Exhibit 10.5
SEPARATION AGREEMENT AND GENERAL RELEASE
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Caution: Read Carefully This Is a Release in Full
THIS SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement") is made and
entered into as of the Effective Date between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Employee"), and
Alltrista Corporation ("Alltrista").
WHEREAS, Alltrista employed Employee in the position of Chairman, President
and CEO, and Employee is eligible for retirement;
WHEREAS, Employee also served as a member of the Board of Directors of
Alltrista and has submitted his resignation from such Board;
WHEREAS, Alltrista and Employee desire to amicably dispose of any and all
matters and claims of any kind or nature between them which may now or hereafter
exist in any way relating to Employee's employment with and service to Alltrista
and his retirement from that employment and service;
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, it is agreed as follows:
1. Definitions.
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(a) "Company" means Alltrista and its Affiliates. "Affiliate" means (i)
any corporation, partnership, joint venture or other entity in which, as of the
Separation Date, at least a fifty percent (50%) of the voting or profits
interests is owned, directly or indirectly, by Alltrista or by any entity that
is a successor to Alltrista
(b) "Company Releasees" mean Alltrista and its Affiliates, all of their
respective past and present officers, directors, employees, trustees, agents,
parents, partners, members, shareholders, affiliates, divisions, principals,
insurers, all employee benefit plans (and any fiduciary of such plans) sponsored
by the aforesaid entities, and each of them, none of whom admit any liability,
but all of whom expressly deny any such liability.
(c) "Competitor" means any person or entity that competes with the
Company's business of manufacturing, distributing, selling, packaging and
shipping of products offered by the Company as of the date of this Agreement
("Company Products").
(d) "Customer" or "Client" means any person or entity which, within the
twelve (12) month period immediately preceding the date of this Agreement, used
or purchased or contracted to use or purchase any Company Products from the
Company in an amount in excess of $1,000,000.
(e) "Effective Date" means that date occurring seven (7) calendar days
after Employee's signing of this Agreement, on the condition that this Agreement
is not revoked by Employee within the Revocation Period.
(f) "Employee Releasees" mean Employee and his spouse and dependents, and
their successors and assigns, none of whom admit any liability, but all of whom
expressly deny any such liability.
(g) "Performance Share Plan" means the Alltrista Corporation 1998
Performance Share Plan, effective as of January 1, 1998, and any amendments
thereto.
(h) "Restricted Period" means a period of 24 months from the Separation
Date.
(i) "Revocation Period" means the seven (7) calendar day period after
Employee signs this Agreement, not counting the day Employee actually signs it.
(j) "Separation Date" means September 24, 2001.
(k) "Signing Period" means the twenty-one (21) day period following the
day Employee receives this Agreement, in which Employee has to consider whether
to sign this Agreement.
(l) "Stock Option Plan" means the Alltrista Corporation 1998 Stock Option
Plan.
(m) "Vendor" means any person or entity which is or within the twelve (12)
month period immediately preceding the Separation Date contracted to provide
services or products to the Company in an amount in excess of $1,000,000.
2. Employee's Release Of Claims. In consideration of the Company's
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agreement to make the Separation Payments upon the terms and conditions
described in paragraph 3, Employee gives up, releases, and waives all Claims
against the Company Releasees, including without limitation: (a) all claims
Employee has as of the Effective Date of this Agreement, whether known or
unknown, including without limitation all claims arising directly or indirectly
out of or relating to Employee's service as a member of the Board of Directors
of the Company, or the termination of that service, and Employee's employment
with Company, or the termination of that employment, including, but not limited
to, any claims arising under the Fair Labor Standards Act; Title VII of the
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act
("ADEA"); the Older Worker Benefits Protection Act ("OWBPA"); the Equal Pay Act;
Employee Retirement Income Security Act; the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"); the Rehabilitation Act of 1973; the Civil Rights
Act of 1991; the Civil Rights Act of 1866 (42 U.S.C. (S) 1981, et seq.); the
Family and Medical Leave Act; the Americans with Disabilities Act; Indiana Civil
Rights Law; all such laws as amended and/or any other federal, state or local
law; (b) all claims under any principle of common law or equity, including but
not limited to, claims for alleged unpaid wages or other compensation; any tort;
breach of contract; promissory or equitable estoppel; and any other allegedly
wrongful employment practices; and (c) all claims for any type of relief from
the Company Releasees,
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including but not limited to, claims for damages of any kind and all claims
for costs, expenses and attorneys fees. Provided, however, that Employee is not
waiving any rights provided for in this Agreement, including without limitation
the right to receive the Separation Payments provided in paragraph 3, the right
to receive retiree benefits provided in paragraph 4, and the right to
indemnification and errors and omissions coverage provided in paragraph 5.
