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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

BALL CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

(1)

 

Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

 


Table of Contents

LOGO

BALL CORPORATION

Notice of 2016

Annual Meeting

of Shareholders

and Proxy Statement

   

Wednesday,
April 27, 2016,
8:00
A.M ., local time

10 Longs Peak Drive,
Broomfield, Colorado


Table of Contents

   

Ball and GRAPHIC are trademarks of Ball Corporation, Reg. U.S. Pat. & Tm. Office


Table of Contents


TABLE OF CONTENTS

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

  1

PROXY STATEMENT

 
2

ABOUT THE ANNUAL MEETING

 
3

VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS

 
4

BENEFICIAL OWNERSHIP

 
5

VOTING ITEM 1—ELECTION OF DIRECTORS

 
6

DIRECTOR NOMINEES AND CONTINUING DIRECTORS

 
7

BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT

 
12

BOARD DIVERSITY

 
12

GOVERNANCE OF THE CORPORATION

 
13

BOARD MEETINGS AND ANNUAL MEETING

 
14

BOARD COMMITTEES

 
14

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

 
17

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

 
18

EXECUTIVE SUMMARY

 
18

COMPENSATION OBJECTIVES AND  PHILOSOPHY

 
24

ROLE OF THE HUMAN RESOURCES COMMITTEE AND EXECUTIVE COMPENSATION CONSULTANT

 
24

MARKET REFERENCE POINTS AND PEER GROUPS

 
24

PROCESS FOR DETERMINING EXECUTIVE COMPENSATION

 
26

ELEMENTS OF BALL'S EXECUTIVE COMPENSATION PROGRAM AND 2015 PERFORMANCE

 
27

SPECIFICS RELATED TO THE 2015 EXECUTIVE COMPENSATION ELEMENTS

 
29

OTHER EXECUTIVE COMPENSATION POLICIES AND GUIDELINES

 
36

TABLES AND NARRATIVES

 
38

SUMMARY COMPENSATION TABLE

 
38

GRANTS OF PLAN-BASED AWARDS TABLE

 
40

OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2015

 
42

OPTION EXERCISES AND STOCK VESTED  IN 2015

 
43

NON-QUALIFIED DEFERRED COMPENSATION

 
43

PENSION BENEFITS

 
45

OTHER POTENTIAL POST-TERMINATION EMPLOYMENT BENEFITS

 
48

DIRECTOR COMPENSATION

 
53

REPORT OF THE HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS

 
54

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

 
54

VOTING ITEM 2—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITOR

 
55

VOTING ITEM 3—ADVISORY (NON-BINDING) VOTE TO APPROVE EXECUTIVE COMPENSATION

 
55

SHAREHOLDER PROPOSALS FOR 2017 ANNUAL MEETING

 
57

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 
57

HOUSEHOLDING

 
57

SOLICITATION AND OTHER MATTERS

 
58

EXHIBIT A BALL CORPORATION BYLAWS

 
A-1

i


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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Wednesday, April 27, 2016,
8:00
A.M. , local time

10 Longs Peak Drive, Broomfield, Colorado 80021

The Annual Meeting of Shareholders of Ball Corporation will be held at the Corporation's offices, 10 Longs Peak Drive, Broomfield, Colorado 80021-2510, on Wednesday, April 27, 2016, at 8:00 A.M. (MDT) for the following purposes:

1.
To elect two directors for three-year terms expiring at the Annual Meeting of Shareholders to be held in 2019;

2.
To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Corporation for 2016;

3.
To approve, by non-binding advisory vote, the compensation of the named executive officers ("NEOs") as disclosed in the following Proxy Statement; and

4.
To consider any other business as may properly come before the meeting, although it is anticipated that no business will be conducted other than the matters listed above.

Only holders of common stock of record at the close of business on March 1, 2016, are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. A Proxy Statement containing important information about the meeting and the matters being voted upon appears on the following pages.

Your vote is important.    You are urged to read the accompanying proxy materials carefully and in their entirety and submit your proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. You have a choice of submitting your proxy by Internet or by telephone, or, if you request a paper copy of the materials, by mail.

        By Order of the Board of Directors,
Charles E. Baker
Corporate Secretary

March 14, 2016
Broomfield, Colorado

PLEASE NOTE: The 2016 Annual Meeting of Shareholders will be held to tabulate the votes cast and to report the results of voting on the items described above. No management presentations or other business matters are planned for the meeting.

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BALL CORPORATION
10 Longs Peak Drive, Broomfield, Colorado 80021-2510



PROXY STATEMENT
March 14, 2016



ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 27, 2016

Important Notice Regarding the Availability of Proxy Materials
for the Annual Shareholder Meeting

The Proxy Statement, Form 10-K and Annual Report are Available
at
http://materials.proxyvote.com



To Shareholders of Ball Corporation:

This Proxy Statement and the accompanying proxy are furnished to shareholders in connection with the solicitation by the Board of Directors of Ball Corporation (the "Corporation" or "Ball") of proxies to be voted at the Annual Meeting of Shareholders (the "Annual Meeting") to be held April 27, 2016, for the purposes stated in the accompanying notice of the meeting. We are first furnishing and making available to shareholders the proxy materials on March 14, 2016.

Please submit your proxy as soon as possible so that your shares can be voted at the meeting. All properly completed proxies submitted by telephone or Internet, and all properly executed written proxies returned by shareholders who request paper copies of the proxy materials, that are delivered pursuant to this solicitation, will be voted at the meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting. Only holders of record of shares of the Corporation's common stock as of the close of business on March 1, 2016, the record date for the Annual Meeting, are entitled to notice of and to vote at the meeting, or at any adjournments or postponements of the meeting.

Any Ball Corporation shareholder of record as of March 1, 2016, the record date, desiring to submit a proxy by telephone or via the Internet will be required to enter the unique voter control number imprinted on the Ball Corporation proxy card, and therefore should have the proxy card for reference when initiating the process.


ICON

  To submit your proxy by telephone, call 1-800-690-6903 on a touch-tone telephone and follow the menu instructions provided. There is no charge for this call.


ICON


 

To submit your proxy over the Internet, log on to the website www.proxyvote.com and follow the instructions provided.

Similar instructions are included on the enclosed proxy card.

A shareholder of record of the Corporation may revoke a proxy in writing at any time prior to the meeting by sending written notice of revocation to the Corporate Secretary; by voting again by telephone; by voting via the Internet; by voting in writing if you requested your materials in paper copy; or by voting in person at the meeting.

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ABOUT THE ANNUAL MEETING

Why am I receiving the Proxy Statement? You are receiving the Proxy Statement because you owned shares of Ball Corporation common stock on March 1, 2016, the record date, and that entitles you to vote at the Annual Meeting. The Corporation's Board of Directors ("Board") is soliciting your proxy to vote at the scheduled 2016 Annual Meeting or at any later meeting should the scheduled Annual Meeting be adjourned or postponed for any reason. Your proxy will authorize specified people (proxies) to vote on your behalf at the Annual Meeting in accordance with your written instructions. By use of a proxy, you can vote, whether or not you attend the meeting.

What will I be voting on? You will be voting on (1) the election of two director nominees named in this Proxy Statement for terms expiring at the 2019 annual meeting of shareholders; (2) the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2016; and (3) an advisory vote to approve named executive officer compensation.

What are the Board of Directors' recommendations? The Board recommends a vote (1) FOR the election of the two director nominees named in this Proxy Statement; (2) FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Corporation's independent registered public accounting firm for 2016; and (3) FOR the advisory vote on the compensation of the named executive officers.

Could other matters be decided at the Annual Meeting? We do not know of any other matters that will be raised at the Annual Meeting. The Chairman will allow presentation of a proposal or a nomination for the Board from the floor at the Annual Meeting only if the proposal or nomination was properly submitted. The proxies will have discretionary authority, to the extent permitted by law, to vote for or against other matters that may properly come before the Annual Meeting as those persons deem advisable.

How many votes can be cast by all shareholders? Each share of Ball Corporation common stock (other than 688 shares of common stock that have been granted as restricted stock without voting rights) is entitled to one vote on each of the two directors to be elected and one vote on each other matter that is properly presented at the Annual Meeting.

How do I vote my shares if I am a record holder? If you are a record holder of shares; that is, the shares are registered in your name and not the name of your broker or other nominee, you are urged to submit your proxy as soon as possible, so that your shares can be voted at the meeting in accordance with your instructions. You may submit your proxy by telephone or via the Internet as instructed on page 2 of the Proxy Statement and on your proxy card, or you can complete, sign, date and mail your proxy card if you request a paper copy of the proxy materials. You may also vote by attending the Annual Meeting, or sending a personal representative to the Annual Meeting with an appropriate proxy, in order to vote. Unless you or a personal representative plan to be in attendance and vote at the meeting, your vote must be received no later than 11:59 P.M. (EDT) on Tuesday, April 26, 2016.

How do I vote my shares if I hold my shares under the Employee Stock Purchase Plan ("ESPP") or the 401(k) Plan? Participants may vote their shares in the manner set forth above; however, shares held through the Plans must be voted by 11:59 P.M. (EDT) on Sunday, April 24, 2016. The Trustee of the 401(k) Plan will vote the unvoted shares for each voting item in the same proportion as the voted shares for each item. The Administrator of the ESPP will vote the unvoted shares for that Plan in accordance with the Board of Directors' recommendations.

How do I vote my shares if I hold my shares in "street name" through a bank or broker? If you hold your shares as a beneficial owner through a bank, broker or other nominee, you must provide voting instructions to your bank, broker or other nominee by the deadline provided in the materials you receive from your bank, broker or other nominee to ensure your shares are voted in the way you would like at the meeting. Your bank, broker or other nominee will send you specific instructions in this regard to vote your shares. If you do not provide instructions to your bank, broker or other nominee, whether your shares are voted depends on the type of item being considered for a vote. For example, under applicable stock exchange rules, brokers are permitted to vote on "discretionary" items if the voting instructions from the beneficial owners of the shares are not provided in a timely manner. Brokers are not permitted to vote on "nondiscretionary" items. The proposal to approve the appointment of independent auditors is considered a "discretionary" item. This means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least ten days before the date of the meeting. In contrast, the other items to be voted on at the Annual Meeting are "nondiscretionary" items. This means brokerage firms that have not received voting instructions from their clients on these items may not vote on them. These so-called "broker nonvotes" will be included in the calculation of the number of votes considered to be present at the meeting for purposes of determining a quorum, but will not be considered in determining the number of votes necessary for approval and will have no effect on the outcome of the votes for such items.

Can I revoke my proxy or change my vote? Shareholders of record may revoke their proxies or change their votes in writing at any time prior to the meeting by sending written notice of revocation to the Corporate Secretary; by voting again by telephone or via the Internet; by voting in writing if they requested their materials in paper copy; or by voting in person at the meeting. Attendance in and of itself at the Annual Meeting will not revoke a proxy. For shares you hold beneficially but not of record, you may change your vote by submitting new voting instructions to your broker or nominee or, if you have obtained a valid proxy from your broker or nominee giving you the right to vote your shares, by attending the meeting and voting in person.

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VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS

At the close of business on March 1, 2016, there were outstanding 141,385,688 shares of common stock (together with the associated preferred stock purchase rights under the Rights Agreement dated as of July 26, 2006, between the Corporation and Computershare Investor Services, LLC, as amended). Other than 688 shares of common stock granted as restricted stock without voting rights, each of the shares of common stock is entitled to one vote. Shareholders do not have cumulative voting rights with respect to the election of directors.

Based on Schedule 13G filings with the Securities and Exchange Commission ("SEC"), the following table indicates the beneficial owners of more than 5% of the Corporation's outstanding common stock as of December 31, 2015:

Name and Address
of Beneficial Owner
  Shares
Beneficially Owned
  Percent
of Class
 

The Vanguard Group
100 Vanguard Boulevard
Malvern, Pennsylvania 19355

    12,004,503  (1)   8.80  

BlackRock, Inc.
55 East 52nd Street
New York, New York 10022

   
7,741,147

 (2)
 
5.70
 

Vanguard Fiduciary Trust Company
500 Admiral Nelson Boulevard
Malvern, Pennsylvania 19355

   
7,670,504

 (3)
 
5.63
 

T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202

   
7,072,388

 (4)
 
5.10
 

(1)
254,094 shares with sole voting power.
13,000 shares with shared voting power.
11,735,038 shares with sole dispositive power.
269,465 shares with shared dispositive power.
(2)
6,635,642 shares with sole voting power and 7,741,147 shares with sole dispositive power.

(3)
7,670,504 shares with shared voting power and 7,670,504 with shared dispositive power.

(4)
2,232,561 shares with sole voting power and 7,072,388 shares with sole dispositive power.

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BENEFICIAL OWNERSHIP

The following table lists the beneficial ownership of common stock of the Corporation of our director nominees, continuing directors, all individuals who served as either our Chief Executive Officer ("CEO") or our Chief Financial Officer ("CFO") during the last fiscal year, the three other most highly compensated executive officers of the Corporation and, as a group, all of such persons and our other executive officers as of the close of business on March 1, 2016.

     

 

          Included in Shares
Beneficially Owned
 




Excluded from Shares
 



 
Title of Class

    Name of  
Beneficial  
Owner  







Shares
Beneficially
Owned (1)



Percent of
Class (2)











Number of Shares
Which Become
Available or
Subject to Options
Exercisable
or Which Become
Exercisable
Within 60 Days of
March 1, 2016 (3)













Deferred
Share or
Stock Unit
Equivalent (4)








Restricted
Stock
Shares or
Units (5)




 
               

    Common  

Robert W. Alspaugh

      *         25,895     30,941    

  Common  

Charles E. Baker

  286,740  (6) *   248,897   56,823   12,814    

    Common  

Erik C. M. Bouts

    9,539   *     7,051         26,469    

  Common  

Michael J. Cave

    *     1,548   4,761    

    Common  

Hanno C. Fiedler

    116,730   *             29,629    

  Common  

John A. Hayes

  1,307,181  (7) 0.9   1,128,493   254,379   107,605    

    Common  

R. David Hoover

    1,806,578  (8) 1.3     1,421,000     109,704     12,605    

  Common  

Scott C. Morrison

  411,313   *   265,621   131,237   31,691    

    Common  

Georgia R. Nelson

    6,000   *         32,728     28,941    

  Common  

Lisa A. Pauley

  322,977  (9) *   153,541   67,991   12,202    

    Common  

George M. Smart

    34,442   *         13,208     28,941    

  Common  

Theodore M. Solso

  64,154  (10) *     60,027   28,941    

    Common  

Stuart A. Taylor II

    80,678   *         52,783     28,941    

  Common  

All of the above and present executive officers as a group (19)

  4,977,526  (11) 3.5   3,608,322   951,607   442,499    
(1)
Full voting and dispositive investment power, unless otherwise noted.

