2002 Form 10-K

-----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, NiCdTQJ0vtZL0Omt5Qv3JSmaLnuEW52Pt8Vk027CqsHNTR/2MytPo2UmZo9r7Dsk mYLWfL6V6ZlEoipercGWfw== 0000895726-03-000004.txt : 20030326 0000895726-03-000004.hdr.sgml : 20030325 20030326164909 ACCESSION NUMBER: 0000895726-03-000004 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US CAN CORP CENTRAL INDEX KEY: 0000895726 STANDARD INDUSTRIAL CLASSIFICATION: METAL CANS [3411] IRS NUMBER: 061094196 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13678 FILM NUMBER: 03618692 BUSINESS ADDRESS: STREET 1: 700 EAST BUTTERFIELD ROAD CITY: LOMBARD STATE: IL ZIP: 60148 BUSINESS PHONE: 6305712500 MAIL ADDRESS: STREET 1: 700 EAST BUTTERFIELD ROAD CITY: LOMBARD STATE: IL ZIP: 60148 10-K 1 form_10k-2002.htm 2002 FORM 10-K 2002 Form 10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

For the fiscal year ended December 31, 2002

Commission File Number 333-53276

U.S. Can Corporation
(Exact Name Of Registrant As Specified In Its Charter)

Delaware 06-1094196
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

700 East Butterfield Road, Suite 250, Lombard, Illinois 60148
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code (630) 678-8000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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 (the "Exchange Act") 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes |X| No |_|

As of March 26, 2003, 53,333.333 shares of Common Stock were outstanding.

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TABLE OF CONTENTS

Page
----

PART I

Item 1. Business.................................................................................... 2
Item 2. Properties.................................................................................. 10
Item 3. Legal Proceedings........................................................................... 11
Item 4. Submission of Matters to a Vote of Security Holder.......................................... 12

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.................................... 13
Item 6. Selected Financial Data..................................................................... 14
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................................................... 15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.................................. 23
Item 8. Financial Statements and Supplementary Data................................................. 25
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.................................................................. 65

PART III

Item 10. Directors and Executive Officers of the Registrant.......................................... 65
Item 11. Executive Compensation...................................................................... 68
Item 12. Security Ownership of Certain Beneficial Owners and Management.............................. 73
Item 13. Certain Relationships and Related Transactions.............................................. 74

PART IV

Item 14. Controls and Procedures..................................................................... 77
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................ 77

INCLUSION OF FORWARD-LOOKING INFORMATION

Certain statements in this report constitute "forward-looking statements" within the meaning of the federal
securities laws. Such statements involve known and unknown risks and uncertainties which may cause the Company's actual
results, performance or achievements to be materially different than any future results, performance or achievements
expressed or implied in this report. By way of example and not limitation and in no particular order, known risks and
uncertainties include our substantial debt and ability to generate sufficient cash flows to service our debt; the timing
and cost of plant closures; the level of cost reduction achieved through restructuring and capital expenditure programs;
the success of new technology; changes in market conditions or product demand; loss of important customers or volume;
downward selling price movements; changes in raw material costs; and currency and interest rate fluctuations. In light of
these and other risks and uncertainties, the inclusion of a forward-looking statement in this report should not be
regarded as a representation by the Company that any future results, performance or achievements will be attained.

PART I

ITEM 1. BUSINESS

General

U.S. Can Corporation, incorporated in Delaware in 1983, through its wholly owned subsidiary, United States
Can Company, is a leading manufacturer, by sales volume, of steel containers for personal care, household, automotive,
paint, industrial and specialty products in the United States and Europe. We also are a manufacturer of plastic
containers in the United States and food cans in Europe. We have long-standing relationships with many well-known
consumer products and paint manufacturers in the United States and Europe, including Reckitt Benckiser, Sherwin Williams,
S.C. Johnson, Gillette and Unilever. We also produce seasonal holiday tins sold by mass merchandisers. References in this
report include U.S. Can Corporation (the "Corporation" or "U.S. Can"), its wholly owned subsidiary, United States Can
Company ("United States Can"), and United States Can's subsidiaries (the "Subsidiaries"). The consolidated group is
referred to herein as "the Company".

We hold the number one market position in steel aerosol cans, based on sales volume, in the United States
and the number two market position in Europe. In addition, we hold the number two market position in paint cans in the
United States, by unit volume. We attribute our market leadership to our ability to consistently provide high-quality
products and service at competitive prices, while continually improving our product-related technologies. The references
in this Report to market positions or market share are based on information derived from annual reports, trade
publications and management estimates which the Company believes to be reliable. For financial information about business
segments and geographic areas, refer to Note (16) to the Consolidated Financial Statements.

Business Segments

We have four major business segments: Aerosol Products; International Operations; Paint, Plastic & General
Line Products; and Custom & Specialty Products.

Aerosol Products

As the largest producer of steel aerosol cans in the United States by sales volume, we have a leading
position in all of the major aerosol consumer product lines, including personal care, household, automotive and spray
paint cans. We offer a wide range of aerosol containers to meet our customer requirements including stylized necked-in
cans and barrier pack cans used for products that cannot be mixed with a propellant, such as shaving gel. Most of the
aerosol cans that we produce employ a lithography process that consists of printing our customers' designs and logos on
flat sheets of tinplate, prior to formation into cans.

