SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
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Banta Corporation
(Name of Registrant as Specified in its Charter)
-----------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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BANTA CORPORATION
225 Main Street
Menasha, Wisconsin 54952
Notice of Annual Meeting of Shareholders
To Be Held April 27, 1999
To the Shareholders of Banta Corporation:
You are hereby notified that the annual meeting of shareholders of Banta
Corporation will be held at the Paper Valley Hotel & Conference Center, 333 West
College Avenue, Appleton, Wisconsin, on Tuesday, April 27, 1999, at 2:00 p.m.,
Central Time, for the following purposes:
1. To elect ten directors to serve for the ensuing year.
2. To act upon a proposal to approve the Banta Corporation 1995
Equity Incentive Plan, as amended.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 5, 1999
as the record date for the determination of the shareholders entitled to notice
of and to vote at the annual meeting.
We hope that you will be able to attend the meeting in person, but if you
are unable to do so, please fill in, sign and promptly mail back the enclosed
proxy form, using the return envelope provided. If, for any reason, you should
subsequently change your plans, you may, of course, revoke the proxy at any time
before it is actually voted.
By Order of the Board of Directors
BANTA CORPORATION
/s/Ronald D. Kneezel
Ronald D. Kneezel
Secretary
Menasha, Wisconsin
March 19, 1999
BANTA CORPORATION
225 Main Street
Menasha, Wisconsin 54952
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 27, 1999
This proxy statement is being furnished to shareholders by the Board of
Directors (the "Board") of Banta Corporation (the "Company"), beginning on or
about March 19, 1999, in connection with a solicitation of proxies by the Board
for use at the annual meeting of shareholders to be held on Tuesday, April 27,
1999, at 2:00 p.m., Central Time, at the Paper Valley Hotel & Conference Center,
333 West College Avenue, Appleton, Wisconsin, and all adjournments or
postponements thereof (the "Annual Meeting"), for the purposes set forth in the
attached Notice of Annual Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will not
affect a shareholder's right to attend the Annual Meeting and to vote in person.
Presence at the Annual Meeting of a shareholder who has signed a proxy does not
in itself revoke a proxy. Any shareholder giving a proxy may revoke it at any
time before it is voted by giving notice thereof to the Company in writing or in
open meeting, by attending the Annual Meeting and voting in person, or by
delivering a proxy bearing a later date.
A proxy, in the enclosed form, which is properly executed, duly returned
to the Company and not revoked will be voted in accordance with the instructions
contained therein. The shares represented by executed but unmarked proxies will
be voted FOR the ten persons nominated for election as directors referred to
herein, FOR the proposal to approve the Banta Corporation 1995 Equity Incentive
Plan, as amended, and on such other business or matters which may properly come
before the Annual Meeting in accordance with the best judgment of the persons
named as proxies in the enclosed form of proxy. Other than the election of
directors and the proposal to approve the 1995 Equity Incentive Plan, as
amended, the Board has no knowledge of any matters to be presented for action by
the shareholders at the Annual Meeting.
Only holders of record of the Company's common stock, $.10 par value (the
"Common Stock"), at the close of business on March 5, 1999 are entitled to
notice of and to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 27,777,309 shares of Common Stock, each of
which is entitled to one vote per share.
ELECTION OF DIRECTORS
At the Annual Meeting, the shareholders will elect ten directors of the
Company, each to hold office until the 2000 annual meeting of shareholders and
until his or her successor is duly elected and has qualified. Set forth below
are the Board's nominees to serve as directors of the Company. Unless
shareholders otherwise specify, the shares
represented by the proxies received will be voted in favor of the election as
directors of the ten persons named as nominees herein. The Board has no reason
to believe that any of the listed nominees will be unable or unwilling to serve
as a director if elected. However, in the event that any nominee should be
unable or unwilling to serve, the shares represented by proxies received will be
voted for another nominee selected by the Board.
The following sets forth certain information, as of March 5, 1999, about
each of the Board nominees for election at the Annual Meeting. Except as
otherwise noted, each nominee has engaged in the principal occupation or
employment and has held the offices shown for more than the past five years.
Director Principal Occupation; Office, if any,
Name Age Since Held in the Company; Other Directorships
- --------------------- ---------- ------------- ----------------------------------------------------
Jameson A. Baxter 55 1991 President of Baxter Associates, Inc. (management
and financial consulting); Trustee of The Putnam
Funds; Director of MB Financial, Inc. and Ryerson
Tull, Inc.
Donald D. Belcher 60 1994 Chairman since May 1, 1995 and President and Chief
Executive Officer since January 1, 1995 of the
Company; President and Chief Operating Officer of
the Company from September 1, 1994 to January 1,
1995; Senior Group Vice President of Avery
Dennison Corporation (diversified manufacturing
company) from 1990 until joining the Company;
Director of Hunt Corporation.
John F. Bergstrom 52 1998 Chairman and Chief Executive Officer of Bergstrom
Corporation (automobile sales and service, credit
life insurance, and automotive fleet leasing);
Director of Kimberly-Clark Corporation, Midwest
Express Holdings, Inc., Universal Foods
Corporation and Wisconsin Energy Corporation.
George T. Brophy 64 1986 Former Chairman, President and Chief Executive
Officer of ABT Building Products Corporation
(building materials).
Henry T. DeNero 52 1996 Chief Executive Officer of AmeriNet Financial
Systems, Inc. (a financial services company) since
1999; Executive Vice President of First Data
Corporation (an information processing and
computer services company) from 1995 to 1998; Vice
Chairman of Dayton Hudson Corporation (retailing)
from 1992 to 1994.
Richard L. Gunderson 65 1995 Chairman of Aid Association for Lutherans
(fraternal benefit society providing insurance and
financial services).
-2-
Director Principal Occupation; Office, if any,
Name Age Since Held in the Company; Other Directorships
- --------------------- ---------- ------------- ----------------------------------------------------
Gerald A. Henseler 58 1982 Executive Vice President and Chief Financial
Officer of the Company.
Bernard S. Kubale 70 1973 Retired partner, law firm of Foley & Lardner,
Milwaukee, Wisconsin; Director of Consolidated
Papers, Inc.
Raymond C. Richelsen 57 1998 Executive Vice President-Transportation, Safety
and Specialty Materials of 3M Company (a
manufacturer of optical films and specialty
materials) since January 1999; Executive Vice
President-Transportation, Safety and Chemical
Markets of 3M Company from January 1998 to January
1999; Group Vice President of 3M Company prior
thereto.
Michael J. Winkler 53 1996 Senior Vice President and Group General Manager of
Compaq Computer Corporation (computer services)
since 1995; Vice President and General Manager of
Toshiba American Information Systems (computer
services) prior thereto.
Directors are elected by a plurality of the votes cast (assuming a quorum
is present). An abstention from voting will be tabulated as a vote withheld on
the election, and will be included in computing the number of shares present for
purposes of determining the presence of a quorum, but will not be considered in
determining whether each of the nominees has received a plurality of the votes
cast at the Annual Meeting. A broker or nominee holding shares registered in its
name, or the name of its nominee, which are beneficially owned by another person
and for which it has not received instructions as to voting from the beneficial
owner, has the discretion to vote the beneficial owner's shares with respect to
the election of directors.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND
URGES EACH SHAREHOLDER TO VOTE "FOR" ALL NOMINEES. SHARES OF COMMON STOCK
REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL NOMINEES.
BOARD OF DIRECTORS
General
The Board held five meetings in 1998. Each director attended at least 75%
of the aggregate of (a) the total number of meetings of the Board and (b) the
total number of
-3-
meetings held by all committees of the Board on which the director served during
1998, other than Mr. Brophy who attended 73% of such meetings.
The Company has Audit, Compensation, Stock Option and Nominating
Committees of the Board. The Audit Committee consists of Messrs. Brophy,
Gunderson and Kubale (Chairperson). The principal functions performed by the
Audit Committee, which met two times in 1998, are to meet with the Company's
independent public accountants before the annual audit to review procedures and
the scope of the audit; to review the results of the audit; to review the
financial control mechanisms used by the Company and the adequacy of the
Company's accounting and financial controls; and to annually recommend to the
Board a firm of independent public accountants to serve as the Company's
auditors. The Compensation Committee consists of Ms. Baxter and Messrs.
Gunderson, Kubale (Chairperson) and Winkler. The principal functions of the
Compensation Committee, which met four times in 1998, are to administer the
Company's deferred and incentive compensation plans; to annually evaluate salary
grades and ranges; to establish guidelines concerning average compensation
increases; and to specifically establish compensation (except for awards under
the Company's equity incentive plans) of all officers, directors and subsidiary
or division presidents. The Stock Option Committee consists of Ms. Baxter
(Chairperson) and Messrs. Brophy and DeNero. The principal function of the Stock
Option Committee, which met four times in 1998, is to administer the Company's
equity incentive plans. The Nominating Committee consists of Ms. Baxter and
Messrs. Belcher, DeNero, Gunderson (Chairperson) and Kubale The principal
functions of the Nominating Committee, which met two times in 1998, are to
recommend persons to be selected by the Board as nominees for election as
directors; to recommend persons to be elected to fill any vacancies on the
Board; and to consider and recommend to the Board qualifications for the office
of director and policies concerning the term of office of directors and the
composition of the Board. The Nominating Committee will consider persons
recommended by shareholders to become nominees. Recommendations for
consideration by the Nominating Committee should be sent to the Secretary of the
Company in writing together with appropriate biographical information concerning
each proposed nominee. The Company's By-laws also set forth certain requirements
for shareholders wishing to directly nominate director candidates for
consideration by the shareholders. With respect to an election of directors to
be held at an annual meeting, a shareholder must, among other things, give
written notice of an intent to make such a nomination to the Secretary of the
Company in advance of the meeting in compliance with the terms and within the
time period specified in the By-laws.
Director Compensation
Annual Retainer and Meeting Fees. For fiscal 1998, directors of the
Company, other than full time employees and Mr. Kubale, received an annual
retainer fee of $22,000 ($11,000 of which was payable in shares of Common
Stock). The annual retainer fee for fiscal 1999 has been increased to $24,000
($12,000 of which is payable in shares of Common Stock). In addition, such
directors in fiscal 1998 were paid a fee of $1,000 for every Board meeting they
attended and $1,000 ($1,250 for the committee chairperson) for every committee
meeting they attended. A director may elect to defer all or any part of the cash
compensation he or she is entitled to receive for serving as a director, in
which case the amount deferred will
-4-
be paid in cash in three annual installments after such person ceases to be a
director and, at the direction of the director, either will be credited with
interest at the prime rate or will be treated for valuation purposes as if such
deferred compensation had been invested in Common Stock pursuant to the phantom
stock subaccount under the director's deferred compensation plan. The portion of
the retainer fee payable in Common Stock may also be deferred. Such amount will
be credited to the phantom stock subaccount and will ultimately be paid in cash
in the same manner as cash retainer fees which are deferred.
Director Stock Options. In addition to the compensation described above,
each of Ms. Baxter and Messrs. Brophy, DeNero, Gunderson, Kubale and Winkler
automatically received an option for 1,500 shares of Common Stock at a per share
exercise price of $31.375 on April 29, 1998 in accordance with the terms of the
Company's 1995 Equity Incentive Plan (the "1995 Plan"). In addition, each of
Messrs. Bergstrom and Richelsen received an option under the 1995 Plan for 4,500
shares of Common Stock at a per share exercise price of $24.875 on November 1,
1998 upon their election to the Board. Under the terms of the 1995 Plan, each
person when first elected as a non-employee director of the Company
automatically receives an option for 4,500 shares of Common Stock. The 1995 Plan
also provides that, subsequent to the initial grant, each non-employee director
(who continues to serve in such capacity) automatically receives an option to
purchase an additional 1,500 shares of Common Stock on the day after each annual
meeting of shareholders; provided, however, that if a person who is first
elected as a non-employee director on the date of the annual meeting of
shareholders receives the initial option grant under the 1995 Plan on that date,
such director will not be entitled to begin receiving subsequent grants until
the day following the next succeeding annual meeting of shareholders. Options
granted to non-employee directors under the 1995 Plan have a per share exercise
price equal to 100% of the market value of a share of Common Stock on the date
of grant and become exercisable six months after the date of grant, except that
if the non-employee director ceases to be a director by reason of death,
disability or retirement during such six-month period, the option will become
immediately exercisable in full. Options granted to non-employee directors under
the 1995 Plan terminate on the earlier of (a) ten years after the date of grant
or (b) twelve months after the non-employee director ceases to be a director. At
the Annual Meeting, shareholders will be asked to approve the 1995 Plan, as
amended. For additional information on this proposal, see "Approval of the 1995
Plan, As Amended."
