-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VFYjj58EA72tDpgTTbUUOqFXaxGLmgbU10K3uOOGOYSSRGvsRkQ6cVDcqyc5Jmfe BA/Ys7hWBhywp3EX2O5pmw== 0000940180-01-500646.txt : 20020410 0000940180-01-500646.hdr.sgml : 20020410 ACCESSION NUMBER: 0000940180-01-500646 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLTRISTA CORP CENTRAL INDEX KEY: 0000895655 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351828377 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13665 FILM NUMBER: 1790464 BUSINESS ADDRESS: STREET 1: 5875 CASTLE CREEK PARKWAY, NORTH DRIVE STREET 2: SUITE 440 CITY: INDIANAPOLIS STATE: IN ZIP: 46250-4330 BUSINESS PHONE: 3175775000 MAIL ADDRESS: STREET 1: 5875 CASTLE CREEK PARKWAY, NORTH DRIVE STREET 2: SUITE 440 CITY: INDIANAPOLIS STATE: IN ZIP: 46250-4330 10-Q 1 d10q.txt FORM 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2001 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- Alltrista Corporation Indiana 0-21052 35-1828377 State of Incorporation Commission File Number IRS Identification Number 555 Theodore Fremd Avenue, Suite B302 Rye, New York 10580 Registrant's telephone number, including area code: (914) 967-9426 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Outstanding at Class October 28, 2001 - ----- ---------------- Common Stock, without par value 6,392,136 shares
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ALLTRISTA CORPORATION Quarterly Report on Form 10-Q For the period ended September 30, 2001 INDEX
Page Number ------ PART I FINANCIAL INFORMATION: Item 1. Financial Statements Unaudited Consolidated Statements of Income for the three and nine month periods ended September 30, 2001 and October 1, 2000................................................. 3 Unaudited Statements of Comprehensive Income for the three and nine month periods ended September 30, 2001 and October 1, 2000................................................. 4 Unaudited Consolidated Balance Sheets at September 30, 2001 and December 31, 2000...... 5 Unaudited Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2001 and October 1, 2000................................................. 6 Notes to Unaudited Consolidated Financial Statements................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 13 Item 3. Quantitative and Qualitative Disclosures About Market Risk............................. 20 PART II. OTHER INFORMATION Item 4. Submission of matters to a vote of security holders.................................... 21 Item 6. Exhibits and Reports on Form 8-K....................................................... 21
2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ALLTRISTA CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three month period ended Ninth month period ended ----------------------- ----------------------- September 30, October 1, September 30, October 1, 2001 2000 2001 2000 ------------- ---------- ------------- ---------- (thousands except per share amounts) Net sales................................................ $ 90,477 $97,096 $ 250,102 $296,549 Costs and expenses Cost of sales......................................... 68,299 73,973 188,312 223,794 Selling, general and administrative expenses.......... 14,352 14,660 40,626 45,634 Goodwill amortization................................. 1,626 1,632 4,876 4,771 Special charges (credits) and reorganization expenses. 3,901 2,219 233 891 Loss on thermoforming net assets held for sale........ 119,725 -- 119,725 -- --------- ------- --------- -------- Operating earnings (loss)................................ (117,426) 4,612 (103,670) 21,459 Interest expense, net.................................... (2,180) (3,041) (8,351) (9,204) --------- ------- --------- -------- Income (loss) before taxes and minority interest......... (119,606) 1,571 (112,021) 12,255 Income tax (provision) benefit........................... 36,496 -- 33,606 (4,167) Minority interest in loss of consolidated subsidiary..... 78 70 256 207 --------- ------- --------- -------- Net income (loss)........................................ $ (83,032) $ 1,641 $ (78,159) $ 8,295 ========= ======= ========= ======== Basic earnings (loss) per share.......................... $ (13.04) $ .26 $ (12.30) $ 1.31 Diluted earnings (loss) per share........................ $ (13.04) $ .26 $ (12.30) $ 1.30 Weighted average shares outstanding: Basic................................................. 6,368 6,310 6,354 6,344 Diluted............................................... 6,368 6,353 6,354 6,392
See accompanying notes to unaudited consolidated financial statements. 3 ALLTRISTA CORPORATION UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME
Three month period ended Nine month period ended ----------------------- ----------------------- September 30, October 1, September 30, October 1, 2001 2000 2001 2000 ------------- ---------- ------------- ---------- (thousands of dollars) Net income (loss)......................... $(83,032) $1,641 $(78,159) $8,295 Foreign currency translation.............. (319) (300) (369) (548) Interest rate swap unrealized gain (loss): Transition adjustment.................. -- -- 45 -- Change during period................... (116) -- (981) -- -------- ------ -------- ------ Comprehensive income (loss)............... $(83,467) $1,341 $(79,464) $7,747 ======== ====== ======== ======
See accompanying notes to unaudited consolidated financial statements. 4 ALLTRISTA CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS
September 30, December 31, 2001 2000 ------------- ------------ (thousands of dollars) ASSETS Current assets Cash and cash equivalents......................................... $ 6,828 $ 3,303 Accounts receivable, net.......................................... 23,264 32,806 Inventories, net.................................................. 22,877 52,548 Deferred taxes on income.......................................... 5,140 4,621 Prepaid expenses.................................................. 630 1,102 Net assets held for sale.......................................... 21,716 -- -------- -------- Total current assets.......................................... 80,455 94,380 -------- -------- Property, plant and equipment, at cost............................... 132,573 186,462 Accumulated depreciation............................................. (87,758) (97,410) -------- -------- 44,815 89,052 Goodwill, net........................................................ 15,764 114,138 Deferred taxes on income............................................. 32,029 -- Other assets......................................................... 8,114 11,169 -------- -------- Total assets.................................................. $181,177 $308,739 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt................................. $ 27,500 $ 25,995 Notes payable..................................................... -- 16,000 Accounts payable.................................................. 18,361 17,842 Accrued salaries, wages and employee benefits..................... 9,081 8,344 Other current liabilities......................................... 7,114 3,224 -------- -------- Total current liabilities..................................... 62,056 71,405 -------- -------- Noncurrent liabilities Long-term debt.................................................... 73,750 95,065 Deferred taxes on income.......................................... -- 13,068 Other noncurrent liabilities...................................... 5,430 9,957 -------- -------- Total noncurrent liabilities.................................. 79,180 118,090 -------- -------- Minority interest in subsidiary...................................... 611 1,023 -------- -------- Contingencies........................................................ -- -- Shareholders' equity: Common stock (7,963,351 common shares issued and 6,381,483 shares outstanding at September 30, 2001).............................. 39,677 40,017 Retained earnings................................................. 39,994 118,153 Accumulated other comprehensive loss: Cumulative translation adjustment............................... (1,347) (978) Interest rate swap.............................................. (936) -- -------- -------- 77,388 157,192 Less treasury stock (1,581,868 shares at cost at September 30, 2001). (38,058) (38,971) -------- -------- Total shareholders' equity........................................ 39,330 118,221 -------- -------- Total liabilities and shareholders' equity.................... $181,177 $308,739 ======== ========
See accompanying notes to unaudited consolidated financial statements. 5 ALLTRISTA CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine month period ended ----------------------- September 30, October 1, 2001 2000 ------------- ---------- (thousands of dollars) Cash flows from operating activities Net income (loss)................................................................ $(78,159) $ 8,295 Reconciliation of net income (loss) to net cash provided by operating activities: Depreciation................................................................... 11,203 10,892 Amortization................................................................... 5,065 5,050 Loss on thermoforming net assets held for sale................................. 119,725 -- Special charges (credits) and reorganization expenses.......................... (3,750) (1,600) Deferred employee benefits..................................................... 216 76 Minority interest.............................................................. (412) (207) Other, net..................................................................... 221 941 Changes in working capital components, net of effects from acquisitions and net assets held for sale........................................................... (11,338) (5,523) -------- -------- Net cash provided by operating activities.................................... 42,771 17,924 -------- -------- Cash flows from financing activities Proceeds from revolving credit borrowings........................................ 29,150 44,932 Payments on revolving credit borrowings.......................................... (45,150) (36,240) Payments on long-term debt....................................................... (19,027) (14,003) Debt modification cost........................................................... (637) -- Proceeds from issuance of common stock........................................... 518 990 Purchase of treasury stock....................................................... -- (10,485) -------- -------- Net cash used in financing activities........................................ (35,146) (14,806) -------- -------- Cash flows from investing activities Additions to property, plant and equipment....................................... (8,343) (10,786) Insurance proceeds from property casualty........................................ 1,535 -- Acquisition of businesses, net of cash acquired.................................. -- (6,930) Proceeds from the surrender of insurance contracts............................... 6,706 -- Proceeds from insurance contracts loaned to officers............................. (4,059) -- Other, net....................................................................... 61 112 -------- -------- Net cash used in investing activities........................................ (4,100) (17,604) -------- -------- Net increase (decrease) in cash................................................... 3,525 (14,486) Cash and cash equivalents, beginning of period.................................... 3,303 17,394 -------- -------- Cash and cash equivalents, end of period.......................................... $ 6,828 $ 2,908 ======== ========
See accompanying notes to unaudited consolidated financial statements. 6 ALLTRISTA CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. Presentation of Consolidated Financial Statements Certain information and footnote disclosures, including significant accounting policies normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for a fair presentation of the results for the interim periods presented. Results of operations for the periods shown are not necessarily indicative of results for the year, particularly in view of the seasonality for home food preservation products. The accompanying unaudited consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements of Alltrista Corporation and Subsidiaries included in the Company's latest annual report. Certain reclassifications have been made in the Company's financial statements of prior years to conform to the current year presentation. These reclassifications have no impact on previously reported net income. 2. Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets On October 15, 2001, the Company announced it had signed a definitive agreement with Wilbert, Inc. to sell the assets of its Triangle, TriEnda and Synergy World plastic thermoforming operations. The Company will retain its thermoforming operation in Fort Smith, Arkansas, which produces plastic parts primarily for the appliance market. The transaction is anticipated to close in the fourth quarter and is subject to normal and customary closing conditions. The agreement calls for a payment of $21 million in cash and a $2.5 million non-interest bearing one-year note as well as the assumption of certain identified liabilities. A $1.5 million deposit was received upon signing the agreement. The Company recorded a pre-tax loss of approximately $120 million in the third quarter to reflect the write-down of the net assets to be sold to the amount of the estimated net proceeds from the sale. Accordingly, the net realizable value of these net assets of approximately $21.7 million, consisting primarily of property, plant and equipment, accounts receivable and inventories, net of liabilities are included in Net Assets Held For Sale on the Consolidated Balance Sheet as of September 30, 2001. The Company expects to recover approximately $15 million of federal income taxes paid in 1999 and 2000 as a result of the carryback of a tax net operating loss generated in 2001. The tax net operating loss that will not be utilized during the allowable carryback period will be available to offset taxable income in future periods. The combined net sales of the assets to be sold included in the Company's historical results were approximately $52.4 million for the first nine months of 2001, $100.3 million in 2000 and $70.7 million in 1999. Operating earnings (losses) associated with these assets were approximately $(9.9) million for the first nine months of 2001, $(8.4) million in 2000 and $2.8 million in 1999. 3. Pro forma Financial Information The following unaudited pro forma information presents a summary of consolidated results of the Company as if the proposed sale of the assets of the Triangle, TriEnda and Synergy World plastic thermoforming operations (as described in Note 2 above) had occurred at the beginning of each period presented. In addition, the pro forma information excludes special charges and reorganization expenses. The pro forma information assumes the proceeds from the thermoformed assets to be divested were received at the beginning of each period, and assumes a 35.0% effective income tax rate for all periods. (In thousands except per share data.)
Nine month period ended ------------------------ September 30, October 1, 2001 2000 ------------- ---------- Net sales................. $197,075 $213,998 Operating earnings........ 26,535 25,275 Net income................ 13,062 11,690 Diluted earnings per share $ 2.06 $ 1.83
7 ALLTRISTA CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 4. Earnings Per Share Calculation Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated based on the weighted average number of outstanding common shares plus the dilutive effect of stock options as if they were exercised. Due to the net loss for the three-month and nine-month periods ended September 30, 2001, the effect of the potential exercise of stock options was not considered in the diluted earnings per share calculation for those periods since it would be antidilutive. A computation of earnings per share is as follows (in thousands except per share data):
Three month period ended Nine month period ended ------------------------ ------------------------ September 30, October 1, September 30, October 1, 2001 2000 2001 2000 ------------- ---------- ------------- ---------- Net income (loss)............................. $(83,032) $1,641 $(78,159) $8,295 -------- ------ -------- ------ Weighted average shares outstanding........... 6,368 6,310 6,354 6,344 Additional shares assuming conversion of stock options..................................... -- 43 -- 48 -------- ------ -------- ------ Weighted average shares outstanding assuming conversion.................................. 6,368 6,353 6,354 6,392 -------- ------ -------- ------ Basic earnings (loss) per share............... $ (13.04) $ .26 $ (12.30) $ 1.31 Diluted earnings (loss) per share--assuming conversion.................................. $ (13.04) $ .26 $ (12.30) $ 1.30
5. Segment Information The Company is currently organized into two segments: metal products and plastic products. The metal products segment includes sales of zinc and consumer products. This segment provides cast zinc strip and fabricated zinc products primarily for zinc coinage and industrial applications. It also markets a line of home food preservation products including home canning jars, home canning metal closures and related food products, which are distributed through a wide variety of retail outlets. The plastic products segment produces injection molded plastic products used in medical, pharmaceutical and consumer products and industrial thermoformed plastic parts for appliances, manufactured housing, recreational vehicles, heavy trucking, agriculture equipment, portable restrooms, recreational and construction products. 8 ALLTRISTA CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Net sales, operating earnings and assets employed in operations by segment are summarized as follows (thousands of dollars):
Three month period ended Nine month period ended ----------------------- ------------------------- September 30, October 1, September 30, October 1, 2001 2000 2001 2000 ------------- ---------- ------------- ------------ Net Sales: Metal products: Consumer products............................ $ 43,609 $42,171 $ 105,760 $111,096 Zinc products................................ 11,970 13,480 37,345 44,199 Other........................................ 256 154 657 320 --------- ------- --------- -------- Total metal products..................... 55,835 55,805 143,762 155,615 --------- ------- --------- -------- Plastic products: Industrial thermoformed parts................ 23,274 30,609 75,545 104,549 Injection molded products.................... 11,488 10,744 31,442 37,174 --------- ------- --------- -------- Total plastic products................... 34,762 41,353 106,987 141,723 --------- ------- --------- -------- Intercompany................................... (120) (62) (647) (789) --------- ------- --------- -------- Total net sales.......................... $ 90,477 $97,096 $ 250,102 $296,549 ========= ======= ========= ======== Operating earnings: Metal products................................. $ 8,846 $ 7,983 $ 21,111 $ 19,627 Plastic products............................... (4,189) (2,270) (5,212) 1,575 Intercompany................................... (1) (47) 19 (73) Unallocated corporate income (expense)......... (2,357) (1,054) 137 330 Loss on thermoforming net assets held for sale. (119,725) -- (119,725) -- --------- ------- --------- -------- Total operating earnings (loss).......... (117,426) 4,612 (103,670) 21,459 Interest expense, net........................... (2,180) (3,041) (8,351) (9,204) --------- ------- --------- -------- Income (loss) before taxes and minority interest $(119,606) $ 1,571 $(112,021) $ 12,255 ========= ======= ========= ======== September 30, December 31, 2001 2000 ------------- ------------ Assets employed in operations: Metal products................................. $ 72,299 $ 84,755 Plastic products (2)........................... 62,530 207,914 --------- -------- Total assets employed in operations...... 134,829 292,669 Corporate (1).................................. 46,348 16,070 --------- -------- Total assets............................. $ 181,177 $308,739 ========= ========
- -------- (1) Corporate assets primarily include cash and cash equivalents, amounts relating to benefit plans, deferred tax assets and corporate facilities and equipment. (2) Includes $21.7 million of thermoforming net assets held for sale. 6. Costs to Exit Facilities In August 2001, the Company announced that it would be consolidating its home canning metal closure production from its Bernardin Ltd. Toronto, Ontario facility into its Muncie, Indiana manufacturing operation. The total cost to exit the Toronto facility of $0.7 million was recorded in the third quarter of 2001 and includes a $0.3 million loss on the sale and disposal of equipment, and $0.4 million of employee severance costs. This exit 9 ALLTRISTA CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) cost is included in Special Charges (Credits) and Reorganization Expenses on the Consolidated Statement of Income. Of the $0.4 million accrued liability established for severance costs, approximately $10,000 had been expended through September 30, 2001, with the remainder expected to be paid in the fourth quarter. Also in August 2001, the Company announced that it had vacated its former Triangle Plastics facility in Independence, Iowa and integrated personnel and capabilities into its other operating and distribution facilities in the area. The total cost to exit this Iowa facility of $0.6 million was recorded in the third quarter of 2001 and includes $0.4 million in future lease obligations and an additional $0.2 million of costs related to the leased facility. This exit cost is included in Special Charges (Credits) and Reorganization Expenses on the Consolidated Statement of Income. Of the $0.5 million accrued liability established for future lease payments and other costs related to the facility, no amounts had been expended through September 30, 2001. 7. Contingencies The Company is involved in various legal disputes in the ordinary course of business. In addition, the Environmental Protection Agency has designated the Company as a potentially responsible party, along with numerous other companies, for the clean up of several hazardous waste sites. Information at this time does not indicate that disposition of any of the legal or environmental disputes the Company is currently involved in will have a material, adverse effect upon the financial condition, results of operations, cash flows or competitive position of the Company. 8. Discharge of Deferred Compensation Obligations and Related Loans During the first and second quarters of 2001, certain participants in the Company's deferred compensation plans agreed to forego balances in those plans in exchange for loans from the Company in the same amounts. The loans, which were completed during the second quarter, bear interest at the applicable federal rate and require the individuals to secure a life insurance policy having the death benefit equivalent to the amount of the loan payable to the Company. All accrued interest and principal on the loans are payable upon the death of the participant and their spouse. The Company recognized $1.9 million and $2.2 million of pre-tax income during the first and second quarters of 2001, respectively, related to the discharge of the deferred compensation obligations. These amounts are included in Special Charges (Credits) and Reorganization Expenses on the Consolidated Statement of Income. 9. Inventories Inventories at September 30, 2001 and December 31, 2000 were comprised of the following (in thousands):
September 30, December 31, 2001 2000 ------------- ------------ Raw materials and supplies $ 2,823 $14,311 Work in process........... 5,826 10,253 Finished goods............ 14,228 27,984 ------- ------- Total inventories...... $22,877 $52,548 ======= =======
10. New Accounting Pronouncements The Company adopted Statement of Financial Accounting Standard 133 (SFAS 133), Accounting for Derivative Instruments and Hedging Activities, on January 1, 2001. The statement requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair 10 ALLTRISTA CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge ineffectiveness, the amount by which the change in the value of a hedge does not exactly offset the change in the value of the hedged item, will be immediately recognized in earnings. The adoption of SFAS 133 on January 1, 2001 did not have a material impact on the Company's results of operations or financial position. In July 2001, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill (and intangible assets deemed to have indefinite lives) will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. The Company will apply the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of 2002. During 2002, the Company will perform the first of the required impairment tests of goodwill and indefinite lived intangible assets, but does not anticipate a material impact on its results of operations or financial position. In June 2001, the FASB issued Statement of Financial Accounting Standard No. 143 (SFAS 143), Accounting for Asset Retirement Obligations, effective for fiscal years beginning after June 15, 2002. This standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. SFAS 143 is effective for the Company beginning with the first quarter of 2003, and its adoption is not expected to have a material impact on the Company's results of operations or financial position. In August 2001, the FASB issued Statement of Financial Accounting Standard No. 144 (SFAS 144), Accounting for the Impairment or Disposal of Long-Lived Assets, effective for fiscal years beginning after December 15, 2001. This standard supercedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and provides a single accounting model for long-lived assets to be disposed of. The new standard also supersedes the provisions of APB Opinion 30 with regard to reporting the effects of a disposal of a segment of a business and requires expected future operating losses from discontinued operations to be displayed in discontinued operations in the period(s) in which the losses are incurred. SFAS 144 is effective for the Company beginning with the first quarter of 2002, and its adoption it is not expected to have a material impact on the Company's results of operations or financial position. 11. Derivative Financial Instruments The Company's derivative activities are initiated within the guidelines of documented corporate risk-management policies and do not create additional risk because gains and losses on derivative contracts offset losses and gains on the assets, liabilities and transactions being hedged. As derivative contracts are initiated, the Company designates the instruments individually as either a fair value hedge or a cash flow hedge. Management reviews the correlation and effectiveness of its derivatives on a periodic basis. The Company uses interest rate swaps to manage a portion of its exposure to short-term interest rate variations with respect to the London Interbank Offered Rate on its term debt obligations. The Company has designated the interest rate swaps as cash flow hedges. Gains and losses related to the effective portion of the interest rate swaps are reported as a component of other comprehensive income and reclassified into earnings in the same period the hedged transaction affects earnings. Because the terms of the swaps exactly match the terms of the underlying debt, the swaps are perfectly effective. The Company anticipates that the majority of the interest rate swap unrealized loss included in other comprehensive income at September 30, 2001 will be reclassified into earnings by December 31, 2001. The interest rate swap agreements expire in March 2002. 11 ALLTRISTA CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 12. Stock Plans Effective September 24, 2001, the Company established the 2001 Stock Option Plan for the purpose of granting options for the purchase of common shares to the Company's executive officers and independent directors. Options vest to, and are exercisable by, participants on the earlier of 1) the Company's closing stock price equals or exceeds $17 per share or 2) the seventh anniversary of the grant date. During September, 570,000 options were granted to participants under this new plan. The Plan and all options granted are contingent on ratification of the Plan by the Company's shareholders on or before September 23, 2002. 12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management Reorganization On September 25, 2001, the Company announced the departure from the Company of Thomas B. Clark, Chairman, President and Chief Executive Officer, and Kevin D. Bower, Senior Vice President and Chief Financial Officer. The Board announced the appointment of Martin E. Franklin as Chairman and Chief Executive Officer and Ian G.H. Ashken as Vice Chairman, Chief Financial Officer and Secretary. Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets On October 15, 2001, the Company announced it had signed a definitive agreement with Wilbert, Inc. to sell the assets of its Triangle, TriEnda and Synergy World plastic thermoforming operations. The Company will retain its thermoforming operation in Fort Smith, Arkansas, which produces plastic parts primarily for the appliance market. The transaction is anticipated to close in the fourth quarter and is subject to normal and customary closing conditions. The agreement calls for a payment of $21 million in cash and a $2.5 million non-interest bearing one-year note as well as the assumption of certain identified liabilities. A $1.5 million deposit was received upon signing the agreement. The Company recorded a pre-tax loss of approximately $120 million in the third quarter to reflect the write-down of the net assets to be sold to the amount of the estimated net proceeds from the sale. Accordingly, the net realizable value of these net assets of approximately $21.7 million, consisting primarily of property, plant and equipment, accounts receivable and inventories, net of liabilities are included in Net Assets Held For Sale on the Consolidated Balance Sheet as of September 30, 2001. The Company expects to recover approximately $15 million of federal income taxes paid in 1999 and 2000 as a result of the carryback of a tax net operating loss generated in 2001. The tax net operating loss that will not be utilized during the allowable carryback period will be available to offset taxable income in future periods. The combined net sales of the assets to be sold included in the Company's historical results were approximately $52.4 million for the first nine months of 2001, $100.3 million in 2000 and $70.7 million in 1999. Operating earnings (losses) associated with these assets were approximately $(9.9) million for the first nine months of 2001, $(8.4) million in 2000 and $2.8 million in 1999. Corporate Office Reorganization On October 15, 2001, the Company announced the closing of its Indianapolis, Indiana corporate office. Corporate functions are scheduled to be transitioned to the Company's new headquarters in Rye, New York and the Company's consumer products division in Muncie, Indiana during the first quarter of 2002. Results of Operations--Comparing Year to Date 2001 to Year to Date 2000 The Company reported net sales of $250.1 million for the first nine months of 2001, a 15.7% decrease from net sales of $296.5 million for the same period in 2000. Operating earnings, excluding the loss on thermoforming net assets held for sale, decreased 25.2% from $21.5 million for the first nine months of 2000 to $16.1 million for the first nine months of 2001. The metal products segment reported lower sales, but higher operating earnings as price increases and cost management accounted for sustained earnings on lower comparable sales. Sales of consumer products were lower in the first nine months of 2001 compared with the same period a year ago due to unfavorable weather conditions, however, the Company anticipates sales for the fourth quarter of 2001 to be at similar levels to the comparable period a year ago. Due in part to lower anticipated requirements from the U.S. Mint, sales of zinc products in the fourth quarter of 2001 are expected to be below levels for the comparable period a year ago. In July 2001, proposed legislation was introduced to the Committee on Financial Services of the U.S. House of 13 Representatives which, if passed, could affect the use and demand for the U.S. penny. The proposed legislation calls for, among other things, the rounding of all cash transactions to the nearest nickel. Similar attempts to effectively eliminate or reduce circulation of the penny have been initiated in the past without success. The plastic products segment reported lower sales as demand in the Class 8 heavy truck market continues to be well below prior year levels. Sales of material handling products to the automotive industry were also lower than a year ago due to weakness in that sector. Operating earnings for the plastic products segment, while lower than the previous year, reflect the positive effect of profit improvement initiatives implemented in 2000 and 2001, which included realignment and consolidation of personnel and operations. See the "Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets" section above. Net sales within the metal products segment decreased from $155.6 million for the first nine months of 2000 to $143.8 million for the first nine months of 2001. Sales of consumer products decreased $5.3 million due primarily to unfavorable weather conditions in Canada and the western and northeastern portions of the United States. The decrease was offset somewhat by price increases on home canning and housewares products. Sales of zinc products decreased $6.9 million, due primarily to reduced demand for products to the automotive and construction markets, lower coinage sales volumes and a customer's decision to self-manufacture zinc carbon batteries in Mexico. The average price of zinc ingot decreased 9.6% in the first nine months of 2001 compared to the same period one year ago resulting in lower sales of approximately $0.8 million. The Company passes on fluctuations in zinc ingot prices to those customers who do not purchase their own zinc ingot. Net sales within the plastic products segment decreased from $141.7 million for the first nine months of 2000 to $107.0 million for the first nine months of 2001. Sales of industrial thermoformed parts decreased $29.0 million or 27.7%. The severe downturn in the heavy truck market resulted in a decline in sales to this market of approximately 51% or $11.9 million, compared to the first nine months of 2000. Sales of material handling products, primarily to the automotive industry and to the U.S. Postal Service, were off 41% or approximately $14.1 million. Bath product sales also decreased $3.1 million as the manufactured housing market remains depressed. Sales of injection molded products were $5.7 million lower due primarily to continued softness in the precision consumer products market, a decrease in tooling sales, as well as some customers moving production to in-house molding operations. Gross margin percentages increased from 24.5% for the first nine months of 2000 to 24.7% for the first nine months of 2001. Gross margin percentages on metal products increased from 31.6% for the first nine months of 2000 to 34.0% for the first nine months of 2001. Price increases for home canning and housewares products as well as lower manufacturing costs for zinc products, offset somewhat by lower overall sales volumes, accounted for the positive effect on gross margin for the metal products segment. Additionally, the gross margin for metal products for the current period reflects a $1.5 million charge for slow moving inventory, while the prior period's gross margin reflects a $1.2 million write-down of inventory relating to the Central European home canning test market. Gross margin percentages on plastic products decreased from 16.7% for the first nine months of 2000 to 12.0% for the first nine months of 2001. Margins on plastic products decreased due to lower sales volumes of thermoformed parts resulting from decreased demand in the heavy truck, material handling and manufactured housing markets. Smaller orders have reduced the length of production runs and, thus, diminished operating efficiencies. Lower sales of injection molded precision consumer products also contributed to the decline in margins. Selling, general and administrative expenses decreased from $45.6 million for the first nine months of 2000 to $40.6 million for the first nine months of 2001. Expenses within the metal products segment decreased primarily due to lower costs in connection with sales and marketing, warehousing and shipping. Expenses within the plastic products segment decreased primarily as a result of cost savings related to the realignment and consolidation of the Company's thermoforming operations, which occurred during the latter half of 2000. This decrease was offset somewhat by the inclusion of the expenses of Synergy World since its acquisition date of June 1, 2000. Selling, general and administrative expenses as a percentage of net sales increased from 15.4% for 14 the first nine months of 2000 to 16.2% for the first nine months of 2001. The increase in the percentage resulted primarily from lower sales, offset partially by the cost savings realized due to the realignment and consolidation of the thermoforming operations. Goodwill amortization increased slightly for the first nine months of 2001 compared to the same period last year due to the June 2000 acquisition of Synergy World. The Company incurred net special charges (credits) and reorganization expenses of $0.2 million for the first nine months of 2001, compared to $0.9 million for the same period one year ago. These amounts are comprised of the following (in millions):
Nine month period ended ----------------------- September 30, October 1, 2001 2000 ------------- ---------- Costs to evaluate strategic options.................. $ 1.4 $ 0.3 Discharge of deferred compensation obligations....... (4.1) -- Separation costs for officers........................ 2.6 -- Cost to exit facilities.............................. 1.3 -- Gain from insurance recovery......................... (1.0) -- Reduction of long-term performance-based compensation -- (1.6) Litigation charges................................... -- 2.2 ----- ----- $ 0.2 $ 0.9 ===== =====
Costs incurred by the Company to evaluate its strategic options were $1.4 million for the first nine months of 2001 compared to $0.3 million for the first nine months of 2000. During the first and second quarters of 2001, certain participants in the Company's deferred compensation plans agreed to forego balances in those plans in exchange for loans from the Company in the same amounts. The loans, which were completed during the second quarter, bear interest at the applicable federal rate and require the individuals to secure a life insurance policy having the death benefit equivalent to the amount of the loan payable to the Company. The Company has recognized $4.1 million of pre-tax income during 2001 related to the discharge of the deferred compensation obligations. Separation costs associated with the management reorganization announced by the Company on September 25, 2001 (see the "Management Reorganization" section above), were approximately $2.6 million. In August 2001, the Company announced that it would be consolidating its home canning metal closure production from its Bernardin Ltd. Toronto, Ontario facility into its Muncie, Indiana manufacturing operation. The total cost to exit the Toronto facility of $0.7 million was recorded in the third quarter of 2001 and includes a $0.3 million loss on the sale and disposal of equipment, and $0.4 million of employee severance costs. Also in August 2001, the Company announced that it had vacated its former Triangle Plastics facility in Independence, Iowa and integrated personnel and capabilities into its other operating and distribution facilities in the area. The total cost to exit this Iowa facility of $0.6 million was recorded in the third quarter of 2001 and includes $0.4 million in future lease obligations and an additional $0.2 million of costs related to the leased facility. During the second quarter of 2001, the Company recorded a pre-tax gain of $1.0 million in connection with an insurance recovery associated with a property casualty. During the second quarter of 2000, the Company recorded a pre-tax gain of $1.6 million related to a reduction in long-term performance-based compensation. 15 During the third quarter of 2000, the Company reached settlements in two legal disputes incurring $2.2 million in settlement and legal expenses in the aggregate. Net interest expense decreased from $9.2 million for the first nine months of 2000 to $8.4 million for the first nine months of 2001. The decrease is due primarily to lower average borrowings outstanding and lower interest rates in the first nine months of 2001 compared to those in the same period one year ago, offset somewhat by debt issuance costs associated with the amendment of the Company's debt agreement. The Company's effective tax rate was 34.0% for the first nine months of 2000 compared to 30.0% for the first nine months of 2001. The current year effective rate is lower than the statutory federal rate as it includes a valuation allowance for tax benefits associated with the loss on the sale of the thermoforming assets that may not be realizable. The effective rate in the prior year reflects the recognition of a tax benefit from exiting the Central European home canning test market. Earnings before interest, taxes, depreciation and amortization, excluding the loss on thermoforming net assets held for sale and special charges (credits) and reorganization expenses, were $32.6 million for the first nine months of 2001 as compared to $38.3 million for the same period in 2000. Results of Operations--Comparing Third Quarter 2001 to Third Quarter 2000 The Company reported net sales of $90.5 million for the third quarter of 2001, a 6.8% decrease from net sales of $97.1 million in the third quarter of 2000. Operating earnings, excluding the loss on thermoforming net assets held for sale, decreased 50.2% from $4.6 million for the third quarter of 2000 to $2.3 million for the third quarter of 2001. The metal products segment reported a similar level of sales, but higher operating earnings during the third quarter of 2001 as compared to the same period in 2000. Sales of consumer products were higher than a year ago due to price increases on home canning and housewares products. The Company anticipates sales of consumer products for the fourth quarter of 2001 to be at similar levels to the comparable period a year ago. Sales of zinc products were lower than the previous year due to reduced shipments to the U.S. Mint and the elimination of sales of zinc battery cans as the customer moved the production of batteries to Mexico. Lower demand for zinc products used in the automotive market also contributed to the decline. The Company anticipates sales of zinc products for the fourth quarter of 2001 to be below levels for the comparable period a year ago due in part to lower anticipated requirements from the U.S. Mint. The increase in operating earnings for the metal products segment for the current quarter compared to the same period last year reflects price increases and aggressive cost management, offset somewhat by lower sales volumes of zinc products as well as costs incurred related to the exit of the Bernardin facility in Toronto. The plastic products segment reported lower sales and operating earnings for the quarter. Sales of industrial thermoformed parts were lower in the third quarter of 2001 as the heavy truck market continues to experience depressed conditions and sales of material handling products, particularly to the automotive industry, have been negatively effected by economic conditions. Operating earnings for the plastic products segment, while lower than the previous year, reflect the positive effect of profit improvement initiatives implemented in 2000 and 2001, which included realignment and consolidation of personnel and operations. See the "Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets" section above. Net sales within the metal products segment were $55.8 million for the third quarter of 2001, remaining approximately the same as net sales for the third quarter of 2000. Sales of consumer products increased $1.4 million due primarily to price increases on home canning and housewares products. Sales of zinc products decreased $1.5 million due primarily to reduced demand for products to the automotive market, lower coinage sales volumes and a customer's decision to self-manufacture zinc carbon batteries in Mexico. The average price of zinc ingot decreased 19.0% in the third quarter of 2001 compared to the same period one year ago resulting in lower sales of approximately $0.4 million. The Company passes on fluctuations in zinc ingot prices to those customers who do not purchase their own zinc ingot. 16 Net sales within the plastic products segment decreased from $41.4 million for the third quarter of 2000 to $34.8 million for the third quarter of 2001. Sales of industrial thermoformed parts decreased $7.3 million or 24.0%. The severe downturn in the heavy truck market resulted in a decline in sales to this market of approximately 38% or $2.3 million, compared to the third quarter of 2000. Sales of material handling products, primarily to the automotive industry and to the U.S. Postal Service, were off 44% or approximately $4.6 million. Bath product sales also decreased $0.6 million as the manufactured housing market remains depressed. Sales of injection molded products increased by $0.7 million due primarily to an increase in tooling sales, as well as increased sales of healthcare products. Gross margin percentages increased from 23.8% for the third quarter of 2000 to 24.5% for the third quarter of 2001. Gross margin percentages on metal products increased from 32.3% for the third quarter of 2000 to 35.4% for the third quarter of 2001. Margins increased primarily due to price increases for home canning and housewares products offset somewhat by lower overall sales volumes of zinc products. Additionally, the gross margin percentage for metal products for the current period reflects a $1.5 million charge for slow moving inventory, while the prior period's gross margin reflects a $1.2 million write-down of inventory relating to the Central European home canning test market. Gross margin percentages on plastic products decreased from 12.5% in the third quarter of 2000 to 6.9% in the third quarter of 2001. Lower sales volumes of industrial thermoformed parts associated with the decreased demand in the heavy truck, material handling and manufactured housing markets resulted in the lower margins. Smaller orders have reduced the length of production runs and, thus, diminished operating efficiencies. Selling, general and administrative expenses decreased from $14.7 million for the third quarter of 2000 to $14.4 million for the third quarter of 2001. Expenses within the metal products segment for the current quarter remained approximately the same when compared to the same period one year ago. Expenses within the plastic products segment decreased due in part to cost savings related to the realignment and consolidation of the Company's thermoforming operations, which occurred during the latter half of 2000. The inclusion of certain expenses related to that realignment and consolidation in the prior year quarter also contributed to the decrease. Selling, general and administrative expenses as a percentage of net sales increased from 15.1% for the third quarter of 2000 to 15.9% for the third quarter of 2001. The increase in the percentage resulted primarily from lower sales, offset somewhat by the cost savings realized due to the realignment and consolidation of the thermoforming operations and the inclusion in the prior year quarter of certain expenses related to that action. Goodwill amortization remained approximately the same for the third quarter of 2001 compared to the same period last year. The Company incurred net special charges (credits) and reorganization expenses of $3.9 million for the third quarter of 2001, compared to $2.2 million for the same period one year ago. These amounts are comprised of the following (in millions):
Three month period ended ------------------------ September 30, October 1, 2001 2000 ------------- ---------- Separation costs for officers...................... $2.6 $ -- Cost to exit facilities............................ 1.3 -- Litigation charges................................. -- 2.2 ---- ---- $3.9 $2.2 ==== ====
Separation costs associated with the management reorganization announced by the Company on September 25, 2001 (see the "Management Reorganization" section above), were approximately $2.6 million. In August 2001, the Company announced that it would be consolidating its home canning metal closure production from its Bernardin Ltd. Toronto, Ontario facility into its Muncie, Indiana manufacturing operation. 17 The total cost to exit the Toronto facility of $0.7 million was recorded in the third quarter of 2001 and includes a $0.3 million loss on the sale and disposal of equipment, and $0.4 million of employee severance costs. Also in August 2001, the Company announced that it had vacated its former Triangle Plastics facility in Independence, Iowa and integrated personnel and capabilities into its other operating and distribution facilities in the area. The total cost to exit this Iowa facility of $0.6 million was recorded in the third quarter of 2001 and includes $0.4 million in future lease obligations and an additional $0.2 million of costs related to the leased facility. During the third quarter of 2000, the Company reached settlements in two legal disputes incurring $2.2 million in settlement and legal expenses in the aggregate. Net interest expense decreased from $3.0 million for the third quarter of 2000 to $2.2 million for the third quarter of 2001. The decrease is due primarily to lower average borrowings outstanding and lower interest rates in the third quarter of 2001 compared to those in the same period one year ago. The Company's effective tax rate for the third quarter of 2001 was 30.5%. The rate is lower than the statutory federal rate as it includes a valuation allowance for tax benefits associated with the loss on the sale of the thermoforming assets that may not be realizable. The Company did not record a provision for income taxes in the third quarter of 2000 as the Company adjusted its year-to-date tax provision in that quarter to reflect the recognition of a tax benefit for the losses incurred in the Central European home canning test market. Earnings before interest, taxes, depreciation and amortization, excluding the loss on thermoforming net assets held for sale and special charges (credits) and reorganization expenses, were $11.6 million for the third quarter of 2001 as compared to $12.3 million for the same period in 2000. Financial Condition, Liquidity and Capital Resources In February 2001, the Company entered into an agreement with its lenders to amend certain provisions of its term loan and revolving credit facility and waive violations of its minimum fixed charge ratio and maximum leverage ratio at December 31, 2000. The amendment reduced the revolving credit facility from $100 million to $50 million, provides for the Company's accounts receivable and inventory to be pledged as collateral, and modified certain financial covenants. In November 2001, the Company entered into an agreement with its lenders to amend certain provisions of its term loan and revolving credit facilities and to waive violations of its minimum net worth, minimum fixed charge ratio and maximum leverage ratio which resulted primarily from the loss on thermoforming net assets held for sale. The amendment reduced the revolving credit facility from $50 million to $40 million, shortened the facility termination date by one year, accelerated the required principal payments to conform with the shortened term of the facility, requires that the proceeds from the sale of the thermoforming assets be used to prepay term debt and modified certain financial covenants. Working capital (excluding the current portion of long-term debt and notes payable, and excluding for the current period the effects of the classification of net assets held for sale as described in the "Pending Sale of Triangle, TriEnda and Synergy World Thermoforming Assets" section above) decreased $20.8 million from $65.0 million at December 31, 2000 to $44.1 million at September 30, 2001. Accounts payable increased $5.4 million due primarily to an increased focus on cash flow and the timing of payments. Accounts receivable increased $3.5 million due to the seasonal sales of consumer products. Inventories decreased $14.3 million due primarily to an increased focus on inventory management and due to seasonal consumer product activity. Cash and cash equivalents increased $3.5 million, while short-term borrowings decreased $16.0 million. Capital expenditures were $8.3 million for the first nine months of 2001 compared to $10.8 million for the same period in 2000 and are largely related to maintaining facilities and improving manufacturing efficiencies. 18 Capital expenditures during the first nine months of 2001 related to, among other items, injection molding machines, a co-extrusion line for the production of plastic sheet used in thermoforming operations and the repair and replacement of portions of a building and equipment damaged in a weather-related roof collapse. The Company believes that existing funds, cash generated from operations and its debt facility are adequate to satisfy its working capital and capital expenditure requirements for the foreseeable future. However, the Company may raise additional capital from time to time to take advantage of favorable conditions in the capital markets or in connection with the Company's corporate development activities. Contingencies The Company is involved in various legal disputes in the ordinary course of business. In addition, the Environmental Protection Agency has designated the Company as a potentially responsible party, along with numerous other companies, for the clean up of several hazardous waste sites. Information at this time does not indicate that disposition of any of the legal or environmental disputes the Company is currently involved in will have a material, adverse effect upon the financial condition, results of operations, cash flows or competitive position of the Company. Stock Plans Effective September 24, 2001, the Company established the 2001 Stock Option Plan for the purpose of granting options for the purchase of common shares to the Company's executive officers and independent directors. Options vest to, and are exercisable by, participants on the earlier of 1) the Company's closing stock price equals or exceeds $17 per share or 2) the seventh anniversary of the grant date. During September, 570,000 options were granted to participants under this new plan. The Plan and all options granted are contingent on ratification of the Plan by the Company's shareholders on or before September 23, 2002. New Accounting Pronouncements The Company adopted Statement of Financial Accounting Standard 133 (SFAS 133), Accounting for Derivative Instruments and Hedging Activities, on January 1, 2001. The statement requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Hedge ineffectiveness, the amount by which the change in the value of a hedge does not exactly offset the change in the value of the hedged item, will be immediately recognized in earnings. The adoption of SFAS 133 on January 1, 2001 did not have a material impact on the Company's results of operations or financial position. In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill (and intangible assets deemed to have indefinite lives) will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. The Company will apply the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of 2002. During 2002, the Company will perform the first of the required impairment tests of goodwill and indefinite lived intangible assets, but does not anticipate a material impact on its results of operations or financial position. In June 2001, the FASB issued Statement of Financial Accounting Standard No. 143 (SFAS 143), Accounting for Asset Retirement Obligations, effective for fiscal years beginning after June 15, 2002. This standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in 19 which it is incurred. SFAS 143 is effective for the Company beginning with the first quarter of 2003, and its adoption is not expected to have a material impact on the Company's results of operations or financial position. In August 2001, the FASB issued Statement of Financial Accounting Standard No. 144 (SFAS 144), Accounting for the Impairment or Disposal of Long-Lived Assets, effective for fiscal years beginning after December 15, 2001. This standard supercedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and provides a single accounting model for long-lived assets to be disposed of. The new standard also supersedes the provisions of APB Opinion 30 with regard to reporting the effects of a disposal of a segment of a business and requires expected future operating losses from discontinued operations to be displayed in discontinued operations in the period(s) in which the losses are incurred. SFAS 144 is effective for the Company beginning with the first quarter of 2002, and its adoption it is not expected to have a material impact on the Company's results of operations or financial position. Forward-Looking Information This Quarterly Report on Form 10-Q includes certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Those statements include, but may not be limited to, discussions regarding expectations of future sales and profitability, anticipated demand for the Company's products and expectations regarding operating and other expenses. Reliance on forward-looking statements involves risks and uncertainties. Although the Company believes that the forward-looking statements contained herein are based on reasonable assumptions, any of those assumptions could prove to be inaccurate. As a result, the forward-looking statements based on those assumptions could also be incorrect. Please see the Company's Annual Report on Form 10-K for 2000 for a list of factors which could cause the Company's actual results to differ materially from those projected in the Company's forward-looking statements. Item 3. Quantitative and Qualitative Disclosure About Market Risk In general, business enterprises can be exposed to market risks including fluctuations in commodity prices, foreign currency values, and interest rates that can affect the cost of operating, investing, and financing. The Company's exposures to these risks are low. Over 90% of the Company's zinc business is conducted on a tolling basis whereby customers supply zinc to the Company for processing, or supply contracts provide for fluctuations in the price of zinc to be passed on to the customer. The Company from time to time invests in short-term financial instruments with original maturities usually less than thirty days. The Company is exposed to short-term interest rate variations with respect to London Interbank Offered Rate ("LIBOR") on its term and revolving debt obligations. A portion of this risk has been managed through the use of interest rate swaps, completed in 1999, whereby the Company effectively pays a maximum interest rate of 7.98% on 60% of the outstanding term debt balance for a period of three years. Changes in LIBOR interest rates would affect the earnings of the Company either positively or negatively depending on the changes in short-term interest rates. Assuming that LIBOR rates increased 100 basis points over period end rates on the outstanding term and revolver debt, the Company's interest expense, after considering the effects of its interest rate swap, would have increased by approximately $430,000 and $485,000 for the nine month periods ended September 30, 2001 and October 1, 2000, respectively. The amount was determined by considering the impact of the hypothetical interest rates on the Company's borrowing cost, short-term investment rates, interest rate swap and estimated cash flow. Actual changes in rates may differ from the assumptions used in computing this exposure. The Company does not invest or trade in any derivative financial or commodity instruments, nor does it invest in any foreign financial instruments. 20 PART II. OTHER INFORMATION Item 4. Submission of matters to a vote of security holders The Company held its Annual Meeting of Shareholders on July 27, 2001. Matters voted upon by proxy were the election of three directors for three-year terms expiring in 2004 and the ratification of the appointment of Ernst & Young LLP as independent accountants for 2001. The results of the vote are as follows:
Voted For Voted Against Withheld/Abstained --------- ------------- ------------------ Election of directors for terms expiring in 2004: Ian G. H. Ashken........................................ 4,820,869 -- 137,112 Richard L. Molen........................................ 4,812,490 -- 145,491 Lynda W. Popwell........................................ 4,813,088 -- 144,893 Appointment of Ernst & Young LLP as independent accountants for 2001................................................. 4,929,333 24,632 4,016
Item 6. Exhibits and Reports on Form 8-K a. Exhibits 10.1 Separation Agreement between Jerry T. McDowell and Alltrista Corporation, dated September 19, 2001. 10.2 Separation Agreement between Garnet E. King and Alltrista Corporation, dated September 19, 2001. 10.3 Separation Agreement between A. Bruce Buchholz and Alltrista Corporation, dated September 14, 2001. 10.4 Separation Agreement between Kevin D. Bower and Alltrista Corporation, dated September 25, 2001. 10.5 Separation Agreement between Thomas B. Clark and Alltrista Corporation, dated October 5, 2001. 10.6 Alltrista Corporation 2001 Stock Option Plan, effective September 24, 2001. 10.7 Asset Purchase Agreement by and between Alltrista Plastics Corporation, TriEnda Corporation, Quoin Corporation, Alltrista Corporation and Wilbert, Inc., dated October 15, 2001.