Steel aerosol cans manufactured in the U.S. represent our largest segment, accounting for approximately
45.7%, 43.3% and 44.2% of our total net sales in 2002, 2001 and 2000, respectively. In 2002, we manufactured
approximately 55% of the steel aerosol cans produced in the United States.

International Operations

We produce steel aerosol cans and steel food cans in Europe. We also supply steel aerosol cans to
customers in Latin America through Formametal S.A., our joint venture in Argentina. The Company beneficially owns 36.5%
of Formametal S.A. Our subsidiary, May Verpackungen GmbH & Co., KG ("May"), a German manufacturer of steel food
packaging and aerosol cans provides us with diversification across our product lines and customer base.

International Operations represents our second largest segment, accounting for approximately 30.3%, 29.7%
and 29.6% of our total net sales in 2002, 2001 and 2000, respectively. In 2002, we were the second largest producer of
steel aerosol cans in Europe and manufactured over 30% of the steel aerosol cans produced. May is a leading European
food can producer with more than 30% of the German food can market, by sales volume.

Paint, Plastic & General Line Products

Our primary Paint, Plastic & General Line products include steel paint and coating containers, oblong cans
and plastic pails and drums. Management estimates that U.S. Can is second in market share in the United States, on a unit
volume basis, in steel round and general line containers. Paint, Plastic & General Line products accounted for
approximately 15.1%, 16.9% and 16.8% of our total net sales in 2002, 2001 and 2000, respectively.

Custom & Specialty Products

We also have a significant presence in the Custom & Specialty market, offering a wide range of decorative
and specialty steel products. Our primary products include functional and decorative containers and tins, and collectible
items, such as decorative metal signs. These products are generally custom designed and decorated and are typically
produced in smaller quantities than our other products. On February 20, 2001, we acquired certain assets of Olive Can
Company, a Custom & Specialty manufacturer. The Olive acquisition is not material to the Company's operations or
financial position.

Custom & Specialty products accounted for approximately 8.9%, 10.0% and 9.4% of our total net sales in
2002, 2001 and 2000, respectively.

Customers and Sales Force

As of December 31, 2002, we had approximately 4,800 customers, with our largest customer accounting for
8.6% of our total net sales in 2002. To the extent possible, we enter into one-year or multi-year supply agreements with
our major customers. Some of these agreements specify the number of containers a customer will purchase (or the mechanism
for determining this number), pricing, volume discounts (if any) and, in the case of many of our domestic and some of our
international multi-year supply agreements, a provision permitting us to pass through price increases in specified raw
material and other costs.

We market our products primarily through a sales force comprised of inside and outside sales
representatives dedicated to each segment. As of December 31, 2002, we had 68 sales representatives in the United States
and 19 sales representatives in Europe. Each sales representative is responsible for growing sales in a specific
geographic region and is compensated by a salary and a bonus based on sales volume targets.

Raw Materials

Our principal raw materials are tin-plated steel, referred to as tin-plate, and coatings and inks used to
print our customers' designs and logos onto tin-plate. Tin-plate represents our largest raw material cost. Our domestic
operations purchase tin-plate principally from domestic steel manufacturers, with a smaller portion purchased from
foreign suppliers. Our European operations purchase tin-plate principally from European suppliers. Our largest domestic
steel suppliers are U.S. Steel, Weirton Steel and Wheeling-Pitt, while Corus, Arcelor and Rasselstein supply the largest
volume in Europe.

The President of the United States has imposed 30% ad valorem tariffs under Section 201 of the Trade Act
of 1974 on tin mill imports from most foreign producers effective March 20, 2002. These tariffs are scheduled to remain
in effect for three years, declining to 24% in the second year and 18% in the third year. Tin mill imports from Canada,
Mexico and certain developing countries are excluded from the tariffs. The Company purchases the vast majority of its
domestic steel from domestic sources but since the tariff curtails foreign competition, the Company is being negatively
impacted as the competitive ability to purchase foreign steel at lower prices has been effectively restricted by the
tariff.

In response to the U.S. tariffs imposed under Section 201 of the Trade Act of 1974, in March of 2002
European Union Trade Commission established a steel safeguard initiative whereby imports of steel into Europe from
designated countries are assessed a duty of 17% versus the previous duty of 1%. The new duty on some European imports
remains in effect for the duration of the U.S. imposed tariffs under Section 201. Due to the fact that the Company's
European operations do not import steel from any of the countries affected by the new European duty, in 2002 the
Company's international operations were not affected by the new duty. Likewise, the Company does not anticipate the new
duty to affect its operations in 2003 as the Company has no plans to begin purchasing steel from these countries.

Our domestic and European operations purchase approximately 400,000 tons of tin-plate annually. The
Company believes that adequate quantities of tin-plate will continue to be available from steel manufacturers, however,
potential seasonal shortages may occur from domestic suppliers as foreign sourcing is effectively no longer available due
to the tariffs.