Certain Transactions
During fiscal 1998, the Company maintained its automobile leasing program
and related service program through Bergstrom Corporation. Mr. Bergstrom is
Chairman and Chief Executive Officer and a significant shareholder of Bergstrom
Corporation. The Company in fiscal 1998 paid approximately $710,000 and $70,000
to Bergstrom Corporation for its leasing and service programs, respectively. The
Company believes that the terms of the leasing and service programs are at least
comparable (if not more favorable) to those obtainable from a non-affiliated
party.
-5-
STOCK OWNERSHIP
Management
The following table sets forth information, as of March 5, 1999,
regarding beneficial ownership of Common Stock by each director and nominee,
each of the executive officers named in the Summary Compensation Table set forth
below, and all of the directors and executive officers as a group. As of March
5, 1999, no director or executive officer of the Company beneficially owned one
percent or more of the Common Stock and the directors and executive officers as
a group beneficially owned 2.1% of the Common Stock. Except as otherwise
indicated in the footnotes, all of the persons listed below have sole voting and
investment power over the shares of Common Stock identified as beneficially
owned.
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership (1)(2)
------------------------ --------------------
Jameson A. Baxter......................... 18,375
Donald D. Belcher......................... 197,766(3)
John F. Bergstrom......................... 9,034(4)
George T. Brophy.......................... 18,975
Henry T. DeNero........................... 9,800
Richard L. Gunderson...................... 18,000
Gerald A. Henseler........................ 144,445(5)
Bernard S. Kubale......................... 13,958
Raymond C. Richelsen...................... 4,500
Michael J. Winkler........................ 8,981
John E. Tiffany........................... 35,319(6)
Dennis J. Meyer........................... 33,424
Ronald D. Kneezel......................... 48,802
All directors and executive
officers as a group (14 persons)...... 579,889
-----------------------
(1) Includes shares subject to currently exercisable options and options
exercisable within 60 days of March 5, 1999 as follows: Ms. Baxter, 6,000
shares; Mr. Belcher, 156,666 shares; Mr. Bergstrom, 4,500 shares; Mr.
Brophy, 6,000 shares; Mr. DeNero, 7,500 shares; Mr. Gunderson, 10,500
shares; Mr. Henseler, 45,000 shares; Mr. Kubale, 6,000 shares; Mr.
Richelsen, 4,500 shares; Mr. Winkler, 7,500 shares; Mr. Tiffany, 21,750
shares; Mr. Meyer, 27,333 shares; Mr. Kneezel, 31,500 shares; and all
directors and executive officers as a group, 350,582 shares.
(2) Does not include holdings of phantom stock units by non-employee
directors as follows: Ms. Baxter, 2,723 units; Mr. Bergstrom, 441 units;
Mr. Brophy, 5,686 units; Mr. DeNero, 3,134 units; Mr. Gunderson, 3,106
units; Mr. Kubale, 2,753 units; Mr. Richelsen, 649 units; and Mr.
Winkler, 858 units. The value of the phantom stock units is based upon
and fluctuates with the market value of the Common Stock.
-6-
(3) Includes 1,000 shares held by Mr. Belcher's spouse. Mr. Belcher shares
voting and investment power over these shares.
(4) Includes 2,350 shares held by a trust and 2,000 shares held by a
partnership. Mr. Bergstrom shares voting and investment power over these
shares.
(5) Includes 29,915 shares held by Mr. Henseler's spouse and 7,713 shares
held by trusts for the benefit of Mr. Henseler's daughter. Mr. Henseler
shares voting and investment power over these shares.
(6) Includes 4,026 shares held by Mr. Tiffany's spouse. Mr. Tiffany shares
voting and investment power over these shares.
Other Beneficial Owners
The following table sets forth information, as of December 31, 1998,
regarding beneficial ownership by the only persons known to the Company to own
more than 5% of the outstanding Common Stock. The beneficial ownership set forth
below has been reported on filings made on Schedule 13G with the Securities and
Exchange Commission by the beneficial owners.
Amount and Nature of Beneficial Ownership
-----------------------------------------
Voting Power Investment Power
------------ ----------------
Percent
Name and Address of
of Beneficial Owner Sole Shared Sole Shared Aggregate Class
------------------- ---- ------ ---- ------ --------- -----
FMR Corp.(1)
82 Devonshire Street
Boston, MA 02109 283,400 0 2,487,900 0 2,487,900 9.0%
Lazard Freres & Co. LLC 1,715,750 0 1,828,500 0 1,828,500 6.6%
30 Rockefeller Plaza
New York, NY 10020
- -------------------------------
(1) The Company has been advised that FMR Corp. is the parent holding
company of Fidelity Management & Research Company, an investment adviser to
various investment companies, and Fidelity Management Trust Company, an
investment manager of institutional accounts. The shares of Common Stock
reflected in the table are beneficially owned by the above-referenced
subsidiaries of FMR Corp.
-7-
EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information for each of the last
three fiscal years concerning compensation awarded to, earned by or paid to
certain executive officers of the Company. The persons named in the table are
sometimes referred to herein as the "named executive officers."
Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation (1) Awards
----------------------- ------
Payouts
Securities -------
Underlying LTIP All Other
Name and Principal Position Year Salary Bonus Options Payouts Compensation(2)
- --------------------------- ---- ------ ----- ------- ------- ---------------
Donald D. Belcher 1998 $ 438,000 $ 123,516 100,000 $ 17,155 $ 3,200
Chairman of the Board, 1997 419,000 0 55,000 0 3,200
President and Chief 1996 400,000 0 50,000 0 3,904
Executive Officer
Gerald A. Henseler 1998 326,000 76,610 18,000 12,768 3,024
Executive Vice President 1997 313,000 0 18,000 0 3,200
and Chief Financial Officer 1996 300,000 0 18,000 0 3,288
John E. Tiffany 1998 191,000 35,908 12,000 7,481 2,499
Vice President 1997 182,500 0 12,000 0 2,375
Manufacturing 1996 174,500 0 12,000 0 2,447
Dennis J. Meyer 1998 189,500 35,626 12,000 7,422 3,096
Vice President 1997 182,000 0 10,000 0 3,167
Marketing and Planning 1996 175,000 0 9,000 0 3,126
Ronald D. Kneezel 1998 188,000 35,344 12,000 7,363 2,959
Vice President, General 1997 179,500 0 12,000 0 3,167
Counsel and Secretary 1996 171,000 0 12,000 0 3,034
- ----------------------------
(1) Certain personal benefits provided by the Company to the named executive
officers are not included in the table. The aggregate amount of such
personal benefits for each named executive officer in each year reflected
in the table did not exceed the lesser of $50,000 or 10% of the sum of
such officer's salary and bonus in each respective year.
(2) For fiscal 1998, consists of Company matching contributions under the
Company's Incentive Savings Plan, which is a profit sharing plan under
Section 401(k) of the Internal Revenue Code.
-8-
Stock Options
The Company has in effect equity plans pursuant to which options to
purchase Common Stock may be granted to key employees (including executive
officers) of the Company and its subsidiaries. The following table presents
certain information as to grants of stock options made during fiscal 1998 to
each of the named executive officers.
Option Grants in 1998 Fiscal Year
Grant
Individual Grants Date
--------------------------------------------------------------------------------------------- Value
----------------
Number of Percentage of
Securities Total Options
Underlying Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present
Name Granted (1) Fiscal Year ($/share) Date Value (2)
---- ----------- -------------- ----------- ---------- ----------
Donald D. Belcher........... 100,000 18.0% $26.125 10/26/08 $ 684,000
Gerald A. Henseler.......... 18,000 3.2 $26.125 10/26/08 123,120
John E. Tiffany............. 12,000 2.2 $26.125 10/26/08 82,080
Dennis J. Meyer............. 12,000 2.2 $26.125 10/26/08 82,080
Ronald D. Kneezel........... 12,000 2.2 $26.125 10/26/08 82,080
- -----------------------
(1) The options reflected in the table (which are nonstatutory stock options
for purposes of the Internal Revenue Code) were granted on October 27,
1998 and vest ratably over the three-year period following the date of
grant. The options are subject to early vesting in the case of the
optionee's death, disability or retirement after reaching age 65.
(2) The option values presented are based on the Black-Scholes option pricing
model adopted for use in valuing stock options. Material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the
values of the options reflected in the table above include the following:
(a) an exercise price of the option equal to the fair market value of the
underlying stock on the date of grant; (b) a risk-free rate of return
equal to 4.53%, representing the interest rate on a U.S. Treasury
security with a maturity date corresponding to the term of the option;
(c) volatility of approximately 35%, which was calculated using daily
Common Stock prices for the one-year period prior to the date of grant;
(d) a dividend yield equal to approximately 2%, representing the dividend
yield on the Common Stock as of the date of grant; (e) an option term of
ten years; and (f) reductions of 15.65% to reflect the probability of
forfeiture due to termination prior to vesting and 19.89% to reflect the
probability of a shortened option term due to termination of employment
prior to the expiration date. The actual value, if any, that an optionee
may realize upon exercise will depend on the excess of the price of the
Common Stock over the option exercise price on the date that the option
is exercised. There is no assurance that the value realized by an
optionee will be at or near the value estimated under the Black-Scholes
model.
The following table sets forth information regarding the exercise of
stock options by each of the named executive officers during the 1998 fiscal
year and the fiscal year-end value of unexercised options held by such officers.
-9-
Aggregated Option Exercises in 1998
Fiscal Year and Fiscal Year-End Option Values
Number of Securities Value of Unexercised In-the-
Shares Underlying Unexercised Money Options at Fiscal
Acquired Value Options at Fiscal Year-End Year-End (1)
on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
----------- ----------- ----------------------------- ----------------------------
Name
Donald D. Belcher.............. 0 $ 0 156,666 153,334 $ 601,068 $ 267,919
Gerald A. Henseler............. 10,500 56,621 45,000 36,000 162,960 72,750
John E. Tiffany................ 4,126 42,105 21,750 24,000 55,000 48,500
Dennis J. Meyer................ 0 0 27,333 21,667 101,928 40,792
Ronald D. Kneezel.............. 7,500 67,631 31,500 24,000 115,345 48,500
- ---------------------------
(1) The dollar values are calculated by determining the difference between
the fair market value of the underlying Common Stock and the exercise
price of the options at exercise or fiscal year-end, as the case may be.
Long-Term Incentives
The Company maintains the Banta Corporation Economic Profit Long-Term
Incentive Plan (the "EP Long-Term Plan"), which provides an incentive based on
the value created (i.e., "economic profit") when a business generates a
financial return that exceeds the total cost of capital employed. Specifically,
the EP Long-Term Plan defines economic profit as the difference between (a) net
operating profit after tax and (b) the charge for capital employed in the
business. Awards are made under the EP Long-Term Plan based solely on Company
performance. Payouts under the EP Long-Term Plan are made in three annual
installments and outstanding installments remain "at risk" and subject to total
loss or offset depending on future Company performance. The Company also
maintains the Banta Corporation Economic Profit Incentive Compensation Plan (the
"EP Incentive Plan"), which provides an annual incentive based on the creation
of economic profit. Awards under the EP Incentive Plan for individuals working
in a specific operating group are based in part on the results of the respective
operating group and in part on total Company performance. Awards to participants
with corporate responsibilities are based entirely on Company performance. The
EP Incentive Plan incorporates a "bonus bank" into which annual awards
thereunder in excess of 200% of target, if any, are credited but not paid. Such
bonus amounts are thereafter scheduled to be paid out over time, but remain "at
risk" and subject to total loss or partial offset depending upon future
performance.
