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 [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to s.240.14a-12
BANTA CORPORATION
----------------------------------------------
(Name of Registrant as Specified in its Charter)
---------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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BANTA CORPORATION
225 Main Street
Menasha, Wisconsin 54952
Notice of Annual Meeting of Shareholders
To Be Held April 29, 2003
To the Shareholders of Banta Corporation:
You are hereby notified that the annual meeting of shareholders of Banta
Corporation will be held at the Fox Cities Performing Arts Center,
Kimberly-Clark Theater, 400 West College Avenue, Appleton, Wisconsin, on
Tuesday, April 29, 2003, at 2:00 p.m., Central Time, for the following purposes:
1. To elect nine directors to serve for the ensuing year.
2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 7, 2003 as
the record date for the determination of the shareholders entitled to notice of
and to vote at the annual meeting.
We hope that you will be able to attend the meeting in person, but if you
are unable to do so, please complete, sign and promptly mail back the enclosed
proxy form, using the return envelope provided. If, for any reason, you should
subsequently change your plans, you may, of course, revoke your proxy at any
time before it is actually voted.
By Order of the Board of Directors
BANTA CORPORATION
/s/ Ronald D. Kneezel
Ronald D. Kneezel
Secretary
Menasha, Wisconsin
March 19, 2003
BANTA CORPORATION
225 Main Street
Menasha, Wisconsin 54952
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 29, 2003
This proxy statement is being furnished to shareholders by the Board of
Directors (the "Board") of Banta Corporation (the "Company"), beginning on or
about March 19, 2003, in connection with a solicitation of proxies by the Board
for use at the annual meeting of shareholders to be held on Tuesday, April 29,
2003, at 2:00 p.m., Central Time, at the Fox Cities Performing Arts Center,
Kimberly-Clark Theater, 400 West College Avenue, Appleton, Wisconsin, and all
adjournments or postponements thereof (the "Annual Meeting"), for the purposes
set forth in the attached Notice of Annual Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will not affect
a shareholder's right to attend the Annual Meeting and to vote in person.
Presence at the Annual Meeting of a shareholder who has signed a proxy does not
in itself revoke a proxy. Any shareholder giving a proxy may revoke it at any
time before it is voted by giving notice thereof to the Company in writing or in
open meeting, by attending the Annual Meeting and voting in person, or by
delivering a proxy bearing a later date.
A proxy, in the enclosed form, which is properly executed, duly returned to
the Company and not revoked will be voted in accordance with the instructions
contained therein. The shares represented by executed but unmarked proxies will
be voted FOR the nine persons nominated for election as directors referred to
herein and on such other business or matters which may properly come before the
Annual Meeting in accordance with the best judgment of the persons named as
proxies in the enclosed form of proxy. Other than the election of directors, the
Board has no knowledge of any matters to be presented for action by the
shareholders at the Annual Meeting.
Only holders of record of the Company's common stock, $.10 par value (the
"Common Stock"), at the close of business on March 7, 2003 are entitled to
notice of and to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 25,247,832 shares of Common Stock, each of
which is entitled to one vote per share.
ELECTION OF DIRECTORS
At the Annual Meeting, the shareholders will elect nine directors of the
Company, each to hold office until the 2004 annual meeting of shareholders and
until his or her successor is duly elected and has qualified. Set forth below
are the Board's nominees to serve as directors of the Company. Unless
shareholders otherwise specify, the shares represented by the proxies received
will be voted in favor of the election as directors of the
nine persons named as nominees herein. The Board has no reason to believe that
any of the listed nominees will be unable or unwilling to serve as a director if
elected. However, in the event that any nominee should be unable or unwilling to
serve, the shares represented by proxies received will be voted for another
nominee selected by the Board.
The following sets forth certain information, as of March 7, 2003, about
each of the Board nominees for election at the Annual Meeting. Except as
otherwise noted, each nominee has engaged in the principal occupation or
employment and has held the offices shown for more than the past five years.
Director Principal Occupation; Office, if any,
Name Age Since Held in the Company; Other Directorships
-------------------------------- ---------- ------------- --------------------------------------------------------------
Jameson A. Baxter 59 1991 President of Baxter Associates, Inc. (private investments);
Trustee of The Putnam Funds; Director of Ryerson Tull, Inc.
Donald D. Belcher 64 1994 Chairman of the Company since May 1995; Chief Executive
Officer of the Company from January 1995 to October 2002;
President of the Company from September 1994 to January 2001.
John F. Bergstrom 56 1998 Chairman and Chief Executive Officer of Bergstrom
Corporation (automobile sales and service, credit life
insurance, and automotive fleet leasing); Director of Green
Bay Packers, Inc., Kimberly-Clark Corporation, Midwest
Express Holdings, Inc., Sensient Technologies Corporation
and Wisconsin Energy Corporation.
Ursula M. Burns 44 2002 President of Business Group Operations of Xerox Corporation
(a document management and solutions company) since January
2003; President of the Xerox Document Systems and Solutions
Group and Corporate Senior Vice President of Xerox
Corporation from October 2001 to January 2003; senior
management positions with Xerox Corporation prior thereto;
Director of Boston Scientific Corporation.
Henry T. DeNero 57 1996 Former Chairman and Chief Executive Officer of HomeSpace,
Inc. (homeowner services); Former Executive Vice President
of First Data Corporation (an information processing and
computer services company); Former Vice Chairman and Chief
Financial Officer of Dayton Hudson Corporation; Director of
Western Digital Corporation and Digital Insight Corporation.
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Director Principal Occupation; Office, if any,
Name Age Since Held in the Company; Other Directorships
-------------------------------- ---------- ------------- --------------------------------------------------------------
Richard L. Gunderson 69 1995 Former Chairman and Chief Executive Officer of Aid
Association for Lutherans (fraternal benefit society
providing insurance and financial services).
Ray C. Richelsen 61 1998 Executive Vice President-Transportation, Graphics and Safety
Markets of 3M Company (a manufacturer of optical films and
specialty materials) from January 1998 until his retirement
in August 2000; Group Vice President of 3M Company prior
thereto.
Stephanie A. Streeter 45 2001 President and Chief Executive Officer of the Company since
October 2002; President and Chief Operating Officer of the
Company from January 2001 to October 2002; Chief Operating
Officer of idealab! (creator and operator of internet
businesses) from January 2000 to December 2000; Group Vice
President of Avery Dennison Corporation (diversified
manufacturing company) from 1996 to 2000.
Michael J. Winkler 57 1996 Executive Vice President of Hewlett-Packard Company
(computer services).
Directors are elected by a plurality of the votes cast (assuming a quorum
is present). An abstention from voting will be tabulated as a vote withheld on
the election, and will be included in computing the number of shares present for
purposes of determining the presence of a quorum, but will not be considered in
determining whether each of the nominees has received a plurality of the votes
cast at the Annual Meeting. A broker or nominee holding shares registered in its
name, or the name of its nominee, which are beneficially owned by another person
and for which it has not received instructions as to voting from the beneficial
owner, has the discretion to vote the beneficial owner's shares with respect to
the election of directors.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND
URGES EACH SHAREHOLDER TO VOTE "FOR" ALL NOMINEES. SHARES OF COMMON STOCK
REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL NOMINEES.
-3-
BOARD OF DIRECTORS
General
The Board held nine meetings in 2002. Each director attended at least 75%
of the aggregate of (a) the total number of meetings of the Board and (b) the
total number of meetings held by all committees of the Board on which the
director served during 2002.
The Company has Audit, Compensation, and Nominating and Corporate
Governance Committees of the Board. The Audit Committee consists of Messrs.