Tin-plate prices have increased slightly over the last five years. While there is some long-term
variability, tin-plate prices have generally been stable and price increases have historically been announced several
months before implementation. This stability has enhanced our ability to communicate and negotiate required selling price
increases with our customers and minimizes fluctuations of our gross margins. Many of our domestic and some of our
international multi-year supply agreements with our customers permit us to pass through tin-plate price increases and, in
some cases, other raw material costs. The tariffs implemented in 2002 did not have a material effect on the Company's
costs for the year but the Company expects the increase in steel costs in 2003 to be above historical increases due to
the tariffs. We cannot assess the impact of the tariffs on its steel prices in 2004 or later years. We have not always
been able to immediately offset increases in tin-plate prices with price increases on our products. Further, the tariffs
could jeopardize this pricing stability, and could negatively impact our gross margins as we may not have the ability to
immediately or fully pass through tinplate price increases to all of our customers. The Company is unable to determine
the long term effects the tariffs will have on steel prices or resource availability. However, the Company will continue
to explore other sourcing alternatives to limit any potential negative impact of the tariffs.

Coatings and inks, which are used to coat tin-plate and print designs and logos, represent our second
largest raw material expense. We purchase coatings and inks from regional suppliers in the United States and Europe.
These products historically have been readily available, and we expect to be able to meet our needs for coatings and inks
in the foreseeable future.

Our plastic products are produced from two main types of resins, which are petroleum or natural gas-based
products. High-density polyethylene resin is used to make pails, drums and agricultural products. We use 100%
post-industrial and post-consumer use, recycled polypropylene resin in the production of the Plastite(R)line of paint
cans. The price of resin fluctuates significantly, and we believe that it is standard industry practice, as well as a
provision of many of our customer contracts, to pass on increases and decreases in resin prices to our customers.

Seasonality

The Company's business as a whole has minor seasonal variations. Quarterly sales and earnings tend to be
slightly stronger starting in early spring (second quarter) through late summer (third quarter). Aerosol sales have minor
increases in the spring and summer related to increased sales of containers for household products and insect repellents.
Paint container sales tend to be stronger in spring and early summer due to the favorable weather conditions. Portions of
the Custom & Specialty products line tend to vary seasonally, because of holiday sales late in the year. May's food can
sales generally peak in the third and fourth quarters.

Special Charges

The Company initiated several restructuring programs in 2001, consisting of a voluntary termination
program offered to corporate office salaried employees, the closure of six manufacturing facilities and the opening of a
new plastics plant in Atlanta, Georgia.

During 2001, the Company closed a paint can manufacturing facility and a warehouse in Baltimore, Maryland
and ceased operations in Dallas, Texas. Also in connection with the restructuring programs established in 2001, during
2002 the Company closed a Custom & Specialty plant located in the Baltimore, Maryland area, closed the Southall, England
manufacturing facility and closed the Burns Harbor, Indiana lithography facility. The Company has also closed two
plastics facilities in Georgia and transferred production to a new facility in Atlanta, Georgia. The closure of the
Burns Harbor, Indiana lithography facility, in the fourth quarter of 2002 completed the restructuring program established
in 2001, as originally planned.
While the majority of the restructuring initiatives have been completed in 2002, certain portions of the
programs will not be completed until 2003, and the Company does not expect to realize the full earnings benefits until
2004. Certain long-term liabilities (approximately $3.7 million as of December 31, 2002), consisting primarily of
employee termination costs and future ongoing facility carrying costs will be paid over many years.

During 2002, the Company recorded a net charge of $8.7 million related to its restructuring programs.
The 2002 net charge included a reassessment of the restructuring reserves established in 2001, the costs associated with
an executive level position elimination and the loss on the sale of the Daegeling, Germany facility. The increased 2001
reserves are primarily due to additional required contractual payments to terminated employees and a reassessment of
future carrying costs for closed facilities. The increased employee separation costs are primarily due to larger
payments made to employees of the Southall, England plant as a result of the extension of the closure period and
additional employee terminations in connection with the 2001 program. Facility closing costs were reassessed and
increased as a result of landlord negotiations. The increased costs were offset by reduced employee separation and
facility closing costs of our Burns Harbor facility shutdown. The individual components of the restructuring programs
are discussed in Note (4) to the consolidated financial statements.

Labor

As of December 31, 2002, we employed approximately 2,400 employees in the United States. Of our total U.S.
workforce, approximately 1,600 employees, or 67%, were members of various labor unions, including the United Steelworkers
of America, the International Association of Machinists and the Graphic Communications International Union. Labor
agreements covering approximately 400 employees were successfully negotiated in 2002. As of December 31, 2002, our
European subsidiaries employed approximately 1,350 people. In line with common European practices, all plants are
unionized.

We have followed a labor strategy designed to enhance our flexibility and productivity through
constructive relations with our employees and collective bargaining units. Our practice is to deal directly with local
labor unions on employment contract issues and other employee concerns. This practice also has the effect of staggering
renewal negotiations with the various bargaining units. We believe that our relations with our employees and their
collective bargaining units are generally good.