(2)
* Indicates less than 1% ownership.

(3)
Includes RSUs that may vest or options that may vest or be acquired upon exercise during the next 60 days.

(4)
These deferred shares or stock units are equivalent to an equal number of shares of common stock that have been deferred to the Ball Corporation Deferred Compensation Company Stock Plans, with no voting rights or dispositive investment power with respect to the underlying common stock prior to its issuance.

(5)
These Restricted Stock Shares or RSUs have no voting rights or dispositive investment power.

(6)
Includes 1,040 shares owned by Mr. Baker's children, as to which he disclaims beneficial ownership.

(7)
Includes 58,200 shares held in trust for Mr. Hayes' spouse, as to which he disclaims beneficial ownership.

(8)
Includes 32,605 shares held in trust for Mr. Hoover's spouse, as to which he disclaims beneficial ownership.

(9)
Includes 130,603 shares owned by Ms. Pauley's spouse, as to which she disclaims ownership.

(10)
Includes 28,000 shares held in trust, as to which Mr. Solso disclaims beneficial ownership.

(11)
Includes 250,448 shares to which beneficial ownership is disclaimed. In addition, no shares have been pledged as security.

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VOTING ITEM 1—ELECTION OF DIRECTORS

Pursuant to our previously Amended Articles of Incorporation and the Indiana Business Corporation Law, our Board of Directors is divided into three classes, as nearly equal in number as possible, with directors serving staggered three-year terms. Amendments to the Indiana Business Corporation Law in 2009 made this classified Board structure statutorily required for Ball Corporation, effective from and after July 31, 2009. On April 27, 2016, two persons are to be elected to serve as directors until the 2019 Annual Meeting of Shareholders. Unless otherwise instructed on the accompanying proxy, the persons named in the proxy intend to vote for nominees Hanno C. Fiedler and Georgia R. Nelson to hold office as directors of the Corporation until the 2019 Annual Meeting of Shareholders (Class I), or, in each case, until his or her respective successor is elected and qualified. Each of the nominees has consented to be named as a candidate in the Proxy Statement and has agreed to serve if elected. If, for any reason, either of the nominees becomes unavailable for election, the shares represented by proxies will be voted for any substitute nominee or nominees designated by the Board. The Board has no reason to believe that either of the nominees will be unable to serve.

Under the Corporation's Amended Articles of Incorporation, in an uncontested election, directors are elected by a majority of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. If more "withhold" than "for" votes are received, the Corporation's Bylaws require the director to resign and the Nominating/Corporate Governance Committee must make a recommendation to the Board to consider whether to accept the resignation. The relevant Bylaw provisions are set out in Exhibit A to this Proxy Statement. In a contested election, directors are elected by a plurality of the votes cast by the shares entitled to vote. Abstentions and broker nonvotes are considered neither votes "for" nor "against." Proxies may not be voted for a greater number of persons than the two named nominees.

Set forth for each director nominee in Class I and for each continuing director in Classes II and III is the director's principal occupation and employment during the past five years or, if longer, the period during which the director has served as a director, and certain other information, including his or her public company directorships during the past five years.

The Board of Directors recommends a vote "FOR" the election of each nominee for Director named.

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DIRECTOR NOMINEES AND CONTINUING DIRECTORS

To Be Elected for a Term of Three Years Until the 2019 Annual Meeting (Class I)

PHOTO

Hanno C. Fiedler

Director since: 2002

Age: 70

Board Committees: Audit and Nominating/Corporate Governance

Other Public Company Boards: In the past five years, Mr. Fiedler served on the Supervisory Boards of manroland AG, Offenbach, Germany; Pfleiderer AG, Neumarkt, Germany; Langmatz GmbH (now Langmatz AG), Garmisch-Partenkirchen, Germany; Thyssenkrupp Steel AG, Duisburg, Germany; HowaldtswerkeDeutsche Werft AG, Kiel, Germany; and Pfleiderer Unternehmensverwaltung GmbH, Neumarkt, Germany.

Mr. Fiedler was Executive Vice President, Ball Corporation, and Chairman and Chief Executive Officer, Ball Packaging Europe, December 2002 to December 2005; Chairman and Chief Executive Officer, Schmalbach-Lubeca AG, 1996 to 2002.

Specific qualifications, attributes, skills and experience: After a successful career with TRW, Inc., in 1996 Mr. Fiedler became Chairman and Chief Executive Officer of Schmalbach-Lubeca AG, one of the largest and most successful rigid packaging companies based in Europe. When Ball acquired the beverage can business of Schmalbach-Lubeca in December 2002, Mr. Fiedler became Chairman and Chief Executive Officer of Ball Packaging Europe GmbH and also joined the Board of Ball Corporation. In that capacity, Mr. Fiedler provided excellent leadership to our newly-acquired European business which generated strong earnings performance during his tenure, despite the adverse effects of the German mandatory deposit system for rigid packaging which was initiated in 2003. Mr. Fiedler retired from active management of Ball Packaging Europe at the end of 2005. He has served on the Supervisory Boards of a number of major German companies. His leadership experience within the rigid container industry worldwide, with specific emphasis on Europe, makes him well qualified to serve as a director.

PHOTO

Georgia R. Nelson

Director since: 2006

Age: 66

Board Committees: Human Resources and Nominating/Corporate Governance

Other Public Company Boards: Ms. Nelson is a director of Cummins Inc., Columbus, Indiana; Transalta Corporation, Calgary, Alberta; and Sims Metal Management Ltd., Botany, Australia.

Ms. Nelson has been President and Chief Executive Officer, PTI Resources, LLC, Chicago, Illinois, since June 2005; was President, Midwest Generation EME LLC, Chicago, Illinois, April 1999 to June 2005; and was General Manager, Edison Mission Energy Americas, Irvine, California, January 2002 to June 2005.

Specific qualifications, attributes, skills and experience: Ms. Nelson has enjoyed a successful career in the energy industry, serving as a senior executive for several U.S. and international energy companies, including as President of Midwest Generation EME, LLC from April 1999 to June 2005 and General Manager of Edison Mission Energy Americas from January 2002 to June 2005. She has had extensive international experience as well as environmental and policy experience on four continents. Ms. Nelson regularly lectures on business and corporate governance matters including at Northwestern University's Kellogg Graduate School of Management, and serves on the advisory committee of the Center for Executive Women at Northwestern. Ms. Nelson is a National Association of Corporate Directors ("NACD") Board Leadership Fellow. She also serves as a director of CH2M Inc. Previously, Ms. Nelson served on four other publicly traded company boards. Ms. Nelson's leadership roles in global businesses as well as her service on other company boards, clearly qualify her to serve as a director of our Corporation.

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To Continue in Office Until the 2017 Annual Meeting (Class II)

PHOTO

John A. Hayes

Director since: 2010

Age: 50

Other Public Company Boards: None

Mr. Hayes has been Chairman, Ball Corporation since April 2013; President and Chief Executive Officer, Ball Corporation, since January 2011. He was President and Chief Operating Officer, January 2010 to January 2011; Executive Vice President and Chief Operating Officer, 2008 to 2010; President, Ball Packaging Europe and Senior Vice President, Ball Corporation, 2007 to 2008; Executive Vice President, Ball Packaging Europe and Vice President, Ball Corporation, 2005 to 2006; Vice President, Corporate Strategy, Marketing and Development, 2003 to 2005; Vice President, Corporate Planning and Development, 2000 to 2003; Senior Director, Corporate Planning and Development, 1999.

Specific qualifications, attributes, skills and experience: Prior to joining Ball Corporation in 1999, Mr. Hayes was a Vice President of Lehman Brothers Inc. and part of an investment banking team which focused on merger and acquisition and financing advice to several major companies, including the Corporation. At Ball, Mr. Hayes initially headed our corporate development and planning activities as Senior Director and then Vice President, Corporate Planning and Development, taking on the added responsibilities of marketing and new product development from 2003 to mid-2005. He then served as President of Ball Packaging Europe, which produced excellent financial results and strong revenue growth under his leadership. During 2008 and 2009, Mr. Hayes served as Ball's Executive Vice President and Chief Operating Officer, successfully leading our key operating divisions through the economic and financial crisis. In January 2010, he was named our President and Chief Operating Officer and joined the Ball Board. In January 2011, he became our President and Chief Executive Officer, and in April 2013 he also became our Chairman. Mr. Hayes' extensive investment banking and leadership experience within Ball, including as CEO for the past five years, make him well qualified to serve as a director.

PHOTO

George M. Smart

Director since: 2005

Age: 70

Board Committees: Human Resources and Nominating/Corporate Governance

Other Public Company Boards: Director, FirstEnergy Corp., Akron, Ohio

Mr. Smart has served as Chairman of the Board of FirstEnergy since 2004, except for a brief transition period from January 1, 2015, to April 30, 2015, where he was the Lead Independent Director.

Specific qualifications, attributes, skills and experience: Mr. Smart's long career and success in the U.S. can manufacturing industry make him well qualified to serve as a director. He steadily assumed increasing responsibility at Central States Can Co., a division of Van Dorn Company, culminating in his acting as its President and Chief Executive Officer from 1978 to 1993. When Central States was acquired in 1993, Mr. Smart and his management team established a start-up company, Phoenix Packaging Corporation, to manufacture and sell full-panel easy-open ends for food containers, including to Ball's food can division. Serving as Chairman and Chief Executive Officer for Phoenix, Mr. Smart led its growth to a profitable company with revenues in excess of $80 million, when it was sold to Sonoco Products Company and became Sonoco-Phoenix, Inc. in 2001. Mr. Smart served as President of Sonoco-Phoenix until 2004 and was Chairman of the Board of FirstEnergy Corp. from 2004 to December 31, 2014, when he became its Lead Independent Director. Mr. Smart also previously served on the boards of Belden & Blake Corporation, Commercial Intertech Corporation, Unizan Financial, Van Dorn Company and as Chairman of the Can Manufacturers Institute.

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PHOTO

Theodore M. Solso

Lead Independent Director since: 2013

Director since: 2003

Age: 69

Board Committees: Human Resources and Nominating/Corporate Governance

Other Public Company Boards: Director, General Motors Co. In the past five years, Mr. Solso has served on the boards of Ashland Inc., Covington, Kentucky; and Cummins Inc., Columbus, Indiana.

Specific qualifications, attributes, skills and experience: Mr. Solso had a successful 40-year career at Cummins Inc., a Fortune 500 manufacturing company with operations around the world. This culminated with Mr. Solso becoming Chairman and Chief Executive Officer of Cummins in January 2000, a position he held through 2011, for a total of 12 years. Under his leadership, Cummins increased revenues from $6.6 billion in 2000 to over $18 billion in 2011. During the same period, its earnings per share and operating cash flow increased from $0.35 and $550 million, to $9.55 and $2.1 billion, respectively. Mr. Solso has been on the Ball Board since 2003 and is a trustee of Earth University in Costa Rica. He also serves on the board of Ad Astra Rocket Company, Houston, Texas; and General Motors Co., Detroit, Michigan, and was elected its Lead Independent Director in January 2016. Mr. Solso's long experience in leadership positions with a major global manufacturing company and his service on other public company boards make him well qualified to serve as a director.

PHOTO

Stuart A. Taylor II

Director since: 1999

Board Committees: Audit and Human Resources

Age: 55

Other Public Company Boards: Director, Hillenbrand, Inc., Batesville, Indiana; and Essendant, Inc., Deerfield, Illinois.

Mr. Taylor has been the Chief Executive Officer, The Taylor Group LLC, Chicago, Illinois, since June 2001; he was Senior Managing Director, Bear, Stearns & Co. Inc., Chicago, Illinois, 1999 to 2001.

Specific qualifications, attributes, skills and experience: Prior to starting his own private equity firm, Mr. Taylor spent 19 years in investment banking. The majority of that time was spent at Morgan Stanley in its Corporate Finance Department. In that capacity he executed a number of mergers and acquisitions and financings, including working with Ball in 1993 on the acquisition of Heekin Can Company. He also spent time at several other firms including Bear Stearns where he was a Senior Managing Director and Head of the Chicago office. In 2001, Mr. Taylor established The Taylor Group LLC, of which he is Chief Executive Officer, a successful investment company that primarily invests in small to mid-market businesses. Mr. Taylor has been a director of Ball since 1999, acted as our Presiding Director from 2004 to 2008 and chairs our Human Resources Committee. He is also a director of two other U.S.-based public companies. Mr. Taylor's extensive experience as an investment banker, entrepreneurial investor and Ball Board member make him well qualified to serve as a director.

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To Continue in Office Until the 2018 Annual Meeting (Class III)

PHOTO

Robert W. Alspaugh

Director since: 2008

Age: 69

Board Committees: Audit and Finance

Other Public Company Boards: Director, Autoliv, Inc., Stockholm, Sweden; and VeriFone Systems, Inc., San Jose, California.

Mr. Alspaugh was the Chief Executive Officer for KPMG International from 2002 to 2005.

Specific qualifications, attributes, skills and experience: Mr. Alspaugh enjoyed a distinguished 35-year career with KPMG, with increasing responsibility, which culminated in his acting as Deputy Chairman and Chief Operating Officer of KPMG-U.S. from 1998 to 2002 and Chief Executive Officer of KPMG International from 2002 to October 2005. Mr. Alspaugh's extensive experience, qualifications and skills as a leader of one of the "big four" global accounting firms enhance his service as Chair of the Corporation's Audit Committee and he has provided valuable input as a result. He also sits on two other public company boards, one in the U.S. and the other in Europe (where he chairs the audit committees), thus providing good cross-functional background and experience, with an international component. Mr. Alspaugh's extensive professional experience as a leader of a major global accounting firm, advising and supporting large international corporations, as well as his service on other company boards, make him well qualified to serve as a director.

PHOTO

Michael J. Cave

Director since: 2014

Age: 55

Board Committee: Audit and Finance

Other Public Company Boards: Director, Esterline Technologies, Bellevue, Washington; Harley-Davidson, Inc., Milwaukee, Wisconsin; and Aircastle Limited, Stamford, Connecticut.

