AEROSPACE RETENTION AGREEMENT
THIS RETENTION AGREEMENT made and entered into as of the 22nd day of
June, 1994 (the "Effective Date"), by and between Ball Corporation (the
"Corporation") having its principal place of business located at 345 South High
Street, Muncie, Indiana, and Donovan B. Hicks (the "Executive").
WHEREAS, the Corporation desires that the Executive continue as an
employee of the Corporation in accordance herewith;
WHEREAS, the Executive is willing to commit himself to the employ of
the Corporation and any successor thereto, on the terms and conditions herein
set forth and thus to forego opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Agreement as of the
Effective Date, setting forth the terms and conditions for the employment
relationship of the Executive during the Term (as hereinafter defined).
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. EMPLOYMENT AND TERM.
(a) The Corporation agrees to employ the Executive, and the Executive
agrees to be employed by the Corporation, in accordance with the terms and
provisions of this Agreement for the period set forth below.
(b) The term shall commence as of the Effective Date, and shall
continue until the second anniversary thereof (the "Term"); provided, however,
that if the Sale, as defined in Schedule A attached hereto ("Schedule A") occurs
during the Term and the Executive is offered, but rejects, comparable
employment, i.e., commensurate salary and job responsibility, with the Successor
(as defined in Schedule A), this Agreement shall be terminated, and the
Executive's employment shall be deemed to have been terminated by the
Corporation for Cause (as defined in subsection 4 (b)), in each case, as of the
date of such rejection.
2. DUTIES AND POSITION OF EXECUTIVE. The Executive shall serve in such
capacities and with such titles as may, from time to time, be assigned. During
the Term, the Executive shall have such authority, duties and responsibilities
as, from time to time, are assigned to the Executive by the Corporation. The
Executive agrees to devote substantially all of his professional time and
attention to the Corporation.
3. COMPENSATION. The Executive shall receive the following compensation
for his services hereunder to the Corporation:
(a) SALARY. A base salary ("Annual Base Salary"), payable biweekly.
(b) ANNUAL INCENTIVE COMPENSATION BENEFIT. The Executive shall be
eligible to receive annual incentive compensation ("Annual Incentive
Compensation") in accordance with the provisions of the Corporation's Economic
Value Added Incentive Compensation Plan (the "Incentive Compensation Plan"), in
effect from time to time.
(c) RETENTION BONUS. Subject to the conditions set forth below, in
addition to Annual Base Salary and Annual Incentive Compensation, the
Corporation shall pay to the Executive a retention bonus (the "Retention Bonus")
in a lump sum equal to the amount set forth in Schedule A. The Retention Bonus
shall be paid to the Executive only in the event of the Auction as defined in
Schedule A or the Sale during the Term, followed by the occurrence of one of the
events (each, a "Retention Date") described below:
(i) following the occurrence of the Auction,
if no Sale has occurred and either:
(A) the Executive remains in the
employment of the Corporation
until the expiration of the Term; or
(B) the Corporation terminates the
Executive's employment for other than
Cause prior to the expiration of the
Term; or
(ii) following the occurrence of the Sale,
either: (A) the Executive remains
in the employment of the Successor
until the expiration of the Term, or
(B) the Successor terminates the
Executive for other than Cause (but
substituting the Successor for the
Corporation where it appears therein)
before the Expiration of the Term.
Payment shall be made pursuant to this subsection 3(c), as soon as practicable
following the first Retention Date to occur; provided, however, that on or prior
to the Effective Date, the Executive shall be entitled to make an election, in
lieu of receipt of payment of the Retention Bonus described above, to defer
receipt of such Retention Bonus, pursuant to the terms of the Corporation's 1989
Deferred Compensation Plan (election form attached as Schedule B).
(d) RETIREMENT, INCENTIVE, WELFARE BENEFIT PLANS AND OTHER BENEFITS.
