Exhibit 10(b)
October 16, 2002
This letter confirms our discussions regarding your separation from the position of Executive Vice President
- Aerosol Sales and Marketing and Corporate Marketing with United Stated can company ("U.S. Can" or the
"Company"). Your last day worked was June 30, 2002 ("LDW"). Your resignation was announced on June 20,
0000.Xxx will sign and deliver to U.S. Can the resignation letter attached hereto as Exhibit A on or prior to
the date you sign and deliver this letter agreement ("Letter Agreement").
1. Base Salary Continuance, Transition Assistance, Vacation Pay
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As a result of your separation from the Company, you shall not be entitled to any further compensation,
payments or remuneration, except as provided in this Letter Agreement. You have agreed to be available to
answer any questions we may have that involved your role/responsibilities with U.S. Can and assist in a
smooth transition of your duties and responsibilities to others within U.S. Can beginning on July 1, 2002 and
continuing through September 30, 2003 (the "Salary Continuation Period"). The Company will give due
consideration to your other personal and professional commitments so as to minimize any material disruption
or interference with them. Upon delivery of a fully executed copy of this Letter Agreement to U.S. Can, you
will receive annual base salary continuance of $250,000, payable in bi-weekly increments, for the Salary
Continuation Period. You have been paid a lump sum amount on account of all of your accrued but unused
vacation days through your LDW. You will not accrue or be entitled to payment for any vacation after your
LDW. The base salary continuance and pay on account of unused vacation will be subject to customary
withholding and other employment taxes and any other voluntary, authorized or required deductions.
2. Health Insurance
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During the salary continuation period you will be eligible to continue to participate in U.S. Can's health,
dental and vision insurance, pursuant to the terms of the applicable plan(s) for active employees and
consistent with the terms and provisions of the plans or as they may be amended or modified, provided you
continue to pay any employee portion of premium contributions for the coverage you elected as required by the
terms of the plans. Naturally, this coverage will be discontinued if you obtain a new position with a
company where these benefits are covered as a part of their insurance coverages. Following the Salary
Continuation Period or, if earlier, the date your coverage is discontinued pursuant to the preceding
sentence, you will be eligible for such COBRA benefits as are authorized and required by law.
3. 2002 Bonus
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Your bonus for 2002, prorated based on your service through your LDW and less the $35,000 partial advance
bonus payment you received on July 1, 2002, will be paid on or about March 1, 2003, based on 2002 audited
results for the Company under the 2002 Management Incentive Plan. Bonus payments are subject to customary
withholding and other employment taxes and any other voluntary, authorized or required deductions.
4. Miscellaneous Benefits
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a) You will be eligible for any benefits which have heretofore vested to you in accordance with
applicable plan documents and/or your elections pertaining to the Salaried Employees Retirement and
Accumulation Plan ("SRAP"), and the non-qualified 401(k) plan and benefit replacement plans
("non-qualified plans"). You are 100% vested in all monies that are in your SRAP and non-qualified plans
accounts. Distributions under the non-qualified plans are taxable events and the value of the
distributions would be taxable as ordinary income at your marginal tax rate. U.S. Can is obligated to
withhold taxes upon distribution.
b) U.S. Can will pay the reasonable legal fees you incur in the negotiation, review and completion of
this Letter Agreement (and the agreement in principle, dated June 25, 2002) up to a maximum amount of
$5,000, upon submission of a usual and customary final invoice, together with supporting documentation.
Any invoice is subject to audit and approval.
c) Unless otherwise addressed in this Letter Agreement, Company benefits that will cease on your LDW
include but are not limited to business travel insurance, disability and life insurance, perquisites
(such as executive physicals and any club or membership dues), car allowance and participation in the
SRAP, the non-qualified plans, the EDCP or any other equity, deferred compensation, welfare, benefit or
bonus plan. You will remain vested in any shares or options of basic U.S. Can corporation restricted
common stock ("basic restricted stock") and performance based U.S. Can Corporation restricted stock
("performance based restricted stock") that vested on or before June 30, 2002, subject to the terms and
conditions of the governing stock and option agreements and plans. Any unvested shares or options of
basic or performance based restricted stock will be treated in accordance with the terms and conditions
of the governing stock and option agreements and plans. The current term life insurance policy for which
the premium has been paid through December 1, 2002 will be transferred to you if such transfer is
permitted by such policy.
d) U.S. Can will retain the services of an outplacement firm to provide you with executive outplacement
services on a month-to-month basis, commencing June 25, 2002 and ending no later than March 31, 2003.
