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SCHEDULE 14A INFORMATION

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

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Filed by a Party other than the Registrant o

Check the appropriate box:

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Preliminary Proxy Statement

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

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §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):

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No fee required

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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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):
        

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Fee paid previously with preliminary materials.

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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)

 

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BALL CORPORATION LOGO

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 27, 2005

        The Annual Meeting of Shareholders of Ball Corporation will be held at the Waldorf Astoria Hotel, 301 Park Avenue, New York, New York 10022-6897, on Wednesday, April 27, 2005, at 9:00 a.m. (EDT) for the following purposes:

        Only holders of Common Stock of record at the close of business on March 1, 2005, are entitled to notice of and to vote at the Annual Meeting or any adjournment thereof.

        A Proxy Statement appears on the following pages. Copies of the Annual Report and Form 10-K for 2004 are being mailed to you with this Notice of Annual Meeting of Shareholders and Proxy Statement.

    By Order of the Board of Directors

 

 

David A. Westerlund
Corporate Secretary

March 21, 2005
Broomfield, Colorado

YOUR VOTE IS IMPORTANT

You are urged to complete, sign, date and promptly return your proxy in the enclosed
postage-paid envelope, or submit your proxy via the telephone or Internet,
as soon as possible, so that your shares can be voted at the meeting
in accordance with your instructions.

PLEASE NOTE: The 2005 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.

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

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

PROXY STATEMENT
March 21, 2005

ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 27, 2005

To Shareholders of Ball Corporation:

        This Proxy Statement and the accompanying proxy card 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, 2005, for the purposes stated in the accompanying notice of the meeting.

        Please complete, sign, date and return your proxy card, or submit your proxy by telephone or via the Internet, as soon as possible, so that your shares can be voted at the meeting. Any Ball Corporation shareholder of record 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 card for reference when initiating the process.

Similar instructions are included on the enclosed proxy card.

        A shareholder of the Corporation may revoke a proxy at any time by sending written notice of revocation to the Corporate Secretary; by voting again by telephone, via the Internet or in writing; or by voting in person at the meeting.


VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS

        At the close of business on March 1, 2005, there were outstanding 109,945,811 shares of Common Stock (together with the associated preferred stock purchase rights under the Rights Agreement dated as of January 24, 1996, between the Corporation and EquiServe Trust Company, N.A.). Other than 60,933 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 percent of the Corporation's outstanding Common Stock as of December 31, 2004:

Name and Address
of Beneficial Owner

  Shares
Beneficially Owned

  Percent
of Class

Janus Capital Management LLC
151 Detroit Street
Denver, CO 80206-4805
  7,372,187 (1) 6.5

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

 

7,116,214

(2)

6.3

Iridian Asset Management LLC
276 Post Road West, Suite 100
Westport, CT 06880-4704

 

7,068,818

(3)

6.3

Lord Abbett & Co.
90 Hudson Street
Jersey City, NJ 07302-3973

 

6,524,516

(4)

5.8

(1)
Janus Capital Management LLC ("Janus Capital") has an indirect 100 percent ownership stake in Bay Isle Financial LLC ("Bay Isle") and an indirect 77.5 percent ownership stake in Enhanced Investment Technologies LLC ("INTECH"). Due to the above ownership structure, holdings for Janus Capital, Bay Isle and INTECH are aggregated for purposes of this filing. Janus Capital, Bay Isle and INTECH are registered investment advisers, each furnishing investment advice to various investment companies registered under Section 8 of the Investment Company Act of 1940 and to individual and institutional clients (collectively referred to herein as the "Managed Portfolios").


As a result of its role as investment adviser or sub-adviser to the Managed Portfolios, Janus Capital may be deemed to be the beneficial owner of 4,564,163 shares or 4.1 percent of the shares outstanding of Ball Corporation Common Stock held by such Managed Portfolios. However, Janus Capital does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed Portfolios and disclaims any ownership associated with such rights. Shares are held with sole voting and dispositive power.


As a result of its role as investment adviser or sub-adviser to the Managed Portfolios, INTECH may be deemed to be the beneficial owner of 2,808,024 shares or 2.4 percent of the shares outstanding of Ball Corporation Common Stock held by such Managed Portfolios. However, INTECH does not have the right to receive any dividends from, or the proceeds from the sale of, the securities held in the Managed Portfolios and disclaims any ownership associated with such rights. The above shares are held with shared voting and dispositive power.

(2)
These shares are held with shared voting and dispositive power.

(3)
Iridian Asset Management LLC is jointly owned by the Governor and Company of the Bank of Ireland, IBI Interfunding, BancIreland/First Financial, Inc., BIAM (US) Inc., pursuant to a joint filing agreement dated February 8, 2004. The shares are held with shared voting and dispositive power.

(4)
These shares are held with sole voting and dispositive power.

        The following table lists the beneficial ownership, as of the close of business on March 1, 2005, of Common Stock of the Corporation by director nominees, continuing directors, the Chief Executive Officer and the four other most highly compensated executive officers and, as a group, of such persons and the other executive officers.

Title of Class

  Name of
Beneficial Owner

  Shares Beneficially Owned(1)
  Percent of
Class(2)

Common   Howard M. Dean   109,247 (3) *
Common   Hanno C. Fiedler   95,210 (4) *
Common   John R. Friedery   256,024 (5) *
Common   R. David Hoover   1,510,006 (6) 1.4
Common   John F. Lehman   113,925 (7) *
Common   Jan Nicholson   196,057 (8) *
Common   Raymond J. Seabrook   448,385 (9) *
Common   George A. Sissel   332,997 (10) *
Common   George M. Smart   4,608   *
Common   Theodore M. Solso   44,301 (11) *
Common   William P. Stiritz   1,124,925 (12) 1.0
Common   Stuart A. Taylor II   76,467 (13) *
Common   Erik H. van der Kaay   14,498 (14) *
Common   David A. Westerlund   490,142 (15) *
Common   All of the above and present executive officers as a group (18)   5,421,386 (16) 4.9

(1)
Full voting and dispositive investment power, unless otherwise noted.
(2)
* Indicates less than 1 percent ownership.
(3)
Includes 1,000 shares owned by Mr. Dean's wife, as to which he disclaims beneficial ownership, and 28,293 shares that he may acquire during the next 60 days upon the exercise of stock options.
(4)
Includes 5,000 shares that Mr. Fiedler may acquire during the next 60 days upon exercise of stock options. Also includes 43,333 shares of restricted stock without voting rights. Voting rights attach to the shares as the restrictions lapse.
(5)
Includes 75,000 shares that Mr. Friedery may acquire during the next 60 days upon the exercise of stock options. Also includes 33,029 stock units equivalent to 33,029 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(6)
Includes 378,193 shares held in trust for Mr. Hoover's wife, as to which he disclaims beneficial ownership, and 698,504 shares that he may acquire during the next 60 days upon the exercise of stock options. Also includes 194,139 stock units equivalent to 194,139 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(7)
Includes 30,000 shares that Mr. Lehman may acquire during the next 60 days upon the exercise of stock options. Also includes 1,327 stock units equivalent to 1,327 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(8)
Includes 42,000 shares that Ms. Nicholson may acquire during the next 60 days upon the exercise of stock options. Also includes 1,327 stock units equivalent to 1,327 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(9)
Includes 4,400 shares owned by Mr. Seabrook's children, as to which he disclaims beneficial ownership, and 217,272 shares that he may acquire during the next 60 days upon the exercise of stock options. Also includes 68,556 stock units equivalent to 68,556 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(10)
Includes 39,200 shares owned by Mr. Sissel's wife, as to which he disclaims beneficial ownership, and 56,000 shares that he may acquire during the next 60 days upon the exercise of stock options. Also includes 1,327 stock units equivalent to 1,327 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(11)
Includes 4,000 shares that Mr. Solso may acquire during the next 60 days upon the exercise of stock options. Also includes 795 stock units equivalent to 795 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(12)
Includes 200,000 shares owned by Mr. Stiritz' wife, as to which he disclaims beneficial ownership, and 44,000 shares that he may acquire during the next 60 days upon the exercise of stock options. Also includes 999 stock units equivalent to 999 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(13)
Includes 28,250 shares that Mr. Taylor may acquire during the next 60 days upon the exercise of stock options. Also includes 795 stock units equivalent to 795 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(14)
Includes 382 stock units equivalent to 382 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(15)
Includes 50,000 shares owned by Mr. Westerlund's wife, as to which he disclaims beneficial ownership, and 248,000 shares that he may acquire during the next 60 days upon the exercise of stock options. Also includes 67,207 stock units equivalent to 67,207 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.
(16)
Includes 67,897 additional stock units equivalent to 67,897 shares that have been deferred pursuant to the Ball Corporation 2000 Deferred Compensation Company Stock Plan with no voting rights or dispositive investment power.


VOTING ITEM 1—ELECTION OF DIRECTORS

        In 1985 the shareholders adopted the Amended Articles of Incorporation of Ball Corporation, dividing the Board of Directors (the "Board") into three classes, as nearly equal in number as possible, with directors serving staggered three-year terms. On April 27, 2005, three persons are to be elected to serve as directors until 2008. Unless otherwise instructed on the proxy card, the persons named in the accompanying proxy intend to vote for nominees George M. Smart, Theodore M. Solso and Stuart A. Taylor II to hold office as directors of the Corporation until the 2008 Annual Meeting of Shareholders, or, in each case, until his respective successor is elected and qualified. All nominees have consented to be named as candidates in the Proxy Statement and have agreed to serve if elected. If, for any reason, any 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 of Directors. The Board has no reason to believe that any of the nominees will be unable to serve.

        William P. Stiritz, who has served as a director since 1983, has reached the retirement age for directors and, therefore, will not stand for reelection at the 2005 Annual Meeting. The Corporation wishes to express its appreciation to Mr. Stiritz for his significant contributions to the Corporation and its shareholders during his tenure as a director.

        In accordance with the Indiana Business Corporation Law, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. Abstentions and broker nonvotes are considered neither votes "for" nor "against." Proxies may not be voted for a greater number of persons than the three named nominees.

        Set forth for each director nominee in Class II and for each continuing director in Classes I and III are the director's principal occupation and employment during the past five years or, if shorter, the period during which the director has served as a director, and certain other information.


DIRECTOR NOMINEES AND CONTINUING DIRECTORS

To Be Elected for a Term of Three Years Until the 2008 Annual Meeting (Class II)

GRAPHIC
George M. Smart

 

President, Sonoco-Phoenix Inc., Canton, Ohio, a subsidiary of Sonoco Products Company, 2001 to 2004; Chairman and President, Phoenix Packaging Corporation, 1993 to 2001. Age 59.

 

Director since 2005.

Mr. Smart is a director of FirstEnergy Corp., Akron, Ohio, and Unizan Financial, Canton, Ohio.

GRAPHIC
Theodore M. Solso

 

Chairman and Chief Executive Officer, Cummins, Inc., Columbus, Indiana, since January 2000. Age 58.

 

Director since 2003. Member, Audit, Human Resources and Nominating/Corporate Governance Committees.

Mr. Solso is a director of Ashland Inc., Covington, Kentucky, and Irwin Financial Corporation, Columbus, Indiana.

GRAPHIC
Stuart A. Taylor II

 

Chief Executive Officer, The Taylor Group L.L.C., Chicago, Illinois, since June 2001; Senior Managing Director, Bear, Stearns & Co. Inc., Chicago, Illinois, 1999 to 2001. Age 44.

 

Director since 1999. Member, Finance, Human Resources and Nominating/Corporate Governance Committees.

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

To Continue in Office Until the 2006 Annual Meeting (Class III)

GRAPHIC
Howard M. Dean

 

Chairman of the Board, Dean Foods Company, 1989 to April 2002; Chairman and Chief Executive Officer, 1989 to 2001; President and Chief Operating Officer, 1971 to 1989. Age 67.

 

Director since 1984. Member, Audit, Human Resources and Nominating/ Corporate Governance Committees.

Mr. Dean is a director of Yellow Roadway Corp., Overland Park, Kansas.

GRAPHIC
R. David Hoover

 

Chairman, President and Chief Executive Officer, Ball Corporation, since April 2002; 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 CFO, 1998 to 2000; Executive Vice President and CFO, 1997 to 1998; Executive Vice President, CFO and Treasurer, 1996 to 1997. Age 59.

 

Director since 1996. Member, Finance Committee.

Mr. Hoover is a director of Energizer Holdings, Inc., St. Louis, Missouri, and Irwin Financial Corporation, Columbus, Indiana.

GRAPHIC
Jan Nicholson

 

President, The Grable Foundation, Pittsburgh, Pennsylvania, since 1990; Managing Director, Strategic Risk Assessment, MBIA Insurance Corporation, Armonk, New York, 1998 to 2000; Managing Director, Research and Development, Capital Markets Assurance Corporation (CapMAC), New York, New York, 1994 to 1998. Age 59.

