the Participant shall, for a period of two (2) Class Years beginning with the Class Year during which the request for Liquidating Distribution is made, be ineligible to participate in the Plan or any Comparable Plans with respect to any Compensation not yet deferred. For purposes of this Section, a "Change in Control" shall be deemed to have occurred if: (a) any "Person", which shall mean a "person" as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company's then outstanding securities; (b) at any time during any period of two consecutive years, individuals, who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this Section) whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds of the directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; (c) the shareholders of the Company approved a merger or consolidation of the Company with any other company, other than (i) a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50 percent of the combined voting power of the voting securities of the Company, or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquired 50 percent or more of the combined voting power of the Company's then outstanding securities; or 10 (d) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. 8. Beneficiary Designation With respect to those Participants who have filed a Transfer and Consent form with the Executive Compensation Committee of Alltrista Corporation, their Beneficiary or Beneficiaries (both principal and contingent) shall be as designated under the terms of the 1989 Ball Corporation Deferred Compensation Plan, unless or until a new Beneficiary designation form is filed with the Committee, or the then existing Beneficiary is revoked by divorce. A Participant shall have the right at any time, and from time to time, to designate and/or change or cancel any person, persons, or entity as his/her Beneficiary or Beneficiaries (both principal and contingent) to whom payment under this Plan shall be paid in the event of his/her death prior to complete distribution to Participant of the benefits due him/her under the Plan. Each beneficiary change or cancellation shall become effective only when filed in writing with the Executive Compensation Committee during the Participant's lifetime on a form provided by the Committee. The filing of a new Beneficiary designation form will cancel all Beneficiary designations previously filed. Any finalized divorce of a Participant subsequent to the date of filing of a Beneficiary designation form shall revoke such designation if it was for the spouse Participant subsequently divorced. The spouse of a married Participant domiciled in a community property jurisdiction shall be required to join in any designation of Beneficiary or Beneficiaries other than the spouse in order for the Beneficiary designation to be effective. If a Participant fails to designate a Beneficiary as provided above, or if his/her beneficiary designation is revoked by divorce, or otherwise, without execution of a new designation, or if all designated Beneficiaries predecease the Participant, then the distribution of such benefits shall be made in a lump sum to the Participant's estate. If any installment distribution has commenced to a Beneficiary and the Beneficiary dies before receiving all installments, any remaining installments shall be paid in a lump sum to the estate of the Beneficiary. 11 9. Amendment and Termination of Plan 9.1. Amendment. The Board of Directors at any time may amend the Plan in --------- whole or in part, provided, however, that no amendment shall be effective to reduce the value of any Participant's Deferred Compensation Account or to affect the Participant's vested right therein, and, except as provided in 9.2. or 9.3., no amendment shall be effective to decrease the future benefits under the Plan payable to any Participant or Beneficiary with respect to any Elective Deferred Compensation that was deferred prior to the date of the amendment. Written notice of any amendments shall be given promptly to each Participant. 9.2. Termination of Plan ------------------- a. Employer's Right to Terminate. The Board of Directors at any ----------------------------- time may terminate the Plan as to prospective contributions and credits of interest or investment return, if it determines in good faith that the economic acceptability of the Plan has been substantially impaired and that the resulting cost to the Company is substantially and unacceptably greater than the cost anticipated at the Effective Date. No such termination of the Plan shall reduce the balance in a Participant's Deferred Compensation Account or affect the Participant's vested right therein. b. Payments Upon Termination of Plan. Upon termination of the Plan --------------------------------- under this Section 9.2., Compensation for additional Class Years shall not be deferred under the Plan. With respect to then- existing Deferred Compensation Accounts, the Employer will, depending upon the Participant's election at that time: (i) pay to the Participant, in a lump sum, the value of each of his/her Deferred Compensation Accounts; (ii) continue to defer the Compensation under the Plan, but with only the Fixed Account option and with the interest rate credited on all future Valuation Dates to be equal to the daily average of the best interest rate available to the Company during the then calendar year for short-term borrowings; or (iii) make such other arrangement as the Committee determines appropriate. 9.3. Successors and Mergers, Consolidations or Change in Control. The ----------------------------------------------------------- terms and conditions of this Plan and Election Form shall inure to the benefit of and bind the Company, the Participants, their successors, assigns, and personal representatives. If substantially all of the stock or assets of the Company are acquired by another corporation or entity, or if the Company is merged into, or consolidated with, another corporation or entity, then the obligations created hereunder shall be obligations of the acquirer or successor corporation or entity. 12 10. Miscellaneous 10.1. Unsecured General Creditor. Participants and their beneficiaries, -------------------------- heirs, successors and assigns shall have no legal or equitable rights, interests, or other claims in any property or assets of the Employer, nor shall they be beneficiaries of, or have any rights, claims, or interests in any life insurance policies, annuity contracts, or the policies therefrom owned or that may be acquired by the Company ("Policies"). Such Policies or other assets shall not be held under any trust for the benefit of Participants, their beneficiaries, heirs, successors, or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of such assets and policies shall be and remain general, unpledged, unrestricted assets of the Employer. The Company's obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future. 10.2. Obligations to the Employer. If a Participant becomes entitled to a -------------------------- distribution of benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation, or other liability representing an amount owed to the Employer, then the Employer may offset such amounts owing it or an affiliate against the amount of benefits otherwise distributable. Such determination shall be made by the Committee. 10.3. Non-Assignability. Neither a Participant nor any other person shall ----------------- have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, that are, and all rights to which are expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency. 10.4. Employment or Future Eligibility to Participant Not Guaranteed. -------------------------------------------------------------- Nothing contained in this Plan, nor any action taken hereunder, shall be construed as a contract of employment or as giving an Eligible Employee any right to be retained in the employ of the Employer. Designation as an Eligible Employee may be revoked at anytime by the Executive Compensation Committee with respect to any Compensation not yet deferred. 10.5. Gender Singular and Plural. All pronouns and any variations --------------------------- thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular. 13 10.6. Captions. The captions to the articles, sections, and paragraphs of -------- this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 10.7. Protective Provisions. A Participant will cooperate with the --------------------- Company by furnishing any and all information requested by the Company in order to facilitate the payment of benefits hereunder, including taking such physical examinations as the Company reasonably may deem necessary and taking such other relevant action as may be requested by the Company. If a Participant refuses to cooperate, the Company shall have no further obligation to the Participant under the Plan. If, during the two-year period beginning on the first day of a Plan Cycle, the Participant commits suicide, or dies after providing any material misstatement of information or nondisclosure or medical history with regard to a Cycle, then no benefits shall be payable to such Participant or his/her Beneficiary from such Cycle other than a return of the Participant's Deferral Amount. 