b. Reports on Form 8-K In a Form 8-K (Commission File Number 0-21052) filed August 21, 2001, the Company announced that effective July 19, 2001 it had amended its existing Stockholder Rights Plan to increase from 10 percent to 15 percent the common stock ownership threshold at which any person or group becomes an "acquiring person" and triggers certain provisions under the Rights Plan. As revised, if a person or group becomes the beneficial owner of 15 percent or more of the outstanding shares of Alltrista common stock, subject to certain exceptions, holders of rights (other than the acquiring person) would have the right to purchase Alltrista common stock at a 50 percent discount. In a Form 8-K (Commission File Number 0-21052) filed September 28, 2001, the Company filed a press release dated September 25, 2001 announcing the departure from the Company of Thomas B. Clark, the Company's Chairman, President and Chief Executive Officer, and Kevin D. Bower, the Company's Senior Vice 21 President and Chief Financial Officer. The Company's Board of Directors also recognized the contributions and efforts of Mr. Clark and Mr. Bower and announced the appointment of Martin E. Franklin as Chairman and Chief Executive Officer and Ian G.H. Ashken as Vice Chairman, Chief Financial Officer and Secretary. In a Form 8-K (Commission File Number 0-21052) filed October 17, 2001, the Company filed two press releases dated October 15, 2001. The Company's first release announced that it has signed a definitive agreement with Wilbert, Inc. to sell its Triangle, TriEnda and Synergy World plastic thermoforming businesses. The Company's second release announced the Company's decision to close its Indianapolis headquarters, the Company's intent to renegotiate its current financing arrangements, the Company's withdrawal of its previously announced earnings guidance for 2001 and the Company's termination of its agreement with Bear Stearns & Co., Inc. to pursue a review of the Company's strategic options. 22 EX-10.1 3 dex101.txt SEPARATION AGREEMENT BETWEEN JERRY T. MCDOWELL Exhibit 10.1 SEPARATION AGREEMENT AND GENERAL RELEASE ---------------------------------------- Caution: Read Carefully This Is a Release in Full THIS SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement") is made and entered into this 19th day of September 2001, between Jerry T. McDowell ("Employee"), and Alltrista Corporation (the "Company"). WHEREAS, the Company employed Employee in the position of Group Vice President, Metal Products; WHEREAS, the Company 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 the Company and the conclusion of that employment; NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, it is agreed as follows: 1. Definitions. ----------- (a) "Company" means Alltrista Corporation and all of its past and present officers, directors, employees, trustees, agents, parent, 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, and each entity's subsidiaries, predecessors, successors, and assigns, and all other entities, persons, firms, or corporations liable or who might be claimed to be liable to Employee, none of whom admit any liability, but all of whom expressly deny any such liability. (b) "Competitor" means any person or entity that competes with the Company's business of manufacturing, distributing, selling, packaging or shipping either home-food preservation products or zinc metal coinage. (c) "Customer" or "Client" means any person or entity which, within the twelve (12) month period immediately preceding the Separation Date (as defined below), used or purchased or contracted to use or purchase any services or products from the Company; including, but not limited to, the following: the United States Mint, the Royal Canadian Mint, Wal-Mart Stores, Inc., SuperValu, Inc., Kroger Co., and Consolidated Stores Corp., and the affiliates and subsidiaries thereof. (d) "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". (e) "Performance Share Plan" means the Alltrista Corporation 1998 Performance Share Plan, effective as of January 1, 1998, and any amendments thereto. (f) "Restricted Period" means the period of time during the Consulting Term (as defined below) and any extension of the Restricted Period pursuant to paragraph 10 below. (g) "Revocation Period" means the seven (7) calendar day period after Employee signs this Agreement, not counting the day Employee actually signs it. (h) "Separation Date" means September 28, 2001. (i) "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. (j) "Stock Option Plan" means the Alltrista Corporation 1998 Stock Option Plan. (k) "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. 2. Employee's Release Of Claims. In consideration of the Company's ---------------------------- 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, 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 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; the Rehabilitation Act of 1973; the Civil Rights Act of 1991; the Civil Rights Act of 1866 (42 U.S.C. ss.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, including but not limited to, claims for damages of any kind and all claims for costs, expenses and attorneys fees. 3. Separation Payments. Contingent upon Employee's execution of this ------------------- 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(e). 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 2 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 4 below, and that the Company is not otherwise obligated to make 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, other than those mentioned in this agreement are hereby extinguished. (a) Initial Payment. Upon the expiration of the Revocation Period, the --------------- Company shall pay to Employee an amount equal to Three Hundred and Thirty-Nine Thousand Dollars ($339,000). (b) COBRA. Upon the expiration of the Revocation Period, the Company shall ----- pay to Employee a lump sum cash payment in an amount equal to twelve (12) months of premium payments for Employee's insurance coverage under COBRA. (c) Performance Share Plan. Employee shall participate in the Performance ---------------------- Share Plan through the Separation Date and any payouts to Employee thereunder shall be based on performance factors as of December 31, 2001. Any shares earned by Employee under the Performance Share Plan shall be issued to Employee no later than February 28, 2002. (d) Incentive Compensation. Incentive compensation for 2001 shall be based ---------------------- on Employee's performance factor for that year and Employee's salary earned from January 1, 2001 through the Separation Date. The Company shall pay any such incentive compensation and any remaining bank balance to Employee no later than February 28, 2002. (e) Stock Options/Restricted Stock. Effective on the Separation Date, all ------------------------------ 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 June 30, 2002 or the Options shall expire. Effective on the Separation Date, all restrictions on any restricted stock grants made to Employee prior to the Separation Date shall automatically lapse. 4. Consulting Services. Employee agrees during the period commencing on ------------------- the Effective Date and continuing until the third 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. 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 Restricted Period (and any 3 extension thereof) and upon prior written approval of the Company (which such approval will not be unreasonably withheld), the Employee may consult with any person or business entity. Upon the expiration of the Restricted Period (and any extension thereof) the company's prior approval is not required. 5. Return Of The Company's Property/Non-Disparagement. On or 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. 6. Confidentiality. The Employee shall maintain the fact of and terms and --------------- 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. 7. Confidential Information. Employee acknowledges that in the course of ------------------------ 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 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. 8. Non-Competition. Employee has become acquainted with the affairs of --------------- the 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, during the Restricted Period Employee agrees that he SHALL NOT either directly or indirectly, perform on behalf of a Competitor, Vendor, 4 Customer or Client the same or similar services as those Employee performed for the Company while employed by the Company. 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 8 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 8 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 (and any extension thereof). 9. Non-Solicitation. 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 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 9 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 (and any extension thereof). 10. Change In Ownership. The Company and Employee recognize that any ------------------- potential purchaser of the Company will value Employee's non-competition with the Company given Employee's years of industry experience. Accordingly, the Company and Employee have agreed to a 24-month extension of the Restricted Period of this Agreement, in the event of a Change in Ownership. For purposes of this Agreement, a Change in Ownership is defined as: the entering into any discussions by the Company prior to June 30, 2002, the consummation of which occurs within six (6) months of June 30, 2002 and results in a merger or consolidation of the Company with any other corporation, company, or entity, other than (a) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such 5 merger or consolidation; or (b) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities. For purposes of this Agreement, Change in Ownership also means the entering into any discussions by the Company prior to June 30, 2002, the consummation of which occurs within six (6) months of June 30, 2002 and results in a complete liquidation of the Company, the sale or disposition by the Company of all or substantially all of the Company's assets, or the purchase by a third party of more than fifty percent (50%) of the Company's outstanding common stock. Notwithstanding anything contained herein to the contrary, Employee hereby recognizes and agrees that a sale by the Company of the thermoforming division of the Company, alone, shall not constitute a Change in Ownership. Upon a Change in Ownership of the Company (as defined above), the Restricted Period shall extend for a period of twenty-four (24) months and the Company shall pay Employee as soon as reasonably practicable after the Change in Ownership Eight Hundred and Eighty-Five Thousand Dollars ($885,000). 11. Reasonableness Of Terms. The parties each stipulate and agree that ----------------------- the terms and covenants contained in paragraphs 6, 7, 8 and 9 are fair and reasonable in all respects and that these restrictions are designed for the reasonable protection of the Company's business. 12. Remedies. The Employee recognizes that any breach of the restrictive -------- covenants of this Agreement will cause irreparable injury to the goodwill and proprietary rights of the Company, inadequately 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 injunctive relief in the form of a temporary restraining order, without notice, preliminary injunction, or permanent injunction against the Employee to enforce this Agreement. 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. 13. Twenty-One Calendar Day Period To Consider This Agreement. Employee --------------------------------------------------------- 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. 6 14. Right To Revoke This Agreement. This Agreement will not become ------------------------------ effective or enforceable unless and until the Revocation Period has expired without a revocation by Employee. 15. Procedure For Accepting Or Revoking The Agreement. To accept the ------------------------------------------------- terms of this Agreement, Employee must deliver the Agreement, after it has been signed and dated by him, to 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. David Tolbert, Vice President, Human Resources and Administration, 5875 Castle Creek Parkway North Drive, Suite 440, Indianapolis, Indiana 46250. 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. 16. Representations And Warranties. Employee hereby represents and ------------------------------ warrants to the Company (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, except as specifically set forth in this Agreement; (c) Employee voluntarily releases any claims against the Company, and understands that, in consideration of accepting the consideration described above, he may be giving up possible administrative and/or legal claims against the Company; however, no rights or claims arising after the execution of this agreement are hereby waived; (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. 17. Severability. If any provision of this Agreement is or becomes ------------ invalid, 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. 18. Amendment and Waiver. Neither this Agreement nor any term, covenant, -------------------- 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 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. 7 19. Counterparts. This Agreement may be executed in one or more identical ------------ 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. 20. Assignment. 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. 21. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties with respect to the subject matter hereof. 22. Jurisdiction and Venue; Governing Law. Any action to enforce, ------------------------------------- challenge 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 Marion County, Indiana, except that the Company may elect, at its sole discretion, to litigate the action in the county or state where Employee can be found. 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. 23. Headings. The headings of the sections of this Agreement have been -------- inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. [Signatures On Next Page] 8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. "COMPANY" ALLTRISTA CORPORATION /s/ Thomas B. Clark By: Thomas B. Clark Its: Chairman, President and CEO "EMPLOYEE" /s/ Jerry T. McDowell Jerry T. McDowell EX-10.2 4 dex102.txt SEPARATION AGREEMENT BETWEEN GARNET E. KING Exhibit 10.2 SEPARATION AGREEMENT AND GENERAL RELEASE ---------------------------------------- Caution: Read Carefully This Is a Release in Full THIS SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement") is made and entered into this 19th day of September 2001, between Garnet E. King ("Employee"), and Alltrista Corporation (the "Company"). WHEREAS, the Company employed Employee in the position of Corporate Secretary and Director of Executive Services; WHEREAS, the Company 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 the Company and the conclusion of that employment; NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, it is agreed as follows: 1. Definitions. ----------- (a) "Company" means Alltrista Corporation and all of its past and present officers, directors, employees, trustees, agents, parent, 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, and each entity's subsidiaries, predecessors, successors, and assigns, and all other entities, persons, firms, or corporations liable or who might be claimed to be liable to Employee, none of whom admit any liability, but all of whom expressly deny any such liability. (b) "Competitor" means any person or entity that competes with the Company's business of manufacturing, distributing, selling, packaging or shipping either home-food preservation products or zinc metal coinage. (c) "Customer" or "Client" means any person or entity which, within the twelve (12) month period immediately preceding the Separation Date (as defined below), used or purchased or contracted to use or purchase any services or products from the Company; including, but not limited to, the following: the United States Mint, the Royal Canadian Mint, Wal-Mart Stores, Inc., SuperValu, Inc., Kroger Co., and Consolidated Stores Corp., and the affiliates and subsidiaries thereof. (d) "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". (e) "Performance Share Plan" means the Alltrista Corporation 1998 Performance Share Plan, effective as of January 1, 1998, and any amendments thereto. (f) "Restricted Period" means the period of time during the Consulting Term (as defined below) and any extension of the Restricted Period pursuant to paragraph 9 below. (g) "Revocation Period" means the seven (7) calendar day period after Employee signs this Agreement, not counting the day Employee actually signs it. (h) "Separation Date" means September 28, 2001. (i) "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. (j) "Stock Option Plan" means the Alltrista Corporation 1998 Stock Option Plan. (k) "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. 2. Employee's Release Of Claims. In consideration of the Company's ---------------------------- 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, 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 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; the Rehabilitation Act of 1973; the Civil Rights Act of 1991; the Civil Rights Act of 1866 (42 U.S.C. ss.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, including but not limited to, claims for damages of any kind and all claims for costs, expenses and attorneys fees. 3. Separation Payments. Contingent upon Employee's execution of this ------------------- 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(e). 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 2 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 4 below, and that the Company is not otherwise obligated to make the below described Separation Payments. Employee also acknowledges that all other forms of compensation, of whatever kind, that may be due to her by the Company are hereby extinguished. (a) Initial Payment. Upon the expiration of the Revocation Period, the --------------- Company shall pay to Employee an amount equal to Eighty-Four Thousand, Three Hundred and Seventy-Five Dollars ($84,375). (b) COBRA. Upon the expiration of the Revocation Period, the Company shall ----- pay to Employee a lump sum cash payment in an amount equal to twelve (12) months of benefit payments for Employee's insurance coverage under COBRA. (c) Performance Share Plan. Employee shall participate in the Performance ---------------------- Share Plan through the Separation Date and any payouts to Employee thereunder shall be based on performance factors as of December 31, 2001. Any shares earned by Employee under the Performance Share Plan shall be issued to Employee no later than February 28, 2002. (d) Incentive Compensation. Incentive compensation for 2001 shall be based ---------------------- on Employee's performance factor for that year and Employee's salary earned from January 1, 2001 through the Separation Date. The Company shall pay any such incentive compensation and any remaining bank balance to Employee no later than February 28, 2002. (e) Stock Options. Effective on the Separation Date, all 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 June 30, 2002 or the Options shall expire. 4. Consulting Services. Employee hereby acknowledges the unique nature of ------------------- the services she performed for the Company prior to the Separation Date and her knowledge of the Company's business, operations, administration and policies. Employee agrees during the period commencing on 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; including without limitation advisory and consulting services relating to those services Employee performed for the Company prior to the Separation Date. 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 herself 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 3 other relationship with Company except as an independent contractor with Company under this Agreement. Employee understands that this consulting provision was a material and significant inducement for the Company to enter into this Agreement. During the Restricted Period (and any extension thereof), the Employee will consult with no other person or business entity. 5. Return Of The Company's Property/Non-Disparagement. On or before the -------------------------------------------------- Effective Date, Employee will return to the Company all of the Company's property that is in her 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. 6. Confidentiality. The Employee shall maintain the fact of and terms and --------------- 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. 7. Confidential Information. Employee acknowledges that in the course of ------------------------ her employment with the Company she 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 her by the Company, or learned by her while in the Company's employ; nor shall Employee use any such information for her benefit or for the 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. 8. Non-Solicitation. 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 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 4 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 8 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 (and any extension thereof). 9. Change In Ownership. The Company and Employee recognize that any ------------------- potential purchaser of the Company will value Employee's consulting services to the Company given Employee's years of industry experience. Accordingly, the Company and Employee have agreed to a 24-month extension of the Restricted Period of this Agreement, in the event of a Change in Ownership. For purposes of this Agreement, a Change in Ownership is defined as: the signing of a letter of intent or the entering into any agreement by the Company prior to June 30, 2002, the consummation of which occurs within six (6) months of June 30, 2002 and results in a merger or consolidation of the Company with any other corporation, company, or entity, other than (a) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (b) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities. For purposes of this Agreement, Change in Ownership also means the signing of a letter of intent or the entering into any agreement by the Company prior to June 30, 2002, the consummation of which occurs within six (6) months of June 30, 2002 and results in a complete liquidation of the Company, the sale or disposition by the Company of all or substantially all of the Company's assets, or the purchase by a third party of more than fifty percent (50%) of the Company's outstanding common stock. Notwithstanding anything contained herein to the contrary, Employee hereby recognizes and agrees that a sale by the Company of the thermoforming division of the Company shall not constitute a Change in Ownership. Upon a Change in Ownership of the Company (as defined above), the Restricted Period shall extend for a period of twenty-four (24) months and the Company shall pay Employee as soon as reasonably practicable after the Change in Ownership Two Hundred and Thirty-Six Thousand Dollars ($236,000). 10. Reasonableness Of Terms. The parties each stipulate and agree that the ----------------------- terms and covenants contained in paragraphs 6, 7, and 8 are fair and reasonable in all respects and that these restrictions are designed for the reasonable protection of the Company's business. 11. Remedies. The Employee recognizes that any breach of the restrictive -------- covenants of this Agreement will cause irreparable injury to the goodwill and proprietary rights of the 5 Company, inadequately 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. 12. Twenty-One Calendar Day Period To Consider This Agreement. Employee --------------------------------------------------------- hereby recognizes and acknowledges that her signing of this Agreement before the end of the 21-day Signing Period will be her personal and voluntary decision to do so. Employee further recognizes that if she 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. 13. Right To Revoke This Agreement. This Agreement will not become ------------------------------ effective or enforceable unless and until the Revocation Period has expired without a revocation by Employee. 14. Procedure For Accepting Or Revoking The Agreement. To accept the terms ------------------------------------------------- of this Agreement, Employee must deliver the Agreement, after it has been signed and dated by her, to the Company by hand or by mail and it must be received by the Company within the Signing Period. To revoke her acceptance, Employee must deliver a written, signed statement of the revocation of her 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. David Tolbert, Vice President, Human Resources and Administration, 5875 Castle Creek Parkway North Drive, Suite 440, Indianapolis, Indiana 46250. If Employee chooses to deliver her 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. 15. Representations And Warranties. Employee hereby represents and ------------------------------ warrants to the Company (with the understanding that the Company has relied upon such representations and warranties) that: (a) she 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, except as specifically set forth in this Agreement; (c) Employee voluntarily releases any claims against the Company, and understands that, in consideration of 6 accepting the consideration described above, she may be giving up possible future administrative and/or legal claims against the Company; (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 she 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. 16. Severability. If any provision of this Agreement is or becomes ------------ invalid, 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. 17. Amendment and Waiver. Neither this Agreement nor any term, covenant, -------------------- 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 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. 18. Counterparts. This Agreement may be executed in one or more identical ------------ 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. 19. Assignment. 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. 20. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties with respect to the subject matter hereof. 21. Jurisdiction and Venue; Governing Law. Any action to enforce, ------------------------------------- challenge 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 Marion County, Indiana, except that the Company may elect, at its sole discretion, to litigate the action in the county or state where Employee can be found. 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. 22. Headings. The headings of the sections of this Agreement have been -------- inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. [Signatures On Next Page] 7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. "COMPANY" ALLTRISTA CORPORATION /s/ Thomas B. Clark By: Thomas B. Clark Its: Chairman, President and CEO "EMPLOYEE" /s/ Garnet E. King Garnet E. King EX-10.3 5 dex103.txt SEPARATION AGREEMENT BETWEEN A.BRUCE BUCHHOLZ Exhibit 10.3 SETTLEMENT AGREEMENT AND RELEASE -------------------------------- THIS SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is voluntarily entered into by and between Bruce Buchholz (hereinafter "Mr. Buchholz") and ALLTRISTA CORPORATION (hereafter "ALLTRISTA"). Recitals -------- WHEREAS, Mr. Buchholz has heretofore been employed by ALLTRISTA since October 23, 2000 as the President of the Alltrista Thermoformed Products Division; WHEREAS, Mr. Buchholz and ALLTRISTA have mutually determined it is in the best interest of both parties that the employment relationship should end; and WHEREAS, Mr. Buchholz and ALLTRISTA desire to amicably and mutually compromise and fully settle, finally and completely, all claims, allegations and assertions that may now or hereafter exist between them, known or unknown. Agreement --------- NOW, THEREFORE, In consideration of the mutual understandings and covenants and the release contained herein, Mr. Buchholz and ALLTRISTA hereby voluntarily agree as follows: 1. Vacation and Separation Pay. Mr. Buchholz acknowledges that his --------------------------- employment with ALLTRISTA ceased on September 14, 2001. ALLTRISTA has committed to pay Mr. Buchholz all wages accrued and due and owing to him through September 14, 2001. Mr. Buchholz acknowledges he has no earned, unused vacation existing at the time of termination. Mr. Buchholz also acknowledges that he is entitled to two weeks of severance pay upon termination of his employment in the amount of seven thousand eight hundred fifteen and 38/100 ($7,815.38). Such payment shall be subject to deductions and tax withholdings as may be required by applicable federal, state and local laws. 2. Additional Separation Benefits. In addition to the benefits ALLTRISTA ------------------------------ has already agreed to provide to Mr. Buchholz as described above in paragraph 1, ALLTRISTA agrees to provide the following additional consideration to Mr. Buchholz in exchange for Mr. Buchholz' commitments as described in the remaining paragraphs (3-20) of this Agreement: (a) ALLTRISTA will pay to Mr. Buchholz additional severance pay in the gross amount of forty-two thousand nine hundred eighty-four and 62/100 dollars ($42,984.62), payable in a single lump sum within thirty (30) calendar days after the complete execution of this Agreement. Such payment shall be subject to deductions and tax withholdings as may be required by applicable federal, state and local laws. (b) Mr. Buchholz's participation in ALLTRISTA-sponsored employee benefit plans shall expire on September 14, 2001. ALLTRISTA shall provide Mr. Buchholz with the 1 opportunity to elect extended medical coverage after September 14, 2001 in accordance with applicable federal law. Provided Mr. Buchholz elects coverage under COBRA, the entire cost of this extended medical coverage shall be paid by Mr. Buchholz. (c) ALLTRISTA agrees to provide additional consideration to Mr. Buchholz in the amount of one thousand four hundred thirty-five dollars ($1,435.00). Such payment shall be subject to deductions and tax withholdings as may be required by applicable federal, state and local laws. 3. Release. In return for the additional consideration being provided to ------- Mr. Buchholz by ALLTRISTA as set forth in paragraph 2 above, Mr. Buchholz (for himself and his personal representatives, heirs and assigns) HEREBY KNOWINGLY AND VOLUNTARILY WAIVES, RELEASES AND FOREVER DISCHARGES ALLTRISTA and its predecessors, successors, parent company, divisions, subsidiaries and affiliates (and their current or former officers, directors, employees, agents, shareholders, successors and assigns), and any and all employee benefit plans (and any fiduciary of such plans) sponsored by any of them, of and from any and all claims (including, but not limited to, claims for attorneys' fees), demands, losses, damages, agreements, actions, suits, debts, charges, complaints, promises or causes of action (known or unknown) which he now has or may later discover or which may hereafter exist against them, or any of them, in connection with or arising directly or indirectly out of or in any way related to any and all matters, transactions, events or other things occurring prior to the date hereof, including all those arising out of or in connection with his employment with ALLTRISTA or the cessation of his employment or his retirement, or which occurred during the course of his employment with ALLTRISTA or incidental thereto, and whether pursuant to common law, statute, ordinance, regulation or other including claims of fraud or misrepresentation in the making or execution of the Agreement. Claims or action released herein include, but are not limited to, those based on allegations of wrongful discharge and/or breach of contract, those alleging discrimination on the basis of race, color, sex, religion, national origin, age or disability under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Rehabilitation Act of 1973, the Equal Pay Act of 1963, the Americans With Disabilities Act of 1990, the Civil Rights Act of 1991 (all as amended) or any other federal, state or local law, ordinance, rule or regulation; and those arising under the Employee Retirement Income Security Act of 1974, as amended. The parties intend this release to be broadly construed in favor of ALLTRISTA. Mr. Buchholz agrees and understands that any claims he may have under the aforementioned statutes or any other federal, state or local law, ordinance, rule or regulation are effectively waived by the Agreement. This Agreement does not, however, release any of Mr. Buchholz' rights under the ADEA or workers' compensation rights or claims that may arise after the date on which Mr. Buchholz may sign this Agreement, and does not release the rights and obligations of the parties under this Agreement. 4. Actions. Mr. Buchholz agrees to take any action necessary to carry out ------- the purpose and intent of this Agreement. The amounts to be paid to Mr. Buchholz pursuant to paragraph 2 of this Agreement are a supplement to, and not in lieu of, the amounts described in paragraph 1 of this Agreement. 5. Cooperation. Mr. Buchholz agrees that now and in the future he will ----------- provide his full and unqualified cooperation to ALLTRISTA in the preparation for and the attendance at any and all legal proceedings that may arise out of any matter that took place during his tenure. 2 6. Covenant Not to Sue. In consideration for the sum being provided to ------------------- Mr. Buchholz by ALLTRISTA as set forth in paragraph 2 above, Mr. Buchholz AGREES that: (a) he will never institute a legal or equitable action in any state or federal court against ALLTRISTA, or any of the other persons or entities released herein, with respect to the matters herein resolved and settled; (b) he will not seek to participate in, nor will he accept any benefit from, any class action or other action relating to the claims released herein; and, (c) he will not offer assistance or testimony against ALLTRISTA or any of the other persons or entities released herein brought by any other individual or individuals, unless instructed to do so by a court, agency or other body and then only after he has given ALLTRISTA prompt written notice of any such instruction. 7. Confidential Information. In further consideration for the sum being ------------------------ provided to Mr. Buchholz by ALLTRISTA as set forth in paragraph 2, above, Mr. Buchholz AGREES: (a) That as used herein "Confidential Information" shall mean all financial data, reports, notes, spreadsheets, ideas, suggestions, innovations, conceptions, discoveries, inventions, improvements, technological developments, methods, processes, specifications, formulae, compositions, techniques, systems, machines, devices, computer software and programs, memoranda, work sheets, lists of actual or potential customers and suppliers, works of authorship, products, data and information in any form and on any medium which ALLTRISTA treats as confidential or that concern or relate to any aspect of the actual or contemplated business of ALLTRISTA or its subsidiaries, including without limitation, any market research, technical or scientific research, and business or marketing plans. (b) That as of the date of this Agreement, Mr. Buchholz has returned to ALLTRISTA all Confidential Information, in whatever form, in his possession or under his control and that he has not retained any portion of the Confidential Information. (c) That neither he nor any of his agents or representatives will disclose, take or use any Confidential Information, either directly or indirectly without the prior, written authorization of ALLTRISTA or as may be required by any court or governmental agency, provided that Mr. Buchholz will promptly notify ALLTRISTA of his receipt of any notice regarding disclosure of Confidential Information requested by any Court order or governmental agency to permit ALLTRISTA to oppose the disclosure of the Confidential Information. (d) Mr. Buchholz agrees that ALLTRISTA would suffer severe, irreparable harm in the event there is an unauthorized disclosure or use of Confidential Information and that in addition to any other remedies, ALLTRISTA shall be entitled to obtain injunctive relief with Mr. Buchholz being responsible for all costs incurred by ALLTRISTA relating thereto, including but not limited to all attorney's fees. (e) This paragraph 6 shall only prohibit the taking, use or disclosure of Confidential Information and shall not be construed as limiting Mr. Buchholz's right to undertake any other employment or business activity. The provisions of this paragraph 6 shall survive this Agreement. 