Specific qualifications, attributes, skills and experience: Mr. Cave served for 31 years in various managerial capacities for The Boeing Company. Most recently, Mr. Cave served as Senior Vice President and President of Boeing Capital Corp., a subsidiary of The Boeing Company, from 2010 to 2014. Prior to that, he served as Senior Vice President of Business Development and Strategy at The Boeing Company, as well as Vice President of Business Strategy & Marketing of Boeing Commercial Airplanes from 2006 until late 2009. Prior to that, Mr. Cave served as Vice President & General Manager of Boeing's Airplane Programs division and focused on the strategy, product development and business results associated with those products. From 2003 to 2006, Mr. Cave served as the Chief Financial Officer of Boeing's Commercial Airplanes division and held various other senior positions prior to 2003. In addition to his accounting and financial expertise, Mr. Cave has broad experience in marketing and informational systems. He also serves on the Board of Directors of Harley Davidson, Inc., Aircastle Limited and Esterline Technologies. In 2004, Mr. Cave was honored with the Award for Executive Excellence by the Hispanic Engineer National Achievement Awards Corporation. His experience and qualifications described above make him well qualified to serve as a director.

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PHOTO

R. David Hoover

Director since: 1996

Age: 70

Board Committee: Finance

Other Public Company Boards: Director, Eli Lilly and Company, Indianapolis, Indiana; Edgewell Personal Care Company, St. Louis, Missouri; and Steelcase, Inc., Grand Rapids, Michigan.

Mr. Hoover was Chairman, Ball Corporation, January 2011 to April 2013; Chairman and Chief Executive Officer, January 2010 to January 2011; Chairman, President and Chief Executive Officer, April 2002 to January 2010; President and Chief Executive Officer, January 2001 to April 2002; Vice Chairman, President and Chief Operating Officer, April 2000 to January 2001; Vice Chairman, President and Chief Financial Officer, January 2000 to April 2000; Vice Chairman and Chief Financial Officer, 1998 to 2000; Executive Vice President and Chief Financial Officer, 1997 to 1998; Executive Vice President, Chief Financial Officer and Treasurer, 1996 to 1997.

Specific qualifications, attributes, skills and experience: Mr. Hoover has enjoyed a varied and successful 45-year career with Ball as a director, officer and employee serving in multiple corporate and divisional roles, including as Vice President and Treasurer from 1987 through 1992, Chief Financial Officer from 1993 to April 2000, and Chief Operating Officer for the balance of 2000. He was our Chief Executive Officer from January 2001 to January 2011, and led the Corporation through an unprecedented period of growth in revenues, earnings per share and free cash flow. Mr. Hoover's considerable working knowledge and leadership experience with respect to our Corporation make him uniquely qualified to serve as a director. He has been a Ball Board member for 20 years, serving as Chairman from 2002 until 2013, and serves as a director of three other U.S.-based public companies. Mr. Hoover has also served on the Board of Trustees of DePauw University since 2002 and serves on the board of the Children's Hospital Colorado.

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BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT

In April 2013, John A. Hayes was named Chairman of the Board, having been elected a director in 2010. In 2011, prior to his election as Chairman, Mr. Hayes was named President and Chief Executive Officer ("CEO"), while R. David Hoover, our predecessor CEO, continued to serve as Chairman of the Board. The decision to split the position of Chairman and CEO at that time was part of an orderly succession plan by which Mr. Hayes transitioned into his current role. Mr. Hayes assumed the position of Chairman after more than 14 years with Ball, most recently serving as President and CEO and a member of the Board.

Our Board of Directors is composed of Mr. Hayes, Mr. Hoover and seven other directors, all of whom are independent directors. The Board has four standing committees—Audit, Nominating/Corporate Governance, Human Resources and Finance. Each of the committees, except for Finance, is composed solely of independent directors (the Finance Committee is primarily composed of independent directors), with each of the four committees having an independent director serving as chairman. Mr. Solso has served as Lead Independent Director since April 2013.

Although the Corporation's Bylaws do not require that the roles of Chairman and CEO be combined, we believe our Corporation and its shareholders are well served by this traditional board leadership model. Having a single person lead the Corporation and the Board provides clear leadership, helps to maintain uniform management vision for the Corporation and the Board and provides efficiency. The Board believes that the CEO is the person best suited to serve as Chairman, because he is the person most familiar with the Corporation's businesses and the most capable of effectively identifying strategic priorities and opportunities and leading the Board in the discussion of the execution of the Corporation's strategy. Pursuant to SEC and New York Stock Exchange ("NYSE") rules, regularly scheduled executive sessions of nonmanagement directors are held. Executive sessions of independent directors are also held at least annually. Such meetings promote open discussion by nonmanagement and independent directors, enabling them to serve as a check on management, if necessary. The meetings of the independent directors are chaired by the Lead Independent Director, who is appointed by the Board.

In accordance with NYSE requirements, our Audit Committee is responsible for overseeing the risk management function of the Corporation. While the Audit Committee has primary responsibility for overseeing risk management, the entire Board is involved in overseeing risk management for the Corporation. Additionally, each Board committee considers the specific risks within its area of responsibility. Our Internal Audit Department has, for many years, analyzed various areas of risk to the Corporation and has provided risk assessment and analysis to our Audit Committee. In 2007, the Corporation established a comprehensive Enterprise Risk Management process which is now supervised by our Senior Vice President and Chief Financial Officer, whereby key corporate and divisional risks are systematically identified and assessed on a regular basis. The results of this ongoing risk assessment are reported to our Audit Committee and to our Board at least annually.

One of the responsibilities of our Board of Directors is to evaluate the effectiveness of the Board and make recommendations involving its organization and operation. We recognize that different board leadership structures may be appropriate for different companies and at different times. We believe our current leadership structure, with Mr. Hayes serving as Chairman, President and CEO, a Board with a majority of independent directors, an independent chairman for each of our standing Board committees and separate meetings of nonmanagement and independent directors, the latter led by the Lead Independent Director, provides the most effective form of leadership for our Corporation at this time. We believe that our directors provide effective oversight of risk management through the Board's regular dialogue with Ball management, the Enterprise Risk Management process, annual Board and Committee self-evaluation and assessment of specific risks within each Board committee's areas of responsibility.


BOARD DIVERSITY

Ball's Nominating/Corporate Governance Committee consistently applies the principles of diversity in its consideration of candidates for Board positions. In addition to considering characteristics such as race, gender and national origin, the Committee considers a variety of other characteristics such as business and professional experience, education and skill, all leading to differences of viewpoint and other individual qualities that contribute to Board heterogeneity. This has resulted in a diverse group of talented and capable Board members, as described in more detail under "Director Nominees and Continuing Directors."

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GOVERNANCE OF THE CORPORATION

Corporate Governance Guidelines

The Board has established Corporate Governance Guidelines to comply with the relevant provisions of Section 303A of the NYSE Listed Company Manual (the "NYSE Listing Standards"). The Corporate Governance Guidelines are set forth on the Corporation's website at www.ball.com/investors under, "Corporate Governance." A copy may also be obtained upon request from the Corporation's Corporate Secretary.

Policies on Business Ethics and Conduct

Ball established a Corporate Compliance Committee in 1993, which now consists of a focal point in each operating division and which is chaired by a designated Compliance Officer. The Committee provides quarterly reports to management and to the Audit Committee. The Committee also publishes a code of business ethics, which is in the form of the Business Ethics booklet. The Board has adopted a separate additional business ethics statement referred to as the Ball Corporation Executive Officers and Directors Business Ethics Statement ("Executive Officers and Directors Ethics Statement") designed to establish principles requiring the highest level of ethical behavior toward achieving business success within the requirements of the law and the Corporation's policies and ethical standards. The Business Ethics booklet and the Executive Officers and Directors Ethics Statement are set forth on the Corporation's website at www.ball.com/investors under, "Corporate Governance." Copies may also be obtained upon request from the Corporation's Corporate Secretary.

Director Training

All new directors receive orientation training soon after being elected to the Board. Continuing education programs are made available to directors including internal presentations, third-party presentations and externally offered programs. Three directors attended externally offered director training programs in 2015.

Communications With Directors

The Corporation has established means for shareholders or others to send communications to the Board. Persons interested in communicating with the Board, its individual directors or its committees may send communications in writing to the Corporate Secretary or the Chairman of the Board. The communication should be sent in care of the Corporate Secretary, Ball Corporation, by mail to P.O. Box 5000, Broomfield, Colorado 80038-5000 or facsimile transmission to 303-460-2691.

In accordance with the NYSE and SEC requirements, the Corporation has established additional means for interested parties to send communications to the Board and selected committees, which are described on the Corporation's website at www.ball.com/investors under, "Corporate Governance."

Shareholder proposals for inclusion in the Corporation's proxy materials will continue to be handled and must be communicated as disclosed in this Proxy Statement under "Shareholder Proposals for 2017 Annual Meeting."

Meetings of Nonmanagement and Independent Directors

The Board meets regularly and not less than four times per year. Nonmanagement directors meet regularly, usually in conjunction with a regular Board meeting. Independent directors meet at least annually. Theodore M. Solso serves as Lead Independent Director.

Director Independence Standards

Pursuant to the NYSE Listing Standards, the Board has adopted a policy adhering to the director independence requirements of the NYSE in determining the independence of directors. These standards are described on the Corporation's website at www.ball.com/investors under, "Corporate Governance."

The Board has determined that a majority of the Board is independent. Based upon the NYSE independence standards, during 2015 each of the members of the Board was and currently is independent with the exception of Messrs. Hayes and Hoover.

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BOARD MEETINGS AND ANNUAL MEETING

The members of the Board are expected to attend all meetings of the Board, relevant committee meetings and the Annual Meeting of Shareholders. The Board held ten meetings during 2015. Every current director attended 75% or more of the aggregate of the total number of meetings of the Board and the total number of meetings held by all committees of the Board on which the director served. All directors attended the 2015 Annual Meeting.


BOARD COMMITTEES

The Board has an Audit Committee, Nominating/Corporate Governance Committee, Human Resources Committee and Finance Committee.

Audit Committee

The primary purpose of the Audit Committee is to assist the Board in fulfilling its responsibilities to oversee management's conduct and the integrity of the Corporation's public financial reporting process including the oversight of (1) accounting policies; (2) the system of internal accounting controls over financial reporting; (3) disclosure controls and procedures; (4) the performance of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Corporation (the "independent auditor"); (5) the Internal Audit Department; and (6) oversight of the Corporation's risk management. The Audit Committee is also responsible for engaging and evaluating the Corporation's independent auditor and its lead engagement partner, including the qualifications and independence of both; resolving any differences between management and the independent auditor regarding financial reporting; reviewing and preapproving all audit and non-audit fees and services provided by the independent auditor; and establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters.

Members of the Audit Committee are Messrs. Alspaugh, Cave, Fiedler and Taylor. The Board has determined that each member of the Audit Committee is independent and financially literate, has accounting or financial management expertise and is an Audit Committee financial expert under the NYSE Listing Standards and the SEC regulations. The Audit Committee met five times during 2015.

The Report of the Audit Committee is set forth later in this Proxy Statement. The Committee has considered the non-audit services provided during 2015 and 2014 by the independent auditor as disclosed below and determined the services were compatible with maintaining the auditor's independence. The Committee believes the fees paid to the independent auditor in respect of the services were appropriate, necessary and cost-efficient in the management of the business of the Corporation and are compatible with maintaining the auditor's independence.

Audit Fees and Services

The following table represents fees for professional services rendered by PricewaterhouseCoopers LLP, the Corporation's independent auditor, for 2015 and 2014. Audit fees included the audit of the Corporation's annual Consolidated Financial Statements, reviews of quarterly reports and the auditor's report under the Sarbanes-Oxley Act of 2002, together with fees for statutory and subsidiary audits, SEC registration statements, comfort letter and consents. Audit-related services consisted principally of consultations related to the Corporation's potential acquisitions, audits of employee benefit

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plans, joint venture accounting and derivative transactions. Tax fees consisted principally of tax compliance matters related to tax audits, return preparation fees and fees for tax consultations.

 
Fiscal 2015


Fiscal 2014
 

             

Audit Fees

         

Audit Reports

  $ 7,555,000   $ 6,299,000  

             

Audit-Related Fees

         

Benefit Plans

  $ 23,000   $ 24,000  

Consultations

    2,627,000     357,000  

             

Tax Fees

         

Tax Compliance Matters

  $ 762,000   $ 873,000  

Tax Consultations

    3,075,000     1,786,000  

             

All Other Fees

  $ 113,000   $ 60,000  

The Audit Committee's Charter requires management to submit for preapproval all audit, audit-related and non-audit-related services to be performed by the independent auditor. Management and the independent auditor submit a report of fees for review and preapproval by the Committee on a quarterly basis. The Audit Committee requires management and the independent auditor to submit a report at least annually regarding audit, audit-related, tax and all other fees paid by the Corporation to the independent auditor for services rendered in the immediately preceding two fiscal years. The Committee considers whether the fees for non-audit and audit-related services are compatible with maintaining the auditor's independence and requires management and the independent auditor to confirm this as well. The Audit Committee preapproved 100% of all of the above-referenced fees paid in 2015 and 2014 for services that were provided by PricewaterhouseCoopers LLP.

There were no hours expended by persons other than the independent auditor's full-time, regular employees on the independent auditor's engagement to audit the Corporation's financial statements.

A copy of the Audit Committee Charter is set forth on the Corporation's website at www.ball.com/investors under, "Corporate Governance."

Nominating/Corporate Governance Committee

The Nominating/Corporate Governance Committee is responsible for assisting the Board in fulfilling its responsibility to identify qualified individuals to become Board members; recommending to the Board the selection of Board nominees for the next Annual Meeting of Shareholders; addressing the independence and effectiveness of the Board by advising and making recommendations on matters involving the organization and operation of the Board, Corporate Governance Guidelines and directorship practices; overseeing the evaluation of the Board and its committees; and reviewing and assessing the Corporation's sustainability activities and performance. The Nominating/Corporate Governance Committee utilizes the standards set forth below for considering director nominees.

Members of the Nominating/Corporate Governance Committee are Messrs. Fiedler, Smart, Solso and Ms. Nelson. The Board has determined that the members of the Committee are independent under the NYSE Listing Standards. The Nominating/Corporate Governance Committee met four times during 2015.

The Board has established a process whereby nominees for the Board may be submitted by members of the Board, the CEO, shareholders and any other persons. The Committee considers these recommended candidates in light of criteria set forth below.

The Committee will seek candidates who meet at a minimum the following criteria: (1) have sufficient time to attend or otherwise be present at Board, relevant Board committee and Shareholders' meetings; (2) will subscribe to Ball Corporation's Corporate Governance Guidelines and the Executive Officers and Directors Ethics Statement; (3) demonstrate credentials and experience in a broad range of corporate matters; (4) have experience, qualifications, attributes and skills that would qualify them to serve as a director; (5) will subscribe to the finalized strategic and operating plans of the Corporation as approved by the Board from time to time; (6) are not affiliated with special interest

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groups that represent major causes or constituents; and (7) meet the criteria, if any, for being a director of the Corporation as set forth in the Indiana Business Corporation Law, the Articles of Incorporation and the Bylaws of the Corporation.