Set forth below under the heading "Maximum" is the sum of (a) the amount
of unpaid installments under the EP Long-Term Plan and (b) the amount credited
to the "bonus bank" under the EP Incentive Plan for each of the named executive
officers at the end of fiscal 1998. The amounts under the heading "Threshold"
reflect the fact that the foregoing amounts are "at risk" and subject to total
loss.
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Long-Term Incentive Plans -- Awards in 1998 Fiscal Year
Name Estimated Future Payouts
------------------------------
Threshold Maximum
--------- -------
Donald D. Belcher.............. $ 0 $ 34,310
Gerald A. Henseler............. 0 25,537
John E. Tiffany................ 0 14,962
Dennis J. Meyer................ 0 14,844
Ronald D. Kneezel.............. 0 14,727
Pension Plan Benefits
The following table sets forth the estimated annual pension benefits
payable to a covered participant at normal retirement age under the Company's
Employees Pension Plan as well as under the Company's Supplemental Retirement
Plan (which, in part, provides benefits that would otherwise be denied
participants by reason of (i) certain Internal Revenue Code limitations on
qualified benefit plans and (ii) the exclusion of cash incentive awards and
deferred compensation in calculating benefits under the qualified plan). The
benefits that are payable under the pension and retirement plans are based upon
remuneration that is covered under the plans and years of service with the
Company and its subsidiaries.
Pension Plan Table
Average Monthly Yearly Pension After
Compensation in Five Specified Years of Service
---------------------------------------------------------------------------------
Highest Consecutive Years 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
- ------------------------- -------- -------- -------- -------- -------- --------
$ 18,000 $ 54,000 $ 70,200 $ 86,400 $ 102,600 $ 118,800 $ 135,000
24,000 72,000 93,600 115,200 136,800 158,400 180,000
30,000 90,000 117,000 144,000 171,000 198,000 225,000
36,000 108,000 140,400 172,800 205,200 237,600 270,000
42,000 126,000 163,800 201,600 239,400 277,200 315,000
48,000 144,000 187,200 230,400 273,600 316,800 360,000
54,000 162,000 210,600 259,200 307,800 356,400 405,000
60,000 180,000 234,000 288,000 342,000 396,000 450,000
A participant's remuneration covered by the Company's pension arrangement
is such participant's base salary, annual bonus and long-term incentive
compensation. The covered remuneration paid for each of the last three fiscal
years to the named executive officers is set forth in the Summary Compensation
Table under the headings "Salary", "Bonus" and "LTIP Payouts". As of December
31, 1998, Messrs. Belcher, Henseler, Tiffany, Meyer, and Kneezel had completed
4, 32, 10, 5 and 10 years of credited service under the Company's pension plans,
respectively. Benefits shown in the table are computed as a straight single life
annuity assuming retirement at age 65. The benefits reflected in the table are
not subject to reduction for Social Security benefits.
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Agreements with Named Executive Officers
The Company has an agreement with Mr. Henseler which provides for certain
benefits in the event of termination of employment after a change of control of
the Company. The principal benefits are: (a) a bonus under any Company bonus or
incentive plan or plans for the year in which termination occurs; (b) continued
salary payments and life insurance and medical and disability insurance for a
maximum of four years, with reduced payments for a surviving spouse; (c)
additional pension benefits to fully or partially compensate for the reduction
of benefits under the Company's pension plan due to termination of employment;
and (d) full exercise rights for all stock options for three months following
termination of employment. These benefits are made available if Mr. Henseler's
employment is terminated by the Company other than for cause as defined in the
agreement or if he terminates his employment because of significant changes made
in his working conditions or status without his consent. Continued salary
payments and insurance benefits are to be reduced by corresponding payments and
benefits obtained from any successor employer. The transactions which are deemed
to result in a "change of control" of the Company for purposes of Mr. Henseler's
agreement include: (1) the acquisition of more than 30% of the voting stock of
the Company by any person, organization or group; (2) the sale of all or
substantially all of the Company's business or assets; (3) a consolidation or
merger, unless the Company or a subsidiary is the surviving corporation; (4) the
acquisition of assets or stock of another entity if in connection with the
acquisition new persons become directors of the Company and constitute a
majority of the Board; and (5) the election in opposition to the nominees
proposed by management of two or more directors in any one election on behalf of
any person, organization or group.
The Company also has agreements with Messrs. Belcher, Tiffany, Meyer,
Kneezel and certain other officers and key employees which, in addition to
benefits similar to those described in (a), (c) and (d) above, provide for
continued employment for periods of from one to three years after a change of
control (the "Employment Period") and for lump-sum termination payments ranging
from a minimum of one year's salary and bonus to a maximum of three year's
salary and bonus if employment is terminated during the Employment Period by the
Company (other than for cause or disability) or by the executive due to
significant changes in his working conditions or status without his consent. The
agreements also provide the foregoing benefits in connection with certain
terminations which are effected in anticipation of a change of control. During
the Employment Period, the executive's employee benefits such as health,
accident and life insurance will be continued until comparable benefits are
available from a new employer. The termination payment and amount of benefits
may be reduced to the extent necessary to avoid an "excess parachute payment"
under the Internal Revenue Code but if, notwithstanding any such reduction, the
executive is required to pay any excise tax, penalties or interest with respect
to the termination payment and benefits, the Company is required to make a cash
payment to him designed to compensate for such taxes, penalties and interest. In
addition, the Company has agreed to pay Mr. Belcher a severance payment of two
year's salary (and continue to provide health insurance for two years) if his
employment with the Company is terminated other than for cause or disability
prior to a change of control. The Company has also agreed to pay Mr. Belcher an
additional retirement benefit of $15,000 for each year of service up to five
years
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less the amount he is entitled to receive either under the Company's Employees
Pension Plan and Supplemental Retirement Plan or pursuant to the provisions of
his termination agreement described above which provides for the payment of
additional pension benefits in the event of his termination following a change
in control. The additional retirement benefit would be reduced by 50% in the
event of Mr. Belcher's death and would be paid to his spouse for her life.
The Company has deferred compensation plans for key employees in which
the named executive officers are eligible to participate and which provide for
deferral of salary and cash incentive compensation. Payments under the deferred
compensation plans generally commence following retirement of the participant.
However, in the event of a change of control, a participant in the deferred
compensation plans will receive a lump sum payment. The lump sum payment will be
equal to the present value of the participant's future benefits if the
participant is receiving benefits at the time of such change of control or the
amount standing to the participant's credit in his or her deferred compensation
account if the participant is not otherwise entitled to receive benefits at the
time of such change of control. Payment of such deferred amounts generally
begins following the retirement of the participant and is not subject to
acceleration in the event of a change of control of the Company. The Company has
entered into an executive trust agreement with Firstar Bank Milwaukee, N.A. to
provide a means of segregating assets for the payment of these benefits (as well
as benefits under the Company's Supplemental Retirement Plan), subject to claims
of the Company's creditors. Such trust is only nominally funded until the
occurrence of a potential change of control.
The Company also has an agreement with Mr. Henseler providing for monthly
payments of $2,000 for 120 months in the event that Mr. Henseler's employment is
terminated by the Company or as a result of his death or if Mr. Henseler retires
after age 62. The agreement provides that Mr. Henseler may designate a
beneficiary to receive the payments to which he is entitled in the event of his
death prior to the receipt of any or all such payments. Payments under the
agreement may be forfeited in the event Mr. Henseler engages in specified
competitive activities during the first four years following his retirement or
such termination.
Committee Report on Executive Compensation
The Compensation Committee of the Board is responsible for all aspects of
the Company's compensation package offered to its executive officers, including
the named executive officers, other than for awards under the Company's
equity-based incentive compensation plans. Awards under the Company's
equity-based plans (including the Company's stock option plans) are made by the
Stock Option Committee of the Board. The following is a joint report of the
Compensation Committee and the Stock Option Committee:
Policies Governing Executive Compensation. The Company's general policies
relating to executive compensation are: (a) to establish a direct link between
executive compensation and the annual, intermediate-term and long-term
performance of the Company; (b) to provide performance-based compensation
opportunities (including equity-based awards) which allow executive officers to
earn rewards for maximizing shareholder value; (c) to attract
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and retain the key executives necessary for the Company's long-term success; and
(d) to reward individual initiative and the achievement of specified goals. In
applying these general policies, the objective of the Compensation Committee and
the Stock Option Committee has been to ensure that a significant portion of the
compensation paid to senior executive officers, such as the named executive
officers, be incentive-based since these individuals have significant control
and responsibility for the Company's direction and performance. The intent of
the Compensation Committee and the Stock Option Committee is that there would be
greater variability in the levels of compensation paid to these officers which
is directly linked to Company performance.
Executive Compensation Package. As reflected under the section entitled
"Executive Compensation," the Company's executive compensation package currently
consists of a mix of salary, bonus awards and stock option grants as well as
benefits under the employee benefit plans offered by the Company.
In setting and adjusting executive salaries, including the salaries of
the Chief Executive Officer and the other named executive officers, the
Compensation Committee, in conjunction with independent compensation
consultants, has historically compared the base salaries paid or proposed to be
paid by the Company with the ranges of salaries paid by corporations of similar
size relative to the Company and operating in comparable industries. The
companies in the comparison group, which were selected based on their size and
performance compatibility, manufacturing orientation and geographic diversity,
are not solely in the graphic arts industry and accordingly are not necessarily
the companies in the peer group identified in the section entitled "Performance
Information." It is the judgment of the Compensation Committee that a review of
the compensation practices of companies with the characteristics of the
comparison group is appropriate in establishing competitive salary ranges for
the Company's executive officers.
Based on its analysis of comparative data, the Compensation Committee
increased the minimum, midpoint and maximum ranges for each salary grade by 2.8%
for fiscal 1998. The Compensation Committee also approved a 4.0% guideline for
1998 executive officer base salary increases, subject to individual variances to
reflect above or below average performance. In establishing salaries for each
individual executive officer, Mr. Belcher, the Company's Chief Executive
Officer, made specific recommendations for salary adjustments (other than his
own) to the Compensation Committee based on the foregoing guidance provided by
the Committee as well as a review of industry comparables, the level of
responsibility delegated to the particular executive officer, the expertise and
skills offered by each officer, the officer's individual job performance and the
performance of the group over which the individual had responsibility. These
various factors were considered on a case-by-case basis and no specific formula
was used to give any one factor a relative weight as compared to the others. The
Compensation Committee reviewed the foregoing recommendations and then made
final decisions on the base salaries to be paid by the Company. The Compensation
Committee also reviewed and fixed the base salary of Mr. Belcher for 1998 based
on similar competitive compensation data and individual job performance
criteria. The base salary paid to Mr. Belcher for fiscal 1998 was $438,000, a
4.5% increase over the base salary paid to Mr. Belcher in fiscal 1997.
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Effective January 1, 1998, the Compensation Committee adopted the EP
Incentive Plan which replaced the Management Incentive Award Plan (the "MIAP")
that had been in effect for a number of years as the Company's annual incentive
arrangement. The EP Incentive Plan emphasizes economic value creation which
occurs when a business generates a financial return that exceeds the total cost
of capital employed. The Compensation Committee believes that an analysis based
on economic profit provides a better benchmark for evaluating and rewarding
management's performance than the bonus formula under the MIAP. Specifically,
the EP Incentive Plan defines economic profit as the difference between (a) net
operating profit after tax and (b) the charge for capital employed in the
business. The EP Incentive Plan is designed to reward executive officers and key
managers for productive use of Company assets, reduction of costs and creation
of efficiencies throughout the Company's organization. Under the EP Incentive
Plan, target bonuses calculated as a percentage of salary are fixed by the
Compensation Committee. Awards paid to participants serving in an identified
"value center" (e.g., a specific operating group) under the EP Incentive Plan
are based in part on the performance of the respective value center(s) with the
remainder of the award based on total Company performance. Awards to
participants with corporate responsibilities are based entirely on Company
performance. Target economic profit levels have been established by the
Committee and adjust on an annual basis by a predetermined formula subject to
Committee approval. The EP Incentive Plan also incorporates a "bonus bank" into
which that portion of an award, if any, in excess of 200% of target is credited.