During the Term, the Executive shall be eligible to participate in all
incentive, stock option, restricted stock, performance unit, savings,
retirement, supplemental retirement and welfare plans, practices, policies and
programs applicable generally to comparably situated executives of the
Corporation.
(e) FRINGE BENEFITS AND PERQUISITES. During the Term, the Executive
shall be entitled to receive fringe benefits in accordance with the plans,
practices, programs, and policies of the Corporation from time to time in
effect, commensurate with his position and comparable to those received by
comparably situated executives of the Corporation.
4. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. The Executive's employment shall terminate
automatically upon the Executive's death or "Disability" during the Term;
provided, however, that this provision shall have no effect on whether the
Executive's employment has terminated for purposes of the Corporation's long-
term disability plan or program then in effect. For purposes of this Agreement,
the Executive's employment may be terminated by reason of "Disability," if, as a
result of the Executive's incapacity due to physical or mental illness, the
Executive shall have been absent from the full-time performance of his duties
with the Corporation for six (6) consecutive months, and within thirty (30) days
after written "Notice of Termination" (as defined in subsection 4(d) hereof) is
given, the Executive shall not have returned to the full-time performance of his
duties.
(b) BY THE CORPORATION FOR CAUSE. The Corporation may terminate the
Executive's employment during the Term for "Cause." For purposes of this
Agreement, "Cause" shall mean termination (i) upon the continued failure of the
Executive to substantially perform his duties with the Corporation (other than
any such failure resulting from his incapacity due to physical or mental illness
or any such actual or anticipated failure after the issuance of a Notice of
Termination by the Executive or on account of "Constructive Termination" (as
defined in subsection 4(c) hereof)), after a written demand for substantial
performance is delivered to the Executive by the Corporation, which demand
specifically identifies the manner in which the Board of Directors of the
Corporation (the "Board") believes that the Executive has
not substantially performed his duties, (ii) the engaging by the Executive in
conduct that is demonstrably and materially injurious to the Corporation,
monetarily or otherwise, or (iii) the material breach by the Executive of any
other material provision of this Agreement.
(c) BY THE EXECUTIVE FOR CONSTRUCTIVE TERMINATION. The Executive may
terminate his employment during the Term for "Constructive Termination." For
purposes of this Agreement, "Constructive Termination" shall mean, without the
Executive's consent, the occurrence of any of the following circumstances,
unless such circumstances are corrected prior to the "Date of Termination" (as
defined in subsection 4(e) hereof) specified in the Notice of Termination given
in respect thereof:
(i) a material adverse reduction or
alteration (other than a promotion
or lateral position change) in the
nature or status of the Executive's
position, duties or responsibilities
or the conditions of the Executive's
employment as exist as of the Effective
Date;
(ii) a reduction in the Executive's Annual
Base Salary or the failure of the
Corporation to pay to the Executive
any portion or installment of
deferred compensation under any deferred
compensation program of the Corporation
within fourteen (14) days of the date
such compensation is due, except for
across-the-board salary reductions
similarly affecting all similarly
situated executives of the
Corporation;
(iii) the failure by the Corporation to
continue in effect any compensation
or benefit plan in which the Executive
participates as of the Effective Date
that is material to the Executive's
total compensation, unless an equitable
arrangement (embodied in an ongoing
substitute or alternative plan) has been
made with respect to such plan, or the
failure by the Corporation to continue
the Executive's participation therein
(or in such substitute or alternative
plan) on a basis not materially less
favorable, both in terms of the amount
of benefits provided and the level of
the Executive's participation relative
to other participants, as existed as of
the Effective Date, except for across-
the-board benefit reductions similarly
affecting comparably situated executives
of the Corporation;
(iv) the failure by the Corporation to
continue to provide the Executive with
benefits substantially similar to those
enjoyed by comparably situated
executives under any of the
Corporation's life insurance, medi-
cal, health and accident or disability
plans in which the Executive was
participating as of the Effective Date,
or the failure by the Corporation to
provide the Executive with the number of
paid vacation days to which the
Executive is entitled on the basis of
years of service with the Corporation
in accordance with the Corporation's
normal vacation policy in effect as of
the Effective Date;
(v) the Corporation's requiring, without
the Executive's consent, that the
Executive's principal place of business
be at an office located more than fifty
(50) miles from its location as of the
Effective Date, except for required
travel on the Corporation's business to
an extent substantially consistent with
the Executive's business travel
obligations;
(vi) the failure of the Corporation to
continue this Agreement in effect, or
to obtain satisfactory agreement from
any successor to assume and agree to
perform this Agreement, as contemplated
by Section 9 hereof; or
(vii) any material breach by the Corporation
of any other material provision of this
Agreement.