 

Director since 1994. Member, Audit and Finance Committees.

Ms. Nicholson is a director of Radian Group, Philadelphia, Pennsylvania.

To Continue in Office Until the 2007 Annual Meeting (Class I)

GRAPHIC
Hanno C. Fiedler

 

Executive Vice President, Ball Corporation, since December 2002; Chairman and Chief Executive Officer, Ball Packaging Europe, since December 2002; Chairman and Chief Executive Officer, Schmalbach-Lubeca AG, 1996 to 2002. Age 59.

 

Director since 2002. Member, Finance Committee.

Mr. Fiedler serves on the Supervisory Boards of Thyssen Krupp Stahl AG, Duisburg, Germany; Pfleiderer AG and Pfleiderer Unternehmen- sverwaltung GmbH & Co. KG, both of Neumarkt, Germany; and Howaldtswerke-Deutsche Werft AG, Kiel, Germany.

GRAPHIC
John F. Lehman

 

Chairman, J. F. Lehman & Company, New York, New York, since 1990; Chairman of the Board, OAO Technology Solutions, Inc., Greenbelt, Maryland, since 2001; Chairman of the Board, Sperry Marine Inc., Charlottesville, Virginia, 1993 to 1996; Managing Director, Investment Banking Division, PaineWebber Inc., New York, New York, 1988 to 1990; Secretary of the Navy, Washington, D.C., 1981 to 1987. Age 62.

 

Director since 1987. Member, Finance, Human Resources and Nominating/Corporate Governance Committees.

Mr. Lehman is a director of EnerSys, Reading, Pennsylvania.

GRAPHIC
George A. Sissel

 

Chairman of the Board, Ball Corporation, January 2001 to April 2002; Chairman and Chief Executive Officer, January 1998 to January 2001; Chairman, President and CEO, 1996 to 1998; President and CEO, 1995 to 1996. Age 68.

 

Director since 1995. Member, Finance Committee.

Mr. Sissel is a director of CIBER, Inc., Greenwood Village, Colorado.

GRAPHIC
Erik H. van der Kaay

 

Chairman of the Board, Symmetricom, Inc., October 2002 to October 2003; President, Chief Executive Officer, and Chairman of the Board, Datum, Inc., Irvine, California, April 1998 to October 2002 upon Symmetricom's acquisition of Datum. Age 64.

 

Director since 2004. Member, Audit, Human Resources and Nominating/ Corporate Governance Committee.

Mr. van der Kaay is a director of Comarco, Inc., Irvine, California; RF Micro Devices, Greensboro, North Carolina; and TranSwitch Corporation, Shelton, Connecticut.


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 New York Stock Exchange ("NYSE") Listed Company Manual (the "NYSE Listing Standards"). The Corporate Governance Guidelines are set forth on the Corporation's website at www.ball.com, under the section "Investors," under the subsection "Financial Information," and under the link, "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 chaired by a designated Compliance Officer. The Committee 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. Copies of the Business Ethics booklet and the Executive Officers and Directors Ethics Statement are set forth on the Corporation's website at www.ball.com, under the section "Investors," under the subsection "Financial Information," and under the link, "Corporate Governance." A copy may also be obtained upon request from the Corporation's Corporate Secretary.

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 via 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 303-460-2127.

        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, under the section "Investors," under the subsection "Financial Information," and under the link, "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 on page 12.

Meetings of Nonmanagement 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. The Presiding Director of meetings of nonmanagement and independent directors is Stuart A. Taylor II.

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. Those standards are described on the Corporation's website at www.ball.com, under the section "Investors," under the subsection "Financial Information," and under the link, "Corporate Governance."

        The Board has determined that a majority of the Board is independent, and the Board has determined that based upon the NYSE independence standards, that each of the members of the Board is now independent with the exception of Messrs. Hoover, Fiedler and Stiritz.

        Mr. van der Kaay is a member of the audit committees of three other publicly held companies. The Board has determined that such simultaneous service by Mr. van der Kaay does not impair Mr. van der Kaay's ability to serve effectively on the Corporation's Audit Committee.


CERTAIN COMMITTEES OF THE BOARD

        The standing committees of the Board are the Audit, Nominating/Corporate Governance, Human Resources and Finance Committees.

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 overview of the accounting policies and the system of internal accounting controls over financial reporting, disclosure controls and procedures and the performance of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Corporation (the Corporation's "independent auditor") and the internal audit department. The Audit Committee is responsible for engaging and evaluating the Corporation's independent auditor, including the independent auditor's qualifications and independence; resolving any differences between management and the independent auditor regarding financial reporting; preapproving all audit and non-audit 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 Committee are Ms. Nicholson (Chair), and Messrs. Dean, Solso and van der Kaay. The Board has determined that each member of the Audit Committee is independent and financially literate, and the Board identifies Ms. Nicholson, among others, as having accounting or financial management expertise and as an Audit Committee financial expert under the NYSE Listing Standards and the SEC regulations. The Audit Committee met four times during 2004. The Report of the Audit Committee is set forth on page 22. The Committee has considered the non-audit services provided during 2004 and 2003 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 those 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. The fees billed by PricewaterhouseCoopers LLP for services rendered during 2004 and 2003 are as follows:

Audit Fees

        The aggregate fees billed by PricewaterhouseCoopers LLP for professional services rendered for the audit of the Corporation's annual consolidated financial statements included in the Annual Report on Form 10-K, quarterly reviews of the Corporation's consolidated financial statements included in the quarterly reports on Form 10-Q and accounting consultations directly related to the audit were $2,423,000 and $1,595,000 for 2004 and 2003, respectively. The fees for 2004 include $1 million for the audit of the 2003 financial statements that included the first full year audit of the acquired European operations, formerly known as Schmalbach-Lubeca GmbH. The aggregate fees billed for audit services rendered in connection with the independent auditor's attestation report under the Sarbanes-Oxley Act of 2002 for the year ended December 31, 2004, were $2,415,000 and $137,000 for 2004 and 2003, respectively. The aggregate fees billed for services rendered for statutory audits required by foreign countries for the Corporation's foreign investments were $1,152,000 and $515,000 for 2004 and 2003, respectively. In addition, aggregate fees of €503,000 billed by PricewaterhouseCoopers LLP in 2003 for statutory audits for the year ended 2002 related to the acquisition of the European companies pursuant to an engagement of PricewaterhouseCoopers LLP that was entered into by the acquired European companies prior to the acquisition.

Audit-Related Fees

        Fees for audits of the Corporation's benefit plans were $17,000 and $166,000 for 2004 and 2003, respectively. Other fees for audit-related services for disclosure control and procedure review and general consultations concerning the Sarbanes-Oxley Act of 2002 were $81,000 and $20,000 for 2004 and 2003, respectively. Fees for professional services rendered by PricewaterhouseCoopers LLC for due diligence, accounting consultations, comfort letters and the review of other regulatory filings related to the acquisition of Schmalbach-Lubeca GmbH and associated corporate refinancings were $1,183,000 for 2003.

Tax Fees

        The aggregate fees billed for tax compliance, including tax compliance matters related to tax audits, return preparation fees, and tax compliance for expatriate employees were $1,443,000 and $1,530,000 for 2004 and 2003, respectively. The aggregate fees for tax consultations were $722,000 and $1,130,000 for 2004 and 2003, respectively. Fees for tax services rendered by PricewaterhouseCoopers LLC for consultations and due diligence related to the acquisition of Schmalbach-Lubeca GmbH were $1,324,000 for 2003.

All Other Fees

        Fees of $4,000 and $25,000 were billed for 2004 and 2003, respectively, for other non-prohibited services including fees for access to PricewaterhouseCoopers LLP online accounting research software, licensing fees and other training and accounting advice for the Corporation's foreign investments.

        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. Other than fees paid in 2003 by Ball Packaging Europe GmbH to PricewaterhouseCoopers LLP for statutory audits initiated in 2002 when the Corporation did not own the business, the Audit Committee preapproved 100 percent of all of the other above-referenced fees paid in 2004 and 2003 for services that were provided by PricewaterhouseCoopers LLP.

        The percentage of 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 was less than 10 percent.

        A copy of the Audit Committee Charter is set forth on the Corporation's website at www.ball.com, under the section "Investors," under the subsection "Financial Information," and under the link, "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 and 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; and overseeing the evaluation of the Board and its Committees. The Nominating/Corporate Governance Committee utilizes the standards set forth below for considering director nominees.

        Members of the Committee are Messrs. Taylor (Chair), Dean, Lehman, Solso and van der Kaay. 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 2004.

        The Board has established a process whereby nominees for the Board may be submitted by members of the Board, the Chief Executive Officer, 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: (a) candidates who have sufficient time to attend or otherwise be present at Board, relevant Board Committee and Shareholders' meetings; (b) candidates who will subscribe to Ball Corporation's Corporate Governance Guidelines and the Executive Officers and Directors Ethics Statement; (c) candidates who demonstrate credentials and experience in a broad range of corporate matters; (d) candidates who have experience and are focused on a broad range of corporate performance standards typical of publicly traded companies headquartered in the United States; (e) candidates who will subscribe to the finalized strategic and operating plans of the Corporation as approved by the Board from time to time; (f) candidates who are not affiliated with special interest groups that represent major causes or constituents; and (g) candidates who 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 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.

        Upon the recommendation of the Chief Executive Officer and following interviews by members of the Committee and other directors, George M. Smart was nominated and appointed as a director in January 2005 using the above standards.

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

        The 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 percent 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, under the section "Investors," under the subsection "Financial Information," and under the link, "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 Chief Executive Officer 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 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 systems and succession planning system of the Corporation, including discussions with the Chairman of the Board and Chief Executive Officer about the succession plan for the Chairman of the Board and Chief Executive Officer; hiring experts including executive compensation consultants as deemed appropriate to advise the Committee; and authorizing the filing of required reports with federal, state and local governmental agencies.

        Members of the Committee are Messrs. Dean (Chair), Lehman, Solso, Taylor and van der Kaay. The Board has determined that the members of the Committee are independent under the NYSE Listing Standards. The Human Resources Committee met four times during 2004. The Human Resources Committee Charter is set forth on the Corporation's website at www.ball.com, under the section "Investors," under the subsection "Financial Information," and under the link, "Corporate Governance."

Finance Committee:

        The Finance Committee assists the Board in fulfilling its responsibility to oversee management in the financing and 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 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. Lehman (Chair), Fiedler, Hoover, Sissel, Stiritz and Taylor and Ms. Nicholson. The Committee met four times during 2004. A copy of the Finance Committee Charter is set forth on the Corporation's website at www.ball.com, under the section "Investors," under the subsection "Financial Information," and under the link, "Corporate Governance."


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 four meetings during 2004. Every director attended 75 percent 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. Nine directors attended the 2004 Annual Meeting.


SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING

        To be eligible for inclusion in the Corporation's Proxy Statement for the 2006 Annual Meeting of Shareholders, proposals of shareholders must be in writing and be received by the Corporate Secretary at the Corporation's principal executive offices, 10 Longs Peak Drive, Broomfield, Colorado 80021-2510, by November 21, 2005.

        If a shareholder desires to bring business before the 2006 Annual Meeting of Shareholders, which is not the subject of a proposal submitted for inclusion in the Proxy Statement, the shareholder must notify the Corporation in writing by February 4, 2006, or the proposal may be considered untimely, and management's proxies may exercise their discretionary authority to vote previously solicited proxies against such proposal if it is raised at the 2006 Annual Meeting.