Gunderson (Chairperson), Richelsen and DeNero. The principal functions performed
by the Audit Committee, which met eight times in 2002, are to assist the Board
in monitoring: the integrity of the Company's financial statements; the
independent auditor's qualifications and independence; the performance of the
Company's independent auditors; and the Company's compliance with legal and
regulatory requirements. The Audit Committee has the sole authority to retain
and terminate the Company's independent auditors and to approve the compensation
paid to the independent auditors. The Audit Committee is also responsible for
overseeing the Company's internal audit function. The Compensation Committee
consists of Ms. Baxter (Chairperson), Ms. Burns and Messrs. Bergstrom and
Richelsen. The principal functions of the Compensation Committee, which met four
times in 2002, are: to administer the Company's deferred and incentive
compensation plans (including the Company's equity incentive plans); to annually
evaluate salary grades and ranges; to establish guidelines concerning average
compensation increases; to establish performance criteria for and to evaluate
the performance of the Chief Executive Officer; and to approve compensation of
all officers, directors and subsidiary or division presidents. The Nominating
and Corporate Governance Committee consists of Ms. Baxter and Messrs. DeNero
(Chairperson), Gunderson and Winkler. The principal functions of the Nominating
and Corporate Governance Committee, which met two times in 2002, are: to
recommend persons to be selected by the Board as nominees for election as
directors; to recommend persons to be elected to fill any vacancies on the
Board; to consider and recommend to the Board qualifications for the office of
director and policies concerning the term of office of directors and the
composition of the Board; and to consider and recommend to the Board other
actions relating to corporate governance. The Nominating and Corporate
Governance Committee will consider persons recommended by shareholders to become
nominees for election as directors. Recommendations for consideration by the
Nominating and Corporate Governance Committee should be sent to the Secretary of
the Company in writing together with appropriate biographical information
concerning each proposed nominee. The Company's By-laws also set forth certain
requirements for shareholders wishing to nominate director candidates directly
for consideration by the shareholders. With respect to an election of directors
to be held at an annual meeting, a shareholder must, among other things, give
written notice of an intent to make such a nomination to the Secretary of the
Company in advance of the meeting in compliance with the terms and within the
time period specified in the By-laws.
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Director Compensation
Annual Retainer and Meeting Fees. For fiscal 2002, non-employee directors
of the Company received an annual retainer fee of $26,000 ($13,000 of which was
payable in shares of Common Stock). In addition, these directors in fiscal 2002
were paid a fee of $1,000 for every Board and committee meeting they attended.
Each committee chairperson received an additional $5,000 for serving in such
capacity ($2,500 of which was payable in shares of Common Stock). A director may
elect to defer all or any part of the cash compensation he or she is entitled to
receive for serving as a director, in which case the amount deferred will be
paid in cash in three annual installments after such person ceases to be a
director and, at the direction of the director, either will be credited with
interest at the prime rate or will be treated for valuation purposes as if such
deferred compensation had been invested in Common Stock pursuant to the phantom
stock subaccount under the director's deferred compensation plan. The portion of
the retainer fee payable in Common Stock may also be deferred. Such amount will
be credited to the phantom stock subaccount and will ultimately be paid in cash
in the same manner as cash retainer fees which are deferred.
Director Stock Options. In addition to the compensation described above,
each of Ms. Baxter, Ms. Burns and Messrs. DeNero, Gunderson, Bergstrom,
Richelsen and Winkler automatically received an option for 3,000 shares of
Common Stock at a per share exercise price of $36.71 on April 24, 2002, in
accordance with the terms of the Company's Equity Incentive Plan (the "Equity
Plan"). In addition, Ms. Burns automatically received an option for 6,000 shares
of Common Stock at a per share exercise price of $29.52 upon her election to the
Board in January 2002. Under the terms of the Equity Plan, each person when
first elected as a non-employee director of the Company automatically receives
an option for 6,000 shares of Common Stock. The Equity Plan also provides that,
subsequent to the initial grant, each non-employee director (who continues to
serve in such capacity) automatically receives an option to purchase an
additional 3,000 shares of Common Stock on the day after each annual meeting of
shareholders; provided, however, that if a person who is first elected as a
non-employee director on the date of the annual meeting of shareholders receives
the initial option grant under the Equity Plan on that date, such director will
not be entitled to begin receiving subsequent grants until the day following the
next succeeding annual meeting of shareholders. Options granted to non-employee
directors under the Equity Plan have a per share exercise price equal to 100% of
the market value of a share of Common Stock on the date of grant and become
exercisable six months after the date of grant, except that if the non-employee
director ceases to be a director by reason of death, disability or retirement
during such six-month period, the option will become immediately exercisable in
full. Options granted to non-employee directors under the Equity Plan terminate
on the earlier of (a) ten years after the date of grant or (b) twelve months
after the non-employee director ceases to be a director.
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STOCK OWNERSHIP
Management
The following table sets forth information, as of March 7, 2003, regarding
beneficial ownership of Common Stock by each director and nominee, each of the
executive officers and other persons named in the Summary Compensation Table set
forth below, and all of the directors and executive officers as a group. As of
March 7, 2003, no director or executive officer of the Company beneficially
owned one percent or more of the Common Stock other than Mr. Belcher who owned
1.9% of the Common Stock. On that date, the directors and executive officers as
a group beneficially owned 3.6% of the Common Stock. Except as otherwise
indicated in the footnotes, all of the persons listed below have sole voting and
investment power over the shares of Common Stock identified as beneficially
owned.
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership (1)(2)
------------------------ ---------------------------
Jameson A. Baxter............................. 28,375
Donald D. Belcher............................. 495,788(3)
John F. Bergstrom............................. 18,951(4)
Ursula M. Burns............................... 9,857
Henry T. DeNero............................... 18,800
Richard L. Gunderson.......................... 22,500
Ray C. Richelsen.............................. 13,500
Stephanie A. Streeter......................... 80,000(5)
Michael J. Winkler............................ 28,983
Ronald D. Kneezel............................. 77,304
Dennis J. Meyer............................... 56,176
Frank W. Rudolph.............................. 12,275
Gerald A. Henseler............................ 74,330(6)
Daniel W. Kiener.............................. 0(7)
All directors and executive
officers as a group (14 persons)............ 936,839
-----------------------
1. Includes shares subject to currently exercisable options and options
exercisable within 60 days of March 7, 2003 as follows: Ms. Baxter, 15,000
shares; Mr. Belcher, 435,834 shares; Mr. Bergstrom, 13,500 shares; Ms.
Burns, 9,000 shares; Mr. DeNero, 16,500 shares; Mr. Gunderson, 15,000
shares; Mr. Richelsen, 13,500 shares; Ms. Streeter, 65,000 shares; Mr.
Winkler, 16,500 shares; Mr. Kneezel, 59,500 shares; Mr. Meyer, 47,167
shares; Mr. Rudolph, 11,334 shares; Mr. Henseler, 0 shares; Mr. Kiener, 0
shares; and all directors and executive officers as a group, 717,835
shares.
2. Does not include holdings of phantom stock units by non-employee directors
as follows: Ms. Baxter, 7,503 units; Mr. Bergstrom, 2,464 units; Mr.
DeNero, 9,523 units; Mr. Gunderson, 5,665 units; Mr. Richelsen, 4,684
units; and Mr. Winkler, 2,923
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units. The value of the phantom stock units is based upon and fluctuates
with the market value of the Common Stock.
3. Includes 1,000 shares held by Mr. Belcher's spouse. Mr. Belcher shares
voting and investment power over these shares.
4. Includes 2,350 shares held by a trust, 2,000 shares held by a partnership,
and 900 shares held by a trust for the benefit of Mr. Bergstrom's daughter.
Mr. Bergstrom shares voting and investment power over these shares.
5. Includes 1,000 shares held by Ms. Streeter's spouse. Ms. Streeter shares
voting and investing power over these shares.
6. Includes 27,608 shares held by Mr. Henseler's spouse and 4,974 shares held
by trusts for the benefit of Mr. Henseler's daughter. Mr. Henseler shares
voting and investment power over these shares. Mr. Henseler retired as a
director of the Company effective at the time of the Company's 2002 Annual
Meeting of Shareholders and as an officer of the Company on August 1, 2002.