The outplacement firm may provide periodic reports to U.S. Can of the progress of your employment search.
e) You may elect to purchase your laptop computer, excluding the Company-licensed software and Company
files, at net book value.
5. Employee Agreement, Employment Agreement, Non-Competition/Non-Solicitation Obligations,
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Confidentiality Obligations, Return of Company Property and
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Post-Employment Assistance
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You are a party to that certain Employee Agreement with the Company, dated January 25, 2000, as amended by
the Employment Agreement, dated October 4, 2000, (respectively, the "Employee Agreement" and the "Employment
Agreement"), copies of which are attached hereto as Exhibits B.1 and B.2. The Employee Agreement contains,
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among other things, restrictive covenants and certain confidentiality provisions that survive your LDW and/or
its termination. You specifically agree that the post-employment non-competition and non-solicitation of
clients/customers covenants from the Employee Agreement will remain in effect until June 30, 2004, provided,
however, that such post-employment non-competition is limited to the metal and rigid plastic segments of the
packaging industry. In addition, from July 1, 2002 through June 30, 2004, you agree to be bound by the
following non-solicitation of employees clause:
You will not directly or indirectly on behalf of any other individual 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 an employee of U.S. Can or
any of its affiliates.
You acknowledge that the Company has a protectible interest in you not directly or indirectly competing with
it in the metal and rigid plastic segment of the packaging industry. However, if you present to the Company
names of potential employers, the Company will not unreasonably withhold giving you approval to work for any
such potential employer.
Your obligations under the confidentiality provisions of the Employee Agreement do not expire merely by the
passage of time, but rather remain in effect according to their substantive terms. You agree to return to the
Company any property (keys, credit cards, passes, confidential documents or materials, all work-in-process,
etc.) belonging to the Company or its affiliates, and to return all writings, files, records, correspondence,
notebooks, notes and other document and things (including any copies thereof) containing confidential or
proprietary information or trade secrets of the Company or its affiliates. The Employee Agreement, as
amended, will remain in effect following your LDW and terminate in accordance with its terms. As further
provided herein (at page seven), except to the extent that the Employment Agreement amends the Employee
Agreement, this Letter Agreement supersedes, terminates and discharges agreements, commitments or
understandings between you and U.S. Can or any of the Released Parties with respect to the subject matter
hereof, contained in the Employment Agreement, dated October 4, 2000, among you, the Company and U.S. Can
Corporation.
You agree that, for the period beginning on July 1, 2002, and continuing for a reasonable period thereafter
(including, at a minimum, all times during which you are receiving salary continuation), you will assist the
Company and its affiliates in the defense or prosecution of any claim that may be made by or against the
Company or its affiliates, to the extent that such claim(s) may relate to services performed by you for the
Company or any of its affiliates. You agree to promptly inform the Company if you become aware of any such
claim or threatened claim. The Company will give due consideration to your other personal or professional
commitments with regard to this duty of cooperation and to reimburse you for all of your reasonable
out-of-pocket expenses associated with such assistance, in accordance with the Company's then-current
business expense reimbursement policies. The Company agrees to provide legal counsel to you in connection
with such assistance (to the extent legally permitted). You also agree to promptly inform the Company if you
are asked to assist in any investigation of the Company or any of its affiliates (or their actions) that may
relate to services performed by you for the Company or any of its affiliates, regardless of whether a lawsuit
has then been filed against the Company or any of its affiliates with respect to such investigation.
6. This Letter Agreement
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You agree not to disclose, divulge, publicize or publish the existence or terms of this Letter Agreement, and
any Exhibits, except to your counsel, immediate family or financial advisor, or as required by law or as
required to enforce the terms of this Letter Agreement. The Company also agrees not to disclose, divulge,
publicize or publish the existence of the terms of this agreement to anyone except its lawyers, accountants
and those persons within the Company whose knowledge is necessary for the approval and implementation of this
Letter Agreement or as required by law or as required to enforce the terms of this Letter Agreement.
