SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[X] Definitive Proxy Statement
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[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Alltrista Corporation
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(Name of Registrant as Specified In Its Charter
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
ALLTRISTA CORPORATION
5875 Castle Creek Parkway, North Drive, Suite 440
Indianapolis, Indiana 46250-4330
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 1, 2001
----------------
The Annual Meeting of Shareholders of Alltrista Corporation will be held at
Indianapolis Marriott North, 3645 River Crossing Parkway, Indianapolis,
Indiana 46240 on Friday, June 1, 2001, at 9:30 a.m. (EST) for the following
purposes:
1. To elect two directors for three-year terms expiring at the Annual
Meeting of Shareholders to be held in 2004;
2. To ratify the appointment of the firm of Ernst & Young LLP as
independent accountants for 2001; and
3. To transact any other business as may properly come before the meeting.
Only holders of Common Stock of record at the close of business on March
23, 2001, are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
A Proxy Statement appears on the following pages. A copy of the Annual
Report for 2000 is being mailed to you with this Notice of Annual Meeting of
Shareholders and Proxy Statement.
By Order of the Board of Directors
Garnet E. King
Corporate Secretary
April 2, 2001
Indianapolis, Indiana
YOUR VOTE IS IMPORTANT
You are urged to complete, date, sign and return your proxy in the enclosed
envelope.
ALLTRISTA CORPORATION
5875 Castle Creek Parkway, North Drive, Suite 440
Indianapolis, Indiana 46250-4330
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PROXY STATEMENT
April 2, 2001
----------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 1, 2001
----------------
To Shareholders of Alltrista Corporation:
This Proxy Statement and the accompanying proxy card are furnished to
shareholders in connection with the solicitation by the Board of Directors of
the Corporation of proxies to be voted at the Annual Meeting of Shareholders
to be held on June 1, 2001, and any adjournment thereof.
A written report of the results of the vote will be mailed to each
shareholder following the meeting.
A shareholder of the Corporation who has submitted a proxy may revoke it at
any time before it is voted, but only by executing and returning to the
Corporate Secretary at 5875 Castle Creek Parkway, North Drive, Suite 440,
Indianapolis, Indiana 46250-4330, a proxy bearing a later date, by giving
written notice of revocation to the Corporate Secretary, or by attending the
meeting and voting in person. Attendance at the meeting does not, by itself,
revoke a proxy.
A copy of the Annual Report to Shareholders of the Corporation, including
financial statements and a description of its operations for the year 2000,
has been mailed to each shareholder of record as of March 23, 2001, with this
Proxy Statement. The approximate mailing date of this Proxy Statement and the
accompanying proxy card is April 2, 2001.
At the close of business on March 23, 2001, there were outstanding and
entitled to vote 6,354,538 shares of Common Stock. Each share of Common Stock
is entitled to one vote.
2
ELECTION OF DIRECTORS
Under the Corporation's Articles of Incorporation, the Board of Directors
of the Corporation is divided into three classes, as nearly equal in number as
possible. One of the three classes is elected each year to succeed the
directors whose terms are expiring. Directors hold office until the annual
meeting for the year in which their terms expire or for the year next
following their seventieth birthday and until their successors are elected and
qualified unless, prior to that time, they have resigned, retired, or
otherwise left office.
The nominees for whom the enclosed proxy is intended to be voted are set
forth below. All nominees have consented to be named as candidates in the
Proxy Statement and have agreed to serve if elected. It is not contemplated
that any of these nominees will be unavailable for election, but if such a
situation should arise, the Board of Directors may select a substitute
nominee, and in that event such shares as were voted "for" the nominee will be
voted "for" the person substituted. The Board has no reason to believe that
any of the nominees will be unable to serve. In accordance with the Indiana
Business Corporation Law, directors are elected by a majority of the votes
cast "for" or "against" the nominees by the shares entitled to vote in the
election at a meeting at which a quorum is present. Abstentions and broker
non-votes are considered neither a vote "for" nor "against" the nominees.
Set forth below for each director nominee and continuing director are his
or her principal occupation and employment during the past five years and
certain other information.
Director Nominees And Continuing Directors
To be elected for a term of three years until the 2004 Annual Meeting (Class
II)
Director
Name Age Since Business Experience During the Past Five Years
---- --- -------- ------------------------------------------------------------
Richard L. Molen 60 1993 Mr. Molen was Chairman, President and Chief Executive
Officer of Huffy Corporation from September 1994 until his
retirement in December 1997. Mr. Molen served as President
and Chief Executive Officer of Huffy Corporation since April
1993, and has served on its Board of Directors since June
1984. Mr. Molen also serves as a director of Huntington Bank
and Concrete Technology, Inc.
Lynda W. Popwell 56 1997 Ms. Popwell was President, Carolina Eastman Division of
Eastman Chemical Company from January 1998 until her
retirement in January 2000. From August 1995 until December
1997, she was Vice President, Health, Safety, Environment
and Security and Vice President, Quality of Eastman Chemical
Company. Ms. Popwell served as Vice President, Tennessee
Eastman Division from October 1994 until July 1995.
The Board of Directors unanimously recommends a vote FOR
the election of each nominee for Director named above.
3
Terms expiring at the 2002 Annual Meeting (Class III)
Director
Name Age Since Business Experience During the Past Five Years
---- --- -------- ------------------------------------------------------------
Douglas W. Huemme 59 1999 Mr. Huemme was Chairman and Chief Executive Officer of Lilly
Industries, Inc. from 1990 until his retirement in December
2000. He also served as President of Lilly Industries, Inc.
from 1990 until April 1999. Mr. Huemme was elected a
director of Lilly Industries, Inc. in 1990. Mr. Huemme also
serves as a director of Meridian Mutual Insurance Company
and The Somerset Group, Inc.
Patrick W. Rooney 65 1993 Mr. Rooney was Chairman and Chief Executive Officer of
Cooper Tire & Rubber Company from January 1999 until his
retirement in June 2000. He served as Chairman, President,
and Chief Executive Officer of Cooper Tire & Rubber Company
from October 1994 until December 1998. From January 1992
until October 1994, Mr. Rooney served as President and Chief
Operating Officer of Cooper Tire & Rubber Company. Mr.
Rooney was named President and elected a director of Cooper
Tire & Rubber Company in February 1990. Mr. Rooney also
serves as a director of Huffy Corporation.