In the event the Executive believes Constructive Termination exists, he shall,
in advance of delivery of any Notice of Termination, specify to the Corporation
in writing the circumstances alleged to constitute Constructive Termination, and
provide the Corporation with a reasonable period of time within which to cure
such circumstances.
(d) NOTICE OF TERMINATION. Any termination by the Corporation for
Cause, or by the Executive for Constructive Termination, shall be communicated
by Notice of Termination to the other party hereto given in accordance with this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice that (i) indicates the specific termination provision in this
Agreement relied upon and (ii) to the extent applicable sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated. The failure by the
Executive or the Corporation to set forth in the
Notice of Termination any fact or circumstance that contributes to a showing of
Constructive Termination or Cause shall not waive any right of the Executive or
the Corporation hereunder or preclude the Executive or the Corporation from
asserting such fact or circumstance in enforcing the Executive's or the
Corporation's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Corporation for Cause, or by the
Executive for Constructive Termination, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Corporation other than for Cause,
the Date of Termination shall be the date on which the Corporation notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death or Disability (as the case may be).
(f) Upon the occurrence of a "Change in Control," as defined in
Section 2 of the severance agreement (the "Severance Agreement") dated January
25, 1989, between the Corporation and the Executive, the Executive shall be
entitled to the greater of the benefit otherwise provided herein, and the
benefit provided under Section 5 of the Severance Agreement; provided, however,
that the provisions of Section 5(vi) of the Severance Agreement (regarding the
application of the cap relating to section 280G of the Internal Revenue Code of
1986, as amended) shall also be applied to any and all amounts payable
hereunder.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) CERTAIN TERMINATIONS. During the Term, if the Corporation shall
terminate the Executive's employment (other than in the case of a
termination for Cause), the Executive shall terminate his employment for
Constructive Termination or the Executive's employment shall terminate by reason
of death or Disability (termination in any such case referred to as
"Termination"):
(i) the Corporation shall pay to the
Executive a lump sum amount in cash
equal to the sum of (A) the Executive's
Annual Base Salary through the Date of
Termination to the extent not
theretofore paid, and (B) an amount
equal to the Annual Incentive Com-
pensation at Target Incentive Percent,
as defined in the Incentive
Compensation Plan, established for the
Executive for the fiscal year that
includes the Date of Termination,
multiplied by a fraction the numerator
of which shall be the number of days
from the beginning of such fiscal year
to and including the Date of Termination
and the denominator of which shall be
365. (The amounts specified in clauses
(A) and (B) shall be hereinafter
referred to as the "Accrued
Obligations".) The amounts specified
in this subsection 5(a)(i) shall be paid
within thirty (30) days after the Date
of Termination.