As discussed previously, the restructuring programs initiated in 2001 have resulted in a reduction of the
salaried and hourly work force. The Company has worked closely with the various labor unions and their collective
bargaining units to ensure provisions for termination, severance and pension eligibility were in accordance with the
respective collective bargaining agreements. Except as referenced in "Legal Proceedings - Litigation", the Company's
relationship with represented employees is good and there have been no labor strikes, slow-downs, work stoppages or other
material labor disputes threatened or pending against the Company for at least the past 10 years.

Competition

Quality, service and price are the principal methods of competition in the rigid metal and plastic
container industry. Geographic presence is also an important competitive factor given the cost of shipping empty cans
long distances and accordingly, the Company maintains East Coast, Midwest, Southern and West Coast manufacturing
facilities. In addition, price competition in our industry limits our ability to raise prices for many of our top
products.

In the U.S. steel aerosol can market, we compete primarily with Crown Cork & Seal and BWAY. Because steel
aerosol cans are pressurized and are used for personal care, household and other consumer products, they are more
sensitive to quality, can decoration and other consumer-oriented features than some of our other products. Our European
subsidiaries compete with Crown Cork & Seal, Impress Metal Packaging and other smaller regional producers. Crown Cork &
Seal and Impress are larger and may have greater financial resources than we do.

In metal paint and general line products, we compete primarily with BWAY Corporation and one smaller
regional manufacturer. Our plastic products line competes with many regional companies.

Our Custom & Specialty line competes with a large number of container manufacturers, but we do not compete
across the entire product spectrum with any single company. Competition in this segment is based principally on quality,
service, price, geographical proximity to customers and production capability, with varying degrees of intensity
according to the specific product category.
Our products also face competition from aluminum, glass and plastic containers and flexible pouches.

Strategic Transactions

In February 2001, we acquired certain assets of Olive Can Company, a Custom & Specialty manufacturer. The
acquisition, which is not material to the Company's operations or financial position, was accounted for as a purchase.

The Company continually evaluates all areas of its operations for ways to improve profitability and
overall Company performance. In connection with these evaluations, management considers numerous alternatives to enhance
the Company's existing business including, but not limited to acquisitions, divestitures, capacity realignments and
alternative capital structures.

The Company's Senior Secured Credit Facility prohibits the redemption of the subordinated debt. The
Company may consider making such repurchases upon the expiration or amendment of the Facility.

Refer to Note (5) to the Consolidated Financial Statements for further discussion of the Olive acquisition.

Risk Factors

We have substantial debt that could negatively impact our business by, among other things, increasing our vulnerability
to general adverse economic and industrial conditions and preventing us from fulfilling our obligations under our Senior
Secured Credit Agreement and our Subordinated Debt obligations. As of December 31, 2002, total consolidated debt
outstanding was $549.7 million. We had $30.1 million of unused commitment under our revolving credit facility and cash
of $11.8 million. Our high level of debt could:

o limit our financial flexibility in planning for and reacting to industry changes;
o place us at a competitive disadvantage as compared to less leveraged companies;
o increase our vulnerability to general adverse economic and industry conditions, including changes in
interest rates;
o require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing the
availability of our cash flow for other purposes;
o make it difficult for us to satisfy our obligations, including making interest payments under our debt
obligations; and
o limit our ability to obtain additional financing to operate our business.

The terms of our debt may severely limit our ability to plan for or respond to changes in our business.

Our senior secured credit facility restricts, among other things, our ability to take specific actions,
even if these actions may be in our best interest. These restrictions limit our ability to:

o incur liens or make negative pledges on our assets;
o merge, consolidate or sell our assets;
o issue additional debt;
o pay dividends or redeem capital stock and prepay other debt;
o make investments and acquisitions;
o make capital expenditures;
o materially change our business;
o amend our debt and other material agreements;
o issue and sell capital stock;
o allow distributions from our subsidiaries; or
o prepay specified indebtedness.

Our debt requires us to maintain specified financial ratios and meet specific financial tests. Our failure
to comply with these covenants could result in an event of default that, if not cured or waived, could result in us being
required to repay these borrowings before their due date. If we were unable to make this repayment or otherwise refinance
these borrowings, our lenders could foreclose on our assets. If we were unable to refinance these borrowings on favorable
terms, our business could be adversely impacted.

Our senior debt bears interest at a floating rate, and if interest rates rise, our payments will increase and we may
incur losses.

Outstanding amounts under our senior secured credit facility bear interest at a floating rate. If interest
rates rise, our senior debt interest payments also will increase, which could make it more difficult for us to satisfy
our debt obligations and further reduce availability of our cash flow for operations and other purposes.

This risk has been partially mitigated by interest rate swap and collar agreements that we have entered
into. (See "Quantitative and Qualitative Disclosure About Market Risk - Foreign Currency and Interest Rate Risk -
Interest Rate Risk"). However, the interest rate swaps and collars were entered into in 2000, when interest rates were
higher than current rates. Accordingly, these contracts are "out of the money" and may require future payments if market
interest rates do not return to historical levels. Further, these contracts expire in October 2003. Management has not
determined whether new contracts will be entered into at that time.

Berkshire Partners owns a controlling interest in our voting securities.