8. Employment Actions. In consideration for the sum being provided to Mr. ------------------ Buchholz by ALLTRISTA as set forth in paragraph 2 above, Mr. Buchholz AGREES that neither he nor any agent or representative of his will discuss or in any fashion disclose to any third 3 parties any issues pertaining to any employment action planned or contemplated by ALLTRISTA involving any employee, agent or representative of ALLTRISTA. 9. Return of Property. Mr. Buchholz represents and warrants that he has ------------------ returned, or will return to ALLTRISTA all employer information and related reports, documents, files, memoranda, records, computer disks, door and file keys, passwords and access codes, and other physical or personal property (hereinafter referred to as "property") that Mr. Buchholz received, prepared or helped prepare in connection with his employment, and Mr. Buchholz has not retained and will not retain any copies, duplicates, reproductions, or excerpts thereof. All such property must be returned to ALLTRISTA no later than September 17, 2001. 10. Liability. It is understood and agreed that ALLTRISTA denies that it --------- is liable to Mr. Buchholz on any theory, and that nothing in this Agreement constitutes an admission by ALLTRISTA of any fact, damage or liability to Mr. Buchholz on any theory. It is expressly understood and agreed that this Agreement was entered into by the parties solely to avoid the burden and expense of litigation. 11. Confidentiality. Mr. Buchholz agrees that neither he nor any agent or --------------- representative of his will discuss or in any fashion disclose to any third parties (except an attorney or accountant advising him) any of the terms of this Agreement or the circumstances surrounding its making, unless required to do so by law. 12. Non-Reliance. Mr. Buchholz represents and warrants that in the making ------------ and execution of this Agreement, he is not relying upon any representation, statement or assertion of fact or opinion made by any agent, attorney, employee or representative of the persons, parties or corporations being released herein, and he hereby waives any right to rely upon all prior agreements and/or oral representations made by any agent, attorney, employee or representative of such persons, parties or corporation even though made for the purpose of inducing him to enter into this agreement. 13. Severability. The parties stipulate and agree that all clauses and ------------ provisions of this Agreement are distinct and severable, and Mr. Buchholz understands, and it is his intent, that in the event this Agreement is ever held to be invalid or unenforceable (In whole or in part) as to any particular type of claim or as to any particular circumstances, it shall remain fully valid and enforceable as to all other claims and circumstances. 14. Entire Agreement. This Agreement contains the entire agreement of the ---------------- parties and supersedes all previous negotiations, whether written or oral. This Agreement may be changed only by an instrument in writing signed by the party against whom the change, waiver, modification, extension or discharge is sought. 15. Successors and Assigns. This Agreement shall inure to the benefit of, ---------------------- may be enforced by and shall be binding on the parties and their heirs, executors, administrators, personal representatives, assigns and successors in interest. 16. Governing Law. In the event of any dispute about this Agreement, the ------------- laws of the State of Indiana shall govern the validity, performance, enforcement and all other aspects of this Agreement. 4 17. Headings. The headings placed before the several paragraphs of this -------- Agreement are inserted for ease of reference only, and do not constitute a part of this Agreement, and shall not be used in any way whatsoever in the construction or interpretation of this Agreement. 18. Recitals. The recitals set forth above are incorporated by reference -------- as if more fully set forth at length herein. 19. Additional Representations. Mr. Buchholz represents that he has read -------------------------- this Agreement; fully understands each and every provision of this Agreement; and has voluntarily, on his own accord, executed this Agreement. Mr. Buchholz acknowledges that in consideration of accepting the additional payment and other additional consideration set forth in paragraph 2 above, he is giving up possible future administrative and/or legal claims. MR. BUCHHOLZ, ALSO ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY ALLTRISTA TO CONSULT AN ATTORNEY BEFORE HE EXECUTES THIS AGREEMENT. 20. Review Period. The parties hereby acknowledge and agree that Mr. ------------- Buchholz has twenty-one (21) calendar days (through October 5, 2001) in which to consider this Agreement and that this Agreement may be revoked by Mr. Buchholz within seven (7) calendar days after he executes it. The parties also acknowledge and agree that this Agreement shall not be effective or enforceable until the seven-calendar-day revocation period has expired. IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date set forth below: DATE: October 3, 2001 /s/ A. Bruce Buchholz Bruce Buchholz ALLTRISTA CORPORATION DATE: September 14, 2001 By: /s/ Thomas B. Clark Its: Chairman, President and CEO After consultation with my attorney, I have elected to waive the twenty-one (21) days to consider this Agreement, and hereby voluntarily accept this Agreement on the terms and conditions set forth above. DATE: ____________________________ _________________________________ Bruce Buchholz 5 EX-10.4 6 dex104.txt SEPARATION AGREEMENT BETWEEN KEVIN D. BOWER Exhibit 10.4 SEPARATION AGREEMENT AND GENERAL RELEASE ---------------------------------------- Caution: Read Carefully This Is a Release in Full THIS SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement") is made and entered into this 25th day of September, 2001, between Kevin D. Bower ("Employee"), and Alltrista Corporation (the "Company"). WHEREAS, the Company employed Employee in the position of Senior Vice President and Chief Financial Officer; WHEREAS, the Company 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 the Company and the conclusion of that employment; NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, it is agreed as follows: 1. Definitions. ----------- (a) "Company" means Alltrista Corporation and all of its past and present officers, directors, employees, trustees, agents, parent, 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, and each entity's subsidiaries, predecessors, successors, and assigns, and all other entities, persons, firms, or corporations liable or who might be claimed to be liable to Employee, none of whom admit any liability, but all of whom expressly deny any such liability. (b) "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". (c) "Revocation Period" means the seven (7) calendar day period after Employee signs this Agreement, not counting the day Employee actually signs it. (d) "Separation Date" means September 24, 2001. (e) "Separation Payment" means the payment as provided in paragraph 3 hereof. (f) "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. (g) "Stock Option Plan" means the 1998 Allrista Corporation Stock Option Plan as in effect on the date of this Agreement. 2. Employee's Release Of Claims. In consideration of the Company's ---------------------------- agreement to make the Separation Payment described in paragraph 3, Employee gives up, releases, and waives all claims against the Company, 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 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. ss.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, 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 by this Agreement, including without limitation, the right to receive the Separation Payment. 3. Separation Payment. Contingent upon Employee's execution of this ------------------ Agreement within the Signing Period and the expiration of the Revocation Period, the Company shall pay Employee $600,000 (the "Separation Payment"). The Separation Payment will be made minus all applicable deductions, including deductions for any applicable, federal, state, and local taxes and FICA. Employee acknowledges that the Separation Payment constitutes full and fair consideration for the release of all claims, as set forth in paragraph 2 above. Employee also acknowledges that all other forms of compensation, of whatever kind, that may be due to him by the Company are hereby extinguished. 4. Stock Options and COBRA. Effective on the Separation Date, all stock ----------------------- options previously granted to Employee (the "Options") shall be fully vested and may be exercised by the Employee in accordance with the terms of the Stock Option Plan at any time prior to (i) the current expiration date of the Options which by their terms expire prior to September 25, 2003, or (ii) September 25, 2003 for all other Options with an expiration date after September 25, 2003. The Company shall also provide to Employee COBRA insurance coverage as required by law, but any election by Employee under COBRA shall be at Employee's expense. 5. Return Of The Company's Property/Non-Disparagement. On or before the -------------------------------------------------- end of the Revocation Period, 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 2 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. 6. Confidentiality. The Employee shall maintain the fact of and terms and --------------- 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. 7. Confidential Information. Employee acknowledges that in the course of ------------------------ 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 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. 8. Company Release. The Company hereby releases and waives all claims --------------- against the Employee, 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 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, including but not limited to, claims for damages of any kind and all claims for costs, expenses and attorneys fees. 9. Remedies. 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. 10. Twenty-One Calendar Day Period To Consider This Agreement. Employee --------------------------------------------------------- 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 Separation Payment described herein shall expire and be deemed withdrawn at the end of the Signing Period. 3 11. Right To Revoke This Agreement. This Agreement will not become ------------------------------ effective or enforceable unless and until the Revocation Period has expired without a revocation by Employee. 12. Procedure For Accepting Or Revoking The Agreement. To accept the terms ------------------------------------------------- of this Agreement, Employee must deliver the Agreement, after it has been signed and dated by him, to 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. David Tolbert, Vice President, Human Resources and Administration, 5875 Castle Creek Parkway North Drive, Suite 440, Indianapolis, Indiana 46250. 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. 13. Representations And Warranties. Employee hereby represents and ------------------------------ warrants to the Company (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, except as specifically set forth in this Agreement; (c) Employee voluntarily releases any claims against the Company, 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; (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. 14. Severability. If any provision of this Agreement is or becomes ------------ invalid, 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. 15. Amendment and Waiver. Neither this Agreement nor any term, covenant, -------------------- 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 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. 4 16. Counterparts. This Agreement may be executed in one or more identical ------------ 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. 17. Assignment. 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. 18. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties with respect to the subject matter hereof. 19. Jurisdiction and Venue; Governing Law. Any action to enforce, ------------------------------------- challenge 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 Marion County, Indiana, except that the Company may elect, at its sole discretion, to litigate the action in the county or state where Employee can be found. 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. 20. Headings. The headings of the sections of this Agreement have been -------- inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. [Signatures on following page] 5 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. "COMPANY" ALLTRISTA CORPORATION /s/ Martin E. Franklin By: Martin E. Franklin Its: President and CEO "EMPLOYEE" /s/ Kevin D. Bower Kevin D. Bower 6 EX-10.5 7 dex105.txt SEPARATION AGREEMENT BETWEEN THOMAS B. CLARK Exhibit 10.5 SEPARATION AGREEMENT AND GENERAL RELEASE ---------------------------------------- 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 Thomas B. Clark ("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. ----------- (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 ---------------------------- 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, 2 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 ------------------- 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 --------------- 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 ----- 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, ---------------------- 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, ---------------------- 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 ------------------------------ 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. 3 (f) Vacation Compensation. Upon the expiration of the Revocation Period, --------------------- 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, ---------------------- 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 ------- ------ 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 --------------------------------------------------- Total $ 206,453 4. Retiree Benefits. Employee's employment with the Company will be ---------------- 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 --------------- 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 ------------------- 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 4 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 -------------------------------------------------------------- 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 --------------- 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 ------------------------ 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 5 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 --------------- 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, ---------------- 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. 6 12. Reasonableness Of Terms. The parties each stipulate and agree that the ----------------------- 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 --------------- 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 -------- 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 --------------------------------------------------------- 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 ------------------------------ 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 ------------------------------------------------- of this Agreement, Employee must deliver the Agreement, after it has been signed and dated by him, to 7 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. David Tolbert, Vice President, Human Resources and Administration, 5875 Castle Creek Parkway North Drive, Suite 440, Indianapolis, Indiana 46250. 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 ------------------------------ 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, ------------ 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, -------------------- 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 8 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 ------------ 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 ---------- 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 ---------------- between the parties with respect to the subject matter hereof. 24. Jurisdiction and Venue; Governing Law. Any action to enforce, challenge ------------------------------------- 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 Marion 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 -------- inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. (Signatures On Following Pages) 9 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 G. H. Ashken ------------------------------ By: Ian G. H. Ashken Its: Chief Financial Officer (Employee Signature on Following Page) 10 "EMPLOYEE" Date: October 5, 2001 /s/ Thomas B. Clark ----------------------------- Thomas B. Clark 11 EX-10.6 8 dex106.txt ALLTRISTA CORPORATION 2001 STOCK OPTION Exhibit 10.6 ALLTRISTA CORPORATION 2001 STOCK OPTION PLAN ---------------------------------------------- ARTICLE I ESTABLISHMENT AND PURPOSE ------------------------- The Board of Directors of Alltrista Corporation hereby establishes the Alltrista Corporation 2001 Stock Option Plan ("Plan"), effective September 24, 2001, for the purpose of granting options for the purchase of Common Shares to the Company's Executive Officers and Independent Directors. The Plan and all options granted hereunder are contingent on approval of the Plan by the Company's shareholders on or before September 23, 2002. ARTICLE II DEFINITIONS AND RULES OF CONSTRUCTION ------------------------------------- Section 2.01. Definitions. Whenever used herein, capitalized terms shall ------------------------- have the meanings indicated below: (a) "Agreement" or "Option Agreement" means an agreement between an Optionee and the Company setting out the terms of an Option award. (b) "Board of Directors" means the Board of Directors of Alltrista Corporation, as constituted at any time. (c) "Code" means the Internal Revenue Code of 1986, as amended. (d) "Committee" means the committee consisting of two or more non-employee Directors (within the meaning of Rule 16b-3 of the 1934 Securities Exchange Act, as amended) designated by the Board of Directors to administer the Plan. (e) "Common Share" means a share of common stock of Alltrista Corporation. (f) "Company" means Alltrista Corporation. (g) "Director" means a director of the Company. (h) "Employee" means any individual employed by the Company, including officers and employees who are also members of the Board of Directors of the Company. (i) "Executive Officer" means an officer of the Company named in Section 5.02 or designated by the Board of Directors as eligible to receive an Option grant. (j) "Fair Market Value" means, with respect to a Common Share as of a particular time, the most recent daily closing price of a Common Share, as reported by the Consolidated Transactions Reporting System for the New York Stock Exchange. If the Common Shares are no longer listed on the New York Stock Exchange, "Fair Market Value" as of a particular time means the most recent daily closing price of a Common Share on the system or exchange over which the Common Shares are traded. If, in the judgment of the Board of Directors, events occurring after the most recent closing date and before the time of determination render the determination of Fair Market Value in accordance with the preceding provisions inappropriate, or if the Common Shares cease to be publicly traded, Fair Market Value shall be determined by the Board of Directors, in good faith, taking into account such factors affecting value as it, in its sole discretion, deems appropriate. (k) "Independent Director" means a Director who is not an Employee at the time of an Option grant. (l) "Non-Qualified Stock Option" means a stock option that does not satisfy the requirements of Code Section 422. (m) "Option" means a Non-Qualified Stock Option granted pursuant to the Plan. (n) "Optionee" means an individual who is granted an Option. (o) "Plan" means the Alltrista Corporation 2001 Stock Option Plan, as set forth in this document, as amended from time to time. Section 2.02. Rules of Construction. ----------------------------------- (a) Words used herein in the masculine gender shall be construed to include the feminine gender, where appropriate, and words used herein in the singular or plural shall be construed as being in the plural or singular, where appropriate. (b) The Plan shall be construed, enforced, and administered and the validity thereof determined in accordance with the laws of the State of Delaware. ARTICLE III ADMINISTRATION -------------- The Plan shall be administered by the Committee in accordance with its provisions. The Committee may establish and adopt resolutions, rules, and regulations, including revisions thereto, not inconsistent with the provisions of the Plan, and construe and interpret provisions of the Plan, as it deems appropriate to make the Plan and Options effective and to provide for the administration of the Plan, and it may take such other action with regard to the Plan and Options as it deems appropriate. All such actions shall be final, conclusive, and binding on all persons, -2- and no member of the Committee or the Board of Directors shall be liable for any action or determination made in good faith with respect to the Plan or any Option. ARTICLE IV ELIGIBILITY ----------- Section 4.01. Eligibility. The only persons eligible for Options are ------------------------- Executive Officers and Independent Directors. ARTICLE V STOCK OPTION TERMS AND CONDITIONS --------------------------------- Section 5.01. Shares Subject to Plan. The shares subject to the Plan shall ------------------------------------ be Common Shares. Options for up to 650,000 Common Shares may be issued pursuant to the Plan. No Executive Officer may receive Options covering more than 400,000 shares of Common Stock in any calendar year. Section 5.02. Dates and Amounts of Grants of Stock Options. The following, ---------------------------------------------------------- and only the following, Options shall be granted pursuant to the Plan. (a) Martin E. Franklin, as the Company's Chairman, President, and Chief Executive Officer is granted Options to purchase 300,000 Common Shares, with a grant date of September 24, 2001. (b) Ian G.H. Ashken, as the Company's Secretary and Chief Financial Officer shall be granted Options to purchase 150,000 Common Shares, with a grant date of September 24, 2001. (c) Each Independent Director listed in Appendix A shall be granted Options to purchase 20,000 Common Shares, with a grant date of September 24, 2001. (d) The Board may, in its discretion, grant additional Options to any Executive Officer. Section 5.03. Price of Stock Options. The price of Common Shares to be ------------------------------------ purchased pursuant to the exercise of an Option shall be the Fair Market Value of the Common Shares at the time of the grant. Section 5.04. Vesting of Stock Options. Options shall vest and become -------------------------------------- exercisable on the earlier of (i) the first date after the grant date on which the Fair Market Value of a Common Share equals or exceeds seventeen dollars ($17.00) or (ii) the seventh anniversary of the date of grant. All vesting with respect to Options held by a particular Optionee shall cease upon such Optionee's termination of employment or service with the Company. The Options shall expire on the earlier of (i) the tenth anniversary of the date of grant or (ii) the date that is one year after the Optionee terminates his or her employment or directorship with the Company. -3- Notwithstanding anything herein to the contrary, one-half of Mr Franklin's and Mr Ashken's Options, respectively, shall terminate immediately on the earlier of (i) their voluntary resignation from service with the Company, respectively, if such resignation occurs on or before March 31, 2002, (ii) the date set forth in Section 6.02 on account of death or (iii) the tenth anniversary of the date of grant. The remainder of Messrs. Franklin's and Ashken's Options shall expire on the earlier of (i) the date set forth in Section 6.02 on account of death or (ii) tenth anniversary of the date of grant. Section 5.05. Form of Agreement. The Committee shall notify the recipient ------------------------------- of the grant by a written Stock Option Agreement delivered in duplicate either in person or by mail. Receipt of the Stock Option Agreement shall be acknowledged by the Optionee on the duplicate copy, and by such acknowledgment, the Optionee shall agree that in consideration of the grant of such Option, he will abide by all the terms and conditions of the Plan. The Optionee shall return the duplicate copy of the Stock Option Agreement to the Company, either by delivery in person or by first-class U.S. mail, within sixty days after the date of grant. If the Optionee fails to return the duplicate copy in the time and manner described in the preceding sentence, then, at the discretion of the Committee, the Optionee's Option may be canceled. Any inconsistencies between the Plan and the Stock Option Agreement shall be governed by the Plan. Section 5.06. Exercise of Options. Subject to the remaining terms of the --------------------------------- Plan, each Option shall be exercisable during the term of the Option, but only to the extent that the Option has become vested and exercisable as determined pursuant to Section 5.04. Options unable to be exercised in compliance with the provisions of this Plan shall be canceled and may not be reissued. An Option may be exercised only by written notice to the Company, mailed or personally delivered to the attention of the Company's Secretary, signed by the Optionee (or such other person or persons as shall demonstrate to the Company his right to exercise the Option), specifying the number of Common Shares with respect to which it is being exercised, and accompanied by full payment of the option price for such Common Shares. Section 5.07. Payment of Purchase Price and Withholding. The purchase price ------------------------------------------------------- of each Common Share on the exercise of an Option shall either be paid in full in cash at the time of exercise or payment may be made in whole or in part in Common Shares valued at Fair Market Value on the exercise date, or by any other proper method approved by the Committee. A stock certificate representing the Common Shares so purchased shall be delivered promptly to the person entitled thereto. The Committee may, at its discretion and subject to such rules as it may adopt, permit the Optionee to elect to satisfy, in whole or in part, any withholding tax obligation that may arise in connection with the exercise of an Option by having the Company retain Common Shares or accept delivery from the Optionee of Common Shares having a Fair Market Value equal to the amount of the withholding tax to be satisfied by such retention or delivery. Section 5.08. Non-Transferability of Options. Each Option shall by its -------------------------------------------- terms be nontransferable and non-assignable by the Optionee other than by will or the laws of descent and distribution and shall be exercisable during the Optionee's lifetime only by him. Any attempt to -4- assign, transfer, pledge, hypothecate, or otherwise dispose of any Option that is contrary to the provisions of the Plan, or to levy upon, attach, or initiate a similar proceeding upon any Option, shall be null and void. Section 5.09. Adjustment of Common Shares. In the event of any change in the Common Shares by reason of a merger, consolidation, reorganization, recapitalization, or similar transaction, or in the event of a stock split-up, spin-off, split-off, stock dividend, or distribution to shareholders (other than normal cash dividends), the Committee shall adjust the number and class of shares that may be issued under this Plan, the number and class of shares subject to outstanding Options, the exercise price applicable to outstanding Options, and the Fair Market Value of the Common Shares and other value determinations applicable to outstanding Options, including the $17 Fair Market Value trigger for exercisability, as appropriate to preserve the economic terms of the Options before the event. Section 5.10. Issuance of Shares and Compliance with Securities Laws. The -------------------------------------------------------------------- Company may postpone the issuance and delivery of certificates representing shares until (a) the admission of such shares to listing on any stock exchange on which shares of the Company of the same class are then listed and (b) the completion of such registration or other qualification of such shares under any state or federal law, rule, or regulation as the Company shall determine to be necessary or advisable, which registration or other qualification the Company shall use its best efforts to complete; provided, however, a person purchasing shares pursuant to the Plan has no right to require the Company to register the Common Shares under federal or state securities laws at any time. Any person purchasing shares pursuant to the Plan may be required to make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company, in light of the existence or non-existence with respect to such shares of an effective registration under the Securities Act of 1933, as amended, or any similar state statute, to issue the shares in compliance with the provisions of those or any comparable acts. Section 5.11. Dissolution or Liquidation of Company. In the event of the --------------------------------------------------- proposed dissolution or liquidation of the Company, or in the event of a proposed sale of substantially all of the Company's assets, each Option shall terminate as of a date to be fixed by the Board of Directors; provided, however, that no fewer than thirty days' written notice of the date so fixed shall be given to each Option holder, and each Option holder shall have the right during the period of thirty days immediately preceding such termination to exercise his Options as to all or any part of the Common Shares covered thereby to the extent that such Options are otherwise exercisable. ARTICLE VI TERMINATION OF SERVICE ---------------------- Section 6.01. Termination. Except as provided in Section 5.04 (iii), the ------------------------- termination of Mr. Franklin's or Mr. Ashken's employment with the Company for a reason other than death shall not affect his right with respect to Options. As provided in Section 5.04 (iii), however, if Mr. Franklin or Mr. Ashken resign their employment with the Company before March 31, 2002, the terminating individual shall forfeit the right to exercise his Options with respect to one half of -5- the Common Shares subject to the Options. If an Executive Officer other than Mr. Franklin or Mr. Ashken ceases to be an Executive Officer for a reason other than death or an Independent Director ceases to be a Director for a reason other than death, he may exercise any Options exercisable at the time his service terminates within sixty days thereafter, provided such Options are exercised within the exercise period provided by the Plan and the Stock Option Agreement in the absence of this sentence. Section 6.02. Death. If an Optionee dies (whether before or after ------------------- termination of employment) while he is entitled to exercise an Option, the person or persons to whom the Optionee's rights to the Option have passed by will or the applicable laws of descent and distribution may exercise the Option within the twelve-month period immediately following the Optionee's death; provided, however, no such Option may be exercised after any earlier expiration date specified in the Plan or the Stock Option Agreement. ARTICLE VII AMENDMENT AND TERMINATION OF PLAN --------------------------------- Section 7.01. Cancellation of Options. The Committee may cancel any ------------------------------------- outstanding, unexercised Option, provided the Optionee to whom such Option was granted has given his written consent thereto. Section 7.02. Amendment or Termination of Plan. The Committee may amend or terminate the Plan at any time, in its sole discretion, provided that any such termination or amendment may not adversely affect any outstanding Option without the consent of the Optionee. ARTICLE VIII MISCELLANEOUS ------------- Section 8.01. Notices. Except as specifically set forth in the Plan, all --------------------- notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered in person or sent by registered or certified mail, postage prepaid. Section 8.02. No Employment Rights. Nothing contained in the Plan or any ---------------------------------- Stock Option Agreement executed pursuant to the Plan shall confer upon the Optionee any right to continued employment by the Company or limit in any way the right of the Company to terminate his employment, with or without cause, at any time. Section 8.03. Successor. This Plan and the obligations hereunder shall be ----------------------- binding on any successor of the Company. Section 8.04. Effective Date and Term of the Plan. The Plan shall become ------------------------------------------------- effective as provided herein, and no Options shall be granted other than those specified in Section 5.02. -6- The undersigned representative of the Alltrista Corporation Board of Directors affirms that the Alltrista Corporation 2001 Stock Option Plan, in the form set out above, has been adopted by the Board, effective September 24, 2001, subject to approval by the Company's shareholders as provided herein. ALLTRISTA CORPORATION Date: September 24, 2001 By: /s/ Martin E. Franklin ---------------------------------------- Title: Chairman and Chief Executive Officer -7- APPENDIX A ---------- Independent Directors Granted Options Douglas W. Huemme Richard L. Molen Lynda W. Popwell Patrick W. Rooney David L. Swift Robert L. Wood EX-10.7 9 dex107.txt ASSET PURCHASE AGREEMENT Exhibit 10.7 ASSET PURCHASE AGREEMENT BY AND BETWEEN ALLTRISTA PLASTICS CORPORATION, TRIENDA CORPORATION, QUOIN CORPORATION, ALLTRISTA CORPORATION AND WILBERT, INC. OCTOBER 15, 2001 TABLE OF CONTENTS ----------------- ARTICLE I DEFINITIONS ............................................................ 1 Section 1.1 Defined Terms ...................................................... 1 Section 1.2 Index of Other Defined Terms ....................................... 5 ARTICLE II TRANSFER OF ASSETS ..................................................... 6 Section 2.1 Purchase and Sale of Assets ........................................ 6 Section 2.2 Excluded Assets .................................................... 8 Section 2.3 Instruments of Transfer and Assignment ............................. 8 Section 2.4 Consents to Assignment ............................................. 8 Section 2.5 Subsequent Documentation ........................................... 8 Section 2.6 Closing ............................................................ 8 ARTICLE III PURCHASE PRICE ......................................................... 8 Section 3.1 Consideration, Payment ............................................. 8 Section 3.2 Allocation of Consideration ........................................ 9 Section 3.3 Deposit ............................................................ 9 ARTICLE IV ASSUMPTION OF LIABILITIES .............................................. 9 ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS, HOLDINGS AND ALLTRISTA ...... 10 Section 5.1 Disclosure Schedule ................................................ 10 Section 5.2 Organization; Power ................................................ 10 Section 5.3 Articles of Incorporation and Bylaws ............................... 10 Section 5.4 Authorization of Agreement ......................................... 10 Section 5.5 No Conflicts ....................................................... 11 Section 5.6 Consents and Approvals ............................................. 11 Section 5.7 Financial Information .............................................. 11 Section 5.8 No Undisclosed Liabilities or Claims ............................... 11 Section 5.9 Litigation ......................................................... 12 Section 5.10 Taxes .............................................................. 12 Section 5.11 Accounts Receivable and Accounts Payable ........................... 13 Section 5.12 Inventory .......................................................... 13 Section 5.13 Absence of Certain Changes or Events ............................... 13 Section 5.14 Contracts and Commitments .......................................... 14 Section 5.15 Tooling and Dies ................................................... 15 Section 5.16 Assumed Liabilities ................................................ 15 Section 5.17 OSHA, Environmental ................................................ 15 Section 5.18 Customers and Vendors .............................................. 16 Section 5.19 Books and Records .................................................. 16 Section 5.20 Employment Matters ................................................. 16 Section 5.21 Employee Benefit Plans ............................................. 17 Section 5.22 Employees .......................................................... 18