The Committee will apply the principles of diversity in consideration of candidates. The Committee may utilize and pay third-party consultants to identify and screen candidates on a confidential basis for service on the Board. The Committee will also determine candidates' qualifications in light of the standards set by the Committee and by evaluating the qualifications of all candidates in an attempt to select the most qualified nominees suited to serve as a director while attempting to ensure that a majority of the Board is independent and, where needed, to meet the NYSE and SEC requirements for financial literacy, accounting or financial management expertise or audit committee financial expert status.

The Nominating/Corporate Governance Committee will consider candidates recommended by shareholders in accordance with the Corporation's Bylaws. Any such recommendation should be in writing and addressed to the Chair, Nominating/Corporate Governance Committee, in care of the Corporate Secretary, Ball Corporation, by mail to P.O. Box 5000, Broomfield, Colorado 80038-5000.

The Nominating/Corporate Governance Committee received no recommendations for candidates as nominees for the Board from a security holder or group of security holders that beneficially owned more than 5% of the Corporation's voting common stock for at least one year as of the date of the recommendation.

A copy of the Nominating/Corporate Governance Committee Charter is set forth on the Corporation's website at www.ball.com/investors under, "Corporate Governance."

Human Resources Committee

The primary purpose of the Human Resources Committee is to assist the Board in fulfilling its responsibilities related to the evaluation and compensation of the CEO and overseeing the compensation of the other executive officers of the Corporation; reviewing and approving the schedule of salary ranges and grades for the salaried employees of the Corporation; approving the Corporation's stock and cash incentive compensation programs including awards to executive officers and the number of shares to be optioned and/or granted from time to time to employees of the Corporation; approving and receiving reports on major benefit plans, plan changes and determinations and discontinuations of benefit plans; discussing the performance evaluation system and succession planning system of the Corporation, including discussions with the Chairman of the Board and the CEO about the succession plan for the Chairman of the Board and the CEO; hiring experts, including executive compensation consultants, as deemed appropriate to advise the Committee; assessment of compensation-related risks; and authorizing the filing of required reports with federal, state and local governmental agencies.

Members of the Human Resources Committee are Messrs. Smart, Solso, Taylor and Ms. Nelson. The Board has determined that the members of the Committee are independent under the NYSE Listing Standards. The Human Resources Committee met five times during 2015. A copy of the Human Resources Committee Charter is set forth on the Corporation's website at www.ball.com/investors under, "Corporate Governance."

Finance Committee

The Finance Committee assists the Board in fulfilling its responsibility to oversee management in the financing and related risk management of the Corporation, the status of the Corporation's retirement plans and insurance policies and the Corporation's policies relating to interest rates, commodity hedging and currency hedging. The Committee may hire experts as deemed appropriate to advise the Committee in the performance of its duties. The Committee reports to the Board concerning the financing of the Corporation and the performance of the Committee.

The members of the Finance Committee are Messrs. Alspaugh, Cave and Hoover. The Committee met four times during 2015. A copy of the Finance Committee Charter is set forth on the Corporation's website at www.ball.com/investors under, "Corporate Governance."

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TRANSACTIONS WITH RELATED PERSONS, PROMOTERS
AND CERTAIN CONTROL PERSONS

Ball Corporation has adopted a policy with respect to transactions with related persons requiring its executive officers and directors to comply with all SEC and NYSE requirements concerning transactions between the Corporation and "related persons," as defined in the applicable SEC and NYSE rules. To facilitate compliance with the related persons policy, the Board adopted procedures for the review, approval or ratification of any transaction required to be reported under the applicable rules. The policy provides that each executive officer and director will promptly report to the Chairman of the Board any transaction with the Corporation undertaken or contemplated by such officer or director, by any beneficial owner of 5% or more of the Corporation's voting securities or by any immediate family member. The Chairman of the Board will refer any transaction to the General Counsel for review and recommendation. Upon receipt of such review and recommendation, the matter will be brought before the Nominating/Corporate Governance Committee to consider whether the transaction in question should be approved, ratified, suspended, revoked or terminated. This policy for transactions with related persons is stated in writing and is part of the Ball Corporation Executive Officers and Directors Ethics Statement. The written form of the policy can be found on the Corporation's website as indicated in the section "Policies on Business Ethics and Conduct" on page 13.

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EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Discussion and Analysis ("CD&A") portion of our proxy materials describes Ball Corporation's 2015 executive compensation program and its strong alignment with our pay-for-performance philosophy.


EXECUTIVE SUMMARY

Ball Corporation experienced another solid year in 2015—including sales of $8.0 billion, comparable net earnings of $490 million and free cash flow of $558 million, excluding cash costs related to the proposed Rexam transaction. Results include the impact of unfavorable foreign earnings translation and other transitory costs, and startup costs related to more than $350 million of growth capital investments in 2015 to position the Company for positive Economic Value Added ("EVA®") dollars growth going forward. The chart below summarizes certain key financial results for fiscal year 2015 compared to fiscal year 2014 which, while slightly down from the prior year, represent significant accomplishments given the challenging economic and industry environment:

  2015

2014

% Growth

Revenue (net sales)

  $8.0 billion   $8.6 billion   (7.0%)

Net Earnings (comparable basis)*

  $490 million   $553 million   (11.4%)

Free Cash Flow*

  $558 million   $622 million   (11.1%)

Closing Stock Price on December 31

  $72.73   $68.17   6.7% 

Diluted Earnings Per Share (comparable basis)*

  $3.48   $3.88   (10.3%)
*
These financial measures are on a non-U.S. GAAP basis and should be considered in connection with the Consolidated Financial Statements contained within Item 8 of the 2015 Annual Report on Form 10-K (the "Annual Report"). Non-U.S. GAAP measures should not be considered in isolation and should not be considered superior to, or a substitute for financial measures calculated in accordance with U.S. GAAP. A reconciliation of non-GAAP measures to U.S. GAAP is available in Items 6 and 7 of the Annual Report.

Ball's stock price closed 2015 at $72.73, an increase of 6.7% over the prior year. Including reinvested dividends, Ball generated a total return of 7.5% for the same period. The year-over-year increase was above the (5.8%) decline for the Dow Jones Containers and Packaging Index and the (0.7%) decline for the S&P 500. Since the end of 2012, Ball's stock price increased 67.1% as compared to 47.1% for the Dow Jones Containers and Packaging Index and 52.6% for the S&P 500. Also during 2015, Ball continued to pay a quarterly cash dividend of 13 cents per share.

The solid 2015 business results are a continuation of the performance we have delivered over the last decade. The graph below compares the cumulative ten-year total return to holders of Ball Corporation's common stock with the cumulative total returns of the S&P 500 Index and the Dow Jones U.S. Containers & Packaging Index. The graph tracks the performance of a $100 investment in our common stock (with the reinvestment of all dividends) and in each of the indexes from December 31, 2005, to December 31, 2015.

   
GRAPHIC
   
    Source: Bloomberg    

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

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Much of our financial success is attributable to the fact that we continue to focus on the key components of our financial strategy, which include:

Generating free cash flow;

Disciplined and balanced capital allocation;

Growing earnings before interest and taxes ("EBIT") by maximizing value in existing businesses, expansion into new markets and products through internal capital investments, and merger and acquisition activities; and

Generating incremental Economic Value Added ("EVA®") over our 9% after-tax hurdle rate, which is above our weighted average cost of capital ("WACC"), and over time leads to a higher share price and shareholder returns.

 
GRAPHIC

In 2015, we had many operational successes that were driven by our over 15,000 global employees and our focused execution of Ball's Drive for 10 vision for continued, long-term value creation, including:

Maximizing value in our existing businesses, leveraging plant floor systems in our metal beverage facilities to improve efficiencies and reduce costs, implementing cost-out and value-in initiatives across all our businesses, and continuing our commitment to sustainability by balancing the economic, environmental and social impacts of our products and operations in our business decisions throughout the year;

Expanding into new products and capabilities, with the installation of a new extruded aluminum aerosol line in our Devizes, United Kingdom facility, and the expansion into easy-open metal ends and closures via acquisition;

Aligning ourselves with the right customers and markets, by investing capital to meet double-digit volume growth for specialty beverage containers throughout our global network, which now represent approximately 30% of our global beverage packaging mix, and successfully commercializing the next generation aluminum shaped bottle produced in our Conroe, Texas, facility;

Broadening our geographic reach, with new investments in a metal beverage manufacturing facility in Myanmar, the construction of a metal beverage container facility in Monterrey, Mexico, producing cans and ends, as well as the opening of our extruded aluminum aerosol manufacturing facility in India, and progress on a previously awarded South Korean environmental instrument in our aerospace business; and

Leveraging our technological expertise in packaging innovation, including the introduction of G3-HD a next-generation, two-piece steel aerosol manufacturing technology in our Chestnut Hill, Tennessee, facility and pursuing opportunities to further enhance our aerospace technical expertise across a broader customer portfolio.

These ongoing business developments help us stay close to our customers while expanding and/or sustaining our industry positions with major beverage, food, personal care, household products and aerospace customers. The actions we took in 2015 are linked directly to our Drive for 10 vision, and position Ball well for continued success in 2016. We see opportunities for disciplined growth in selected markets and products, and our strong balance sheet provides a solid foundation to support all of our activities.

Pay-for-Performance Continues to Serve as the Foundation of our Executive Compensation Program—The design, governance and administration of our executive compensation program is centered on the principle of aligning pay to performance, achieved by linking the majority of executive compensation opportunities to long-term shareholder returns and the value-added financial performance of Ball. We believe this principle has directly contributed to the successful performance of the business through:

A management-as-owners culture that builds a management team with meaningful ownership in Ball. Executives are closely aligned to shareholder interests through established ownership expectations, equity-settled long-term incentives and specialized opportunities that encourage individuals to make meaningful, personal investments in Ball Corporation common stock.

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Incentive pay programs that utilize value-added financial performance metrics—specifically, EVA®, ROAIC, TSR and absolute stock price growth—that allow for close alignment with shareholder value generation by creating accountability for both the efficient deployment of capital and strong earnings generation.

The major compensation elements of Ball's pay-for-performance philosophy are shown in the table below, with the page number in the CD&A that details the specifics of each of these components:

Compensation Element

Basis for Performance Measurement

Alignment with Principle of
Pay-for-Performance


Page
             
Short-Term Annual Cash Compensation
Base Salary   Individual performance and contribution based on primary duties and responsibilities   Competitive compensation element required to recruit and retain top executive talent; pay for primary duties and responsibilities   30
Economic Value Added (EVA®) Annual Incentive Plan   EVA® Growth
(net operating profit after-tax, less a cost of capital charge)
  Measures the increase in actual economic value generated by the business   30
Long-Term Incentives (Cash)  
Long-Term Cash Incentive Plan ("LTCIP")  

ROAIC

Relative TSR vs. S&P 500 subset

  Rewards ROAIC performance above a target rate set above Ball's WACC and shareholder returns that outperform the market   32
Long-Term Incentives (Equity)  
Stock Options/Stock-Settled Stock Appreciation Rights ("SARs")   Stock Price Appreciation   Rewards absolute stock price growth over time   34
Performance-Contingent Restricted Stock Units ("PC-RSUs")  

Absolute EVA® Dollars Growth

Stock Price

  Builds executive ownership with stock unit awards that vest contingent upon the achievement of absolute EVA® dollar growth relative to compound growth rate targets over a 3-year period   34
Restricted Stock/RSUs   Stock Price   Granted from time-to-time, generally in connection with the promotion or recruitment of individuals to facilitate ownership and retention   35
Deposit Share Program ("DSP")   Stock Price   Promotes an executives-as-owners culture by making deposit share opportunities from time-to-time at the discretion of the Committee, in exchange for the recipient voluntarily investing in and holding shares of Ball Corporation common stock   35

Our Heavy Weighting of Compensation to Performance Creates Pay-for-Performance Linkage—Consistent with our management-as-owners, pay-for-performance philosophy described previously, the majority of the target total compensation for our executives is variable based on performance, which constitutes pay at risk. The CEO is eligible to participate in the same executive programs as the CFO and the other NEOs; however, a larger portion of the CEO's target total compensation is at risk. The following charts represent the mix of target total compensation awarded to Ball's CEO and other NEOs in 2015, excluding one-time, service-based RSUs awarded to Mr. Bouts (upon hire) and Mr. Morrison (upon successfully serving as interim COO of Ball Corporation's Global Beverage Packaging business in addition to his role as CFO in 2014). As illustrated, 85% of the target total compensation awarded to the CEO and 69% awarded to other NEOs in 2015 was based on elements that are at risk and may vary from year to year depending on business performance. This is generally consistent with competitive market data, which shows that CEOs have 86% and all other NEOs have 72% of their target total compensation based on elements that are at risk. Furthermore, 67% of the CEO's and 47% of the other NEOs' target total compensation was based on long-term performance. Again, this is consistent with competitive market data, which shows that CEOs have 69% and all other NEOs have 52% of their target total compensation based on long-term performance. This emphasis on longer term compensation, through performance based long-term cash and stock awards, ensures a strong continued alignment between Ball's executive ownership and shareholder value creation objectives.

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GRAPHIC

Our Compensation Plans are Closely Linked to Business Performance—Ball's fiscal 2015 financial results and the resulting EVA® improvement were directly linked to the pay outcome of our annual short-term incentive plan, since the payout factor is based on the amount of profits generated, in excess of both operating and capital costs, resulting in EVA® in excess of targets, as shown below:

Compensation Element

2015 Performance Achievement

2015 Pay Outcome
         
Annual Cash Compensation        
Economic Value Added (EVA®) Annual Incentive   For Ball's Consolidated Plan, the actual EVA® generated in excess of Ball's internal 9% after-tax hurdle rate for fiscal year 2015 of $180.6 million exceeded our $167.5 million EVA® incentive plan target by $13.1 million. The actual EVA® generated in the Global Beverage Packaging business also exceeded its EVA® incentive plan target.   Payout was at 125% of target for all NEOs except Mr. Bouts whose payout was 182% of target.

Likewise, our fiscal year 2015 results reflect a continuation of the successful execution of our business strategy and strong performance in prior years; therefore, pay realized by our NEOs from long-term incentive performance cycles

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completed at 2015 year-end reflects our commitment to improved financial performance and stock price growth, as shown below:

Compensation Element

2015 Performance Achievement

2015 Pay Outcome
         
Long-Term Incentives (Equity)
Performance-Contingent RSUs ("PC-RSUs") 2013-2015 Cycle   Actual EVA® generated was $180.6 million compared to our compound growth rate target of $181.5 million.   PC-RSUs granted in 2013 vested for all NEOs on January 29, 2016, at amounts that were 95.5% of target, based on the Actual EVA® growth relative to target.
         