Robert L. Wood 46 2000 Mr. Wood has been Business Group President for Thermosets
for The Dow Chemical Company since April 2000. He served as
Business Vice President for Polyurethanes of The Dow
Chemical Company since May 1997 until April 2000. He served
as Business Vice President for Engineering Plastics of Dow
Plastics, The Dow Chemical Company from October 1995 until
May 1997. Mr. Wood also serves as a director for CoMerica
Bank's Midland Region.
Terms expiring at the 2003 Annual Meeting (Class I)
Director
Name Age Since Business Experience During the Past Five Years
---- --- -------- ------------------------------------------------------------
Thomas B. Clark 55 1994 Mr. Clark has been President and Chief Executive Officer of
the Corporation since January 1995 and has been elected to
the additional post of Chairman of the Board effective as of
the date of the May 2000 annual meeting. Mr. Clark was
elected a director of the Corporation in May 1994 and served
as President and Chief Operating Officer of the Corporation
from March 1994 until December 1994. From April 1993 until
February 1994, Mr. Clark served as Senior Vice President and
Chief Financial Officer of the Corporation. Mr. Clark also
serves as a director of First Merchants Corporation.
David L. Swift 64 1993 Mr. Swift was Chairman, President and Chief Executive
Officer of Acme-Cleveland Corporation from January 1993
until his retirement in July 1996. Mr. Swift served as
President and Chief Executive Officer of Acme-Cleveland
Corporation since April 1987. Mr. Swift also serves as a
director of LESCO, Inc.; Twin Disc, Incorporated and CUNO
Incorporated.
4
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
So far as is known to the Board of Directors, the following table indicates
the only beneficial owners of more than five percent of the Corporation's
outstanding Common Stock as of March 23, 2001. The information shown below is
derived from the latest reports provided to the Corporation by the entities
named below. Unless otherwise noted, the Corporation believes that the persons
named in this table have sole voting and dispositive power with respect to the
shares listed.
Shares
Beneficially Percent of
Name and Address of Beneficial Owner Owned Class(/6/)
------------------------------------ ------------ ----------
AXA Financial, Inc........................... 756,730(/1/) 11.90%
1290 Avenue of the Americas, 11th Floor
New York, NY 10104
Marlin Partners II, L.P...................... 620,800(/2/) 9.76
555 Theodore Fremd Avenue, Suite B-302
Rye, NY 10580
First Manhattan Co........................... 605,459(/3/) 9.52
437 Madison Avenue
New York, NY 10022-7002
Steel Partners II, L.P....................... 587,300(/4/) 9.24
150 East 52nd Street, 21st Floor
New York, NY 10022
Wachovia Corporation and Wachovia Bank,
National Association........................ 364,700(/5/) 5.73
100 North Main Street
Winston-Salem, NC 27104
- --------
(1) Based solely on a Schedule 13G filed as amended and filed February 12,
2001, with the Securities and Exchange Commission ("SEC") by a group
(collectively referred to hereinafter as the "AXA Group") and their
subsidiaries. The AXA Group includes AXA Financial, Inc.; AXA, the
majority shareholder of AXA Financial, Inc.; and four French mutual
insurance companies which, as a group, control AXA: AXA Assurances I.A.R.D
Mutuelle, AXA Assurances Vie Mutuelle, AXA Conseil Vie Assurances Mutuelle
and AXA Courtage Assurances Mutuelle. The address of AXA is 25, avenue
Matignon, 75008 Paris, France. The address for AXA Assurances I.A.R.D
Mutuelle, AXA Assurances Vie Mutuelle and AXA Conseil Vie Assurances
Mutuelle is 370, rue Saint Honore, 75001 Paris, France. The address for
AXA Courtage Assurances Mutuelle is 26, rue Louis le Grand, 75002 Paris,
France. The AXA Group has sole voting power over 627,875 of these shares
and shared voting power over 7,305 of these shares.
(2) Based solely on a Schedule 13D filed January 29, 2001, with the SEC by
Marlin Partners II, L.P.
(3) Based solely on a Schedule 13G as amended and filed February 7, 2001, with
the SEC by First Manhattan Co. The Schedule 13G further reports that First
Manhattan Co. has sole dispositive power and power to vote 17,550 of these
shares, shared power to vote 581,099 of these shares, and shared
dispositive power of 587,909 of these shares. First Manhattan Co.
disclaims dispositive power as to 1,000 of such shares and beneficial
ownership as to 91,300 of such shares.
(4) Based solely on a Schedule 13D filed January 16, 2001, with the SEC by
Steel Partners II, L.P.
(5) Based solely on a Schedule 13G as amended and filed February 14, 2001,
with the SEC by Wachovia Corporation and Wachovia Bank, National
Association. The Schedule 13G further reports that Wachovia Corporation
and Wachovia Bank, National Association has sole dispositive power and
power to vote 364,550 of these shares, shared dispositive power and power
to vote 150 of these shares.
(6) Percent of Class is based upon the common shares outstanding and entitled
to vote as of March 23, 2001. There were 6,354,538 shares outstanding and
entitled to vote as of March 23, 2001.
5
SECURITY OWNERSHIP BY MANAGEMENT AND DIRECTORS
The following table lists the beneficial ownership of Common Stock of the
Corporation, as of the close of business on March 23, 2001, held by director
nominees, continuing directors, each of the non-director executive officers
named in the Summary Compensation Table, and all directors and executive
officers as a group. Unless otherwise noted, the beneficial owner has sole
voting and investment power.
Shares
Beneficially Percent of
Name of Beneficial Owner Owned(/1/) Class(/3/)
- ------------------------ ------------ ----------
Kevin D. Bower....................................... 15,483 *
Thomas B. Clark...................................... 72,863(/2/) 1.14%
Douglas W. Huemme.................................... 1,675 *
Angela K. Knowlton................................... 4,707 *
Jerry T. McDowell.................................... 51,472 *
Richard L. Molen..................................... 5,400 *
Lynda W. Popwell..................................... 3,425 *
Patrick W. Rooney.................................... 5,500 *
David L. Swift....................................... 6,100 *
J. David Tolbert..................................... 6,301 *
Robert L. Wood....................................... 1,000 *
All of the above and present executive officers as a
group (11 persons).................................. 173,926 2.69%
- --------
* Less than 1%
(1) The shares shown include the following shares that may be purchased
pursuant to stock options that are exercisable within 60 days of March 23,
2001: Mr. Bower, 11,459 shares; Mr. Clark, 33,500 shares; Mr. Huemme,
1,000 shares; Ms. Knowlton, 3,500 shares; Mr. McDowell, 27,752 shares; Mr.