i Section 5.23 Finder ............................................................. 19 Section 5.24 Sufficiency of Assets .............................................. 19 Section 5.25 Governmental Authorizations ........................................ 19 Section 5.26 Compliance with Applicable Laws .................................... 19 Section 5.27 Title to Assets, Absence of Liens and Encumbrances ................. 20 Section 5.28 Intellectual Property .............................................. 20 Section 5.29 Real Property ...................................................... 21 Section 5.30 Working Capital .................................................... 22 Section 5.31 Hardware and Software .............................................. 22 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER ................................ 22 Section 6.1 Organization ....................................................... 22 Section 6.2 Authorization of Agreement ......................................... 22 Section 6.3 Approvals .......................................................... 22 Section 6.4 Finder ............................................................. 23 Section 6.5 No Conflicts ....................................................... 23 ARTICLE VII COVENANTS OF THE PARTIES ............................................... 23 Section 7.1 Operation Of Business Prior To Closing ............................. 23 Section 7.2 Approvals and Consents ............................................. 24 Section 7.3 Payment of Liabilities, Bulk Sales ................................. 24 Section 7.4 Access Prior to Closing; Environmental Investigation ............... 24 Section 7.5 Sellers' Employees, Retirement Benefits ............................ 25 Section 7.6 Access After the Closing ........................................... 26 Section 7.7 Taxes .............................................................. 26 Section 7.8 Survey and Title Commitments ....................................... 27 Section 7.9 Title to Intellectual Property ..................................... 28 Section 7.10 No Solicitation .................................................... 29 Section 7.11 Confidentiality .................................................... 29 Section 7.12 Covenant Not to Compete ............................................ 30 Section 7.13 Notification ....................................................... 31 Section 7.14 Intellectual Property Undertakings ................................. 32 ARTICLE VIII CONDITIONS TO CLOSING .................................................. 32 Section 8.1 Buyer's Conditions to Closing ...................................... 32 Section 8.2 Sellers', Holdings' and Alltrista's Conditions to Closing .......... 33 ARTICLE IX DISPUTE RESOLUTION ..................................................... 34 Section 9.1 Initial Meeting .................................................... 34 Section 9.2 Mediation .......................................................... 35 Section 9.3 Binding Arbitration ................................................ 35 Section 9.4 Expeditious Proceedings ............................................ 35 Section 9.5 Attorneys' Fees .................................................... 35 Section 9.6 Enforcement of Awards .............................................. 35 Section 9.7 Equitable Relief ................................................... 35 ARTICLE X INDEMNIFICATION ............................................................ 36
ii Section 10.1 Indemnification by Sellers, Holdings and Alltrista ..................... 36 Section 10.2 Indemnification by Buyer ............................................... 37 Section 10.3 Limits ................................................................. 37 Section 10.4 Procedure .............................................................. 38 Section 10.5 Insurance and Taxes .................................................... 38 Section 10.6 Exclusive Remedy ....................................................... 38 Section 10.7 Indemnification in Case of Strict Liability or Indemnitee Negligence.... 39 ARTICLE XI TERMINATION ................................................................ 39 Section 11.1 Termination ............................................................ 39 Section 11.2 Effect of Termination .................................................. 40 Section 11.3 Risk of Loss ........................................................... 40 ARTICLE XII GENERAL .................................................................... 40 Section 12.1 WARN Act ............................................................... 40 Section 12.2 Expenses ............................................................... 40 Section 12.3 Survival of Representations and Warranties ............................. 40 Section 12.4 Waivers ................................................................ 41 Section 12.5 Binding Effect; Benefits; Assignment ................................... 41 Section 12.6 Notices ................................................................ 41 Section 12.7 Entire Agreement ....................................................... 42 Section 12.8 Headings ............................................................... 42 Section 12.9 Governing Law .......................................................... 42 Section 12.10 Amendments ............................................................. 42 Section 12.11 Severability ........................................................... 42 Section 12.12 Press Releases ......................................................... 42 Section 12.13 Counterparts ........................................................... 43 Section 12.14 Interpretation ......................................................... 43
iii SCHEDULES --------- Schedule 1.1(a) - Working Capital Schedule 1.1(b) - Permitted Encumbrances Schedule 1.1(c) - Permitted Liens Schedule 1.1(d) - Real Property Schedule 2.1 - Assets Schedule 2.1(d) - Excluded Equipment and Machinery Schedule 2.1(1) - Intellectual Property Schedule 2.2 - Excluded Assets Schedule 4 - Assumed Liabilities Schedule 5.1 - Disclosure Schedule Section 5.5 - Conflicts Section 5.6 - Consents and Approvals Section 5.7 - Financial Information Section 5.8 - Liabilities or Obligations Section 5.9 - Litigation Section 5.10 - Taxes Section 5.11 - Accounts Receivable and Accounts Payable Section 5.13 - Absence of Certain Changes or Events Section 5.14 - Contracts Section 5.15 - Owned Tools and Dies Section 5.17 - OSHA, Environmental Section 5.18 - Customers and Vendors Section 5.20 - Employment Matters Section 5.21 - Employee Benefit Plans Section 5.22 - Employees Section 5.24 - Sufficiency of Assets Section 5.25 - Governmental Authorizations Section 5.26 - Compliance with Applicable Laws Section 5.28 - Intellectual Property Agreements Section 5.29 - Real Property Schedule 7.12 - List of Parts Schedule 8.1(l) - Customers Meeting with Buyer EXHIBITS -------- 3.1(a) - Form of Promissory Note 3.1(b) - Form of Assumption Agreement 5.7(a) - Financial Information 5.22(b) - Form of Proprietary Agreements 7.14 - Intellectual Property Undertakings 8.1(j) - Form of Seller Opinion Letter 8.2(g) - Form of Buyer Opinion Letter iv ASSET PURCHASE AGREEMENT This ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of October 15, --------- 2001, is entered into by and among ALLTRISTA PLASTICS CORPORATION, an Indiana corporation, TRIENDA CORPORATION, an Indiana corporation (together with Alltrista Plastics Corporation "Sellers" and individually "Seller"), QUOIN ------- ------ CORPORATION, a Delaware corporation ("Holdings"), ALLTRISTA CORPORATION, an -------- Indiana corporation ("Alltrista") and WILBERT, INC., an Illinois corporation --------- (the "Buyer"). ----- RECITALS: WHEREAS, utilizing thermoforming and sheet extrusion processes, Sellers are engaged in the business of manufacturing heavy gauge plastic products and parts for original equipment manufacturers in a variety of industries, including heavy transportation, agriculture, portable restrooms, appliance, furniture and material handling at the locations set forth on Schedule 1.1(d) (as further --------------- defined below, the "Business"); -------- WHEREAS, Buyer is acquiring certain assets and assuming certain liabilities, the Buyer and Sellers, Holdings and Alltrista intend and agree that no tax attributes will be transferred to the Buyer under Internal Revenue Code Section 381 or any other comparable provision under federal, state or local law. Sellers, Holdings and Alltrista are retaining all tax attributes including, but not limited to, net operating loss carryovers, Section 1231 carryovers, capital loss carryovers, credits carryovers and tax payment deposits; WHEREAS, Sellers, Holdings and Alltrista desire to sell to Buyer the assets used in the Business pursuant to the terms and conditions of this Agreement; WHEREAS, Alltrista owns certain rights to intellectual property used in the Business and desires to sell to Buyer such rights pursuant to the terms and conditions of this Agreement; WHEREAS, Holdings, as the sole shareholder of Sellers, has approved the sale of substantially all of the assets of Sellers to Buyer; and WHEREAS, Buyer desires to purchase from Sellers, Holdings and Alltrista such assets and properties used in the Business pursuant to the terms and conditions of this Agreement. AGREEMENT: NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1 Defined Terms. As used herein, the following terms have the ------------- following meanings: "Accounts Receivable" means accounts receivable of the Business in existence on the Closing Date other than those accounts receivable related to Sellers' business located at Ft. Smith, Arkansas. "Business" means the business defined in the first recital of this Agreement but specifically excluding any of the Assets or operations of Sellers located in Ft. Smith, Arkansas except to the extent such Assets are also used outside of Ft. Smith, Arkansas. "CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, at 42 U.S.C. Sections 9601, et seq. "Closing Approvals" means those approvals and consents to be obtained prior to Closing, all of which are designated on Section 5.6 of the Disclosure ----------- Schedule as exceptions to the representations and warranties of Sellers, Holdings and Alltrista in Section 5.6 hereof. ----------- "Closing Working Capital" means an amount equal to Working Capital calculated by Buyer as of the Closing Date in accordance with the procedures set forth on Schedule 1.1(a). --------------- "Confidential Information" means non-public information that is proprietary to, about or concerning the Business and/or the Assets, including information relating to customer lists, account lists, price lists, product designs, marketing plans or proposals, customer information, accounting, financing, merchandising, know how, trademarks, trade names, trade practices and trade secrets. "Effective Time" means 11:59 P.M., Central Standard Time, on the Closing Date. "Environmental Laws" means any applicable laws (including duties imposed by common law), rules, regulations, orders, ordinances, judgments and decrees of all governmental authorities relating to the environment, including but not limited to CERCLA, the Emergency Planning and Community Right-to-Know Act of 1986, as amended (42 U.S.C.(S) 11001 et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. Sections 1251, et seq.), the Clean Air Act, as amended (42 U.S.C. Sections 7401, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Sections 2601, et seq.), the Clean Water Act, as amended (33 U.S.C. Sections 1251, et seq.), OSHA and similar state and local laws and any regulations issued in connection with the foregoing. "Excluded Assets" means any assets listed on Schedule 2.2, including, ------------ without limitation, any assets or operations of Sellers located in Ft. Smith, Arkansas or any of Sellers' business directly related thereto except to the extent such assets located in Ft. Smith, Arkansas are also used in the Business. "Excluded Records" means any tax analysis and work papers and core corporate records. "Force Majeure" means that a party is delayed or prevented from fulfilling the terms of this Agreement by wars, acts of bio-terrorism, national emergency, floods, fires or acts of God. 2 "Hazardous Substances" means any substance designated as a hazardous substance, hazardous material or hazardous waste by any Environmental Law, including, but not necessarily limited to, solvents, pollutants, chemicals, flammables, contaminants, gasoline, petroleum products, crude oil, explosives, radioactive materials, hazardous materials or toxic materials, substances, or wastes, or polychlorinated biphenyls. "Initial Working Capital" means an amount equal to Working Capital calculated as of September 30, 2001 as set forth on Schedule 1.1(a). -------------- "Intellectual Property" means the intellectual property rights related to the Business, including: trademarks, service marks, brand names, certification marks, trade dress, assumed names, trade names and other indications of origin (both registered and unregistered), the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application; inventions, discoveries and ideas, whether patentable or not in any jurisdiction; patents, applications for patents (including, without limitation, divisions, continuations, continuations in-part and renewal applications), and any renewals, extensions or reissues thereof, in any jurisdiction; non-public information, trade secrets and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any Person; writings and other works, whether copyrightable or not in any jurisdiction; registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; any similar intellectual property or proprietary rights, manufacturing know-how and technology, proprietary processes, methodology and methods of operation, floor designs, laboratory notes and books, discrete disclosures, technical data, product information, distribution methods, supplier and customer lists, manufacturing techniques and laboratory results, computer programs, catalyst and catalytic know-how and technology, distribution know-how and methods; and any claims or causes of action available for the benefit of Sellers, Holdings or Alltrista arising out of or related to any infringement or misappropriation of any of the foregoing. "Inventory" means all inventory, work in progress, raw materials, finished products, supplies, packaging and shipping containers and materials of Sellers (on-site, off-site and consigned). (a) "Knowledge" means the actual knowledge of Martin E. Franklin, Ian Ashken, Angela K. Knowlton, Kyle DeJaeger, Jim Mastrangelo or Bob Shimmel, agents of Sellers, Holdings and Alltrista. "OSHA" means the Occupational Safety and Health Act, 29 U.S.C.ss.651 et seq., as amended. "Permitted Encumbrances" means any encumbrance set forth on Schedule -------- 1.1(b) that is not disapproved pursuant to Section 7.8(c). - ------ -------------- "Permitted Liens" means the liens set forth on Schedule 1.1(c), liens --------------- for taxes or governmental assessments, charges or claims the payment of which is not yet due, statutory liens of landlords and liens of carriers, warehousemen, mechanics, materialmen and other similar persons and other liens imposed by applicable law incurred in the ordinary course of business for 3 sums not yet delinquent or immaterial in amount and being contested in good faith, and liens constituting or securing executory obligations under any lease assumed by Buyer. Permitted Liens shall also include Permitted Encumbrances. "Person" means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, or unincorporated association, or any governmental agency, department, commission, board, bureau or instrumentality thereof. "Post-Closing Tax Period" means any tax period (or portion thereof) ending after the Closing Date. "Pre-Closing Tax Period" means any tax period (or portion thereof) ending on or before the close of business on the Closing Date. "Real Property" means the real property owned or leased by Sellers, Holdings and/or Alltrista and related to the Business which is located at the addresses set forth on Schedule 1.1(d) hereto. --------------- "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaking, dumping, or disposing into the environment any Hazardous Substance. "Shared Savings Obligations" means all payments remaining to be made by Sellers, Holdings or Alltrista at the Closing Date under (a) four (4) certain energy services agreements with Wisconsin Power and Light Company dated November 13, 1996, November 13, 1996, December 10, 1997 and December 20, 1997 and (b) a performance contract with Alliant Energy-Interstate Power dated December 21, 1999 unless any such payments or obligations are accrued on the September 30 Balance Sheet. "Taxes" means all federal, state, local, or foreign taxes (including excise taxes, occupancy taxes, employment taxes, unemployment taxes, ad valorem taxes, custom duties, transfer taxes, and fees), levies, imposts, fees, impositions, assessments, or other governmental charges of any nature imposed upon a Person including all taxes or governmental charges imposed upon any of the personal properties, real properties, tangible or intangible assets, income, receipts, payrolls, transactions, stock transfers, capital stock, net worth or franchises of a Person (including all sales, use, withholding or other taxes which a Person is required to collect and/or pay over to any government), and all related additions to tax, penalties or interest thereon. "Tax Returns" means any return, report, information return, or other document (including any related or supporting information) filed or required to be filed with any governmental agency, department, commission, board, bureau, or instrumentality in connection with the determination, assessment, collection, or administration of any Taxes. "Working Capital" means the current assets, as defined by GAAP, that are among the Assets of the Business, less the current liabilities, as defined by GAAP, that are among the Assumed Liabilities, calculated in accordance with GAAP, consistent with past practice and in the ordinary course of business, which is the same basis for calculation of the Initial Working Capital set forth on Schedule 1.1(a). --------------- 4 Section 1.2 Index of Other Defined Terms. In addition to terms defined ---------------------------- above, the following terms shall have the respective meanings given to them in the Sections set forth below: Defined Term Section ------------ ------- Alltrista Preamble Agreement Preamble Assets 2.1 Assumed Liabilities 4 Basket 10.3(a) Benefit Plans 5.21(b) Bulk Sales Law 7.3 Business Recitals, 1.1 Business Employees 5.20(a) Buyer Preamble Claims 10.1 Closing 2.6 Closing Date 2.6 COBRA 5.21(d) Contracts 5.14 Code 3.2 Customers 5.18 Disapproved Matters 7.8(c) Disclose or Disclosure 7.11(a) Disclosure Schedule 5.1 DOL 5.22(e) Drop Dead Date 11.1(e) ERISA 5.21(a) Excluded Assets 2.2 Exception Documents 7.8(b) Financial Information 5.7 Ft. Smith Employees 7.5(a) GAAP 5.7 Holdings Preamble Indemnifying Party 10.4(a) Indemnified Party 10.4(a) INS 5.22(e) Leave Employees 7.5(a) Monetary Liens 7.8(b) Notice of Dispute 9.1 Plan 5.21(a) Promissory Note 3.1 Proprietary Agreements 5.22(b) Purchase Price 3.1 Retained Contracts 2.1(c) Section 10.1 Indemnified Parties 10.1 Section 10.2 Indemnified Parties 10.2 5 Sellers Preamble September 30 Balance Sheet 2.1(o) Survey(s) 7.8(a) Title Commitment(s) 7.8(b) Title Company 7.8(a) Title Policy(ies) 7.8(b) Transferred Employees 7.5(a) Vendors 5.18 WARN 12.1 ARTICLE II TRANSFER OF ASSETS Section 2.1 Purchase and Sale of Assets. At the Closing, but effective --------------------------- as of the Effective Time, on the terms and conditions set forth herein, Sellers, Holdings and Alltrista shall sell, convey, assign, transfer and deliver to Buyer and Buyer shall purchase from Sellers, Holdings and Alltrista all of the Assets of the Business (other than the Excluded Assets and Excluded Records) free and clear of all liens, encumbrances, security interests, options and pledges of any kind whatsoever, except for Permitted Liens and Permitted Encumbrances. The assets, properties and rights to be sold by Sellers, Holdings and Alltrista and purchased by Buyer under this Agreement, include, without limitation and wherever located, the following: (a) all Inventory related to the Business; (b) all Accounts Receivable, rights under open orders for the purchase and sale of assets, customer orders, prepayments of every kind, security deposits and other deposits of every kind, and all insurance proceeds relating to the Business; (c) all rights of Sellers, Holdings and Alltrista pursuant to Contracts set forth in Section 5.14 of the Disclosure Schedule, other than the rights of ------------ Sellers, Holdings and Alltrista pursuant to those Contracts denoted as not being assigned or transferred to Buyer on Section 5.14 of the Disclosure Schedule (the ------------ "Retained Contracts"); ------------------ (d) all equipment and machinery (including, but not limited to, all tooling and dies) used in the Business, except as set forth on Schedule 2.1(d); --------------- (e) all other tangible personal property used in the Business, including motor vehicles and office and other supplies; (f) all owned Real Property, including all buildings, improvements, and fixtures located thereon; (g) all rights of Sellers, Holdings and Alltrista pursuant to all permits, licenses, and other authorizations relating to the Business and all pending applications therefor or renewals thereof, in each to the extent transferable to Buyer, the first Twenty Thousand Dollars ($20,000) of which shall be paid by Buyer; 6 (h) all computers, hardware, firmware, data transmission equipment, software and software licenses, and related manuals used in connection with the Business; (i) all rights under warranties, express or implied, or other claims for damages or loss related to any of the Assets; (j) all claims of Sellers, Holdings and Alltrista against third parties relating to the Assets, whether choate or inchoate, known or unknown, contingent or noncontingent; (k) all data, books, records and files of Sellers, Holdings and Alltrista (including, without limitation, all computerized records and other computerized storage media and user manuals and documentation relating thereto) relating to the Assets or the Business, including, without limitation, customer lists and records, referral sources, research and development reports and records, production reports and records, service and warranty records, equipment logs, operating guides and manuals, financial and accounting records, creative materials, advertising materials, promotional materials, studies, reports, correspondence and other similar documents and records and, subject to applicable law, copies of all personnel records and other records (subject to Sellers', Holdings' or Alltrista's right to retain copies thereof); (l) all of the intangible rights and property of Sellers, Holdings and Alltrista, including, without limitation, going concern value, goodwill, telephone, telecopy and e-mail addresses and listings used in the Business and all of the Intellectual Property used in the Business, free and clear of all licenses, liens, encumbrances, security interests, options, pledges of any kind whatsoever; (m) all insurance benefits, including rights and proceeds, arising from or relating to the Assets or the Assumed Liabilities prior to the Effective Time, except with respect to insurance for medical or workers' compensation claims the payment of which is the responsibility of Alltrista or Sellers; (n) all rights of Sellers, Holdings and Alltrista relating to deposits and prepaid expenses, claims for refunds and rights to offset in respect thereof, related to the Business; (o) all other assets reflected on the Balance Sheet of the Thermoformed Products Division of Alltrista (excluding assets related to the Ft. Smith, Arkansas operations) dated as of September 30, 2001 (the "September 30 Balance -------------------- Sheet") other than cash and cash equivalents except for petty cash; - ----- (p) all of Sellers', Holdings' and Alltrista's other rights and property interests of any nature which are customarily and exclusively used in the Business; all such assets being referred to herein collectively as the "Assets". ------ By way of further description, the Assets shall include, but not be limited to, those items set forth in Schedule 2.1. ------------ Notwithstanding the foregoing, the transfer of the Assets pursuant to this Agreement shall not include the assumption of any liability or obligation related to the Assets or the Business unless Buyer expressly assumes that liability or obligation pursuant to Article IV or in other express provisions of ---------- this Agreement. 7 Section 2.2 Excluded Assets. The Assets shall not include the items set --------------- forth on Schedule 2.2 attached hereto (the "Excluded Assets"). ------------ --------------- Section 2.3 Instruments of Transfer and Assignment. On the Closing Date -------------------------------------- Alltrista, Holdings and Sellers shall deliver or cause to be delivered to Buyer duly executed bills of sale, deeds, licenses and such other instruments of transfer and assignment as may be necessary to vest in Buyer, subject to Section ------- 2.4 and the Assumed Liabilities, good and valid title to, and all of - --- Alltrista's, Holdings' and Sellers' right, title and interest in and to, the Assets and Intellectual Property, free and clear of all liens, encumbrances, options and pledges of any kind other than Permitted Liens and Permitted Encumbrances and except as noted herein and the Schedules hereto, which bills of sale, deeds, licenses and other instruments of transfer and assignment shall be in form and substance satisfactory to Buyer in its reasonable judgment. Section 2.4 Consents to Assignment. Nothing in this Agreement or the ---------------------- documents to be executed and delivered at the Closing shall be deemed to constitute an assignment or an attempt to assign any permit, contract or other agreement to which either Alltrista, Holdings or Sellers are a party, if the attempted assignment thereof without the consent of the other party to such permit, contract or other agreement would constitute a breach thereof or affect in any way the rights of either Alltrista, Holdings or Sellers thereunder. If any such consent shall not be obtained at or prior to the Closing, or if an attempted assignment would be ineffective or would adversely affect either Alltrista's, Holdings' or Sellers' rights thereunder, Alltrista, Holdings and Sellers shall cooperate in any arrangement Buyer may reasonably request (provided that the payment of money to any party shall not be required) to provide for Buyer the benefits under such permit, contract or other agreement. Section 2.5 Subsequent Documentation. At any time and from time to time ------------------------ after the Closing Date, Alltrista, Holdings and Sellers shall, upon the request and expense of Buyer, and Buyer shall, upon the request and expense of Alltrista and Sellers, promptly execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and other documents, and perform or cause to be performed such further acts, as may be reasonably required to evidence or effectuate the sale, conveyance, transfer, assignment, and delivery hereunder of the Assets and the Intellectual Property, the assumption by Buyer of the Assumed Liabilities, the performance by the parties of any of their other respective obligations under this Agreement, and to carry out the purposes and intent of this Agreement. Section 2.6 Closing. The Closing (the "Closing") of the transactions ------- ------- contemplated hereby shall occur as soon as practicable following the fulfillment of the conditions to Closing set forth in Article VIII hereof, but in no event later than the Drop Dead Date. The Closing will be held at the offices of Ice Miller in Chicago, Illinois at 10:00 a.m. (local time) or at such other time and place as the parties mutually agree. The date upon which the Closing occurs is referred to herein as the "Closing Date". ------------ ARTICLE III PURCHASE PRICE Section 3.1 Consideration, Payment. The aggregate consideration for the ---------------------- Assets (the "Purchase Price") will be: (i) Twenty Three Million Five Hundred -------------- Thousand Dollars 8 ($23,500,000) less the Shared Savings Obligations; and (ii) the assumption of the Assumed Liabilities (including the Shared Savings Obligations). The Purchase Price shall be delivered by Buyer to Sellers, Holdings and Alltrista as follows: (i) One Million Five Hundred Thousand Dollars ($1,500,000) by wire transfer upon execution of this Agreement (the "Deposit"); (ii) Nineteen Million Five Hundred ------- Thousand Dollars ($19,500,000) less the Shared Savings Obligations by wire transfer at Closing; (iii) Two Million Five Hundred Thousand Dollars ($2,500,000) by delivery at Closing of a promissory note in the form attached hereto as Exhibit 3.1(a) (the "Promissory Note"); and (iv) the balance of the -------------- --------------- Purchase Price by the execution and delivery at Closing of an agreement in the form of Exhibit 3.1(b) assuming the Assumed Liabilities. -------------- Section 3.2 Allocation of Consideration. Alltrista, Sellers and Buyer --------------------------- agree to allocate the Purchase Price among the Assets prior to Closing. Buyer and Alltrista shall each file, in accordance with Section 1060 of the Internal Revenue Code of 1986 (the "Code") an Asset Allocation Statement on Form 8594 ---- which reflects such allocation with its federal income tax return for the tax year in which the Closing Date occurs and shall contemporaneously provide the other parties with a copy of the Form 8594 as filed. Each party agrees not to assert, in connection with any tax return, audit or other similar proceeding, any allocation of the Purchase Price which differs from such allocation. Section 3.3 Deposit. The Deposit shall be held subject to the terms of this ------- Agreement by Sellers, Holdings and Alltrista. Upon Closing, the Deposit shall be retained by Sellers, Holdings and Alltrista as partial consideration for the Assets. Upon termination of this Agreement by Sellers, Holdings and Alltrista pursuant to Section 11.1(c) hereof, or Section 11.1(e) hereof (provided Sellers, --------------- --------------- Holdings and Alltrista do not cause the failure to close by the Drop Dead Date) Sellers, Holdings and Alltrista shall be entitled to retain the Deposit as liquidated damages and, unless Buyer's failure to close is determined to be an intentional breach without good cause or in bad faith, such Deposit shall be retained in lieu of all other damage claims arising out of or relating to this Agreement. Upon termination of this Agreement by Buyer pursuant to Section ------- 11.1(b) hereof, Section 11.1(d) hereof or Section 11.1(e) hereof (provided Buyer - ------- --------------- --------------- did not cause the failure to close by the Drop Dead Date, which reasons shall include but not be limited to Force Majeure and inability to obtain all surveys, title commitments and Phase I environmental surveys no fewer than fifteen (15) days prior to Closing), Sellers, Holdings and Alltrista shall promptly return the Deposit to Buyer. In the event Sellers, Holdings and Alltrista believe they are entitled to retain the Deposit pursuant to this Section, they shall provide Buyer with a written notice to that effect within five (5) days of the termination of this Agreement or the Drop Dead Date, whichever is earlier. Buyer shall have fifteen (15) days from its receipt of such notice to send Sellers, Holdings and Alltrista a Notice of Dispute. If a Notice of Dispute is sent pursuant to this Section, such dispute shall be resolved pursuant to the procedures set forth in Article IX hereof. If no Notice of Dispute is sent pursuant to this Section, Sellers, Holdings and Alltrista shall be entitled to retain the Deposit. ARTICLE IV ASSUMPTION OF LIABILITIES At Closing, on the terms and conditions set forth herein, Buyer agrees to assume and discharge only the liabilities and obligations of Sellers, Holdings or Alltrista set forth on 9 Schedule 4 (the "Assumed Liabilities") for which Buyer agrees to be solely - ---------- ------------------- responsible. Sellers shall pay and be responsible for all liabilities or obligations of Sellers, Holdings or Alltrista arising from or relating to the Business or the Assets which are not Assumed Liabilities unless otherwise specifically set forth in this Agreement. ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS, HOLDINGS AND ALLTRISTA Sellers, Holdings and Alltrista jointly and severally represent and warrant to and agree with Buyer as follows, all of which representations, warranties and agreements are made as of the date of this Agreement and as of the Closing Date: Section 5.1 Disclosure Schedule. The disclosure schedule attached hereto as ------------------- Schedule 5.1 (the "Disclosure Schedule") is divided into sections which - ------------ ------------------- correspond to the sections of Article V of this Agreement. Disclosure of any --------- matter within a section of the Disclosure Schedule shall be deemed disclosure only with regard to the corresponding section of this Agreement and those sections specifically cross-referenced. Section 5.2 Organization; Power. Each Seller and Alltrista is a corporation ------------------- duly organized and validly existing under the laws of the State of Indiana. Holdings is a corporation duly organized and validly existing under the laws of the State of Delaware. Each Seller, Holdings and Alltrista is qualified to do business and is in good standing in each jurisdiction in which the character and location of the Assets or the nature of the Business makes such qualification necessary. Each Seller and Alltrista has the requisite corporate power and authority to own or lease the Assets, as the case may be, to operate the Assets as such Assets are now being operated, to conduct the Business as such Business is now being conducted and to consummate the transactions contemplated hereby. Each Seller and Alltrista has had, at all times in the past during which such Seller owned, leased or operated any Assets, the requisite corporate power and authority to own or lease the assets, as the case may have been, and to operate the Assets as such Assets were being operated at such time. Holdings does not lease or operate any Assets and does not conduct any portion of the Business. Holdings has the requisite corporate power and authority to consummate the transactions contemplated hereby. Section 5.3 Articles of Incorporation and Bylaws. Each of the Sellers, ------------------------------------ Holdings and Alltrista have furnished Buyer with (a) their articles of incorporation, as amended to date and (b) their bylaws, as amended to date. Such articles of incorporation and bylaws are in full force and effect. Section 5.4 Authorization of Agreement. The execution, delivery and -------------------------- performance of this Agreement by each Seller, Holdings and Alltrista has been duly and effectively authorized by all necessary corporate action on the part of Sellers, Holdings and Alltrista (including, but not limited to, approval by the stockholders of such entities). This Agreement constitutes, and the documents to be executed at Closing, upon execution and delivery thereof, will constitute, valid and binding obligations of Sellers, Holdings and Alltrista enforceable in accordance with their terms, except that such enforcement may be limited by bankruptcy, insolvency or other similar 10 laws affecting the enforcement of creditors' rights generally, and general principles of equity, regardless of whether enforcement is sought in a proceeding in equity or at law. Section 5.5 No Conflicts. Except as set forth in Section 5.5 of the ------------ ----------- Disclosure Schedule, the execution, delivery and performance of this Agreement by Sellers, Holdings and Alltrista will not, with or without the giving of notice or the lapse of time, or both, (a) violate any provision of law, statute, rule or regulation to which Sellers, Holdings or Alltrista is subject (excluding Bulk Sales Laws), (b) violate any judgment, order, writ or decree of any court applicable to Sellers, Holdings or Alltrista, (c) breach, violate or cause the loss of any permits, licenses, orders or approvals relating to the Business, or (d) result in a breach of or conflict with any term, covenant, condition or provision of, result in a modification or termination of, constitute a default under, or result in the creation or imposition of any lien, security interest, restriction, charge or encumbrance upon any of the Assets (other than Permitted Liens and the Assumed Liabilities) pursuant to, the articles of incorporation or bylaws of Sellers, Holdings or Alltrista or any commitment, contract or other agreement or instrument to which Sellers, Holdings or Alltrista is a party or by which any of the Assets are or may be bound or affected or from which Sellers, Holdings or Alltrista derive benefits with respect to the Business. Section 5.6 Consents and Approvals. Except as set forth in Section 5.6 of ---------------------- ----------- the Disclosure Schedule, no permit, application, notice, transfer, consent, approval, order, qualification, waiver from, or authorization of, or declaration, filing or registration with, any governmental authority is necessary in connection with the execution and delivery by Sellers, Holdings or Alltrista of this Agreement or the consummation by Sellers, Holdings or Alltrista of the transactions contemplated hereby, and no consent of any third party (including, without limitation, any governmental entity) is required to transfer any of the Assets, including, without limitation, any of the Contracts, permits, licenses or other authorizations related to the Business, or to otherwise consummate any of the transactions contemplated hereby. Section 5.7 Financial Information. Buyer has been provided with certain --------------------- unaudited financial information for the Thermoformed Products Division of Alltrista, including an income statement for the eight months ended August 31, 2001 and an unaudited balance sheet dated September 30, 2001, which is attached hereto as Exhibit 5.7(a) (collectively, the "Financial Information"). Except as -------------- --------------------- set forth in Section 5.7 of the Disclosure Schedule, the Financial Information ----------- (a) has been prepared in accordance with the books and records of the Thermoformed Products Division; (b) presents fairly in all material respects the operations and financial condition of the Thermoformed Products Division for the periods and as of the dates indicated; and (c) was prepared in accordance with United States generally accepted accounting principles consistently applied ("GAAP"), consistent with past practice and in the ordinary course of business. ---- The books of account and other financial records of each Seller, Holdings and Alltrista related to the Financial Information, Accounts Receivable, Inventory, the Assumed Liabilities, other current assets, fixed assets, accounts payable and other current liabilities of or relating to the Business or the Assets are complete and correct, are maintained in accordance with good business and financial reporting practices and are located at the addresses set forth on Schedule 1.1(d). - --------------- Section 5.8 No Undisclosed Liabilities or Claims. Except as set forth in ------------------------------------ Section 5.8 of the Disclosure Schedule, Sellers, Holdings and Alltrista have no - ----------- outstanding liabilities or 11 obligations, whether accrued, absolute, contingent or otherwise, relating to the Business except (a) to those reflected in the most recent balance sheet for Sellers included in the Financial Information and (b) current liabilities incurred in the ordinary course of business since September 30, 2001. Section 5.9 Litigation. Except as set forth in Section 5.9 of the ---------- ----------- Disclosure Schedule, there is no claim, action, suit, proceeding, arbitration, investigation or hearing or notice of hearing pending or, to Sellers', Holdings' or Alltrista's Knowledge, threatened against either Sellers, Holdings, Alltrista or any of their affiliates, relating to the Business or any of the Assets or with respect to the transactions contemplated by this Agreement. No such claim, action, suit, proceeding, arbitration, investigation or hearing listed in Section 5.9 of the Disclosure Schedule could prevent the Closing and the - ----------- consummation of the transaction contemplated hereby; provided, however, that -------- ------- Sellers, Holdings or Alltrista, as the case may be, shall retain all liability with respect to all matters set forth in Section 5.9 of the Disclosure Schedule unless a matter is specifically included in Schedule 4 as one of the Assumed ---------- Liabilities. There are no unsatisfied judgments against any of the Sellers, Holdings, Alltrista or any of their affiliates relating to the Business or the Assets. Section 5.10 Taxes. Except as set forth in Section 5.10 of the Disclosure ----- ------------ Schedule: (a) Alltrista on behalf of Sellers, Holdings and itself has prepared and filed, with the appropriate foreign, federal, state and local tax authorities, all income, excise and other Tax Returns required to be filed by Alltrista, Sellers and Holdings related to the Business as of the date hereof, all such Tax Returns are complete, true and accurate, and each Seller, Holdings and Alltrista have paid all Taxes shown on such Tax Returns to be due or which have become due pursuant to any assessments, deficiency notice, 30 day letter or similar notice received by it; (b) no extensions of any statutes of limitation have been invoked by Sellers, Holdings, or Alltrista, or any of their affiliates, with respect to any Taxes or Tax Returns related to the Business; (c) no other Tax Returns (including, without limitation, Tax Returns filed on behalf of Alltrista or its affiliates other than Sellers or Holdings) are required to be filed in connection with the Business; (d) there are no claims pending or threatened for Taxes against either Sellers, Holdings or Alltrista attributable to the Business in excess of the amounts reflected in the Financial Information for such Taxes for such entities; (e) Alltrista on behalf of each Seller, Holdings and itself has paid or provided adequate reserves for all Taxes attributable to the Business; (f) no deficiencies on either Sellers', Holdings' or Alltrista's Tax Returns or reports attributable to or otherwise allocable to the Business known to either Sellers, Holdings or Alltrista have been threatened as of the date hereof; and (g) Alltrista on behalf of each Seller, Holdings and itself has made all withholding payments required to be made under all applicable federal, state, local and foreign laws and 12 regulations with respect to compensation paid to employees relating to the Business and amounts withheld have been properly paid to the appropriate authorities. Section 5.11 Accounts Receivable and Accounts Payable. ---------------------------------------- (a) All Accounts Receivable reflected on the Financial Information or on the records of the Sellers on the Closing Date, represent sales actually made in the ordinary course of business or valid claims as to which substantial performance has been rendered and are appropriately recognized as revenue in accordance with GAAP, consistent with past practice and in the ordinary course of business. The listing of Accounts Receivable attached to Section 5.11 of the ------------ Disclosure Schedule is true and correct (including the aging thereon) as of the date of preparation, and no change has occurred since the date of preparation, except in the ordinary course of business. (b) The accounts payable of each Seller that constitute Assumed Liabilities are related to the Business are reflected on the September 30 Balance Sheet or in existence on the Closing Date arose, or will arise, from bona fide transactions in the ordinary course of business, and all such accounts payable either have been paid, are not yet due and payable or are being contested by Sellers in good faith. The listing of accounts payable attached to Section 5.11 of the Disclosure Schedule is true and correct as of September 30, - ------------ 2001 and when updated pursuant to Section 7.13 of this Agreement, will be true ------------ and correct as of the Closing Date. Section 5.12 Inventory. The Inventory is, and at Closing will be, at --------- levels consistent with the past practices of the Business in the ordinary course. Inventory is valued at the lower of cost or market in the Financial Information in accordance with GAAP, consistent with past practice and in the ordinary course of business. Section 5.13 Absence of Certain Changes or Events. Except as set forth in ------------------------------------ Section 5.13 of the Disclosure Schedule, since December 31, 2000, Alltrista, - ------------ Holdings and each Seller have conducted the Business only in the ordinary course and consistent with past practices and neither Alltrista, Holdings nor either Seller has, individually or jointly: (a) suffered any uninsured damage, destruction or loss of any of the Assets in excess of One Hundred Thousand Dollars ($100,000); (b) suffered any material adverse change in the operations, prospects, assets, results of operations or condition (financial or other) of the Business, and no event has occurred or circumstance exists that may result in such a material adverse change; (c) pledged or permitted the imposition of any lien on (other than Permitted Liens and the Assumed Liabilities) or sold, assigned, transferred or otherwise disposed of any of the Assets, except the sale of Inventory in the ordinary course of business; (d) made any change in any method of accounting or accounting principle or practice; (e) granted any general increase in the compensation to the employees associated with the Business (including any increase pursuant to any bonus, pension, profit-sharing or other plan or commitment), or any special increase in the compensation payable or to become payable 13 to any such employee, or made any bonus payments to any such employee, except for normal merit and cost of living increases in the ordinary course of business and in accordance with past practice; (f) entered into any employment agreements with any employees associated with the Business; or (g) failed to operate the Business in the ordinary course or to preserve the Business intact, to keep available to Buyer the services of the employees of Sellers, Holdings or Alltrista related to the Business and, to the extent associated with the Business to preserve for Buyer the goodwill of the suppliers and customers of the Business, and others having Business relations with Sellers, Holdings or Alltrista. Section 5.14 Contracts and Commitments. Section 5.14 of the Disclosure ------------------------- ------------ Schedule lists all of the following which relate to the Assets, the Business and/or the employees of each Seller, Holdings and Alltrista employed in connection with the Business (collectively, the "Contracts"): --------- (a) employment, consulting, bonus, profit-sharing, percentage compensation, deferred compensation, pension, welfare, retirement, stock purchase or stock option plans or agreements with any employees, agents, affiliates or labor unions, excluding agreements terminable by Sellers on not more than 30 days' notice without liability or penalty; (b) contracts, agreements, or commitments relating to any joint venture, partnership, strategic alliance, or sharing of profits or losses with any person; (c) leases for all Real Property; (d) contracts, agreements, or commitments containing covenants purporting to limit the freedom of either Seller or any of their employees to compete in any business or in any geographic area; (e) contracts, agreements, or commitments requiring payments or distributions to any employee of Sellers, Holdings or Alltrista or any relative or affiliate of any such person; (f) contracts, agreements, or commitments not disclosed on any other Schedule to this Agreement that involve the payment or receipt by either Seller, Holdings or Alltrista (whether in payment of a debt, as a result of a guarantee or indemnification, for goods or services, or otherwise) of more than Fifty Thousand Dollars ($50,000) per year or One Hundred Thousand Dollars ($100,000) over the initial term thereof, or are otherwise material to the Business; and (g) material contracts not made in the ordinary course of business. Each Seller, Holdings and Alltrista have made true and correct copies of all of the Contracts available to Buyer, except for Contracts with Customers, which shall be provided to Buyer within five (5) days of the execution of this Agreement. Furthermore, such Customer Contracts shall not be included in Section ------- 5.14 of the Disclosure Schedule until five (5) days following the - ---- 14 execution of this Agreement, at which time an update with all such information shall be provided to Buyer. Section 5.15 Tooling and Dies. Section 5.15 of the Disclosure Schedule ---------------- ------------ lists each of the tools and dies owned by Sellers, Holdings or Alltrista and used in the Business, and provides the location of each respective item. Sellers, Holdings and Alltrista have all tools and dies needed to serve their customers in the ordinary course as the Business has been operated over the past eighteen (18) months, unless a customer has requested the return of its tools and dies. Section 5.16 Assumed Liabilities. Neither of the Sellers, Holdings nor ------------------- Alltrista is in default with respect to any of the Assumed Liabilities, all such Assumed Liabilities were incurred in the ordinary course of business, and neither of the Sellers, Holdings nor Alltrista has received any notice of, nor otherwise to their Knowledge is there, any claim, cause of action or other factor that would cause any Assumed Liability to exceed the corresponding amount, if any, set forth in Schedule 4. ---------- Section 5.17 OSHA, Environmental. ------------------- (a) Except as set forth in Section 5.17 of the Disclosure Schedule, ------------ neither Alltrista, Holdings nor either Seller has received any written notice from a governmental authority that the Business or Assets have not been in the preceding three fiscal years or are presently not in compliance with OSHA and any applicable state provisions, and to the Knowledge of Holdings, Alltrista and Sellers, the Assets and operations of Alltrista, Holdings and each Seller related to the Business are in compliance with OSHA and any similar or related applicable state law provisions. In addition, after making an inquiry of the plant managers of the Business, to the Knowledge of Sellers, Holdings and Alltrista, the Business has not been subject to an OSHA inspection within the past six months, except with regard to the Portage, Wisconsin facility, and they do not anticipate the issuance of any citations as a result of that inspection. (b) Except as set forth in Section 5.17 of the Disclosure Schedule: ------------ (i) Neither Alltrista, Holdings nor either Seller has deposited or caused to be deposited, on, under or about any Real Property, including without limitation into the ambient air, surface water, groundwater, land surface, or subsurface strata, any Release of Hazardous Substances, except in compliance with Environmental Laws; (ii) Neither Alltrista, Holdings nor either Seller has used any Real Property to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce, process or in any manner deal with Hazardous Substances, except in compliance with applicable Environmental Laws; (iii) With respect to the Business, Alltrista, Holdings and each Seller has obtained all required registrations, permits, licenses, and other authorizations which are required under federal, state and local laws and regulations relating to pollution or protection of the environment, including, but not limited to, all Environmental Laws and including all laws relating to emissions, discharges, releases, or threatened releases of Hazardous Substances or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances; 15 (iv) With respect to the Business, Alltrista, Holdings and each Seller are in compliance with all terms and conditions of required registrations, permits, licenses and authorizations and are also in compliance with other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in the Environmental Laws or contained in any regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder; (v) There is no civil, criminal, or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter pending or threatened with respect to the Business relating in any way to (a) the violation of Environmental Laws or any regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated, or approved thereunder, or (b) the release into the environment of any Hazardous Substances, whether or not occurring at or on a site owned, leased or operated by Alltrista, Holdings or either Seller relating to the Business; (vi) With respect to the Business, Alltrista, Holdings and each Seller have timely filed all reports, obtained all required approvals, generated and maintained all required data, documentation and records required by the Environmental Laws or any regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated, or approved thereunder. Section 5.18 Customers and Vendors. Section 5.18 of the Disclosure Schedule --------------------- ------------ sets forth correct and complete lists of the customers of the Business that resulted in revenues during the most recently completed fiscal year in excess of One Million Dollars ($1,000,000) ("Customers") and the top fifteen vendors --------- ("Vendors") of the Business during the most recently completed fiscal year, ------- based on the aggregate amount of expenditures by Alltrista, Holdings or either Seller in such fiscal year. Except as described in Section 5.18 of the ------------ Disclosure Schedule, since August 31, 2001, no Customer has informed Sellers, Holdings or Alltrista that it will change its business relationship with the Business and, to the Knowledge of Sellers, Holdings and Alltrista, individually or jointly, there are not any circumstances which are likely to cause such a change. Except as described on Section 5.18 of the Disclosure Schedule, Sellers, ------------ Holdings and Alltrista, individually or jointly, have no reason to believe that, following the Closing, any particular Customer of the Business will fail to do business with Buyer substantially as such Customer currently does business with Sellers, Holdings or Alltrista, as the case may be. Section 5.19 Books and Records. The books and corporate records of each ----------------- Seller, Holdings and Alltrista related to the Business and the Assets are complete and correct, are maintained in accordance with good business practices and are located at the address set forth on Schedule 1.1(d). Section 5.20 Employment Matters. ------------------ (a) Except as provided in Section 5.20(a) of the Disclosure Schedule, --------------- each Seller, Holdings and Alltrista is in compliance with all laws, rules and regulations respecting employment, employment practices, terms and conditions of employment and wages and hours 16 with respect to the Business Employees, including, without limitation, all laws relating to employee relations, equal employment, fair employment practices, entitlements, prohibited discrimination, harassment, and retaliation, required accommodation, family and medical leave, and other similar employment practices or acts. With respect to the employees of each Seller relating to the Business, ("Business Employees"), Alltrista on behalf of each Seller has ------------------ withheld all amounts required by law or agreement to be withheld from the wages or salaries of, and other payments to such Business Employees and any former Business Employees and is not liable for any arrearage of wages, salaries or other payments to such employees and any former employees or any taxes or penalties for failure to comply with any of the foregoing. Holdings does not have any employees relating to the Business. (b) Except as set forth in Section 5.20(b) of the Disclosure Schedule, to --------------- Seller's, Holdings' and Alltrista's Knowledge, there are no pending demands for recognition of a union as collective bargaining agent for all or any part of Business Employees. Except as set forth in Section 5.20(b) of the Disclosure --------------- Schedule, neither Seller, Holdings nor Alltrista is a party to any collective bargaining or other labor agreement, and there is no unfair labor practice charge or complaint relating to the Business against either Sellers, Holdings or Alltrista pending or, to the Knowledge of Sellers, Holdings and Alltrista, threatened before the National Labor Relations Board or any other comparable authority. There is no labor strike, dispute, slowdown, or stoppage actually pending or, to the Knowledge of either Sellers, Holdings or Alltrista, threatened against or involving either Sellers, Holdings or Alltrista; no attempt to organize the Business Employees has been made or, to either Sellers', Holdings' and Alltrista's Knowledge, proposed in the last three years; no such grievance or arbitration against either Sellers, Holdings or Alltrista or the Business is pending and, to the Knowledge of either Sellers, Holdings or Alltrista, no such grievance or claim for arbitration is threatened; no private agreement restricts either Sellers, Holdings or Alltrista from relocating, closing, or terminating any of its operations or facilities; and neither Sellers, Holdings nor Alltrista has in the past three years experienced any work stoppage or other labor difficulty or committed any unfair labor practice related to the Business. Section 5.21 Employee Benefit Plans. ---------------------- (a) Each employee pension benefit plan (as defined in Section 3(2) of Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) ----- of either Sellers under which any benefits have been provided to any Business Employee and that is intended to be a tax qualified plan under Section 401(a) of the Code (the "Plan") has been and is being operated in accordance with the ---- documents and instruments governing such Plan, and such documents and instruments are consistent with those provisions of ERISA and the regulations adopted pursuant thereto that are effective and operative as of the date of this Agreement, except to the extent that such documents and instruments have not yet been amended for certain changes in laws and regulations. To either Sellers', Holdings' or Alltrista's Knowledge, no Plan has incurred any accumulated funding deficiency within the meaning of Section 302 of ERISA, whether or not waived, and neither Sellers, Holdings nor Alltrista has incurred any liability with respect to the Plan that is not reflected in the Financial Information. To each Seller's, Holdings' and Alltrista's Knowledge, no Plan nor any trust created thereunder nor any trustee or administrator thereof has engaged in a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code for which an exception is not available. Each Seller, 17 Holding or Alltrista shall make all required contributions to each Plan within the period required by ERISA and the Code. (b) Section 5.21(b) of the Disclosure Schedule contains a list of each --------------- Plan, employee welfare benefit plan (as defined in Section 3(1) of ERISA), pension plan, stock option, stock purchase, deferred compensation plan or arrangement, and other employee fringe benefit plan or arrangement currently maintained, contributed to or required to be maintained or contributed to by either Seller for the benefit of any present Business Employees and their dependents (all the foregoing being herein called "Benefit Plans"). Each Seller ------------- has delivered or made available to Buyer true, complete and correct copies of (i) each Benefit Plan (or, in the case of any unwritten Benefit Plans, descriptions thereof), (ii) the most recent summary plan description for each Benefit Plan (if any such description was required) and (iii) the most recent Form 5500 for each Benefit Plan, together with all attachments (if such Form 5500 was required to be filed). (c) Each Benefit Plan has been operated and is being operated in compliance with all applicable requirements of the Code and ERISA, and in accordance with the documents and instruments governing such Benefit Plan, except to the extent that such documents and instruments have not yet been amended for certain changes in laws and regulations, which amendments are not yet legally required. (d) Except as set forth on Section 5.21(d) of the Disclosure Schedule, --------------- Sellers do not offer post-retirement medical benefits to any Business Employee who retires from a Seller (other than as required under Section 4980 B of the Code ("COBRA")). Sellers have reserved the right to terminate or amend any such ----- post retirement medical benefits at will. Section 5.22 Employees. --------- (a) Section 5.22(a) of the Disclosure Schedule sets forth a complete and --------------- accurate list of all Business Employees as of the date set forth therein, showing for each: name, hire date, current job title or description, current salary level or wage rate and any bonus, commission or other remuneration paid during the most recently completed fiscal year. Except as set forth on Section ------- 5.22(a) of the Disclosure Schedule, as of the date hereof none of the Business - ------- Employees is currently on short-term or long-term disability, absence, maternity or other leave of absence. None of the Business Employees are employees of Holdings; (b) Except as set forth in Section 5.22(b) of the Disclosure Schedule, each --------------- Business Employee has executed a proprietary agreement in the form set forth as Exhibit 5.22(b) hereto that is currently in effect (the "Proprietary - --------------- ----------- Agreements"). Except as set forth in Section 5.6 of the Disclosure Schedule, - ---------- ----------- each Proprietary Agreement is assignable to Buyer without the consent of the respective Business Employee. (c) Sellers are currently, and have at all times since November 7, 1986, been in compliance with the requirements of the Immigration Reform and Control Act of 1986, as amended, as codified at 8 U.S.C. (S) 1324a, et seq.; (d) Sellers are not currently subject to any investigation or administrative procedure concerning its compliance with the Immigration Reform and Control Act of 1986, as codified at 8 U.S.C. (S) 1324a, et seq.; 18 (e) Sellers have not made a false statement or misrepresentation to the Immigration and Naturalization Service ("INS") or the Department of Labor --- ("DOL") in connection with any application or petition for immigration benefits; --- (f) Sellers are not subject to any administrative or court order that precludes, hampers or in any way limits its ability to submit and obtain approvals of petitions or applications from the INS or the DOL for immigration benefits; (g) Sellers have not made a representation or promise to any person concerning any requested sponsorship for any temporary or permanent immigration status; (h) Sellers have identified in Section 5.22(h) of the Disclosure Schedule --------------- every Business Employee for whom they currently have petitions or applications for immigration benefits pending with the INS or DOL and have provided true and complete copies of all petitions and applications to Buyer; and (i) Sellers have identified on Section 5.22(i) of the Disclosure Schedule --------------- every Business Employee who is authorized to be employed pursuant to approval of the INS of a temporary nonimmigrant classification. Section 5.23 Finder. There is no person or entity that is entitled to a ------ finder's fee or any type of commission in relation to or in connection with the transactions contemplated by this Agreement as a result of any agreement or understanding with Alltrista, Holdings or Sellers. Section 5.24 Sufficiency of Assets. Except as otherwise provided in Section --------------------- 5.24 of the Disclosure Schedule and except for the Excluded Assets, the Assets include all of the assets associated with the Business, including, but not limited to, fixed assets, intangible assets, licenses, permits, contracts and rights, that relate to, arise from, are necessary or are used or held by Holdings, Sellers or Alltrista in the operation of the Business as presently conducted. Except for inventory sold in the ordinary course of Business, all Assets will be transferred to Buyer in their current physical condition, subject to ordinary normal wear and tear, and at their current locations as of the date of this Agreement. The Assets are all located at the addresses set forth on Schedule 1.1(d). The chief executive offices, as defined in the Uniform - --------------- Commercial Code, of Sellers, Holdings and Alltrista are maintained at the respective addresses set forth on Schedule 1.1(d). None of the assets of the --------------- Sellers, Holdings or Alltrista located in Ft. Smith, Arkansas, relate to the Assets or are used in the Business. Section 5.25 Governmental Authorizations. Except as set forth in Section --------------------------- ------- 5.25 of the Disclosure Schedule, each Seller, Holdings and Alltrista have all - ---- licenses, permits or other authorizations from governmental, regulatory or administrative agencies or authorities required for the operation of the Business in the manner presently conducted, each of which will be in full force and effect on the Closing Date. All such licenses, permits and authorizations shall be transferred to Buyer at Closing and, except as set forth in Section 5.6 ----------- of the Disclosure Schedule, no consents or approvals are necessary to consummate such transfers to Buyer. Section 5.26 Compliance with Applicable Laws. Except as set forth in ------------------------------- Section 5.26 of the Disclosure Schedule, Sellers, Holdings and Alltrista have - ------------ each been, is, and on the Closing Date will continue to be, in compliance with all applicable laws (including duties imposed by 19 common law), rules, regulations, orders, ordinances, judgments and decrees of governmental authorities (federal, state, local and foreign) having jurisdiction over, applicable to or otherwise concerning the Business, Assets, and the products and employees of Alltrista, Holdings and Sellers related to the Business. Section 5.27 Title to Assets, Absence of Liens and Encumbrances. -------------------------------------------------- (a) Schedule 2.1 contains a list of the fixed assets used in the Business ------------ (other than the Real Property and the Excluded Assets). As of the Closing Date and except for the Assumed Liabilities, Alltrista, Holdings or Sellers will own all right, title and interest in and to all of the Assets, free and clear of all liens, encumbrances, security interests, options and pledges, other than Permitted Liens. (b) The leases and other agreements or instruments included in the Contracts, under which Alltrista, Holdings or each Seller holds, leases or is entitled to the use of any personal property used in the Business, are in full force and effect and all rentals, or other payments payable thereunder prior to the date hereof have been duly paid, and Alltrista, Holdings or each Seller, as the case may be, enjoys peaceable and undisturbed possession under all such leases. Section 5.28 Intellectual Property. Attached hereto as Schedule 2.1(l) is a --------------------- --------------- true and complete list of all patents, trademarks, copyrights and assumed business names used in the Business as now being conducted (other than for off-the-shelf software programs that have not been customized for use by Sellers, Holdings or Alltrista). Except as set forth in Schedule 2.1(l), --------------- Sellers, Holdings or Alltrista owns or has the right to use all Intellectual Property necessary to the conduct of Business as presently conducted and as necessary to develop Sellers', Holdings' or Alltrista's products and services as such products and services are currently anticipated to be developed. Except as indicated in Schedule 2.1(l), with respect to the Intellectual Property: --------------- (a) Sellers, Holdings or Alltrista owns all right, title, and interest in and to or a valid and enforceable license or waiver to use all of such Intellectual Property; (b) there are no outstanding notices or claims (written or oral, past or present) received by Sellers, Holdings or Alltrista asserting the infringement by, or invalidity, abuse, misuse, or unenforceability of, any of such Intellectual Property by the Sellers, Holdings or Alltrista, and, to Sellers', Holdings' and Alltrista's Knowledge, there are no grounds for the same; and (c) to the extent transferable, all such Intellectual Property will be owned or available for use by Buyer on identical terms and conditions for eighteen (18) months after Closing or for such shorter period of time as Sellers, Holdings or Alltrista have the right to use such Intellectual Property. (d) Sellers, Holdings and Alltrista have no Knowledge of any defect in the title of the Intellectual Property acquired under this Agreement; and (e) Sellers, Holdings and Alltrista have no notice of (i) any ownership contests with respect to such Intellectual Property or (ii) any uncorrectable breaks or disruptions to the chain-of-title of such Intellectual Property as presented to Buyer under this Agreement or in the 20 assignment documents executed by Alltrista or any of its subsidiaries in connection with such Intellectual Property. Except as disclosed on Section 5.28 of the Disclosure Schedule, the conduct of ------------ the Business has not and does not infringe any Intellectual Property rights of others. Except as set forth on Schedule 2.1(l), all of the patents, trademarks --------------- (including service marks and logos) and copyrights owned by Sellers, Holdings or Alltrista have been duly registered in, filed in or issued by the United States Patent and Trademark Office or Register of Copyrights or the corresponding offices of other countries as identified on Schedule 2.1(l) and have been --------------- properly maintained and renewed, consistent with commercially reasonable business practices, in accordance with all applicable provisions of law and administrative regulations in the United States and each such country, except in those instances set forth in Schedule 2.1(l) where registration applications are --------------- pending in either such Office or Register. Except as disclosed in Section 5.28 ------------ of the Disclosure Schedule, there are no licenses now outstanding or other rights granted to third parties under any Intellectual Property. To the extent any Intellectual Property exists, Sellers, Holdings or Alltrista have taken reasonable security measures to maintain the confidentiality of and to protect such Intellectual Property. After the Effective Time, all patents, patent applications or other Intellectual Property used or useful in the Business shall be unimpaired as a result of the transactions anticipated by this Agreement. Section 5.29 Real Property. ------------- (a) Except as set forth in Section 5.29 of the Disclosure Schedule, (i) ------------ there are no physical or mechanical defects in any of the improvements on the Real Property which would impair the intended use of the Real Property, and (ii) all such improvements are reasonably functional for their intended use (subject to normal wear and tear); (b) Each Seller is the sole owner of good, marketable and insurable fee simple title to the owned Real Property and legal, valid and binding leasehold title to the leased Real Property free and clear of all liens, security interests, covenants, conditions, rights-of-way, easements and encumbrances of any kind or character whatsoever, subject only to the Permitted Encumbrances and the Assumed Liabilities as noted in the Schedules hereto. (c) Neither Seller has committed or obligated itself in any manner whatsoever to sell the owned Real Property, or any portion thereof, to any party other than Buyer. Except with respect to Permitted Encumbrances and Permitted Liens, neither Seller has hypothecated or assigned any rents or income from the Real Property, or any portion thereof, in any manner except pursuant to secured financing to be assumed or discharged at Closing. (d) All buildings and improvements on the Real Property have received all approvals of governmental authorities (including licenses and permits) reasonably necessary in connection with the current ownership and operation thereof and such buildings and improvements in general have been operated and maintained in compliance with applicable laws, rules and regulations; and 21 (e) All buildings and improvements on the Real Property are supplied with utilities and other similar services or have available utilities and other similar services (e.g., on-site wells) reasonably adequate for the present operation. Section 5.30 Working Capital. --------------- (a) The Initial Working Capital of the Business at September 30, 2001 is Twenty Million Two Hundred Thirty Thousand Two Hundred Seventy Dollars ($20,230,270), as calculated on Schedule 1.1(a). The components of the --------------- calculation have been determined in accordance with GAAP, and the calculation has been performed in accordance with GAAP, consistent with past practice and in the ordinary course of business (including the accounting principles, policies and practices set forth on Schedule 1.1(a)). ---------------- (b) The Closing Working Capital of the Business will not be less than the Initial Working Capital. Section 5.31 Hardware and Software. The computers, hardware, data --------------------- transmission equipment, software and software licenses conveyed to Buyer as a part of the Assets are adequate to run the Business in the ordinary course. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER Buyer hereby represents, warrants and covenants to and agrees with Alltrista, Sellers and Holdings as follows, all of which representations, warranties and agreements are made as of the date of this Agreement and as of the Closing Date: Section 6.1 Organization. Buyer is a corporation duly organized and ------------ validly existing under the laws of its state of incorporation. Buyer has the requisite corporate power and authority to execute, deliver and perform this Agreement and consummate the transactions contemplated hereby. Section 6.2 Authorization of Agreement. The execution, delivery and -------------------------- performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement constitutes, and the documents to be executed at Closing, upon execution and delivery thereof, will constitute, valid and binding obligations of Buyer enforceable in accordance with their terms, except that such enforcement may be limited by (a) bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally, and (b) general principles of equity, regardless of whether enforcement is sought in a proceeding in equity or at law. Section 6.3 Approvals. Excluding Bulk Sales Law requirements, no --------- permit, application, notice, transfer, consent, approval, order, qualification, waiver from or authorization of or declaration, filing or registration with any governmental authority is necessary in connection with the execution and delivery by Buyer of this Agreement or the consummation by Buyer of the transactions contemplated hereby, and no consent of any third party is required to consummate any of the transactions contemplated hereby. 22 Section 6.4 Finder. There is no person or entity that is entitled to a ------ finder's fee or any type of commission in relation to or in connection with the transactions contemplated by this Agreement as a result of any agreement or understanding with Buyer. Section 6.5 No Conflicts. The execution, delivery and performance of ------------ this Agreement by Buyer and consummation by Buyer of the transactions contemplated hereby will not, with or without the giving of notice or the lapse of time, or both, (a) violate any provision of law, statute, rule or regulation to which Buyer is subject, (b) violate any judgment, order, writ or decree of any court applicable to Buyer, or (c) result in the breach of or conflict with any term, covenant, condition or provision of, result in the modification or termination of, constitute a default under, or result in the creation or imposition of any lien, security interest, restriction, charge or encumbrance upon any of the assets of Buyer pursuant to the articles of incorporation or bylaws of Buyer, or any commitment, contract or other agreement or instrument to which Buyer is a party or by which any of the Assets is or may be bound or affected or from which Buyer derives benefit. ARTICLE VII COVENANTS OF THE PARTIES Section 7.1 Operation Of Business Prior To Closing. Between the date -------------------------------------- hereof and the earlier of the termination of this Agreement or the Closing Date: (a) Negative Covenants. Alltrista, Sellers and Holdings covenant and ------------------ agree with Buyer that, except with the prior written consent of Buyer, neither Alltrista, Sellers nor Holdings shall do any of the following with respect to the Business or the Assets other than in the ordinary course of business: (i) sell or otherwise dispose of any Assets or pledge, assign or otherwise convey, or cause any lien to be placed upon any Asset other than Permitted Liens or the Assumed Liabilities; (ii) amend the articles of incorporation or bylaws of Alltrista, Holdings or either Seller in such fashion as to have any effect on the Business, the Assets or the transactions contemplated by this Agreement; (iii) permit the corporate existence of Alltrista, Holdings or either Seller or any permit of Alltrista, Holdings or Sellers relating to the Business to be suspended, lapsed, revoked or modified; (iv) amend, terminate or renew any Contract on terms that have not been approved by Buyer; (v) allow any insurance policy relating to the Business or any Asset to be amended or terminated without simultaneously replacing such policy with a policy providing substantially equivalent coverage, insuring comparable risks and issued by an insurance company financially comparable to the prior insurance company; 23 (vi) renegotiate, renew or extend the existing collective bargaining agreements for Business Employees, increase any compensation or benefits payable, enact any termination pay policies or enter into any employment agreements with any Business Employees, except pursuant to any agreements disclosed in Section 5.14 of the Disclosure Schedule ------------ which mandate such increases or termination pay policies or for normal salary adjustments consistent with past practice; or (vii) modify the nature or amount of the Assumed Liabilities other than in the ordinary course of business. (b) Affirmative Covenants. Alltrista, Holdings and Sellers shall use --------------------- all commercially reasonable efforts to: (i) operate the Business in the ordinary course of business; (ii) comply in all respects with all applicable laws affecting the Business; (iii) pay accounts payable of the Business in accordance with its past practice; and (iv) preserve their relationships with customers of and suppliers to the Business and others having business relations with the Business. Section 7.2 Approvals and Consents. Each party shall use its reasonable ---------------------- best efforts to consummate the transactions contemplated hereby on or prior to the Closing Date (including, but not limited to, the fulfillment of all closing conditions) and to obtain in writing prior to the Closing Date all Closing Approvals and shall deliver to the other party copies of such approvals and consents in form and substance reasonably satisfactory to the other party. If any party hereto learns prior to Closing that a permit, application, notice, transfer, consent, approval, order, qualification, waiver from, or authorization of, or declaration, filing or registration with, any third party is necessary to transfer the Assets to Buyer (but that it has not been obtained), such party shall update Section 5.6 of the Disclosure Schedule to add such item or, if such ----------- party is the Buyer, it shall notify Sellers of such omission from Section 5.6 of ----------- the Disclosure Schedule and Sellers shall cause it to be added. Section 7.3 Payment of Liabilities, Bulk Sales. Buyer and Sellers, ---------------------------------- Holdings and Alltrista hereby waive compliance with the bulk-transfer provisions of the Uniform Commercial Code (or any similar law) ("Bulk Sales Laws") in --------------- connection with the transactions contemplated by this Agreement. Section 7.4 Access Prior to Closing; Environmental Investigation. ---------------------------------------------------- Subject to Section 7.11 hereof, from the date of this Agreement until the ------------ Closing Date (or, if earlier, the date this Agreement is terminated), Alltrista, Holdings and each Seller shall provide Buyer, its agents and designees, upon reasonable prior notice, the right to go upon the Real Property for the purpose of inspecting the same and making such tests, inquiries and examinations, including, but not limited to, Phase I environmental site assessments (at Buyer's sole expense), as Buyer shall deem necessary. Sellers, Holdings and Alltrista shall further provide Buyer and its representatives with reasonable access to, and will make available for inspection and review, the 24 Assets, all properties, books, records and accounts, and with reasonable prior notice to Sellers, personnel of Sellers, Holdings and Alltrista relating to the Business and Customers of the Business (provided, however, that no discussions -------- ------- with Customers shall take place without a representative of Alltrista present) in order that Buyer may have a reasonable opportunity to make such investigation as it shall desire to make of the Business during normal business hours. Section 7.5 Sellers' Employees, Retirement Benefits. --------------------------------------- (a) Prior to the Closing Date, Buyer shall offer employment to all of the Business Employees of Sellers other than those employees on long-term disability listed in Section 5.22 of the Disclosure Schedule (the "Leave Employees") or ------------ --------------- Kyle DeJaeger, Jim Rahn or Jim Bescup (the "Ft. Smith Employees") (all such ------------------- Business Employees to whom Buyer shall be required to offer employment and who accept such employment are referred to herein as the "Transferred Employees"). --------------------- Each Seller, Holdings and Alltrista shall make reasonable efforts to assist Buyer in securing the employment of the Business Employees to whom Buyer shall be required to offer employment hereunder. The terms of employment with Buyer of the Transferred Employees shall provide that the compensation and benefits of each Transferred Employee with Buyer shall not be less than the Transferred Employee's base compensation or base hourly rate of pay and basic benefits (other than post-retirement life insurance benefits) with Sellers as of September 30, 2001. (b) Sellers, Holdings and Alltrista shall be liable for workers' compensation claims for incidents occurring up to and on the Closing Date. (c) Each Seller shall fully vest, effective as of the Closing Date, the Transferred Employees who are participating in any employee benefit plans of Sellers, Holdings and Alltrista that are intended to be qualified under Section 401(a) of the Code. Buyer shall have no obligation to allow the Transferred Employees to participate in its defined benefit pension plan. Except as otherwise specifically stated in this Section 7.5(c), the Transferred Employees shall be treated as new employees of Buyer for purposes of Buyer's Benefit Plans. Buyer shall amend its medical, life and 401(k) plans to provide that Transferred Employees shall receive service credit under such plans for purposes of eligibility and vesting but not for purposes of benefit accrual. The Transferred Employees shall not be eligible to participate in Buyer's pension plan. For purposes of Buyer's vacation policy, Transferred Employees shall also receive credit for years of service with Alltrista or Sellers. (d) Sellers, Holdings and Alltrista shall continue to provide health care continuation coverage under COBRA on behalf of all persons who are qualified beneficiaries and all Business Employees who are Business Employees on the Closing Date, but any related expense shall be borne by the Business Employees. (e) The employment of all Transferred Employees with Sellers shall terminate effective at the close of business on the Closing Date. Sellers shall complete all necessary paperwork to complete the termination of employment. All Transferred Employees shall receive their final paycheck from Sellers, Holdings or Alltrista consistent with applicable state and local law. Sellers, Holdings and Alltrista shall properly provide to the Transferred Employees all notices regarding the termination of employment required by federal, state, or local laws, or 25 company policy. Unless identified as an Assumed Liability, Sellers shall be responsible for all employment termination and severance liabilities arising at or prior to Closing, including but not limited to any payments under any change-in-control agreements, consulting agreements and employment agreements. Sellers shall be responsible for all employment terminations and severance liabilities arising at any time in connection with any of the Business Employees and Leave Employees who are not Transferred Employees. (f) The employment of all Transferred Employees with Buyer shall commence effective the start of business on the first business day following the Closing Date. Buyer shall complete all necessary paperwork to begin the employment of each employee. Prior to Closing, at times reasonably requested by Buyer and by delivery of prior notice, Sellers, Holdings and Alltrista shall allow Buyer to conduct meetings with the Transferred Employees to explain the transition, terms, and conditions of employment to the Transferred Employees. Unless otherwise provided in this Agreement, Buyer shall be fully responsible for the normal payroll and payroll-related benefits reflected upon Schedule 1.1(a) (as --------------- updated at Closing) as "Accrued Salaries and Benefits" that arise before Closing, to the extent they relate to the Transferred Employees as set forth in Schedule 4, and any liabilities arising in connection with termination of - ---------- employment of the Transferred Employees occurring after the Closing. (g) Nothing in this Section 7.5 shall prohibit Buyer from terminating the ----------- employment of a Transferred Employee for any or no reason with or without notice at any time after the Closing. Section 7.6 Access After the Closing. After the Closing, Alltrista, ------------------------ Holdings and each Seller shall afford Buyer reasonable temporary access to the Excluded Assets and Excluded Records (including related computers and computer records) or corporate records retained by Alltrista, Holdings or Sellers if necessary to operate the Business and Buyer shall afford each Seller reasonable temporary access to records acquired hereunder and to the Transferred Employees to the extent necessary for each Seller to reasonably operate its business and to prepare its tax returns. After the Closing, Buyer shall afford Sellers reasonable access to any records acquired hereunder for legitimate business purposes. Section 7.7 Taxes. ----- (a) Buyer and Sellers shall share equally all state and local sales, transfer, excise, value-added, or other similar taxes (including, without limitation, all state and local taxes in connection with the transfer of the Real Property) and any deficiency, interest, or penalty asserted with respect thereto, and all recording and filing fees that may be imposed by reason of the sale, transfer, assignment, or delivery by Sellers of the owned Real Property, and each Seller shall pay all other such taxes or fees for all other Assets. Sellers shall be responsible for the preparation and filing of all required Tax Returns and (except for prorated Taxes specifically assumed by Buyer hereunder) shall be liable for the payment of any and all Taxes relating to all periods through the Closing Date (including all Taxes resulting from the sale and transfer by Sellers of Assets hereunder). (b) The parties hereto agree to furnish or cause to be furnished to one another, upon request, as promptly as practicable, such information and assistance relating to the Assets, the 26 Assumed Liabilities and the Business as is reasonably necessary for the filing of all Tax Returns, and making of any election related to Taxes, the preparation for any audit by any taxing authority, and the prosecution or defense of any claim, suit or proceeding relating to any Tax Return. The parties hereto shall reasonably cooperate with each other in the conduct of any audit or other proceeding related to taxes involving the Business and each shall execute and deliver such other documents as are reasonably necessary to carry out the intent of this Section 7.7. Alltrista, Holdings, each Seller and Buyer shall ----------- preserve until the fifth anniversary of the Closing Date all records possessed by such party after the Closing relating to any of the Assets, Assumed Liabilities or the Business. The parties shall cooperate with each other to retain records for a reasonably longer period if reasonably requested by either of them. In addition, from and after the Closing Date, upon reasonable notice and during normal business hours, the parties shall provide access to each other and their respective representatives, at the expense of the requesting party, to such files and records as the requesting party may reasonably deem necessary in connection with any such return, filing, audit, or other proceeding. (c) All property taxes levied with respect to the Real Property and any personal property included in the Assets for a taxable period that includes (but does not end on) the Closing Date shall be apportioned between Sellers and Buyer as of the Closing Date based on the number of days of such taxable period included in the Pre-Closing Tax Period and the number of days of such taxable period included in the Post-Closing Tax Period. Sellers shall be liable for the proportionate amount of such taxes that is attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the proportionate amount of such taxes that is attributable to the Post-Closing Tax Period. Lease, rental and utility payments shall also be allocated among Buyer and each Seller based on the portion of the relevant period that such entity owned the Property. At Closing, Sellers and Buyer shall agree to a statement setting forth the amount of reimbursement to which each is entitled under this Section 7.7, together with ----------- such supporting evidence as is reasonably necessary to calculate the proration amount. The net proration amount shall be paid by the party owing it to the other at Closing. Buyer and Sellers shall cooperate prior to the Closing to agree on mutually acceptable allocations with respect to any other cost typically allocated in connection with similar real property closings. Section 7.8 Survey and Title Commitments. ---------------------------- (a) Buyer, at its cost and expense, will obtain, as soon as practicable using all reasonable efforts, a current ALTA on-the-ground/as built survey of each parcel of Real Property (collectively, the "Surveys" and each, a "Survey"), ------- ------ prepared by licensed surveyors chosen by Buyer and Buyer's selected title company (the "Title Company"). The surveys shall be certified to Buyer and the ------------- Title Company and shall contain such other documentation and certifications as Buyer or the Title Company may require. The Surveys shall be used for a description of the Real Property contained in the deeds, lease assignments and all other documents related to this transaction which require a legal description. (b) Buyer shall obtain, at its cost and expense, (i) current title insurance commitments (collectively, the "Title Commitments" and each, a "Title ----------------- ----- Commitment") pursuant to which the Title Company shall agree to issue to Buyer, - ---------- at Sellers', Holdings' and Alltrista's expense, owner's policies of title insurance (collectively, the "Title Policies, and each, a "Title Policy") on the -------------- ------------ ALTA standard Form B-1970 (amended 10-17-90) policy form or such other form as may be 27 acceptable to Buyer (except that the standard exceptions relating to survey matters, rights of parties in possession, other than the rights of tenants, as tenants only, under any leases, mechanic's liens, easements or claims of easements not of record, and taxes and assessments not shown by the public records, shall be eliminated), in an amount to be determined by Buyer, insuring marketable fee simple title to the owned Real Property in Buyer and valid leasehold interest of the Buyer in the leased Real Property upon recording of the deeds or assignments, subject only to those matters not disapproved by Buyer (pursuant to subsection "(c)" below) and no other matters, and (ii) complete and legible copies of all exception documents (the "Exception Documents") listed in ------------------- the Title Commitment. All liens and encumbrances securing the payment of money other than the current year's ad valorem taxes (the "Monetary Liens") shall be -------------- removed by Sellers at or before the Closing. The Title Policy shall provide (i) full coverage against mechanics' or materialmen's liens, (ii) an access endorsement, (iii) survey endorsement insuring that the land described in the Title Policy is the same land as the land described and depicted in the Survey, (iv) tax lot endorsement affirmatively insuring that the Land consists of one or more separate tax lots and is assessed separately from all other property, (v) a 3.1 zoning endorsement including parking; and (vi) such other coverages and endorsements as reasonably shall be required by Buyer. (c) If a Survey or Title Commitment, as initially issued or as redated to the Closing Date, shall disclose title exceptions, or if any title matter is otherwise unacceptable to Buyer (those disapproved title matters as so identified by Buyer are hereinafter called the "Disapproved Matters"), Buyer ------------------- shall provide Sellers written notice of same within ten (10) days after Buyer's receipt of the last of the Survey, the Title Commitment and the Exception Documents with respect to each Real Property, and Sellers shall then have the right, but not the obligation, at Sellers' sole cost and expense, for a period of ten (10) business days after such Seller receives written notice from Buyer of Buyer's objections to title to cure any defects or objectionable matters. In the event that Sellers fail or are unwilling to cure such defects to the reasonable satisfaction of Buyer's counsel, the Disapproved Matters will be considered inaccuracies of representations and warranties under Section 5.29 of ------------ this Agreement. Notwithstanding the foregoing, Sellers shall in all events, at Sellers' sole cost and expense, remove all Monetary Liens on or before the Closing. (d) Buyer shall use commercially reasonable efforts to satisfy the conditions set forth in subsections (a), (b) and (c) of this Section 7.8 as soon ----------- as reasonably practicable and shall notify Sellers, Holdings and Alltrista of the status of their efforts periodically and upon request. Two (2) days prior to Closing, Buyer will notify Sellers, Holdings and Alltrista of those Surveys and Title Commitments yet to be received under subsections (a) and (b) above, and those Disapproved Matters as to which Sellers, Holdings and Alltrista have not, as of that date, had ten (10) days to cure. Notwithstanding subsection (c) above, matters that would be reflected in the missing Surveys or Title Commitments, and the pending Disapproved Matters, will not be considered inaccuracies of representations and warranties under Section 5.29 of this ------------ Agreement for purposes of Closing Conditions in Section 8.1 of this Agreement, ----------- but shall remain eligible for consideration as inaccuracies of representations and warranties for purposes of indemnification under Article X of this --------- Agreement. Section 7.9 Title to Intellectual Property. Sellers, Holdings and ------------------------------ Alltrista will make all commercially reasonable efforts to assist Buyer in correcting any chain-of-title defects in the 28 Intellectual Property acquired under this Agreement. Sellers, Holdings and Alltrista will provide all documentation they possess supporting their assignment or ownership of such Intellectual Property, any evidence they possess that verifies chain-of-title and any contact information that will assist Buyer in establishing chain-of-title. Sellers, Holdings and Alltrista will make appropriate officers available to Buyer to assist Buyer in verifying chain-of-title with third parties. Sellers, Holdings and Alltrista will use commercially reasonable legal means to secure the cooperation of third parties in order to correct any chain-of-title defects in the Intellectual Property. Section 7.10 No Solicitation. From the date hereof until the Closing --------------- Date or the date this Agreement is terminated pursuant to Article XI, Alltrista, ---------- Holdings and Sellers shall not, and shall ensure that each of their directors, officers, representatives and agents shall not, solicit or entertain offers from, negotiate with, or enter into any agreement with, any third party relating to the acquisition of any of the Assets, in whole or in part other than dispositions of Inventory in the ordinary course of business. Section 7.11 Confidentiality. --------------- (a) Prior to Closing, each of the parties hereto agrees that it will not use, or permit the use of, any Confidential Information of the other party in a manner or for a purpose known by the using party to be detrimental to such other party or otherwise than in connection with this Agreement, and that they will not disclose, divulge, provide or make accessible (collectively, "Disclose" -------- or "Disclosure"), or permit the Disclosure of, any of the Confidential ---------- Information to any person or entity, other than their respective directors, officers, employees, investment advisors, lenders, accountants, counsel and other authorized representatives and agents (who shall be bound by this Section ------- 7.11), except as may be required by judicial or administrative process or, in - ---- the opinion of such party's counsel, by other requirements of law. The restrictions of this Section 7.11(a) shall not apply to any Confidential --------------- Information relating to a party which the party disclosing such information can show: (i) to have been in its possession prior to its receipt from another party hereto; (ii) to be now or to later become generally available to the public through no fault of the disclosing party; (iii) to have been available to the public at the time of its receipt by the disclosing party; (iv) to have been received separately by the disclosing party in an unrestricted manner from a person entitled to disclose such information; or (v) to have been developed independently by the disclosing party without regard to any information received in connection with this transaction. Each party hereto also agrees to promptly return to the party from whom it originally received such information all original and duplicate copies of written materials containing Confidential Information if this Agreement is terminated. A party hereto shall be deemed to have satisfied its obligations to hold the Confidential Information confidential if it exercises the same care as it takes with respect to its own similar information. (b) From and after the Closing Date and until the second anniversary of the Closing, Sellers, Holdings, Alltrista and all of their affiliates will maintain in secrecy all Confidential Information, using the same safeguards as they customarily use to protect confidential information of a similar character, but at least using reasonable care, and shall not Disclose, or permit the Disclosure of, any Confidential Information to a third party without the express written consent of Buyer, except as may be required by judicial or administrative process or, in the opinion of such party's counsel, by other requirements of law; provided, however, that in the -------- ------- 29 case of required disclosure, either of the Sellers, Holdings or Alltrista has given notice to Buyer of any such requirement and cooperates with Buyer if it elects to pursue legal means to contest and avoid the disclosure. The restrictions set forth in this Section 7.11(b) shall not apply to Confidential --------------- Information that is publicly available or otherwise in the public domain due to no fault of Sellers, Holdings, Alltrista or any of their affiliates. Section 7.12 Covenant Not to Compete. ----------------------- (a) Each Seller, Holdings and Alltrista hereby agree that for a period of five years after the Closing Date, they will not, directly or indirectly, as a partner, joint venturer, employer, consultant, shareholder, manager, principal, agent, affiliate, or otherwise, own, manage, operate, join, control or participate in the ownership, management, operation or control of any business, whether in corporate, limited liability company or partnership form or otherwise, which engages in any portion of the Business (including, but not limited to, the manufacturing, distribution or sale of thermoformed products) or is substantially similar to the Business as carried on at the time of this Agreement or at Closing in any geographic area in which, or to those customers to which, the Business has sold its products within the two years prior to the Closing Date; provided, however, that Sellers, Holdings and Alltrista may -------- ------- continue to own, operate, sell or otherwise dispose of the Excluded Assets. The parties hereto specifically acknowledge and agree that a remedy at law for any breach of the foregoing will be inadequate and that Buyer, in addition to any other relief available to it, shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damage; provided, -------- however, that nothing herein shall be construed to prevent each Sellers, - ------- Holdings and Alltrista from holding collectively not more than two percent of the shares in any company whose shares are quoted on any stock exchange, even though that company carries on the activities conducted by the Business. (b) For a period of 24 months after the Closing Date, Sellers, Holdings and Alltrista 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, solicit for employment, endeavor to entice away from the Buyer or otherwise interfere with the relationship of Buyer with any person who was employed or otherwise engaged to perform services for the Buyer or any of the Transferred Employees. Furthermore, for a period of 24 months after the Closing Date, Buyer 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, solicit for employment, endeavor to entice away from the Sellers or Alltrista, or otherwise interfere with the relationship of the Sellers or Alltrista with any person who was employed or otherwise engaged to perform services for the Sellers or Alltrista on the Closing Date. (c) Buyer hereby agrees that for a period of five years after the Closing Date, it will not, directly or indirectly, as a partner, joint venturer, employer, consultant, shareholder, manager, principal, agent, or otherwise, own, manage, operate, join, control or participate in the ownership, management, operation or control of any business, whether in corporate, limited liability company or partnership form or otherwise, which produces or sells to Whirlpool or General Electric any of the parts listed on Schedule 7.12, or any ` ------------- modifications, improvements or derivations thereof. The parties hereto specifically acknowledge and agree that a remedy at law for any breach of the foregoing will be inadequate and that Alltrista and Sellers, in addition to 30 any other relief available to them, shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damage; provided, however, that nothing herein shall be construed to prevent Buyer from - -------- ------- holding collectively not more than two percent of the shares in any company whose shares are quoted on any stock exchange, even though that company produces or sells the listed parts to Whirlpool or General Electric. (d) Each Seller, Holdings and Alltrista acknowledge and agree that in view of the nature of the Business and the Assets and the business objectives of Buyer in acquiring them and the consideration paid to Sellers, Holdings and Alltrista therefor, the territorial and time limitations contained in this Section 7.12 are reasonable and properly required for the adequate protection of - ------------ Buyer. The parties intend for the covenants of this Section 7.12 to be ------------ enforceable to the maximum extent permitted by law, and if any reviewing court deems any of such covenants to be unenforceable or invalid, the parties authorize such court to (i) reform the unenforceable or invalid provisions and to impose such restrictions as reformed and (ii) enforce the remaining provisions that it deems reasonable. Section 7.13 Notification. ------------ (a) Between the date of this Agreement and the Closing, Sellers, Holdings and Alltrista shall promptly notify Buyer in writing if any of them becomes aware of (i) any fact or condition that causes or constitutes a breach of any of their representations and warranties made as of the date of this Agreement; (ii) the occurrence after the date of this Agreement of any fact or condition that would or be reasonably likely to (except as expressly contemplated by this Agreement) cause or constitute a breach of any such representation or warranty had that representation or warranty been made as of the time of the occurrence of, either Seller's, Holdings' or Alltrista's discovery of, such fact or condition or (iii) the breach of any representation and warranty made by Buyer. Should any such fact or condition require any change to the Schedules, Sellers shall promptly deliver to Buyer a supplement to the relevant Schedule(s) specifying such changes. Such delivery shall not affect any rights of Buyer under Article IX, Article X and Article XI. During the same period, Sellers, ---------- --------- ---------- Holdings and Alltrista also shall promptly notify Buyer of the occurrence of any breach of any covenant of Sellers, Holdings or Alltrista in this Article VII or ----------- of the occurrence of any event that may make the satisfaction of the conditions in Article VIII impossible or unlikely. ------------ (b) Between the date of this Agreement and the Closing, Buyer shall promptly notify Sellers in writing if it becomes aware of (i) any fact or condition that causes or constitutes a breach of any of its representations and warranties made as of the date of this Agreement; (ii) the occurrence after the date of this Agreement of any fact or condition that would or be reasonably likely to (except as expressly contemplated by this Agreement) cause or constitute a breach of any such representation or warranty had that representation or warranty been made as of the time of the occurrence of its discovery of such fact or condition or (iii) the breach of any representation and warranty made by Sellers, Holdings or Alltrista. During the same period, Buyer shall promptly notify Sellers of the occurrence of any breach of any covenant of Buyer in this Article VII or of the occurrence of any event that may ----------- make the satisfaction of the conditions in Article VIII impossible or unlikely. ------------ 31 Section 7.14 Certain Intellectual Property Undertakings. The parties hereto ------------------------------------------ agree to certain undertakings involving Intellectual Property as set forth in Exhibit 7.14 hereto. - ------------ ARTICLE VIII CONDITIONS TO CLOSING Section 8.1 Buyer's Conditions to Closing. The obligations of Buyer under ----------------------------- this Agreement are subject to the satisfaction of the following conditions as of the Closing Date, any or all of which conditions may be waived by Buyer in writing in its sole discretion: (a) All of Sellers', Holdings' and Alltrista's representations and warranties in this Agreement (considered collectively), and each of these representations and warranties (considered individually), shall have been accurate in all material respects as of the date of this Agreement, and shall be accurate in all material respects as of the time of the Closing as if then made, without giving effect to any update to the Schedules and each of the representations and warranties in this Agreement that contains an express materiality qualification shall have been accurate in all respects as of the date of this Agreement, and shall be accurate in all respects as of the time of the Closing as if then made, without giving effect to any update to the Schedules, except for inaccuracies that in the aggregate will, or could reasonably be expected to, result in an adverse financial impact (including but not limited to claims, losses, obligations, expenses, costs incurred, and lost margin and costs likely to be incurred over the next twelve (12) months, obligations or liabilities) to Buyer in an amount greater than One Million Five Hundred Thousand Dollars ($1,500,000). Sellers, Holdings and Alltrista shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed and complied with by them at or prior to the Closing Date, and Alltrista, Holdings and Sellers shall have delivered to Buyer a true and accurate certificate of their corporate officers dated the Closing Date certifying to such compliance and completion. (b) Buyer shall have received with respect to each of the Sellers, Holdings and Alltrista, a good standing certificate dated within ten (10) days of the Closing Date from their respective states of incorporation and every jurisdiction in which they are respectively required to qualify for business. (c) Buyer shall have received all Closing Approvals in form and substance reasonably satisfactory to Buyer. (d) Each Seller, Holdings and Alltrista shall have executed and delivered a bill of sale and deeds conveying the Assets and Intellectual Property to Buyer in form satisfactory to Buyer and its counsel in their reasonable judgment and any other instrument required by Section 2.3 including assignments of contracts ----------- and leases free and clear of all encumbrances other than Permitted Liens, the Assumed Liabilities and other encumbrances noted in the Schedules and Exhibits hereto. (e) Sellers, Holdings or Alltrista shall have executed and delivered certificates of title and assignments thereof for all motor vehicles transferred to Buyer as part of the Assets. 