EXECUTIVE COMPENSATION

        The following table sets forth information concerning the annual and long-term compensation for services in all capacities to the Corporation of the Chief Executive Officer and of the next four most highly compensated executive officers of the Corporation (the "Named Executive Officers") in office on December 31, 2004:

SUMMARY COMPENSATION TABLE

 
   
   
   
   
  Long-Term Compensation
   
 
   
  Annual Compensation
  Awards
  Payouts
   
Name and Principal
Position

  Year
  Salary
  Bonus(1)
  Other Annual
Compensation

  Restricted
Stock
Awards(2)

  Securities
Underlying
Options

  LTIP(3)
Payouts

  All Other
Compensation(4)

R. David Hoover

Chairman, President and
Chief Executive Officer
  2004
2003
2002
  $
$
$
820,000
792,105
765,000
  $
$
$
1,755,809
1,469,701
1,271,870
        $
$
$
2,912,280
1,126,200
1,744,690
      $
$
$
1,604,980
1,436,256
841,835
  $
$
$
117,306
113,773
134,191

Hanno C. Fiedler(5)
Executive Vice President,
Ball Corporation and
Chairman and Chief Executive
Officer, Ball Packaging Europe

 

2004
2003
2002

 




450,000
400,000
13,636

 



579,482
529,013

 

 

 

 


$
$

  
1,040,800
250,350

 

 

 



568,294
403,754

 


960

John R. Friedery

Senior Vice President,
Ball Corporation and
Chief Operating Officer,
North American Packaging

 

2004

 

$

375,000

 

$

521,007

 

 

 

 

$

696,825

 

 

 

$

417,611

 

$

38,676

Raymond J. Seabrook

Senior Vice President and
Chief Financial Officer

 

2004
2003
2002

 

$
$
$

342,500
327,500
312,500

 

$
$
$

514,211
439,952
392,354

 


$

  
98,869

 

$
$

620,920
225,240

 

 

 

$
$
$

437,791
409,866
233,530

 

$
$
$

61,686
59,900
59,364

David A. Westerlund

Senior Vice President,
Administration, and Corporate
Secretary

 

2004
2003
2002

 

$
$
$

305,000
290,000
275,000

 

$
$
$

457,075
359,488
316,578

 

 

 

 

$
$
$

620,920
225,240
789,760

 

 

 

$
$
$

383,769
354,986
201,093

 

$
$
$

60,769
57,701
57,888

(1)
As noted in the Report of the Human Resources Committee, Ball Corporation uses the term Incentive Compensation rather than Bonus. Also noted in the Report of the Human Resources Committee is the performance level of the Corporation and each of the operating units in relation to incentive targets and the resulting impact on the "Bonus" amounts shown above.

(2)
In 2004 "Restricted Stock Awards" for all Named Executive Officers were awarded pursuant to the Deposit Share Program.

(3)
In 2004 the amounts shown in "LTIP Payouts" consist of the following:
(4)
The amounts shown in the "All Other Compensation" column for 2004 consist of the following:
(5)
Mr. Fiedler is paid in euros, except stock awards which are U.S. dollar denominated. On December 31, 2004, the exchange rate was 1 euro = 1.3567 U.S. dollars.

Long-Term Incentive Compensation

Stock Option Grants and Exercises

        The following tables present certain information for the Named Executive Officers relating to stock option grants and exercises during 2004 and, in addition, information relating to the valuation of unexercised stock options:

STOCK OPTION GRANTS IN 2004

Name

  Options
Granted

  Percentage of
Total Options
Granted to
Employees in
Fiscal 2004

  Exercise Price
(per share)

  Expiration
Date

  Grant Date
Present Value

R. David Hoover   0   N/A            
Hanno C. Fiedler   0   N/A            
John R. Friedery   0   N/A            
Raymond J. Seabrook   0   N/A            
David A. Westerlund   0   N/A            

AGGREGATED STOCK OPTION EXERCISES IN 2004
AND FISCAL YEAR-END OPTION VALUES

 
   
   
  Number of Unexercised
Options Held at
December 31, 2004

  Value of Unexercised
In-the-Money Options at
December 31, 2004(1)

Name

  Shares
Acquired
on Exercise

  Value
Realized

  Exercisable
  Unexercisable
  Exercisable
  Unexercisable
R. David Hoover   235,496   $ 6,376,169   563,504   210,000   $ 17,543,174   $ 5,035,838
Hanno C. Fiedler         5,000   15,000   $ 98,400   $ 295,200
John R. Friedery   40,000   $ 1,051,999   44,000   48,000   $ 1,148,940   $ 1,154,745
Raymond J. Seabrook   44,000   $ 1,232,124   178,272   57,000   $ 5,873,057   $ 1,428,788
David A. Westerlund   50,496   $ 1,509,659   214,000   52,000   $ 7,069,322   $ 1,261,950

(1)
Based on the closing price on the New York Stock Exchange-Composite Transactions of the Corporation's Common Stock on December 31, 2004, of $43.98.

Equity Compensation Plans

        The following table summarizes information, as of December 31, 2004, relating to equity compensation plans of the Corporation pursuant to which grants of options, restricted stocks, restricted stock units or other rights to acquire shares may be granted from time to time.

 
  Equity Compensation Plan Information
Plan Category

  Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(a)

  Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
(b)

  Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)

Equity compensation plans approved by security holders   4,832,207   $ 17.84   1,568,780
Equity compensation plans not approved by security holders        
   
 
 
Total   4,832,207   $ 17.84   1,568,780
   
 
 

Long-Term Cash Incentive

        The following tables present information for the Named Executive Officers concerning the long-term cash incentive programs and, in addition, information relating to the estimated future payouts.

LONG-TERM CASH INCENTIVE PLAN—AWARDS IN LAST FISCAL YEAR

 
   
   
  Estimated Future Payouts(2)
Name

  Number of
Units(1)

  Performance Period
Until Maturation

  Threshold
  Target
  Maximum
R. David Hoover   0   1/1/03 - 12/31/05   $ 329,460   $ 658,920   $ 1,317,839
Hanno C. Fiedler   0   1/1/03 - 12/31/05   89,100   185,625   371,250
John R. Friedery   0   1/1/03 - 12/31/05   $ 66,392   $ 138,317   $ 276,635
Raymond J. Seabrook   0   1/1/03 - 12/31/05   $ 69,225   $ 144,218   $ 288,437
David A. Westerlund   0   1/1/03 - 12/31/05   $ 61,003   $ 127,089   $ 254,178

(1)
Participants are not awarded a number of units. Awards are expressed as a percentage of average annual salary and "bonus" at target during the performance period. However, Named Executive Officers whose Ball Corporation stock holdings are below the established guidelines will receive up to one-half of their award in Ball Corporation Restricted Stock.

(2)
Estimated future payouts ("earned awards") are based on Ball Corporation's total shareholder return performance; i.e., stock price appreciation plus dividends, over three-year performance cycles which begin at the start of each calendar year, relative to the total shareholder return of companies listed on the S&P Global Industry Classification Standard ("GICS") which has replaced the S&P Industrials index.

ACQUISITION-RELATED, SPECIAL INCENTIVE PLAN—AWARDS IN LAST FISCAL YEAR

 
   
   
  Estimated Future Payouts(2)
Name

  Number of
Units(1)

  Performance Period
Until Maturation

  Threshold
  Target
  Maximum
R. David Hoover   0   1/1/03 - 12/31/05   $ 0   $ 53,207   $ 471,891
Hanno C. Fiedler   0   1/1/03 - 12/31/05   0   54,202   391,702
John R. Friedery   0   1/1/03 - 12/31/04   $ 0   $ 81,240   $ 243,390
Raymond J. Seabrook   0   1/1/03 - 12/31/05   $ 0   $ 17,031   $ 188,448
David A. Westerlund   0   1/1/03 - 12/31/05   $ 0   $ 15,716   $ 168,216

(1)
Participants are not awarded a number of units. Awards are expressed as a percentage of average annual salary during the performance period.

(2)
Estimated future payouts ("earned awards") are based on Ball Packaging Europe's cumulative earnings before interest and taxes, and cumulative economic value added for the three-year performance cycle that began January 1, 2003. Target amount represents payout at target performance for the three-year performance cycle minus interim amounts paid for 2003 and 2004. Interim amounts paid in 2003 and 2004 were above target; therefore, the remaining target opportunity for 2005, the final year of the three-year performance cycle, is reduced. Maximum amount represents payout at maximum performance for the three-year performance cycle minus interim amounts paid for 2003 and 2004. Amounts paid are reported in the Summary Compensation Table under "LTIP Payouts."

Retirement Plans

        The following table, for purposes of illustration, indicates the amounts of annual retirement income which would be payable in 2005 to the Named Executive Officers, except Mr. Fiedler, at normal retirement age 65. The calculation of retirement benefits under the plans generally is based upon average earnings (base salary only) for the highest five consecutive years of the ten years preceding retirement.

PENSION PLAN TABLE

 
  Years of Service
Average Annual Earnings
  15
  20
  25
  30
  35
$ 250,000   $ 52,779   $ 70,372   $ 87,964   $ 105,557   $ 123,150
  300,000     64,029     85,372     106,715     128,057     149,400
  350,000     75,279     100,372     125,465     150,557     175,650
  400,000     86,529     115,372     144,214     173,057     201,900
  450,000     97,779     130,372     162,965     195,557     228,150
  500,000     109,029     145,372     181,715     218,057     254,400
  550,000     120,279     160,372     200,464     240,557     280,650
  600,000     131,529     175,372     219,215     263,057     306,900
  650,000     142,779     190,372     237,965     285,557     333,150
  700,000     154,029     205,372     256,714     308,057     359,400

        The Corporation's qualified United States salaried retirement plans provide defined benefits determined by base salary and years of service. The Corporation has also adopted a nonqualified Supplemental Executive Retirement Plan that provides benefits otherwise not payable under the qualified pension plan to the extent that the Internal Revenue Code, as amended, (the "Code") limits the pension to which an executive would be entitled under the qualified pension plan. The benefit amounts shown in the preceding table reflect the amount payable as a straight life annuity and include amounts payable under the Supplemental Executive Retirement Plan. On November 30, 2003, the Corporation terminated the Split-Dollar Life Insurance Plan that provided a portion of the nonqualified pension benefit. Mr. Seabrook elected a cash distribution from this Plan that will reduce his retirement benefit.

        Average Annual Earnings used under the pension formula to calculate benefits together with years of benefit service, as of December 31, 2004, for the Named Executive Officers are: R. David Hoover, $697,421 (34.54 years); John R. Friedery, $275,500 (16.33 years); Raymond J. Seabrook, $310,300 (12.21 years); and David A. Westerlund, $274,880 (29.32 years) offset by benefits received from a prior employer.

        Mr. Fiedler's retirement income benefits are provided by a pension agreement that is part of his Employment Agreement. The Agreement provides a benefit of 60 percent of his last gross base salary provided he is employed on the earlier of December 31, 2005, or reaches age 60 and retires in good standing from the Corporation. Should Mr. Fiedler meet these criteria, his retirement benefit would be €270,000 per year based on his 2004 salary of €450,000.

Termination of Employment and Change-in-Control Arrangements

        The Corporation maintains revocable, funded grantor trusts, which, in the event a change in control of the Corporation occurs, would become irrevocable with funds thereunder to be available to apply to the Corporation's obligations under its deferred compensation plans covering key employees, including the Named Executive Officers, except Mr. Fiedler. Under the trusts, a "change in control" can occur by virtue, in general terms, of an acquisition by any person of 40 percent or more of the Corporation's voting shares; a merger in which shareholders of the Corporation before the merger own less than 60 percent of the Corporation's Common Stock after the merger; shareholder approval of a plan to sell or dispose of substantially all of the assets of the Corporation; a change of a majority of the Corporation's Board within a 12-month period unless approved by two-thirds of the directors in office at the beginning of such period; a threatened change in control deemed to exist if there is an agreement which would result in a change in control or public announcement of intentions to cause a change in control; and by the adoption by the Board of a resolution to the effect that a change or threatened change in control has occurred for purposes of the trusts. For amounts deferred on or after January 1, 2005, the definition of "change in control" will have the meaning set forth in Section 409A of the Code, as amended, or any Treasury Department Regulations or Guidance. The trusts were funded as of December 31, 2004, with approximately $44.3 million of net equity of corporate-owned life insurance policies on the lives of various employees, including participants in the plans, and 714,896 shares of the Corporation's Common Stock, and cash equivalents valued at $31.5 million ($43.98 per share) at the close of business on December 31, 2004, to support approximately $149.0 million of current deferred compensation account balances of the beneficiaries of the trusts in the event of a change in control. The Corporation has borrowing capacity to fully fund the trusts in advance of a change in control and is required to do so prior to a change in control. If the funds set aside in the trusts would be insufficient to pay amounts due the beneficiaries, then the Corporation would remain obligated to pay those amounts. In the event of the insolvency of the Corporation, the funds in the trusts would be available to satisfy the claims of the creditors of the Corporation. The trusts were not established in response to any effort to acquire control of the Corporation, and the Board is not aware of any such effort.

        The Corporation intends to establish separate revocable, funded grantor trusts in 2005 which will adopt the definition of "change in control" as set forth in the Treasury Department's Guidance and any regulations issued under Section 409A of the Internal Revenue Code, as amended.

