BALL CORPORATION 1986 DEFERRED COMPENSATION PLAN
(as Amended July 1, 1994)
BALL CORPORATION 1986 DEFERRED COMPENSATION PLAN
1. Statement of Purpose
The purpose of the 1986 Deferred Compensation Plan (the "Plan") is to aid
Ball Corporation (the "Company") and its subsidiaries in attracting and
retaining key employees by providing a non-qualified deferred compensation
vehicle.
2. Definitions
2.1 Beneficiary - "Beneficiary" means the person or persons designated as
such in accordance with Section 8.
2.2. Class Year - "Class Year" means the year in respect of which compensa-
tion is deferred under the Plan.
2.3. Compensation - "Compensation" means the Participant's incentive
compensation for the Class Year.
2.4. Deferral Amount - "Deferral Amount" means the amount of Elective
Deferred Compensation deferred by the Participant for each Class Year.
2.5. Deferred Compensation Account - "Deferred Compensation Account" means
the account for each Class Year maintained by the Company for each
Participant pursuant to Section 6.
2.6. Disability - "Disability" means a bodily injury or disease, as
determined by the Human Resources Committee, that totally and
continuously prevents the Participant, for at least six (6)
consecutive months, from engaging in an "occupation" for pay or
profit. During the first twenty-four (24) months of total disability,
"occupation" means the Participant's regular occupation. After that
period, "occupation" means any occupation for which the Participant is
reasonably fitted based on the Participant's education, training, or
experience.
2.7. Distribution Date - "Distribution Date" means the date on which the
Employer makes distributions from the Participant's Deferred
Compensation Account.
2.8. Effective Date - "Effective Date" means July 1, 1986, the date on
which the Plan commences.
2.9. Election Form - "Election Form" means the form or forms attached to
this Plan and filed with the Human Resources Committee by the
Participant in order to participate in the Plan. The terms and
conditions specified in the Election Form(s) are incorporated by
reference herein and form a part of the Plan.
2.10. Elective Deferred Compensation - "Elective Deferred Compensation"
means the amount elected to be deferred by an Eligible Employee in his
Election Form.
2.11. Eligible Employee - "Eligible Employee" means those employees of the
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Company who have been selected by the Human Resources Committee.
2.12. Employer - "Employer" means Ball Corporation and any of its fifty
percent (50%) or more owned subsidiaries.
2.13. Human Resources Committee - "Human Resources Committee" (also referred
to as the "Committee") means the committee appointed by the Board of
Directors who will administer the Plan.
2.14. Moody's - "Moody's" means the annual average composite yield on
Moody's Seasoned Corporate Bond Yield Index for the twelve (12) months
ending October 31 immediately preceding the Valuation Date, as
determined from Moody's Bond Record published by Moody's Investors
Service, Inc. (or any successors thereto), or, if such yield is no
longer published, a substantially similar average selected by the
Company.
2.15. Participant - "Participant" means an Eligible Employee participating
in the Plan in accordance with the provisions of Section 4.
2.16. Substantially Equal Installments - "Substantially Equal Installments"
means a series of annual payments, such that equal payments over the
remaining payment period would exactly amortize the Deferred
Compensation Account balance as of the Distribution Date if the
credited interest rate remained constant at the level credited as of
the Valuation Date immediately preceding the Distribution Date for the
remainder of the payment period.
2.17. Termination of Employment - "Termination of Employment" means the
termination of a Participant's employment with Employer for any reason
other than Disability.
2.18. Valuation Date - "Valuation Date" means the date on which the value of
a Participant's Deferred Compensation Account for each Class Year is
determined as provided in Section 6 hereof. Unless and until changed
by the Committee, the Valuation Date shall be the last day of each
calendar year.
3. Administration of the Plan
The Human Resources Committee, by appointment of the Board of Directors of
the Company, shall be the sole administrator of the Plan. The Committee
shall have full power to formulate additional details and regulations for
carrying out this Plan. The Committee shall also be empowered to make any
and all of the determinations not herein specifically authorized which may
be necessary or desirable for the effective administration of the Plan.
Any decision or interpretation of any provision of this Plan adopted by the
Committee shall be final and conclusive.