3. Separation Payments. Contingent upon Employee's execution of this
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Agreement within the Signing Period and the expiration of the Revocation Period,
the Company shall make payments (collectively, the "Separation Payments") to
Employee in the amounts and on the terms as set forth below in subparagraphs
3(a) through 3(g). Unless otherwise specified, all Separation Payments will be
made minus all applicable deductions, including deductions for any applicable,
federal, state, and local taxes and FICA. All Separation Payments will be deemed
to have been made when a check representing the appropriate amount is mailed to
Employee's last known address. Employee acknowledges that the Separation
Payments described below constitute full and fair consideration for the release
of all Claims, as set forth in paragraph 2 above, and the performance of the
consulting services described in paragraph 6 below, and that the Company is not
otherwise obligated to make all of the below described Separation Payments.
Employee also acknowledges that all other forms of compensation, of whatever
kind, that may be due to him by the Company are hereby extinguished, except as
otherwise provided herein.
(a) Initial Payment. Upon the expiration of the Revocation Period, the
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Company shall pay to Employee an amount equal to One Million Dollars
($1,000,000).
(b) COBRA. Upon the expiration of the Revocation Period, the Company shall
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pay to Employee a lump sum cash payment in an amount equal to Seventeen
Thousand, Two Hundred and Eighteen Dollars ($17,218) for three (3) years of
insurance coverage under COBRA. The Company shall provide Employee and his
spouse COBRA insurance coverage for three (3) years from the Separation Date,
but any election by Employee or his spouse under COBRA shall be at Employee or
his spouse's expense.
(c) Performance Share Plan. Upon the expiration of the Revocation Period,
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Alltrista shall issue to Employee under the Performance Share Plan 20,000 shares
of common stock of the Company valued at $10.98 per share, less shares to cover
applicable withholding taxes.
(d) Incentive Compensation. Upon the expiration of the Revocation Period,
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the Company shall pay to Employee his bank balance in an amount equal to
Twenty-Eight Thousand, Six Hundred and Sixty Dollars ($28,660).
(e) Stock Options/Restricted Stock. Effective on the Separation Date, all
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grants of stock options previously made to Employee (the "Options"), shall be
fully vested and immediately exercisable. Employee must exercise the Options in
accordance with the terms of the Stock Option Plan on or before September 24,
2003 or the Options shall expire. Any Options which by their terms expire prior
to September 24, 2003 shall be extended to September 24, 2003.
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(f) Vacation Compensation. Upon the expiration of the Revocation Period,
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the Company shall pay to Employee Sixty-One Thousand, Two Hundred Dollars
($61,200) in lieu of any unused or accrued vacation time of Employee.
(g) Other Benefits Payment. Upon the expiration of the Revocation Period,
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the Company shall pay to Employee an amount equal to Two Hundred and Six
Thousand, Four Hundred and Fifty-Three Dollars ($206,453), allocated as follows:
Benefit Amount
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401(k) Plan Match $ 20,400
401(k) Plan Security Contribution 2,950
SERP Plan Contribution 77,846
Life Plan Coverage 39,042
Long Term Disability Coverage 20,215
Outplacement 25,000
Attorneys Fees 1,000
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Total $ 206,453
4. Retiree Benefits. Employee's employment with the Company will be
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deemed to have terminated on the Separation Date by reason of retirement. Thus,
Employee and his spouse shall both be entitled to elect to maintain coverage
under the Company's retiree medical plan on the same basis as all other
participating Company retirees and their spouses until their respective Medicare
eligibility dates so long as the Company maintains a retiree medical plan.
5. Indemnification. If Employee incurs liability by reason of actions
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taken by Employee on behalf of the Company while Employee was employed by or
served as a director of the Company, or by reason of actions taken by Employee
as required under this Agreement, Employee shall be eligible for indemnification
from the Company to the same extent as other current or former directors or
officers of the Company. Employee shall be entitled to coverage under the
directors and officers liability insurance coverage currently maintained by the
Company (or as maintained in the future) to the same extent as other current or
former officers and directors of the Company. To the extent that expenses
(including attorneys' fees) reasonably incurred by Employee in defending any
civil, criminal, administrative or investigative action, suit or proceeding may
be subject to indemnification by the Company and such expenses are not paid
currently by insurance, the Company shall pay all such expenses (including
attorneys' fees) in advance of the final disposition of such action, suit or
proceeding upon receipt of a written undertaking by Employee to repay such
amount if it shall ultimately be determined that Employee is not entitled to be
indemnified by the Company and not entitled to insurance coverage for such
expenses.