10.8. Applicable Law. This Plan shall be governed and construed in -------------- accordance with the laws of the State of Indiana. 10.9. Validity. In the event any provision of this Plan is held invalid, -------- void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of this Plan. 10.10. Notice. Any notice or filing required or permitted to be given to ------ the Executive Compensation Committee shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company, directed to the attention of the President of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 14 EX-10.15 7 dex1015.txt 1997 DEFERRED COMPENSATION PLAN FOR DIRECTORS Exhibit 10.15 ALLTRISTA CORPORATION 1997 DEFERRED COMPENSATION PLAN FOR DIRECTORS ALLTRISTA CORPORATION 1997 DEFERRED COMPENSATION PLAN FOR DIRECTORS (Amended on February 1, 2001) 1. Statement of Purpose The purpose of the 1997 Deferred Compensation Plan for Directors (the "Plan") is to establish an alternative method of compensating those directors of Alltrista Corporation (the "Company") who do not receive compensation as employees of the Company ("Directors") in order to aid the Company in attracting and retaining as Directors persons whose abilities, experience and judgment can contribute to the continued progress of the Company. 2. Definitions 2.1. Beneficiary - "Beneficiary" means the person or persons designated as ----------- such in accordance with Section 8. 2.2. Class Year - "Class Year" means the year in respect of which ---------- compensation is deferred under the Plan. 2.3. Committee - "Committee" (also referred to as the "Executive --------- Compensation Committee") means the committee appointed by the Board of Directors that will administer the Plan. 2.4. Director - "Director" means a Director of the Company who is not an -------- employee of the Company or an affiliate. 2.5. Director's Fees - "Director's Fees" means any compensation payable to --------------- a Director for services rendered as a Director for the Class Year, including retainer fees, meeting fees, committee fees, chairmanship fees and special assignment fees, but not including director's reimbursable expenses. 2.6. Declining Balance Installments - "Declining Balance Installments" ------------------------------ means a series of annual payments such that each payment is determined by taking that portion of the Participant's Deferred Compensation Account in the Equity Index Account as of the Distribution Date and dividing by the number of years of distributions remaining. 2.7. Deferral Amount - "Deferral Amount" means the amount of Elective --------------- Deferred Compensation deferred by the Participant for each Class Year. 2.8. Deferred Compensation Account - "Deferred Compensation Account" means ----------------------------- the account for each Class Year maintained by the Company for each Participant pursuant to Section 6. 1 2.9. Distribution Date - "Distribution Date" means the date on which the ----------------- Company makes distributions from the Participant's Deferred Compensation Account. 2.10. Effective Date - "Effective Date" means January 1, 1997, the date on -------------- which the Plan commenced as approved by the Board of Directors on November 21, 1996. 2.11. Election Form - "Election Form" means the form or forms attached to ------------- this Plan and filed with the Executive Compensation Committee by the Participant in order to participate in the Plan. The terms and conditions specified in the Election Form(s) are incorporated by reference herein and form a part of the Plan. 2.12. Elective Deferred Compensation - "Elective Deferred Compensation" ------------------------------ means the amount elected to be deferred by a Director in his/her Election Form. 2.13. Equity Index Account - "Equity Index Account" means an investment -------------------- option providing for a return based upon the hypothetical investment of the Deferral Amount, or a portion thereof, in the S&P 500 Index. 2.14. Executive Compensation Committee - "Executive Compensation -------------------------------- Committee" (also referred to as the "Committee") means the committee appointed by the Board of Directors that will administer the Plan. 2.15. Fixed Account - "Fixed Account" means an investment option providing ------------- for a stated amount of interest to be credited to the Deferral Amount, or a portion thereof, based on Moody's. 2.16. Investment Allocation Change Form - "Investment Allocation Change --------------------------------- Form" means the form attached to this Plan and filed with the Committee by the Participant in order to request a change in the allocation of the Participant's Deferred Compensation Account(s) between the Fixed Account and the Equity Index Account. The terms and conditions specified in the Investment Allocation Change Form are incorporated by reference herein and form a part of the Plan. 2.17. Moody's - "Moody's" means the annual average composite yield on ------- Moody's Seasoned Corporate Bond Yield Index for the twelve (12) months ending the October 31st immediately preceding the Valuation Date, as determined from Moody's Bond Record published by Moody's Investors Service, Inc. (or any successors thereto), or, if such yield is no longer published, a substantially similar average selected by the Company. 2.18. Participant - "Participant" means a Director participating in the ----------- Plan in accordance with the provisions of Section 4. 2 2.19. S&P 500 Investment Return - "S&P 500 Investment Return" means the ------------------------- return used to determine the amount of gain or loss credited to that portion of a Participant's Deferred Compensation Account in the Equity Index Account under Sections 6.5 and 6.6. The return for a Class Year shall be determined by using a hypothetical investment in the Standard & Poor's 500 Composite Stock Index inclusive of reinvested dividends less management fees (currently 25 basis points a year, but may be changed by the Committee to no more than 50 basis points). 2.20. Substantially Equal Installments - "Substantially Equal -------------------------------- Installments" means a series of annual payments such that equal payments over the remaining payment period would exactly amortize the Deferred Compensation Account balance in the Fixed Account as of the Distribution Date if the credited interest rate remained constant at the level credited as of the Valuation Date immediately preceding the Distribution Date for the remainder of the payment period. 2.21. Valuation Date - "Valuation Date" means the date on which the value -------------- of a Participant's Deferred Compensation Account for each Class Year is determined as provided in Section 6 hereof. Unless and until changed by the Committee, the Valuation Date shall be the last day of each calendar year. 3. Administration of the Plan The Executive Compensation Committee, by appointment of the Board of Directors of the Company, shall be the sole administrator of the Plan. Members of the Committee may be Participants under this Plan. The Committee shall have full power to formulate additional details and regulations for carrying out this Plan. The Committee shall also be empowered to make any and all of the determinations not herein specifically authorized which may be necessary or desirable for the effective administration of the Plan. Any decision or interpretation of any provision of this Plan adopted by the Committee shall be final and conclusive. 4. Participation Participation in the Plan shall be limited to Directors who elect to participate in the Plan by filing an Election Form prior to the beginning of the Class Year in which the Participant's Director's Fees are earned. Notwithstanding the foregoing, an individual who first becomes a Director during any Class Year may elect to participate in the Plan for such Class Year with respect to any Director's Fees not yet earned by filing an Election Form within thirty (30) days after becoming a Director. Such election shall be irrevocable and shall remain in effect with respect to Director's Fees earned for each Class Year thereafter until such election is terminated or amended, or until the Participant ceases to be a Director, whichever shall first occur. Any such election may be terminated, or amended by a new election having specifications different from the election then in effect for the Participant, but any such termination or amendment shall be effective only with respect to Director's Fees for Class Years beginning after the date such termination or amendment is filed. 3 5. Vesting of Deferred Compensation Account A Participant's interest in his/her Deferred Compensation Account and interest credited thereto shall vest immediately. 