(ii) in the event of Termination other than
by reason of the Executive's death or
Disability, then: (A) the Company shall
also pay to the Executive, within thirty
(30) days of the Executive's Date of
Termination, a lump sum amount, in cash,
equal to the sum of (x) two times the
Executive's Annual Base Salary in effect
immediately prior to the Date of
Termination, and (y) two times the
Executive's Annual Incentive
Compensation, calculated based on the
Target Incentive Percent as defined in
the Incentive Compensation Plan,
established for the Executive for the
fiscal year in which the Date of
Termination occurs; (B) the
Corporation shall pay to the
Executive the present value
(discounted using an interest rate
equal to the prime rate promulgated
by the First National Bank of Chicago
and in effect as of the Date of
Termination, plus one percent) of all
benefits under the Corporation's
Pension Plan for Salaried Employees,
or any successor plan thereto, and
any supplemental executive retirement
plans to which the Executive would
have been entitled had he remained in
employment with the Corporation for
an additional twenty-four (24) months,
each, where applicable, at the rate of
Annual Base Salary, and using the same
assumptions and factors, in effect at
the time Notice of Termination is given,
minus the present value (discounted at
the Prime Rate) of the benefits to which
he is actually entitled under the above
mentioned plans; and (C) the Corporation
shall continue, for a period of twenty-
four (24) months from the Date of
Termination, medical and welfare
benefits to the Executive and/or the
Executive's family at least equal to
those that would have been provided if
the Executive's employment had not been
terminated, such benefits to be in
accordance with the medical and welfare
benefit plans, practices, programs or
policies (the "M&W Plans") of the
Corporation as in effect and applicable
generally to comparably situated
executives of the Corporation and their
families immediately preceding the Date
of Termination; provided, however, that
if the Executive becomes employed with
another employer and is eligible to
receive medical or other welfare
benefits under another employer-
provided plan, the benefits under the
M&W Plans shall be reduced to the extent
comparable benefits are actually
received by or made available to the
Executive without cost during the
twenty-four (24) month period following
the Executive's Date of Termination
(and any such benefits actually received
by the Executive shall be reported to
the Corporation by the Executive).
(b) TERMINATION BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE OTHER
THAN FOR CONSTRUCTIVE TERMINATION. If the Executive's employment shall be
terminated for Cause during the Term, or if the Executive terminates employment
during the Term other than a termination for Constructive Termination, which he
shall not be prohibited from doing, the Corporation shall have no further
obligations to the Executive under this Agreement other than the obligation to
pay to the Executive the Accrued Obligations, plus any other earned but unpaid
compensation in each case to the extent not theretofore paid.
(c) LEGAL EXPENSES. The Corporation shall pay to the Executive such
reasonable legal fees and expenses incurred by the Executive as a result of a
Termination pursuant to subsection 5(a)(ii) hereof, but only with respect
to such claim or claims upon which the Executive prevails. Such payments shall
be made within five (5) business days after delivery of the Executive's written
request for payment accompanied with such evidence of fees and expenses incurred
as the Corporation reasonably may require.
6. RELEASE. The Executive shall, as a condition to the receipt of
benefits hereunder, execute a full and general release (on a form to be supplied
by the Corporation). Amounts that are vested benefits or that the Executive is
otherwise entitled to receive at or subsequent to the Date of Termination under
the Severance Agreement, under any benefit plan, policy, practice or program of
the Corporation, or under any contract or agreement entered into after the date
hereof with the Corporation, shall be payable in accordance with such benefit
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
7. MITIGATION. Except as provided in subsection 5(a)(ii)(C) hereof,
in no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts (including amounts for
damages for breach) payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment.
8. CONFIDENTIAL INFORMATION; NONDISPARAGEMENT. The Executive shall
hold in a fiduciary capacity for the benefit of the Corporation all secret,
confidential or proprietary information, knowledge or data relating to the
Corporation or any of their affiliated companies, and their respective
businesses, that shall have been obtained by the Executive during the
Executive's employment by the Corporation or any of their affiliated companies
and that shall not have been or now or hereafter have become public knowledge
(other than by acts by the Executive or representatives of the Executive in
violation of this Agreement). During the Term, and at all times thereafter,
regardless of the reason for termination of the Executive's employment, the
Executive shall not, without the prior written consent of the Corporation or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Corporation and
those designated by it. The Executive understands that during the Term, the
Corporation may be required from time to time to make public disclosure of the
terms or existence of the Executive's employment relationship in order to comply
with various laws and legal requirements.