Molen, 5,050 shares; Ms. Popwell, 3,000 shares; Mr. Rooney, 4,700 shares;
Mr. Swift, 5,400 shares; Mr. Tolbert, 4,500 shares; Mr. Wood, 1,000
shares, and all of the above and the present executive officers as a
group, 100,861.
(2) Includes 29,791 shares held in trust for which he disclaims any beneficial
ownership.
(3) Percent of Class is based upon the common shares outstanding and entitled
to vote as of March 23, 2001.
There were 6,354,538 shares outstanding and entitled to vote as of March
23, 2001.
BOARD OF DIRECTORS MEETINGS
The Board of Directors met nine times during 2000. All directors of the
Corporation's Board of Directors attended at least 75 percent of the aggregate
of (1) the total number of meetings of the Board of Directors and (2) the
total number of meetings held by all committees of the Board on which they
served.
CERTAIN COMMITTEES OF THE BOARD
The standing committees of the Board of Directors are the Audit, Executive
Compensation, Corporate Governance and Nominating and Strategy Committees.
Executive Compensation Committee
The Executive Compensation Committee is comprised of four directors:
Messrs. Rooney (Committee Chairman), Molen, Swift and Wood. The duties of the
Executive Compensation Committee are to (a) approve the salaries of all
elected corporate officers and other employees of the Corporation, as the
Board of Directors may determine and direct from time to time; (b) approve the
Corporation's schedule of salary ranges and grades for all salaried employees;
(c) approve the Corporation's schedule for approval signatures to be required
for salary and employee status changes; (d) approve the Corporation's
incentive compensation program, including
6
its design, administration, participation basis and participation rates, as
they apply to all elected corporate officers and other employees of the
Corporation, as the Board of Directors may determine and direct from time to
time; (e) approve major salaried employee benefit plans and changes thereto,
including plan additions, terminations, and discontinuations; (f) direct the
administration of the Corporation's long-term equity incentive plans and
deferred compensation plans in accordance with such plans; (g) designate from
time to time those officers and other key employees of the Corporation and its
subsidiaries to whom equity awards are to be granted, approve the quantity of
such awards granted from time to time to any individual, and determine the
exercise price of any options granted; and (h) perform such other functions
with respect to employee compensation as may be requested by the Board of
Directors. The Executive Compensation Committee met three times during 2000.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee is comprised of five
directors: Messrs. Molen (Committee Chairman), Clark, Huemme and Rooney and
Ms. Popwell. The duties of the Nominating Committee are to review and make
recommendations regarding (a) the organization and structure of the Board; (b)
the candidate for Chairman of the Board; (c) the qualifications for director
candidates; (d) the candidates for election to the Board; and (e) the
effectiveness of the Board and each director in the corporate governance
process. The Nominating Committee met once during 2000. The Nominating
Committee seeks potential nominees for Board membership in a number of ways
and will consider nominees recommended by shareholders. Any such
recommendation should be in writing and addressed to the Corporate Secretary,
Alltrista Corporation, 5875 Castle Creek Parkway, North Drive, Suite 440,
Indianapolis, Indiana 46250.
Strategy Committee
The Strategy Committee is comprised of four directors: Messrs. Swift
(Committee Chairman), Clark, Huemme, and Molen. The duties of the Strategy
Committee are to (a) review the major business strategies of the Corporation
as formulated by management; (b) provide counsel to management regarding
elements of strategy; and (c) to provide a continuing interface between
management and the Board of Directors with respect to corporate level
strategy. The Strategy Committee met once during 2000.
Audit Committee
The Audit Committee is comprised of three directors, Messrs. Swift
(Committee Chairman) and Wood and Ms. Popwell. The duties of the Audit
Committee are to: (a) recommend for nomination by the Board of Directors the
independent certified public accountants who shall conduct the annual audit of
the Corporation; (b) assist the Board of Directors in fulfilling its fiduciary
responsibilities relating to corporate accounting and reporting practices
through review of accounting principles, policies, and changes thereto,
financial statements, and general financial disclosure procedures; (c)
maintain, through periodic meetings, a direct line of communication with the
independent accountants to provide for exchanges of views and information; and
(d) review management's evaluation of the adequacy of the Corporation's
internal control structure and the extent to which major recommendations made
by the independent accountants have been implemented. The number of meetings
held during the fiscal year is set forth in the "Report of the Audit
Committee," included in this annual proxy statement. The Audit Committee is
governed by a written charter approved by the Board of Directors. A copy of
this charter is included in Appendix A.
Report of the Audit Committee
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process including the systems
of internal controls. In fulfilling its oversight responsibilities, the
Committee reviewed the audited financial statements in the Annual Report with
management including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements.
7
The Committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, their judgments as
to the quality, not just the acceptability, of the Company's accounting
principles and such other matters as are required to be discussed with the
Committee under generally accepted auditing standards. In addition, the
Committee has discussed with the independent auditors the auditors'
independence from management and the Company, including the matters in the
written disclosures required by the Independence Standards Board, and
considered the compatibility of non-audit services with the auditors'
independence.
The Committee discussed with the Company's independent auditors the overall
scope and plans for their respective audits. The Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examination, their evaluation of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
Committee held two meetings during fiscal year 2000.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board approved) that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2000 for filing with the Securities and Exchange
Commission. The Committee and the Board have also recommended, subject to
shareholder approval, the selection of the Company's independent auditors for
the fiscal year 2001.
Respectfully submitted. Audit Committee
David L. Swift, Chairman
Lynda W. Popwell
Robert L. Wood
8
EXECUTIVE COMPENSATION
Report Of The Executive Compensation Committee
Introduction
The Corporation's Executive Compensation Committee ("Committee") consists
of four directors, all of whom have considerable experience in executive
compensation issues and management development. No member of the Committee has
ever been an officer or employee of the Corporation, nor is there a direct or
indirect relationship between any of the members of the Committee and any of
the Corporation's executive officers.
The Board of Directors of the Corporation has established certain benefit
plans. These plans currently include the Alltrista Corporation 1999 Economic
Value Added and Growth Incentive Compensation Plan for Key Members of
Management ("EVA/Growth Plan"), the Alltrista Corporation 1993 Deferred
Compensation Plans ("Deferred Compensation Plans"), the Alltrista Corporation
Excess Savings and Retirement Plan ("Excess Savings and Retirement Plan"), the
Alltrista Corporation 1996 Employee Stock Purchase Plan, the Alltrista
Corporation 1997 Deferred Compensation Plan for Directors, and the Alltrista
Corporation 1998 Long-Term Equity Incentive Plan (the "Equity Plan").