6. Accounts and Valuations 6.1. Deferred Compensation Accounts. The Committee shall establish and ------------------------------ maintain a separate Deferred Compensation Account for each Participant for each Class Year. Deferred Director's Fees shall be credited to the Deferred Compensation Account when otherwise payable and prior to the last day of each calendar quarter in which such fees are earned. 6.2. Investment Allocation of Deferred Compensation Account. The ------------------------------------------------------- Participant's Deferral Amount shall be deemed to be invested in either the Fixed Account or the Equity Index Account in accordance with the Participant's election. 6.3. Interest Rate Credited. That portion of the Participant's Deferred ---------------------- Compensation Account in the Fixed Account shall be credited with interest on each Valuation Date, as provided hereinafter, at an annual rate equal to Moody's. 6.4. Timing of Crediting of Interest. That portion of the Participant's ------------------------------- Deferred Compensation Account in the Fixed Account shall be revalued and credited with interest as of each Valuation Date. As of each Valuation Date, the value of that portion of the Participant's Deferred Compensation Account in the Fixed Account shall consist of the balance of such Deferred Compensation Account as of the immediately preceding Valuation Date, plus the amount of any Elective Deferred Compensation credited to the Fixed Account and any transfers from the Equity Index Account, if any, made to such Deferred Compensation Account since the preceding Valuation Date, minus the amount of all distributions and transfers to the Equity Index Account, if any, made from such Deferred Compensation Account since the preceding Valuation Date. As of each Valuation Date, interest shall be credited on that portion of the Participant's Deferred Compensation Account in the Fixed Account since the immediately preceding Valuation Date after adjustment for any additions thereto or distributions or transfer therefrom. Normal benefit distributions (under Section 7.1) from the Fixed Account made on or before February 15 of the year of payment will be considered to have been made from the account and deducted from the account balance as of January 1 of such year for the purpose of crediting interest under this Section 6.4. Interest on Hardship Benefits distributed from the Fixed Account will be prorated to the date of distribution for the purpose of crediting interest under this Section 6.4. 6.5. Investment Return Credited. That portion of the Participant's -------------------------- Deferred Compensation Account in the Equity Index Account shall be credited annually with an investment return at a rate equal to the S&P 500 Investment Return. 4 6.6. Timing of Crediting of Investment Return. That portion of the ---------------------------------------- Participant's Deferred Compensation Account in the Equity Index Account shall be revalued and credited with investment return as of each Valuation Date. As of each Valuation Date, the value of that portion of the Participant's Deferred Compensation Account in the Equity Index Account shall consist of the balance of such Equity Index Account as of the immediately preceding Valuation Date, plus any Elective Deferred Compensation credited to the Equity Index Account and any transfers from the Fixed Account since the preceding Valuation Date, minus the amount of all distributions and transfers to the Fixed Account, if any, made from such Equity Index Account since the preceding Valuation Date. As of each Valuation Date, the investment return shall be credited on that portion of the Participant's Deferred Compensation Account in the Equity Index Account since the immediately preceding Valuation Date after adjustment for any additions thereto or distributions or transfers therefrom. Benefit distributions (under Section 7) from the Equity Index Account made on or before February 15 of the year of payment will be considered to have been made and deducted from the account balance as of January 1 of such year for the purpose of crediting investment return under this Section 6.6. The investment return on Hardship Benefits distributed from the Equity Index Account will be calculated to the date of distribution for the purpose of crediting the investment return under this Section 6.6. 6.7. Change of Investment Allocation by a Participant. A Participant may ------------------------------------------------- make different investment allocations for each Class Year, and may change a Class Year's investment allocation once a year. Any change will be effective as of January 1 of the next year if the Participant submits an Investment Allocation Change Form to the Committee by December 15 of any Plan year. 7. Benefits 7.1. Normal Benefit -------------- a. A Participant's Deferred Compensation Account shall be paid to the Participant as requested in his/her Election Form, subject to the terms and conditions set forth in the Plan, including the Election Form. If a Participant elects to receive payment of his/her Deferred Compensation Account in the Fixed Account in installments, payments shall be made in Substantially Equal Installments. If a Participant elects to receive payment of his/her Deferred Compensation Account in the Equity Index Account in installments, payments shall be made in Declining Balance Installments. Unless the Executive Compensation Committee determines otherwise, and subject to the provisions of Section 7.4. as to when payments shall commence, distribution payments, whether lump sum or installment, shall be made on or before the fifteenth (15th) day of February of each year. A Participant may elect different payment schedules for different Class Year Deferred Compensation Accounts. 5 b. If a Participant dies before receiving his/her total Deferred Compensation Account balances, whether distributions have commenced earlier or not, his/her Beneficiary shall be entitled to the remaining account balances in accordance with the payment elections in the Election Form, except that such payments, if not already commenced, shall commence on or before February 15 next following the date of the Participant's death. 7.2. Hardship Benefit. In the event that the Executive Compensation ---------------- Committee, upon written request of a Participant or Beneficiary of a deceased Participant, determines in its sole discretion, that such person has suffered an unforeseeable financial emergency, the Company shall pay to such person, from the Deferred Compensation Account designated by the Participant or Beneficiary, as soon as practicable following such determination, an amount necessary to meet the emergency, not in excess of the amount of the Deferred Compensation Account. The Deferred Compensation Account of the Participant shall thereafter be reduced to reflect the payment as of the date paid of a Hardship Benefit. 7.3. Request to Committee for Delay in Payment. A Participant shall have ----------------------------------------- no right to modify in any way the schedule for the distribution of amounts from his/her Deferred Compensation Account that he/she has specified in his/her Election Form. However, upon a written request submitted by the Participant to the Committee, the Committee may, in its sole discretion, for each Class Year: . Postpone one time the date on which payment shall commence (not beyond the year in which the Participant will attain age seventy- one (71)); and . Increase the number of installments (to a number not to exceed fifteen (15)). Any such request(s) must be made at least ninety (90) days prior to the earlier of (a) the beginning of the year which the Participant has elected for distributions to commence, or (b) when the Participant ceases to be a Director. 7.4. Date of Payments. Except as otherwise provided in this plan, ---------------- payments under this Plan shall begin on or before the fifteenth (15th) day of February of the calendar year following receipt of notice by the Executive Compensation Committee of an event that entitles a Participant (or Beneficiary) to payments under the Plan, or at such earlier date after receipt of such notice as may be determined by the Executive Compensation Committee. 7.5. Taxes: Withholding. To the extent required by law, the Company shall ------------------ withhold from payments made hereunder any amount required to be withheld by the federal government, or any state or local government. 