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EXHIBIT 10.7
January 28, 2000
Xx. Xxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Dear Xxxxx:
This Letter Agreement confirms our earlier discussions regarding your voluntary
retirement from the position of Executive Vice-President and General Manager
Aerosol with the United States Can Company ("U.S. Can"), effective February 4,
2000. This Letter Agreement supplements the Separation and "Non-Compete"
Understanding between Xxxxx X. Xxxxxx and U.S. Can, dated January 4, 2000, which
is incorporated hereto as Attachment A.
A. Base Salary Continuance & Lump Sum Payments
As a result of your retirement, you shall not be entitled to any further
compensation, payments or remuneration, except as provided herein. After
February 4, 2000, you will receive base salary continuance, payable in bi-weekly
increments through February 4, 2002. In addition, on February 4, 2002 and
February 4, 2003, respectively, you will receive lump sum payments in the gross
amount of $170,000. The base salary continuance and lump sum payments shall be
subject to customary withholding and other employment taxes and any other
voluntary, authorized or required deductions.
B. Limited Special Projects
During 2000 and 2001, based on your availability, limited special projects may
be assigned to you from time to time by Xxxx X. Xxxxx, President and CEO of U.S.
Can. Any reasonable and necessary business expenses incurred in connection with
the limited special projects shall be reimbursed in accordance with U.S. Can's
expense reimbursement policies in effect when such expenses are incurred. A
separate consulting agreement will be agreed to by both parties.
C. Medical and Health Benefits
Upon payment of the applicable annual premiums (currently $1,430), you are
eligible to receive U.S. Can's medical and dental insurance coverages pursuant
to the terms of those plans until February 4, 2002. From February 4, 2002
through July 16, 2006, you, your spouse and dependents will be eligible for the
supplemental retirement medical benefits as described in Amendment No. 1 to
Employment Agreement, dated November 17, 1997. which, except as has been
specifically amended by this Letter Agreement, is incorporated hereto as
Attachment B.
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D. Accrued or Unused Vacation
You will be separately compensated (in a lump sum) only for accrued or unused
vacation through February 4, 2000.
E. 1999 Bonus
Your bonus for 1999 will be paid on or about February 11, 2000, based on 1999
audited results for the Company.
F. Restricted Stock and Stock Options
Subject to and contingent upon the approval of the U.S. Can Board of Directors,
the vesting of the certain restricted stock and/or non-qualified stock options
will be accelerated to February 4, 2000, as follows:
Original
Plan Shares Vest Date Exercise Price
---- ------ --------- --------------
1995 Equity Incentive Plan 30,000 6/23/00 --
1995 Equity Incentive Plan 4,666 10/29/00 $16.125
1995 Equity Incentive Plan 4,667 10/29/01 $16.125
Vesting of restricted stock is a taxable event and the value of the restricted
stock would be taxable as ordinary income at your marginal tax rate. U.S. Can is
obligated to withhold taxes upon vesting, generally at your marginal tax rate.
G. Miscellaneous Benefits
(1) You will be eligible for any benefits which have heretofore
vested to you in accordance with applicable documents pertaining to the Salaried
Employees Retirement and Accumulation Plan ("SRAP") and the non-qualified 401(k)
plan and benefit replacement plans ("non-qualified plans").
(2) Unless otherwise addressed in this Letter Agreement or its
Attachments, benefits that will cease on February 4, 2000 include car allowance
and deductions, travel insurance, short and long term disability, SRAP and
non-qualified plan participation, Employee Stock Purchase Plan, the Benefit
Replacement Plan and any other equity, deferred compensation, benefit or bonus
plan.
(3) U.S. Can will retain the services of a mutually-agreeable
executive outplacement firm on a month-to-month basis for a period of up to 12
months. (Three firms have been suggested to you as options.)
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H. Non-Competition/Non-Solicitation Agreement
After your retirement from U.S. Can, you understand that you shall be free to
work for any other employer or to engage in consulting or in any other business
EXCEPT that you hereby covenant and agree that from the effective date of this
Letter Agreement and for the four (4) years following your retirement during
which you will receive the payments described above, you will not, without the
express written approval of the President and CEO of U.S. Can:
(1) engage, directly or indirectly, as owner, officer, director,
employee, stockholder, principal, consultant, advisor, sales
representative, agent, lender, guarantor, cosigner, investor
or trustee of any corporation, partnership, proprietorship,
joint venture, association or any other business or entity of
any nature in the manufacture, development, sale, marketing,
licensing and/or distribution of any product or service which
is directly competitive with any product or service supplied
by U.S. Can or any of its affiliates in the metal or rigid
plastic container segment of the packaging industry, including
but not limited to the following direct competitors of U.S.