The Committee annually determines compensation of the Corporation's senior
management and its executive officers, oversees the administration of
executive programs, and has approved a compensation philosophy for the
Corporation, which is described below.
Executive Compensation Philosophy
The basic elements of the Corporation's compensation philosophy are to
provide competitive annual compensation combined with long-term reward
opportunities and risks by linking management's compensation to the
Corporation's success in creating value for its shareholders. The total
compensation package, which includes base salary, incentive compensation and
long-term incentive opportunities in the form of stock, is designed to allow
the Corporation to attract, motivate, and retain top quality executives.
An executive's total compensation, including the Chief Executive Officer's,
is determined after a subjective review of the executive's objectives and
performance compared to peers within the Corporation. The Corporation also
compares the pay of executives in similar positions of other manufacturing
firms of similar size (based upon sales, business activity and total
employment) as reflected in studies and salary surveys, prepared by
compensation consulting firms, which are among those most widely used. The
comparison is made against a database of many industrial corporations rather
than only companies in the various industries in which the Corporation does
business because the Committee believes industrial corporations generally
represent the Corporation's most direct competitors for executive talent.
The combination of base salary and target incentive compensation is
intended to result in compensation ranges having an upper limit which is
approximately 20% above, and a lower limit which is approximately 20% below,
median levels of comparable industrial companies for equivalent positions. The
target compensation level within the 20% range above and below the median for
each executive, other than the Chief Executive Officer, is established based
on recommendations from the Chief Executive Officer, together with the
Committee's consideration of the executive's responsibilities and individual
performance versus predetermined personal goals and objectives. Target total
compensation for Mr. Clark was within the established percentile range for
2000.
Cash Compensation
For 2000, base salaries and target incentive compensation participation
rates (percentage of base salary) for the Corporation's executive officers
were established by the Committee. Base salary and incentive compensation
(total cash compensation) earned in 2000 by the Named Executive Officers are
reflected in the "Salary" and "Bonus" columns in the Summary Compensation
Table.
Once the appropriate target total compensation for an executive is
established, target base salary is determined by dividing target total
compensation by the sum of one plus the executive's incentive compensation
participation rate. For example, Mr. Clark's incentive compensation
participation rate for 2000 was 65%.
9
Accordingly, his base target salary was calculated by dividing his target
total compensation by 1.65. Consequently, when target performance as defined
in the EVA/Growth Plan is attained, Mr. Clark will be paid a total
compensation which equals the amount established by the Committee as
appropriate for his performance when compared to executives in similar
positions at other companies. Target incentive compensation participation
rates are set by level of responsibility and represent a greater proportion of
total compensation as the responsibility of the executive increases. As a
result, senior executives have a significant portion of total compensation "at
risk" and dependent on increasing economic value. The 2000 target incentive
compensation for Mr. Clark was 65% of his base salary; for Mr. Bower, Mr.
McDowell, 50% of their base salary; and for Mr. Tolbert and Ms. Knowlton, 30%
of their base salary. The award to Mr. McDowell is based 75% on the
performance of the Metals Group for which he is responsible and 25% on the
performance of the Plastics Group, for year ended December 31, 2000; incentive
compensation for Mr. McDowell was earned at a negative 0.28 times the target
incentive compensation established under the EVA/Growth Plan; therefore, Mr.
McDowell did not receive a payment from the EVA/Growth Plan for 2000. For the
year ended December 31, 2000, incentive compensation for other corporate level
participants was earned at a negative 0.27 times the target incentive
compensation established under the EVA/Growth Plan; therefore, Mr. Clark and
the other corporate level participants did not receive a cash payment from the
EVA/Growth Plan for 2000.
The EVA/Growth Plan awards incentive compensation to the Named Executive
Officers, as defined below, based upon performance of the Corporation relative
to Economic Value Added ("EVA") and growth targets, and the awards of the
individuals in each division are based on the performance of the respective
divisions relative to their EVA and growth targets. The program applies to all
key employees and all executive officers, including the Chief Executive
Officer.
Incentive compensation is not, in part or in total, discretionary, but
instead is driven by actual EVA and growth compared to established targets.
The target return on invested capital ("EVA target") for any year is
determined in accordance with the provisions of the EVA/Growth Plan. The EVA
target for a year is a function of the prior year's target, adjusted up or
down depending on the prior year's actual performance versus the prior year's
target, i.e., if actual performance exceeds target, the target for the
following year is increased by a portion of such excess; if actual performance
is less than target, the target for the following year is reduced by a portion
of such shortfall. This adjustment process is carried out according to a
specific formula and is not discretionary. The growth target is based on
several factors including market growth rates, operational plans for the year
and the Corporation's overall long-term growth objectives. The purpose of the
EVA/Growth Plan is to encourage sustained value creation by the management of
the Corporation by establishing a direct link between EVA and growth achieved
and incentive compensation payments. This approach establishes a link between
shareholder value and incentive compensation.
There is no maximum limit on the annual amount of incentive compensation
which can be earned; however, incentive compensation earned in any year in
excess of two times the individual's target incentive compensation is accrued
in a contingent "bank." The amount of incentive compensation earned in a year
may be negative, in which case such negative amount is applied against any
positive bank balance resulting from prior years' performance, and may result
in a negative bank balance. One-third of the beginning of the year bank
balance, after consideration of any negative incentive compensation from the
current year, is paid to the individual in combination with the current year's
incentive compensation. If an individual has a negative bank balance at the
beginning of the year and earns incentive compensation for the year, up to
one-third of the amount earned in excess of the individual's target incentive
compensation for the year is used to reduce the negative bank balance.
Positive bank balances remain completely at risk at all times except in the
event of death or disability. A positive bank balance at death or disability
will be paid in full without adjustment for negative performance in the year
following such death or disability. Upon retirement, the bank balance will be
paid in full after reflecting for any negative performance in the year
following the year of retirement. The bank balance will be forfeited upon any
other termination of employment. The negative performance amounts earned for
2000 were applied against the positive bank balances carried over from prior
years' performance for the Named Executive Officers, including the Chief
Executive Officer, thus reducing the balances that otherwise would have been
distributed in future years.
10
Pursuant to the Deferred Compensation Plans, certain participants in the
EVA/Growth Plan, which includes all of the Named Executive Officers, may elect
to receive in cash all or any part of the incentive compensation payable, with
the remaining portion deferred under various deferred compensation options
selected by the participant. The participant may elect to have the deferrals
paid at a future date, either in a lump sum or in up to fifteen substantially
equal annual installments.