7.6. Liquidating Distributions. Notwithstanding any provisions of the ------------------------- Plan or the Participant's Election Form to the contrary, upon written request for a Liquidating Distribution submitted by the Participant (or Beneficiary) to the Executive 6 Compensation Committee, the Committee may, in its sole discretion, (or, following a Change in Control, the Committee must) pay to the Participant (or Beneficiary following the death of Participant) the Participant's (or Beneficiary's) Liquidating Distribution Account Balance in a lump sum as soon as practicable, but no later than 60 days, following the request. "Liquidating Distribution" shall mean a distribution requested by the Participant (or Beneficiary) in writing directed to the Committee and specifically referencing this section. "Liquidating Distribution Account Balance" shall mean all of the Deferred Compensation Accounts under the Plan in which the Participant has an undistributed balance, increased by interest credited or investment return credited or debited on the account(s) to the date of distribution from the preceding Valuation Date, and decreased by a forfeiture penalty equal to six percent (6%) of the value of the Participant's Deferred Compensation Account(s) as of the date of distribution. Notwithstanding any provisions of the Plan to the contrary, if a Participant requests a Liquidating Distribution within sixty (60) days following the effective date of a Change in Control, the Liquidating Distribution Account Balance shall be paid as set forth above except that the forfeiture penalty of six percent (6%) of the value of the Participant's (or Beneficiary's) Deferred Compensation Account(s) as of the date of distribution shall not be applied. Notwithstanding any provisions of the Plan or the Participant's Election Form to the contrary, if the Participant requesting the Liquidating Distribution is, at the time of the request, an active Director of the Company, then the Participant shall, for a period of two (2) Class Years beginning with the Class Year during which the request for Liquidating Distribution is made, be ineligible to participate in the Plan or any Comparable Plans with respect to any Compensation not yet deferred. For purposes of this Section, a "Change in Control" shall be deemed to have occurred if: (a) any "Person", which shall mean a "person" as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company's then outstanding securities; (b) at any time during any period of two consecutive years, individuals, who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an 7 agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this Section) whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds of the directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; (c) the shareholders of the Company approved a merger or consolidation of the Company with any other company, other than (i) a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50 percent of the combined voting power of the voting securities of the Company, or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquired 50 percent or more of the combined voting power of the Company's then outstanding securities; or (d) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. 7.7. Replacement of Committee Member. In the event the Participant ------------------------------- requesting a Hardship Benefit under Section 7.2., a delay in payment under the Section 7.3., or a Liquidating Distribution under Section 7.6., is a member of the Executive Compensation Committee, he/she shall not participate in the Committee's decision and, for purposes of considering his/her request only, the Chief Executive Officer will replace the Participant as a member of the Executive Compensation Committee. 8. Beneficiary Designation A Participant shall have the right at any time, and from time to time, to designate and/or change or cancel any person, persons, or entity as his/her Beneficiary or Beneficiaries (both principal and contingent) to whom payment under this Plan shall be paid in the event of his/her death prior to complete distribution to Participant of the benefits due him/her under the Plan. Each beneficiary change or cancellation shall become effective only when filed in writing with the Executive Compensation Committee during the Participant's lifetime on a form provided by the Committee. The filing of a new Beneficiary designation form will cancel all Beneficiary designations previously filed. Any finalized divorce of a Participant subsequent to the date of filing of a Beneficiary designation form shall revoke such designation if it was for the spouse Participant subsequently divorced. The spouse of a married Participant domiciled in a community property jurisdiction shall be required to join in any designation of 8 Beneficiary or Beneficiaries other than the spouse in order for the Beneficiary designation to be effective. If a Participant fails to designate a Beneficiary as provided above, or if his/her beneficiary designation is revoked by divorce, or otherwise, without execution of a new designation, or if all designated Beneficiaries predecease the Participant, then the distribution of such benefits shall be made in a lump sum to the Participant's estate. If any installment distribution has commenced to a Beneficiary and the Beneficiary dies before receiving all installments, any remaining installments shall be paid in a lump sum to the estate of the Beneficiary. 9. Amendment and Termination of Plan 9.1. Amendment. The Board of Directors may at any time may amend the --------- Plan in whole or in part, provided, however, that no amendment shall be effective to reduce the value of any Participant's Deferred Compensation Account or to affect the Participant's vested right therein, and, except as provided in 9.2. or 9.3., no amendment shall be effective to decrease the future benefits under the Plan payable to any Participant or Beneficiary with respect to any Elective Deferred Compensation which was deferred prior to the date of the amendment. Written notice of any amendments shall be given promptly to each Participant. 9.2. Termination of Plan ------------------- a. Company's Right to Terminate. The Board of Directors may at any ---------------------------- time terminate the Plan as to prospective contributions and credits of interest or investment return, if it determines in good faith that the economic acceptability of the Plan has been substantially impaired and that the resulting cost to the Company is substantially and unacceptably greater than the cost anticipated at the Effective Date. No such termination of the Plan shall reduce the balance in a Participant's Deferred Compensation Account or affect the Participant's vested right therein. b. Payments Upon Termination of Plan. Upon termination of the Plan --------------------------------- under this Section 9.2., Director's Fees not yet earned shall prospectively cease to be deferred. With respect to then- existing Deferred Compensation Accounts, the Company will, depending upon the Participant's election at that time: (i) pay to the Participant, in a lump sum, the value of each of his/her Deferred Compensation Accounts; (ii) continue to defer the Compensation under the Plan, but with only the Fixed Account option and with the interest rate credited on all future Valuation Dates to be equal to the daily average of the best interest rate available to the Company during the then calendar year for short-term borrowings; or (iii) make such other arrangement as the Committee determines appropriate. 9 9.3. Successors and Mergers, Consolidations or Change in Control. The ----------------------------------------------------------- terms and conditions of this Plan and Election Form shall enure to the benefit of and bind the Company, the Participants, their successors, assigns, and personal representatives. If substantially all of the stock or assets of the Company are acquired by another corporation or entity or if the Company is merged into, or consolidated with, another corporation or entity, then the obligations created hereunder shall be obligations of the acquirer or successor corporation or entity. 10. Miscellaneous 10.1. Unsecured General Creditor. Participants and their beneficiaries, -------------------------- heirs, successors and assigns shall have no legal or equitable rights, interests, or other claims in any property or assets of the Company, nor shall they be beneficiaries of, or have any rights, claims, or interests in any life insurance policies, annuity contracts, or the policies therefrom owned or that may be acquired by the Company ("Policies"). Such Policies or other assets shall not be held under any trust for the benefit of Participants, their beneficiaries, heirs, successors, or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of such assets and policies shall be and remain general, unpledged, unrestricted assets of the Company. The Company's obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future. 10.2. Obligations to the Company. If a Participant becomes entitled to a -------------------------- distribution of benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation, or other liability representing an amount owed to the Company, then the Company may offset such amounts owing it or an affiliate against the amount of benefits otherwise distributable. Such determination shall be made by the Committee. 10.3. Non-Assignability. Neither a Participant nor any other person shall ----------------- have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, that are, and all rights to which are expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency. 10.4. Election to Board of Directors Not Guaranteed. Participation in --------------------------------------------- this Plan shall not confer upon any Participant any right to be nominated for re-election to the Board of Directors, or to be re- elected to the Board of Directors. 