Such bonus amounts are thereafter scheduled to be paid out over time, but remain
"at risk" and subject to total loss or partial offset depending on future
Company and value center performance as determined under the EP Incentive Plan.
Depending upon performance, the bonus bank may have a negative balance that
would need to be offset before payments could be made from the bank. Under the
EP Incentive Plan, Mr. Belcher received a bonus of $123,516 for the 1998 fiscal
year.
The Compensation Committee also adopted, effective January 1, 1998, the
EP Long-Term Plan as the successor to the Company's Long Term Incentive Plan
(the "LTIP"). The EP Long-Term Plan is similar to the EP Incentive Plan. Awards
paid under the EP Long-Term Plan are paid based entirely on Company performance
and are paid out in three annual installments. The payouts which are deferred
remain "at risk" and subject to total loss or partial offset depending on future
Company performance. Similar to the EP Incentive Plan, the EP Long-Term Plan
contemplates that the bonus bank may have a negative balance based on the
performance levels achieved. The Committee believes that employing an economic
profit formula to provide long-term incentive opportunities for management
personnel provides a more favorable link to the goal of maximizing long-term
shareholder value than was offered by the LTIP. Mr. Belcher received an award of
$17,155 under the EP Long-Term Plan for 1998 performance.
In addition to the foregoing annual and long-term incentive plans, the
Company's executive compensation package includes stock option grants. Under the
1995 Plan, the Stock Option Committee also has the authority to grant, in
addition to stock options, other equity-based awards, including stock
appreciation rights, restricted stock and performance shares. To date, however,
only stock options have been granted under the Company's equity-based plans.
Stock options granted by the Company have a per share
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exercise price of 100% of the fair market value of a share of Common Stock on
the date of grant and, accordingly, the value of the option will be dependent on
the future market value of the Common Stock. It has been the policy of the Stock
Option Committee that options should provide a long-term incentive and align the
interests of management with the interests of shareholders.
In determining proposed stock option grants to be made to the Company's
executive officers, the Stock Option Committee compares, in consultation with
the Company's independent compensation consultants, option grants made by a
selected group of peer companies. In 1998, the peer group companies, some of
which are included in the peer group described in the section entitled
"Performance Information," consisted of both industry competitors as well as
Midwestern-based companies of comparable size to the Company. Based on this
analysis, Mr. Belcher received an option to purchase 100,000 shares of Common
Stock at a per share exercise price of $26.125. By tying a portion of each
executive officer's overall compensation to stock price through the grant of
options, the Stock Option Committee seeks to enhance its objective of providing
a further incentive to maximize long-term shareholder value.
In connection with the equity-based plans, the Company endorses the
policy that stock ownership by management is an important factor in aligning the
interests of management and shareholders. The Company has adopted stock
ownership guidelines that are intended to encourage stock ownership by
management. Under these guidelines, management personnel are expected to own a
specified number of shares of Common Stock depending upon their respective
salary grade. The Stock Option Committee considers an individual's compliance
with the stock ownership guidelines in determining the size of equity-based
grants.
The Company's policy with respect to other employee benefit plans is to
provide competitive benefits to the Company's employees, including executive
officers, to encourage their continued service with the Company. In the view of
the Compensation Committee and the Stock Option Committee, a competitive
benefits package is an essential component in achieving the Company's goal of
being able to attract new key employees from time to time as events warrant.
Under Section 162(m) of the Internal Revenue Code, the tax deduction by
corporate taxpayers, such as the Company, is limited with respect to the
compensation of certain executive officers unless such compensation is based
upon performance objectives meeting certain regulatory criteria or is otherwise
excluded from the limitation. The Compensation Committee and the Stock Option
Committee currently intend to qualify compensation paid to the Company's
executive officers for deductibility by the Company under Section 162(m) of the
Internal Revenue Code.
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BANTA CORPORATION BANTA CORPORATION
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Bernard S. Kubale, Chairperson Jameson A. Baxter, Chairperson
Jameson A. Baxter George T. Brophy
William J. Cadogan William J. Cadogan
Richard L. Gunderson Henry T. DeNero
Michael J. Winkler
Compensation Committee Interlocks and Insider Participation
During 1998, the Compensation Committee consisted of Ms. Baxter, William
J. Cadogan and Messrs. Gunderson, Kubale (Chairperson) and Winkler. During 1998,
the Stock Option Committee consisted of Ms. Baxter (Chairperson) and Messrs.
Brophy, Cadogan and DeNero. Mr. Cadogan retired as a director of the Company in
December 1998. Mr. Kubale is a retired partner in the law firm of Foley &
Lardner, Milwaukee, Wisconsin. Foley & Lardner has served as legal counsel to
the Company for many years.
PERFORMANCE INFORMATION
Set forth below are line graphs comparing during the last six and five
years, respectively, the Company's cumulative total shareholder return with the
cumulative total return of companies in the Standard & Poor's 500 Stock Index
and companies in a peer group selected by the Company. The total return
information presented in the graphs assumes the reinvestment of dividends. The
companies in the peer group are: Big Flower Press Holdings, Inc.; Cadmus
Communications Corp.; Courier Corp.; R. R. Donnelley & Sons Company; Quebecor
Inc.; and World Color Press, Inc. The returns of each company in the peer group
have been weighted based on such company's relative market capitalization. The
Company has included a six-year comparison since its relatively high stock price
at December 31, 1993 as compared with its peer group significantly impacts the
starting point for the five-year presentation.
Comparison Of Six Year Cumulative Total Return
Among Banta Corporation, S&P 500 Index And Peer Group Companies
[STOCK PERFORMANCE CHART]
December 31,
1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ----
Banta Value............... $ 100 $ 133 $ 113 $ 167 $ 132 $ 159 $164
S&P 500 Composite......... $ 100 110 112 153 189 251 323
Peer Group................ $ 100 98 95 130 112 133 160
-17-
Comparison Of Five Year Cumulative Total Return
Among Banta Corporation, S&P 500 Index And Peer Group Companies
[STOCK PERFORMANCE CHART]
December 31,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Banta Value............... $ 100 $ 85 $ 125 $ 99 $ 120 $ 123
S&P 500 Composite......... 100 101 139 171 228 294
Peer Group................ 100 97 133 115 136 164
APPROVAL OF THE 1995 PLAN, AS AMENDED
General
The 1995 Plan was initially adopted by the Board on December 6, 1994 and
approved and ratified by shareholders on April 25, 1995. On February 2, 1999,
the Board unanimously adopted amendments to the 1995 Plan contingent upon
shareholder approval of the 1995 Plan, as so amended, at the Annual Meeting.
Among other things, the amendments to the 1995 Plan increase the
aggregate number of shares of Common Stock authorized for issuance thereunder
from 1,500,000 to 2,500,000 (subject to adjustment in order to prevent dilution
in certain cases described below). As of the record date for the Annual Meeting,
stock options covering an aggregate of 1,378,783 shares of Common Stock were
outstanding under the 1995 Plan. Other than the grant of stock options, no other
awards have been made under the 1995 Plan to date. On the record date for the
Annual Meeting, 98,722 shares of Common Stock remained available for the
granting of new awards under the 1995 Plan. The Board approved the
above-described amendment to allow for the issuance of additional shares under
the 1995 Plan. The amendments to the 1995 Plan also modify the limitations on
awards to individual participants thereunder. As amended, the 1995 Plan would
provide that no participating key employee may be granted, during any calendar
year, stock options for more than 150,000 shares, stock appreciation rights
("SARs") with respect to more than 50,000 shares, more than 25,000 shares of
restricted stock and/or more than 50,000 performance shares (in each case
subject to adjustment in order to prevent dilution in certain cases described
below). Prior to being amended, the 1995 Plan provided that no participating key
employee could receive, during the term of the 1995 Plan, options for, or SARs
with respect to, more than 225,000 shares of Common Stock or awards relating to
more than 75,000 shares of restricted stock or more than 75,000 performance
shares. The amendments do not change the aggregate number of shares of
restricted stock issuable under the 1995 Plan. The modifications of the per
participant award limitations are being proposed to reflect the increase in the
authorized shares issuable under the 1995 Plan, as amended. The 1995 Plan as
proposed to be amended also provides that the Committee of the Board authorized
to administer the 1995 Plan may delegate its authority to one or more executive
officers of the Company, other than in connection with awards made to the
directors and executive officers of the Company. This amendment is proposed to
provide additional flexibility in the administration of the 1995 Plan.
-18-
The following summary description of the 1995 Plan, as amended, is
qualified in its entirety by reference to the full text of such Plan which is
attached to this Proxy Statement as Appendix A.
Purpose
The purpose of the 1995 Plan is to promote the best interests of the
Company and its shareholders by providing key employees of the Company and its
affiliates, and members of the Board who are not employees of the Company or its
affiliates, with an opportunity to acquire a proprietary interest in the
Company. The 1995 Plan is intended to promote continuity of management and to
provide increased incentive and personal interest in the welfare of the Company
by those key employees who are primarily responsible for shaping and carrying
out the long-range plans of the Company and securing the Company's continued
growth and financial success. In addition, by encouraging stock ownership by
directors who are not employees of the Company or its affiliates, the Company
seeks to attract and retain on the Board persons of exceptional competence and
to provide a further incentive to serve as a director of the Company.
Administration and Eligibility
The 1995 Plan is administered by a committee of the Board (the
"Committee") consisting of no less than two directors who are "non-employee
directors" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and who are "outside directors" within
the meaning of Section 162(m) of the Internal Revenue Code. In the event that
the Committee is not appointed, the functions of the Committee will be exercised
by those members of the Board who qualify as "non-employee directors" under Rule
16b-3 and as "outside directors" within the meaning of Section 162(m). The Stock
Option Committee has been designated as the current administrator of the 1995
Plan. Among other functions, the Committee has the authority to establish rules
for the administration of the 1995 Plan; to select the key employees of the
Company and its affiliates to whom awards will be granted; to determine the
types of awards to be granted to key employees and the number of shares covered
by such awards; and to set the terms and conditions of such awards. The
Committee may also determine whether the payment of any proceeds of any award
shall or may be deferred by a key employee participating in the 1995 Plan. Under
the 1995 Plan, as amended, to the extent permitted by applicable law, the
Committee may delegate to one or more executive officers of the Company any or
all of the authority and responsibility of the Committee in connection with the
1995 Plan, other than with respect to those persons who file reports under
Section 16 of the Exchange Act (e.g., executive officers and directors of the
Company). Subject to the express terms of the 1995 Plan, determinations and
interpretations with respect thereto will be in the sole discretion of the
Committee, whose determinations and interpretations will be binding on all
parties.
Any key employee of the Company or any affiliate, including any executive
officer or employee-director of the Company, is eligible to be granted awards by
the Committee under the 1995 Plan. In addition to key employees, each
non-employee director of the Company is automatically entitled, as described
below, to receive option grants under the
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1995 Plan. Approximately 130 persons are currently eligible to participate in
the 1995 Plan. The number of eligible participants may increase over time based
upon future growth of the Company.
Awards Under the 1995 Plan; Available Shares
The 1995 Plan authorizes the granting to key employees of: (a) stock
options, which may be either incentive stock options meeting the requirements of
Section 422 of the Internal Revenue Code ("ISOs") or non-qualified stock
options; (b) SARs; (c) restricted stock; and (d) performance shares. The 1995
Plan also provides for the automatic grant of non-qualified options to
non-employee directors of the Company. The 1995 Plan, as amended, provides that
up to a total of 2,500,000 shares of Common Stock (subject to adjustment as
described below) will be available for the granting of awards thereunder.
If any shares subject to awards granted under the 1995 Plan, or to which
any award relates, are forfeited or if an award otherwise terminates, expires or
is cancelled prior to the delivery of all of the shares or other consideration
issuable or payable pursuant to the award, such shares will be available for the
granting of new awards under the 1995 Plan. Any shares delivered pursuant to an
award may be either authorized and unissued shares of Common Stock or treasury
shares held by the Company.
Terms of Awards
Option Awards to Key Employees. Options granted under the 1995 Plan to
key employees may be either ISOs or non-qualified stock options. No individual
key employee may be granted, during any calendar year, options to purchase in
excess of 150,000 shares of Common Stock under the 1995 Plan, as amended
(subject to adjustment as described below).