Long-Term, Equity-Based Employee Incentive Compensation
The Corporation's Long-Term Equity Incentive Plan (the "Equity Plan") is
designed to give the Board discretion and flexibility in designing incentive
compensation packages to motivate executive officers and key employees to
maximize shareholder value. Pursuant to the Equity Plan, the Board may issue
to non-employee directors, executive officers and key employees of the
Corporation incentive stock options, nonqualified stock options, restricted
stock, stock equivalent units, stock appreciation rights and other stock-
related forms of incentive compensation. The specific types and size of awards
to be granted (other than options granted to non-employee directors) and the
terms and conditions of such awards will be determined by the Committee
subject to the provisions of the Equity Plan.
Pursuant to the provisions of the Equity Plan, the Committee implemented a
long-term incentive plan in 1998. This plan provides for the award of stock
equivalent units to select key employees, including the Named Executive
Officers. Participants receive an award for a target number of stock
equivalent units and have the right to convert these units into Common Shares
of the Company provided that specified levels of performance for a three-year
period as established by the Committee are achieved. In the event that a
minimum level of performance is not achieved no stock equivalent units may be
converted and such units are forfeited. If actual performance exceeds target,
participants are able to earn additional stock equivalent units subject to a
maximum of 150% of the original award. The performance period for the 1998
program of this plan is fiscal years 1998, 1999, and 2000, in which Mr. Clark
received an award of 2,333 stock equivalent units for the third year of this
program. The performance period for the 1999 program of this plan is fiscal
years 1999, 2000, and 2001, in which Mr. Clark received an award of 2,759
stock equivalent units for the second year of this program. The performance
period for the 2000 program of this plan is fiscal years 2000, 2001, and 2002,
in which Mr. Clark received an award of 2,992 stock equivalent units for the
first year of this program. The 1998 program ended December 31, 2000, and as a
result of the actual levels of performance during the three-year period there
was no payout for the Named Executive Officers, including Mr. Clark.
Under the Corporation's Equity Plan, stock options may be granted to the
Corporation's executive officers and other key employees. The Committee has
set guidelines which determine the number of shares to be granted and the
frequency of stock option awards. These guidelines, which are applicable to
all participants including the Chief Executive Officer, provide that awards
will generally be based upon the employee's position within the Corporation
and a subjective review of the employee's performance. Any such decision would
be subjective in nature and not based upon any objective factors. The stock
option awards to each individual are not conditioned on the number of
previously granted options. All awards are made by the Committee, which has
the discretion to elect not to award stock option grants. Stock options are
typically granted with an exercise price equal to the closing market price of
the Common Stock on the date of the grant and become exercisable at a rate of
25% annually beginning on the first anniversary of the grant. Mr. Clark
received an incentive stock option grant of 15,000 shares in 2000.
The Corporation's Equity Plan allows the Committee to award grants of
shares of restricted stock to select key employees, including the Named
Executive Officers. Such grants have been made primarily under circumstances
associated with initial employment or a significant increase in
responsibility. Mr. Clark, as Chief Executive Officer, holds no restricted
stock. Among other restrictions, the Equity Plan requires that any restricted
stock issued on which the restrictions have not lapsed must be returned to the
Corporation if the employee's employment with the Corporation is terminated
for any reason other than death or disability. The restrictions on all grants
made through December 31, 2000 lapse at a rate of 20% annually beginning on
the first anniversary of
11
the award. The Committee may grant shares of restricted stock whose
restrictions lapse as a function of parameters other than the passage of time.
The holders of restricted stock have a right to vote the shares and receive
dividends, if declared. There were no restricted stock grants to the Named
Executive Officers in 2000.
The Committee believes that the total compensation package has been
designed to motivate executive officers and focus on increasing the market
value of the Corporation's Common Stock. The following tables reflect the
compensation structure being pursued by the Committee.
Respectfully submitted. Executive Compensation Committee
Patrick W Rooney, Chairman
Richard L. Molen
David L. Swift
Robert L. Wood
12
Summary Compensation Table
The following table sets forth a summary of the annual and long-term
compensation of the Chief Executive Officer and the four other most highly
compensated executive officers (the "Named Executive Officers") of the
Corporation for the year ended December 31, 2000 for services in all
capacities to the Corporation.
Annual Compensation Long Term Compensation
------------------- ------------------------
Award Payout
----------- ------------
Securities
Name and Principal Underlying LTIP All Other
Position Year Salary Bonus(/1/) Options (#) Payouts(/2/) Compensation(/3/)
------------------ ---- -------- ---------- ----------- ------------ -----------------
Thomas B. Clark......... 2000 $331,923 $ 0 15,000 $ 0 $65,856
Chairman, President and 1999 309,461 402,300 0 3,226 48,152
Chief Executive Officer 1998 281,134 248,523 0 4,839 36,597
Kevin D. Bower.......... 2000 174,615 0 10,000 0 13,805
Senior Vice President
and 1999 157,692 157,692 0 860 12,400
Chief Financial Officer 1998 149,038 101,346 0 1,290 11,218
Angela K. Knowlton(/4/). 2000 123,461 0 7,500 0 8,344
Vice President, Finance
and Treasurer
Jerry T. McDowell....... 2000 216,407 0 10,000 0 52,217
Group Vice President, 1999 201,638 201,638 0 22,630 57,097
Metal Products 1998 209,192 104,596 0 11,315 41,780
J. David Tolbert ....... 2000 134,653 0 7,500 0 10,119
Vice President, Human
Resources 1999 129,615 77,769 0 0 9,887
and Administration 1998 117,692 48,018 0 0 8,680
- --------
(1) The Named Executive Officers did not receive a payment from the EVA/Growth
Plan for 2000.
(2) Represents amounts paid from the "bank" under the Corporation's EVA/Growth
Plan for prior performance (See "Report of The Executive Compensation
Committee, Cash Compensation"). For the year 2000, the following negative
performance amounts were applied against the positive bank balances
carried over from prior year's performance, thus reducing the balances
that otherwise would have been distributed in future years: Mr. Clark,
($58,252); Mr. Bower, ($23,573); Ms. Knowlton, ($10,000); Mr. McDowell,
($30,297) and Mr. Tolbert, ($10,906).
(3) The amounts shown in the All Other Compensation column for 2000 are
comprised as follows:
Mr. Clark--above-market interest on deferred compensation account,
$11,825; life insurance premiums, $828; long-term disability premiums,
$6,741; the Corporation's match on the employee's 401(k) contribution,
$6,800; the Corporation's additional contribution to the employee's
401(k), $7,650; the Corporation's contribution to the excess savings
and retirement account for 2000, $32,012.