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4. Participation
Participation in the Plan shall be limited to Eligible Employees who elect
to participate in the Plan by filing an Election Form prior to the
beginning of the Class Year in which the Participant's Compensation is
earned. Notwithstanding the foregoing, (a) an election to defer Class Year
1986 Compensation must be made prior to September 1, 1986; and (b) an
employee who first becomes an Eligible Employee during any Class Year may
elect to participate in the Plan for such Class Year by filing an Election
Form within thirty (30) days after becoming an Eligible Employee.
An Eligible Employee, who has also elected to defer incentive compensation
attributable to 1985 or prior years under the Company's Incentive
Compensation Plan, may elect to transfer, effective July 1, 1986, to this
Plan with respect to each Class Year the dollar value of his deferred
compensation account, including interest thereon through June 30, 1986.
Such amounts, including such interest, shall be deemed to be Deferral
Amounts under this Plan. Such election shall be made by delivering to the
Company a properly executed Election Form for each Class Year prior to the
Plan's Effective Date.
The minimum annual deferral shall be $1,000, and the maximum deferral shall
be one hundred percent (100%) of the Participant's Compensation.
5. Vesting of Deferred Compensation Account
A Participant's interest in his Deferred Compensation Account and interest
credited thereto shall vest immediately.
6. Accounts and Valuations
6.1. Deferred Compensation Accounts. The Committee shall establish and
maintain a separate Deferred Compensation Account for each Participant
for each Class Year. Elective Deferred Compensation shall be deemed
credited to the Deferred Compensation Account as of the close of busi-
ness on December 31 of the Class Year, and no interest shall be earned
for that calendar year.
6.2. Interest Credited. Each Deferred Compensation Account of each
Participant shall be credited with interest on each Valuation Date, as
provided hereinafter, at an annual rate equal to Moody's plus five (5)
percentage points, except as may otherwise be provided under
Section 7.7.
6.3. Timing of Crediting of Interest. Each Deferred Compensation Account
of each Participant shall be revalued as of each Valuation Date. As
of each Valuation Date, the value of each Deferred Compensation
Account shall consist of the balance of such Deferred Compensation
Account as of the immediately preceding Valuation Date (July 1, 1986,
shall be considered an "immediately preceding Valuation Date" for
Deferred Compensation Accounts transferred into the Plan on that
date), minus the amount of all distributions (except Disability
Benefits payable under Section 7.3.), if any, made from such Deferred
Compensation Account since the preceding Valuation Date, plus interest
credited on the net balance after deducting said distributions.
Normal benefit distributions (under Section 7.1) made on or before
February 15 of the year of payment will be considered to have been
made from the account and deducted from the account balance as of
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January 1 of such year for the purpose of crediting interest under
this Section 6.3. Interest on Hardship Benefits distributed will be
prorated to the date of distribution for the purpose of crediting
interest under this Section 6.3.
7. Benefits
7.1. Normal Benefit
a. A Participant's Deferred Compensation Account shall be paid to the
Participant as requested in his Election Form, subject to the
terms and conditions set forth in the Plan, including the Election
Form. If a Participant elects to receive payment of his Deferred
Compensation Account in installments, payments shall be made in
Substantially Equal Installments. Unless the Committee determines
otherwise, and subject to the provisions of Section 7.6. as to
when payments shall commence, distribution payments, whether lump
sum or installment, shall be made on or before the fifteenth
(15th) day of February of each year. A Participant may elect
different payment schedules for different Deferred Compensation
Accounts.
b. If a Participant dies before receiving his total Deferred
Compensation Account balance, whether or not distributions have
earlier commenced, his Beneficiary shall be entitled to the
remaining account balance in accordance with the payment elections
in the Election Form, except that such payments, if not already
commenced, shall commence on or before February 15 next following
the date of the Participant's death.
7.2. Contingent Death Benefit. If a Participant dies prior to the
commencement of distributions for a Class Year (other than
distribution of Disability Benefits payable under Section 7.3.), the
Company shall pay to the Beneficiary, in a lump sum, as soon as
practicable after death, an amount equal to the amount by which (a)
five (5) times the Deferral Amount for that Class Year exceeds (b) the
value of the Participant's Deferred Compensation Account for that
Class Year. Such excess amount under the above formula shall not be
available for any Deferred Compensation Account from which the
Participant has been paid any amount of Hardship Benefit pursuant to
Section 7.4., below.