During the Term and at all times thereafter, the Executive shall not
disparage or criticize, orally or in writing, the performance of the
Corporation, the Board or any director of the Corporation or of any specific
former or current officer of the Corporation or any operating company or group
president or the Corporation's management group to any person; provided,
however, that the Executive may divulge, discuss or provide the information
described above to the extent that he is compelled by law to do so, and, in such
event, the Executive shall notify the Corporation immediately upon any request
or demand for information so that the Corporation may seek a protective order or
other appropriate remedy.
9. SUCCESSORS.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Corporation shall not be assignable by the Executive.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform this Agreement if no
such succession had taken place.
(c) In addition to the foregoing, upon the occurrence of the Sale,
the Corporation shall require any Successor to assume expressly and agree to
perform this Agreement until the expiration of the Term, in the same manner and
to the same extent that the Corporation would be required to perform this
Agreement if no such succession had taken place.
10. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or the breach of this Agreement shall be settled exclusively by
arbitration conducted before a panel of three arbitrators (one chosen by the
Executive, one by the Corporation and the third by the other two) in Muncie,
Indiana, in accordance with the rules of the American Arbitration Association
then in effect. The determination of the arbitrators shall be conclusive and
binding on the Corporation and the Executive, and judgment may be entered on the
arbitrators' award in any court having appropriate jurisdiction; provided,
however, that the Corporation shall be entitled to seek a restraining order or
injunction in any court of competent jurisdiction to prevent any continuation of
any violation of Section 8 of this Agreement.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Indiana, without reference to principles of
conflict of laws.
(b) The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
(c) This Agreement may not be amended, modified, repealed, waived,
extended or discharged except by an agreement in writing signed by the party
against whom enforcement of such amendment, modification, repeal, waiver,
extension or discharge is sought. No person, other than pursuant to a
resolution of the Board or a committee thereof, shall have authority on behalf
of the Corporation to agree to amend, modify, repeal, waive, extend or discharge
any provision of this Agreement or anything in reference thereto.
(d) The parties hereto acknowledge that the Executive's employment
relationship is employment at will, except for the Corporation's obligations
under this Agreement.
(e) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EXECUTIVE: Donovan B. Hicks
304 Hollyberry Lane
Boulder, CO 80303
IF TO BALL CORPORATION: Ball Corporation
345 South High Street
Muncie, IN 47305
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(g) The Corporation may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(h) The Executive's or the Corporation's failure to insist upon
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Corporation
may have hereunder, including without limitation the right of the Executive to
terminate employment for Constructive Termination pursuant to subsection 4(c) of
this Agreement, or the right of the Corporation to terminate the Executive's
employment for Cause pursuant to subsection 4(b) of this Agreement shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.
(i) This instrument contains the entire agreement of the parties with
respect to the subject matter hereof; and all promises, representations,
understandings, arrangements and prior agreements are merged herein and
superseded hereby; provided, however, that this subsection shall not apply to
the Severance Agreement.
(j) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF, the Executive and, pursuant to due authorization from
its Board of Directors, the Corporation has caused this Agreement to be executed
as of the day and year first above written.
BALL CORPORATION
Name:
Title:
EXECUTIVE
Donovan B. Hicks
SCHEDULE A
Definitions
For purposes of this Agreement:
"Sale" shall mean, within the term of this Agreement, a sale of the majority
ownership, or formation of a joint venture in which the Corporation has a
minority position of ownership, in more than 50% of the previous aerospace
business of the Corporation existing at the date of this Agreement.
"Auction" shall mean the solicitation of bids for acquisition of the aerospace
business of the Corporation within the Term of this Agreement. Such
solicitation shall be a result of formal action by the Corporation's Board of
Directors.
"Successor" shall mean the successor to the aerospace business of the
Corporation pursuant to the Sale.
Retention Bonus (subject to subsection 3(c) of this Agreement) shall be $80,000.