        The Corporation has change-in-control severance agreements with certain key employees, including the Named Executive Officers, except Mr. Fiedler. The agreements are effective on a year-to-year basis and would provide severance benefits in the event of both a change in control of the Corporation and an actual or constructive termination of employment within two years after a change in control. Under the agreements, a "change in control" can occur by virtue, in general terms, of an acquisition by any person of 30 percent or more of the Corporation's voting shares; a merger in which the shareholders of the Corporation before the merger own 50 percent or less of the Corporation's voting shares after the merger; shareholder approval of a plan of liquidation or a plan to sell or dispose of substantially all of the assets of the Corporation; and if, during any two-year period, directors at the beginning of the period fail to constitute a majority of the Board. "Actual termination" is any termination other than by death or disability, by the Corporation for cause, or by the executive, other than for constructive termination. "Constructive termination" means, in general terms, any significant reduction in duties, compensation or benefits or change of office location from those in effect immediately prior to the change in control, unless agreed to by the executive. The severance benefits payable, in addition to base salary and incentive compensation accrued through the date of termination, shall include two times current annual base salary and target incentive compensation; the bargain element value of then-outstanding stock options; the present value of the amount by which pension payments would have been larger had the executive accumulated two additional years of benefit service; two years of life, disability, accident and health benefits; outplacement services; and legal fees and expenses reasonably incurred in enforcing the agreements. In the event such benefits, together with other benefits paid because of a change in control, would be subject to the excise tax imposed under Section 280G of the Internal Revenue Code, the Corporation would reimburse the executive for such excise taxes paid, together with taxes incurred as a result of such reimbursement. The agreements were not entered into in response to any effort to acquire control of the Corporation, and the Board is not aware of any such effort.

        The Corporation has severance benefit agreements with certain key employees, including the Named Executive Officers, except Mr. Fiedler. The agreements provide severance benefits in the event of an actual or constructive termination of employment. "Actual termination" is any termination other than by death or disability, by the Corporation for cause, or by the executive, other than for constructive termination. "Constructive termination" means, in general terms, any significant reduction in compensation or benefits, unless agreed to by the executive. The severance benefits payable, in addition to base salary and incentive compensation accrued through the date of termination, include two times current annual salary and target incentive compensation for Mr. Hoover and one and one-half times current annual salary and target incentive compensation for Messrs. Friedery, Seabrook and Westerlund; the present value of the amount by which pension payments would have been larger had the executive accumulated two additional years of benefit service for Mr. Hoover and one and one-half years of benefit service for Messrs. Friedery, Seabrook and Westerlund; two years of life, disability, accident and health benefits for Mr. Hoover and one and one-half years of life, disability, accident and health benefits for Messrs. Friedery, Seabrook and Westerlund; outplacement services; and legal fees and expenses reasonably incurred in enforcing the agreements. Upon the occurrence of a change in control as defined in the change-in-control severance agreements, the executive is entitled to the greater of each of the benefits provided in this agreement and each of the benefits provided in the change-in-control severance agreement, including reimbursement for excise taxes which may be incurred as a result of such payments.

        The Corporation entered into an Employment Agreement with Mr. Fiedler negotiated in connection with the acquisition of Schmalbach-Lubeca AG and effective from December 19, 2002, through December 31, 2005. The Agreement provides for certain severance benefits in the event of termination by the Corporation for any reason or termination by Mr. Fiedler for "Good Reason." "Good Reason" means in general terms, any substantial diminution of duties and responsibilities, a reduction in base salary, or a substantial reduction in (or failure to provide) the aggregate level of incentive compensation and benefits that may be earned pursuant to the terms of the Agreement and the respective plans. The severance benefits payable in addition to base salary and incentive compensation accrued through the date of termination include: (i) a lump sum payment equal to the amount of base salary he would have earned for the balance of the Agreement term; (ii) a lump sum payment equal to the greater of (a) his annual bonus payable for the remainder of the Agreement term calculated as the average of the annual bonus payable for the two calendar years immediately preceding such termination and (b) his target annual incentive compensation for the remainder of the Agreement term; and (iii) such amounts, if any, as he may be entitled to in accordance with the provisions of the Long-Term Cash Incentive Plan; the Acquisition-Related, Special Incentive Plan; the Deposit Share Program; and the Restricted Stock Plan provided, however, all such amounts shall be calculated based on his actual date of termination.

Directors' Compensation

        Directors who are not employees of the Corporation receive as compensation a total target annual retainer composed of a $30,000 annual fixed retainer, plus an annual incentive retainer based upon the Corporation's actual operating performance for each fiscal (calendar) year. The annual incentive retainer is calculated in accordance with the Corporation's performance-based Incentive Compensation Plan at a rate of 50 percent of the director's annual fixed retainer. Both annual retainers are paid 50 percent in cash and 50 percent in restricted stock. The restrictions on the stock will lapse upon the director ceasing to serve as a director for any reason other than voluntary resignation, in which case the restrictions will not lapse and the director will forfeit the shares. For federal income tax purposes, the value of the shares will be taxable to the recipient as compensation income in an amount equal to the fair market value of the Corporation's Common Stock on the date the restrictions lapse. There has been no retirement plan for directors since 1997.

        Nonemployee directors also receive a fee of $1,500 for attending each Board meeting, a fee of $1,250 for attending one or more committee meetings held on any one day and a fee of $1,250 per quarter for serving as a chair of a Board committee and a per diem allowance of $750 for special assignments. Directors who are also employees of the Corporation receive no additional compensation for their service on the Board or on any Board committee.

        Nonemployee directors may elect to defer the payment of a portion or all of their directors' fees into the 2000 Deferred Compensation Company Stock Plan and/or the 2002 Deferred Compensation Plan for Directors. These plans replace the directors' prior deferred compensation plan for incentive retainers earned in 2001 or after and for other directors' fees earned in 2002 and after. In addition, amounts deferred into the prior deferred compensation plan may be transferred to these plans or remain in the prior plan. Amounts deferred or transferred into the 2000 Deferred Compensation Company Stock Plan receive a 20 percent company match with a maximum match of $20,000 per year. Amounts deferred, transferred or credited to this Plan will be represented in the participant's account as stock units, with each unit having the value equivalent to one share of Ball Corporation Common Stock. All distributions of accounts will be made in the form of Ball Common Stock following termination of each director's service. Amounts deferred or transferred to the 2002 Deferred Compensation Plan for Directors are "invested" among various investment funds available under the Plan. A participant's amounts are not actually invested in the investment funds for the account, but the return on a participant's account is determined as if the amounts were notionally invested in those funds.

        Each nonemployee director will receive a 4,000-share (post-August 2004 stock split) restricted stock award upon reelection for a three-year term. Each newly eligible nonemployee director will receive a 4,000-share (post-August 2004 stock split) restricted stock award upon election or appointment for an initial term (except initial terms of less than one year), and upon reelection for a three-year term. The restrictions against disposal of the stock will lapse upon the termination of the director's service to the Corporation as a director, for whatever reason other than voluntary resignation during a term, in which case the restrictions will not lapse and the director will forfeit the shares. For federal income tax purposes, the value of the stock will be taxable to the director as compensation income in an amount equal to the fair market value of the Common Stock on the date the restrictions lapse. Mr. Lehman and Mr. Sissel each received a 2,000-share restricted stock award upon reelection as directors on April 28, 2004, under the terms of the 1997 Stock Incentive Plan. Mr. van der Kaay received a 2,000-share restricted stock award upon his election as a director by the Board on April 28, 2004. The Corporation has established stock ownership guidelines for all directors.

        In April 2001 the Corporation implemented a Deposit Share Program for its nonemployee directors. The program is intended to increase share ownership by directors who must make additional investments in the Corporation's Common Stock to participate in the program. Under this program, each director receives one share of restricted stock for every share acquired by the director. Restricted stock is granted pursuant to the shareholder approved Ball Corporation 1997 Stock Incentive Plan or its successor. Under the terms of the Deposit Share Program for Directors, which was amended and restated in April 2004, future awards have share acquisition periods and restricted stock lapse provisions established at the time of the award. In April 2004 grants were made to nonemployee directors pursuant to the Amended and Restated Deposit Share Program. The grants provided a one-year period beginning in April 2004 for the acquisition of the Corporation's Common Stock up to a maximum of 2,000 shares per director. As with the initial program, each director receives one share of restricted stock for every share acquired by the director. Restrictions will lapse upon the termination of the director's service as a director, for whatever reason other than voluntary resignation during a term in which case the restrictions will not lapse and the director will forfeit the shares. On January 28, 2004, Mr. van der Kaay was granted the opportunity to participate in the program up to a maximum of 6,000 shares that must be acquired during a two-year period beginning on the grant date. On January 26, 2005, Mr. Smart was granted the opportunity to participate in the program up to a maximum of 6,000 shares that must be acquired during a two-year period beginning on the grant date.


REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION

Overall Policy

        The Human Resources Committee (the "Committee") of the Board oversees the administration of executive compensation programs and determines the compensation of the executive officers of Ball Corporation. The Committee is composed solely of independent, nonemployee directors and employs a compensation-consulting firm to advise and provide input in the course of its deliberations.

        Target total compensation of executive officers of the Corporation, including the Chief Executive Officer, is determined after reviewing the executive's performance viewed in conjunction with the executive's responsibility and experience when compared to the pay of similarly situated executives at other manufacturing firms of similar size. The external comparison is based upon the results of annual reports prepared by the corporate compensation department and the compensation consulting firm selected by the Committee. These reports gather information from compensation surveys that report on executive level positions at other manufacturing firms of similar size.

Annual Compensation

        The Committee establishes target total annual compensation, defined as the sum of base salary and incentive compensation at target, for each of the Corporation's executive officers based on the individual's responsibility, experience and performance when compared to the 50th percentile of what comparable companies are paying. The target total annual compensation level for each executive, other than the Chief Executive Officer, is determined based on the recommendation of the Chief Executive Officer, together with the Committee's consideration of the executive's responsibility, experience in the position, individual performance and the performance of the executive's area of responsibility. The Chief Executive Officer's target total annual compensation is similarly determined by the Committee considering the Committee's assessment of the Chief Executive Officer's individual performance and the financial and operating performance of the Corporation, and considering this evaluation in relation to the market's 50th percentile. When establishing Mr. Hoover's target annual compensation for 2005, utilizing the evaluation process described above, the Committee determined that it desired to increase Mr. Hoover's target annual compensation to more closely approximate the market's 50th percentile.

        Compensation survey data is analyzed to determine competitive levels of target total annual compensation. The compensation surveys used include some, but not all, of the companies included in the performance graph on page 22 of this proxy. After the Committee has established the appropriate target total annual compensation for an executive, base salary is determined by dividing target total annual compensation by the sum of one plus the executive's incentive compensation participation rate. When target performance, as defined in the Annual Incentive Compensation Plan (the "Annual IC Plan") discussed below, is attained, the executive will be paid a total annual compensation, which equals that established by the Committee as appropriate for target performance. Incentive compensation participation rates for executives, including the Chief Executive Officer, are set generally by organizational level. Mr. Hoover's participation rate was set at 100 percent of his base salary for 2004 and 2005. Senior executive officers, other officers and other key employees participate at different and lower rates. The Committee intends that an executive's target incentive compensation should be a significant portion of target total annual compensation. It is not intended or perceived as a "bonus" but rather as the component of total compensation which is "at risk" as an incentive, dependent upon operating performance.

        Base salary is referred to as "Salary" in the Summary Compensation Table and incentive compensation actually earned by an executive officer is reported under the heading "Bonus." Actual incentive compensation earned is driven by the economic value added targets approved by the Committee at the beginning of the year. The Annual IC Plan targets are calculated taking into account historical performance, the Corporation's cost of capital and the capital investment of each business unit. The resulting targets encourage continuous improvement in economic value added. The Annual IC Plan applies to the Named Executive Officers, among others.

        The Annual IC Plan awards incentive compensation to executives based upon actual performance of the Corporation or, in certain cases, the actual performance of the profit center for which the executive is responsible in achieving improvements in economic value added relative to the established targets. Improvement in economic value added occurs when the ratio of net operating profit after tax to capital employed in the business increases over time. It establishes a direct link between incentive compensation and return earned on capital relative to a specified target return. Economic value added was selected as the measure for the Corporation's Annual IC Plan because it has been demonstrated that it correlates management's incentive with shareholder total return.

        If actual performance for the year is higher than the target performance level, then the actual incentive compensation for such year will be higher than target. Whenever actual performance falls below the target performance level, the executive will receive incentive compensation which is less than target. If performance falls below the minimum acceptable level established in the Annual IC Plan, then no annual incentive compensation will be earned. For the year ended December 31, 2003, actual incentive compensation for the Named Executive Officers was above target reflecting above-target performance for the Corporation as a whole, for North American packaging operations and for Ball Packaging Europe. Incentive compensation levels for 2004 reflect above-target performance for the Corporation as a whole, for North American packaging operations and for Ball Packaging Europe. Incentive compensation for Messrs. Hoover, Seabrook and Westerlund was based entirely on the performance of the Corporation as a whole, while Mr. Friedery's incentive compensation was based primarily on the performance of North American packaging operations and partially on the performance of the Corporation as a whole and Mr. Fiedler's incentive compensation was based primarily on the performance of Ball Packaging Europe and partially on the performance of the Corporation as a whole.