Can--Crown Cork & Seal, Impress, B-Way, Central, Plastican,
Lettica, Southcorp, KW Plastics, Independent Can and X.X.
Xxxxx;
(2) assist any person or entity in the development, maintenance,
manufacture, sale, licensing, distribution or marketing of any
product or service in a business or line of business in
competition with U.S. Can or its affiliates in the metal or
rigid plastic container segment of the packaging industry;
(3) on behalf of yourself, or any other person or entity, solicit
or otherwise interfere, with any customers or clients or
prospective customers or clients of U.S. Can with whom you or
anyone reporting to you had contact during your tenure with
U.S. Can or during the consulting period; or
(4) on behalf of yourself, or for any other person or entity,
employ, offer to employ, solicit for employment, engage as a
consultant, advisor, independent contractor or form an
association with any person who is then, or who during the
preceding two years was, an employee of U.S. Can or any of its
affiliates.
The foregoing restrictions shall not preclude you from retaining and/or making
passive investment interests of less than two percent (2%) in corporations whose
stock is registered under the Securities Exchange Act of 1934, as amended.
If, at the time of enforcement of this provision, the period or scope of any
provision is found to be unreasonable, the maximum reasonable period or scope
shall be substituted for the period or scope stated in such provision.
THIS NON-COMPETITION/NON-SOLICITATION PROVISION SUPERSEDES AND SUPPLANTS ANY
NON-COMPETITION AND/OR NON-SOLICITATION AGREEMENT, CLAUSE OR PROVISION
PREVIOUSLY AGREED TO BETWEEN YOU AND U.S. CAN, INCLUDING BUT NOT LIMITED TO
PARAGRAPH 1.C. OF ATTACHMENT B.
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I. Confidentiality
(A) U.S. Can Proprietary Information
Except in connection with your remaining employment or your limited special
projects, you agree that you shall not disclose to any person or entity, or use,
any proprietary or confidential information acquired by you while employed or
engaged by U.S. Can. Proprietary and confidential information includes, but is
not limited to, trade secrets, technical information, designs, drawings,
processes, systems, procedures, formulae, test data, know-how, improvements,
price lists, financial or other data, business plans, sales data, which is or
was used by U.S. Can in the conduct of its business. You acknowledge that all
such information, in any form, and copies and extracts thereof, are and shall
remain the sole and exclusive property of U.S. Can. Upon your last day, you
agree to return all such information, in whatever form maintained, to U.S. Can.
If you acquire proprietary or confidential information during the course of any
limited special projects, you agree to return all such information, in whatever
form maintained, to U.S. Can at the conclusion of the project. For purposes of
this Letter Agreement, Confidential Information is subject to the protection of
the Illinois Trade Secrets Act.
(B) This Letter Agreement
From this date forward, you agree not to disclose, divulge, publicize or publish
the existence or terms of this Letter Agreement, and its attachments, except to
your counsel, spouse or financial advisor, or as required by law or as required
to enforce the terms of this Letter Agreement.
THIS CONFIDENTIALITY PROVISION SUPERSEDES AND SUPPLANTS ANY CONFIDENTIALITY
AGREEMENT, CLAUSE OR PROVISION PREVIOUSLY AGREED TO BETWEEN YOU AND U.S. CAN.
J. Nondisparagement
You agree that you will refrain from making any negative, adverse or disparaging
comments regarding U.S. Can or any of the Released Parties referred to in this
Letter Agreement.
K. Effect of Breach
In the event you breach of the confidentiality, disparagement, or
non-competition/non-solicitation provisions of this letter agreement, all
payments hereunder will cease immediately.
L. Release
In consideration for the promises herein, you, for yourself, your agents, legal
or personal representatives, assigns, heirs, distributees, administrators and
executors (the "Releasing Parties"), hereby release and forever discharge U.S.