Mr. Bower--life insurance premiums, $828; long-term disability
premiums, $995; the Corporation's match on the employee's 401(k)
contribution, $6,800; the Corporation's additional contribution to the
employee's 401(k), $2,550; the Corporation's contribution to the excess
savings and retirement account for 2000, $2,632.
Ms. Knowlton--life insurance premiums, $690; long-term disability
premiums, $609; the Corporation's match on the employee's 401(k)
contribution, $4,938; the Corporation's additional contribution to the
employee's 401(k), $1,700; the Corporation's contribution to Employee
Stock Purchase Plan, $260; the Corporation's contribution to the excess
savings and retirement account for 2000, $147.
Mr. McDowell--above-market interest on deferred compensation account,
$21,670; life insurance premiums, $828; long-term disability premium,
$1,233; the Corporation's match on the employee's
13
401(k) contribution, $6,800; the Corporation's additional contribution
to the employee's 401(k), $7,650; the Corporation's contribution to the
excess savings and retirement account for 2000, $14,036.
Mr. Tolbert--life insurance premiums, $744; long-term disability
premiums, $665; the Corporation's match on the employee's 401(k)
contribution, $5,386; the Corporation's additional contribution to the
employee's 401(k), $1,700; the Corporation's contribution to Employee
Stock Purchase Plan, $1,200; the Corporation's contribution to the
excess savings and retirement account for 2000, $424.
(4) Information regarding annual and long-term compensation for Ms. Knowlton
for 1999 and 1998 has not been included as she was not a Named Executive
Officer for those years.
14
Long-Term Incentive Plan
Awards in Last Fiscal Year
The following table summarizes the performance share grants of stock
equivalent units in 2000 for the Named Executives Officers.
Estimated Future Payouts
Under Non-Stock Price-
Based Plans(/4/)(/5/)
Performance -------------------------
Period Threshold Target Maximum
Number Until (# of (# of (# of
Name of Units Maturation shares) shares) shares)
---- -------- ----------- --------- ------- -------
Thomas B. Clark............... 2,333(/1/) 1998-2000 -0- 2,333 3,499
2,759(/2/) 1999-2001 -0- 2,759 4,138
2,992(/3/) 2000-2002 -0- 2,992 4,488
Kevin D. Bower................ 705(/1/) 1998-2000 -0- 705 1,058
833(/2/) 1999-2001 -0- 833 1,249
904(/3/) 2000-2002 -0- 904 1,356
Angela K. Knowlton............ 411(/1/) 1998-2000 -0- 411 617
486(/2/) 1999-2001 -0- 486 729
527(/3/) 2000-2002 -0- 527 791
Jerry T. McDowell............. 705(/1/) 1998-2000 -0- 705 1,058
833(/2/) 1999-2001 -0- 833 1,249
904(/3/) 2000-2002 -0- 904 1,356
J. David Tolbert.............. 411(/1/) 1998-2000 -0- 411 617
486(/2/) 1999-2001 -0- 486 729
527(/3/) 2000-2002 -0- 527 791
- --------
(1) The third grant of Stock Equivalent Units ("Units") for the performance
period of three consecutive calendar years beginning January 1, 1998 under
the 1998 Long-Term Equity Incentive Plan. The three-year program 1998-2000
ended December 31, 2000 and as a result of the actual levels of
performance during the three-year period there was no payout for this
Plan.
(2) The second grant of stock Units for the performance period of three
consecutive calendar years beginning January 1, 1999, under the 1998 Long-
Term Equity Incentive Plan.
(3) The first grant of stock Units for the performance period of three
consecutive calendar years beginning January 1, 2000, under the 1998 Long-
Term Equity Incentive Plan.
(4) Units will be convertible into shares of Common Stock following the end of
the three-year performance period based on the Corporation's actual
performance compared to threshold, target and maximum performance levels
established by the Committee. If the threshold level of performance is not
exceeded, the Units will be forfeited and no shares of Common Stock will
be issued. If the target level of performance is achieved, then Units will
be convertible into shares of Common Stock equal in number to the target
number of shares of Common Stock. If the maximum level of performance is
achieved or exceeded, then Units will be convertible into shares of Common
Stock equal in number to 150% of the target number of shares. The number
of shares into which Units are convertible for levels of performance
between threshold and target and between target and maximum will be based
on interpolation. If a recipient of Units terminates employment prior to
the end of the three-year performance period for any reason other than
retirement, disability or death, the recipient forfeits all rights with
respect to the Units.
(5) The Estimated Future Payout for Target and Maximum are as of the grant
date for each performance period. The three-year program 1998-2000 ended
December 31, 2000 and as a result of the actual levels of performance
during the three-year period there was no payout for this Plan.
15
Option Grants In 2000
The following table summarizes the grants of stock options awarded during
2000 under the Corporation's Stock Option Plan to the Named Executive
Officers.
Potential Realizable Value
at Assumed Rates of Stock
Price Appreciation for
Individual Grants Option Term(/3/)
---------------------------------------- ---------------------------
Percentage of Total
Number of Securities Options Granted to Exercise
Underlying Employees in Fiscal Price Expiration
Name Options Granted(/1/) 2000 ($/Sh.) Date(/2/) 5% 10%
---- -------------------- ------------------- -------- ---------- ------------- -------------
Thomas B. Clark......... 15,000 20.5% $12.50 12/21/2010 $ 117,917 $ 298,826
Kevin D. Bower.......... 10,000 13.7% 12.50 12/21/2010 78,611 199,217
Angela K. Knowlton...... 7,500 10.3% 12.50 12/21/2010 58,958 149,413
Jerry T. McDowell....... 10,000 13.7% 12.50 12/21/2010 78,611 199,217
J. David Tolbert........ 7,500 10.3% 12.50 12/21/2010 58,958 149,413
- --------
(1) Options were granted to the Names Executive Officers on December 21, 2000,
and are exercisable in four equal annual installments beginning one year
from the date of grant.
(2) Subject to earlier expiration if the executive officer ceases to be an
employee of the Corporation.
(3) The dollar amounts under these columns are the result of calculation at
the 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, in the market value of the Corporation's Common Stock.
Aggregated Option Exercises In 2000
And Fiscal Year-End Option Values
The following table summarizes the stock options exercised during 2000 and
the stock options outstanding on December 31, 2000, for the Named Executive
Officers.