        Certain key employees, including the Named Executive Officers, except Mr. Fiedler, may elect to defer the payment of a portion or all of their incentive compensation into the 2000 Deferred Compensation Company Stock Plan and/or the 2001 Deferred Compensation Plan. These plans succeeded prior deferred compensation plans for incentive compensation earned in 2001 or after. In addition, amounts deferred into prior deferred compensation plans may be transferred to these plans or remain in the prior plans. Amounts deferred or transferred into the 2000 Deferred Compensation Company Stock Plan receive a 20 percent company match with a maximum match of $20,000 per year. Amounts deferred, transferred or credited to this Plan will be represented in the participant's account as stock units, with each unit having the value equivalent to one share of Ball Corporation Common Stock. All distributions of accounts will be made in the form of Ball Corporation Common Stock following termination of employment. Amounts deferred or transferred to the 2001 Deferred Compensation Plan are "invested" among various investment funds available under the Plan. A participant's amounts are not actually invested in the investment funds for their account, but the return on a participant's account is determined as if the amounts were notionally invested in those funds. In October 2004, Congress enacted the American Jobs Creation Act of 2004 (the "Act"). The Act made significant changes to the rules governing deferred compensation. The Corporation is evaluating its deferred compensation plans in light of the new rules and will take the steps necessary to comply with the Act.

Long-Term Incentive Program

        The Corporation's long-term incentive program consists of plans based upon and designed to enhance the performance of Ball Corporation's Common Stock. Employee stock option and/or restricted stock grants are designed to encourage employee stock ownership and to recognize and reward employees for their levels of responsibility in building shareholder value. Grants of stock options and restricted stock to employees, including the Named Executive Officers, except Mr. Hoover, are generally made by the Committee after considering the recommendation of the Chief Executive Officer, based primarily on the level of the employee's position within the Corporation and individual performance, taking into account the number of outstanding and previously granted options and restricted stock. Stock options and restricted stock granted to the Chief Executive Officer are determined by the Committee in relation to grant levels of other executive officers within the Corporation and an assessment of his performance as well as the number of outstanding and previously granted options and restricted stock. No stock option grants were made to the Named Executive Officers in 2004. As the stock option and restricted stock grants are long term in nature, grants are determined independently of the shorter-term Annual IC Plan. The Corporation has established stock ownership guidelines for all officers, including the Named Executive Officers, as well as certain other key employees. These guidelines range from a minimum of one to five times base annual salary according to job position. All executive officers, including the Named Executive Officers, currently meet their stock ownership guidelines.

        The Long-Term Cash Incentive Plan (the "LTCIP") is limited in its participation to selected key employees, including the Named Executive Officers, who can potentially contribute materially to the success of Ball Corporation and its subsidiaries through their leadership skills, vision and dedication. The Plan provides cash and restricted stock awards on the basis of Ball Corporation's total shareholder return performance; i.e., stock price appreciation plus dividends, over three-year performance cycles that begin at the start of each calendar year, relative to the total shareholder return of companies comprising the S&P Global Industry Classification Standard ("GICS"). Named Executive Officers and other key employees whose Ball Corporation stock holdings are below established guidelines receive up to one-half of their award in Ball Corporation restricted stock. LTCIP awards are shown in the Summary Compensation Table under "LTIP Payouts." Beginning with the three-year cycle ending December 31, 2005, awards will be based one-half on Ball Corporation's total shareholder return performance described above and one-half on Ball Corporation's return on average invested capital ("ROAIC") over the three-year performance cycle measured against established ROAIC targets.

        In March 2001 the Corporation implemented a Deposit Share Program for certain of its key employees, including the Named Executive Officers. The program is intended to increase share ownership by key employees who must make additional investments in the Corporation's Common Stock to participate in the program. Under this program, a participant receives one share of restricted stock for every share acquired by the participant. Restricted stock is granted pursuant to the shareholder approved Ball Corporation 1997 Stock Incentive Plan or its successor. Restrictions lapse on the restricted stock after four years (or partially lapse earlier if share ownership guidelines are met) provided the acquired shares are retained until the restrictions lapse. Under the terms of the Deposit Share Program, which was amended and restated in April 2004, future awards have share acquisition periods and restricted stock lapse provisions established by the Committee at the time of the awards. In April 2004 grants were made to the Named Executive Officers pursuant to the Amended and Restated Deposit Share Program. The grants provided for a one-year period beginning in April 2004 for the acquisition of the Corporation's Common Stock up to preestablished maximums for each participant established by the Committee. The values of matching restricted stock received pursuant to the April 2004 grant are shown in the Summary Compensation Table under "Restricted Stock Awards."

        In conjunction with the acquisition of Schmalbach-Lubeca AG in December 2002, the Corporation implemented a three-year Acquisition-Related, Special Incentive Plan designed to motivate key employees, including the Named Executive Officers, to rapidly and successfully integrate the acquisition into the Corporation. Payouts under this Plan are based on cumulative earnings before interest and taxes and cumulative economic value added (or in some cases cumulative cash flow) over a 36-month period with awards made at 12 months, 24 months and 36 months. All payouts are made in cash. Acquisition-Related, Special Incentive Plan awards are included in the Summary Compensation Table under "LTIP Payouts."

        Section 162(m) of the Internal Revenue Code of 1986, as amended, generally provides that publicly held corporations may not deduct in any one taxable year certain compensation in excess of $1 million paid to the Chief Executive Officer and the next four most highly compensated executive officers. One of the primary responsibilities of the Committee is to provide a compensation program that will attract, retain and reward executive talent necessary to maximize shareholder return. Nevertheless, to the extent that any cash compensation for any Named Executive Officer, otherwise deductible for a particular tax year, would not be deductible in that year because of the limitations of Section 162(m), the Committee has mandated that such compensation will be deferred until retirement; however, the Committee, at its sole discretion, may approve payment of nondeductible compensation from time to time if it determines circumstances warrant it. The Committee intends to continue to review and monitor its policy with respect to the deductibility of compensation.

        The following directors and members of the Human Resources Committee have furnished the foregoing report:

Compensation Committee Interlocks and Insider Participation

        Mr. Hoover, Chairman of the Board and Chief Executive Officer, and Member of the Finance Committee of the Corporation, also serves on the Board of Directors of Energizer Holdings, Inc. Mr. Stiritz, Chairman of the Management Strategy and Finance Committee and Chairman of the Board of Energizer Holdings, Inc. also served as a member of the Human Resources Committee of the Corporation until November 3, 2004. Mr. Stiritz has reached the retirement age for directors and, therefore, will not stand for reelection at the 2005 Annual Meeting.

Shareholder Return Performance Presentation

        The line graph below compares the annual percentage change in Ball Corporation's cumulative total shareholder return on its Common Stock with the cumulative total return of the S&P Composite 500 Stock Index and The Dow Jones Containers & Packaging Index for the five-year period ending December 31, 2004.

Comparison of Five-Year Cumulative Total Return Among Ball Corporation Common,
The S&P Composite 500 Stock Index and The Dow Jones Containers & Packaging Index

GRAPHIC


 

Notes:

 

Assumes $100 invested on December 31, 1999.
Total return assumes reinvestment of dividends.
The Dow Jones Containers & Packaging Index total return weighted by market capitalization.

        The Dow Jones Containers & Packaging Index reflects the stock market performance of certain packaging businesses, the Corporation's principal industry group, and provides an appropriate indicator of cumulative total shareholder returns for those businesses. Companies included in The Dow Jones Containers & Packaging Index, in addition to Ball Corporation, are: AptarGroup, Inc.; Bemis Company, Inc.; Chesapeake Corporation; Crown Holdings, Inc.; Owens-Illinois, Inc.; Packaging Corporation of America; Pactiv Corporation; Sealed Air Corporation; Smurfit-Stone Container Corporation; Sonoco Products Company; and Temple-Inland Inc.


REPORT OF THE AUDIT COMMITTEE

        The Audit Committee of the Corporation's Board consists of nonemployee directors who are independent under the NYSE Listing Standards and SEC rules.

        Management is responsible for the Corporation's system of internal accounting controls over financial reporting, disclosure controls and procedures, and compliance with laws and regulations and applicable ethical business standards. The independent auditor is responsible for performing an audit of the Corporation's consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board ("PCAOB") and issuing a report thereon as well as issuing an attestation report on the audit of management's assessment of the effectiveness of the Corporation's internal control over financial reporting.

        The Committee's responsibility is to monitor and oversee the internal controls over financial reporting, disclosure controls and procedures and to engage and evaluate the independent auditor. Management has represented to the Committee that the financial statements for the Corporation for the year ended December 31, 2004, were prepared in accordance with generally accepted accounting principles of the United States, and the Committee has reviewed and discussed those financial statements with management and the independent auditor. The Committee has also discussed with the independent auditor the matters required to be discussed by Statement of Auditing Standards, as amended, the PCAOB Auditing Standards and the NYSE Listing Standards.

        The Corporation's independent auditor provided to the Committee the written disclosures and letter required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees ("ISBS No. 1"). The Committee has discussed with the independent auditor that firm's independence and that firm's internal quality control procedures, peer reviews and the investigations or inquiries by governmental or professional authorities disclosed by the independent auditor.

        Based upon the Committee's review and discussion with management and the independent auditor, the representations of management and the disclosures and letter of the independent auditor (as required by ISBS No. 1) to the Committee, the Committee recommended to the Board that the audited consolidated financial statements in the Corporation's Annual Report on Form 10-K, including management's and the independent auditor's attestation of the Corporation's internal control over financial reporting for the year ended December 31, 2004, be filed with the SEC.

        The foregoing report has been furnished by the following directors and members of the Audit Committee:


VOTING ITEM 2—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITOR

        As disclosed in this Proxy Statement, during 2004 PricewaterhouseCoopers LLP rendered audit and non-audit services to the Corporation.

        The Board of Directors recommends that shareholders vote "FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as the Corporation's independent auditor for 2005.


VOTING ITEM 3—PROPOSAL TO APPROVE THE 2005 STOCK AND CASH INCENTIVE PLAN

        On January 26, 2005, the Board approved the 2005 Stock and Cash Incentive Plan (the "Plan") for submission to shareholders. Under the Plan 8,000,000 shares of common stock will be reserved for issuance (approximately 7 percent of the outstanding common shares as of December 31, 2004). The Plan will not become effective until it is approved by the Corporation's shareholders. In accordance with applicable NYSE Listing Standards, the Board is asking the Corporation's shareholders to approve the Plan so that the Corporation may use the shares authorized in the Plan, as well as cash, to assist the Corporation in achieving its goals of increasing profitability and shareholder value, while receiving a federal income tax deduction for certain compensation paid under the Plan pursuant to Section 162(m) of the Internal Revenue Code (the "Code") and qualifying such shares for incentive stock option tax treatment under Section 422 of the Code.

Reasons for Approval of the 2005 Stock and Cash Incentive Plan

        The Board of Directors recommends approval of the Plan in the form attached as Exhibit A to this Proxy Statement. Capitalized terms used below are defined in the attached Plan.

        The Board believes that the Corporation and its shareholders have benefited substantially over the years from the use of stock options, restricted stock and other incentives as an effective means to secure, motivate and retain competent key personnel. Such equity incentives, beginning with the first plan in 1958 and continuing with several successor plans, have been significant factors in the success and growth of the Corporation. The 1997 Stock Incentive Plan reserved an aggregate of 3,000,000 shares of Common Stock (12,000,000 shares post stock splits) for issuance to key employees and nonemployee directors and 1,571,978 shares remain available for equity grants as of March 1, 2005. However, upon shareholder approval of the Plan, the remaining shares available under the 1997 Stock Incentive Plan will be canceled.

        Believing that a new plan is both necessary and appropriate for the Corporation to continue offering meaningful incentives to key employees and directors of the Corporation and its subsidiaries, the Board approved the Plan on January 26, 2005, subject to approval by the shareholders.

        The Plan reserves for issuance a total of 8,000,000 shares of Common Stock for grants of Options, Stock Awards (i.e., Shares, Stock Units and Restricted Stock) and Stock Appreciation Rights ("SARs") to eligible Awardees. Shares subject to Awards that are canceled, expire or are forfeited will be available for re-grant under the Plan.) The Corporation may reacquire shares (including shares purchased on the open market or authorized but unissued shares). Of the 8,000,000 authorized shares, no more than 5,000,000 shares may be granted for Stock Awards and SARs and the aggregate number of shares that may be subject to all Incentive Stock Options granted under the Plan is no more than 1,500,000. Further, no more than 500,000 shares may be granted to any Awardee in any calendar year, except that in connection with his or her initial service, an Awardee may also be granted up to an additional 500,000 shares. The shares are subject to adjustment resulting from certain changes in capitalization or corporate structure, including stock splits, reverse stock splits, stock dividends, other changes in capitalization, mergers, combinations, dissolution, recapitalizations or reclassification of the Common Stock.