Long-Term Incentives (Cash)
Long-Term Cash Incentive Plan ("LTCIP") 2013-2015 Cycle   Actual 3-year average ROAIC of 13.0% exceeded the target of 9.0%.

Relative TSR versus the S&P 500 subset was at the 61st percentile, which exceeded the target of 50th percentile.

  All of our NEOs received LTCIP payout equal to 172.2% of target, based on the blended ROAIC and TSR performance relative to targets.

We Are Committed to Shareholder-Oriented Corporate Governance—Our governance process ensures that the executive compensation program is appropriately maintained and updated to always meet a standard of excellence in pay-for-performance alignment. Specifically, a number of practices and policies are in place to promote the continuous improvement and accountability of our executive compensation program:

A Human Resources Committee of the Board of Directors (the "Committee") composed entirely of directors who meet the NYSE independence standards;

An executive compensation consultant, engaged by and reporting directly to the Committee;

A review of total compensation via tally sheets;

External benchmarking of compensation levels and incentive design practices;

Dividend equivalents for performance-based awards which only vest when performance measures are achieved;

Nominal perquisites that are not grossed-up for taxes;

Ongoing assessment of the relationship between risk and compensation programs;

Executive stock ownership guidelines for executives and directors, which have been attained by all, with the exception of Mr. Cave, who joined the Board in October 2014 and is in the process of attaining shares within the required period, and Mr. Bouts, who joined the Company in February 2015 and is in the process of attaining shares within the required period;

An anti-hedging policy for our executives and directors;

A shareholder-approved recoupment or "clawback" provision for cash incentive and stock compensation, which in the case of fraud or intentional misconduct by any executive at a level of vice president or above, may result in full reimbursement to Ball of any incentive compensation or cancellation of any outstanding awards to the executive; and

Change-in-control agreements with multiples that do not exceed two times pay and that require a termination of employment following a change in control ("double trigger") before severance benefits are due. Excise tax gross-ups have been eliminated for any new change-in-control agreements entered into after January 1, 2010.

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Composition of our NEOs in 2015—This year's NEOs are shown in the table below:

Officers

Title
John A. Hayes   President and CEO since 2011, elected Chairman in 2013
Scott C. Morrison   SVP and CFO since 2010 (and interim COO of Global Metal Beverage Packaging in 2014)
Erik C. M. Bouts   SVP and COO, Global Metal Beverage Packaging, hired February 2015
Charles E. Baker   VP and General Counsel since 2004, elected Corporate Secretary in 2011
Lisa A. Pauley   SVP, Human Resources and Administration since 2011

NEO Target Compensation Awarded in 2015—After review of competitive market data based on both General Industry and Peer Group, Ball's financial and operational performance, executive compensation consultant and CEO recommendations, tally sheet analysis, executive individual performance, and internal pay comparisons, the Committee authorized the following target total compensation elements for the CEO and other NEOs:

Base salary increases to all NEOs based on analysis of external market data, with the exception of Mr. Bouts who joined the Company in February 2015;

Continued utilization of the short-term annual incentive EVA® plan. Target incentive opportunity percentages changed for all NEOs except Mr. Bouts, which increased to better-align their total pay and total direct compensation with market;

Continued utilization of the long-term cash incentive plan for all NEOs. LTCIP targets for the 2015-2017 cycle were defined as a fixed dollar amount and the mix of the target value of long-term incentive vehicles was targeted 20% for LTCIP, 40% for SARS and 40% for PC-RSUs for all NEOs; and

Continued utilization of PC-RSUs and SARs awards. As outlined above, the performance measure and degree of vesting for the 2015-2017 PC-RSU awards is based on a future target value of absolute EVA® dollars generated in excess of Ball's 9% after-tax hurdle rate as the capital charge, relative to compound growth rate targets achieved over a three-year period. PC-RSU awards for 2015-2017 have a potential outcome to executives of 0% to 200%.

The Committee is confident that our executive compensation program, along with our management-as-owners culture and our pay-for-performance philosophy, have directly contributed to the successful performance of the business and resulted in an executive team closely aligned with shareholders.

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COMPENSATION OBJECTIVES AND PHILOSOPHY

The primary objective of the Corporation's executive compensation program is to attract and retain exceptional leaders and enable them to behave like an owner—one of our key business values. When setting executive compensation, the Corporation applies a consistent approach for all executive officers and intends that the combination of compensation elements closely aligns the executives' financial interests with those of the shareholders. The program is mainly designed to:

Attract, motivate and retain a highly capable and performance-focused executive team;

Promote a culture of management owners whose financial interests are aligned with those of the Corporation's shareholders;

Pay-for-performance such that total compensation reflects the individual performance of executives and the absolute and relative performance of the Corporation; and

Efficiently manage the potential stock dilution, cash flow, tax and reported earnings implications of executive compensation, consistent with the other objectives of the program.

Target total compensation is composed of base salary, annual EVA® incentive compensation and long-term incentive compensation in the form of both cash and equity. In support of the Corporation's emphasis on significant ownership by key executives, the Corporation delivers long-term incentive opportunities that encourage ownership. Generally, the amount of compensation realized or potentially realizable does not directly impact the level at which future pay opportunities are set. However, when granting equity awards, the Committee reviews and considers both individual performance and the number of outstanding and previously granted equity awards.

In addition to promoting share ownership, the Corporation's executive compensation objectives and philosophy focus on rewarding performance. This means that shareholder returns along with corporate performance, both short-term and long-term, comprise the largest portion of executive pay.


ROLE OF THE HUMAN RESOURCES COMMITTEE AND EXECUTIVE
COMPENSATION CONSULTANT

The Committee oversees the administration of the executive compensation program and determines the compensation of the executive officers of the Corporation. The Committee is solely composed of nonmanagement directors, all of whom meet the independence requirements of the NYSE. Furthermore, the Committee has retained an independent consultant (the "Consultant") to assist in fulfilling its responsibilities. The Consultant is employed by Pay Governance, LLC, and is engaged by and reports directly to the Committee. Specifically, the Consultant's role is to develop recommendations for the Committee related to all aspects of the executive compensation program and the Consultant works with management to obtain information necessary to develop the recommendations. The Committee assessed Pay Governance's independence in 2015, as required under NYSE listing rules. Based on this review, we do not believe that any conflict of interest exists with the work performed by Pay Governance and consider them to be independent.


MARKET REFERENCE POINTS AND PEER GROUPS

When benchmarking compensation to the competitive market, we use two market reference points for our executive officers. This two-pronged approach provides a spectrum of relevant information on executive compensation levels, practices and trends in the marketplace.

The primary market reference point ("General Industry") reflects the broad talent market in which we compete. The critical skills required by the Corporation's management team have historically been found both inside and outside of the containers and packaging industry, and as such, the Committee believes it is appropriate to focus on General Industry market levels as the primary market reference point for evaluating the competitiveness of our executive compensation program. These data are size-adjusted to reflect the relative size of the Corporation or the relevant business unit for the executive. Size-adjusting the data ensures that market levels are being developed for like roles within businesses of similar size and scope. Data for the General Industry are collected from multiple proprietary survey sources published by leading market data providers.

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The secondary market reference point ("Peer Group") is composed of companies within the containers and packaging, distiller and brewer, food, household durable and nondurable goods, aerospace and general manufacturing industries. We use the secondary reference point to identify any differences in compensation practices between related industry peers and the broader General Industry. Our Peer Group consisted of 17 companies with fiscal-annual revenues ranging from 0.4x to 2.5x Ball's revenues. Data for the Peer Group are collected from both proprietary survey sources where custom analyses for selected peer groups are available and publicly disclosed data from SEC filings.

In developing the Peer Group, the Consultant used objective, quantitative financial and industry criteria, as well as qualitative criteria regarding the nature of our business operations. Specifically, the Consultant used the following principles and criteria in identifying the Peer Group companies:

    Design Principle

Criteria

 
    Quantitative financial criteria to ensure organizations are comparable in terms of size and structure  

Revenue between an approximate range of 0.4x to 2.5x Ball's revenues

Market capitalization between 0.25x to 5.0x Ball's market capitalization (used as a secondary reference)

Ratio of market capitalization to revenue between 0.5x and 2.0x

Positive operating margins ranging from 5% to 20%

   
    Qualitative criteria regarding appropriate industry, business types and organizational complexity  

Ball's direct peers in the containers and packaging industry

Nondurable consumer product companies with some or all of the following characteristics: containers and packaging are a critical element of the final product, there is a substantial business focus on meeting annual performance expectations, and the individual consumer represents the ultimate purchaser of the product

Broader manufacturing companies within the aerospace, office services supplies, capital goods, chemical manufacturing, paper products and steel industries

   

For 2015, our Peer Group included the following companies, reflecting the removal of H.J. Heinz, as they were acquired by Berkshire Hathaway, and the addition of Rock-Tenn in 2014:

    Avery Dennison Corporation
Bemis Company, Inc.
Campbell Soup Company
ConAgra Foods, Inc.
Crown Holdings Inc.
Eastman Chemical Company
      Exelis
Greif, Inc.
MeadWestvaco Corporation
Molson Coors Brewing Company
Owens-Illinois, Inc.
PPG Industries, Inc.
      Rock-Tenn
Sealed Air Corporation
Silgan Holdings, Inc.
Sonoco Products Company
United States Steel Corp.
   

In the third quarter of 2015, Exelis was removed from our Peer Group as it was acquired by Harris Corporation, making it no longer a viable comparator. Additionally, MeadWestvaco merged with Rock-Tenn in the third quarter of 2015 to create WestRock Company. The combined entity will be a part of the 2016 Peer Group. This amended Peer Group will be used for all 2016 pay decisions.

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The chart below illustrates the Corporation's relative positioning compared to the 2015 Peer Group on relevant financial metrics.


Ball Market Capitalization, Revenue and Net Income as
Compared to the Peer Group

   
LOGO
   

 

 

Note: Financial statistics shown above in $M, are on a U.S.-GAAP, as-reported basis and were provided by the Consultant and obtained from the S&P's Capital IQ database.

 

 

*      Market Cap is as of December 31, 2014.

 

 

**    Revenue and Net Income are as reported for FY 2014.


PROCESS FOR DETERMINING EXECUTIVE COMPENSATION

The Committee reviews and adjusts executive target total compensation levels, including long-term incentive levels in January of each year.

The Corporation begins the annual process by reviewing each executive officer's target total compensation in relation to the 50th percentile of both the primary and secondary market reference points, e.g., General Industry and Peer Group. The data is gathered by the Consultant and presented to the Corporation and the Committee in detailed reports providing a comparative analysis of our executive officer compensation to the market data. The Consultant collaborates with the Corporation's Executive Compensation Department when preparing such reports.

Additionally, the Consultant creates tally sheets for each executive outlining each executive's annual target and actual pay in relation to competitive market information as well as total accumulated pay under various corporate performance scenarios, both recent and projected. The tally sheets are used to analyze and determine executive officer pay recommendations and understand the potential realizable compensation under various performance scenarios. The Consultant also prepares for the Committee an independent review and recommendation of the CEO's compensation. In its deliberations, the Committee meets with the CEO and other members of senior management, as appropriate, to discuss the application of the competitive benchmarking (pay and performance) relative to the unique structure and needs of the Corporation.

The CEO's target total compensation package is set by the Committee during an executive session based on the Committee's review of the competitive information and recommendation prepared by the Consultant, assessment of the CEO's individual performance in conjunction with the financial and operating performance of the Corporation and appropriate business judgment.

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A recommendation for the target total compensation of the Corporation's other executive officers, including the CFO and other NEOs, is made by the CEO after reviewing the executive's and the Corporation's business performance in conjunction with the executive's responsibility and experience when compared to the competitive market information prepared by the Consultant. The compensation package for the other executive officers is established by the Committee taking into consideration the recommendation of the CEO, the executive officer's individual job responsibilities, experience and overall performance, along with appropriate business judgment.

The Committee may also adjust an executive's compensation level during the year as a result of a promotion. Such adjustments take into consideration competitive market data and a recommendation provided by the Consultant, as well as the recommendation of the CEO, which takes into account the additional responsibilities assigned and overall experience and performance of the executive.


ELEMENTS OF BALL'S EXECUTIVE COMPENSATION PROGRAM AND 2015 PERFORMANCE

The primary elements of the Corporation's executive compensation program are designed to be consistent with the compensation objectives described previously. The elements are outlined in the following table. The purpose of each element is also provided to demonstrate how each fits with the overall compensation objectives, specifically, stock ownership and pay-for-performance.

 
   
   
   
   
   
   
   
   
   
   
      
Component


   
Element


    
Purpose


    
Performance Measures


  2015 Performance
Outcome


 
    Base Compensation–
Current Year
      Annual Base Salary       Fixed element of pay based on an individual's primary duties and responsibilities.       Individual performance and contribution based on primary duties and responsibilities.       All NEOs received base pay increases, except for Mr. Bouts (as he was hired in February 2015), which included increases for certain NEOs to better-align total compensation with market median, as applicable.    
    Annual Incentive–
Performance Based
Cash
      Annual EVA® Incentive Compensation Plan       Designed to reward achievement of specified annual corporate and/or operating unit financial goals pursuant to EVA® principles.       Actual 2015 EVA® based on the amount of corporate net operating profit after-tax, less a charge for capital employed in the business based on the Corporation's 9% after-tax internal hurdle rate, as compared to the 2015 EVA® incentive plan target.       Resulted in an award of 125% of target for all NEOs except Mr. Bouts, who received an award of 182% of target (as his target is based on a combination of his respective operating unit's financial and EVA® goals and the Corporation's consolidated plan).    
    Long-Term Incentive–
Performance Based
Cash
      Long-Term Cash Incentive Plan       Designed to promote long-term creation of shareholder value in relative terms (TSR performance versus a subset of companies in the S&P 500) and absolute terms (ROAIC) and provide an executive retention incentive.       50% based on TSR over 3 years relative to a subset of S&P 500 companies and 50% based on ROAIC over 3 years, as compared to targets.       The 2013-2015 cycle resulted in an award payment of 172.2% of target for all NEOs, except Mr. Bouts, based on above-target performance for relative TSR (61st percentile) and above-target ROAIC performance (13.0%).    

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Component


   
Element


    
Purpose


    
Performance Measures


  2015 Performance
Outcome


 
    Long-Term Incentive—Performance Based Equity       Stock Options and Stock-Settled SARs       Designed to promote share ownership and long-term performance resulting in the creation of shareholder value.       Stock price appreciation relative to the grant date stock price (exercise price) of the stock options/SAR grants.      