Number of Securities Value of Unexercised
Underlying Unexercised at In-the-Money Options at
December 31, 2000 December 31, 2000(/1/)
Shares Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
Thomas B. Clark......... -0- $0.00 31,750 16,750 $1,875 $15,000
Kevin D. Bower.......... -0- 0.00 10,834 10,625 364 10,000
Angela K. Knowlton...... -0- 0.00 3,125 7,875 0 7,500
Jerry T. McDowell....... -0- 0.00 26,502 11,250 3,403 10,000
J. David Tolbert........ -0- 0.00 7,875 1,000 250 7,500
- --------
(1) Before taxes. The dollar value reported is based on the difference between
the exercise price of the option outstanding and the market price of
Alltrista Common Stock at the close of trading on December 31, 2000. The
closing market price on that date was $13.50 per share.
Change of Control Agreements
The Corporation has change of control severance agreements with the Named
Executive Officers. The agreements are effective on a year-to-year basis and
would provide severance benefits in the event of both a change of control of
the Corporation and an actual or constructive termination of employment within
two years after a change in control. Under the agreements, a "change in
control" can occur by virtue, in general terms, of an acquisition by any
person of 30 percent or more of the Corporation's voting shares; a merger in
which the shareholders of the Corporation before the merger own 50 percent or
less of the Corporation's voting shares after the merger; shareholder approval
of a plan of liquidation or to sell or dispose of substantially all of the
assets of
16
the Corporation; or if, during any two-year period, directors at the beginning
of the period fail to constitute a majority of the Board of Directors. "Actual
termination" is any termination other than by death or disability, by the
Corporation for cause, or by the executive other than for constructive
termination. "Constructive termination" means, in general terms, any
significant reduction in duties, compensation or benefits or change of office
location from those in effect immediately prior to the change in control,
unless agreed to by the executive.
The severance benefits payable, in addition to base salary and incentive
compensation accrued through the date of termination, shall include (i) three
times current annual base salary and target incentive compensation; (ii) the
bargain element value of then outstanding stock options; (iii) the value of
then outstanding common stock equivalents; (iv) an amount equal to the
employer and matching contributions the individual would have received under
the Corporation's defined contribution plans for a period of 3 years; (v)
life, disability, accident and health benefits for a period of 35 months; (vi)
the amount of any "bank" balance of the individual under the Corporation's
EVA/Growth Plan; (vii) outplacement services; and (viii) legal fees and
expenses reasonably incurred in enforcing the agreements.
The agreements for the Named Executive Officers were not entered into in
response to any effort to acquire control of the Corporation.
Directors' Compensation
Directors who are not employees of the Corporation receive as compensation
an annual retainer of $12,000 and an annual fee of $1,500 if he or she serves
as chairman of a Board committee. In addition, non-employee directors will be
paid a fee of $750 for attendance at each Board of Directors meeting, $600 per
day for attendance at one or more committee meetings, $625 for participation
in a telephonic Board of Directors meeting, and $500 for participation in a
telephonic committee meeting. If a non-employee director were to serve as
Chairman of the Board, he would receive as compensation an annual retainer of
$36,000, plus meeting fees at the same rate as those for other non-employee
directors. Directors who are also employees of the Corporation receive no
additional compensation for their service on the Board or on any Board
committee.
Pursuant to the Alltrista Corporation 1997 Deferred Compensation Plan for
Directors, non-employee directors may elect to receive in cash all or any part
of the director compensation payable, with the remaining portion deferred
under various deferred compensation options selected by the participant. The
participant may elect to have the deferrals paid at a future date, either in a
lump sum or in up to fifteen substantially equal annual installments.
The Corporation's Equity Plan authorizes the grant of an option to acquire
1,000 shares of the Corporation's Common Stock on April 30 of each year to
each non-employee director. Ms. Popwell and Messrs. Huemme, Molen, Rooney,
Swift and Wood each were granted an option to acquire 1,000 shares of common
stock in 2000. The exercise price for each share of the Corporation's Common
Stock subject to the option granted to such director will be equal to the fair
market value of a share of the Corporation's Common Stock as of the date such
option is granted. The option will be a non-qualified option and will expire
ten years after the date it is granted. The option will become exercisable at
the earlier of one year subsequent to the date the option was granted or upon
the optionee's death, disability or attainment by the optionee of age 70.
17
Shareholder Return Performance Presentation
Set forth below is a graph comparing the shareholder return from December
31, 1995, through December 31, 2000, for the Corporation, the Dow Jones US
Total Market Index, and the Dow Jones Industrial--Diversified Index. The graph
assumes that the beginning value of the Common Stock of the Corporation on
each index was $100.
Comparison of Cumulative Total Return Among Alltrista, Dow Jones
US Total Market Index and Dow Jones Industrial--Diversified Index
December 31, December 31, December 31, December 31, December 31, December 31,
1995 1996 1997 1998 1999 2000
------------ ------------ ------------ ------------ ------------ ------------
ALLTRISTA............... $100 $143 $158 $133 $126 $ 75
D.J. US TOTAL MARKET.... 100 122 161 201 247 224
D.J. INDUSTRIAL--
DIVERSIFIED............ 100 135 192 247 334 337
The Dow Jones Industrial--Diversified Index was selected for comparison
purposes since the Corporation is a multi-industry company. This index is
comprised of companies that participate in two or more industries in the
industrial market sector or whose products are used in many different
industries.
18
ACTIVITIES AND RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
During 2000, Ernst & Young LLP rendered audit and non-audit services to the
Corporation. Audit services included examinations of the consolidated
financial statements required to be filed, reviews of quarterly financial data
and filings with the Securities and Exchange Commission.
The Board of Directors recommends that the shareholders vote for
ratification of the appointment of Ernst & Young LLP as independent public
accountants for 2001. If the appointment of Ernst & Young LLP is not ratified
by the shareholders, the Audit Committee will select another firm of
independent public accountants for 2001. Representatives of Ernst & Young LLP
are not expected to be present at the Annual Meeting of Shareholders, and thus
will not be available to respond to questions from, and to make statements to,
the shareholders.
The Board of Directors unanimously recommends a vote FOR the
ratification of the appointment of Ernst & Young LLP
as independent accountants for 2001.