Berkshire Partners and its affiliates own approximately 77.3% of the total common equity of U.S. Can
Corporation. Subject to specified limitations contained in our stockholders agreement, Berkshire Partners controls the
Company. Accordingly, Berkshire and its affiliates will control the power to elect directors and to approve many actions
requiring the approval of our stockholders, such as adopting most amendments to our certificate of incorporation and
approving mergers, sales of all or substantially all of our assets and other corporate transactions that could result in
a change of control of our company.

We face competitive risks from many sources that may negatively impact our profitability.

The can and container industry is highly competitive with some of our competitors having greater financial
resources than we do. Quality, service and price are the principal methods of competition in our industry. Because our
customers have the ability to buy similar products from our competitors, we are limited in our ability to increase
prices. Our capital investments have improved our operating efficiencies, and consequently, improved profitability, but
we cannot assure you that we will continue to improve profit margins in this manner. In addition, our profit margins
could decrease if we are unable to meet our customers' quality and service demands.

We also face competitive risks from substitute products, such as aluminum, glass and plastic containers.
Our business also is affected by changes in consumer demand for our customers' products. A decrease in the costs of
substitute products or a decline in consumer demand for our customers' products, particularly their aerosol-based
products, could reduce our customers' orders and adversely affect our business, including our profitability.

The loss of a key customer could have a significant impact on our sales.

We make a significant percentage of our sales to a limited number of customers. Our largest customer
accounted for approximately 8.6% of our sales in 2002. The loss of key customers could adversely affect our sales,
necessitating quick operating cost reductions to offset the resulting sales decrease.

In addition, several of our manufacturing plants are dependent on high volume orders from customers. The
loss of any of these customers or a decrease in demand for their products, which are packaged in our containers, could
adversely affect our business and force us to close manufacturing plants. Product quality is a key element in customer
retention in the packaging industry.

Increases in tin-plated steel prices could cause our production costs to increase, which could reduce our ability to
compete effectively.

Tin-plated steel is the most significant raw material used to make our products. Negotiations with our
domestic and European tin-plated steel suppliers generally occur once per year. Failure to negotiate favorable tin-plated
steel prices in the future could result in an increase in production costs and a negative impact on our results of
operations.

The President of the United States has imposed 30% ad valorem tariffs under Section 201 if the Trade Act
of 1974 on tin mill imports from most foreign producers effective March 30, 2002. These tariffs are scheduled to remain
in effect for three years, declining to 24% in 2003 and 18% in 2004. Tin mill imports from Canada, Mexico and certain
developing counties are excluded from these tariffs. The Company purchases the vast majority of its domestic steel from
domestic sources. Since the tariff curtails foreign competition, a negative impact to the Company is expected since the
Company is unable to purchase foreign steel at lower prices.

Some customer contracts allow us to pass tin-plated steel price increases through to our customers.
However, these contracts generally limit pass-throughs and also may require us to match other competitive bids. If we
cannot pass through all future tin-plated steel price increases to our customers or match other packaging suppliers'
bids, our financial condition may be adversely affected.

We face risks associated with our international operations.

We operate facilities and sell products in several countries outside the United States. We have
significant foreign operations, including plants and sales offices in Denmark, France, Germany, Italy, Spain and the
United Kingdom. In addition, we currently own 36.5% of an aerosol can manufacturer located in Argentina. Our
international operations subject us to risks associated with selling and operating in foreign countries. In Europe,
these risks include:

o fluctuations in currency exchange rates;
o restrictions on dividend payments and other payments by our foreign subsidiaries;
o withholding and other taxes on dividend payments and other payments by our foreign subsidiaries; and
o investment regulation and other restrictions by foreign governments.

In Argentina, these risks include:

o limitations on conversion of foreign currencies into United States dollars;
o hyperinflation; and
o political instability.

Our business is subject to substantial environmental remediation and compliance costs.

Our operations are subject to federal, state, local and foreign laws and regulations relating to
pollution, the protection of the environment, the management and disposal of hazardous substances and wastes and the
cleanup of contaminated sites. In particular, our lithography operations' air emissions are strictly regulated. We spend
significant funds each year to upgrade emissions control equipment to comply with changes in environmental regulations
and increase the efficiencies of our manufacturing operations. Changes in applicable environmental regulations could
increase the capital expenditures necessary to bring manufacturing facilities into compliance with changing environmental
laws. We also could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, as a result
of violations of, or liabilities under, environmental laws or non-compliance with environmental permits required for our
production facilities. Occasionally, contaminants from current or historical operations have been detected at some of our
present and former sites. Although we are not currently aware of any material claims or obligations with respect to these
sites, the detection of additional contaminants or the imposition of cleanup obligations at existing or unknown sites of
contamination could result in significant liability.

We cannot predict the amount or timing of costs imposed under environmental laws. Liability under certain
environmental laws relating to contaminated sites can be imposed retroactively and on a joint and several basis (i.e.,
one liable party could be held liable for all costs at a site). We have been named as a potentially responsible party for
costs incurred in the clean up of a regional groundwater plume partially extending underneath property located in San
Leandro, California, formerly a site of one of our can assembly plants. We have agreed to indemnify the owner of this
property against this matter. We do not believe the past operations of our can assembly plant caused or contributed to
this groundwater plume. However, any liability in connection with this or other environmental matters could result in
substantial costs.