        The Plan will be administered by the Board of Directors or a Committee consisting of two or more nonemployee independent directors or its delegates (collectively the "Administrator"). The Board will administer the Plan as to grants and awards to nonemployee independent directors. The principal features of the Plan are summarized below under "2005 Stock and Cash Incentive Plan"; however, this summary should be read subject to the full text of the Plan attached as Exhibit A and incorporated herein by reference.

Existing Incentive Plans

        The Board has identified several ways in which to compensate officers, key employees, other employees and directors of the Corporation that are consistent with increasing shareholder value. In addition to the employee's base pay, the Corporation has utilized an economic value added annual incentive compensation plan since 1992. This plan provides an opportunity for employees to earn between zero and two times their target incentive compensation based on the Corporation's (or relevant operating unit's) performance against economic value added targets. Amounts earned in excess of two times their target incentive compensation are banked and paid out over time.

        In addition, long-term incentive compensation, special acquisition-related incentive, stock option, restricted stock and deposit share plans have all been utilized from time to time to align the interests of participants with the interests of shareholders of the Corporation. These plans are described in detail above in the "Report of the Human Resources Committee on Executive Compensation." The Corporation's financial performance and shareholder return has been significantly above relevant market and peer group averages for the past several years. The use of a variety of equity based and other incentives was important to creating such close alignment with shareholder interests and facilitating the Corporation's successful performance.

        The Corporation last sought and obtained shareholder approval of an equity based incentive plan in 1997. The Board is seeking approval of the 2005 Stock and Cash Incentive Plan so that the Corporation is able to continue to provide appropriate incentives to motivate and retain officers, directors and employees and continue to align their interests with the interests of the shareholders. The average number of stock awards granted under the Corporation's equity plans during the last three years has been approximately one percent of the average common shares outstanding at the end of the last three years.

2005 Stock and Cash Incentive Plan

Awards and Eligibility

        The Plan provides for Awards which are defined to include Cash Awards, Options or opportunities to participate in SARs and Stock Awards (i.e., Shares, Stock Units and Restricted Stock). Under the Plan, Stock Options to purchase the Corporation's Common Stock may be granted to directors (except no Incentive Stock Options may be granted to nonemployee directors) and key executive, administrative, professional and technical employees, including corporate officers of the Corporation or any of its subsidiaries. The directors and the number of key employees who will be selected to participate in the Plan are not identifiable at this time. The benefits or amounts payable under the Plan are discretionary and are not determinable.

Stock Awards

        Stock Awards may consist of the issuance of Shares, Stock Units and Restricted Stock. The grant, issuance, retention and/or vesting of each Stock Award may be subject to such performance criteria and level of achievement versus these criteria as the Administrator shall determine, which criteria may be based on financial performance, personal performance evaluations and/or completion of service by the Awardee. Notwithstanding anything to the contrary in the Plan, the performance criteria for any Stock Award that is intended to satisfy the requirements for "performance-based compensation" under Section 162(m) of the Code shall be established by the Committee based on one or more of the Qualifying Performance Criteria that satisfy the requirements of Section 162(m) of the Code, which will be determined by the Committee and specified in writing generally not later than 90 days after the commencement of the period of service to which the performance goals relate, provided that the outcome is substantially uncertain at that time.

        Unless otherwise designated by the Administrator during the period of restriction, a holder of Restricted Shares will have all other rights of a shareholder, including the right to vote the shares and receive the dividends paid thereon. The Corporation will retain the stock certificates until the lapse of any applicable restrictions. The Administrator, at its sole discretion, will establish a Participant's rights to receive Restricted Stock in the event the Participant's employment or a director's service is terminated prior to vesting, such rights to be reflected in the Participant's Award Agreement. Generally, nonperformance based Stock Awards will lapse or vest in full not less than three years from the grant date, and performance based Stock Awards will lapse or vest in full not less than one year from the grant date; however, Stock Awards which do not meet these lapse or vesting guidelines shall be limited to five percent of authorized shares under the Plan.

        At the discretion of the Board or Committee, Participants may be entitled to dividends declared with respect to shares earned in connection with the grant of Stock Units. The Administrator may establish the terms and conditions of any payout of Stock Units or shares (if any) upon the termination of the Participant's employment or service on the Board. The Administrator may modify or amend each Award, including, but not limited to, the allocation of vesting and/or exercisability, but such allocation shall be limited to circumstances that are nonrecurring or extraordinary.

Stock Options

        Each Stock Option will have a term no longer than ten years from the date of grant, and will be exercisable as decided by the Administrator in accordance with law. Generally, nonperformance based Stock Options will vest in full not less than three years from the grant date, and performance based Stock Options will vest in full not less than one year from the grant date; however, Stock Options which do not meet these vesting guidelines shall be restricted to five percent of authorized shares under the Plan. Incentive Stock Options may be exercised upon termination of employment or the termination of a director's service, as the Administrator shall determine in accordance with applicable law. No Incentive Stock Option may be granted under the Plan after the tenth anniversary of the adoption date of the Plan.

        The exercise price for both Incentive Stock Options and Nonqualified Stock Options shall not be less than 100 percent of the fair market value of the Corporation's Common Stock on the date of grant, defined to be the closing price of the Corporation's Common Stock as published in the Wall Street Journal report of the New York Stock Exchange-Composite Transactions. The exercise price may be paid in cash and/or check or wire transfer or, with the consent of the Administrator, in Common Stock which the Awardee owns or in such other form as permitted by the Administrator. The exercise price under each Stock Option will not change during the life of the option (subject to adjustment as provided in the Plan to reflect certain corporate transactions), regardless of changes in the market value of the Common Stock. The Administrator will not amend or replace, without shareholder approval, previously granted Stock Options in any transaction that constitutes a "repricing" as such term is used under the rules of the NYSE. As of March 1, 2005, the fair market value, as defined, of the Corporation's Common Stock was $43.77 per share.

Stock Appreciation Rights

        Each SAR entitles the holder to receive, upon exercise, the difference between the fair market value of a share of Common Stock on the date of exercise over the exercise price of each SAR, multiplied by the number of shares with respect to which the SAR is exercised. SARs may be granted in tandem with a Stock Option.

        A SAR may be awarded based upon the attainment of certain performance criteria. The exercise price per share of any SAR will not be less than 100 percent of the fair market value of a share of Common Stock on the date the SAR is granted. The term of each SAR will be determined by the Administrator. SARs will be paid in cash, in shares or in a combination thereof, as the Administrator may determine at the time of such grant. The Administrator will not amend or replace without shareholder approval, previously granted SARs in any transaction that constitutes a "repricing" as such term is used under the rules of the NYSE. Each SAR shall have a term no longer than ten years from the date of grant. At the discretion of the Administrator, payment of such incentive awards may be in the form of cash or shares of Common Stock.

Cash Awards

        Subject to the terms of the Plan, Cash Awards may be granted to eligible employees or nonemployee Directors at any time as determined by the Administrator, as appropriate. The Administrator may establish the amount of other incentive awards granted, the applicable related performance period and performance goals and other terms and conditions applicable to such grant. For an Award that is intended to satisfy the requirements of Section 162(m), the Committee will establish the percentage of target Cash Award and the performance criteria based on one or more Qualifying Performance Criteria that satisfy the requirements of Section 162(m) of the Code for such Award.

        The maximum amount payable as a Cash Award that is settled for cash may be a multiple of the target amount payable, but the maximum amount payable pursuant to that portion of the Cash Award granted under the Plan for any fiscal year to any Awardee that is intended to satisfy the requirements for "Performance-Based Compensation" under Section 162(m) of the Code shall not exceed $10,000,000.

Awards Nontransferable

        Unless determined otherwise by the Administrator, an Award may not be assigned, transferred, pledged or otherwise encumbered by an Awardee, other than by will or the laws of descent and distribution.

Section 162(m) of the Internal Revenue Code

        Section 162(m) of the Code permits the Corporation to deduct from income compensation over $1,000,000 to the extent such amounts qualify as "Performance-Based Compensation" under Section 162(m) of the Code and the Corporation intends to grant Awards under the Plan that so qualify. The Performance Criteria are the following: (i) cash flow; (ii) earnings (including gross margin, earnings before interest and taxes, earnings before taxes, and net earnings); (iii) earnings per share; (iv) growth in earnings or earnings per share; (v) stock price; (vi) return on equity or average shareholders' equity; (vii) total shareholder return or growth in total shareholder return either directly or in relation to a comparative group; (viii) return on capital; (ix) return on assets or net assets; (x) invested capital, required rate of return on capital or return on invested capital; (xi) revenue; (xii) income or net income; (xiii) operating income, net operating income or net operating income after tax; (xiv) operating profit or net operating profit; (xv) operating margin; (xvi) return on operating revenue; (xvii) market share; (xviii) contract awards or backlog; (xix) overhead or other expense reduction; (xx) growth in shareholder value relative to the growth of the S&P 500 or S&P 500 Index, S&P Global Industry Classification Standards ("GICS") or GICS Index, or another peer group or peer group index; (xxi) credit rating; (xxii) strategic plan development and implementation; (xxiii) improvement in workforce diversity; (xxiv) economic value added (including typical adjustments consistently applied from generally accepted accounting principles required to determine economic value added performance measures); (xxv) customer satisfaction; (xxvi) merger and acquisitions, and (xxvii) other similar criteria consistent with the foregoing. The Committee may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following events that occur during a performance period: (A) asset impairments or write-downs; (B) litigation judgments or claim settlements; (C) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; (D) accruals for reorganization and restructuring programs; (E) any extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management's discussion and analysis of financial condition and results of operations appearing in the Corporation's annual report to shareholders for the applicable year; and (F) any other adjustment consistent with the operation of the Plan. Notwithstanding the foregoing, Awards intended to comply with Section 162(m) of the Code shall be based exclusively on those criteria and other terms and conditions that so comply. The Plan also permits Awards to be granted that are not intended to satisfy the requirements of Section 162(m) of the Code.

Deferral

        In order to encourage directors, officers and key employees to invest in and retain ownership of the Corporation's shares, employees may be permitted to defer all or some of their Awards under this Plan, as well as shares and matches of shares, in accordance with the Code and any Treasury Department or Internal Revenue Service Regulations or Guidance. Deferrals may be for such periods and upon such terms as the Administrator may determine in its sole discretion and in accordance with Section 409A of the Code and any Treasury Department or Internal Revenue Service Regulations or Guidance.

        The first year an Awardee becomes eligible to defer compensation, such election may be made with respect to services to be performed subsequent to the election within 30 days after the date the Awardee becomes so eligible, or such other period as may be provided by the Code or any Treasury Department or Internal Revenue Service Regulations or Guidance.

        No acceleration of the time or the schedule of any payments shall be permitted for amounts deferred, except as provided under Section 409A of the Code and any Treasury Department or Internal Revenue Service Regulations or Guidance.

        The payment of deferred compensation will generally occur upon a separation from service; death; disability; pursuant to a fixed time schedule at the date of the deferral of such compensation; upon a change of ownership or control of the Corporation or a change in the ownership of substantial portion of assets of the Corporation; or the occurrence of an unforeseeable emergency. All payments will comply with the provisions of Section 409A of the Code and any Treasury Department or Internal Revenue Service Regulations or Guidance.

Change in Control

        In order to protect the Participants' rights in the event of a change in control of the Corporation (as defined in the Plan), the Plan provides for the immediate vesting of all outstanding Options and SARs granted under the Plan that are outstanding at the time of the Change in Control, and such Stock Awards, Options and SARs shall become immediately exercisable in full, or restrictions will be removed, without regard to the number of years that have elapsed from the date of grant or when the performance criteria have been achieved.

        With respect to Awards under the Plan that are deferred, the definition of Change in Control shall have the meaning set forth in Section 409A of the Code, and any Treasury Department or Internal Revenue Service Regulations or Guidance.

Term of the Plan

        If approved by the shareholders, the Plan will be effective on January 26, 2005, and will continue in effect for a term of ten years from the later of the date of the Plan or any amendment to add shares to the Plan which is approved by the shareholders of the Corporation. Incentive Stock Options will have a term of ten years from January 26, 2005, until January 26, 2015, after which time no Incentive Stock Option will be granted unless otherwise authorized by the shareholders. The foregoing is subject to the right of the Board or Committee to terminate or cancel the Plan.

Administration of the Plan

        The Plan will be administered by the Administrator. With respect to officers and directors of the Corporation, the Plan will be administered by the Board or a Committee consisting of no fewer than two nonemployee independent directors. The Administrator will decide to whom and when to make grants, the number of shares to be covered by the grants and any special terms or provisions relating to Awards. The Administrator may at any time adopt such resolutions, rules and regulations for the Plan and interpret the Plan as it deems advisable. No shares shall be issued or transferred pursuant to a Stock Award unless all legal requirements applicable to the issuance of shares have, in the opinion of the General Counsel, been ratified.