Stock price performance ending
   
            Restricted Stock/RSUs       Designed to
promote share ownership, provide a retention incentive and provide long-term incentive for the creation of shareholder value.
      Stock price
appreciation.
      December 31, 2015, excluding reinvestment of dividends:

Ball vs. S&P 500 1-year:
    6.7% vs. (0.7%).

Ball vs. S&P 500 3-year:
    67.1% vs. 52.6%.
   
            Deposit Shares/RSUs       Designed to promote executive financial investment in the Corporation, promote share ownership and provide long-term incentive for performance resulting in the creation of shareholder value.       Attainment of required holding period and stock price appreciation.            
            Performance-Contingent RSUs       Designed to promote share ownership through the achievement of absolute EVA® dollar growth relative to compound growth rate targets over a 3-year period.       Actual absolute EVA® dollars, equal to or exceeding a future estimated absolute EVA® dollar target.       For all NEOs, except Mr. Bouts, resulted in vesting of the 2013-2015 PC-RSU award on January 29, 2016, based on actual EVA® generated of $180.6 million compared to our compound growth rate target of $181.5 million (award equal to 95.5% of target).    

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Component


   
Element


    
Purpose


    
Performance Measures


  2015 Performance
Outcome


 
    Benefits       Life Insurance and Pension Benefits       Supports basic life insurance and retirement income security needs.       N/A       N/A    
            Supplemental Executive Retirement Plan ("SERP")       Replicates benefits provided under the U.S. qualified pension plan, not otherwise payable due to IRS qualified plan limits.                    
            Non-Qualified Deferred Compensation       Provides eligible participants the ability to defer certain pretax compensation into a savings plan to support retirement income or other needs.                    
            Perquisites and Other Personal Benefits       Noncash compensation generally nominal in value, which may consist of financial planning, executive physicals, aircraft usage and insurance premiums. The percent of total compensation may exceed the nominal range for an executive on foreign assignment.                    


SPECIFICS RELATED TO THE 2015 EXECUTIVE COMPENSATION ELEMENTS

When determining our executive target total compensation decisions in January 2015, the Committee took into account the Corporation's operating and financial performance in 2014, which resulted in a total return to shareholders of 33.1%, based on stock price appreciation plus reinvested dividends, compared to a 11.4% return of the S&P 500 and the 7.5% return of the Dow Jones Industrial Average. The Corporation also generated significant free cash flow of $622 million, achieved EVA® dollars greater than 2013 levels and an after-tax return on average invested capital of 13.4%. The Committee also recognized that all NEOs, with the exception of Mr. Bouts who joined the Company in February 2015, contributed to the many other successes of the Corporation, including: 1) leveraging plant floor systems in our metal beverage facilities to improve efficiencies and reduce costs, 2) implementing cost-out and value-in initiatives across all of our global businesses, 3) installing a new extruded aluminum aerosol line in our DeForest, Wisconsin, facility, 4) investing capital to meet global double-digit volume growth for specialty beverage containers as well as the next generation aluminum bottle-shaping technology in North America, 5) expanding our global reach by initiating investments in a metal beverage facility in Myanmar as well as an extruded aluminum aerosol facility in India, 6) leveraging our capabilities in steel aerosol manufacturing to invest in G3-HD the next generation steel aerosol production capabilities in our Chestnut Hill, Tennessee, facility, and 7) successfully delivering multiple aerospace technologies and instruments to government and commercial customers throughout 2014 which significantly improved year-over-year financial performance. During 2014, the Company was also recognized by Fortune as one of the Most Admired Companies in 2014, by Newsweek for being ranked third among the 500 largest U.S. companies on overall environmental performance and by the Dow Jones Sustainability Index for maintaining our position as the only packaging company to be listed on both the North American and World indexes.

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Base Salary

Base salary levels are set on the basis of factors such as job responsibilities, the CEO's subjective judgment of individual performance and contributions to overall business performance, experience level, internal merit increase budgets, external market base salary movement and market competitiveness as compared to 50th percentile data. With respect to promotions, we may initially position an individual below the 50th percentile and then adjust their base pay closer to the market median over time, in order to ensure that the individual is successfully performing and growing into their new role. The Committee reviewed base salary levels during the executive compensation review as outlined under the section entitled "Process for Determining Executive Compensation," which included an analysis of external market data, prepared by the Consultant and approved salary increases for all NEOs in early February 2015, with changes effective retroactively to January 1, 2015.

                   
    NEO



2015
Base Salary


Rationale

    John A. Hayes   $ 1,200,000   2015 base salary was based on the executive compensation review, including an analysis of external market data. Mr. Hayes' 2015 base salary reflected a merit increase consistent with the Corporation's merit increase budget and an increase to recognize his performance in relation to market median practices.    
  Scott C. Morrison   $ 650,403   2015 base salary was based on the executive compensation review, including an analysis of external market data. Mr. Morrison's 2015 base salary reflected a merit increase consistent with the Corporation's merit increase budget and an increase to recognize his performance in relation to market median practices.  
    Erik C. M. Bouts   $ 689,053   2015 base salary was based on an executive compensation review of his initial employment compensation package, including an analysis of external market data. Mr. Bouts' 2015 base salary was evaluated against a combination of U.S. market data, Swiss market data from non-Swiss, multinational companies and Swiss market data from Swiss companies. Mr. Bouts is paid in Swiss francs; his 2015 base salary and his annual non-equity incentive and other compensation is converted to U.S. dollars based upon 0.998, the exchange rate on December 31, 2015.    
  Charles E. Baker   $ 478,998   2015 base salary was based on the executive compensation review, including an analysis of external market data. Mr. Baker's 2015 base salary reflected a merit increase consistent with the Corporation's merit increase budget and an increase to better align his compensation package with market median practices.  
    Lisa A. Pauley   $ 453,071   2015 base salary was based on the executive compensation review, including an analysis of external market data, and reflected a merit increase consistent with the Corporation's merit increase budget.    

Annual Incentive

This short-term annual pay-for-performance incentive is used to encourage and reward the CEO and other NEOs for making decisions that improve performance as measured by EVA®. It is designed to produce sustained shareholder value by establishing a direct link between EVA® improvement and incentive compensation. EVA® was selected as the measure for Ball's Annual Incentive Compensation Plan because it has been demonstrated to correlate management's incentive with share price growth and shareholder returns. EVA® is calculated by subtracting a charge for the use of invested capital from net operating profit after-tax as illustrated below:

    EVA®       =   GRAPHIC   Net Operating
Profit After Tax
("NOPAT")
  GRAPHIC   minus   GRAPHIC   Capital Charge (the Amount of
Capital Invested by Ball multiplied
by Ball's After-Tax Hurdle Rate)
  GRAPHIC

Generating profits in excess of both operating and capital costs (debt and equity) creates EVA®. If EVA® improves, value has been created.

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Performance Measures—Targets are established annually for each operating unit and for the Corporation as a whole based on prior performance. The Plan design motivates continuous improvement in order to achieve payouts at or above target over time.

The Corporation's and/or operating unit's EVA® financial performance determines the amount, if any, of awards earned under the Annual Incentive Compensation Plan. Such awards are based on actual EVA® performance relative to the established EVA® target. For any one year, the EVA® target is equal to the sum of the prior year's target EVA® plus one-half the amount of the prior year's EVA® gain or shortfall relative to the prior year's EVA® target and is calculated as follows:

    Current Year's
EVA® Target
      =   GRAPHIC   Prior Year's
EVA® Target
  GRAPHIC   plus 1/2   GRAPHIC   Prior Year's Actual EVA®   minus   Prior Year's
EVA® Target
  GRAPHIC

Improvement in EVA® occurs when the amount of NOPAT, less a charge for capital employed in the business, increases over time. It establishes a direct link between annual incentive compensation and continuous improvement of return on invested capital relative to a 9% after-tax "hurdle rate." The Corporation has established a minimum 9% after-tax as the hurdle rate when evaluating capital expenditures and strategic initiatives in most regions in which we do business. This hurdle rate is above the Corporation's actual cost of capital.

For a given year, a payout at 100% of target annual incentive compensation is achieved when actual EVA® is equal to the EVA® target. Actual annual incentive payments each year can range from 0% to 200% of the targeted incentive opportunity based on corporate performance and/or the performance of the operating unit over which the executive has responsibility. For the Corporation's consolidated plan, a payout of 0% is realized when actual EVA® is $104 million less than targeted EVA®. A payout of 200% or greater may be achieved if actual EVA® is $52 million or higher than target EVA®. However, any amounts over 200% of target are banked and remain at risk until paid over time in one-third increments whenever actual performance under the Annual Incentive Plan results in a payout of less than 200% of target. When the bank balance falls below $7,500 it is paid in full. All payments from the bank balance are made at the same time annual incentive payments are made. In 2015, the Corporation's consolidated actual EVA® performance exceeded our EVA® target by $13.1 million and resulted in a payout of 125% of target, as shown below:

                                 
    Performance Measure


Minimum


Target


Maximum


Actual

    EVA®   $ 63.5 million   $ 167.5 million   $ 219.5 million   $ 180.6 million    

Mr. Bouts' EVA® target is based on a combination of his respective operating unit's financial and EVA® goals and the Corporation's consolidated plan; however, due to the competitively sensitive nature of such financial metrics, these values have been excluded.

Target Incentive Percentages and 2015 Incentive Paid—A target incentive opportunity is established each year as a percentage of an executive's annual base salary and is targeted at approximately the 50th percentile of the competitive market with the opportunity to earn more for above-target performance or less for below-target performance. The 2015 target incentive opportunity for Messrs. Hayes, Morrison and Baker and Ms. Pauley was dependent upon the Corporation's consolidated EVA® performance; whereas for Mr. Bouts, 80% was dependent upon the EVA® performance of the Corporation's Global Metal Beverage Packaging operating unit and 20% dependent upon the Corporation's consolidated EVA® performance. The table below summarizes for each NEO the 2015 target incentive opportunity as

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compared to the actual incentive paid as a result of the year's strong EVA® performance. The value paid may include a one-third increment of a prior bank balance.

                               

 

 

 
Target Annual Incentive


Actual Annual Incentive

 
           

 

NEO



% of Base


$ Value


% of Base


$ Value Paid

 

John A. Hayes

    125 % $ 1,498,077     156 % $ 1,872,596    

 

Scott C. Morrison

  80 % $ 519,000   100 % $ 648,751  

 

Erik C. M. Bouts

    75 % $ 473,724     136 % $ 861,230    

 

Charles E. Baker

  65 % $ 310,980   81 % $ 388,725  

 

Lisa A. Pauley

    70 % $ 316,866     88 % $ 396,082    

Certain executives including the CEO and the other NEOs may elect to defer the payment of all or a portion of their annual incentive compensation into the 2005 Deferred Compensation Plan and/or the 2005 Deferred Compensation Company Stock Plan, as described in the "Non-Qualified Deferred Compensation" section.

Long-Term Incentives

This element of compensation is designed to provide ownership and cash opportunities to promote the achievement of longer term financial performance goals and enhanced TSR. The Corporation's long-term incentive opportunity is generally provided through a combination of equity and cash awards, which the Committee believes best matches the compensation principles for the program.

For 2015, the target award mix of long-term incentive vehicles was 20% LTCIP, 40% SARs and 40% PC-RSUs as described previously. The total target amount of long-term incentives, based on the grant date expected value, is generally established in relation to the 50th percentile of the competitive market, individual roles and responsibilities, individual performance (as outlined in the preceding "Base Salary" section) and the Corporation's financial and operating performance.

                                     

 

 

     
Mix of Long-Term Vehicles

 
             

 

NEO





Total Target
Long-Term
Value






% LTCIP
(2015-2017
Cycle)






%
Options/
SARs






% Performance-
Contingent RSUs
(2015-2017 Cycle)




% DSP

 

John A. Hayes

  $ 5,500,023     20 %   40 %   40 %   0 %  

 

Scott C. Morrison

  $ 1,250,024   20 % 40 % 40 % 0 %

 

Erik C. M. Bouts

  $ 993,550     20 %   40 %   40 %   0 %  

 

Charles E. Baker

  $ 624,986   20 % 40 % 40 % 0 %

 

Lisa A. Pauley

  $ 619,999     20 %   40 %   40 %   0 %  

The long-term incentive awards provide value only if the Corporation achieves positive stock price and financial performance. This emphasis on long-term compensation, through performance-based long-term cash and equity awards, ensures a strong continued alignment with the Corporation's executive ownership and shareholder value creation objectives.

Performance-Based Cash Awards—The Corporation's performance-based long-term cash incentive award, LTCIP, is intended to focus executives on the achievement of multiyear performance goals that will enhance shareholder value. The Corporation's TSR and ROAIC are considered in determining the amount, if any, of awards earned under the Corporation's LTCIP. Performance is measured on a cumulative basis over a three-year performance cycle. Awards pursuant to the LTCIP are generally made on an annual basis such that three performance cycles overlap. Any actual award earned is paid at the end of the three-year performance cycle. During 2015, there were three overlapping cycles:

2013-2015—Awarded in 2013, completed at the end of 2015, vesting took place in early 2016.

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2014-2016—Awarded in 2014, in process, will complete at the end of 2016, payment in early 2017, if performance measures are attained.

2015-2017—Awarded in 2015, in process, will complete at the end of 2017, payment in early 2018, if performance measures are attained; included in the "Grants of Plan-Based Awards Table."

The LTCIP provides executives the opportunity to earn awards based on a combination of two performance measures. One-half of the award is based on the Corporation's three-year TSR as measured against the TSRs of a subset of companies in the S&P 500 excluding companies in the S&P 500 Index that are classified as being part of the Financial or Utilities industry sectors or the Transportation industry group. Companies added to the S&P 500 during the performance cycle are also excluded. TSR is measured by comparing the average daily closing price and dividends of the Corporation in the third year of the performance cycle with the average daily closing price and dividends prior to the start of the performance cycle relative to the distribution of the equivalent TSRs during the performance cycle of the group of companies as described above. The target performance requirement for the TSR measure is the 50th percentile of the S&P 500 subset described above. The other one-half of the award is based on ROAIC performance over the three-year period. ROAIC is calculated by dividing the average of the Corporation's net operating profit after-tax over the relevant performance cycle by its average invested capital over such period. The target performance requirement for the ROAIC measure is 9% after-tax, which is above the Corporation's estimated WACC. The target, minimum and maximum performance requirements are as follows:

                   

 

Performance Measure


Minimum

Target

Maximum

 

TSR

  37.5th percentile   50th percentile   75th percentile    

 

ROAIC (after-tax)

  7%   9%   11%  
         

For each measure, minimum performance results in a zero payout factor, target performance results in a 100% payout factor and maximum performance results in a 200% payout factor for the respective one-half of the award. Performance between minimum, target and maximum is extrapolated to determine the payout factor.