AUDIT FEES
For services rendered in 2000 by Ernst & Young LLP, our principal
independent auditors, fees incurred are as follows:
. Annual audit fees: $171,471
. All other fees:$ 41,040
(principally, fees for the audit of the employee benefit plans)
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
The Corporation believes that during 2000 its executive officers and
directors complied with all Section 16 filing requirements under Section 16(a)
of the Securities Exchange Act of 1934, as amended.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2002 Annual
Meeting and included in the Corporation's 2002 Proxy Statement must be in
writing and received by the Corporate Secretary at the Corporation's principal
executive offices, 5875 Castle Creek Parkway, North Drive, Suite 440,
Indianapolis, Indiana 46250-4330, by December 3, 2001. In order to be
considered timely under the Corporation's Bylaws, as amended, shareholder
proposals and shareholder nominations of candidates for election to the Board
of Directors intended to be presented at the 2002 Annual Meeting, but not
included in the Corporation's 2002 Proxy Statement, must be in writing and
received by the Corporate Secretary at the address set forth in the
immediately preceding sentence not later than March 3, 2002 and not earlier
than February 1, 2002.
19
SOLICITATION AND OTHER MATTERS
The cost of soliciting proxies will be paid by the Corporation. In addition
to solicitations by mail, some directors, officers and regular employees of
the Corporation, without extra remuneration, may conduct solicitations by
telephone, facsimile and personal interview. The Corporation will reimburse
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy material and annual reports to the
beneficial owners of Common Stock. In addition, the Corporation has engaged
CIC/Georgeson Shareholder Communications to assist it in the solicitation of
proxies, for a fee of approximately $5,000, plus out-of-pocket expenses.
As of the date of this Proxy Statement, the Board of Directors of the
Corporation has no knowledge of any matters to be presented for consideration
at the meeting other than those referred to above. However, persons named in
the accompanying form of proxy shall have the authority to vote such proxy as
to any other matters which do properly come before the meeting and as to
matters incidental to the conduct of the meeting, according to their
discretion.
By Order of the Board of Directors
Garnet E. King
Corporate Secretary
April 2, 2001
Indianapolis, Indiana
20
Appendix A
ALLTRISTA CORPORATION
AUDIT COMMITTEE CHARTER
I. Purpose.
This charter governs the operations of the audit committee. The charter
will be reviewed and reassessed by the committee and will be approved by the
Board of Directors (the "Board"), at least annually.
II. Function.
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities to the shareholders,
potential shareholders, the investment community and others relating to the
Company's financial statements and the financial reporting process, the
systems of internal accounting and financial controls, the annual independent
audit of the company's financial statements, and the legal compliance and
ethics programs, as established by management and the Board of Directors.
Consistent with this function, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the corporation's policies,
procedures and practices at all levels. The Audit Committee has the authority
to conduct or authorize investigations into any matters within the Committee's
scope of responsibilities. The committee is empowered to retain independent
counsel and other professionals to assist it in the conduct of any
investigation.
III. Composition.
The Audit Committee shall be comprised of at least three directors as
determined by the Board, each of who are independent of management and the
Company. Members of the committee will be considered independent if they have
no relationship that may interfere with the exercise of their independence
from management and the Company. All members of the Committee shall have a
working familiarity with basic finance and accounting practices, and at least
one member of the Committee shall have accounting or related financial
management expertise. Committee members may enhance their familiarity with
finance and accounting by participating in educational programs conducted by
the Corporation or an outside consultant.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the
members of the Committee may designate a Chair by majority vote of the full
Committee membership.
IV. Responsibilities and Processes.
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board and report the
results of their activities to the Board. Management is responsible for
preparing the Company's consolidated financial statements, and the independent
auditors are responsible for auditing those consolidated financial statements.
The Committee in carrying out its responsibilities believes its policies and
procedures should remain flexible, in order to best react to changing
conditions and circumstances. The Committee should take the appropriate action
to set the overall corporate "tone" for quality financial reporting, sound
business risk practices and ethical behavior.
The following shall be the principal recurring processes of the audit
committee in carrying out its oversight responsibilities. The processes are
set forth as a guide with the understanding that the committee may supplement
as appropriate.
. The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the audit committee, as representatives of
the Company's shareholders. The committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The committee shall discuss the
21
auditors' independence from management and the Company and the matters
included in the written disclosures required by the Independence Standards
Board. Annually, the committee will review and recommend to the Board the
selection of the Company's independent auditors, subject to shareholders'
approval.
. The committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the committee will discuss
the results of the quarterly review and any other matters required to be
communicated to the committee by the independent auditors under generally
accepted auditing standards. The chair of the committee may represent the
entire committee for the purposes of this review.
. The committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report on
Form 10-K (or the annual report to shareholders if distributed prior to
the filing of Form 10-K), including their judgment about the quality, not
just acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the
financial statements. Also, the committee will discuss the results of the
annual audit and any other matters required to be communicated to the
committee by the independent auditors under generally accepted auditing
standards.
22
Please mark your 6328
[X] vote as in this
example.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this proxy
will be voted FOR the proposals 1 and 2.
FOR WITHHELD authority for all Nominees
1. Election of
Directors [_] [_] Nominees:
Richard L. Molen
Lynda W. Popwell
For, except vote withheld from the following nominee(s):
_______________________________________________________
FOR AGAINST ABSTAIN
2. Proposals to approve the appointment of
Ernst & Young LLP as the independent [_] [_] [_]
public accountants of the Corporation.
3. In their discretion, the proxies are authorized
to vote upon such other business as properly may
come before the meeting.
Please sign exactly as name appears at left. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Note: Please sign name exactly as your name appears on the Stock Certificate.
When signing as attorney, executor, administrator, trustee, or guardian, please
give full title. If more than one trustee, all should sign. All joint owners
must sign.
___________________________________________________________
___________________________________________________________
Signature (if held jointly) Date
- --------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
The Board of Directors recommends a vote
FOR
proposals 1 and 2 above.
ALLTRISTA Corporation PROXY/VOTING INSTRUCTION CARD
5875 Castle Creek Parkway, North Drive, Suite 440, Indianapolis, IN 46250
______________________________________________________________________________
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting on June 1, 2001.
The undersigned hereby appoints Thomas B. Clark, Kevin D. Bower, Jerry T.
McDowell, and each or any of them as Proxies, with full power of substitution,
to vote all shares of Alltrista Corporation Common Stock entitled to be voted by
the undersigned for the election of directors and on Proposal 2 referred to on
the reverse side of this Proxy Card and described in the Proxy Statement, and on
any other business as properly may come before the Annual Meeting of
Shareholders on June 1, 2001, or any adjournment thereof.
This proxy will be voted as directed. If no direction is given, this proxy will
be voted FOR Items 1 and 2.
Election of two Directors. Nominees are:
Richard L. Molen, Lynda W. Popwell
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE.
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
YOUR VOTE IS IMPORTANT
Please sign, date and return your proxy
in the enclosed envelope.