Mr. Henseler was reappointed as the Company's Executive Vice President and
Chief Financial Officer on January 2, 2003.
7. Mr. Kiener resigned as Chief Financial Officer of the Company in November
2002.
Other Beneficial Owners
The following table sets forth information, as of December 31, 2002,
regarding beneficial ownership by the only persons known to the Company to own
more than 5% of the outstanding Common Stock. The beneficial ownership set forth
below has been reported on filings made on Schedule 13G with the Securities and
Exchange Commission by the beneficial owners.
Amount and Nature of Beneficial Ownership
-----------------------------------------
Voting Power Investment Power
------------ ----------------
Percent
Name and Address of
of Beneficial Owner Sole Shared Sole Shared Aggregate Class
------------------- ---- ------ ---- ------ --------- -----
Barclays Global Investors, NA 2,057,804 0 2,057,804 0 2,057,804 8.2%
(and certain affiliates)
45 Fremont Street
San Francisco, California
Wachovia Corporation 92,103 1,200 1,702,870 0 1,716,070 6.8%
One Wachovia Center
Charlotte, North Carolina
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EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information for each of the last
three fiscal years concerning compensation awarded to, earned by or paid to
certain executive officers of the Company. The persons named in the table are
sometimes referred to herein as the "named executive officers."
Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation (1) Awards
----------------------- ------ Payouts
Securities -------
Underlying LTIP All Other
Name and Principal Position Year Salary Bonus Options Payouts(2) Compensation(3)
--------------------------- ---- ------ ----- ------- ---------- ---------------
Donald D. Belcher (4) 2002 $ 700,000 $ 524,731 110,000 $ 133,208 $ 4,000
Chairman of the Board 2001 650,000 322,165 110,000 140,051 3,400
2000 550,000 508,200 100,000 140,238 3,400
Stephanie A. Streeter (4) 2002 534,231 310,487 75,000 47,172 4,000
President and Chief 2001 438,461 155,123 130,000 12,195 73,063
Executive Officer 2000 -- -- -- -- --
Ronald D. Kneezel 2002 241,000 75,452 14,000 47,428 4,000
Vice President, General 2001 230,000 25,308 15,000 276,509 3,400
Counsel and Secretary 2000 206,000 126,896 12,000 53,600 3,400
Dennis J. Meyer 2002 225,750 70,677 14,000 46,090 4,000
Vice President 2001 215,000 23,657 14,000 276,165 3,400
Marketing and Planning 2000 206,000 126,896 12,000 53,659 3,400
Frank W. Rudolph 2002 220,000 68,877 14,000 28,147 4,000
Vice President 2001 210,000 23,107 14,000 13,797 3,400
Human Resources 2000 63,000 43,120 10,000 8,893 --
Gerald A. Henseler (5) 2002 242,866 142,842 -- 86,359 43,479
2001 365,000 51,944 -- 312,795 3,400
2000 352,500 271,425 -- 91,906 3,400
Daniel W. Kiener (6) 2002 238,787 88,053 20,000 14,676 106,130
2001 -- -- -- -- --
2000 -- -- -- -- --
----------------------------
(1) Certain personal benefits provided by the Company to the named executive
officers are not included in the table. The aggregate amount of such
personal benefits for each named executive officer in each year reflected
in the table did not exceed the lesser of $50,000 or 10% of the sum of such
officer's salary and bonus in each respective year.
(2) For fiscal 2002, consists of payments made pursuant to the Banta
Corporation Economic Profit (EP) Long-Term Incentive Compensation Plan. For
Mr. Henseler, includes accelerated payments under this plan due to his
retirement on August 1, 2002. Mr. Henseler was subsequently reappointed as
Executive Vice President and Chief Financial Officer of the Company in
January 2003.
-8-
(3) For fiscal 2002, consists of Company matching contributions under the
Company's Incentive Savings Plan, which is a profit sharing plan under
Section 401(k) of the Internal Revenue Code, for Ms. Streeter and Messrs.
Belcher, Kneezel, Meyer and Rudolph. For Mr. Henseler for fiscal 2002,
consists of a $2,979 Company matching contribution under the Incentive
Savings Plan and $40,500 paid by the Company to Mr. Henseler for consulting
services following his retirement on August 1, 2002. For Mr. Kiener for
fiscal 2002, consists of a $2,523 Company matching contribution under the
Incentive Savings Plan and relocation payments of $103,607.
(4) Mr. Belcher served as Chairman and Chief Executive Officer from January
2002 to October 1, 2002. Ms. Streeter succeeded Mr. Belcher as Chief
Executive Officer on October 1, 2002. Ms. Streeter joined the Company as
President and Chief Operating Officer on January 22, 2001.
(5) Mr. Henseler retired as Executive Vice President on August 1, 2002. Mr.
Henseler served as a consultant to the Company following the resignation of
Daniel W. Kiener as the Company's Chief Financial Officer in November 2002.
Mr. Henseler was reappointed as the Company's Executive Vice President and
Chief Financial Officer in January 2003 pending completion of an ongoing
search to identify and appoint a new Chief Financial Officer for the
Company.
(6) Mr. Kiener served as Chief Financial Officer from March 2002 to November
2002.
Stock Options
The Company has in effect equity plans pursuant to which options to
purchase Common Stock may be granted to key employees (including executive
officers) of the Company and its subsidiaries. The following table presents
certain information as to grants of stock options made during fiscal 2002 to the
named executive officers. Mr. Henseler was not granted stock options in fiscal
2002.
Option Grants in 2002 Fiscal Year
Grant
Date
Individual Grants Value
-------------------------------------------------------------------------------------------------- ----------------
Number of Percentage of
Securities Total Options
Underlying Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present
Name Granted (1) Fiscal Year ($/share) Date Value (2)
---- ----------- ----------- --------- ---- ---------
Donald D. Belcher........... 110,000 15.1% $35.04 10/28/12 $841,500
Stephanie A. Streeter....... 75,000 10.3 35.50 10/01/12 628,500
Ronald D. Kneezel........... 14,000 1.9 35.04 10/28/12 107,100
Dennis J. Meyer............. 14,000 1.9 35.04 10/28/12 107,100
Frank W. Rudolph............ 14,000 1.9 35.04 10/28/12 107,100
Daniel W. Kiener............ 20,000 2.7 34.30 (3) 177,600
_______________________
1. The options reflected in the table (which are nonstatutory stock options
for purposes of the Internal Revenue Code) were granted on October 28, 2002
(March 11, 2002 in the case of Mr. Kiener and October 1, 2002 in the case
of Ms. Streeter) and vest ratably over the three-year period following the
date of grant. The options are subject to early vesting in the case of the
optionee's death, disability or retirement.
2. The option values presented are based on the Black-Scholes option pricing
model adopted for use in valuing stock options. Material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value
of the options reflected in the table above include the following: (a) an
exercise price of the option equal to the fair market value of the
underlying stock on the date of grant; (b) a risk-free rate of return
representing the interest rate
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on a U.S. Treasury security with a maturity date corresponding to the term
of the option; (c) volatility of 30% (32.9% and 30.8% in the case of the
options granted to Mr. Kiener and Ms. Streeter, respectively), which was
calculated using daily Common Stock prices for the one-year period prior to
the date of grant; (d) a dividend yield equal to 1.9% (1.8% in the case of
the option granted to Ms. Streeter) representing the dividend yield on the
Common Stock as of the date of grant; (e) an option term of ten years; and
(f) reductions of 15.6% to reflect the probability of forfeiture due to
termination prior to vesting and 22.6% (22.0% and 22.7% in the case of the
options granted to Mr. Kiener and Ms. Streeter, respectively) to reflect
the probability of a shortened option term due to termination of employment
prior to the expiration date. The actual value, if any, that an optionee
may realize upon exercise will depend on the excess of the price of the
Common Stock over the option exercise price on the date that the option is
exercised. There is no assurance that the value realized by an optionee
will be at or near the value estimated under the Black-Scholes model.