In all cases the value of the Participant's Deferred Compensation
Account for each Class Year will be payable in accordance with the
provisions of Section 7.1.b., above.
7.3 Disability Benefit. In the event of Disability prior to Termination
of Employment and prior to the commencement of distributions for a
Class Year (other than distribution of a Hardship Benefit under
Section 7.4.), a disabled Participant shall receive, as an additional
benefit, a monthly benefit equal to two percent (2%) of the
Participant's Deferral Amount for that Class Year. Such benefit shall
be payable until the earliest of the following events: (a) the
Participant attains age sixty-five (65); (b) the Participant's
Disability ceases and he resumes employment with the Company; (c) the
Participant dies; or (d) the Termination of Employment of the
Participant. During the period a Disability Benefit remains payable,
the Participant's Deferred Compensation Account shall continue to earn
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interest as provided in Section 6. The Participant's Deferred
Compensation Account will not be reduced by the payment of any
Disability Benefits.
7.4. Hardship Benefit. In the event that the Committee, upon written
request of a Participant or Beneficiary of a deceased Participant,
determines in its sole discretion, that such person has suffered an
unforeseeable financial emergency, the Company shall pay to such
person, from the Deferred Compensation Account designated by the
Participant or Beneficiary, as soon as practicable following such
determination, an amount necessary to meet the emergency, not in
excess of the amount of the Deferred Compensation Account. The
Deferred Compensation Account of the Participant shall thereafter be
reduced to reflect the payment as of the date paid of a Hardship
Benefit, and the Contingent Death Benefit under Section 7.2., above,
shall no longer be available for the Participant's Deferred
Compensation Account of that Class Year.
7.5. Request to Committee for Delay in Payment. A Participant shall have
no right to modify in any way the schedule for the distribution of
amounts from his Deferred Compensation Account which he has specified
in his Election Form. However, upon a written request submitted by
the Participant to the Committee, the Committee may, in its sole
discretion, for each Class Year postpone one time the date on which
payment shall commence, not beyond the year in which he will attain
age seventy-one (71); and at the same time increase the number of
installments to a number not to exceed fifteen (15). Any such
request(s) must be made prior to the earlier of (a) the beginning of
the year which the Participant has elected for distributions to
commence, or (b) the Termination of Employment.
7.6. Date of Payments. Except as otherwise provided in this Plan, payments
under this Plan shall begin on or before the fifteenth (15th) day of
February of the calendar year following receipt of notice by the
Committee of an event which entitles a Participant (or Beneficiary) to
payments under the Plan, or at such earlier date after receipt of such
notice as may be determined by the Committee.
7.7. Termination of Employment Before Age 55. In the event a Participant
has a termination of Employment prior to his attaining age fifty-five
(55) (other than by death, for which benefits and/or accounts will be
paid in accordance with Section 7.1.b. and/or 7.2., above), then,
whether or not distributions have earlier commenced, the Participant's
Deferred Compensation Account will be paid to him in a lump sum on or
before the fifteenth (15th) day of February in the year following the
year in which the Termination of Employment occurred, unless otherwise
determined by the Committee. Upon written request of the Participant
made within thirty (30) days following Termination of Employment, the
Committee may, in its sole discretion, determine that, in lieu of a
lump sum, payments shall be made to the Participant in not more than
five (5) Substantially Equal Installments, commencing on or before
such next fifteenth (15th) day of February following the date of
Termination of Employment. The interest credited to the Participant's
Deferred Compensation Account on the Valuation Date next following the
Termination of Employment shall be as provided in Section 6., above.
If payments are to be made in installments, the interest rate credited
to the Participant's Deferred Compensation Account on all Valuation
Dates subsequent to the Valuation Date next following Termination of
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Employment (and to be considered as the interest rate on such
Valuation Date next following Termination of Employment for the sole
purpose of calculating Substantially Equal Installments under Section
2.16., above) shall be limited to the daily average of the best
interest rate available to the Company during the then calendar year
for short-term borrowings.
7.8. Taxes; Withholding. To the extent required by law, the Company shall
withhold from payments made hereunder any amount required to be
withheld by the federal or any state or local government.
