equity awards, ensures a strong continued alignment with Ball's executive ownership and shareholder value creation
objectives.
Performance-Based Cash Awards--Ball's performance-based long-term cash incentive award, LTCIP, is intended
to focus executives on the achievement of multiyear performance goals that will enhance shareholder value. The
Corporation's TSR and ROAIC are considered in determining the amount, if any, of awards earned under the
Corporation's LTCIP. Performance is measured on a cumulative basis over a three-year performance cycle. Awards
pursuant to the LTCIP are generally made on an annual basis such that three performance cycles overlap. Any actual
award earned is paid at the end of the three-year performance cycle. During 2011, there were three overlapping cycles
underway:
· 2009 through 2011--Awarded in 2009, completed at the end of 2011, payment early 2012 (included in Summary
Compensation Table)
· 2010 through 2012--Awarded in 2010, in process, will complete at the end of 2012, payment early 2013 if
performance measures are attained
· 2011 through 2013--Awarded in 2011, in process, will complete at the end of 2013, payment early 2014 if
performance measures are attained
The LTCIP provides executives the opportunity to earn awards based on a combination of two performance
measures. One-half of the award is based on the Corporation's three-year TSR as measured against the TSRs of a group
of companies in the S&P 500 excluding companies in the S&P 500 Index that are classified as being part of the Financial
or Utilities industry sectors or the Transportation industry group. Companies added to the S&P 500 during the
performance cycle are also excluded. TSR is measured by comparing the average daily closing price and dividends of
the Corporation in the third year of the performance cycle with the average daily closing price and dividends prior to
the start of the performance cycle relative to the distribution of the equivalent TSRs during the performance cycle of the
group of companies as described above. The target performance requirement for the TSR measure is the 50th percen-
tile of the S&P group described above. The other one-half of the award is based on ROAIC performance over the
three-year period. ROAIC is calculated by dividing the average of the Corporation's net operating profit after-tax over
the relevant performance cycle by its average invested capital over such period. The target performance requirement
for the ROAIC measure is 9%, which is above the Corporation's estimated weighted average cost of capital. The target,
minimum and maximum performance requirements are as follows:
Performance Measure
Minimum
Target
Maximum
TSR
37.5th percentile
50th percentile
75th percentile
ROAIC (after-tax)
7%
9%
11%
For each measure, minimum performance results in a zero payout factor, target performance results in a 100%
payout factor and maximum performance results in a 200% payout factor for the respective one-half of the award.
Performance between minimum, target and maximum is extrapolated to determine the payout factor.
Each NEO's incentive opportunity is established by considering external long-term incentive market data and Ball
internal pay equity and is set as a percentage of the executive's average base salary plus target annual incentive over the
three-year performance cycle (i.e., average target annual cash compensation during the performance cycle).
The executive's award for any given performance cycle is calculated as follows:
Executive's Avg.
Base Salary
50%
50%
Executive's
LTCIP
Plus
TSR
ROAIC
=
times
Incentive
times
plus
Payment
Target Annual
Payout
Payout
Percentage
Incentive for
Factor
Factor
3-Year Cycle
Actual payments at the end of the performance cycle for each factor (TSR and ROAIC) can range from 0-100% of
the target opportunity based on actual performance relative to the established performance measures described above.
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