3. Mr. Kiener's options originally had a term of ten years from the date of
grant. Due to his resignation, Mr. Kiener's options expired.
The following table sets forth information regarding the exercise of stock
options by each of the named executive officers during the 2002 fiscal year and
the fiscal year-end value of unexercised options held by the named executive
officers.
Aggregated Option Exercises in 2002 Fiscal Year and Fiscal Year-End Option Values
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at Fiscal
Shares Options at Fiscal Year-End Year-End(1)
Acquired Value ---------------------------- ----------------------------
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
Donald D. Belcher.................. 80,000 $895,550 435,834 216,666 $3,006,380 $618,495
Stephanie A. Streeter.............. 0 0 43,334 161,666 173,769 347,531
Ronald D. Kneezel.................. 12,000 141,600 59,500 28,000 359,610 77,400
Dennis J. Meyer.................... 16,700 213,748 47,167 27,333 277,258 75,632
Frank W. Rudolph................... 0 0 11,334 26,666 72,204 54,646
Gerald A. Henseler................. 71,000 754,021 0 0 0 0
Daniel W. Kiener................... 0 0 0 20,000 0 0
_______________
1. The dollar values are calculated by determining the difference between the
fair market value of the underlying Common Stock and the exercise price of
the options at exercise or fiscal year-end, as the case may be.
Long-Term Incentives
The Company maintains the Banta Corporation Economic Profit (EP) Long-Term
Incentive Plan (the "EP Long-Term Plan"), which provides an incentive based both
on earnings per share performance and on the value created (i.e., "economic
profit") when a business generates a financial return that exceeds the total
cost of capital employed. The EP Long-Term Plan defines economic profit as the
difference between (a) net operating profit after tax and (b) the charge for
capital employed in the business. Payouts under the EP Long-Term Plan are made
in three annual installments contingent (other than in the case of death,
disability, retirement or termination without cause) upon the participant's
continued employment with the Company.
Set forth below under the heading "Maximum" are the amounts accrued but not
paid for fiscal 2002 performance for each of the named executive officers under
the EP Long-Term Plan. The amounts under the heading "Threshold" reflect the
fact that the accrued but
-10-
unpaid amounts are subject to forfeiture. No amounts are reflected for Mr.
Kiener since he forfeited his accrued but unpaid award under the EP Long-Term
Plan upon his resignation.
Long-Term Incentive Plan - Awards in 2002 Fiscal Year
Estimated Future Payouts
----------------------------------------
Name Threshold Maximum
---- --------- -------
Donald D. Belcher $0 $91,314
Stephanie A. Streeter 0 69,953
Ronald D. Kneezel 0 31,438
Dennis J. Meyer 0 29,449
Frank W. Rudolph 0 28,699
Gerald A. Henseler 0 47,614
Pension Plan Benefits
The following table sets forth the estimated annual pension benefits
payable to a covered participant at normal retirement age under the Company's
Employees Pension Plan as well as under the Company's Supplemental Retirement
Plan (which, in part, provides benefits that would otherwise be denied
participants by reason of (i) certain Internal Revenue Code limitations on
qualified benefit plans and (ii) the exclusion of cash incentive awards and
deferred compensation in calculating benefits under the qualified plan). The
benefits that are payable under the pension and retirement plans are based upon
remuneration that is covered under the plans and years of service with the
Company and its subsidiaries.
Pension Plan Table
Yearly Pension After
Average Monthly Specified Years of Service
Compensation in Five ---------------------------------------------------------------------------------
Highest Consecutive Years 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
------------------------- -------- -------- -------- -------- -------- --------
$ 24,000 $72,000 $93,600 $115,200 $136,800 $158,400 $180,000
36,000 108,000 140,400 172,800 205,200 237,600 270,000
48,000 144,000 187,200 230,400 273,600 316,800 360,000
60,000 180,000 234,000 288,000 342,000 396,000 450,000
72,000 216,000 280,800 345,600 410,400 475,200 540,000
84,000 252,000 327,600 403,200 478,800 554,400 630,000
96,000 288,000 374,400 460,800 547,200 633,600 720,000
108,000 324,000 421,200 518,400 615,600 712,800 810,000
120,000 360,000 468,000 576,000 684,000 792,000 900,000
132,000 396,000 514,800 633,600 752,400 871,200 990,000
144,000 432,000 561,600 691,200 820,800 950,400 1,080,000
A participant's remuneration covered by the Company's pension arrangement
is such participant's base salary, annual bonus and long-term incentive
compensation. The covered remuneration paid for the last fiscal year to the
named executive officers is set forth in the Summary Compensation Table under
the headings "Salary", "Bonus" and "LTIP Payouts." As of December 31, 2002,
Messrs. Belcher, Kneezel, Meyer, Rudolph and Henseler
-11-
had completed 8, 14, 9, 2 and 35 years of credited service under the Company's
pension plans, respectively. On such date, Ms. Streeter had two years of
credited service. Due to the limited period of time Mr. Kiener was employed by
the Company, he is not entitled to pension benefits from the Company. Benefits
shown in the table are computed as a straight single life annuity assuming
retirement at age 65. The benefits reflected in the table are not subject to
reduction for Social Security benefits.
Agreements with Named Executive Officers
The Company has agreements with Ms. Streeter as well as Messrs. Belcher,
Kneezel, Meyer, Rudolph and certain other officers and key employees which
provide for continued employment for periods of from two to three years after a
change of control (the "Employment Period") and for lump-sum termination
payments equal to three times the executive's base salary plus the highest
incentive compensation earned by the executive in any year during the preceding
three years if employment is terminated during the Employment Period by the
Company (other than for cause or disability) or by the executive due to
significant changes in his or her working conditions or status without his or
her consent. The agreements also provide the foregoing benefits in connection
with certain terminations which are effected in anticipation of a change of
control. Under the agreements, the executive's employee benefits such as health,
accident and life insurance will also be continued following a termination for
which a termination payment is made for up to three years or until comparable
benefits are available from a new employer. The agreements similarly provide for
the accelerated vesting of outstanding stock options in the event of a change of
control. The agreements provide that, if any payments thereunder constitute an
"excess parachute payment" under the Internal Revenue Code, the Company will pay
the officer the amount necessary to offset the excise tax and any additional
taxes resulting from the payment of an excess parachute payment. In addition,
the Company has agreed to pay Mr. Belcher a severance payment of two year's
salary (and continue to provide health insurance for two years) if, prior to a
change of control, the Company terminates his employment other than for cause or
disability. Ms. Streeter has a similar agreement that provides for a severance
payment of one year's salary (and the continuation of health insurance for one
year) if, prior to a change of control, the Company terminates her employment
other than for cause or disability.
The Company has deferred compensation plans for key employees in which the
named executive officers are eligible to participate and which provide for
deferral of salary and cash incentive compensation. Payments under the deferred
compensation plans generally commence following retirement of the participant.
However, in the event of a change of control, a participant in the deferred
compensation plans will receive a lump sum payment. The lump sum payment will be
equal to the present value of the participant's future benefits if the
participant is receiving benefits at the time of such change of control or the
amount standing to the participant's credit in his or her deferred compensation
account if the participant is not otherwise entitled to receive benefits at the
time of such change of control. The Company has entered into an executive trust
agreement with a third party trust company to provide a means of segregating
assets for the payment of these benefits (as well as benefits under the
Company's Supplemental Retirement Plan), subject to claims of the Company's
-12-
creditors. Such trust is only nominally funded until the occurrence of a
potential change of control.