A significant portion of our workforce is unionized and labor disruptions could decrease our productivity.

As of December 31, 2002, we had approximately 3,800 employees. Nearly 1,600 of our United States employees
are subject to collective bargaining agreements. In keeping with common practice, virtually all manufacturing employees
at our European plants are unionized. Although we consider our current relations with our employees to be good, except as
referenced in "Legal Proceedings - Litigation", if we do not maintain these good relations, or if major work disruptions
were to occur, our production costs could increase.

ITEM 2. PROPERTIES

We have 13 operations located in the United States, many of which are strategically positioned near
principal customers and suppliers. Through our European subsidiaries, we also have production locations in the largest
regional markets in Europe, including Denmark, France, Germany, Italy, Spain and the United Kingdom. The following table
sets forth certain information with respect to our principal plants as of March 15, 2003.

Location Size (in sq. Status Segment
- -------- ------------- ------ -------
ft.)
----

United States
Elgin, IL (1)............................ 481,346 Owned Aerosol
Tallapoosa, GA (1)....................... 249,480 Owned Aerosol
Baltimore, MD ........................... 232,172 Leased Custom & Specialty
Commerce, CA............................. 215,860 Leased Paint, Plastic & General Line
Newnan, GA............................... 185,122 Leased Paint, Plastic & General Line
Hubbard, OH (1).......................... 174,970 Owned Paint, Plastic & General Line
Elgin, IL................................ 144,578 Leased Custom & Specialty
Baltimore, MD (1)........................ 137,000 Owned Custom & Specialty
Horsham, PA (1).......................... 132,000 Owned Aerosol
Weirton, WV.............................. 108,000 Leased Aerosol
Danville, IL (1)......................... 100,000 Owned Aerosol
Alliance, OH............................. 52,000 Leased Paint, Plastic & General Line
New Castle, PA (1)....................... 22,750 Owned Custom & Specialty
Europe
Erftstadt, Germany....................... 369,000 Leased International
Merthyr Tydfil, United Kingdom (2)....... 320,000 Leased International
Laon, France............................. 220,000 Owned International
Reus, Spain.............................. 182,250 Owned International
Itzehoe, Germany......................... 80,730 Owned International
Esbjerg, Denmark......................... 66,209 Owned International
Voghera, Italy........................... 45,200 Leased International
Schwedt, Germany......................... 35,500 Leased International

(1) U.S. owned plants are subject to a lien in favor of Bank of America, N.A. as collateral agent for the
lenders under the credit agreement.

(2) The property at Merthyr Tydfil is subject to a 999-year lease with a pre-paid option to buy that becomes
exercisable in January 2007. Up to that time, the landowner may require us to purchase the property for a
payment of one Pound Sterling. Currently, the leasehold interest in, and personal property located at,
Merthyr Tydfil is subject to a pledge to secure amounts outstanding under a credit agreement with General
Electric Capital Corporation.

In connection with our restructuring initiatives, we have closed several manufacturing facilities, some
which have been subleased. The Company has reserved for on-going costs associated with these closed facilities and they
are not included in the above listing.

We believe our facilities are adequate for our present needs and that our properties are generally in good
condition, well maintained and suitable for their intended use. We continuously evaluate the composition of our various
manufacturing facilities in light of current and expected market conditions and demand, and may further consolidate our
plant operations in the future.

ITEM 3. LEGAL PROCEEDINGS

Environmental Matters

Our operations are subject to environmental laws in the United States and abroad, relating to pollution,
the protection of the environment, the management and disposal of hazardous substances and wastes and the cleanup of
contaminated sites. Our capital and operating budgets include costs and expenses associated with complying with these
laws, including the acquisition, maintenance and repair of pollution control equipment, and routine measures to prevent,
contain and clean up spills of materials that occur in the ordinary course of our business. In addition, some of our
production facilities require environmental permits that are subject to revocation, modification and renewal. We believe
that we are in substantial compliance with environmental laws and our environmental permit requirements, and that the
costs and expenses associated with this compliance are not material to our business. However, additional operating costs
and capital expenditures could be incurred if, among other developments, additional or more stringent requirements
relevant to our operations are promulgated.

Occasionally, contaminants from current or historical operations have been detected at some of our present
and former sites. Although we are not currently aware of any material claims or obligations with respect to these sites,
the detection of additional contamination or the imposition of cleanup obligations at existing or unknown sites could
result in significant liability.

We have been designated as a potentially responsible party under superfund laws at various sites in the
United States, including a former can plant located in San Leandro, California. As a potentially responsible party, we
are or may be legally responsible, jointly and severally with other members of the potentially responsible party group,
for the cost of environmental remediation at these sites. Based on currently available data, we believe our contribution
to the sites designated under U.S. Superfund law was, in most cases, minimal. With respect to San Leandro, we believe the
principal source of contamination is unrelated to our past operations.