The exercise price per share of Common Stock subject to options granted
to key employees under the 1995 Plan will be determined by the Committee,
provided that the exercise price may not be less than 100% of the fair market
value of a share of Common Stock on the date of grant. The term of any option
granted to a key employee under the 1995 Plan will be as determined by the
Committee, provided that the term of an ISO may not exceed ten years from the
date of its grant. Options granted to key employees under the 1995 Plan will
become exercisable in such manner and within such period or periods and in such
installments or otherwise as determined by the Committee. Options may be
exercised by payment in full of the exercise price, either (at the discretion of
the Committee) in cash or in whole or in part by tendering shares of Common
Stock or other consideration having a fair market value on the date of exercise
equal to the option exercise price. All ISOs granted under the 1995 Plan will
also be required to comply with all other terms of Section 422 of the Internal
Revenue Code.
Option Awards to Non-Employee Directors. Under the 1995 Plan, any person
who is first elected as a non-employee director of the Company will
automatically be granted, on the date of such election, a non-qualified stock
option to purchase 4,500 shares of Common Stock (subject to adjustment as
described below). In addition, the 1995 Plan provides that each non-employee
director (if he or she continues to serve in such capacity) will, on the day
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after the annual meeting of shareholders in each year, automatically be granted
an option to purchase 1,500 shares of Common Stock (subject to adjustment as
described below). Notwithstanding the preceding sentence, the 1995 Plan provides
that if a person who is first elected as a non-employee director on the date of
an annual meeting of shareholders receives the initial option grant under the
1995 Plan on that date, such director will not be entitled to begin receiving
subsequent grants until the day following the next succeeding annual meeting of
shareholders. Non-employee directors will be entitled to receive the automatic
grants under the 1995 Plan as described above only for so long as the 1995 Plan
remains in effect and a sufficient number of shares are available for the
granting of such options thereunder.
The option price per share of any option granted to a non-employee
director must be 100% of the "market value" of a share of Common Stock on the
date of grant of such option. The "market value" of a share on the date of grant
to the non-employee director will be the closing price per share for the Common
Stock on the New York Stock Exchange on the trading day next preceding such
grant date or, if no trading occurred on the trading date next preceding the
date on which the non-qualified stock option is granted, then the "market value"
per share shall be determined with reference to the next preceding date on which
the shares were traded. An option granted to a non-employee director becomes
exercisable six months after the date of grant, except that if the non-employee
director ceases to be a director by reason of death, disability or retirement
within six months after the date of grant, the option will become immediately
exercisable in full.
Options granted to non-employee directors will terminate on the earlier
of (a) ten years after the date of grant or (b) twelve months after the
non-employee director ceases to be a director of the Company. Options granted to
non-employee directors may be exercised under the 1995 Plan by payment in full
of the exercise price, either in cash or in whole or in part by tendering
previously acquired shares of Common Stock having a market value on the date of
exercise equal to the option exercise price.
The Committee has no discretion to alter the provisions governing options
granted to non-employee directors.
SARs. An SAR granted under the 1995 Plan will confer on the key employee
holder a right to receive, upon exercise thereof, the excess of (a) the fair
market value of one share of Common Stock on the date of exercise over (b) the
grant price of the SAR as specified by the Committee. The grant price of an SAR
under the 1995 Plan may not be less than 100% of the fair market value of a
share of Common Stock on the date of grant. The grant price, term, methods of
exercise, methods of settlement (including whether the holder of an SAR will be
paid in cash, shares of Common Stock or other consideration), and any other
terms and conditions of any SAR granted under the 1995 Plan are determined by
the Committee at the time of grant. Pursuant to the terms of the 1995 Plan, as
amended, no individual key employee may be granted, during any calendar year,
SARs thereunder with respect to in excess of 50,000 shares of Common Stock
(subject to adjustment as described below).
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Restricted Stock. Shares of restricted Common Stock granted to key
employees under the 1995 Plan will be subject to such restrictions as the
Committee may impose, including any limitation on the right to vote such shares
or receive dividends thereon. The restrictions imposed on the shares may lapse
separately or in combination at such time or times, or in such installments or
otherwise, as the Committee may deem appropriate. Except as otherwise determined
by the Committee, upon termination of a key employee's employment for any reason
during the applicable restriction period, all shares of restricted stock still
subject to restriction will be subject to forfeiture by the key employee.
The 1995 Plan limits the total number of shares of restricted stock that
may be awarded thereunder to 225,000 shares. In addition, no individual key
employee may be granted, during any calendar year, in excess of 25,000 shares of
restricted stock under the 1995 Plan, as amended. The foregoing numerical
limitations on the issuance of shares of restricted stock are subject to
adjustment as described below.
Performance Shares. The 1995 Plan also provides for the granting of
performance shares to key employees. The Committee will determine and/or select
the applicable performance period, the performance goal or goals (and the
performance level or levels related thereto) to be achieved during any
performance period, the proportion of payments, if any, to be made for
performance between the minimum and full performance levels for any performance
goal and, if applicable, the relative percentage weighting given to each of the
selected performance goals, the restrictions applicable to shares of restricted
stock received upon payment of performance shares if payment is made in such
manner, and any other terms, conditions and rights relating to the grant of
performance shares. Under the terms of the 1995 Plan, the Committee may select
from various performance goals, including return on equity, return on
investment, return on net assets, economic value added, earnings from
operations, pre-tax profits, net earnings, net earnings per share, working
capital as a percent of net sales, net cash provided by operating activities,
market price for the Common Stock and total shareholder return. In conjunction
with selecting the applicable performance goal or goals, the Committee will also
fix the relevant performance level or levels (e.g., a 15% return on equity)
which must be achieved with respect to the goal or goals in order for the
performance shares to be earned by the key employee. The performance goals
selected by the Committee under the 1995 Plan may, to the extent applicable,
relate to a specific division or subsidiary of the Company or apply on a
Company-wide basis.
Following completion of the applicable performance period, payment on
performance shares granted to and earned by key employees will be made in shares
of Common Stock (which, at the discretion of the Committee, may be shares of
restricted stock) equal to the number of performance shares payable. The
Committee may provide that, during a performance period, key employees will be
paid cash amounts with respect to each performance share granted to such key
employees equal to the cash dividend paid on a share of Common Stock. Pursuant
to the terms of the 1995 Plan, as amended, no key employee may receive, during
any calendar year, more than 50,000 performance shares thereunder (subject to
adjustment as described below).
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Adjustments
If any dividend or other distribution, recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of shares of Common Stock or other
securities of the Company, issuance of warrants or other rights to purchase
shares of Common Stock or other securities of the Company, or other similar
corporate transaction or event affects the shares of Common Stock so that an
adjustment is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the 1995
Plan, then the Committee will generally have the authority to, in such manner as
it deems equitable, adjust (a) the number and type of shares subject to the 1995
Plan and which thereafter may be made the subject of awards, (b) the number and
type of shares subject to outstanding awards, and (c) the grant, purchase or
exercise price with respect to any award, or may make provision for a cash
payment to the holder of an outstanding award.
Limits on Transferability
No award granted under the 1995 Plan (other than an award of restricted
stock on which the restrictions have lapsed) may be assigned, sold, transferred
or encumbered by any participant, otherwise than by will, by designation of a
beneficiary, or by the laws of descent and distribution. Each award will be
exercisable during the participant's lifetime only by such participant or, if
permissible under applicable law, by the participant's guardian or legal
representative.
Amendment and Termination
The Board may amend, suspend or terminate the 1995 Plan at any time,
except that no such action may adversely affect any award granted and then
outstanding thereunder without the approval of the respective participant. The
1995 Plan provides that the provisions governing the granting of options to
non-employee directors may not be amended more than once every six months, other
than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules promulgated
thereunder. The 1995 Plan further provides that shareholder approval of any
amendment thereto must also be obtained if required by (a) the Internal Revenue
Code or any rules promulgated thereunder (in order to allow for ISOs to be
granted thereunder) or (b) the quotation or listing requirements of the exchange
or market on which the Common Stock is then traded (in order to maintain the
trading of the Common Stock on such exchange or market).
Withholding
Not later than the date as of which an amount first becomes includible in
the gross income of a key employee for federal income tax purposes with respect
to any award under the 1995 Plan, the key employee will be required to pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount.
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Unless otherwise determined by the Committee, withholding obligations arising
with respect to awards under the 1995 Plan may be settled with shares of Common
Stock (other than shares of restricted stock), including shares of Common Stock
that are part of, or are received upon exercise of, the award that gives rise to
the withholding requirement. The obligations of the Company under the 1995 Plan
are conditional on such payment or arrangements, and the Company and any
affiliate will, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the key employee. The Committee may
establish such procedures as it deems appropriate for the settling of
withholding obligations with shares of Common Stock.
Certain Federal Income Tax Consequences
Stock Options. The grant of a stock option under the 1995 Plan creates no
income tax consequences to the key employee or the non-employee director or the
Company. A key employee or a non-employee director who is granted a
non-qualified stock option will generally recognize ordinary income at the time
of exercise in an amount equal to the excess of the fair market value of the
Common Stock at such time over the exercise price. The Company will be entitled
to a deduction in the same amount and at the same time as ordinary income is
recognized by the key employee or the non-employee director. A subsequent
disposition of the Common Stock will give rise to capital gain or loss to the
extent the amount realized from the sale differs from the tax basis, i.e., the
fair market value of the Common Stock on the date of exercise. This capital gain
or loss will be a long-term capital gain or loss if the Common Stock has been
held for more than one year from the date of exercise.
In general, a key employee will recognize no income or gain as a result
of exercise of an ISO (except that the alternative minimum tax may apply).
Except as described below, any gain or loss realized by the key employee on the
disposition of the Common Stock acquired pursuant to the exercise of an ISO will
be treated as a long-term capital gain or loss and no deduction will be allowed
to the Company. If the key employee fails to hold the shares of Common Stock
acquired pursuant to the exercise of an ISO for at least two years from the date
of grant of the ISO and one year from the date of exercise, the key employee
will recognize ordinary income at the time of the disposition equal to the
lesser of (a) the gain realized on the disposition or (b) the excess of the fair
market value of the shares of Common Stock on the date of exercise over the
exercise price. The Company will be entitled to a deduction in the same amount
and at the same time as ordinary income is recognized by the key employee. Any
additional gain realized by the key employee over the fair market value at the
time of exercise will be treated as a capital gain. This capital gain will be a
long-term capital gain if the Common Stock has been held for more than one year
from the date of exercise.
Stock Appreciation Rights. The grant of an SAR will create no income tax
consequences for the key employee or the Company. Upon exercise of an SAR, the
key employee will recognize ordinary income equal to the amount of any cash and
the fair market value of any shares of Common Stock or other property received,
except that if the key employee receives an option or shares of restricted stock
upon exercise of an SAR, recognition of income may be deferred in accordance
with the rules applicable to such other awards. The
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Company will be entitled to a deduction in the same amount and at the same time
as income is recognized by the key employee.
Restricted Stock. A key employee will not recognize income at the time an
award of restricted stock is made under the 1995 Plan, unless the election
described below is made. A key employee who has not made such an election will
recognize ordinary income at the time the restrictions on the stock lapse in an
amount equal to the fair market value of the restricted stock at such time
reduced by any amount paid for the restricted stock. The Company will generally
be entitled to a corresponding deduction in the same amount and at the same time
as the key employee recognizes income. Any otherwise taxable disposition of the
restricted stock after the time the restrictions lapse will generally result in
capital gain or loss (long-term or short-term depending upon the length of time
the restricted stock is held after the time the restrictions lapse). Dividends
paid in cash and received by a participant prior to the time the restrictions
lapse will constitute ordinary income to the participant in the year paid. The
Company will be entitled to a corresponding deduction for such dividends. Any
dividends paid in stock will be treated as an award of additional restricted
stock subject to the tax treatment described herein.