10 10.5. Gender Singular and Plural. All pronouns and any variations thereof -------------------------- shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular. 10.6. Captions. The captions to the articles, sections, and paragraphs of -------- this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 10.7. Applicable Law. This Plan shall be governed and construed in -------------- accordance with the laws of the State of Indiana. 10.8. Validity. In the event any provision of this Plan is held invalid, -------- void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of this Plan. 10.9. Notice. Any notice or filing required or permitted to be given to ------ the Executive Compensation Committee shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company, directed to the attention of the Chief Executive Officer. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 11 EX-10.16 8 dex1016.txt EXCESS SAVINGS AND RETIREMENT PLAN Exhibit 10.16 ALLTRISTA CORPORATION EXCESS SAVINGS AND RETIREMENT PLAN Effective May 1, 1997 ALLTRISTA CORPORATION EXCESS SAVINGS AND RETIREMENT PLAN (Amended on February 1, 2001) 1. Statement of Purpose The purpose of the Alltrista Corporation Excess Savings and Retirement Plan (the "Excess Plan") is to provide benefits to current and retired employees of Alltrista Corporation (the "Company") and its subsidiaries who participate in or previously participated in the Alltrista Corporation Savings and Retirement Plan (the "Underlying 401(k) Plan") and whose allocable contributions under the Underlying 401(k) Plan will be or have been limited due to the participant's compensation by one or more provisions of the Internal Revenue Code of 1986, as amended, or the regulations promulgated thereunder (the "Tax Law Restrictions"). 2. Definitions (any term for which a definition is not provided shall be taken to have the same meaning as it has, or may have from time to time under the Underlying 401(k) Plan): 2.01. Beneficiary - "Beneficiary" means the person or persons designated ----------- as such in accordance with Section 8. 2.02. Committee - "Committee" (also referred to as the "Executive --------- Compensation Committee") means the committee appointed by the Board of Directors that will administer the Excess Plan. 2.03. Declining Balance Installments - "Declining Balance Installments" ------------------------------ means a series of annual payments such that each payment is determined by taking that portion of the Participant's Excess 401(k) Account in the Equity Index Account as of the Distribution Date and dividing by the number of years of distributions remaining. 2.04. Disability - "Disability" means the Participant is receiving ---------- disability benefits under the long term disability benefit plan sponsored by the Employer. 2.05. Distribution Date - "Distribution Date" means the date on which the ----------------- Company makes distributions from the Participant's Excess 401(k) Account. 2.06. Effective Date - "Effective Date" means May 1, 1997, the date on -------------- which the Excess Plan commenced. 2.07. Eligible Employee - "Eligible Employee" means any employee of the ----------------- Company whose compensation and participation in the Underlying 401(k) Plan qualifies him/her for participation in the Excess Plan. 1 2.08. Eligible Retiree - "Eligible Retiree" means any retiree of the ---------------- Company who had ten or more years of Vesting Service as of April 2, 1993 under the Ball Corporation Salary Conversion Plan and whose former participation in the Underlying 401(k) Plan and former compensation qualifies him/her for participation in the Excess Plan. 2.09. Employer - "Employer" means Alltrista Corporation and any subsidiary -------- entity in which Alltrista Corporation holds a fifty percent (50%) or more interest, either: (i) directly as a stockholder or partner in such subsidiary entity; or (ii) indirectly as a stockholder or partner in one or more other entities which in turn are stockholders or partners in such subsidiary entity. 2.10. Equity Index Account - "Equity Index Account" means an investment -------------------- option providing for a return based upon a hypothetical investment of the Excess 401(k) Account, or a portion thereof, in the S&P 500 Index. 2.11. Excess 401(k) Account - "Excess 401(k) Account" means the account --------------------- maintained by the Company for each Participant pursuant to Section 6. 2.12. Executive Compensation Committee - "Executive Compensation -------------------------------- Committee" (also referred to as the "Committee") means the committee appointed by the Board of Directors that will administer the Excess Plan. 2.13. Fixed Account - "Fixed Account" means an investment option providing ------------- for a stated amount of interest to be credited to the Excess 401(k) Account, or a portion thereof, based on Moody's. 2.14. Initial Make-up Contribution - "Initial Make-up Contribution" means ---------------------------- the amount determined by the Committee to be credited to the Participant's Excess 401(k) Account that will provide for the amount of contribution not made to the Participant's Underlying 401(k) Plan account due to associated Tax Law Restrictions for the period from Company inception through the end of 1996. 2.15. Investment Allocation Change Form - "Investment Allocation Change --------------------------------- Form" means the form attached to this Excess Plan and filed with the Committee by the Participant in order to request a change in the allocation of the Participant's Excess 401(k) Account between the Fixed Account and the Equity Index Account. The terms and conditions specified in the Investment Allocation Change Form are incorporated by reference herein and form a part of the Excess Plan. 2.16. Investment Election and Distribution Form - "Investment Election and ----------------------------------------- Distribution Form" means the form attached to this Excess Plan and filed with the Committee by the Participant in order to participate in the Excess Plan. The terms and conditions specified in the Investment Election and Distribution Form are incorporated by reference herein and form a part of the Excess Plan. 2 2.17. Make-up Contribution - "Make-up Contribution" means the amount -------------------- determined by the Committee to be credited to the Participant's Excess 401(k) Account each year that will provide for the amount of contribution not made to the Participant's Underlying 401(k) Plan account due to associated Tax Law Restrictions. 2.18. Moody's - "Moody's" means the annual average composite yield on ------- Moody's Seasoned Corporate Bond Yield Index as determined from Moody's Bond Record published by Moody's Investors Service, Inc. (or any successors thereto), or, if such yield is no longer published, a substantially similar average selected by the Company. 2.19. Participant - "Participant" means an Eligible Employee or Eligible ----------- Retiree participating in the Excess Plan in accordance with the provisions of Section 4. 2.20. Related Employment - "Related Employment" means the transfer of a ------------------ Participant within the Employer entities defined in Section 2.09, provided: (i) that immediately prior to such employment the Participant was an employee of the Employer or was engaged in Related Employment as herein defined; and (ii) such employment is recognized by the Committee, in its sole discretion, as Related Employment. 2.21. Retirement - "Retirement" means termination of the Participant's ---------- employment with the Employer after attaining age 55 and after having a minimum of ten (10) Years of Vesting Service ( as defined in the Underlying 401(k) Plan). 2.22. S&P 500 Investment Return - "S&P 500 Investment Return" means the ------------------------- return used to determine the amount of gain or loss credited to that portion of a Participant's Excess 401(k) Account in the Equity Index Account under Sections 6.5 and 6.6. The return for a year shall be determined by using a hypothetical investment in the Standard & Poor's 500 Composite Stock Index inclusive of reinvested dividends less management fees (currently 25 basis points a year, but may be changed by the Committee to no more than 50 basis points). 2.23. Substantially Equal Installments - "Substantially Equal -------------------------------- Installments" means a series of annual payments such that equal payments over the payment periods chosen would exactly amortize the Excess 401(k) Account balance in the Fixed Account as of the final distribution date if the credited interest rate remained constant at the level credited as of the Valuation Date immediately preceding the Distribution Date for the remainder of the payment periods. 2.24. Termination of Employment - "Termination of Employment" means: (i) ------------------------- the termination of a Participant's employment with the Employer for any reason other than Disability or Related Employment; or (ii) the termination of a Participant's Related Employment. 