7.9. Liquidating Distribution. Notwithstanding any provisions of the Plan
or the Participant's Election Form to the contrary, the Company shall,
as soon as practicable (but not later than 30 days) following the
receipt of a written request from a Participant (or Beneficiary) for a
Liquidation Distribution, pay to the Participant (or Beneficiary) the
Participant's (or Beneficiary's) Liquidating Distribution Account
Balance in a lump sum. "Liquidating Distribution" shall mean a
distribution requested by the Participant (or Beneficiary following
the death of the Participant) in writing directed to the Committee and
specifically referencing this section. If the Participant requesting
the Liquidating Distribution is, at the time of the request, an active
employee of the Employer, "Liquidating Distribution Account Balance"
shall mean all of the Deferred Compensation Accounts under the Plan in
which the Participant has an undistributed balance, increased by
interest credited on the account(s) to the date of distribution from
the preceding Valuation Date (based upon the interest rate credited on
the preceding Valuation Date), and decreased by a forfeiture penalty
equal to six percent (6%) of the value of the Participant's Deferred
Compensation Account(s) as of the preceding Valuation Date. If the
Participant requesting the Liquidating Distribution is, at the time of
the request, no longer an active employee of the Employer, or in the
case of a request made by a Participant's Beneficiary, "Liquidating
Distribution Account Balance" shall mean all of the Deferred
Compensation Accounts under the Plan in which the Participant (or
Beneficiary) has an undistributed balance and all of the Deferred
Compensation Accounts under any Comparable Plans maintained by the
Employer in which the Participant (or Beneficiary) has an
undistributed balance, increased by interest credited on the
account(s) to the date of distribution from the preceding Valuation
Date, and decreased by a forfeiture penalty equal to six percent (6%)
of the value of the Participant's (or Beneficiary's) Deferred
Compensation Account(s) as of the preceding Valuation Date.
"Comparable Plans" shall mean the Ball Corporation 1988 Deferred
Compensation Plan, the Ball Corporation 1989 Deferred Compensation
Plan, the Ball-InCon Glass Packaging Corp. Deferred Compensation Plan,
and any comparable successor plans so designated by the Committee.
Notwithstanding any provisions of the Plan or the Participant's
Election Form to the contrary, if the Participant requesting the
Liquidating Distribution is, at the time of the request, an active
employee of the Employer, then the Participant shall, for a period of
one (1) Class Year beginning with the Class Year during which the
request for the Liquidating Distribution is made, be ineligible to
participate in the Plan or any Comparable Plans with respect to any
Compensation not yet deferred.
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8. Beneficiary Designation
A Participant shall have the right at any time, and from time to time, to
designate and/or change or cancel any person, persons, or entity as his
Beneficiary or Beneficiaries (both principal and contingent) to whom
payment under this Plan shall be paid in the event of his death prior to
complete distribution to Participant of the benefits due him under the
Plan. Each beneficiary change or cancellation shall become effective only
when filed in writing with the Committee during the Participant's lifetime
on a form provided by the Committee.
The filing of a new Beneficiary designation form will cancel all
Beneficiary designations previously filed. Any finalized divorce of a
Participant subsequent to the date of filing of a Beneficiary designation
form shall revoke such designation. The spouse of a married Participant
domiciled in a community property jurisdiction shall be required to join in
any designation of Beneficiary or Beneficiaries other than the spouse in
order for the Beneficiary designation to be effective.
If a Participant fails to designate a Beneficiary as provided above, or, if
his beneficiary designation is revoked by divorce, or otherwise, without
execution of a new designation, or if all designated Beneficiaries
predecease the Participant, then the distribution of such benefits shall be
made in a lump sum to the Participant's estate.
If any installment distribution has commenced to a Beneficiary and the
Beneficiary dies before receiving all installments, any remaining
installments shall be paid in a lump sum to the estate of the Beneficiary.
9. Amendment and Termination of Plan
9.1. Amendment. The Board of Directors may at any time amend the Plan in
whole or in part, provided, however, that no amendment shall be effec-
tive to reduce the value of any Participant's Deferred Compensation
Account or to affect the Participant's vested right therein, and,
except as provided in 9.2. or 9.3., no amendment shall be effective to
decrease the future benefits under the Plan payable to any Participant
or Beneficiary with respect to any Elective Deferred Compensation
which was deferred prior to the date of the amendment. Written notice
of any amendments shall be given promptly to each Participant.