A key employee may, within 30 days after the date of the award of
restricted stock, elect to recognize ordinary income as of the date of the award
in an amount equal to the fair market value of such restricted stock on the date
of the award reduced by any amount paid for the restricted stock. The Company
will be entitled to a corresponding deduction in the same amount and at the same
time as the key employee recognizes income. If the election is made, any cash
dividends received with respect to the restricted stock will be treated as
dividend income to the key employee in the year of payment and will not be
deductible by the Company. Any otherwise taxable disposition of the restricted
stock (other than by forfeiture) will result in capital gain or loss (long-term
or short-term depending on the holding period). If the key employee who has made
an election subsequently forfeits the restricted stock, the key employee will
not be entitled to deduct any loss. In addition, the Company would then be
required to include as ordinary income the amount of the deduction it originally
claimed with respect to such shares.
Performance Shares. The grant of performance shares will create no income
tax consequences for the key employee or the Company. Upon the receipt of shares
of Common Stock at the end of the applicable performance period, the key
employee will recognize ordinary income equal to the fair market value of the
shares of Common Stock received, except that if the key employee receives shares
of restricted stock in payment of performance shares, recognition of income may
be deferred in accordance with the rules applicable to such restricted stock. In
addition, the key employee will recognize ordinary income equal to the dividend
equivalents paid on performance shares prior to or at the end of the performance
period. The Company will be entitled to a deduction in the same amount and at
the same time as income is recognized by the key employee.
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New Plan Benefits
During fiscal 1998, the Committee approved grants of stock options to
executive officers and others that are not subject to shareholder approval of
the 1995 Plan, as amended. See "Executive Compensation-Stock Options." The
Committee has not approved any grants of awards that require shareholder
approval of the 1995 Plan, as amended.
Other than the automatic grants of stock options to non-employee
directors, the Company cannot currently determine the number of shares or the
type of shares that may be granted to eligible participants under the 1995 Plan,
as amended, in the future. Such determinations will be made from time to time by
the Committee.
On March 10, 1999, the closing price per share of the Common Stock on the
New York Stock Exchange was $21.25.
Vote Required
The affirmative vote of the holders of a majority of the shares of Common
Stock represented and voted at the Annual Meeting (assuming a quorum is present)
is required to approve the 1995 Plan, as amended; provided that a majority of
the outstanding shares of Common Stock are voted on the proposal. Assuming such
proviso is met, any shares not voted at the Annual Meeting with respect to the
1995 Plan, as amended, will have no impact on the vote. In the event that the
1995 Plan, as amended, is not approved by shareholders at the Annual Meeting,
the 1995 Plan (except for the amendments adopted by the Board in February 1999)
will remain in full force and effect.
THE BOARD RECOMMENDS A VOTE "FOR" THE 1995 PLAN, AS AMENDED. SHARES OF
COMMON STOCK REPRESENTED AT THE ANNUAL MEETING BY EXECUTED BUT UNMARKED PROXIES
WILL BE VOTED "FOR" THE 1995 PLAN, AS AMENDED.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP acted as the independent auditors for the Company
during the fiscal year ended January 2, 1999, and it is anticipated that such
firm will be similarly appointed to act in the current fiscal year.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting to answer appropriate questions and, if they so desire, to make a
statement.
OTHER MATTERS
Solicitation Expenses
All expenses of solicitation of proxies will be borne by the Company. In
addition to soliciting proxies by mail, proxies may be solicited personally and
by telephone by certain officers and regular employees of the Company. The
Company has retained D.F. King & Co.,
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Inc. to assist in the solicitation of proxies, and expects to pay such firm a
fee of approximately $4,000 plus out-of-pocket expenses. Brokers, nominees and
custodians who hold Common Stock in their names and who solicit proxies from the
beneficial owners will be reimbursed by the Company for out-of-pocket and
reasonable clerical expenses.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors to file reports of ownership and changes of ownership with the
Securities and Exchange Commission and the New York Stock Exchange. The
regulations of the Securities and Exchange Commission require the officers and
directors to furnish the Company with copies of all Section 16(a) forms they
file. Based on such forms, the Company believes that all its officers and
directors have complied with the Section 16(a) filing requirements.
SHAREHOLDER PROPOSALS
Proposals of shareholders pursuant to Rule 14a-8 under the Exchange Act
("Rule 14a-8") that are intended to be presented at the 2000 annual meeting of
shareholders must be received by the Company no later than November 20, 1999 to
be included in the Company's proxy materials for that meeting. Further, a
shareholder who otherwise intends to present business at the 2000 annual meeting
must comply with the requirements set forth in the Company's By-laws. Among
other things, to bring business before an annual meeting, a shareholder must
give written notice thereof, complying with the By-laws, to the Secretary of the
Company not less than 60 days and not more than 90 days prior to the second
Tuesday in the month of April, provided that the date of the annual meeting is
not advanced by more than 30 days or delayed by more than 60 days from the
second Tuesday in the month of April. The 2000 annual meeting of shareholders is
tentatively scheduled to be held on April 25, 2000. Under the By-laws, if the
Company does not receive notice of a shareholder proposal submitted otherwise
than pursuant to Rule 14a-8 (i.e., a proposal a shareholder intends to present
at the 2000 annual meeting of shareholders but does not intend to have included
in the Company's proxy materials) on or prior to February 11, 2000 (assuming an
April 25, 2000 meeting date), then the notice will be considered untimely and
the Company will not be required to present such proposal at the 2000 annual
meeting. If the Board nonetheless chooses to present such proposal at the 2000
annual meeting, then the persons named in proxies solicited by the Board for the
2000 annual meeting may exercise discretionary voting power with respect to such
proposal.
By Order of the Board of Directors
BANTA CORPORATION
/s/Ronald D. Kneezel
Ronald D. Kneezel
Secretary
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The Company will furnish to any shareholder, without charge, a copy of its
Annual Report on Form 10-K for the fiscal year 1998. Requests for the Form 10-K
must be in writing and addressed to Gerald A. Henseler, Executive Vice President
and Chief Financial Officer, Banta Corporation, P.O. Box 8003, Menasha,
Wisconsin 54952.
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Appendix A
BANTA CORPORATION
1995 EQUITY INCENTIVE PLAN
As Amended
Section 1. Purpose
The purpose of the Banta Corporation 1995 Equity Incentive Plan
(the "Plan") is to promote the best interests of Banta Corporation (together
with any successor thereto, the "Company") and its shareholders by providing key
employees of the Company and its Affiliates (as defined below) and members of
the Company's Board of Directors who are not employees of the Company or its
Affiliates with an opportunity to acquire a proprietary interest in the Company.
It is intended that the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company by those key
employees who are primarily responsible for shaping and carrying out the
long-range plans of the Company and securing the Company's continued growth and
financial success. In addition, by encouraging stock ownership by directors who
are not employees of the Company or its Affiliates, the Company seeks to attract
and retain on its Board of Directors persons of exceptional competence and to
provide a further incentive to serve as a director of the Company.
Section 2. Definitions
As used in the Plan, the following terms shall have the respective
meanings set forth below:
(a) "Affiliate" shall mean any entity that, directly or through
one or more intermediaries, is controlled by, controls, or is under common
control with, the Company.
(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock or Performance Share granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract,
or other instrument or document evidencing any Award granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Commission" shall mean the United States Securities and
Exchange Commission or any successor agency.
(f) "Committee" shall mean a committee of the Board of Directors
of the Company designated by such Board to administer the Plan and composed of
not less than two directors, each of whom is a "non-employee director for
purposes of Section 16" within the meaning of Rule 16b-3 and each of whom is an
"outside director" within the meaning of Section 162(m)(4)(C) of the Code (or
any successor provision thereto).
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
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(h) "Excluded Items" shall mean any items which the Committee
determines shall be excluded in fixing Performance Goals, such as any gains or
losses from discontinued operations, any extraordinary gains or losses and the
effects of accounting changes.
(i) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee.
(j) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of Section
422 of the Code (or any successor provision thereto).
(k) "Key Employee" shall mean any officer or other key employee of
the Company or of any Affiliate who is responsible for or contributes to the
management, growth or profitability of the business of the Company or any
Affiliate as determined by the Committee.
(l) "Non-Employee Director" shall mean any member of the Company's
Board of Directors who is not an employee of the Company or of any Affiliate.
(m) "Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option and shall mean any option granted to a Non-Employee Director under
Section 6(b) of the Plan.
(n) "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
(o) "Participating Key Employee" shall mean a Key Employee
designated to be granted an Award under the Plan.
(p) "Performance Goals" shall mean the following (in all cases
after excluding the impact of applicable Excluded Items):
(i) Return on equity for the Performance Period for
the Company on a consolidated basis.
(ii) Return on investment for the Performance Period
(aa) for the Company on a consolidated basis, (bb) for any one or
more Affiliates or divisions of the Company and/or (cc) for any
other business unit or units of the Company as defined by the
Committee at the time of selection.
(iii) Return on net assets for the Performance
Period (aa) for the Company on a consolidated basis, (bb)
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for any one or more Affiliates or divisions of the Company and/or
(cc) for any other business unit or units of the Company as
defined by the Committee at the time of selection.
(iv) Economic value added (as defined by the
Committee at the time of selection) for the Performance Period
(aa) for the Company on a consolidated basis, (bb) for any one or
more Affiliates or divisions of the Company and/or (cc) for any
other business unit or units of the Company as defined by the
Committee at the time of selection.
(v) Earnings from operations for the Performance
Period (aa) for the Company on a consolidated basis, (bb) for any
one or more Affiliates or divisions of the Company and/or (cc) for
any other business unit or units of the Company as defined by the
Committee at the time of selection.
(vi) Pre-tax profits for the Performance Period (aa)
for the Company on a consolidated basis, (bb) for any one or more
Affiliates or divisions of the Company and/or (cc) for any other
business unit or units of the Company as defined by the Committee
at the time of selection.
(vii) Net earnings for the Performance Period (aa)
for the Company on a consolidated basis, (bb) for any one or more
Affiliates or divisions of the Company and/or (cc) for any other
business unit or units of the Company as defined by the Committee
at the time of selection.
(viii) Net earnings per Share for the Performance
Period for the Company on a consolidated basis.
(ix) Working capital as a percent of net sales for
the Performance Period (aa) for the Company on a consolidated
basis, (bb) for any one or more Affiliates or divisions of the
Company and/or (cc) for any other business unit or units of the
Company as defined by the Committee at the time of selection.
(x) Net cash provided by operating activities for
the Performance Period (aa) for the Company on a consolidated
basis, (bb) for any one or more Affiliates or divisions of the
Company and/or (cc) for any other business unit or units of the
Company as defined by the Committee at the time of selection.
(xi) Market price per Share for the Performance
Period.
(xii) Total shareholder return for the Performance
Period for the Company on a consolidated basis.
(q) "Performance Period" shall mean, in relation to Performance
Shares, any period for which a Performance Goal or Goals have been established.
(r) "Performance Share" shall mean any right granted under Section
6(e) of the Plan that will be paid out as a Share (which, in specified
circumstances, may be a Share of Restricted Stock).
(s) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
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(t) "Released Securities" shall mean Shares of Restricted Stock
with respect to which all applicable restrictions have expired, lapsed, or been
waived.
(u) "Restricted Securities" shall mean Awards of Restricted Stock
or other Awards under which issued and outstanding Shares are held subject to
certain restrictions.
(v) "Restricted Stock" shall mean any Share granted under Section
6(d) of the Plan or, in specified circumstances, a Share paid in connection with
a Performance Share under Section 6(e) of the Plan.
(w) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission under the Exchange Act, or any successor rule or regulation thereto.
(x) "Shares" shall mean shares of common stock of the Company,
$.10 par value, and such other securities or property as may become subject to
Awards pursuant to an adjustment made under Section 4(b) of the Plan.
(y) "Stock Appreciation Right" shall mean any right granted under
Section 6(c) of the Plan.