The Company has a retirement agreement with Mr. Belcher pursuant to which
he will receive three annual payments of $500,000 each provided that he remains
employed by the Company through April 30, 2004. Payments would also be due to
Mr. Belcher under this agreement if, prior to April 30, 2004, Mr. Belcher is
terminated by the Company other than for cause, he terminates his employment due
to disability or good reason (as defined in the agreement) or his employment is
terminated as a result of his death. In the event that this retirement benefit
is earned by Mr. Belcher, payments will commence in April 2005.
The Company also has an agreement with Mr. Henseler that provides for
monthly payments of $2,000 for 120 months. These payments commenced upon Mr.
Henseler's August 1, 2002 retirement. The agreement provides that Mr. Henseler
may designate a beneficiary to receive the payments to which he is entitled in
the event of his death prior to the receipt of any or all such payments.
Payments under the agreement may be forfeited in the event Mr. Henseler engages
in specified competitive activities during the first four years following his
retirement. In connection with Mr. Henseler rejoining the Company as an
executive officer in January 2003, the Company agreed to provide an enhanced
retirement benefit to Mr. Henseler. The amount of this benefit will depend on
the length of time after January 2003 that Mr. Henseler serves as Executive Vice
President and Chief Financial Officer. The amount of the enhanced benefit is
intended to approximate the amount of retirement benefits Mr. Henseler is
foregoing by delaying his retirement and will be paid in conjunction with the
agreement described above.
Committee Report on Executive Compensation
The Compensation Committee of the Board is responsible for all aspects of
the Company's compensation package offered to its executive officers, including
the named executive officers. The following is a report of the Compensation
Committee regarding executive compensation:
Policies Governing Executive Compensation. The Company's general policies
relating to executive compensation are: (a) to establish a direct link between
executive compensation and the annual, intermediate-term and long-term
performance of the Company; (b) to provide performance-based compensation
opportunities (including equity-based awards) which allow executive officers to
earn rewards for maximizing shareholder value; (c) to attract and retain the key
executives necessary for the Company's long-term success; and (d) to reward
individual initiative and the achievement of specified goals. In applying these
general policies, the objective of the Compensation Committee has been to ensure
that a significant portion of the compensation paid to senior executive
officers, such as the named executive officers, be incentive-based since these
individuals have significant control and responsibility for the Company's
direction and performance.
-13-
Executive Compensation Package. As reflected under the section entitled
"Executive Compensation," the Company's executive compensation package currently
consists of a mix of salary, annual and long-term bonus awards and stock option
grants as well as benefits under the employee benefit plans offered by the
Company.
In setting and adjusting executive salaries, including the salaries of the
Chief Executive Officer and the other named executive officers, the Compensation
Committee, in conjunction with the Company's independent compensation
consultants, has historically compared the base salaries paid or proposed to be
paid by the Company with the ranges of salaries paid by corporations of similar
size relative to the Company and operating in comparable industries. It is the
judgment of the Compensation Committee that a review of the compensation
practices of companies with such characteristics is appropriate in establishing
competitive salary ranges for the Company's executive officers.
Based on its analysis of comparative data, the Compensation Committee
increased the minimum, midpoint and maximum ranges for each salary grade by 3.0%
for fiscal 2002. The Compensation Committee also approved a 4.0% guideline for
2002 executive officer base salary increases, subject to individual variances to
reflect above or below average performance. In establishing 2002 salaries for
each individual executive officer, Mr. Belcher, the Company's then Chief
Executive Officer, made specific recommendations for salary adjustments (other
than his own) to the Compensation Committee based on the foregoing guidance
provided by the Committee as well as a review of industry comparables, the level
of responsibility delegated to the particular executive officer, the expertise
and skills offered by each officer, the officer's individual job performance and
the performance of the group over which the individual had responsibility. These
various factors were considered on a case-by-case basis and no specific formula
was used to give any one factor a relative weight as compared to the others. The
Compensation Committee reviewed the foregoing recommendations and then made
final decisions on the base salaries to be paid by the Company. The Compensation
Committee also reviewed and fixed the base salary of Mr. Belcher for 2002 based
on similar competitive compensation data and individual job performance
criteria. The base salary paid to Mr. Belcher for fiscal 2002 was $700,000. Upon
her appointment as Chief Executive Officer of the Company effective October 1,
2002, Ms. Streeter's base salary was increased to $615,000.
The Compensation Committee has adopted the Economic Profit (EP) Incentive
Compensation Plan (the "EP Incentive Plan"), which provides an annual incentive
for certain employees of the Company, including the named executive officers.
The factors on which awards under the EP Incentive Plan are based include: (i)
earnings per share performance; (ii) the creation of economic profit for the
Company; and (iii) for participants affiliated with a specific business unit,
the operating earnings and the creation of economic profit for such unit. An
award under the EP Incentive Plan may also have a discretionary component based
on such criteria as the Committee may determine. For purposes of the economic
value creation component of the formula, the EP Incentive Plan defines economic
profit as the difference between (a) net operating profit after tax and (b) the
charge for capital employed in the business. The EP Incentive Plan is designed
to reward executive officers and key managers
-14-
for EPS performance, productive use of Company assets, reduction of costs and
creation of efficiencies throughout the Company's organization. Under the EP
Incentive Plan, target bonuses calculated as a percentage of salary are fixed by
the Compensation Committee as are economic profit levels. The EP Incentive Plan
also incorporates a "bonus bank" into which that portion of an award, if any, in
excess of 200% of target is credited. Such bonus amounts are thereafter
scheduled to be paid out over three years contingent (other than in the case of
death, disability, retirement or termination without cause) upon the
participant's continued employment with the Company. Under the EP Incentive
Plan, Mr. Belcher and Ms. Streeter received payouts of $524,731 and $310,487,
respectively, for the 2002 fiscal year.
The Compensation Committee has also adopted the Economic Profit (EP)
Long-Term Incentive Compensation Plan (the "EP Long-Term Plan"), which provides
long-term incentives for certain employees of the Company, including the named
executive officers. The EP Long-Term Plan is similar to the EP Incentive Plan.
Awards paid under the EP Long-Term Plan to the executive officers are paid based
entirely on Company performance (EPS and economic profit performance) and are
paid out in three annual installments contingent (other than in the case of
death, disability, retirement or termination without cause) upon the
participant's continued employment with the Company. Under the EP Long-Term
Plan, Mr. Belcher and Ms. Streeter received payouts of $133,208 and $47,172,
respectively, in 2002.
In addition to the foregoing annual and long-term incentive plans, the
Company's executive compensation package has historically included stock option
grants. The Compensation Committee has the authority to grant, in addition to
stock options, other equity-based awards, including stock appreciation rights,
restricted stock and performance shares. To date, however, only stock options
have been granted under the Company's equity-based plans. Stock options granted
by the Compensation Committee have a per share exercise price of 100% of the
fair market value of a share of Common Stock on the date of grant and,
accordingly, the value of the option will be dependent on the future market
value of the Common Stock. It has been the view of the Compensation Committee
that options should create a long-term incentive and align the interests of
management with the interests of shareholders.
In determining proposed stock option grants to be made to the Company's
executive officers, the Compensation Committee reviews, in consultation with the
Company's independent compensation consultants, equity-based incentive programs
of a select group of peer companies. Based on this analysis, Mr. Belcher
received an option to purchase 110,000 shares of Common Stock at a per share
exercise price of $35.04 on October 28, 2002. Upon her appointment as Chief
Executive Officer of the Company effective October 1, 2002, Ms. Streeter
received an option to purchase 75,000 shares of Common Stock at a per share
exercise price of $35.50. By tying a portion of each executive officer's overall
compensation to stock price through the grant of options, the Compensation
Committee seeks to enhance its objective of providing a further incentive to
maximize long-term shareholder value.