6. Consulting Services. Employee agrees during the period commencing on
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the Effective Date and continuing until the first anniversary hereof (the
"Consulting Term") to be available to the Company up to ten (10) hours per
month, for such advisory and consulting services relating to the business,
operations, administration or policies of Company as from time to time may be
reasonably requested by Company. Employee will have reasonable discretion as
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to the selection of the manner, times and places in or at which such services
will be provided. No additional compensation shall be paid to the Employee for
providing the consulting services. During the Consulting Term, Employee shall
act in the capacity of an independent contractor to Company, shall have no
authority to make commitments on behalf of or bind Company in any manner except
as may be specifically authorized by Company's Board of Directors from time to
time, and shall not make any representation nor hold himself out in any fashion
inconsistent with the foregoing. Without limiting the generality of the
preceding sentence, it is expressly understood that, during the Consulting Term,
Employee shall not be construed to be an employee, agent or partner of, or joint
venturer with, or to have any other relationship with Company except as an
independent contractor with Company under this Agreement. During the Consulting
Term, the Employee may consult with any person or business entity who is not a
Competitor, Customer, Client or Vendor of the Company.
7. Return Of The Company's Property/Non-Disparagement/Cooperation. On or
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before the Effective Date, Employee will return to the Company all of the
Company's property that is in his possession or control, including, but not
limited to, credit cards, phone cards, cellular telephones, pagers, office keys,
directories, computer, computer hardware, books, documents, memoranda, computer
disks and other software, and all other records, and copies thereof. Each party
further agrees that neither will make any negative or disparaging remarks or
comments to any other person and/or entity about the other party. Employee shall
cooperate with the Company by executing and delivering to the Company any
documentation reasonably necessary to complete his retirement.
8. Confidentiality. The Employee shall maintain the fact of and terms and
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conditions of this Agreement as strictly confidential, and shall not disclose
the same to any person other than to Employee's attorney, accountant, and
spouse, if any, or as required by law or lawfully-issued subpoena.
9. Confidential Information. Employee acknowledges that in the course of
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his employment with the Company he had access to or knowledge of trade secrets
and other information about the Company which is confidential or proprietary to
the Company, including, but not limited to: (a) information about the Company,
Company's business, its employees and its products; (b) techniques, technical
know-how, methods, and formulations; (c) hardware, software and computer
programs and technology used by Company; (d) the Customer/Client database and
other information about the Company's Customers/Clients, such as contacts,
criteria, requirements, specifications, policies, or other similar information;
(e) relationships with other service providers, partners and contractors; (f)
Vendor and supplier information; (g) marketing plans and concepts; (h) fee, rate
and price information; (i) sales, costs, profits, profit margins, salaries and
other financial information pertaining to the Company or Company's business; and
(j) information pertaining to the Company's Customers'/Clients' users, customers
or clients, including but not limited to personal information such as names,
addresses, e-mail addresses, financial information, etc. (All collectively
referred to as "Confidential Information"). At all times after the Effective
Date, Employee agrees not to disclose to any third party any Confidential
Information made known to him by the Company, or learned by him while in the
Company's employ; nor shall Employee use any such information for his benefit or
for the
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benefit of any third party. Employee understands that this confidentiality
provision was a material and significant inducement for the Company to enter
into this Agreement.
10. Non-Competition. Employee has become acquainted with the affairs of the
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Company, its officers and employees, its services, products, business practices,
business relationships and the needs and requirements of its Customers and
prospective customers, trade secrets, Confidential Information, and other
information proprietary to the Company. To protect these interests of the
Company and the Company's goodwill, and to prevent unfair competition and the
inevitable use or disclosure of such proprietary information or Confidential
Information to a Competitor, Vendor, Customer or Client, Employee agrees that he
SHALL NOT, for a period of 24 months from the Separation Date, either directly
or indirectly, perform on behalf of a Competitor, Vendor, Customer or Client the
same or similar services as those Employee performed for the Company while
employed by the Company or engage in any activities which would compete with the
Company's business as conducted on the date of this Agreement. Because of the
nature of the Company's business, the potential irreparable harm that will occur
to the Company as a result of competition by Employee is not necessarily tied to
the physical location or presence of the Company, Employee, Competitor, Vendor,
Customer or Client. Therefore, the non-competition restriction set forth in this
paragraph 10 shall apply to the broadest enforceable geographic restrictions,
including without limitation the following (excluding any state or location
where covenants not to compete are prohibited by law): (a) any state or location
in which Employee acted on behalf of the Company within the twenty-four (24)
month period immediately preceding the Separation Date, including without
limitation: Indiana, Tennessee, Washington, D.C., Colorado, Florida, Ohio,
Arkansas, Pennsylvania, Minnesota; (b) any state in which Employee performs
consulting services (as described in paragraph 4 above) for the Company during
the Consulting Term; and (c) the United States of America and Canada. Employee's
obligations set forth in this paragraph 10 and the Company's rights and remedies
with respect thereto, whether legal or equitable, shall remain in full force and
effect during the Restricted Period.