7. Non-Disparagement/References
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You agree that you will refrain from making any discrediting or disparaging comments regarding the Company or
any of the Released Parties referred to in this Letter Agreement. The Company agrees that it will refrain
from making any discrediting or disparaging comments regarding you provided that it may give truthful
responses to employment reference inquiries upon receipt of a written release from you. In response to
unsolicited requests for employment references or in the absence of a written release from you, the Company
will provide a neutral reference identifying your dates of employment and positions held and that you
separated from the Company. You agree to direct all employment references to Xxxxx Xxxxxx, Senior Vice
President, Human Resources.
8. Effect of Breach
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In the event of a material breach or threatened material breach of the Employee Agreement, as amended, the
Employment Agreement, or the provisions of this Letter Agreement, the Company shall be entitled to suspend
any payment(s) hereunder immediately and without notice, pending receipt of adequate assurances that no
breach has or will occur, or final resolution of any breach. This shall be in addition to, and not in place
of, any other remedies that may be available to the Company for such breach or threatened breach.
9. Releases
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a) By you:
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, representatives and agents of each of them (the "Released Parties"), from any and all 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.
Notwithstanding any provision in this release to the contrary, you are not releasing any of your rights that
you may have (a) under any company benefit plan, (b) to indemnity under the Company's charter, bylaws or
other agreements, (c) under any directors and officers insurance and (d) under this Letter Agreement.
b) By Company:
The Company, on behalf of itself, and its former and present parents, subsidiaries, affiliates, successors,
assigns and their respective present or former directors and officers, hereby release you, your heirs, and
representatives from any and all claims, demands, actions and liabilities whatsoever arising from or out of
your employment through the date of this Release, EXCEPT wanton and willful misfeasance, gross misconduct,
fraud or criminal conduct in the discharge of your employment duties or acts outside the scope of your
employment.
10. Non-admission of Liability
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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.
11. Effect of Death
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In the event of your death, the unfulfilled payments described in section 1 will be made to Employee's
designated beneficiary, if one has been designated. (A form for this purpose is attached hereto as Exhibit
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C.) Otherwise, the payments described in section 1 will be paid to your estate. All other benefits,
compensation, payments or remuneration shall cease, except that the Company will provide such COBRA benefits
as authorized or required by law.
12. Arbitration
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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 and shall
include any employment disputes or 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, or any tort or contract claims, with respect to the subject
matter hereof. 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; provided, however, that any award issued as a result of arbitration shall be reviewable de novo by a
court of competent jurisdiction for errors of law. Should you be the prevailing party in such arbitration or
appeal therefrom the Company will reimburse you for the reasonable attorneys' fees, costs and expenses
incurred by you in connection with such arbitration or appeal therefrom.
13. Knowing and Voluntary Agreement; Statutory Consideration Period
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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 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.
Your revocation must be in writing, and must be received by Xxxxxx X. Xxxxxxx within the 7-day revocation
period. (A form you may use for such purpose is attached hereto as Exhibit D.) This Letter Agreement shall
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not become effective or enforceable until the revocation period has expired.
14. Call Of Stock
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Upon this agreement being executed by you, Company waives any call rights it has, arising out of your
separation, as to Company stock held by you.
This Letter Agreement, consisting of five pages, plus your resignation letter (one page), a copy of the
Employee Agreement (seven pages), a copy of the Employment Agreement (seventeen pages), your designation of
beneficiary form (one page) and a form of revocation (one page), constitutes the entire agreement between you
and U.S. Can or any of the Released Parties. This Letter Agreement supersedes, terminates and discharges all
prior oral and written agreements, commitments or understandings between you and U.S. Can or any of the
Released Parties with respect to the subject matter hereof, including but not limited to that certain
Employment Agreement, dated October 4, 2000, among you, the Company and U.S. Can Corporation. This Letter
Agreement shall be binding upon us, our successors, assigns, heirs and legal representatives, and inure to
our benefit and the benefit of U.S. Can's successors and assigns.
Sincerely,
UNITED STATES CAN COMPANY
By: s/s Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Vice President
Organization, Staffing, Compensation & Benefits
ACCEPTED AND AGREED TO:
s/s J. Xxxxxxx Xxxx
J. Xxxxxxx Xxxx
Date: October 16, 2002
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