In connection with the equity-based plans, the Company endorses the policy
that stock ownership by management is an important factor in aligning the
interests of management
-15-
and shareholders. The Company has adopted stock ownership guidelines that are
intended to encourage stock ownership by management. Under these guidelines,
management personnel are expected to own a specified number of shares of Common
Stock depending upon their respective salary grade. The Compensation Committee
considers an individual's compliance with the stock ownership guidelines in
determining the size of equity-based grants.
The Company's policy with respect to other employee benefit plans is to
provide competitive benefits to the Company's employees, including executive
officers, to encourage their continued service with the Company. In the view of
the Compensation Committee, a competitive benefits package is an essential
component in achieving the Company's goal of being able to attract new key
employees from time to time as events warrant.
Under Section 162(m) of the Internal Revenue Code, the tax deduction by
corporate taxpayers, such as the Company, is limited with respect to the
compensation of certain executive officers unless such compensation is based
upon performance objectives meeting certain regulatory criteria or is otherwise
excluded from the limitation. The Compensation Committee currently intends, in
all appropriate circumstances, to qualify compensation paid to the Company's
executive officers for deductibility by the Company under Section 162(m) of the
Internal Revenue Code.
BANTA CORPORATION
COMPENSATION COMMITTEE
Jameson A. Baxter, Chairperson
John F. Bergstrom
Ursula M. Burns
Ray C. Richelsen
-16-
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board is composed of three directors, each of
whom is independent as defined in the New York Stock Exchange's listing
standards. The Audit Committee operates under a written charter adopted by the
Board. In January 2003, the Board approved revisions to the charter. A copy of
the charter of the Audit Committee, as so revised, is attached to this proxy
statement as Appendix A.
Ernst & Young LLP has served as the independent auditors for the Company
since May 17, 2002 and audited the financial statements of the Company for the
fiscal year ended December 28, 2002. Under its revised charter, the Audit
Committee is solely responsible for the selection and termination of the
Company's independent auditors.
The Company's management is responsible for the Company's internal controls
and the financial reporting process, including the system of internal controls.
The Company's independent auditors are responsible for expressing an opinion on
the conformity of the Company's audited consolidated financial statements with
accounting principles generally accepted in the United States. The Audit
Committee's responsibility is to monitor and oversee this process.
The Audit Committee has reviewed and discussed the audited consolidated
financial statements of the Company for the fiscal year ended December 28, 2002
with management and the independent auditors. The Audit Committee has discussed
with the independent auditors matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees).
Ernst & Young LLP has provided to the Audit Committee the written
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with Ernst & Young LLP its independence. The Audit Committee considered whether
the independent auditors' provision of non-audit services is compatible with
maintaining Ernst & Young LLP's independence.
During the fiscal years ended December 28, 2002 and December 29, 2001, the
Company retained and paid Ernst & Young LLP to provide audit and/or other
services. Arthur Andersen LLP served as the Company's independent auditors in
the fiscal year ended December 29, 2001 and provided services to the Company in
fiscal 2002 until such firm was succeeded by Ernst & Young LLP as the Company's
independent auditors on May 17, 2002. The fees paid to Ernst & Young LLP and
Arthur Andersen LLP for the years ended December 28, 2002 and December 29, 2001
were as follows:
Audit Fees. Fees for audit services paid to Ernst & Young LLP totaled
$434,000 in 2002 and $0 in 2001. Fees for audit services paid to Arthur Andersen
LLP totaled $8,000 in 2002 and $334,000 in 2001. Audit fees include fees
associated with the annual audit, the reviews of the Company's quarterly reports
on Form 10-Q, and statutory audits required internationally.
-17-
Audit-Related Fees. Fees for audit-related services paid to Ernst & Young
LLP totaled $193,000 in 2002 and $0 in 2001. Fees for audit-related services
paid to Arthur Andersen LLP totaled $31,000 in 2002 and $47,000 in 2001.
Audit-related services principally include due diligence in connection with
acquisitions and accounting consultations.
Tax Fees. Fees paid to Ernst & Young LLP for tax services, including tax
compliance, tax advice and tax planning (including expatriate tax services),
totaled $144,000 in 2002 and $12,000 in 2001. Tax fees paid to Arthur Andersen
LLP totaled $104,000 in 2002 and $327,000 in 2001.
All Other Fees. There were no such fees paid to Ernst & Young LLP in 2002
or 2001. All other fees paid to Arthur Andersen LLP totaled $0 in 2002 and
$298,000 in 2001. Such fees paid to Arthur Andersen LLP related primarily to
services for financial information systems design and implementation.
The Audit Committee discussed with the Company's internal and independent
auditors the overall scopes and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, the evaluation
of the Company's internal controls and overall quality of the Company's
financial reporting.
Based on the Audit Committee's reviews and discussions with management, the
internal auditors and Ernst & Young LLP referred to above, the Audit Committee
recommended to the Board that the audited consolidated financial statements be
included in the Company's Annual Report on Form 10-K for the year ended December
28, 2002 for filing with the Securities and Exchange Commission.
BANTA CORPORATION AUDIT COMMITTEE
Richard L. Gunderson, Chairperson
Ray C. Richelsen
Henry T. DeNero
-18-
PERFORMANCE INFORMATION
Set forth below are line graphs during the last five years comparing the
Company's cumulative total shareholder return with the cumulative total return
of companies in the Standard & Poor's 500 Stock Index and companies in a peer
group selected in good faith by the Company. The total return information
presented in the graphs assumes the reinvestment of dividends. The companies in
the peer group are: Cadmus Communications Corp.; Courier Corp.; R. R. Donnelley
& Sons Company; and Quebecor World Inc. The returns of each company in the peer
group have been weighted based on such company's relative market capitalization.
Comparison Of Five Year Cumulative Total Return
Among Banta Corporation, S&P 500 Index And Peer Group Companies
[STOCK PERFORMANCE CHART OMITTED]
December 31,
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
Banta Value................................. $ 100 $ 103 $ 87 $ 101 $ 120 $ 130
S&P 500 Composite........................... 100 129 154 138 120 92
Peer Group.................................. 100 118 72 83 82 74
INDEPENDENT PUBLIC ACCOUNTANTS
Current Independent Accountants
Ernst & Young LLP has served as the independent auditors for the Company
since May 17, 2002 and audited the financial statements of the Company for the
fiscal year ended December 28, 2002. Representatives of Ernst & Young LLP are
expected to be present at the Annual Meeting to answer appropriate questions
and, if they so desire, to make a statement. The Company's independent auditors
for fiscal year 2003 will be appointed later in the year by the Audit Committee.
Change in Independent Accountants
On May 17, 2002, the Board of Directors, upon the recommendation of the
Audit Committee, dismissed Arthur Andersen LLP ("Andersen") as the Company's
independent accountants and engaged Ernst & Young LLP to serve as the Company's
independent accountants for 2002.
Andersen's reports on the Company's consolidated financial statements for
the fiscal years ended December 29, 2001 and December 30, 2000 did not contain
an adverse opinion, disclaimer of opinion or qualification or modification as to
uncertainty, audit scope or accounting principles.
-19-
During the fiscal years ended December 29, 2001 and December 30, 2000 and
the subsequent interim period from December 30, 2001 through May 17, 2002, there
were no disagreements between the Company and Andersen on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedures, which disagreements, if not resolved to the satisfaction of
said former accountant, would have caused it to make a reference to the subject
matter of such disagreements in connection with its reports ("Disagreements").
During the fiscal years ended December 29, 2001 and December 30, 2000 and the
subsequent interim period, there were no reportable events (as described in Item
304(a)(1)(v) of Regulation S-K).
The Company provided Andersen with a copy of the foregoing statements.
Anderson delivered a letter to the Company, dated May 22, 2002, stating its
agreement with such statements.
During the Company's two most recent fiscal years and the subsequent
interim period through May 17, 2002, the date on which Ernst & Young LLP was
engaged, the Company did not consult Ernst & Young LLP regarding the application
of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on the Company's
consolidated financial statements, or any matter that was either the subject of
a Disagreement or a reportable event (as described in Item 304(a)(1)(v) of
Regulation S-K).