3 2.25. Valuation Date - "Valuation Date" means the date on which the value -------------- of a Participant's Excess 401(k) Account is determined as provided in Section 6 hereof. Unless and until changed by the Committee, the Valuation Date shall be the last day of each calendar year. 3. Administration of the Excess Plan The Executive Compensation Committee, by appointment of the Board of Directors of the Company (also referred to as the "Board" or the "Board of Directors"), shall be the sole administrator of the Excess Plan. The Committee shall have full power to formulate additional details and regulations for carrying out this Excess Plan. The Committee also shall be empowered to make any and all of the determinations not authorized specifically herein that may be necessary or desirable for the effective administration of the Excess Plan. Any decision or interpretation of any provision of this Excess Plan adopted by the Committee shall be final and conclusive. 4. Participation 4.1. Participation by Eligible Retirees. Participation in the Excess Plan ----------------------------------- shall be available to Eligible Retirees with an Initial Make-up Contribution of $2,500 or more who elect to participate in the Excess Plan by filing an Investment Election and Distribution Form with the Committee prior to June 1, 1997. Those Eligible Retirees with an Initial Make-up Contribution of less than $2,500 will receive their Initial Make-up Contribution as soon as feasible after the Effective Date of the Excess Plan. 4.2. Participation by Eligible Employees. Participation in the Excess ------------------------------------ Plan shall be available to Eligible Employees who elect to participate in the Excess Plan by filing an Investment Election and Distribution Form with the Committee. 5. Vesting of Excess 401(k) Account A Participant's interest in his/her Excess 401(k) Account and interest and/or investment return credited thereto shall vest immediately. 6. Accounts and Valuations 6.1. Excess 401(k) Accounts. The Committee shall establish and maintain a ---------------------- separate Excess 401(k) Account for each Participant. Initial Make-up Contributions from the Company shall be credited to a Participant's Excess 401(k) Account as of June 1, 1997. Make-up Contributions shall be credited to a Participant's Excess 401(k) Account on January 1 of the year following to which they relate. 4 6.2. Investment Allocation of Excess 401(k) Account. The Participant's ----------------------------------------------- Excess 401(k) Account shall be deemed to be invested in either the Fixed Account or the Equity Index Account, or both, in accordance with the Participant's election as provided in the Investment and Distribution Election Form. In the event a Participant fails to make a timely election, the Participant's Excess 401(k) Account shall be deemed to be invested in the Fixed Account. 6.3. Interest Rate Credited. That portion of the Participant's Excess ---------------------- 401(k) Account in the Fixed Account shall be credited with interest on each Valuation Date, as provided hereinafter, at an annual rate equal to Moody's. 6.4. Timing of Crediting of Interest. That portion of the Participant's ------------------------------- Excess 401(k) Account in the Fixed Account shall be revalued and credited with interest as of each Valuation Date. As of each Valuation Date, the value of that portion of the Participant's Excess 401(k) Account in the Fixed Account shall consist of the balance of such Excess 401(k) Account as of the immediately preceding Valuation Date plus the amount of any additional Make-up Contribution credited to the Fixed Account and any transfers from the Equity Index Account since the preceding Valuation Date, minus the amount of all distributions from and transfers to the Equity Index Account since the preceding Valuation Date. As of each Valuation Date, interest shall be credited on that portion of the Participant's Excess 401(k) Account in the Fixed Account since the immediately preceding Valuation Date after adjustment for any additions thereto or distributions or transfers therefrom. Normal benefit distributions (under Section 7.1) from the Fixed Account made on or before February 15 of the year of payment will be considered to have been made from the account and deducted from the account balance as of January 1 of such year for the purpose of crediting interest under this Section 6.4. Interest on Hardship Benefits distributed from the Fixed Account will be prorated to the date of distribution for the purpose of crediting interest under this Section 6.4. 6.5. Investment Return Credited. That portion of the Participant's Excess --------------------------- 401(k) Account in the Equity Index Account shall be credited annually with an investment return at a rate equal to the S&P 500 Investment Return. 6.6. Timing of Crediting of Investment Return. That portion of the ----------------------------------------- Participant's Excess 401(k) Account in the Equity Index Account shall be revalued and credited with investment return as of each Valuation Date. As of each Valuation Date, the value of that portion of the Participant's Excess 401(k) Account in the Equity Index Account shall consist of the balance of such Equity Index Account as of the immediately preceding Valuation Date, plus any Make-up Contribution credited to the Equity Index Account and any transfers from the Fixed Account since the preceding Valuation Date, minus the amount of all distributions and transfers to the Fixed Account made from such Equity Index Account since the preceding Valuation Date. As of each Valuation Date, the investment return shall be credited 5 on that portion of the Participant's Excess 401(k) Account in the Equity Index Account since the immediately preceding Valuation Date after adjustment for any additions thereto or distributions or transfers therefrom. Benefit distributions (under Section 7) from the Equity Index Account made on or before February 15 of the year of payment will be considered to have been made and deducted from the account balance as of January 1 of such year for the purpose of crediting investment return under this Section 6.6. The investment return on Hardship Benefits distributed from the Equity Index Account will be calculated to the date of distribution for the purpose of crediting the investment return under this Section 6.6. 6.7. Change of Investment Allocation by a Participant. A Participant may ------------------------------------------------- change his/ her investment allocation once a year. Any change will be effective as of January 1 of the next year if the Participant submits an Investment Allocation Change Form to the Committee by December 15 of any year. 7. Benefits 7.1. Normal Benefit -------------- a. A Participant's Excess 401(k) Account shall be paid to the Participant as requested in his/her Investment and Distribution Election Form, subject to the terms and conditions set forth in the Excess Plan, including the Investment and Distribution Election Form. If a Participant elects to receive payment of his/ her Excess 401(k) Account in the Fixed Account in installments, payments shall be made in Substantially Equal Installments. If a Participant elects to receive payment of his/her Excess 401(k) Account in the Equity Index Account in installments, payments shall be made in Declining Balance Installments. In the event a Participant fails to file an Investment and Distribution Election Form (or files a form that fails to specify the timing of payments), the Participant's Excess 401(k) Account shall be paid to the Participant in a lump sum in the year following Termination of Employment. Unless the Executive Compensation Committee determines otherwise, and subject to the provisions of Section 7.4. as to when payments shall commence, distribution payments, whether lump sum or installment, shall be made on or before the fifteenth (15th) day of February of each year. b. If a Participant dies before receiving his/her total Excess 401(k) balance, whether distributions have commenced earlier or not, his/her Beneficiary shall be entitled to the remaining account balances in accordance with the payment elections in the Election Form, except that such payments, if not already commenced, shall commence on or before February 15 next following the date of the Participant's death. 6 7.2. Hardship Benefit. In the event that the Executive Compensation ---------------- Committee, upon written request of a Participant or Beneficiary of a deceased Participant, determines in its sole discretion, that such person has suffered an unforeseeable financial emergency, the Company shall pay to such person, from the Excess 401(k) Account of the Participant or Beneficiary, as soon as practicable following such determination, an amount necessary to meet the emergency, not in excess of the amount of the Excess 401(k) Account. The Excess 401(k) Account of the Participant shall thereafter be reduced to reflect the payment as of the date paid of a Hardship Benefit. 