Amendment and Termination

        The Board or Committee may amend or terminate the Plan and change its terms and conditions, as they deem appropriate. The Plan may be amended by the Board or Committee, without shareholder approval, at any time and in any respect, unless shareholder approval of the amendment in question is required under applicable law, rules or regulations, including without limitation, Indiana law, the Code (including, without limitation, Code Section 162(m)(4) and Code Section 422, including applicable regulations), any applicable exemption from Section 16 of the Exchange Act (including, without limitation, SEC Rule 16b-3) for which the Corporation intends transactions by or with respect to Section 16 Persons to qualify, the NYSE or any material securities exchange or system on which shares of Stock are then listed or reported, any regulatory body having jurisdiction with respect to the Plan, or under any other applicable laws, rules or regulations. The Plan may also be terminated at any time by the Board or Committee. No amendment or termination of the Plan shall adversely affect any Award granted prior to the date of such amendment or termination without the written consent of the Awardee.

U.S. Federal Tax Consequences

        The following summary constitutes a brief overview of the principal federal income tax consequences relating to the above-described Awards based upon current federal income tax laws. This summary is not intended to be exhaustive and does not discuss the tax consequences arising in the context of the employee's death or the tax consequences of any municipal, state, local or foreign taxes. The recently enacted American Jobs Creation Act of 2004 has added legislation concerning deferred compensation, which may require amendments to the Plan to comply with this legislation. Further, it is unclear how this legislation and future guidance will change the tax consequences described above. In this regard, it is the Corporation's intent that the Plan and Awards granted thereunder avoid adverse tax consequence by reason of the application of this legislation.

        An Awardee will not realize income upon the granting of a Stock Option under the Plan, nor would the Corporation be entitled to a deduction at such time.

        Generally, there will be no realization of income by the Awardee upon the exercise of an Incentive Stock Option (generally if exercised no later than three months after any termination of employment). If the Awardee sells shares acquired upon exercise of an Incentive Stock Option of Common Stock after the later of one year from the exercise date or two years from the date of grant, any gain or loss on the sale generally will be treated as a long-term capital gain or loss, and the Corporation will not be entitled to any deduction on account of the issuance of Common Stock or the grant of the Incentive Stock Option. The tax consequences of any untimely exercise or disposition of shares with respect to an Incentive Stock Option will be determined in accordance with the rules applicable to Nonqualified Stock Options. The amount by which the fair market value of the stock on the exercise date of an Incentive Stock Option exceeds the option price, however, will be an item of tax adjustment for purposes of the "alternative minimum tax" imposed by Section 55 of the Internal Revenue Code, as amended.

        Upon the exercise of a Nonqualified Stock Option, the Awardee will realize compensation income in the amount of the excess of the fair market value of the Corporation's Common Stock on the day of exercise over the stock option exercise price. The tax basis of any shares acquired upon exercise of a Nonqualified Stock Option Shares of Common Stock received will be the fair market value of such shares on the date the stock option is exercised.

        With respect to Restricted Stock or Stock Units, an Awardee will generally not realize income at the date of the award, nor would the Corporation be entitled to a deduction at that time. The Awardee generally will realize compensation income in an amount equal to the fair market value of the awarded shares at the time the restrictions lapse on such shares, and the Corporation will be entitled to a corresponding tax deduction. Dividends paid to participants prior to the lapse of restrictions generally will be taxed as compensation income to the Awardee and deductible as such by the Corporation.

        When a SAR is exercised (the difference between the value of the SAR or the grant over the value at the date of exercise), the Awardee would realize compensation income equal to the then fair market value of such cash or Common Stock received upon such exercise or lapse of such restrictions (less any consideration paid by the grantee for such award). The Corporation would be entitled to a deduction for federal income tax purposes in the amount and in the year that the optionee realizes the compensation income. The tax basis of any shares of any Common Stock received will be the fair market value of such shares on the date the SAR is exercised.

        The Plan and Awards granted thereunder are designed and intended, to the extent applicable, to comply with the requirements of Section 409A of the Code, as amended, and any Treasury Department or Internal Revenue Service Regulations or Guidance.

        Awardees who are residents of foreign countries may be subject to the tax laws of those countries.

Shareholder Approval

        The Plan will be approved if the votes cast in favor of the Plan exceed the votes cast opposing approval of the Plan. Abstentions and broker nonvotes are considered neither a vote "for" nor "against."

        The Board of Directors recommends that shareholders vote "FOR" the proposal to approve the 2005 Stock and Cash Incentive Plan.


VOTING ITEM 4—PROPOSAL TO AMEND THE AMENDED ARTICLES OF INCORPORATION TO
INCREASE AUTHORIZED SHARES OF THE CORPORATION'S COMMON STOCK

        On January 26, 2005, the Corporation's Board of Directors recommended that the shareholders approve an amendment of the Amended Articles of Incorporation (the "Amended Articles") of Ball Corporation to increase the authorized number of shares of the Corporation's Common Stock, without par value, from 240,000,000 to 550,000,000. If the proposed amendment is adopted, the total number of shares of all classes of stock which the Corporation is authorized to issue would be 565,000,000.

Reasons for Approval of the Proposed Increase in Authorized Common Shares

        On August 23, 2004, the Corporation effected a two-for-one stock split, the second such split in just over two years, which increased the number of issued shares to 155,453,918 (including treasury shares). As of March 1, 2005, 157,555,909 shares of Common Stock were issued (of which 109,945,811 were outstanding and 47,610,098 were held as treasury shares of the Corporation) leaving a balance of only 82,444,091 authorized but unissued shares of Common Stock available for issuance without further action by the shareholders. Fifteen million shares of Preferred Stock have been authorized but are unissued.

        The Board of Directors believes that it is in the Corporation's best interests to have additional authorized shares of Common Stock available for possible stock splits, stock dividends, future financings, acquisitions and other general corporate purposes. The Board considers it desirable to increase the authorized number of shares of Common Stock to provide the Corporation greater flexibility and enable it to take advantage of favorable opportunities in which an issuance of Common Stock might be appropriate without the expense and delay of a special shareholders' meeting. At the date of this Proxy Statement, the Corporation has no agreements, commitments or plans with respect to the sale or issuance of the additional shares of Common Stock which would be authorized by the proposed amendment.

        The additional shares of Common Stock authorized under the proposed amendment would be part of the existing class of Common Stock and, if and when issued, would have the same rights and privileges as the shares of Common Stock presently outstanding. The shareholders have no preemptive rights to subscribe for or purchase any additional shares of Common Stock nor to purchase any shares of Common Stock held by the Corporation as treasury stock. No shareholder of Common Stock has any right of cumulative voting.

        Although the Corporation has no present intention of taking the following actions, shares of authorized but unissued Common Stock could be used by the Board to discourage or make more difficult a change in control of the Corporation. For example, the issuance of new voting shares could be used to dilute the stock ownership of a person seeking control of the Corporation. The Corporation is not currently aware of any specific efforts to obtain control of the Corporation.

        If this amendment is approved, no further action or authorization by the Corporation's shareholders would be necessary prior to issuance of additional shares of Common Stock, except as may be required for a particular transaction or issuance by applicable law or by the rules of any stock exchange on which the Corporation's securities may then be listed.

        The proposed amendment to the Amended Articles will be adopted if the votes cast favoring the amendment exceed the votes cast opposing the amendment. Abstentions and broker nonvotes are considered neither a vote "for" nor "against."

        The Board of Directors recommends that shareholders vote "FOR" the proposal to amend the Amended Articles of Incorporation.


VOTING ITEM 5—SHAREHOLDER PROPOSAL TO DECLASSIFY THE BOARD OF DIRECTORS

        Information regarding a shareholder proposal is set forth below. Ball Corporation disclaims any responsibility for the content of this precatory proposal and statement of support, which is presented as received from the shareholder.

        In 1985 the shareholders of the Corporation amended the Articles of Incorporation to establish the classified board and require that at least three-fourths (75 percent) of the outstanding shares entitled to vote shall be required to alter or amend the classified board. Only votes cast for or against the proposal will be counted, except that the accompanying proxy will be voted against the proposal in the absence of instructions to the contrary. Abstentions and broker nonvotes will not change the number of votes cast for or against the proposal.

        The Service Employees International Union Master Trust of the Service Employees International Union, AFL-CIO, CLC, 1313 L Street, N.W., Washington, D.C. 20005, the beneficial owner of 2,000 shares of common stock, has given notice that it intends to present for action the following proposal at the Annual Meeting.

        The Board of Directors recommends that shareholders vote "AGAINST" the shareholder proposal.


SHAREHOLDER PROPOSAL

RESOLVED: That the shareholders of Ball Corporation ("Ball Corp." or "the Company") urge the Board of Directors to take the necessary steps to declassify the Board of Directors for the purpose of director elections. The Board declassification shall be done in a manner that does not affect the unexpired terms of directors previously elected.


SUPPORTING STATEMENT

We believe the election of directors is the most powerful way that shareholders influence the strategic direction of our company. Currently the Board of Directors of Ball Corp. is divided into three classes serving staggered three-year terms.

It is our belief that the classification of the Board of Directors is not in the best interests of Ball Corp. and its shareholders. The elimination of the staggered board would require each director to stand for election annually. This procedure would allow shareholders an opportunity to annually register their views on the performance of the board collectively and each director individually.

Concerns that the annual election of directors would leave Ball Corp. without experienced board members in the event that all incumbents are voted out are unfounded. If the owners should choose to replace the entire board, it would be obvious that the incumbent directors' contributions were not valued.

A classified board of Directors protects the incumbency of the board of Directors and current management, which in turn limits accountability to stockholders. It is our belief Ball Corp.'s corporate governance procedures and practices, and the level of management accountability they impose, are related to the financial performance of the company. We believe sound corporate governance practices, such as the annual election of Directors, will impose the level of management accountability necessary to help insure that a good performance record continues over the long term.

Classified boards like ours have become increasingly unpopular in recent years. Last year a majority of shareholders supported proposals asking their boards to repeal classified board structures at a number of respected companies, including Boeing, Costco, Ingersoll-Rand, Goldman Sachs, and Northrop Grumman.

For a greater voice in the governance of Ball Corp. through annual Board of Directors accountability, we ask shareholder to vote YES on this proposal.


STATEMENT IN OPPOSITION TO THE SHAREHOLDER PROPOSAL

        The Board of Directors believes that a classified board, where approximately one-third of the directors are elected annually, is in the best interests of the Corporation and its shareholders. The classified board was approved at the 1985 Annual Meeting of Shareholders by 82 percent of the shares entitled to vote.

        The Board believes a classified board helps provide continuity and stability of the Corporation's leadership and policies because a majority of the directors at any one time will have prior experience as directors of the Corporation and in-depth knowledge of the Corporation. This system permits directors to represent more effectively the long-term interests of all shareholders in a variety of circumstances, including responding to circumstances created by demands or actions by a minority shareholder or group or proponents of a takeover or restructuring or other extraordinary corporate action. The Board believes that the continuity and quality of leadership that results from a classified board helps directors focus on creating long-term value for shareholders. The proponent has not provided any evidence, other than its own opinion, to demonstrate that declassifying the Board would benefit the Corporation or its shareholders.

        The Board in its present form is accountable to the shareholders and committed to sound corporate governance practices. A majority of the Board is comprised of independent directors and all directors owe fiduciary duties to the Corporation and its shareholders regardless of the length of the term for which they are elected. In addition, the Board has implemented measures to further foster accountability, including the adoption of Corporate Governance Guidelines (that focus on the independence and quality of members of the Board and its effective functioning) and regular annual self-evaluations of the Board and its four committees.

        The Board and our management have demonstrated accountability to the shareholders through the financial performance of the Corporation. During the period January 1, 2000, through December 31, 2004:

        The Board believes that the continuity and stability provided by having a classified Board enhances the Corporation's ability to implement its long-term strategies and sustain its long-term financial health and performance.

        For the reasons set forth above, the Board of Directors recommends that shareholders vote "AGAINST" this shareholder proposal.


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        As a result of an administrative error, the Form 4 report regarding a Restricted Stock Award for 172 shares to Mr. Howard M. Dean on February 17, 2004, was not timely reported. The Award was reported on a Form 4 filed on April 29, 2004. To the best of the Corporation's knowledge, all of the other filings for its executive officers and directors were made on a timely basis in 2004.


SOLICITATION AND OTHER MATTERS

        The Corporation will pay the cost of soliciting proxies. Georgeson Shareholder has been retained to assist in the solicitation of proxies for a fee of $7,000. In addition to solicitations by mail, proxies also may be solicited personally, by telephone or electronic means by some directors, officers and regular employees of the Corporation, without additional compensation, as well as by employees of Georgeson Shareholder. The Corporation will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy material and annual reports to the beneficial owners of Common Stock.