OTHER MATTERS
Solicitation Expenses
All expenses of solicitation of proxies will be borne by the Company. In
addition to soliciting proxies by mail, proxies may be solicited personally and
by telephone by certain officers and regular employees of the Company. Brokers,
nominees and custodians who hold Common Stock in their names and who solicit
proxies from the beneficial owners will be reimbursed by the Company for
out-of-pocket and reasonable clerical expenses.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors to file reports of ownership and changes of ownership
with the Securities and Exchange Commission and the New York Stock Exchange. The
regulations of the Securities and Exchange Commission require the officers and
directors to furnish the Company with copies of all Section 16(a) forms they
file. Based on such forms, the Company believes that all its officers and
directors have complied with the Section 16(a) filing requirements.
Related Party Transaction
The Company has an agreement with Hewlett-Packard Company (formerly Compaq
Computer Corporation) pursuant to which the Company provides various
supply-chain management services in connection with the configuration, testing
and worldwide distribution
-20-
of Hewlett-Packard's hard drives. Michael J. Winkler, a director of the Company,
is an Executive Vice President of Hewlett-Packard. The Company's revenue
attributable to its contract with Hewlett-Packard totaled $115 million in 2002.
The Company currently expects that revenue from the Hewlett-Packard contract in
fiscal 2003 will be comparable to the fiscal 2002 revenue. Due to the business
relationship between the Company and Hewlett-Packard, it is not expected that
Mr. Winkler will be appointed in the future to serve on the Company's Audit,
Compensation or Nominating and Corporate Governance Committees.
Delivery of Proxy Materials to Households
Pursuant to the rules of the Securities and Exchange Commission, services
that deliver the Company's communications to shareholders that hold their stock
through a bank, broker or other holder of record may deliver to multiple
shareholders sharing the same address a single copy of the Company's annual
report to shareholders and this proxy statement. Upon oral or written request,
the Company will promptly deliver a separate copy of the annual report to
shareholders and/or proxy statement to any shareholder at a shared address to
which a single copy of each document was delivered. Shareholders may notify the
Company of their requests by calling or writing Ronald D. Kneezel, Vice
President, General Counsel and Secretary, Banta Corporation, P.O. Box 8003,
Menasha, Wisconsin 54952, telephone number: (920) 751-7777.
SHAREHOLDER PROPOSALS
Proposals of shareholders pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934 ("Rule 14a-8") that are intended to be presented at the
2004 annual meeting of shareholders must be received by the Company no later
than November 20, 2003 to be included in the Company's proxy materials for that
meeting. Further, a shareholder who otherwise intends to present business at the
2004 annual meeting must comply with the requirements set forth in the Company's
By-laws. Among other things, to bring business before an annual meeting, a
shareholder must give written notice thereof, complying with the By-laws, to the
Secretary of the Company not less than 60 days and not more than 90 days prior
to the second Tuesday in the month of April, provided that the date of the
annual meeting is not advanced by more than 30 days or delayed by more than 60
days from the second Tuesday in the month of April. The 2004 annual meeting of
shareholders is tentatively scheduled to be held on April 27, 2004. Under the
By-laws, if the Company does not receive notice of a shareholder proposal
submitted otherwise than pursuant to Rule 14a-8 (i.e., a proposal a shareholder
intends to present at the 2004 annual meeting of shareholders but does not
intend to have included in the Company's proxy materials) on or prior to
February 13, 2004 (assuming an April 27, 2004 meeting date), then the notice
will be considered untimely
-21-
and the Company will not be required to present such proposal at the 2004 annual
meeting. If the Board nonetheless chooses to present such proposal at the 2004
annual meeting, then the persons named in proxies solicited by the Board for the
2004 annual meeting may exercise discretionary voting power with respect to such
proposal.
By Order of the Board of Directors
BANTA CORPORATION
/s/ Ronald D. Kneezel
Ronald D. Kneezel
Secretary
The Company will furnish to any shareholder, without charge, a copy of its
Annual Report on Form 10-K for the fiscal year 2002. Requests for the Form 10-K
must be in writing and addressed to Gerald A. Henseler, Executive Vice President
and Chief Financial Officer, Banta Corporation, P.O. Box 8003, Menasha,
Wisconsin 54952.
-22-
Appendix A
BANTA CORPORATION
CHARTER OF THE AUDIT COMMITTEE
(Adopted January 28, 2003)
Statement of Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in monitoring (a) the integrity of the financial statements of the
Company, (b) the independent auditors' qualifications and independence, (c) the
performance of the Company's internal audit function and independent auditors
and (d) the compliance by the Company with legal and regulatory requirements.
The Committee is also responsible for preparing the report of the Audit
Committee required by the Securities and Exchange Commission (the "SEC") to be
included in the Company's proxy statement for its annual meeting of
shareholders.
Committee Membership and Qualifications
The Committee shall be comprised of three or more directors. The members of
the Committee shall meet the independence and experience requirements of the New
York Stock Exchange, Inc., Section 10A(m)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of the SEC.
The Company will endeavor to ensure that at least one member of the Committee is
a "financial expert" as defined by the SEC. Members of the Committee shall not
simultaneously serve on audit committees of more than two other public companies
without the prior consent of the Board of Directors.
Appointment and Removal of Committee Members
The members of the Committee shall be appointed by the Board of Directors
annually or as necessary to fill vacancies on the recommendation of the
Company's Nominating and Corporate Governance Committee. Each member shall serve
until his or her successor is duly elected and qualified or until such member's
earlier resignation or removal. Any member of the Committee may be removed, with
or without cause, by a majority vote of the Board of Directors.
Chairperson
The Chairperson of the Committee shall be appointed by the Board of
Directors upon recommendation of the Nominating and Corporate Governance
Committee and in consultation with the Chairman of the Board of Directors. The
Chairperson will chair all regular sessions of the Committee and, in
consultation with the Company's Chief Financial Officer, set the agendas for
Committee meetings.
A-1
Meetings
The Committee shall meet at least quarterly, or more frequently as
circumstances dictate. Any member of the Committee may call meetings of the
Committee.
The Committee may ask members of management or others to attend the meeting
and provide pertinent information as necessary. The Committee shall periodically
meet privately in executive session with management, the internal auditing
department, the independent auditors, and as a Committee.
Responsibilities and Duties
The Committee shall have the sole authority to retain and terminate the
Company's independent auditors. The Committee shall be directly responsible for
the compensation and oversight of the work of the independent auditors
(including resolution of disagreements between management and the independent
auditors regarding financial reporting) for the purpose of preparing or issuing
an audit report or related work. The independent auditors shall report directly
to the Committee.
The Committee shall preapprove all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Company by its independent auditors, subject to the de minimus exceptions
for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act
which are approved by the Committee prior to the completion of the audit. The
Committee may delegate authority to grant preapprovals of audit and permitted
non-audit services to one or more of its members, provided that decisions of
such member or members to grant preapprovals shall be presented to the full
Committee at its next scheduled meeting. Except as specified in the preceding
sentence, the Committee shall have no authority to delegate its responsibilities
and duties to a subcommittee of its members.
The Committee shall have the authority, to the extent it deems necessary or
appropriate, to retain independent legal, accounting or other advisors. The
Company shall provide for appropriate funding, as determined by the Committee,
for payment of compensation to the independent auditors for the purpose of
rendering or issuing an audit report and to any advisors employed by the
Committee.
In carrying out these responsibilities and duties, the Committee will:
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually in
consultation with the Nominating and Corporate Governance Committee.
Submit the Charter to the Board of Directors for approval and have the
Charter published in the proxy statement in accordance with SEC
regulations.