Can, its present or past parents, subsidiaries, divisions, affiliates, or
related companies, and their respective successors or assigns, present or past
officers, trustees, directors, employees and agents of each of them (the
"Released Parties"), from any and all
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claims, demands, actions, liabilities and other claims for relief and
remuneration whatsoever, whether known or unknown, arising or which could have
arisen, up to and including the date of your execution of this letter agreement,
including, without limitation, those arising out of or relating to your
employment or change in employment status and termination of prior agreements,
including any claims arising under Title VII of the Civil Rights Act of 1964 (as
amended by the Civil Rights Act of 1991), the Americans With Disabilities Act,
the Age Discrimination in Employment Act of 1967, the Illinois Human Rights Act,
the Illinois Wage Payment and Collection Act, the Employee Retirement Income
Security Act ("ERISA"), or any other federal, state, county, or local statute,
law, ordinance, regulation, code or executive order, any tort or contract
claims, whether express or implied, and any of the claims, matters and issues
which could have been asserted by the Releasing Parties against the Released
Parties in any legal, administrative, or other proceeding.
U.S. Can, on behalf of itself and its past, present and future principals,
officers and directors, predecessors, affiliates, successors and assigns, hereby
release you, your heirs, and representatives from any and all claims, demands,
actions and liabilities whatsoever arising from or out of your employment except
wanton and willful misfeasance, fraud or criminal conduct in the discharge of
your employment duties.
M. Non-admission of Liability
Nothing in this Letter Agreement, nor any actions taken by any parties in
connection herewith, shall constitute, be construed as, or be deemed to be, an
admission of fault, liability or wrongdoing of any kind whatsoever on the part
of U.S. Can or the Released Parties or Xxxxx X. Xxxxxx.
N. Effect of Death
In the event of your death, the benefits and payments described above will be
made to the Estate of Xxxxx X. Xxxxxx, except that the medical and health
benefits described in paragraph C, above, will continue for your spouse and/or
eligible dependents in accordance with the applicable plans.
O. Arbitration
Any dispute or claim under this Letter Agreement shall be settled by arbitration
in Chicago, Illinois by an arbitrator, who shall be appointed pursuant to the
rules of the American Arbitration Association ("AAA"). The arbitration shall be
conducted in accordance with the AAA rules governing employment disputes. Any
award issued as a result of such arbitration shall be final and binding on the
parties, and judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof.
P. Knowing and Voluntary Agreement; Statutory Consideration Period
YOU REPRESENT AND WARRANT THAT YOU HAVE BEEN ADVISED, IN WRITING, TO CONSULT
WITH COUNSEL OR AN ATTORNEY IN CONNECTION WITH THIS LETTER AGREEMENT. THE
PARTIES REPRESENT AND WARRANT THAT, PRIOR TO EXECUTING THIS LETTER AGREEMENT,
THEY HAVE READ IT IN ITS ENTIRETY AND
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FULLY UNDERSTAND ITS MEANING AND EFFECT AND THAT THEY HAVE ENTERED INTO IT
KNOWINGLY AND VOLUNTARILY.
YOU REPRESENT AND WARRANT THAT YOU HAVE BEEN GIVEN TWENTY-ONE (21) DAYS WITHIN
WHICH TO CONSIDER THIS LETTER AGREEMENT AND THAT YOU HAVE BEEN GIVEN SEVEN (7)
DAYS AFTER EXECUTING OR SIGNING IT IN WHICH TO REVOKE IT. THIS LETTER AGREEMENT
SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED.
This Letter Agreement, consisting of six (6) pages and Attachments A and B,
contains the entire agreement between you and U.S. Can or its affiliates. This
Letter Agreement supersedes, terminates and discharges all prior oral and
written agreements, commitments or understandings between you and U.S. Can or
its affiliates. This Letter Agreement shall be binding on and inure to the
benefit of U.S. Can, its affiliates and successors and assigns.
Sincerely,
UNITED STATES CAN COMPANY
By:
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Xxxxx X. Xxxxxx
Xx. Vice President - Human Resources
AGREED TO BY: APPROVED:
UNITED STATES CAN COMPANY
By:
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Xxxxx X. Xxxxxx Xxxx X. Xxxxx
Executive Vice President & Gen'l Mgr., President and CEO
Aerosol
Attachments