32 (f) Sellers, Holdings and Alltrista shall have delivered a list of the Inventory, Accounts Receivable and fixed assets as of the close of business on a date as close as practicable to the Closing Date. (g) No temporary restraining order, preliminary or permanent injunction, or cease and desist order, issued by any court or governmental authority preventing the transfers contemplated hereby or the consummation of the Closing, shall be in effect at the Closing Date, and no proceeding by any court or governmental authority seeking to restrict or prohibit the consummation of the Closing shall be pending on the Closing Date. (h) Since the date of this Agreement, there shall have been no change, occurrence or circumstance in the operations, properties, condition (financial or otherwise) or the results of operations of the Business or the Assets having or reasonably expected to have, individually or in the aggregate, an adverse financial impact (including but not limited to claims, losses, obligations, expenses, costs incurred, and lost margin and costs likely to be incurred over the next twelve (12) months, obligations or liabilities) to Buyer in an amount greater than One Million Five Hundred Thousand Dollars ($1,500,000). Specifically excluded are changes in conditions affecting the plastic thermoforming industry, the United States economy generally, an outbreak of hostilities or additional terrorist attacks not affecting the Buyer or the Business directly, trade embargoes, the closing of United States securities exchanges, or other similar developments which do not disproportionately affect the Business. (i) Buyer shall have received a certificate of the Secretary of each Seller, Holdings and Alltrista with respect to the resolutions respectively adopted by each Seller, Holdings and Alltrista approving this Agreement and the transactions contemplated hereby, each of which shall be reasonably acceptable to Buyer. (j) Buyer shall have received the opinion of Ice Miller dated the Closing Date, in the form set forth in Exhibit 8.1(j). -------------- (k) Pro Forma versions of the Title Policies shall have been issued to Buyer with respect to the owned and leased Real Property, and Sellers, Holdings and Alltrista shall have fully paid one-half of the premiums for such Title Policies. (l) Buyer shall have been given the opportunity to meet with the Customers of the Business identified on Schedule 8.1(l), and, during such discussions, no --------------- Customer shall have indicated to Buyer that it has changed its business relationship with the Business in any material respect since August 31, 2001 or that it has decided to change its business relationship with the Business in any material respect or that it has decided not to do business with Buyer substantially as such Customer currently does business with Sellers, Holdings or Alltrista, as the case may be. No such discussions shall take place without a representative of Alltrista present. Section 8.2 Sellers', Holdings' and Alltrista's Conditions to Closing. The --------------------------------------------------------- obligations of Sellers, Holdings and Alltrista under this Agreement are subject to the satisfaction of the following conditions as of the Closing Date, any or all of which may be waived by either Seller, Holdings or Alltrista in its sole discretion: 33 (a) All of Buyer's representations and warranties in this Agreement (considered collectively), and each of these representations and warranties (considered individually), shall have been accurate in all material respects as of the date of this Agreement and shall be accurate in all material respects as of the time of the Closing as if then made. Buyer shall have performed and complied with all agreements, covenants, and conditions required by this Agreement to be performed or complied with by it at or prior to the Closing Date, and Buyer shall have delivered to Sellers a certificate of an officer dated the Closing Date certifying to such compliance and completion. (b) Sellers shall have received payment of the Purchase Price and an executed promissory note in the form attached hereto as Exhibit 3.1(a). -------------- (c) Sellers shall have received with respect to Buyer a good standing certificate dated within ten (10) days of the Closing Date from Buyer's state of incorporation. (d) Sellers shall have received the Closing Approvals all in form and substance reasonably satisfactory to Sellers. (e) No temporary restraining order, preliminary or permanent injunction, or cease and desist order, issued by any court or governmental authority preventing the transfers contemplated hereby or the consummation of the Closing, shall be in effect at the Closing Date, and no proceeding by any court or governmental authority seeking to restrict or prohibit the consummation of the Closing shall be pending on the Closing Date. (f) Sellers shall have received a certificate of the Secretary of Buyer with respect to the resolutions adopted by Buyer approving this Agreement and the transactions contemplated hereby. (g) Sellers, Alltrista and Holdings shall have received the opinion of counsel to Buyer, dated at the Closing Date, in the form set forth in Exhibit ------- 8.2(g) attached hereto. - ------ (h) The parties shall have entered into the Assumption Agreement in the form attached as Exhibit 3.1(b). -------------- ARTICLE IX DISPUTE RESOLUTION Section 9.1 Initial Meeting. In the event that there is a dispute arising --------------- out of or relating to this Agreement the parties shall attempt in good faith to resolve such disputes promptly by negotiation between the parties. Any party may give the other parties written notice that a dispute exists (a "Notice of --------- Dispute"). The Notice of Dispute shall include a statement of such party's - ------- position. Within ten (10) days of the delivery of the Notice of Dispute, the parties shall meet at a mutually acceptable time and place, and thereafter as long as they reasonably deem necessary, to attempt to resolve the dispute. All documents and other information or data on which each party relies concerning the dispute shall be furnished or made available on reasonable terms to the other party at or before the first meeting of the parties as provided by this Section 9.1. - ----------- 34 Section 9.2 Mediation. If the dispute has not been resolved by negotiation --------- within thirty (30) days of the delivery of a Notice of Dispute, or if the parties have failed to meet within ten (10) days of the Notice of Dispute, the parties shall endeavor to settle the dispute by mediation under the then current CPR Model Mediation Procedure for Business Disputes. The parties shall select a mediator from the Chicago office of JAMS, the Resolution Experts. Expenses of mediation shall be divided equally between Sellers and Buyer. Section 9.3 Binding Arbitration. Any controversy or claim arising out of or ------------------- relating to this Agreement or any agreement or document in connection therewith, the breach, termination or validity thereof, or the transactions contemplated herein (including any question arising as to whether or not any dispute falls within the terms of this Section or the selection of arbitrators) if not settled by negotiation or mediation as provided in Section 9.1 and Section 9.2 shall be ----------- ----------- settled by arbitration in Chicago, Illinois, in accordance with the rules of the American Arbitration Association. Any party may initiate arbitration from and after 60 days following the delivery of a Notice of Dispute if the dispute has not then been settled by negotiation or mediation. Except as otherwise provided herein, the arbitration procedure shall be governed by the United States Arbitration Act, 9 U.S.C.(S) 1-16, and the award rendered by the arbitrators shall be final and binding on the parties and may be entered in any court having jurisdiction thereof. The arbitrator shall be bound to follow the laws of the State of Delaware and the Federal laws of the United States of America. The arbitrators may not award damages in excess of compensatory damages. Section 9.4 Expeditious Proceedings. It is the intent of the parties that ----------------------- any arbitration shall be concluded as quickly as reasonably practicable. The arbitrators shall use all reasonable efforts to issue the final award or awards within a period of five (5) business days after closure of the proceedings. Failure of the arbitrators to meet the time limits of this Section 9.4 shall not ----------- be a basis for challenging the award. Section 9.5 Attorneys' Fees. Sellers, Holdings, Alltrista and Buyer shall --------------- bear their own attorneys' fees and costs for arbitration and mediation and Sellers, Holdings and Alltrista, on the one hand, and Buyer, on the other hand, shall pay one-half of the fees and expenses of the arbitrators and mediator. Provided, however, that the arbitrators may instruct the non-prevailing party to - -------- ------- pay all or any appropriate portion of the costs of the proceedings, including the fees and expenses of the arbitrators and the reasonable attorneys' fees and expenses of the prevailing party, upon the determination that a claim or defense asserted by the non-prevailing party had no reasonable basis in law or fact. Section 9.6 Enforcement of Awards. Each party agrees that any legal --------------------- proceeding instituted to enforce an arbitration award hereunder may be brought in a court of competent jurisdiction (either state or federal). Section 9.7 Equitable Relief. Nothing herein shall be construed to prevent ---------------- any party from seeking equitable relief in any court of competent jurisdiction to restrain or prohibit any breach or threatened breach of any covenant of the parties set forth in this Agreement, whether or not the parties have first sought to resolve the dispute through negotiation, mediation or arbitration pursuant to this Article IX. ---------- 35 ARTICLE X INDEMNIFICATION Section 10.1 Indemnification by Sellers, Holdings and Alltrista. Sellers, -------------------------------------------------- Holdings and Alltrista covenant and agree with Buyer that they shall jointly and severally indemnify Buyer and its directors and officers, and their successors, assigns and legal representatives ("Section 10.1 Indemnified Parties") and hold -------------------------------- them harmless from, against and in respect of any and all costs, losses, claims, contribution claims, liabilities, fines, penalties, damages and expenses (including court or alternative dispute resolution costs and reasonable fees and disbursements of counsel) (hereinafter referred to as "Claims") arising out of ------ or with respect to: (a) any liabilities or obligations of Sellers, Holdings or Alltrista not expressly assumed by Buyer hereunder, including, without limitation, any and all liability of either of the Sellers, Holdings or Alltrista arising under any Environmental Law relating to: (i) any Release or alleged Release of a Hazardous Substance that occurred prior to Closing, or (ii) any violation or alleged violation of any Environmental Law that occurred prior to Closing; (b) any liabilities or obligations related to the Assets, the Intellectual Property or the Business not expressly assumed by Buyer hereunder, including, without limitation, (i) any liability to a third party for incidents, events or occurrences arising on or prior to the Closing Date, and (ii) any noncompliance with any Bulk Sales Laws or fraudulent transfer law in respect of the transactions contemplated by this Agreement; (c) any tax liability of Sellers, Holdings or Alltrista (including, without limitation, liabilities for taxes, interest, penalties, governmental charges, duties, fees, and fines imposed by the United States, foreign countries, states, counties, municipalities, and subdivisions, and by all other governmental entities or taxing authorities), except to the extent that such tax is expressly assumed by Buyer hereunder; (d) any breach of any representation or warranty made by Sellers, Holdings or Alltrista in (i) this Agreement (without giving effect to any supplement to the Schedules), (ii) the Schedules, (iii) the supplements to the Schedules, (iv) the certificates delivered pursuant to Section 8.1(a) (for this purpose, each -------------- such certificate will be deemed to have stated that the representations and warranties of Sellers, Holdings and Alltrista in this Agreement fulfill the requirements of Section 8.1(a) as of the Closing Date as if made on the Closing -------------- Date without giving effect to any supplement to the Schedules, unless the certificate expressly states that the matters disclosed in a supplement have caused a condition specified in Section 8.1(a) not to be satisfied), (v) any -------------- Asset transfer instrument or (vi) any other certificate, delivered by Sellers, Holdings or Alltrista pursuant to this Agreement; (e) any breach of any covenant or obligation of Sellers, Holdings or Alltrista in this Agreement or in any other certificate delivered by Sellers, Holdings or Alltrista pursuant to this Agreement; and (f) any finder's fee or type of commission in relation to or in connection with the transactions contemplated by this Agreement as a result of any agreement or understanding of Sellers, Holdings or Alltrista. 36 (g) any defect in title of the Intellectual Property acquired under this Agreement, including patents, trademarks, servicemarks and copyrights and the cost of correcting title with the United States Patent and Trademark Office, the United States Copyright Office or any foreign Patent, Trademark, or Copyright Office. Sellers, Holdings and Alltrista will reimburse Buyer for all costs of defending title against third parties, for obtaining cooperation from third parties necessary to establish chain of title and enforcing assignment of title from a third party to Sellers, Holdings or Alltrista. Section 10.2 Indemnification by Buyer. Buyer hereby covenants and agrees ------------------------ with Sellers, Alltrista and Holdings that it shall indemnify Sellers, Holdings and Alltrista and each of Sellers', Holdings' and Alltrista's directors, officers, and successors, heirs and legal representatives ("Section 10.2 ------------ Indemnified Parties"), and hold them harmless from, against and in respect of - ------------------- any and all Claims, arising out of or with respect to: (a) the operation of the Business or ownership of the Assets by Buyer or its successors, assigns or transferees after the Closing Date, except for any and all liability of either Seller, Holdings or Alltrista arising under any Environmental Law relating to: (i) any Release or alleged Release of a Hazardous Substance that occurred prior to Closing, or (ii) any violation or alleged violation of any Environmental Law that occurred prior to Closing; (b) the discharge or performance by Buyer after the Closing Date of the Assumed Liabilities; and (c) any breach or nonfulfillment of any of the representations, warranties, covenants or agreements made by Buyer in this Agreement or in any other certificate executed and delivered by Buyer pursuant hereto. Section 10.3 Limits. ------ (a) No Claim for indemnification may be made by any party hereto until the total of all Claims by such party exceeds One Million Five Hundred Thousand Dollars ($1,500,000) and then only for the amount by which such Claims exceed One Million Five Hundred Thousand Dollars ($1,500,000) (the "Basket"). However, ------ this Section 10.3 will not apply to any failure to pay Assumed Liabilities, ------------ breaches of Section 5.15, costs incurred by Buyer due to the environmental ------------ condition of the Assets as of Closing, to any breach of any of either party's representations and warranties of which either the party had Knowledge at any time prior to the date on which such representation and warranty is made or any intentional breach of any covenant or obligation. (b) The aggregate Claims indemnified against shall not exceed the Purchase Price. (c) No Claim for indemnification shall be made (i) by either party for indirect, special, consequential or punitive damages or (ii) with respect to any matter set forth in Section 12.2, beyond the time period set forth in such ------------ Section. (d) If Buyer has one or more Claims in excess of the Basket, it may provide Sellers, Holdings and Alltrista with a written notice to such effect and stating that it intends to offset such Claim(s) against the unpaid principal under the Promissory Note (which notice may be the same 37 notice as that described in Section 10.4(a)). Upon receipt of such a notice, ---------------- Sellers, Holdings and Alltrista shall have fifteen (15) days to send Buyer a Notice of Dispute. If a Notice of Dispute is sent pursuant to this section, such dispute shall be resolved pursuant to the procedures set forth in Article IX ---------- hereof. If the maturity date of the Promissory Note occurs prior to the final determination of the Claim dispute, such Claims may not be offset against the principal amount of the Promissory Note. If no Notice of Dispute is sent pursuant to this section, the Claim(s) set forth in the Notice of Dispute shall be deemed accurate and Buyer shall be entitled to offset the amount of such Claim(s) against the principal amount of the Promissory Note. Section 10.4 Procedure. --------- (a) Promptly (and in any event within thirty (30) days after the service of any citation or summons) after acquiring knowledge of any Claim for which one of the parties hereto (the "Indemnified Party") may seek indemnification against ----------------- another party (the "Indemnifying Party") pursuant to Section 10.1 or 10.2 of ------------------ ------------ ---- this Article X, the Indemnified Party shall given written notice thereof to the --------- Indemnifying Party. Failure to provide notice shall not relieve the Indemnifying Party of its obligations under this Article X except to the extent that the --------- Indemnifying Party demonstrates actual damage caused by that failure. The Indemnifying Party shall have the right to assume the defense of any Claim with counsel reasonably acceptable to the Indemnified Party upon delivery of notice to that effect to the Indemnified Party. If the Indemnifying Party, after written notice from the Indemnified Party, fails to take timely action to defend the action resulting from the Claim, the Indemnified Party shall have the right to defend the action resulting from the Claim by counsel of its own choosing, but at the cost and expense of the Indemnifying Party. The Indemnified Party shall have the right to settle or compromise any Claims against it, and, as the case may be, recover from the Indemnifying Party any amount paid in settlement or compromise thereof, if it has given written notice thereof to the Indemnifying Party and the Indemnifying Party has failed to take timely action to defend the same. The Indemnifying Party shall have the right to settle or compromise any claim against the Indemnified Party without the consent of the Indemnified Party provided that the terms of the settlement or compromise provide for the unconditional release of the Indemnified Party and require the payment of monetary damages only. (b) Upon its receipt of any amount paid by the Indemnifying Party pursuant to this Article X, the Indemnified Party shall deliver to the Indemnifying Party --------- such documents as it may reasonably request assigning to the Indemnifying Party any and all rights, to the extent indemnified, that the Indemnified Party may have against third parties with respect to the Claim for which indemnification is being received. Section 10.5 Insurance and Taxes. Any claim for indemnification hereunder ------------------- shall be reduced by any insurance payment to be received by the party claiming indemnification and any tax benefit to be realized by such indemnity with respect to the matter for which indemnification is sought. Section 10.6 Exclusive Remedy. The indemnification set forth in this ---------------- Article X shall be the sole and exclusive remedy of the parties against the - --------- other for breach of the representations, warranties and covenants (other than non-performance) of this Agreement and 38 any agreement or document executed in connection herewith, except for claims arising from fraud. Section 10.7 Indemnification in Case of Strict Liability or Indemnitee --------------------------------------------------------- Negligence. THE INDEMNIFICATION PROVISIONS IN THIS ARTICLE X SHALL BE - ---------- --------- ENFORCEABLE REGARDLESS OF WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS, CLAIMS OR LEGAL REQUIREMENTS (INCLUDING ANY PAST, PRESENT OR FUTURE BULK SALES LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH LAW OR PRODUCTS LIABILITY OR OTHER LEGAL REQUIREMENT) AND REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION. ARTICLE XI TERMINATION Section 11.1 Termination. Anything in this Agreement to the contrary ----------- notwithstanding, this Agreement may be terminated and the transactions contemplated herein abandoned: (a) by the written consent of the parties hereto at any time prior to the Closing; (b) by Buyer in the event of a breach by Sellers, Holdings or Alltrista of any material provision of this Agreement, which breach is not remedied within ten (10) days after receipt of notice thereof; (c) by Sellers, Holdings and Alltrista in the event of a breach by Buyer of any material provision of this Agreement, which breach is not remedied within ten (10) days after receipt of notice thereof; (d) by Buyer, upon a breach of any representation, warranty, covenant or agreement on the part of Sellers, Holdings or Alltrista set forth in this Agreement, or if any representation or warranty of Sellers, Holdings or Alltrista shall have become untrue, in either case such that the conditions set forth in Section 8.1(a) would be incapable of being satisfied by the Drop Dead -------------- Date; provided, however, that in any case, a willful breach shall be deemed to -------- ------- cause such conditions to be incapable of being satisfied for purposes of this Section 11.1(d); - --------------- (e) by Sellers, Holdings and Alltrista, upon a breach of any representation, warranty, covenant or agreement on the part of Buyer set forth in this Agreement, or if any representation or warranty of Buyer shall have become untrue, in either case such that the conditions set forth in Section 8.2(a) would be incapable of being satisfied by the Drop Dead Date; provided, however, that in any case, a willful breach shall be deemed to cause such conditions to be incapable of being satisfied for purposes of this Section 11.1(e); and 39 (f) by any party if the Closing does not occur (other than through the failure of the party seeking to terminate to comply fully with its obligations under this Agreement) on or before November 30, 2001, or such later date as the parties shall mutually agree upon in writing (the "Drop Dead Date"). -------------- Section 11.2 Effect of Termination. Each party's right of termination under --------------------- Section 11.1 is in addition to any other rights it may have under this Agreement - ------------ or otherwise, and the exercise of such right of termination will not be an election of remedies. If this Agreement is terminated pursuant to Section 11.1, ------------ all obligations of the parties under this Agreement will terminate, except that the obligations of the parties in Sections 11.2, 7.11(a) and 12.2 and Article IX ------------- ------- ---- ---------- will survive, provided, however, that, if this Agreement is terminated because of a breach of this Agreement by the non-terminating party or because one or more of the conditions to the terminating party's obligations under this Agreement is not satisfied as a result of the non-terminating party's failure to comply with its obligations under this Agreement, the terminating party's right to pursue all legal remedies will survive such termination unimpaired. Section 11.3 Risk of Loss. The Assumed Liabilities and the risk of loss to ------------ the Business and the Assets, and all liability with respect to injury and damage occurring in connection therewith, shall remain with and be the sole responsibility of Sellers, Holdings and Alltrista until the Effective Time of the Closing. ARTICLE XII GENERAL Section 12.1 WARN Act. The parties to this Agreement intend that the -------- transactions contemplated by this Agreement will not result in an "employment loss" within the meaning of the Worker Adjustment and Retraining Notification Act of 1988, as amended ("WARN"); provided, however, that (a) Sellers, Holdings ---- -------- ------- and Alltrista shall retain all liability for compliance with all applicable employee termination notice and similar laws if they apply to the transactions contemplated by this Agreement, including all applicable requirements of WARN and all similar state laws, to the extent such liability is the result of action taken by Sellers, Holdings, Alltrista or their affiliates prior to the Closing and (b) Buyer shall have liability for compliance with all applicable employee termination notice and similar laws to the extent such liability is the result of action taken by Buyer on or after the Closing. Section 12.2 Expenses. Buyer, Sellers, Holdings and Alltrista shall pay -------- their own respective expenses and the fees and expenses of their respective counsel, accountants and other experts. Provided, however, that Sellers, -------- ------- Holdings and Alltrista, on one hand, and Buyer, on the other hand, each agree to pay one-half of the cost of title insurance premiums covering the Real Property, and Buyer agrees to pay all of the costs associated with obtaining real estate surveys, real estate title commitments and environmental surveys regarding the Real Property. Section 12.3 Survival of Representations and Warranties. The ------------------------------------------ representations and warranties in this Agreement and in any ancillary certificate or document shall survive the Closing for a period of eighteen (18) months, except the representations and warranties contained in Sections 5.2, ------------ 5.4, 6.2 and 7.2, which shall survive indefinitely, Section 5.17, which shall - --- --- --- ------------ 40 survive for five years and Section 5.10, which shall survive for the applicable ------------ statute of limitation. Section 12.4 Waivers. The waiver by any party hereto of a breach of any ------- provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach. The waiver by any party hereto at or before the Closing Date of any condition to its obligations hereunder which is not fulfilled shall preclude such party from seeking redress from the other party hereto for breach of any representation, warranty, covenant or agreement contained in this Agreement related to such waiver. Section 12.5 Binding Effect; Benefits; Assignment. This Agreement shall ------------------------------------ inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Except as otherwise set forth herein, nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement. No party may assign its rights hereunder without the consent of the other party except to a subsidiary (but any such assignment of rights shall not affect the assigning party's obligations under this Agreement) or in connection with the sale of all or substantially all of such assigning party's assets. Section 12.6 Notices. All notices, consents, waivers and other ------- communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with confirmation by telephone of transmission receipt; or (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses, facsimile numbers or e-mail addresses and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties): Sellers, Holdings and Alltrista: Alltrista Corporation 555 Theodore Fremd Ave., Ste B302 Rye, New York 10580 Attention: Martin E. Franklin Chairman and Chief Executive Officer Fax no.: 914-967-9405 E-mail address: mfranklin@marlincap.com with a mandatory copy to: ICE MILLER One American Square Box 82001 Indianapolis, Indiana 46282 Attention: Joseph E. DeGroff Fax no.: 317-236-2219 E-mail address: degroff @icemiller.com 41 Buyer: Wilbert, Inc. 2913 Gardner Road Broadview, Illinois 60155 Attention: Curtis J. Zamec Chairman, President and CEO Fax no.: 708-865-1646 E-mail address:cjzamec@wilbertinc.com with a mandatory copy to: Blackwell Sanders Peper Martin LLP 2300 Main Street, Suite 1000 Kansas City, Missouri 64108 Attention: Gary D. Gilson Fax no.: 816-983-8080 E-mail address: ggilson@bspmlaw.com Section 12.7 Entire Agreement. This Agreement (including the Schedules and ---------------- Exhibits hereto) constitutes the entire agreement and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. No representations or warranties, express or implied, are made with respect to the Business, Sellers, the Intellectual Property or the Assets except as expressly set forth herein. Section 12.8 Headings. The Section and other headings contained in this -------- Agreement are for reference purposes only and shall not be deemed to be a part of this Agreement or to affect the meaning or interpretation of this Agreement. Section 12.9 Governing Law. This Agreement shall be construed as to both ------------- validity and performance and enforced in accordance with and governed by the laws of the State of Delaware without giving effect to the choice of law principles thereof. Section 12.10 Amendments. This Agreement may not be modified or changed ---------- except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Section 12.11 Severability. If any provision of this Agreement is held ------------ invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable Section 12.12 Press Releases. Neither of the Sellers, Alltrista or Holdings -------------- on the one hand or Buyer on the other hand shall, without the prior approval of the other party, issue any press release or written statement for general circulation relating to the transactions contemplated hereby, except as required by law or the regulation of any stock exchange (but each party shall still endeavor to allow the other party reasonable opportunity to review and comment to the extent feasible). 42 Section 12.13 Counterparts. This Agreement may be executed in counterparts, ------------ each of which shall be deemed an original but all of which shall constitute one and the same instrument. However, in making proof hereof it shall be necessary to produce only one copy hereof signed by the party to be charged. Signature pages delivered by facsimile to this Agreement or any document delivered in connection herewith or at the Closing shall be binding to the same extent as an original. Section 12.14 Interpretation. Unless otherwise specifically provided -------------- herein, whenever consent of a party is required for any action, such consent shall not be unreasonably withheld, conditioned or delayed. 43 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed in their respective names by an officer thereunto duly authorized on the date first above written. SELLERS: BUYER: ALLTRISTA PLASTICS CORPORATION WILBERT, INC. By: /s/ Martin E. Franklin By: /s/ Curtis J. Zamec Martin E. Franklin, President Curtis J. Zamec, President and Chief Executive Officer TRIENDA CORPORATION By: /s/ Martin E. Franklin Martin E. Franklin, President HOLDINGS: QUOIN CORPORATION By: /s/ Angela K. Knowlton Angela K. Knowlton, Treasurer ALLTRISTA: ALLTRISTA CORPORATION By: /s/ Martin E. Franklin Martin E. Franklin, Chairman and Chief Executive Officer 44 SCHEDULE 1.1(a) A. Working Capital Formula. For purposes of this Agreement, "Working Capital" shall be calculated using the following formula: Accounts Receivable Less Allowance for Uncollectible Accounts Plus Inventories - Finished Goods Plus Inventories - WIP Plus Inventories - Raw Materials Less Allowance for Inventory obsolescence or valuation reserves Less Accounts Payable Less Assumed Salary & Benefits, etc. Less Other Accrued Liabilities included in Assumed Liabilities -------------------------------------------------------------- Equals Working Capital The components of Working Capital shall be determined in accordance with GAAP, consistent with past practice and in the ordinary course of business. B. Initial Working Capital Calculation. Petty Cash $ 3,483 Accounts Receivable, net 13,006,041 Inventory, net 15,412,557 Prepaid Expenses 189,448 Accounts Payable (4,929,956) Accrued Salary & Benefits (2,616,236) Other Accruals (835,067) -------------- ------------ Initial Working Capital $20,230,270 45 -----END PRIVACY-ENHANCED MESSAGE-----