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2. Review and discuss with management and the independent auditors the
Company's annual audited financial statements and the independent
auditors' report thereon, including disclosures made in management's
discussion and analysis, contained in the Company's Form 10-K and
annual report to shareholders prior to the filing or distribution
thereof. As part of the review process, the Committee will recommend
to the Board of Directors whether the audited financial statements
should be included in the Company's Form 10-K.
3. Meet separately and on a periodic basis with management, the internal
auditors and the independent auditors.
4. Review and discuss with management and the independent auditors the
quarterly and annual earnings press releases (including a review of
any use of "pro forma" or "adjusted" non-GAAP information), as well as
financial information and earnings guidance provided to analysts and
rating agencies.
5. Review and discuss with management and the independent auditors the
Company's Form 10-Q, including disclosures made in management's
discussion and analysis as well as the results of the independent
auditors' review of the quarterly financial statements.
6. In consultation with the management, the independent auditors and the
internal auditors, consider the integrity of the Company's financial
reporting processes and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control and
report such exposures, including the Company's risk assessment and
risk management policies. Review significant findings prepared by the
independent auditors and the internal auditing department together
with management's responses.
7. Discuss with management and the independent auditors significant
financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements and any major issues
regarding accounting principles and financial statement presentation,
including any significant changes in the Company's selection or
application of accounting principles, any major issues as to the
adequacy of the Company's internal controls and any special steps
adopted in light of material control deficiencies.
8. Review and discuss quarterly reports from the independent auditors on:
o All critical accounting policies and practices to be used.
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o All alternative treatments of financial information within
generally accepted accounting principles that have been discussed
with management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
independent auditors.
o Other material written communications between the independent
auditors and management, such as any management letter or
schedule of unadjusted differences.
9. Discuss with management and the independent auditors the effect of
accounting and regulatory initiatives as well as off-balance sheet
structures, if any, on the Company's financial statements.
10. Discuss with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit, including any difficulties or problems
encountered in the course of the audit work and management's response
thereto, any restrictions on the scope of activities or access to
requested information, and any significant disagreements with
management.
11. Review disclosures made to the Committee by the Company's Chief
Executive Officer and Chief Financial Officer during their
certification process for the Form 10-K and Form 10-Q about any
significant deficiencies in the design or operation of internal
controls or material weaknesses therein and any fraud involving
management or other employees who have a significant role in the
Company's internal controls.
Independent Auditors
12. Review the performance of the independent auditors, including an
evaluation of the lead audit partner.
13. Approve all audit engagement fees and terms and other significant
compensation to be paid to the independent auditors.
14. On an annual basis, review and discuss with the independent auditors
all significant relationships they have with the Company that could
impair the auditors' independence.
15. Review the independent auditors' audit plan prior to the commencement
of the audit and discuss audit scope, staffing, locations, reliance
upon management, and internal audit and general audit approach.
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16. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
17. Obtain and review a report from the independent auditors at least
annually regarding (a) the independent auditors' internal
quality-control procedures, (b) any material issues raised by the most
recent internal quality-control review, or peer review, of the firm,
or by any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or more
independent audits carried out by the firm, (c) any steps taken to
deal with any such issues, and (d) all relationships between the
independent auditors and the Company. Evaluate the qualifications,
performance and independence of the independent auditors, including
considering whether the auditors' quality controls are adequate and
the provision of permitted non-audit services is compatible with
maintaining the auditors' independence, and taking into account the
opinions of management and the internal auditors. The Committee shall
present its conclusions with respect to the independent auditors to
the Board of Directors.
18. Ensure the rotation of the lead (or coordinating) audit partner having
primary responsibility for the audit and the audit partner responsible
for reviewing the audit as required by law. Consider whether, in order
to assure continuing auditor independence, there should be regular
rotation of the audit firm itself.
19. Set clear policies for the hiring by the Company of employees or
former employees of the independent auditors who participated in any
capacity in the audit of the Company.
Internal Audit Department
20. Review and approve the internal audit function of the Company,
including independence and the proposed audit plans for the coming
year.
21. Review the budget, any changes in plan, activities, organizational
structure, and qualifications of the internal audit department, as
needed.
22. Review the appointment, performance, replacement, reassignment or
dismissal of the internal audit manager.
23. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
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Compliance Oversight
24. On at least an annual basis, review with the Company's General Counsel
any legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from
regulators or governmental agencies.
25. Advise the Board of Directors with respect to the Company's policies
and procedures regarding compliance with applicable laws and
regulations and the Company's codes of ethics and compliance. Annually
review a summary of director and officer related party transactions
and potential conflicts of interest.
26. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential,
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.
27. Obtain from the independent auditors assurance that Section 10A(b) of
the Exchange Act has not been implicated.
Other Committee Responsibilities
28. Report regularly to the Board of Directors (i) following meetings of
the Committee, (ii) with respect to such other matters as are relevant
to the Committee's discharge of its responsibilities and (iii) with
respect to such recommendations as the Committee may deem appropriate.
The report to the Board of Directors may take the form of an oral
report by the Committee's Chairperson or any other member of the
Committee designated by the Committee to make such report.
29. Maintain minutes or other records of meetings and activities of the
Committee.
Annual Performance Evaluation
The Committee shall perform a review and evaluation, at least annually, of
the performance of the Committee, including by reviewing the compliance of the
Committee with this Charter. The Committee shall conduct such evaluations and
reviews in such manner as it deems appropriate.
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Limitation of Committee's Role
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements and disclosures are complete
and accurate and are in accordance with generally accepted accounting principles
and applicable rules and regulations. These are the responsibilities of
management and the independent auditors.
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ANNUAL MEETING OF SHAREHOLDERS OF
BANTA CORPORATION
April 29, 2003
Common
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach and mail in the envelope provided.
BANTA CORPORATION
COMMON
Proxy for Annual Meeting of Shareholders to be held April 29, 2003
The undersigned constitutes and appoints DONALD D. BELCHER and RONALD D.
KNEEZEL, or either of them, the true and lawful proxies of the undersigned, with
full power of substitution, to represent and to vote as designated on the
reverse side, all shares of Banta Corporation which the undersigned is entitled
to vote at the annual meeting of shareholders of such corporation to be held at
the Fox Cities Performing Arts Center, Kimberly-Clark Theater, 400 West College
Avenue, Appleton, Wisconsin on April 29, 2003, at 2:00 P.M., Central Time, and
at all adjournments or postponements thereof.
The shares represented by this proxy when properly executed will be voted
in the manner directed herein by the undersigned shareholder, but, if no
direction is indicated, this proxy will be voted FOR all indicated nominees as
directors (Item 1).
The undersigned hereby revokes any other proxy heretofore executed by the
undersigned for the meeting and acknowledges receipt of notice of the annual
meeting and the proxy statement. This proxy is solicited on behalf of the Board
of Directors of Banta Corporation.
(Continued and to be signed on the reverse side)
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF THE BOARD'S NOMINEES FOR DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS
SHOWN HERE |X|
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1. ELECTION OF DIRECTORS 2. In their discretion upon all such other
business as may properly come before the
meeting.
NOMINEES
|_| FOR ALL NOMINEES o Jameson A. Baxter
|_| WITHHOLD AUTHORITY o Donald D. Belcher
FOR ALL NOMINEES o John F. Bergstrom
|_| FOR ALL EXCEPT o Ursula M. Burns
(See instructions below) o Henry T. DeNero
o Richard L. Gunderson
o Ray C. Richelsen
o Stephanie A. Streeter
o Michael J. Winkler
INSTRUCTION: To withhold authority to vote for any
individual nominee(s), mark "FOR ALL EXCEPT" and fill in the
circle next to each nominees you wish to withhold, as shown
here: o
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To change the address on your account, please check the box
at the right and indicate your new address in the address
space above. Please note that changes to the registered |_|
name(s) on the account may not be submitted by this method.
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Signature of Shareholder Date: Signature of Shareholder Date:
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NOTE: This proxy must be signed exactly as the name appears hereon. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.