7.3. Request to Committee for Delay in Payment. A Participant shall have ------------------------------------------ no right to modify in any way the schedule for the distribution of amounts from his/her Excess 401(k) Account that he/she has specified in his/her Investment and Distribution Election Form. However, upon a written request submitted by the Participant to the Committee, the Committee may, in its sole discretion: . Postpone one time the date on which payment shall commence, but not beyond the year in which he/she will attain age seventy-one (71); and . At the same time, increase the number of installments to a number not to exceed fifteen (15). Any such request(s) must be made prior to the earlier of (a) the beginning of the year that the Participant has elected for distributions to commence, or (b) the Termination of Employment. 7.4. Date of Payments. Except as otherwise provided in this Excess Plan, ---------------- payments under this Excess Plan shall begin on or before the fifteenth (15th) day of February of the calendar year following receipt of notice by the Executive Compensation Committee of an event that entitles a Participant (or Beneficiary) to payments under the Excess Plan, or at such earlier date after receipt of such notice as may be determined by the Executive Compensation Committee. 7.5. Termination of Employment Before Retirement. In the event that a -------------------------------------------- Participant has a Termination of Employment prior to Retirement (other than by death, for which benefits and/or accounts will be paid in accordance with Section 7.1.b.), then the Participant's Excess 401(k) Account will be paid to him/her in a lump sum on or before the fifteenth (15th) day of February in the year following the year in which the Termination of Employment occurred, unless otherwise determined by the Committee. Upon written request of the Participant made within thirty (30) days following Termination of Employment, the Committee may, in its sole discretion, determine that, in lieu of a lump sum, payments shall be made to the Participant in 7 not more than five (5) Substantially Equal Installments, commencing on or before such next fifteenth (15th) day of February following the date of Termination of Employment. The interest or investment return credited to the Participant's Excess 401(k) Account on the Valuation Date next following the Termination of Employment shall be as provided in Section 6., above. If payments are to be made in installments, both Fixed and Equity Index Accounts will be combined into one amount that will be the Participant's Excess 401(k) Account going forward and the interest rate credited to the Participant's Excess 401(k) Account on all Valuation Dates subsequent to the Valuation Date next following Termination of Employment (and to be considered as the interest rate on such Valuation Date next following Termination of Employment for the sole purpose of calculating Substantially Equal Installments under Section 2.22., above) shall be limited to the daily weighted average borrowing rate paid by the Company during the then calendar year for total borrowing. 7.6. Taxes: Withholding. To the extent required by law, the Company shall ------------------ withhold from payments made hereunder any amount required to be withheld by the federal government, or any state or local government. 7.7. Liquidating Distributions. Notwithstanding any provisions of the ------------------------- Excess Plan or the Participant's Investment and Distribution Election Form to the contrary, upon written request for a Liquidating Distribution submitted by the Participant (or Beneficiary) to the Executive Compensation Committee following a Change in Control, the Company must pay to the Participant (or Beneficiary following the death of Participant) the Participant's (or Beneficiary's) Liquidating Distribution Account Balance in a lump sum as soon as practicable, but no later than 60 days, following the request. "Liquidating Distribution" shall mean a distribution requested by the Participant (or Beneficiary) in writing directed to the Committee and specifically referencing this section. "Liquidating Distribution Account Balance" shall mean the Participant's (or Beneficiary's) Excess 401(k) Account balance increased by interest credited or investment return credited or debited on the account to the date of distribution from the preceding Valuation Date, and decreased by a forfeiture penalty equal to six percent (6%) of the value of the Participant's Excess 401(k) Account as of the date of distribution. Notwithstanding any provisions of the Plan to the contrary, if a Participant requests a Liquidating Distribution within sixty (60) days following the effective date of a Change in Control, the Liquidating Distribution Account Balance shall be paid as set forth above except that the forfeiture penalty of six percent (6%) of the value of the Participant's (or Beneficiary's) Deferred Compensation Account(s) as of the date of distribution shall not be applied. 8 Notwithstanding any provisions of the Excess Plan or the Participant's Election Form to the contrary, if the Participant requesting the Liquidating Distribution is, at the time of the request, an active employee of the Employer, then the Participant shall, for a period of two (2) calendar years beginning with the calendar year during which the request for Liquidating Distribution is made, be ineligible to participate in the Excess Plan. For purposes of this Section, a "Change in Control" shall be deemed to have occurred if: (a) any "Person", which shall mean a "person" as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company's then outstanding securities; (b) at any time during any period of two consecutive years, individuals, who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this Section) whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds of the directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; (c) the shareholders of the Company approved a merger or consolidation of the Company with any other company, other than (i) a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50 percent of the combined voting power of the voting securities of the Company, or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquired 50 percent or more of the combined voting power of the Company's then outstanding securities; or 9 (d) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. 8. Beneficiary Designation A Participant shall have the right at any time, and from time to time, to designate and/or change or cancel any person, persons, or entity as his/her Beneficiary or Beneficiaries (both principal and contingent) to whom payment under this Excess Plan shall be paid in the event of his/ her death prior to complete distribution to Participant of the benefits due him/her under the Excess Plan. Each beneficiary change or cancellation shall become effective only when filed in writing with the Executive Compensation Committee during the Participant's lifetime on a form provided by the Committee. The filing of a new Beneficiary designation form will cancel any Beneficiary designation previously filed. Any finalized divorce of a Participant subsequent to the date of filing of a Beneficiary designation form shall revoke such designation if it was for the spouse Participant subsequently divorced. The spouse of a married Participant domiciled in a community property jurisdiction shall be required to join in any designation of Beneficiary or Beneficiaries other than the spouse in order for the Beneficiary designation to be effective. If a Participant fails to designate a Beneficiary as provided above, or if his/her beneficiary designation is revoked by divorce, or otherwise, without execution of a new designation, or if all designated Beneficiaries predecease the Participant, then the distribution of such benefits shall be made in a lump sum to the Participant's estate. If any installment distribution has commenced to a Beneficiary and the Beneficiary dies before receiving all installments, any remaining installments shall be paid in a lump sum to the estate of the Beneficiary. 9. Amendment and Termination of Excess Plan 9.1. Amendment. The Board of Directors at any time may amend the Excess --------- Plan in whole or in part, provided, however, that no amendment shall be effective to reduce the value of any Participant's Excess 401(k) Account or to affect the Participant's vested right therein, and, except as provided in 9.2. or 9.3., no amendment shall be effective to decrease the future benefits under the Excess Plan payable to any Participant or Beneficiary with respect to any Make-up Contribution that was made prior to the date of the amendment. Written notice of any amendments shall be given promptly to each Participant. 