9.2. Termination of Plan
a. Employer's Right to Terminate. The Board of Directors may at any
time terminate the Plan as to prospective contributions and
credits of interest, if it determines in good faith that the
economic acceptability of the Plan has been substantially impaired
and that the resulting cost to the Company is substantially and
unacceptably greater than the cost anticipated at the Effective
Date. No such termination of the Plan shall reduce the balance in
a Participant's Deferred Compensation Account or affect the
Participant's vested right therein.
b. Payments Upon Termination of Plan. Upon any termination of the
Plan under this Section 9.2., Compensation for additional Class
Years shall not be deferred under the Plan. With respect to then-
existing Deferred Compensation Accounts, the Employer will,
depending upon the Participant's election at that time: (i) pay
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to the Participant, in a lump sum, the value of each of his
Deferred Compensation Accounts; (ii) continue to defer the
Compensation under the Plan, but with the interest rate credited
on all future Valuation Dates to be equal to the daily average of
the best interest rate available to the Company during the then
calendar year for short-term borrowings and without the Contingent
Death Benefit under Section 7.2 and without the Disability Benefit
under Section 7.3; or (iii) make such other arrangement as the
Committee determines appropriate.
9.3. Successors and Mergers, Consolidations or Change in Control. The
terms and conditions of this Plan and Election Form shall enure to the
benefit of and bind the Company, the Participants, their successors,
assignees, and personal representatives. If substantially all of the
stock or assets of the Company are acquired by another corporation or
entity or if the Company is merged into, or consolidated with, another
corporation or entity, then the obligations created hereunder shall be
obligations of the acquiror or successor corporation or entity.
10. Miscellaneous
10.1. Unsecured General Creditor. Participants and their beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests, or other claims in any property or assets of the Employer,
nor shall they be beneficiaries of, or have any rights, claims, or
interests in any life insurance policies, annuity contracts, or the
policies therefrom owned or which may be acquired by the Company
("policies"). Such policies or other assets shall not be held under
any trust for the benefit of Participants, their beneficiaries, heirs,
successors, or assigns, or held in any way as collateral security for
the fulfilling of the obligations of the Company under this Plan. Any
and all of such assets and policies shall be and remain general,
unpledged, unrestricted assets of the Employer. The Company's obliga-
tion under the Plan shall be that of an unfunded and unsecured promise
to pay money in the future.
10.2. Obligations to the Employer. If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the
Participant has outstanding any debt, obligation, or other liability
representing an amount owed to the Employer, then the Employer may
offset such amounts owing it or an affiliate against the amount of
benefits otherwise distributable. Such determination shall be made by
the Committee.
10.3. Non-Assignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage, or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are, expressly
declared to be unassignable and nontransferable. No part of the
amounts payable shall, prior to actual payment, be subject to seizure
or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant's or
any other person's bankruptcy or insolvency.
10.4. Employment or Future Eligibility to Participate Not Guaranteed.
Nothing contained in this Plan nor any action taken hereunder shall be
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construed as a contract of employment or as giving any Eligible
Employee any right to be retained in the employ of the Employer.
Designation as an Eligible Employee may be revoked at any time by the
Committee with respect to any Compensation not yet deferred.
10.5. Protective Provisions. In order to be eligible to participate in this
Plan, Participant will cooperate with the Company by furnishing any
and all information requested by the Company in order to facilitate
the payment of benefits hereunder, including taking such physical
examinations as the Company may deem necessary and taking such other
relevant action as may be requested by the Company. If a Participant
refuses to cooperate, the Company shall have no further obligation to
the Participant to allow him to begin participation in the Plan.
10.6. Gender, Singular and Plural. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the
identity of the person or persons may require. As the context may
require, the singular may be read as the plural and the plural as the
singular.
10.7. Captions. The captions to the articles, sections, and paragraphs of
this Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
10.8. Applicable Law. This Plan shall be governed and construed in
accordance with the laws of the State of Indiana.
10.9. Validity. In the event any provision of this Plan is held invalid,
void, or unenforceable, the same shall not effect, in any respect
whatsoever, the validity of any other provision of this Plan.
10.10. Notice. Any notice or filing required or permitted to be given to
the Committee shall be sufficient if in writing and hand delivered, or
sent by registered or certified mail, to the principal office of the
Company, directed to the attention of the Chief Executive Officer of
the Company. Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
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