Section 3. Administration
The Plan shall be administered by the Committee; provided,
however, that if at any time the Committee shall not be in existence, the
functions of the Committee as specified in the Plan shall be exercised by a
committee consisting of those members of the Board of Directors of the Company
who qualify as "non-employee directors for purposes of Section 16" under Rule
16b-3 and as "outside directors" under Section 162(m)(4)(C) of the Code (or any
successor provision thereto). To the extent permitted by applicable law, the
Committee may delegate to one or more executive officers of the Company any or
all of the authority and responsibility of the Committee with respect to the
Plan, other than with respect to Persons who are subject to Section 16 of the
Exchange Act. To the extent the Committee has so delegated to one or more
executive officers the authority and responsibility of the Committee, all
references to the Committee herein shall include such officer or officers.
Subject to the terms of the Plan and without limitation by reason of
enumeration, the Committee shall have full power and authority to: (i) designate
Participating Key Employees; (ii) determine the type or types of Awards to be
granted to each Participating Key Employee under the Plan; (iii) determine the
number of Shares to be covered by (or with respect to which payments, rights, or
other matters are to be calculated in connection with) Awards granted to
Participating Key Employees; (iv) determine the terms and conditions of any
Award granted to a Participating Key Employee; (v) determine whether, to what
extent, and under what circumstances Awards granted to Participating Key
Employees may be settled or exercised in cash, Shares, other securities, other
Awards, or other property, and the method or methods by which Awards may be
settled, exercised, cancelled, forfeited, or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares, other Awards, and
other amounts payable with respect to an Award granted to Participating Key
Employees under the Plan shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan (including, without limitation, any Award Agreement); (viii)
establish, amend, suspend, or waive
A-4
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (ix) make any other determination
and take any other action that the Committee deems necessary or desirable for
the administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participating Key
Employee, any Non-Employee Director, any holder or beneficiary of any Award, any
shareholder, and any employee of the Company or of any Affiliate.
Notwithstanding the foregoing, Awards to Non-Employee Directors under the Plan
shall be automatic and the amount and terms of such Awards shall be determined
as provided in Section 6(b) of the Plan.
Section 4. Shares Available for Award
(a) Shares Available. Subject to adjustment as provided in Section
4(b):
(i) Number of Shares Available. The number of Shares
with respect to which Awards may be granted under the Plan shall
be 2,500,000. If, after the effective date of the Plan, any Shares
covered by an Award granted under the Plan, or to which any Award
relates, are forfeited or if an Award otherwise terminates,
expires or is cancelled prior to the delivery of all of the Shares
or of other consideration issuable or payable pursuant to such
Award, then the number of Shares counted against the number of
Shares available under the Plan in connection with the grant of
such Award, to the extent of any such forfeiture, termination,
expiration or cancellation, shall again be available for granting
of additional Awards under the Plan.
(ii) Limitations on Awards to Individual
Participants. No Participating Key Employee shall be granted,
during any calendar year, Options for more than 150,000 Shares,
Stock Appreciation Rights with respect to more than 50,000 Shares,
more than 25,000 Shares of Restricted Stock and/or more than
50,000 Performance Shares under the Plan. Such number of Shares as
specified in the preceding sentence shall be subject to adjustment
in accordance with the terms of Section 4(b) hereof. In all cases,
determinations under this Section 4(a)(ii) shall be made in a
manner that is consistent with the exemption for performance-based
compensation provided by Section 162(m) of the Code (or any
successor provision thereto) and any regulations promulgated
thereunder.
(iii) Accounting for Awards. The number of Shares
covered by an Award under the Plan, or to which such Award
relates, shall be counted on the date of grant of such Award
against the number of Shares available for granting Awards under
the Plan.
(iv) Sources of Shares Deliverable Under Awards. Any
Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or of treasury Shares.
(b) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other
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property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee may, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of Shares subject to the Plan and
which thereafter may be made the subject of Awards under the Plan, (ii) the
number and type of Shares subject to outstanding Awards, and (iii) the grant,
purchase, or exercise price with respect to any Award, or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award; provided, however, in each case, that with respect to Awards of Incentive
Stock Options no such adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b) of the Code (or any
successor provision thereto); and provided further that the number of Shares
subject to any Award payable or denominated in Shares shall always be a whole
number. Notwithstanding the foregoing, Non-Qualified Stock Options subject to
grant or previously granted to Non-Employee Directors under Section 6(b) of the
Plan at the time of any event described in the preceding sentence shall be
subject to only such adjustments as shall be necessary to maintain the relative
proportionate interest represented thereby immediately prior to any such event
and to preserve, without exceeding, the value of such Options.
Section 5. Eligibility
Any Key Employee, including any executive officer or
employee-director of the Company or of any Affiliate, shall be eligible to be
designated a Participating Key Employee. All Non-Employee Directors shall
receive Awards of Non-Qualified Stock Options as provided in Section 6(b).
Section 6. Awards
(a) Option Awards to Key Employees. The Committee is hereby
authorized to grant Options to Key Employees with the terms and conditions as
set forth below and with such additional terms and conditions, in either case
not inconsistent with the provisions of the Plan, as the Committee shall
determine.
(i) Exercise Price. The exercise price per Share of
an Option granted pursuant to this Section 6(a) shall be
determined by the Committee; provided, however, that such exercise
price shall not be less than 100% of the Fair Market Value of a
Share on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be
fixed by the Committee; provided, however, that in no event shall
the term of any Incentive Stock Option exceed a period of ten
years from the date of its grant.
(iii) Exercisability and Method of Exercise. An
Option shall become exercisable in such manner and within such
period or periods and in such installments or otherwise as shall
be determined by the Committee. The Committee also shall determine
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the method or methods by which, and the form or forms, including,
without limitation, cash, Shares, other securities, other Awards,
or other property, or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant exercise
price, in which payment of the exercise price with respect to any
Option may be made or deemed to have been made.
(iv) Incentive Stock Options. The terms of any
Incentive Stock Option granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code (or any
successor provision thereto) and any regulations promulgated
thereunder. Notwithstanding any provision in the Plan to the
contrary, no Incentive Stock Option may be granted hereunder after
December 6, 2004.
(b) Non-Qualified Stock Option Awards to Non-Employee Directors.
(i) Eligibility. Each Non-Employee Director shall
automatically be granted Non-Qualified Stock Options under the
Plan in the manner set forth in this Section 6(b). A Non-Employee
Director may hold more than one Non-Qualified Stock Option, but
only on the terms and subject to any restrictions set forth
herein.
(ii) Grant of Options to Newly-Elected Non-Employee
Directors. Any Person who is first elected as a Non-Employee
Director after the effective date of the Plan shall, on the date
of such election, automatically be granted a Non-Qualified Stock
Option to purchase 4,500 Shares (which number of Shares shall be
subject to adjustment in the manner provided in Section 4(b)
hereof).
(iii) Annual Option Grants to Non-Employee
Directors. Each Non-Employee Director (if he or she continues to
serve in such capacity) shall, on the day following the annual
meeting of shareholders in each year during the time the Plan is
in effect, automatically be granted a Non-Qualified Stock Option
to purchase 1,500 Shares (which number of Shares shall be subject
to adjustment in the manner provided in Section 4(b) hereof);
provided, however, that a Person who is first elected as a
Non-Employee Director on the date of an annual meeting of
shareholders and who receives on that date a Non-Qualified Stock
Option pursuant to Section 6(b)(ii) hereof shall not be eligible
to begin to receive grants pursuant to this Section 6(b)(iii)
until the day following the next succeeding annual meeting of
shareholders.
(iv) Grant Limitation. Notwithstanding the
provisions of Sections 6(b)(ii) and 6(b)(iii) hereof,
Non-Qualified Stock Options shall be automatically granted to
Non-Employee Directors under the Plan only for so long as the Plan
remains in effect and a sufficient number of Shares are available
hereunder for the granting of such Options.
(v) Exercise Price. The exercise price per Share for
a Non-Qualified Stock Option granted to a Non-Employee Director
under the Plan shall be equal to 100% of the "market value" of a
Share on the date of grant of such Option. The "market value" of a
Share on the date of grant to the Non-Employee Director shall be
the closing price per Share for the Shares on the New York Stock
Exchange on the trading date next preceding the date of grant, or
if no trading occurred on the trading date next preceding the date
on
A-7
which the Non-Qualified Stock Option is granted, then the "market
value" per Share shall be determined with reference to the next
preceding date on which the Shares were traded.
(vi) Exercisability and Termination of Options.
Non-Qualified Stock Options granted to Non-Employee Directors
under the Plan shall become exercisable six months following the
date of grant; provided, however, that if a Non-Employee Director
ceases to be a director of the Company by reason of death,
disability or retirement within six months after the date of
grant, the Option shall become immediately exercisable in full.
Non-Qualified Stock Options granted to Non-Employee Directors
shall terminate on the earlier of:
(A) ten years after the date of grant;
or
(B) twelve months after the
Non-Employee Director ceases to be a director of the
Company for any reason, including as a result of the
Non-Employee Director's death, disability or
retirement.
(vii) Exercise of Options. A Non-Qualified Stock
Option granted to a Non-Employee Director may be exercised,
subject to its terms and conditions and the terms and conditions
of the Plan, in full at any time or in part from time to time by
delivery to the Secretary of the Company at the Company's
principal office in Menasha, Wisconsin, of a written notice of
exercise specifying the number of shares with respect to which the
Option is being exercised. Any notice of exercise shall be
accompanied by full payment of the exercise price of the Shares
being purchased (x) in cash or its equivalent; (y) by tendering
previously acquired Shares (valued at their "market value" [as
determined in accordance with Section 6(b)(v)] as of the date of
exercise); or (z) by any combination of the means of payment set
forth in subparagraphs (x) and (y). For purposes of subparagraphs
(y) and (z) above, the term "previously acquired Shares" shall
only include Shares owned by the Non-Employee Director prior to
the exercise of the Option for which payment is being made and
shall not include Shares which are being acquired pursuant to the
exercise of said Option. No shares will be issued until full
payment therefor has been made.
(c) Stock Appreciation Rights. The Committee is hereby authorized
to grant Stock Appreciation Rights to Key Employees. Non-Employee Directors are
not eligible to be granted Stock Appreciation Rights under the Plan. Subject to
the terms of the Plan and any applicable Award Agreement, a Stock Appreciation
Right granted under the Plan shall confer on the holder thereof a right to
receive, upon exercise thereof, the excess of (i) the Fair Market Value of one
Share on the date of exercise over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee, which shall not be less than
100% of the Fair Market Value of one Share on the date of grant of the Stock
Appreciation Right. Subject to the terms of the Plan, the grant price, term,
methods of exercise, methods of settlement (including whether the Participating
Key Employee will be paid in cash, Shares, other securities, other Awards, or
other property, or any combination thereof), and any other terms and conditions
of any Stock Appreciation Right shall be as determined by the Committee. The
Committee may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it may deem appropriate.
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(d) Restricted Stock Awards.
(i) Issuance. The Committee is hereby authorized to
grant Awards of Restricted Stock to Key Employees; provided,
however, that the aggregate number of Shares of Restricted Stock
granted under the Plan to all Participating Key Employees as a
group shall not exceed 225,000 (such number of Shares subject to
adjustment in accordance with the terms of Section 4(b) hereof).
Non-Employee Directors are not eligible to be granted Restricted
Stock under the Plan.
(ii) Restrictions. Shares of Restricted Stock
granted to Participating Key Employees shall be subject to such
restrictions as the Committee may impose (including, without
limitation, any limitation on the right to vote a Share of
Restricted Stock or the right to receive any dividend or other
right or property), which restrictions may lapse separately or in
combination at such time or times, in such installments or
otherwise, as the Committee may deem appropriate.
(iii) Registration. Any Restricted Stock granted
under the Plan to a Participating Key Employee may be evidenced in
such manner as the Committee may deem appropriate, including,
without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is
issued in respect of Shares of Restricted Stock granted under the
Plan to a Participating Key Employee, such certificate shall be
registered in the name of the Participating Key Employee and shall
bear an appropriate legend (as determined by the Committee)
referring to the terms, conditions, and restrictions applicable to
such Restricted Stock.
(iv) Payment of Restricted Stock. At the end of the
applicable restriction period relating to Restricted Stock granted
to a Participating Key Employee, one or more stock certificates
for the appropriate number of Shares, free of restrictions imposed
under the Plan, shall be delivered to the Participating Key
Employee, or, if the Participating Key Employee received stock
certificates representing the Restricted Stock at the time of
grant, the legends placed on such certificates shall be removed.