11. Non-Solicitation. For a period of 24 months from the Separation Date,
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Employee shall not, directly or indirectly, as an entity, individually or on
behalf of any other individual, corporation, partnership, firm, other company,
business organization, or entity, or in any other capacity, in promotion of or
otherwise with respect to a Competitor, call upon, solicit, contact, or service
any Customer or Client, or any potential customer or client, of the Company that
the Employee called upon, solicited, contacted, or serviced within the
twenty-four (24) month period immediately preceding the Separation Date.
Furthermore, during the Restricted Period, Employee shall not, directly or
indirectly, as an entity, individually or on behalf of any other individual,
corporation, partnership, firm, other company, business organization, or entity,
or in any other capacity, in promotion of or otherwise with respect to any
business or activity (whether or not for a Competitor), solicit for employment,
endeavor to entice away from the Company, hire, or otherwise interfere with the
relationship of the Company with any person who was employed or otherwise
engaged to perform services for the Company within the twenty-four (24) month
period immediately preceding the Separation Date or during the Consulting Term.
Employee's obligations set forth in this paragraph 11 and the Company's rights
and remedies with respect thereto, whether legal or equitable, shall remain in
full force and effect during the Restricted Period.
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12. Reasonableness Of Terms. The parties each stipulate and agree that the
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terms and covenants contained in paragraphs 8, 9, 10 and 11 are fair and
reasonable in all respects and that these restrictions are designed for the
reasonable protection of the Company's business.
13. Company Release. The Company hereby releases and waives all claims
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against the Employee Releasees, including without limitation: (a) all claims the
Company has as of the Effective Date of this Agreement, whether known or
unknown, including without limitation all claims arising directly or indirectly
out of or relating to Employee's employment with the Company, or the termination
of that employment, (b) all claims under any principle of common law or equity,
and (c) all claims for any type of relief from the Employee Releasees, including
but not limited to, claims for damages of any kind and all claims for costs,
expenses and attorneys' fees. Provided, however, that the Company is not waiving
any of its rights provided for under this Agreement.
14. Remedies. The Employee recognizes that any breach of the restrictive
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covenants of this Agreement will cause irreparable injury to the goodwill and
proprietary rights of the Company, and cannot be adequately compensable in
monetary damages. Accordingly, in addition to any other legal or equitable
remedies that may be available to the Company, the Employee agrees that the
Company will be able to seek and obtain injunctive relief in the form of a
temporary restraining order, without notice, preliminary injunction, or
permanent injunction against the Employee to enforce this Agreement. The Company
shall not be required to demonstrate actual injury or damage to obtain
injunctive relief from the courts. To the extent that any damages are calculable
resulting from the breach of this Agreement, the Company shall also be entitled
to recover damages from the Employee, including any lost profits of the Company.
Any recovery of damages by the Company shall be in addition to and not in lieu
of the injunctive relief to which the Company is entitled. In no event shall a
damage recovery be considered a penalty in liquidated damages, but shall be
considered as measurable compensation damages for breach by the Employee. In any
action at law or in equity arising out of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, expenses (including experts and
consultants) and court costs in addition to any other relief to which it may be
entitled.
15. Twenty-One Calendar Day Period To Consider This Agreement. Employee
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hereby recognizes and acknowledges that his signing of this Agreement before the
end of the 21-day Signing Period will be his personal and voluntary decision to
do so. Employee further recognizes that if he fails to deliver this Agreement to
the Company within the Signing Period, the offer to provide the payments
described herein shall expire and be deemed withdrawn at the end of the Signing
Period.
16. Right To Revoke This Agreement. This Agreement will not become
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effective or enforceable unless and until the Revocation Period has expired
without a revocation by Employee.