        As of the date of this Proxy Statement, the Board of the Corporation has no knowledge of any matters to be presented for consideration at the Annual Meeting other than those referred to above. However, the persons named in the accompanying proxy card shall have authority to vote such proxy as to any other matters that do properly come before the meeting and as to matters incidental to the conduct of the meeting, according to their discretion.

    By Order of the Board of Directors

 

 

David A. Westerlund
Corporate Secretary

March 21, 2005
Broomfield, Colorado


Exhibit A


Ball Corporation
2005 Stock and Cash Incentive Plan

1.     Purposes of the Plan.

        The purpose of this 2005 Stock and Cash Incentive Plan is to promote the interests of Ball Corporation (the "Corporation") and its shareholders by encouraging ownership in the Corporation and rewarding key employees and nonemployee directors of the Corporation who make substantial contributions to the successful operation of the Corporation. It is anticipated the Plan will further encourage key employees and nonemployee directors to act in the shareholders' interests, and to attain performance goals that promote the continued success and progress of the Corporation. It is also anticipated that the opportunity to provide these awards will assist the Corporation to attract, retain and motivate key employees and nonemployee directors.

2.     Definitions.

        As used herein, the following definitions shall apply:

3.     Stock Subject to the Plan.

4.     Administration of the Plan.

5.     Eligibility.

        Awards may be granted to Officers and nonemployee Directors of the Corporation and persons expected to become Officers or nonemployee Directors of the Corporation (subject to commencement of employment or services), as the Board or Committee may determine in its sole discretion. Except as it relates to Officers of the Corporation, Awards may be granted to Employees, and persons expected to become Employees of the Corporation or any of its Affiliates (subject to commencement of employment or service), as the Administrator may determine in its sole discretion. The Administrator's selection of a person to participate in the Plan at any time shall not require the Administrator to select such persons to participate in the Plan at any other time.

6.     Term of Plan.

        The Plan shall become effective upon its approval by shareholders of the Corporation. It shall continue in effect for a term of ten years from the later of the date the Plan or any amendment to add shares to the Plan is approved by shareholders of the Corporation unless terminated earlier under Section 16 of the Plan.

7.     Term of Award.

        The term of each Award shall be determined by the Administrator and stated in the Award Agreement. In the case of an Option or Stock Appreciation Right, the term shall be ten years from the Grant Date or such shorter term as may be provided in the Award Agreement.

8.     Options.

        The Administrator may grant an Option or provide for the grant of an Option, either from time to time in the discretion of the Administrator or automatically upon the occurrence of specified events, including, without limitation, the achievement of performance goals, the satisfaction of an event or condition within the control of the Awardee or within the control of others.

9.     Incentive Stock Option Limitations/Terms.

10.   Stock Appreciation Rights.

        Stock appreciation rights ("SARs") shall be evidenced by written SAR Agreements in such form not inconsistent with the Plan as the Administrator shall approve from time to time. Such SAR Agreements shall contain the number of SARs awarded and the terms and conditions applicable to the SARs, including in substance the following terms and conditions:

11.   Exercise of Option or Stock Appreciation Right.

12.   Stock Awards.

13.   Cash Awards.

        Each Cash Award shall confer upon the Participant the opportunity to earn a future payment tied to the level of achievement with respect to one or more performance criteria established for a performance period of not less than one year.

14.   Other Provisions Applicable to Awards.

15.   Adjustments upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

16.   Amendment and Termination of the Plan.

17.   Designation of Beneficiary.

18.   No Right to Awards or to Employment.

        No person shall have any claim or right to be granted an Award and the grant of any Award shall not be construed as giving an Awardee the right to continue in the employ of the Corporation or its Affiliates. Further, the Corporation and its Affiliates expressly reserve the right, at any time, to dismiss any Employee or Awardee at any time without liability or any claim under the Plan, except as provided herein or in any Award Agreement entered into hereunder.

19.   Legal Compliance.

        Shares shall not be issued or transferred pursuant to the exercise of an Option, SAR or Stock Award unless the exercise of such Option, SAR or Stock Award and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to such approval as the General Counsel may deem necessary or desirable.

20.   Inability to Obtain Authority.

        To the extent the Corporation is unable to or the Administrator deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Corporation's General Counsel to be necessary to the lawful issuance and sale of any Shares hereunder, the Corporation shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

21.   Reservation of Shares.

        The Corporation, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

22.   Notice.

        Any written notice to the Corporation required by any provisions of this Plan shall be addressed to the Secretary of the Corporation and shall be effective when received.

23.   Governing Law; Interpretation of Plan and Awards.

24.   Deferrals.

        To the extent permitted by Applicable Laws, the Administrator, in its sole discretion, may determine that the delivery of Shares or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Awardees.

        Deferrals by Awardees after January 1, 2005, will be made in accordance with Section 409A of the Code, which currently provides:

        With respect to the first year that an Awardee becomes eligible to defer payments, such election may be made with respect to services to be performed subsequent to the election within 30 days after the date the Awardee becomes eligible to defer compensation.

        In the case of performance-based compensation, as defined by Section 409A of the Code and the Treasury Department or Internal Revenue Service Regulations or Guidance, based on services performed over a period of at least 12 months, such election may be made no later than six months before the end of the period.

        Changes in the time and form of payment may not take effect until at least 12 months after the date on which the election is made by the Participant. Any payment with respect to an election by a Participant for reasons other than separation from service as defined in the Treasury Regulations or Guidance, the date that the Participant becomes disabled as defined in Section 409A of the Code and Treasury Regulations and Guidance, death, and a specified time not to exceed 15 years as specified at the date of deferral, will cause the first payment with respect to which such an election is made to be deferred for a period of time not less than five years from the date which payment would have been made to the Participant. In the case of a subsequent election, no payment shall be made less than 12 months prior to the date of the first scheduled payment.

        No acceleration of the time or the schedule of deferred compensation benefits shall be permitted, except as provided in the Code, Treasury Regulations and Guidance.

        Deferred compensation may not be distributed earlier than the separation from service, or such later time as determined by Section 409A of the Code or Treasury Regulations and Guidance, the date the participant becomes disabled within the meaning of the Treasury Regulations and Guidance; death; a specified time or a fixed schedule not to exceed 15 years as specified at the date of the deferral of such compensation; and to the extent provided by the Code or Treasury Regulations, a change in ownership, a change in control or a change in the ownership of a substantial portion of the assets of the Corporation; or, the occurrence of an unforeseeable emergency as defined by Section 409A of the Code or Treasury Regulations and Guidance.

        Consistent with Section 409A of the Code, the Administrator may provide for distributions while a Participant is still an employee. The Administrator is authorized to make deferrals of Stock Units and matching Stock Units awarded, and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant's termination of employment or retirement, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with Applicable Laws.

25.   Limitation on Liability.

        The Corporation and any Affiliate which is in existence or hereafter comes into existence shall not be liable to a Participant, an Employee, an Awardee or any other persons as to:

26.   Unfunded Plan.

        Insofar as it provides for Awards, the Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Awardees who are granted Awards under this Plan, any such accounts shall be used merely as a bookkeeping convenience. Neither the Corporation nor any Affiliate shall be required to segregate any assets which may at any time be represented by Awards, nor shall the Plan be construed as providing for such segregation, nor shall the Corporation nor the Administrator be deemed to be a trustee of stock or cash to be awarded under the Plan. Any liability of the Corporation to any Participant with respect to an Award shall be based solely upon any contractual obligations which may be created by the Plan; no such obligation of the Corporation shall be deemed to be secured by any pledge or other encumbrance on any property of the Corporation. Neither the Corporation nor the Administrator shall be required to give any security or bond for the performance of any obligation which may be created by this Plan.

GRAPHIC

Ball Corporation

10 LONGS PEAK DRIVE
BROOMFIELD, COLORADO 80021-2510

GRAPHIC

BALL CORPORATION
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8059
EDISON, NJ 08818-8059

The EquiServe Vote by Internet and Vote by Telephone systems can be accessed
24-hours a day, seven days a week until 11:59 p.m. EDT, April 26, 2005.

Your vote is important. Please vote immediately.

Vote-by-Internet       Vote-by-Telephone
        OR        
1.   Log on to the Internet and go to
http://www.eproxyvote.com/bll
      1.   Call toll-free
1-877-PRX-VOTE (1-877-779-8683)

If you vote over the Internet or by telephone, please do not mail your card.

FOLD AND DETACH HERE


ý   Please mark
votes as in
this example.
  3101

This proxy, when properly executed, will be voted as directed by the undersigned shareholder(s). If no direction is made, this proxy will be voted FOR the election of directors and FOR Proposals 2, 3 and 4, and will be voted AGAINST Proposal 5.



        The Board of Directors recommends a vote FOR the election of directors and FOR Proposals 2, 3 and 4.


1.   Election of
Directors.
  FOR
o
  WITHHOLD
authority for all
Nominees
o
  01 George M. Smart
02 Theodore M. Solso
03 Stuart A. Taylor II
o  
For, except withhold vote from the above nominee(s):
2.   Proposal to ratify the appointment of PricewaterhouseCoopers LLP as the independent auditor for the Corporation.   FOR
o
  AGAINST
o
  ABSTAIN
o

3.

 

Proposal to approve the 2005 Stock and Cash Incentive Plan.

 

FOR
o

 

AGAINST
o

 

ABSTAIN
o

4.

 

Proposal to amend the Amended Articles of Incorporation to increase the amount of authorized Common Stock from 240,000,000 to 550,000,000 shares.

 

FOR
o

 

AGAINST
o

 

ABSTAIN
o

The Board of Directors recommends a vote AGAINST Proposal 5.

5.

 

Proposal to declassify the Board of Directors so that all directors are elected annually.

 

FOR
o

 

AGAINST
o

 

ABSTAIN
o

6.

 

At their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof.

MARK HERE IF YOU PLAN TO ATTEND THE MEETING

 

o

Please sign exactly as your name(s) appear(s) on this card. When signing as attorney, executor, administrator, trustee, officer, partner or guardian, please give full title. If more than one trustee, all should sign.

Signature:

 



 

Date:

 



 

Signature:

 



 

Date:

 



BALL CORPORATION

Dear Shareholder:

We encourage you to vote your shares electronically this year either via the Internet or by telephone. This will eliminate the need to return your proxy card. You will need your proxy card and Social Security Number (where applicable) when voting your shares electronically.

PLEASE RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE

FOLD AND DETACH HERE


PROXY

BALL CORPORATION   PROXY/VOTING INSTRUCTION CARD

10 Longs Peak Drive, Broomfield, Colorado 80021-2510


This proxy is solicited on behalf of the Board of Directors for the Annual Meeting on April 27, 2005.

The undersigned hereby appoints Howard M. Dean, Jan Nicholson and George A. Sissel and each or any of them as Proxies, with full power of substitution, to vote all shares of Ball Corporation Common Stock entitled to be voted by the undersigned with respect to the election of directors and on Proposals 2, 3, 4 and 5 referred to on the reverse side of this Proxy Card and described in the Proxy Statement, and on any other business as may properly come before the Annual Meeting of Shareholders on Wednesday, April 27, 2005, or any adjournment thereof.

This proxy will be voted as directed. If no direction is given, this proxy will be voted FOR Items 1, 2, 3 and 4 and AGAINST Item 5.

You are encouraged to specify your votes by marking the appropriate boxes on the reverse side.

PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.

SEE REVERSE
SIDE
  (Continued and to be dated and signed on reverse side.)   SEE REVERSE
SIDE



QuickLinks

VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
VOTING ITEM 1—ELECTION OF DIRECTORS
DIRECTOR NOMINEES AND CONTINUING DIRECTORS
GOVERNANCE OF THE CORPORATION
CERTAIN COMMITTEES OF THE BOARD
BOARD MEETINGS AND ANNUAL MEETING
SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
EXECUTIVE COMPENSATION
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
REPORT OF THE AUDIT COMMITTEE
VOTING ITEM 2—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITOR
VOTING ITEM 3—PROPOSAL TO APPROVE THE 2005 STOCK AND CASH INCENTIVE PLAN
VOTING ITEM 4—PROPOSAL TO AMEND THE AMENDED ARTICLES OF INCORPORATION TO INCREASE AUTHORIZED SHARES OF THE CORPORATION'S COMMON STOCK
VOTING ITEM 5—SHAREHOLDER PROPOSAL TO DECLASSIFY THE BOARD OF DIRECTORS
SHAREHOLDER PROPOSAL
SUPPORTING STATEMENT
STATEMENT IN OPPOSITION TO THE SHAREHOLDER PROPOSAL
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
SOLICITATION AND OTHER MATTERS
Ball Corporation 2005 Stock and Cash Incentive Plan