(v) Forfeiture. Except as otherwise determined by
the Committee, upon termination of employment of a Participating
Key Employee (as determined under criteria established by the
Committee) for any reason during the applicable restriction
period, all Shares of Restricted Stock still subject to
restriction shall be forfeited by the Participating Key Employee;
provided, however, that the Committee may, when it finds that a
waiver would be in the best interests of the Company, waive in
whole or in part any or all remaining restrictions with respect to
Shares of Restricted Stock held by a Participating Key Employee.
(e) Performance Shares.
(i) Issuance. The Committee is hereby authorized to
grant Awards of Performance Shares to Participating Key Employees.
Non-Employee Directors are not eligible to be granted Performance
Shares under the Plan.
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(ii) Performance Goals and Other Terms. The
Committee shall determine the Performance Period, the Performance
Goal or Goals (and the performance level or levels related
thereto) to be achieved during any Performance Period, the
proportion of payments, if any, to be made for performance between
the minimum and full performance levels for any Performance Goal
and, if applicable, the relative percentage weighting given to
each of the selected Performance Goals, the restrictions
applicable to Shares of Restricted Stock received upon payment of
Performance Shares if Performance Shares are paid in such manner,
and any other terms, conditions and rights relating to a grant of
Performance Shares. The Committee shall have sole discretion to
alter the selected Performance Goals set forth in Section 2(p),
subject to shareholder approval, to the extent required to qualify
the Award for the performance-based exemption provided by Section
162(m) of the Code (or any successor provision thereto).
Notwithstanding the foregoing, in the event the Committee
determines it is advisable to grant Performance Shares which do
not qualify for the performance-based exemption under Section
162(m) of the Code (or any successor provision thereto), the
Committee may make such grants without satisfying the requirements
thereof.
(iii) Rights and Benefits During the Performance
Period. The Committee may provide that, during a Performance
Period, a Participating Key Employee shall be paid cash amounts,
with respect to each Performance Share held by such Participating
Key Employee, in the same manner, at the same time, and in the
same amount paid, as a cash dividend on a Share. Participating Key
Employees shall have no voting rights with respect to Performance
Shares held by them.
(iv) Payment of Performance Shares. As soon as is
reasonably practicable following the end of the applicable
Performance Period, and subject to the Committee certifying in
writing as to the satisfaction of the requisite Performance Goal
or Goals if such certification is required in order to qualify the
Award for the performance-based exemption provided by Section
162(m) of the Code (or any successor provision thereto), one or
more certificates representing the number of Shares equal to the
number of Performance Shares payable shall be registered in the
name of and delivered to the Participating Key Employee; provided,
however, that any Shares of Restricted Stock payable in connection
with Performance Shares shall, pending the expiration, lapse, or
waiver of the applicable restrictions, be evidenced in the manner
as set forth in Section 6(d)(iii) hereof.
(f) General.
(i) No Consideration for Awards. Awards shall be
granted to Participating Key Employees for no cash consideration
unless otherwise determined by the Committee. Awards of
Non-Qualified Stock Options granted to Non-Employee Directors
under Section 6(b) of the Plan shall be granted for no cash
consideration unless otherwise required by law.
(ii) Award Agreements. Each Award granted under the
Plan shall be evidenced by an Award Agreement in such form
(consistent with the terms of the Plan) as shall have been
approved by the Committee.
A-10
(iii) Awards May Be Granted Separately or Together.
Awards to Participating Key Employees under the Plan may be
granted either alone or in addition to, in tandem with, or in
substitution for any other Award or any award granted under any
other plan of the Company or any Affiliate. Awards granted in
addition to or in tandem with other Awards, or in addition to or
in tandem with awards granted under any other plan of the Company
or any Affiliate, may be granted either at the same time as or at
a different time from the grant of such other Awards or awards.
(iv) Forms of Payment Under Awards. Subject to the
terms of the Plan and of any applicable Award Agreement, payments
or transfers to be made by the Company or an Affiliate upon the
grant, exercise, or payment of an Award to a Participating Key
Employee may be made in such form or forms as the Committee shall
determine, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the
payment or crediting of interest on installment or deferred
payments.
(v) Limits on Transfer of Awards. No Award (other
than Released Securities), and no right under any such Award,
shall be assignable, alienable, saleable, or transferable by a
Participating Key Employee or a Non-Employee Director otherwise
than by will or by the laws of descent and distribution (or, in
the case of an Award of Restricted Securities, to the Company);
provided, however, that a Participating Key Employee at the
discretion of the Committee may, and a Non-Employee Director
shall, be entitled, in the manner established by the Committee, to
designate a beneficiary or beneficiaries to exercise his or her
rights, and to receive any property distributable, with respect to
any Award upon the death of the Participating Key Employee or the
Non-Employee Director, as the case may be. Each Award, and each
right under any Award, shall be exercisable, during the lifetime
of the Participating Key Employee or the Non-Employee Director,
only by such individual or, if permissible under applicable law,
by such individual's guardian or legal representative. No Award
(other than Released Securities), and no right under any such
Award, may be pledged, alienated, attached, or otherwise
encumbered, and any purported pledge, alienation, attachment, or
encumbrance thereof shall be void and unenforceable against the
Company or any Affiliate.
(vi) Term of Awards. Except as otherwise provided in
the Plan, the term of each Award shall be for such period as may
be determined by the Committee.
(vii) Share Certificates; Representation. In
addition to the restrictions imposed pursuant to Section 6(d) and
Section 6(e) hereof, all certificates for Shares delivered under
the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the Commission, any stock
exchange or other market upon which such Shares are then listed or
traded, and any applicable federal or state securities laws, and
the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
The Committee may require each Participating Key Employee,
Non-Employee Director or other Person who acquires Shares under
the Plan by means of an Award originally made to a
A-11
Participating Key Employee or a Non-Employee Director to represent
to the Company in writing that such Participating Key Employee,
Non-Employee Director or other Person is acquiring the Shares
without a view to the distribution thereof.
Section 7. Amendment and Termination of the Plan; Correction of Defects and
Omissions
(a) Amendments to and Termination of the Plan. The Board of
Directors of the Company may at any time amend, alter, suspend, discontinue, or
terminate the Plan; provided, however, that the provisions of Section 6(b) of
the Plan shall not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules promulgated thereunder; and provided further that
shareholder approval of any amendment of the Plan shall also be obtained if
otherwise required by: (i) the Code or any rules promulgated thereunder (in
order to allow for Incentive Stock Options to be granted under the Plan), or
(ii) the listing requirements of the New York Stock Exchange or any principal
securities exchange or market on which the Shares are then traded (in order to
maintain the listing of the Shares thereon). Termination of the Plan shall not
affect the rights of Participating Key Employees or Non-Employee Directors with
respect to Awards previously granted to them, and all unexpired Awards shall
continue in force and effect after termination of the Plan except as they may
lapse or be terminated by their own terms and conditions.
(b) Correction of Defects, Omissions and Inconsistencies. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in any Award or Award Agreement in the manner and to the extent it
shall deem desirable to carry the Plan into effect.
Section 8. General Provisions
(a) No Rights to Awards. No Key Employee, Participating Key
Employee or other Person (other than a Non-Employee Director to the extent
provided in Section 6(b) of the Plan) shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment of
Key Employees, Participating Key Employees, or holders or beneficiaries of
Awards under the Plan. The terms and conditions of Awards need not be the same
with respect to each Participating Key Employee.
(b) Withholding. No later than the date as of which an amount
first becomes includible in the gross income of a Participating Key Employee for
federal income tax purposes with respect to any Award under the Plan, the
Participating Key Employee shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to such
amount. Unless otherwise determined by the Committee, withholding obligations
arising with respect to Awards to Participating Key Employees under the Plan may
be settled with Shares (other than Restricted Securities), including Shares that
are part of, or are received upon exercise of, the Award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and any Affiliate
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the Participating Key Employee. The Committee
may establish such procedures as it deems appropriate for the settling of
withholding obligations with Shares, including, without
A-12
limitation, the establishment of such procedures as may be necessary to satisfy
the requirements of Rule 16b-3.
(c) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(d) Rights and Status of Recipients of Awards. The grant of an
Award shall not be construed as giving a Participating Key Employee the right to
be retained in the employ of the Company or any Affiliate. Further, the Company
or any Affiliate may at any time dismiss a Participating Key Employee from
employment, free from any liability, or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement. The grant of
an Award to a Non-Employee Director pursuant to Section 6(b) of the Plan shall
confer no right on such Non-Employee Director to continue as a director of the
Company. Except for rights accorded under the Plan and under any applicable
Award Agreement, Participating Key Employees and Non-Employee Directors shall
have no rights as holders of Shares as a result of the granting of Awards
hereunder.
(e) Unfunded Status of the Plan. Unless otherwise determined by
the Committee, the Plan shall be unfunded and shall not create (or be construed
to create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Participating Key Employee,
any Non-Employee Director or other Person. To the extent any Person holds any
right by virtue of a grant under the Plan, such right (unless otherwise
determined by the Committee) shall be no greater than the right of an unsecured
general creditor of the Company.
(f) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Wisconsin and applicable federal law.
(g) Severability. If any provision of the Plan or any Award
Agreement or any Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction, or as to any Person or Award, or would
disqualify the Plan, any Award Agreement or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan, any Award Agreement or the Award, such provision shall be stricken
as to such jurisdiction, Person, or Award, and the remainder of the Plan, any
such Award Agreement and any such Award shall remain in full force and effect.
(h) No Fractional Shares. No fractional Shares or other securities
shall be issued or delivered pursuant to the Plan, any Award Agreement or any
Award, and the Committee shall determine (except as otherwise provided in the
Plan) whether cash, other securities, or other property shall be paid or
transferred in lieu of any fractional Shares or other securities, or whether
such fractional Shares or other securities or any rights thereto shall be
canceled, terminated, or otherwise eliminated.
A-13
(i) Headings. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 9. Effective Date of the Plan
The Plan originally became effective on April 26, 1995.
A-14
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BANTA CORPORATION
Proxy for Annual Meeting of Shareholders to be held April 27, 1999
The undersigned constitutes and appoints DONALD D. BELCHER AND RONALD
D. KNEEZEL, or either of them, the true and lawful proxies of the undersigned,
with full power of substitution, to vote as designated below, all shares of
Banta Corporation which the undersigned is entitled to vote at the annual
meeting of shareholders of such corporation to be held at the Paper Valley Hotel
& Conference Center, 333 West College Avenue, Appleton, Wisconsin on April 27,
1999, at 2:00 P.M., Central Time, and at all adjournments or postponements
thereof.
1. Election of Directors [ ] FOR all nominees listed below
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
to vote for all nominees listed below
Jameson A. Baxter, Donald D. Belcher, John F. Bergstrom, George T. Brophy,
Henry T. DeNero, Richard L. Gunderson, Gerald A. Henseler,
Bernard S. Kubale, Raymond C. Richelsen and Michael J. Winkler
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
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2. Approval of the Banta Corporation 1995 Equity Incentive Plan, as amended
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion upon all such other business as may properly come before
the meeting.
THE UNDERSIGNED HEREBY REVOKES ANY OTHER PROXY HERETOFORE EXECUTED BY THE
UNDERSIGNED FOR THE MEETING AND ACKNOWLEDGES RECEIPT OF NOTICE OF THE ANNUAL
MEETING AND THE PROXY STATEMENT.
(Please sign on the other side)
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PROXY NO. (Continued from other side) NO. OF SHARES
The shares represented by this proxy when properly executed will be voted
in the manner directed herein by the undersigned shareholder; but, if no
direction is indicated, this proxy will be voted FOR Items 1 and 2.
DATE:________________________________ , 1999
Signature __________________________________
Signature if held jointly __________________
Please sign exactly as your name appears on
your stock certificate. Joint owners should
each sign personally. A corporation should
sign full corporate name by duly authorized
officers and affix corporate seal. When
signing as attorney, executor,
administrator, trustee or guardian, give
full title as such.
PLEASE SIGN AND MAIL PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE REQUIRED.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BANTA CORPORATION.
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