Each NEO's incentive opportunity is established by considering external long-term incentive market data and the Corporation's internal pay equity. Each NEO's LTCIP opportunity is set as a fixed target dollar amount based on the 20% target award mix of long-term incentive vehicles, which ensures that the value of Ball's long-term incentives remain consistent with competitive market practices.

The executive's award for any given performance cycle is calculated as follows:

LTCIP
Payment
  =   Fixed Target
Dollar Amount
  times   GRAPHIC   GRAPHIC   50% x
TSR
Payout
Factor
  GRAPHIC   plus   GRAPHIC   50% x
ROAIC
Payout
Factor
  GRAPHIC   GRAPHIC

Actual payments at the end of the performance cycle for each factor (TSR and ROAIC) can range from 0% to 100% of the target opportunity based on actual performance relative to the established performance measures described above.

For the 2015-2017 performance cycle, the fixed target dollar incentive opportunities awarded in early 2015 to the CEO and other NEOs, and reported in the "Grants of Plan-Based Awards Table," are as follows:

             

 

NEO




Target LTCIP Dollar Value for the
2015-2017 Performance Cycle


 

John A. Hayes

  $ 1,100,000    

 

Scott C. Morrison

  $ 250,000  

 

Erik C. M. Bouts

  $ 192,596    

 

Charles E. Baker

  $ 125,000  

 

Lisa A. Pauley

  $ 124,000    

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For the 2013-2015 performance cycle, the incentive opportunities for the CEO and other NEOs were as follows:

             

 

NEO




Target LTCIP Dollar Value for the
2013-2015 Performance Cycle


 

John A. Hayes

  $ 965,000    

 

Scott C. Morrison

  $ 223,000  

 

Erik C. M. Bouts

    N/A    

 

Charles E. Baker

  $ 125,000  

 

Lisa A. Pauley

  $ 108,000    

As a result of the Corporation's actual performance for the 2013-2015 performance cycle of 61st percentile TSR and 13.0% ROAIC, cash payouts (made in early 2016) to the CEO and other NEOs are 172.2% of the target opportunities and reported in the "Summary Compensation Table."

Equity-Based Awards—The Corporation's equity awards may be provided through various forms (SARs, Incentive Stock Options ("ISOs"), Non-Qualified Stock Options ("NQSOs"), PC-RSUs, restricted stock and RSUs), all of which are tied to the price of Ball Corporation common stock. Annual equity awards associated with target total compensation are typically granted in January on the date of the quarterly meeting of the Board; however, equity awards may be granted during the year as part of an executive's promotion, extraordinary performance or for retention purposes. In the case of newly hired executives, equity awards may be granted upon the executive joining the Corporation. Annual equity-based awards are determined for each NEO in order to bring target total compensation to the level deemed appropriate by the Committee in relation to the external market 50th percentile and each executive's roles, responsibilities and performance.

In February 2015, the Committee approved the award of SARs and PC-RSUs to the CEO and other NEOs and executive officers. Each form of equity is described below. The target values of these awards were based on the total target award mix of long-term incentive vehicles as previously described (40% SARS and 40% PC-RSUs). The number and/or value of the equity awarded in 2015 to the CEO and other NEOs is reported in the "Summary Compensation Table" and the "Grants of Plan-Based Awards Table." All equity awards are pursuant to the provisions of the 2013 Stock and Cash Incentive Plan.

Stock-Settled SARs and Stock Options:  SARs, ISOs and/or NQSOs are granted in order to reward executives for the creation of shareholder value, and will only provide value to executives if the price of the Corporation's stock increases. Such awards generally vest at 25% per year for four years and expire in ten years. The grant value of each SAR, ISO or NQSO is based on the closing price of the Corporation's common stock on the date of grant.

Performance-Contingent RSUs:  PC-RSUs are granted in order to promote share ownership through the achievement of defined multiyear performance goals that enhance shareholder value and align with the Corporation's Drive for 10 vision. The performance measure is a future target value of the Corporation's absolute EVA® dollars generated in excess of Ball's 9% after-tax hurdle rate. The future dollar absolute EVA® target value is calculated by increasing the prior year actual EVA® dollars generated in excess of the 9% after tax hurdle rate by a compound annual growth rate of 4% over the three-year cycle. Given the challenging nature of this measure, a minimum and maximum performance range exists and may result in an actual payout of between 0% and 200%. The minimum performance measure, which would result in a 0% payout, is the base figure of prior year-end absolute EVA® dollars. In this case, even though we have continued to generate positive EVA®, the lack of growth in that figure results in a zero payout. The maximum performance measure is only achieved if we grow absolute EVA® dollars at an aggressive compound annual growth rate of 8% over the three years of the cycle. Performance between minimum, target and maximum is extrapolated to determine the payout factor. Awards are generally made on an annual basis such that three performance cycles overlap. Any actual award earned is paid at the end of the three-year performance cycle. During 2015, there were three overlapping cycles:

2013-2015—PC-RSUs were granted in 2013, completed at the end of 2015, and vesting took place in early 2016. The actual EVA® generated was $180.6 million compared to our compound growth rate target of $181.5 million and 95.5% of all granted units for that three-year cycle vested for the NEOs. The PC-RSUs vested in January 2016 and the value realized on vesting is reported in the "Option Exercises and Stock Vested Table" in 2017.

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Performance Measure


Minimum

Target

Maximum

Target Absolute EVA® Dollars

  $149.3 million   $167.9 million   $188.1 million

           

Performance Measure


Minimum

Target

Maximum

Target Absolute EVA® Dollars

  $190.7 million   $214.5 million   $240.2 million
Deposit Share Program/RSUs:  The Corporation may grant restricted stock or RSUs pursuant to the DSP, which was introduced in 2001. The DSP is intended to increase share ownership among certain executives who must make additional investments in the Corporation's stock in order to participate. Under this program, an executive receives one share of restricted stock or one RSU for every newly acquired share by the participant (either in the market, through the exercise and holding of stock options or settlement of SARs, or deferral, if eligible, of annual incentive compensation to the Deferred Compensation Company Stock Plan) during a specified acquisition period, up to a maximum number of shares preestablished by the Committee. As long as the executive continues to hold the newly acquired shares, the restricted stock or units granted cliff vest four years from the date of grant; or, if stock ownership guidelines are met, 30% of the shares or units vest at the end of the second year and again at the end of the third year and 40% will vest at the end of the fourth year. Restricted stock or units granted pursuant to the DSP are made on the 15th day of each month following the executive's submission of adequate documentation to the Corporation detailing the acquisition of the newly acquired shares. No new DSP RSUs were granted in 2015.

Restricted Stock or RSUs:  The Committee or CEO may also grant restricted stock or RSUs generally in connection with the promotion or recruitment of individuals to facilitate ownership and retention. Pursuant to the provisions of the 2013 Stock and Cash Incentive Plan, the Committee delegated to the CEO the authority to grant up to a maximum of 10,000 restricted shares or RSUs to any one individual in a calendar year, except the CEO may not make such grants to officers of the Corporation. Any such grant is ratified by the Committee at the first Committee meeting following such grant. Grants made are generally effective at the closing stock price on the day of the grant or may be effective at the closing stock price on a specific day in the future as defined by the Committee or the CEO. As an example, the future grant of a restricted stock award may be approved pending the effective date of a promotion, employment or a specific date. These awards generally vest in either 20% or 25% increments on each anniversary of the grant date. These grants serve as a long-term incentive element, promote share ownership and may provide an executive retention incentive. In 2015, one-time, service-based RSUs were awarded to Mr. Bouts (upon hire) and Mr. Morrison (upon successfully serving as interim COO of Ball Corporation's Global Beverage Packaging business in addition to his role as CFO in 2014) and are reported in the "Summary Compensation Table" and the "Grants of Plan-Based Awards Table."

Retirement Benefits

The Corporation strives for overall benefits to be competitive with the market. The CEO and other U.S.-based NEOs participate in the same benefit plans and on the same terms as provided to all U.S. salaried employees, with the exception of the differences noted below.

Included in these benefits for the U.S. salaried employees are the annual pension accruals under the qualified pension plan ("Salaried Pension Plan") and contributions to the qualified 401(k) savings plan. The Corporation sponsors two qualified salaried defined benefit pension plans in the U.S., one covering its Aerospace subsidiary's employees and the other covering all other U.S. salaried employees. Prior to January 1, 2007, the benefits were determined by final average salary, covered compensation and years of service. Beginning in 2007, the benefit in both plans is an accumulated annual credit based on base salary, the Social Security Wage Base ("SSWB") and a multiplier that is based on service.

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The 401(k) savings plan is a tax-qualified defined contribution plan that allows U.S. salaried employees, including the U.S.-based NEOs, to contribute to the plan 1% to 55% of their base salary up to IRS-determined limits on a before-tax basis. Prior to January 1, 2007, the Corporation matched 50% of the first 6% of base salary contributed to the plan. Beginning in 2007, the Corporation matches 100% of the first 3% of base salary contributed, and 50% of the next 2% of base salary contributed, up to a maximum match of 4% of base salary contributed.

Certain executives, including the U.S.-based NEOs, also receive benefits under the non-qualified SERP which replaces benefits otherwise available in the qualified pension plan except for limits on covered compensation in the qualified plan set by the Internal Revenue Code of 1986, as amended (the "Code"). The SERP is designed to provide retirement benefits that are calculated on base salary that exceeds the maximum amount of pay that can be included in the pension calculation under a pension plan that is tax qualified under the Code. Further information regarding the Salaried Pension Plan and the SERP are provided in the "Pension Benefits" section.

The Corporation's U.S. pension plans and SERP provide pension benefits based on base salary only and do not include incentive compensation as part of the pension calculation.

Beginning in February 2015, Mr. Bouts began accruing benefits under a defined contribution pension plan generally available to all salaried employees in Switzerland ("PersonalVorsorgestiftung").

Additionally, the Corporation provides a deferred compensation benefit to certain U.S. employees. Under the terms of the deferred compensation program, participants are eligible to defer current annual incentive compensation to be paid and/or RSUs to be issued in the future. When amounts are deferred, the participant becomes a general unsecured creditor of the Corporation and deferred amounts become subject to claims on the same basis as other general unsecured creditors to the Corporation. The deferred compensation plans provide a means for participants to accumulate funds for retirement or other purposes.


OTHER EXECUTIVE COMPENSATION POLICIES AND GUIDELINES

Plan Terms and Procedures

In 2015, the annual and long-term incentives awarded were established and paid pursuant to the terms of the Ball Corporation 2013 Stock and Cash Incentive Plan and the Ball Corporation Annual EVA® Incentive Compensation Plan, which are administered by the Committee. The 2013 Stock and Cash Incentive Plan permits grants of cash awards, stock options, SARs or stock awards (e.g., shares, restricted stock and RSUs).

Risk Assessment

The Committee continually reviews the relationship between risk and reward in our compensation programs; both through recurring in-depth reviews and ongoing review of any program changes as they occur. At this time, the Committee does not believe that these compensation programs encourage excessive or inappropriate risk. The Corporation's internal assessment of risk confirms that our compensation arrangements do not foster undue risk taking. They are performance driven and have strong governance and control mechanisms.

The Committee's executive compensation Consultant conducted a thorough risk assessment of our executive compensation programs in 2013, and reported on this to the Committee. The Consultant reviews a number of criteria regarding compensation design and governance and whether financial risks, operational risks or reputational risks may be generated through any of our programs, policies or practices. The Consultant concluded that they did not identify any elements within Ball's compensation programs and processes that pose material risk to the Corporation. The basis for the Consultant's conclusion is that the Corporation's incentive plans and processes are well designed, diversified and appropriately structured to mitigate risk without diluting incentives for high performance. During 2015, the Consultant assessed the programs and determined that since no changes had occurred since 2013, the programs continue to pose no material risk.

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Stock Ownership Guidelines

Consistent with its stock ownership philosophy, the Corporation has established guidelines for senior management. The 2015 stock ownership guidelines (minimum requirements) are as follows:

   

Executive


Ownership Multiple
(of Base Salary)

CEO

  5 times

CFO, EVPs and SVPs

  3 times

Other Executives

  1 to 2 times

As of December 31, 2015, all executive officers including the CEO and the other NEOs have met their ownership guidelines with the exception of Mr. Bouts, who joined the Company in February 2015 and is in the process of attaining shares within the required period. Furthermore, the Corporation has established a 10,000 share stock ownership guideline for each nonmanagement director and all have met their ownership guidelines with the exception of Mr. Cave, who joined the Board in October 2014 and is in the process of attaining shares within the required period.

Anti-Hedging Policy

When the Corporation's share price appreciates, an executive or director may desire to lock in a portion of that appreciation, thereby managing a portion of the economic risk associated with concentrated holdings of Ball Corporation common stock. The Corporation has evaluated the potential approaches that executives and directors can use. As a result of this review, executives are permitted to use prepaid variable forward contracts or contracts to purchase or sell Ball Corporation common stock pursuant to SEC Rule 10b5-1. Put and call options and other hedging transactions involving Corporation stock (including selling the stock "short"), are not permitted.

Severance and Change in Control Benefits

The CEO and other NEOs are covered by arrangements that specify payments in the event the executive's employment is terminated. The type and amount of payments vary by executive level and whether the termination is following a change in control of the Corporation. These severance benefits, which are competitive with General Industry practices, are payable only if the executive's employment is terminated as specified in each of the agreements. Further discussion is provided in the "Other Potential Post-Termination Employment Benefits" section.

Employment Agreement with Mr. Bouts

Mr. Bouts, SVP and COO of the Global Metal Beverage Packaging division, has an employment contract with the Corporation due to the customary nature of such agreements for executives working in Europe. In consideration of outstanding long-term equity incentives and short-term annual incentives forfeited upon his termination of service with his prior employer, Mr. Bouts received RSUs and a one-time cash bonus payment which are included in the "Summary Compensation Table" and "Grants of Plan-Based Awards Table," as applicable. He also is eligible to participate in the Corporation's broad-based benefit programs that are generally available to all salaried employees in Zurich, Switzerland, including insurance that provides personal coverage for accident and illness, a health insurance premium allowance, a defined contribution pension plan and the ability to purchase shares of our common stock under our Employee Stock Purchase Plan. In addition, we provide Mr. Bouts a housing allowance and other benefits also available to other Ball Corporation's Swiss executive officers, such as a petty expense allowance, meal allowance, car leasing and payment for financial planning services. We believe these benefits are customary for similar executives in Europe.

Mr. Bouts' employment agreement is for an unspecified period and provides that either party may terminate the agreement by giving three months' written notice at the end of a month.