17. Procedure For Accepting Or Revoking The Agreement. To accept the terms
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of this Agreement, Employee must deliver the Agreement, after it has been signed
and dated by him, to
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the Company by hand or by mail and it must be received by the Company within
the Signing Period. To revoke his acceptance, Employee must deliver a written,
signed statement of the revocation of his acceptance to the Company by hand or
by mail and any such notice of revocation must be received by the Company within
the Revocation Period. All deliveries shall be made to the Company as follows
and marked "Personal and Confidential": Alltrista Corporation, ATTN: J. ▇▇▇▇▇
▇▇▇▇▇▇▇, Vice President, Human Resources and Administration, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. If Employee chooses
to deliver his acceptance or any revocation notice by mail, it must be: (a)
postmarked and received by the Company within the applicable period stated
above; (b) properly addressed to the Company at the address stated above; and
(c) sent by certified mail, return receipt requested.
18. Representations And Warranties. Employee hereby represents and warrants
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to the Company Releasees (with the understanding that the Company has relied
upon such representations and warranties) that: (a) he has read this Agreement
carefully and understands all of its terms; (b) in agreeing to sign this
Agreement, Employee has not relied on any statements or explanations made by the
Company Releasees, except as specifically set forth in this Agreement; (c)
Employee voluntarily releases any claims against the Company Releasees, and
understands that, in consideration of accepting the consideration described
above, he may be giving up possible future administrative and/or legal claims
against the Company Releasees; (d) Employee understands and agrees that this
Agreement contains all of the agreements between the Company and Employee
relating to the matters included in this Agreement; (e) Employee understands and
agrees that this Agreement may not be assigned by Employee to any individual or
entity; and (f) the Company has advised Employee that he should consult with an
attorney prior to signing this Agreement, that Employee has had adequate
opportunity to do so, and that Employee's decision to sign this Agreement was
voluntary and made after being given opportunity to consult with an attorney.
The Company hereby represents and warrants to the Employee Releasees (with the
understanding that Employee has relied upon such representations and warranties)
that: (a) it has read this Agreement carefully and understands all of its terms;
(b) in agreeing to sign this Agreement, the Company has not relied on any
statements or explanations made by the Employee Releasees, except as
specifically set forth in this Agreement; (c) the Company voluntarily releases
any claims against the Employee Releasees, and understands that it may be giving
up possible future administrative and/or legal claims against the Employee
Releasees; (d) the Company understands and agrees that this Agreement contains
all of the agreements between the Company and Employee relating to the matters
included in this Agreement; (e) the Company's decision to sign this Agreement
was voluntary and made after being given opportunity to consult with an
attorney.
19. Severability. If any provision of this Agreement is or becomes invalid,
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illegal or unenforceable in any respect under any law, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired.
20. Amendment and Waiver. Neither this Agreement nor any term, covenant,
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condition or other provision hereof may be changed, waived, discharged or
terminated except by an instrument in writing signed by both parties. No delay
or omission by either party hereto in exercising any right, power or privilege
hereunder shall impair such right, power or privilege nor
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shall any single or partial exercise of any such right, power or privilege
preclude any further exercise thereof or the exercise of any other right, power
or privilege.
21. Counterparts. This Agreement may be executed in one or more identical
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counterparts, each of which when executed by both of the parties and delivered
shall be an original, but all of which taken together shall constitute one and
the same instrument.
22. Assignment. This Agreement is entered into by Alltrista on behalf of
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itself and all of its Affiliates and shall inure to the benefit of and be
binding upon Allrista, its Affiliates and their respective successors and
assigns, including any purchaser of all or substantially all of Alltrista's
assets and business. The rights and obligations of the parties hereto shall
inure to the benefit of, and shall be binding upon, the successors and assigns
of each of them; provided, however, that Employee shall not assign this
Agreement without the prior written consent of the Company.
23. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties with respect to the subject matter hereof.
24. Jurisdiction and Venue; Governing Law. Any action to enforce, challenge
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or construe the terms or making of this Agreement or to recover for its breach
shall be litigated exclusively in a state or federal court located in ▇▇▇▇▇▇
County, Indiana, except that the Company may elect, at its sole discretion, to
litigate the action in the county or state where Employee may be residing at
such time. Employee hereby waives any defense of lack of personal jurisdiction
or improper venue. This Agreement and the performance by the parties under this
Agreement shall be governed by the laws of the State of Indiana, notwithstanding
the choice of law provisions of the venue where the action is brought, where the
violation occurred, or where the Employee may be located.
25. Headings. The headings of the sections of this Agreement have been
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inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
(Signatures On Following Pages)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates set forth below opposite their respective signatures.
"COMPANY"
ALLTRISTA CORPORATION
Date: October 5, 2001
/s/ Ian ▇. ▇. ▇▇▇▇▇▇
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By: Ian ▇. ▇. ▇▇▇▇▇▇
Its: Chief Financial Officer
(Employee Signature on Following Page)
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"EMPLOYEE"
Date: October 5, 2001
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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