10 9.2. Termination of Excess Plan -------------------------- a. Company's Right to Terminate. The Board of Directors at any ---------------------------- time may terminate the Excess Plan as to prospective contributions and credits of interest or investment return, if it determines in good faith that the economic acceptability of the Excess Plan has been impaired substantially and that the resulting cost to the Company is substantially and unacceptably greater than the cost anticipated at the Effective Date. No such termination of the Excess Plan shall reduce the balance in a Participant's Excess 401(k) Account or affect the Participant's vested right therein. b. Payments Upon Termination of Excess Plan. Upon termination of ---------------------------------------- the Excess Plan under this Section 9.2., Make-up Contributions for an additional year shall not be made under the Excess Plan. With respect to then-existing Excess 401(k) Accounts, the Company will, depending upon the Participant's election at that time: (i) pay to the Participant, in a lump sum, the value of each of his/her Excess 401(k) Accounts; (ii) continue to invest the contributions under the Excess Plan, but with only the Fixed Account option and with the interest rate credited on all future Valuation Dates to be equal to the daily average of the best interest rate available to the Company during the then calendar year for short-term borrowings; or (iii) make such other arrangement as the Committee determines appropriate. 9.3. Successors and Mergers, Consolidations or Change in Control. The ----------------------------------------------------------- terms and conditions of this Excess Plan and Investment and Distribution Election Form shall inure to the benefit of and bind the Company, the Participants, their successors, assigns, and personal representatives. If substantially all of the stock or assets of the Company are acquired by another corporation or entity, or if the Company is merged into, or consolidated with, another corporation or entity, then the obligations created hereunder shall be obligations of the acquirer or successor corporation or entity. 10. Miscellaneous 10.1. Unsecured General Creditor. Participants and their beneficiaries, -------------------------- heirs, successors and assigns shall have no legal or equitable rights, interests, or other claims in any property or assets of the Company. The Company's obligation under the Excess Plan shall be that of an unfunded and unsecured promise to pay money in the future. 10.2. Obligations to the Employer. If a Participant becomes entitled to a --------------------------- distribution of benefits under the Excess Plan, and if at such time the Participant has outstanding any debt, obligation, or other liability representing an amount owed to the 11 Employer, then the Company may offset such amounts owing it or an affiliate against the amount of benefits otherwise distributable. Such determination shall be made by the Committee. 10.3. Non-Assignability. Neither a Participant nor any other person shall ----------------- have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, that are, and all rights to which are expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency. 10.4. Employment or Future Eligibility to Participant Not Guaranteed. -------------------------------------------------------------- Nothing contained in this Excess Plan, nor any action taken hereunder, shall be construed as a contract of employment or as giving an Eligible Employee any right to be retained in the employ of the Employer. 10.5. Gender Singular and Plural. All pronouns and any variations -------------------------- thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular. 10.6. Captions. The captions to the articles, sections, and paragraphs of -------- this Excess Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 10.7. Applicable Law. This Excess Plan shall be governed and construed in -------------- accordance with the laws of the State of Indiana. 10.8. Validity. In the event any provision of this Excess Plan is held -------- invalid, void, or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of this Excess Plan. 10.9. Notice. Any notice or filing required or permitted to be given to ------ the Executive Compensation Committee shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Company, directed to the attention of the President of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 12 EX-21.1 9 dex211.txt SUBSIDIARIES OF ALLTRISTA CORPORATION Exhibit 21.1 ALLTRISTA CORPORATION AND SUBSIDIARIES SUBSIDIARIES OF ALLTRISTA CORPORATION
Company Shareholder State of Incorporation/Organization - ------- ----------- ----------------------------------- Bernardin Ltd. Alltrista Limited Canada Alltrista Limited Alltrista Corporation Canada Alltrista Kft. Alltrista Corporation Hungary Alltrista Newco Corporation Alltrista Corporation Indiana Quoin Corporation Alltrista Corporation Delaware Hearthmark, Inc.* Quoin Corporation Indiana Alltrista Plastics Corporation** Quoin Corporation Indiana TriEnda Corporation*** Quoin Corporation Indiana Alltrista Zinc Products, L.P.**** Quoin Corporation (LP 99%) Alltrista Newco Corporation (GP 1%) Indiana Microlin, LLC Alltrista Zinc Products, L.P. (51%) Indiana
* (DBA) Alltrista Consumer Products Company ** (DBA) Alltrista Triangle Plastics Alltrista Industrial Plastics Company Alltrista Unimark Plastics Company Synergy World *** (DBA) Alltrista TriEnda Corporation ****(DBA) Alltrista Zinc Products Company EX-23.1 10 dex231.txt CONSENT OF INDEPENDENT AUDITORS Exhibit 23.1 Consent of Independent Auditors We consent to the incorporation by reference in Registration Statement Number 33-60622 on Form S-8 dated March 31, 1993, Registration Statement Number 33-60730 on Form S-8 dated March 31, 1993, Registration Statement Number 333-27459 on Form S-8 dated May 20, 1997, Registration Statement Number 333-27461 on Form S-8 dated May 20, 1997, and in Registration Statement Number 333-67033 on Form S-8 dated November 10, 1998 of our report dated January 26, 2001 (except for Note 5, as to which the date is February 9, 2001), with respect to the consolidated financial statements and schedule of Alltrista Corporation included in the 2000 Annual Report (Form 10-K) for the year ended December 31, 2000. /s/ ERNST & YOUNG LLP Indianapolis, Indiana March 26, 2001 EX-99.1 11 dex991.txt FORWARD-LOOKING STATEMENT Exhibit 99.1 Forward-Looking Statements From time to time, the Company may make or publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, and similar matters. Such statements are necessarily estimates reflecting the Company's best judgment based on current information. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Such statements are usually identified by the use of words or phases such as "believes," "anticipates," "expects," "estimates," "planned," "outlook," and "goal." Because forward-looking statements involve risks and uncertainties, the Company's actual results could differ materially. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. While it is impossible to identify all such factors, the risks and uncertainties that may affect the operations, performance and results of the Company's business include the following: (1) economic and competitive conditions in the markets in which the Company operates; (2) strikes or other work stoppages affecting the Company or its major customers or suppliers; (3) the Company's ability to continue to control and reduce its costs of production; (4) the level of consumer demand for the Company's line of home food preservation products, which varies based on the impact of the weather on growing conditions; (5) the effect of changes in the distribution channels for home food preservation products; (6) continuation of the U.S. penny as a currency denomination; (7) the risks associated with the reliance on one or a few significant customers in several of the Company's businesses; (8) the impact of significant price increases or decreased availability in certain materials used in the manufacture and distribution of the Company's products, particularly plastic resin, plastic sheet, glass containers, tin plate, and zinc ingot; (9) the effect of customers bringing in-house the molding or thermoforming of parts currently supplied by the Company; (10) the nature and extent of any current or future state and federal environmental regulations on the Company's operations; (11) costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters, including, but not limited to, those described in Management's Discussion and Analysis of Financial Condition and Results of Operations; (12) the change in the relative strength of the U.S. dollar and its impact on the Company's ability to do business in export markets; (13) changes in financial markets affecting the Company's financial structure and the Company's cost of capital and borrowed money; (14) any other factors which may be identified from time to time in the Company's periodic SEC filings and other public announcements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statement. The Company does not intend to update forward-looking statements. -----END PRIVACY-ENHANCED MESSAGE-----