Through corporate due diligence and the Company's compliance management system, we identified potential
noncompliance with the environmental laws at our New Castle, Pennsylvania facility related to the possible use of a
coating or coatings inconsistent with the conditions in the facility's Clean Air Act Title V permit. In February 2001,
the Company voluntarily self-reported the potential noncompliance to the Pennsylvania Department of Environmental
Protection (PDEP) and the Environmental Protection Agency (EPA) in accordance with PDEP's and EPA's policies. The
Company undertook a full review, revised its emissions calculations based on its review and determined that it had not
exceeded its emissions cap for any reporting year. In September 2001, the Company reported to PDEP and EPA certain
deviations from the requirements of its Title V permit related to the use of non-compliant coatings and corresponding
recordkeeping and reporting obligations, and certain recordkeeping deviations stemming from the malfunction of the
temperature recorder for an oxidizer. The Company met with PDEP officials in October 2001, and provided some supplemental
information requested by PDEP in November 2001. On May 21, 2002, the Company met with PDEP officials and reached an
agreement to resolve the past reported deviations by entering into a Consent Assessment of Civil Penalty for $30,000.
The Company and PDEP signed a definitive agreement in October 2002 and the Company paid the first installment. The
second installment is due in April 2003.

Based upon currently available information, the Company does not expect the effects of environmental
matters to be material to its financial position.

Litigation

We are involved in litigation from time to time in the ordinary course of our business. In our opinion,
the litigation is not material to our financial condition or results of operations.

In May 1998, the National Labor Relations Board issued a decision ordering us to pay $1.5 million in back
pay, plus interest, for a violation of certain sections of the National Labor Relations Act. The violation was a result
of our closure of several facilities in 1991 and our failure to offer inter-plant job opportunities to 25 affected
employees. We appealed this decision on the grounds, among others, that we are entitled to a credit against this award
for certain supplemental unemployment benefits and pension payments. On June 19, 2001, the Court of Appeals issued a
written decision. While the Court enforced the award of backpay, with interest, it agreed with the Company's position
that the NLRB should permit the Company to present actuarial calculations of any credit due it because of overpayments or
early payments of supplemental unemployment benefits or pension. On March 1, 2002, the Company settled this case. Under
the settlement agreement, the Company paid approximately $1.8 million in backpay and interest, as well as certain pension
adjustments that are not expected to have a material effect on the Company. The National Labor Relations Board approved
the settlement on May 30, 2002. The Company made substantially all payments due under the settlement in July 2002. In
October 2002, the NLRB entered an Order officially closing this matter.

Walter Schmidt, former finance director at May Verpackungen GmbH ("May") sued for unfair dismissal
following termination of his employment contract. The contract had a five-year term and Schmidt remains in pay status
through its notice period, ending January 31, 2005. Mr. Schmidt claims that he also is due a severance settlement of
five years' salary at the end of the notice period. In July 2002, the labor courts of first instance ruled that Mr.
Schmidt's notice date and termination should be effective December 31, 2005, and that the severance settlement is due at
that time. On January 7, 2003, May appealed this ruling. In its appeal, May contends that the labor courts' ruling is
erroneous on four bases. The appeals court will review the ruling of the labor courts of first instance de novo, meaning
that it is not bound by the prior ruling and may render an independent decision. Since the appeals court's review is not
complete, the Company is unable, at this time, to determine the appeals court's position or the effect on the Company of
the initial decision.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

In December 2002, U.S. Can Corporation sought the consent of its common and preferred shareholders to
amend its certificate of incorporation to effect (i) a reverse stock split which, upon obtaining the necessary consents
and filing with the Secretary of State of the State of Delaware, reclassified and converted each preexisting share of
common stock and Series A preferred stock into 1/1000th of a share of common and preferred stock, respectively, and (ii)
a corresponding reduction in the number of its authorized shares of common stock from 100,000,000 shares to 100,000
shares and in the number of its authorized shares of preferred stock from 200,000,000 shares to 200,000 shares.

The following tables set forth the number of shares consenting, not consenting, abstaining, or not
obtained (numbers shown are prior to the reverse stock split):

Common Stock
------------

Shares Outstanding........................................... 53,333,333
Shares Consenting................................. 48,620,761
Shares Not Consenting........................... ---
Shares Abstaining................................. ---
Shares Consent Not Obtained.................... 4,712,572

Preferred Stock
---------------

Shares Outstanding........................................... 106,666,667
Shares Consenting................................. 105,979,382
Shares Not Consenting........................... ---
Shares Abstaining................................. ---
Shares Consent Not Obtained.................... 687,285

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

U.S. Can has approximately 20 common stockholders. Its common stock has not been registered and there is
no trading market for its common stock. It has not paid, and has no present intention to pay, cash dividends. As U.S.
Can Corporation has no operations, its only source of cash for dividends or distributions is United States Can Company.
There are stringent limitations in the Senior Secured Credit Facility ("the Facility") and the Senior Subordinated Notes
("the Notes") on United States Can's ability to fund or pay cash dividends to U.S. Can Corporation.