Accounting and Tax Considerations

When establishing pay elements or associated programs, the Committee reviews projections of the estimated pro forma expense and tax impact of all material elements of the executive compensation program. Generally, an accounting expense is accrued over the requisite service period of the particular pay element, which in many cases is equal to the performance cycle, and the Corporation realizes a tax deduction upon payment to and/or realization by the executive.

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The Plans are intended to meet the deductibility requirements of Code Section 162(m) as performance-based pay, resulting in amounts paid being tax deductible to the Corporation. Code Section 162(m) generally provides that publicly-held corporations may not deduct in any one taxable year certain compensation in excess of $1 million paid to the CEO or any other executive officer (other than the CFO as such) whose total compensation is required to be disclosed in the "Summary Compensation Table" by reason of being the next three most highly-compensated executive officers. To the extent that any cash compensation for any NEO, otherwise deductible for a particular tax year, would not be deductible in that year because of the limitations of Code Section 162(m), the Committee has mandated that such compensation will be deferred until retirement; however, the Committee, in its sole discretion, may approve payment of nondeductible compensation from time to time if it deems circumstances warrant it.

Beginning January 1, 2006, the Corporation began accounting for stock-based awards including current and prior year stock options, SARs, restricted stock and RSUs in accordance with the requirements of FASB ASC Topic 718 ("Topic 718"), which addresses accounting for stock compensation.

In December 2005, the Committee approved three new deferred compensation plans that incorporate rules applicable to non-qualified deferred compensation as provided by Code Section 409A regulations. In 2008, the Corporation reviewed and updated all plans and agreements to conform to Code Section 409A final regulations.

Code Section 280G considerations related to tax reimbursements made to executives for taxes on amounts paid in the event of termination following a change in control are discussed in the narrative to the "Other Potential Post-Termination Employment Benefits" section.


TABLES AND NARRATIVES

Set forth on the following pages are tables showing, for the CEO, CFO and the three other highest paid executive officers of the Corporation, the following: (1) fiscal year 2015 elements of compensation in summary form; (2) equity and non-equity incentives awarded in 2015; (3) outstanding stock options and stock awards held as of December 31, 2015; (4) the value realized on stock options or SARs exercised and stock awards that vested during 2015; (5) information regarding non-qualified deferred compensation; (6) projected pension benefit values; and (7) projections for other potential post-termination benefits. The "Director Compensation Table" summarizes the fiscal year 2015 elements of compensation for the Corporation's nonmanagement directors. Accompanying each table are narratives and/or footnotes intended to further the understanding of the information disclosed in the tables. The tables should be read in conjunction with the CD&A beginning on page 18, which explains the Corporation's compensation objectives and philosophy, its process for determining executive compensation and a description of the elements of compensation.


SUMMARY COMPENSATION TABLE

The "Summary Compensation Table" represents all fiscal year 2015 elements of compensation for the Corporation's NEOs including:

Base salary earned,

Bonus earned,

Awards earned under the Annual EVA® Incentive Compensation Plan for 2015 performance,

Awards earned under the LTCIP for the three-year performance cycle ended in 2015,

Fair value of PC-RSU and/or other RSU awards granted in 2015, calculated in accordance with Topic 718, and

Fair value of SAR awards granted in 2015, calculated in accordance with Topic 718.

The 2015 payout factors used to determine the amounts earned for the Annual EVA® Incentive Compensation Plan and LTCIP for the CEO, CFO and the other NEOs are provided in the "2015 Performance Outcome" column.

In addition to these elements of compensation, the table also presents the change in 2015 in the value of pensions payable at age 65 for the NEOs as well as above-market earnings associated with non-qualified deferred compensation. Certain of the Corporation's predecessor deferred compensation plans provide for an interest rate that is equal to the Moody's Seasoned Corporate Bond Index ("Moody's") and in some plans, an interest rate that is 5 percentage points

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higher than Moody's, and in others, a fixed interest rate equal to 9%. No additional deferrals are permitted into these plans. Any earnings credited to accounts within plans that provide the Moody's rate plus 5 percentage points and/or the 9% fixed interest that is in excess of above-market earnings that would have been credited at a rate that is 120% of the applicable federal long-term rate have been classified as above-market earnings on deferred compensation.

The "All Other Compensation" column represents the sum of the values of:

Perquisites and other personal benefits,

Corporation contributions to defined contribution plans or deferred compensation plans,

Corporation-paid insurance premiums,

Company match of securities purchases pursuant to the Corporation's broad-based Employee Stock Purchase Plan ("ESPP"), and

Tax equalization payments related to foreign assignments pursuant to the Corporation's broad-based Mobility program.

The individual values are disclosed in the "All Other Compensation Table" that follows the "Summary Compensation Table."

Details regarding post-termination compensation are discussed in the section entitled "Other Potential Post-Termination Employment Benefits."

Summary Compensation Table

    Name & Principal Position

 
Year

 
Salary ($)


Bonus ($) (1)



Stock
Awards ($) (2)




Option
Awards ($) (3)






Non-Equity
Incentive
Plan
Compensation ($) (4)











Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings ($) (5)









All Other
Compensation ($) (6)


 
Total ($)

                           
    John A. Hayes         2015       $ 1,198,462   $   $ 2,200,017   $ 2,200,006   $ 3,534,326   $ 99,027   $ 133,907       $ 9,365,745    
    Chairman, President         2014       $ 1,149,327   $   $ 1,933,358   $ 1,746,180   $ 4,255,890   $ 243,109   $ 84,686       $ 9,412,550    
    and CEO         2013       $ 1,121,538   $   $ 1,929,060   $ 1,585,056   $ 2,870,096   $ 40,567   $ 190,280       $ 7,736,597    
  Scott C. Morrison     2015     $ 648,751   $   $ 1,000,036   $ 499,996   $ 1,032,757   $ 62,951   $ 68,608     $ 3,313,099  
  SVP, CFO     2014     $ 596,384   $   $ 458,805   $ 413,982   $ 1,259,021   $ 135,697   $ 47,684     $ 2,911,573  
      2013     $ 582,715   $   $ 445,521   $ 366,718   $ 832,241   $ 28,003   $ 44,349     $ 2,299,547  
                           
    Erik C. M. Bouts (7)         2015       $ 631,632   $ 285,401   $ 1,711,747   $ 400,483   $ 861,230   $ 93,204   $ 99,034       $ 4,082,731    
    SVP Ball Corp;         2014       $   $   $   $   $   $   $       $    
    COO Global Metal         2013       $   $   $   $   $   $   $       $    
    Beverage Packaging                                                                      
  Charles E. Baker     2015     $ 478,431   $   $ 249,981   $ 250,005   $ 603,975   $ 97,438   $ 35,630     $ 1,715,460  
  VP, General Counsel     2014     $ 460,156   $   $ 242,897   $ 219,744   $ 750,604   $ 197,300   $ 35,430     $ 1,906,131  
  and Corporate     2013     $ 443,585   $   $ 250,319   $ 205,953   $ 457,521   $ 38,347   $ 34,730     $ 1,430,455  
  Secretary                                                    
                           
    Lisa A. Pauley         2015       $ 452,665   $   $ 247,996   $ 248,003   $ 582,058   $ 39,679   $ 39,898       $ 1,610,299    
    SVP, Human         2014       $ 439,475   $   $ 223,269   $ 202,086   $ 820,656   $ 169,316   $ 41,762       $ 1,896,564    
    Resources and         2013       $   $   $   $   $   $   $       $    
    Administration                                                                      
(1)
Represents one-time, cash bonus paid to Mr. Bouts upon hire in consideration of short-term incentives forfeited upon termination of service with his prior employer.

(2)
Reflects the fair value of performance-contingent equity awards granted for each reported year, calculated in accordance with Topic 718 assuming the probable outcome. The assumptions used in the calculation of these amounts are included in the Corporation's Annual Report on Form 10-K in Notes 1 and 17 to the Consolidated Financial Statements for fiscal year ended December 31, 2015. At the maximum number, the values for 2015 PC-RSUs are: Mr. Hayes $4,400,033; Mr. Morrison $1,000,056; Mr. Bouts $800,944; Mr. Baker $499,962, and Ms. Pauley $495,993; and values for 2014 PC-RSUs are: Mr. Hayes $3,866,716; Mr. Morrison $917,609; Mr. Baker $485,793, and Ms. Pauley $446,537. Additionally, includes one-time, service-based RSUs awarded to Mr. Bouts (upon hire) and Mr. Morrison (upon successfully serving as interim COO of Ball Corporation's Global Beverage Packaging business in addition to his role as CFO in 2014) as further reported in the "Grants of Plan-Based Awards Table."

(3)
Reflects the fair value of ISO or SAR equity awards granted for each reported year, calculated in accordance with Topic 718. The assumptions used in the calculation of these amounts are included in the Corporation's Annual Report on Form 10-K in Notes 1 and 17 to the Consolidated Financial Statements for fiscal year ended December 31, 2015.

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(4)
Includes payouts from the Annual Incentive Compensation Plan and LTCIP, which were earned in 2015 and paid or deferred in 2016. The detail for each NEO is as follows:
(5)
The aggregate change in pension value and above-market earnings, on deferred compensation for each NEO, is as follows:
(6)
May include the value of financial planning services, the incremental cost for the personal use of the corporate aircraft, the value of executive physical examinations, employer contributions to 401(k), employer contributions to the 2005 Deferred Compensation Company Stock Plan, employer paid disability insurance premiums and the value of the Corporation's match for the ESPP. Additional information for all is included in the "All Other Compensation Table" below.

(7)
Mr. Bouts is paid in Swiss francs; his 2015 base salary and his annual non-equity incentive and other compensation is converted to U.S. dollars based upon 0.998, the exchange rate on December 31, 2015.

All Other Compensation Table

NEO






Perquisites
and Other
Personal
Benefits (1)(2)









Registrant
Contributions
to Defined
Contribution
Plans







Insurance
Premiums





Discounted
Securities
Purchases








Registrant
Contributions
to Deferred
Compensation
Plans








Tax
Reimburse-
ments (3)
 
           

John A. Hayes

  $ 51,509   $ 10,600   $ 1,892   $ 1,200   $   $ 68,706  

Scott C. Morrison

  $ 35,009   $ 10,600   $ 1,799   $ 1,200   $ 20,000   $  

Erik C. M. Bouts

  $ 95,741   $   $ 3,293   $   $   $  

Charles E. Baker

  $ 1,650   $ 10,600   $ 2,180   $ 1,200   $ 20,000   $  

Lisa A. Pauley

  $ 7,500   $ 10,600   $ 1,798   $   $ 20,000   $  
(1)
Represents the value of $10,000 for financial planning services for Messrs. Hayes and Morrison, and $7,500 for Ms. Pauley; the incremental costs for the personal use of the corporate aircraft for Mr. Hayes of $40,659 and Mr. Morrison of $23,359; and the costs of executive physicals for Mr. Hayes of $850 and Messrs. Morrison and Baker of $1,650. The amount for Mr. Bouts includes housing and furniture allowance of $82,668, car lease of $8,131, executive physical of $2,408, meal and phone allowance of $2,305 and tax services of $229, paid in Swiss francs and converted to U.S. dollars based upon 0.998, the exchange rate on December 31, 2015.

(2)
The incremental cost of the personal use of the corporate aircraft was calculated based on the 2015 average direct operating cost apportioned among business versus nonbusiness related passengers.

(3)
The amount for Mr. Hayes includes tax equalization payments related to his foreign assignment as it is the Corporation's policy to neutralize the tax effects by limiting the assignee's tax costs to what the assignee would have paid had the assignee not resided in the foreign location.


GRANTS OF PLAN-BASED AWARDS TABLE

The "Grants of Plan-Based Awards Table" summarizes the plan-based awards granted by the Corporation to the NEOs during 2015, which includes the following:

Annual cash incentives pursuant to the Annual Incentive Compensation Plan for the 2015 performance cycle,

Cash-based long-term incentives under the LTCIP for the 2015-2017 three-year performance cycle,

Fair value of PC-RSUs for the 2015-2017 three-year performance cycle and/or other RSUs, calculated in accordance with Topic 718, and

Fair value of stock-settled SARs and/or ISOs, calculated in accordance with Topic 718.

40


Table of Contents

Awards made under the Annual EVA® Incentive Compensation Plan are determined based on EVA® performance. For the NEOs, awards can range from 0% to 200% of target. Amounts earned in excess of 200% are banked and may be paid over time in one-third increments based on corporate and/or operating unit performance.

Awards under the LTCIP are granted on an annual basis and are determined based on the Corporation's TSR relative to the subset of S&P 500 companies described in the CD&A as well as the Corporation's ROAIC. The award made in 2015 is for the three-year performance cycle beginning January 1, 2015, and ending December 31, 2017.

PC-RSUs were granted to the NEOs in 2015. The awards will cliff vest after the performance cycle if the Corporation's performance measure and degree of vesting of the units, which is based on a future target value of absolute EVA® dollars generated in excess of Ball's 9% after-tax hurdle rate as the capital charge, relative to compound growth rate targets achieved over a three-year period. PC-RSUs awarded in 2015 have a potential outcome to the executive from 0% to 200%. SARs were granted to the NEOs in 2015. The awards vest annually in 25% increments starting on the first anniversary of the date of grant. If the price of the Corporation's stock increases during the vesting period, each NEO would receive, upon exercise, a number of shares of Corporation stock that reflects the value of the appreciation over the original grant price.

Dividends or dividend equivalents are paid quarterly on the number of unvested restricted shares or RSUs accounted for on the record date used for determining dividends payable to shareholders and at the same dividend rate as paid to shareholders. Dividend equivalents related to PC-RSUs granted pursuant to the 2013 Stock and Cash Incentive Plan will be accrued and paid only if the performance condition is achieved and the restrictions on the units lapse.

The vesting of plan-based awards may be accelerated as described in the narrative to the "Other Potential Post-Termination Employment Benefits Table."

Grants of Plan-Based Awards Table

            Estimated Future Payouts Under
Non-Equity Incentive
Plan Awards





  Estimated Future Payouts Under
Equity Incentive Plan Awards




  All Other
Stock
Awards:
Number of
Shares of





Grant Date
per Share
Fair Value



All Other
Option
Awards:
Number of
Securities





Exercise or
Base Price
of Equity
Incentive
Plan Awards or





Grant Date
Fair Value
of Equity
Incentive Plan
Awards
and Stock






                                   
    NEO

 

Grant
Date


  Threshold
($)


Target
($)


Maximum
($)


  Threshold
(#)


Target
(#)


Maximum
(#)


  Stock
or Units (#)


of All Other
Stock Awards


Underlying
Options (#)


Option Awards
($ per Share)


and Option
Awards (1)