In 2000, U.S. Can Corporation issued shares of preferred stock having a face value of $106.7 million.
Dividends accrue on the preferred stock at an annual rate of 10%, are cumulative from the date of issuance and are
compounded quarterly, on March 31, June 30, September 30 and December 31 of each year and are payable in cash when and as
declared by our Board of Directors, so long as sufficient cash is available to make the dividend payment and such payment
would not violate the terms of the Facility and the Notes. As of December 31, 2002, dividends of approximately $26.5
million have been accrued. As United States Can is U.S. Can Corporation's only source of cash and payments by United
States Can are restricted by the terms of the Facility and the Notes, U.S. Can Corporation does not anticipate paying
cash dividends on the preferred stock in the foreseeable future. Holders of the preferred stock have no voting rights,
except as otherwise required by law. The preferred stock has a liquidation preference equal to the purchase price per
share (after giving effect to the reverse stock split), plus all accrued and unpaid dividends. The preferred stock ranks
senior to all classes of U.S. Can Corporation common stock and is not convertible into common stock.

On December 20, 2002, U.S. Can Corporation amended its certificate of incorporation to effect (i) a
reverse stock split which, upon filing with the Secretary of State of the State of Delaware, reclassified and converted
each preexisting share of common stock and Series A preferred stock into 1/1000th of a share of common and preferred
stock, respectively, and (ii) a corresponding reduction in the number of its authorized shares of common stock from
100,000,000 shares to 100,000 shares and in the number of its authorized shares of preferred stock from 200,000,000
shares to 200,000 shares. The reverse stock split did not affect the relative percentages of ownership for any
shareholders. The reverse stock split did not affect the annual rate at which dividends on preferred stock accrue, their
cumulation or quarterly compounding. Dividends remain payable in cash when and as declared by our Board of Directors, so
long as sufficient cash is available to make the dividend payment and such payment would not violate the terms of the
Facility and the Notes.

ITEM 6. SELECTED FINANCIAL DATA

The following consolidated financial data as of and for each of the fiscal years in the five years ended
December 31, 2002 were derived from our audited financial statements. You should read all of this information in
conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our
financial statements for the year ended December 31, 2002 and accompanying notes beginning on page 25.

U.S. CAN CORPORATION AND SUBSIDIARIES
(000's omitted)
For the Year Ended December 31,
-------------------------------
2002 2001 2000 1999 1998
---- ---- ---- ---- ----
OPERATING DATA:
Net sales........................................ $ 796,500 $ 772,188 $ 809,497 $ 732,897 $ 730,951
Special charges (a).............................. 8,705 36,239 3,413 -- 35,869
Recapitalization charge (b)...................... -- -- 18,886 -- --
Operating income (loss).......................... 39,547 (6,146) 48,153 66,975 21,748
Income (loss) from continuing operations
before discontinued operations, extraordinary item,
and cumulative effect of accounting change.... (53,474) (40,416) 3,341 22,452 (7,525)
Discontinued operations, net of income taxes (c)
Net loss on sale of business.................. -- -- -- -- (8,528)
Extraordinary item, net of income taxes - loss from
early extinguishment of debt (d).............. -- -- (14,863) (1,296) --
Cumulative effect of accounting change, net of
income taxes (e).............................. (18,302) -- -- -- --
Net income (loss) before preferred stock dividends (71,776) (40,416) (11,522) 21,156
(16,053)
Preferred stock dividend requirements............ (12,521) (11,345) (2,601) -- --
Net income (loss) attributable to
common stockholders........................... $ (84,297) $ (51,761) $ (14,123) $ 21,156 $ (16,053)
BALANCE SHEET DATA:
Total assets..................................... $ 578,826 $ 634,350 $ 637,864 $ 663,570 $ 555,571
Total debt....................................... 549,682 536,776 495,045 359,317 316,673
Redeemable preferred stock....................... 133,133 120,613 109,268 -- --
Stockholders' equity (f)......................... (343,846) (247,124) (174,323) 68,556 50,177

(a) See Note (4) of the "Notes to Consolidated Financial Statements" for a description of the 2002, 2001 and 2000
Special Charges. In 1998, the Company established a restructuring provision for closure of the Green Bay,
Wisconsin aerosol assembly plant, the Alsip, Illinois general line plant, and the Columbiana, Ohio specialty
plant; a write-down to estimated proceeds for the sale of the metal closure business located in Glen Dale, West
Virginia; and selected closures and realignment of facilities servicing the lithography needs of the Company's
core businesses.

(b) See Note (3) of the "Notes to Consolidated Financial Statements."

(c) On November 9, 1998, the Company sold its commercial metal services business ("Metal Services"). Metal Services
included one plant in each of Chicago, Illinois; Trenton, New Jersey; Brookfield, Ohio, and Alsip, Illinois.

(d) In April of 2002, the FASB issued Statement of Financial Accounting Standard No. 145 related to gains and
losses on extinguishment of debt. See "New Accounting Pronouncements". In accordance with the pronouncement,
the Company will adopt the standard for the year ended December 31, 2003 and is in the process of reviewing the
criteria in Accounting Principles Board Opinion 30 as it relates to the Company's early extinguishment of debt
in 2000 and 1999. See Note (6) of the "Notes to Consolidated Financial Statements" for further details relating
to the early extinguishment of debt.

(e) See Note (15) of the "Notes to Consolidated Financial Statements."

(f) Negative stockholders' equity in 2000 was caused by the recapitalization. See Note (3) of the "Notes to
Consolidated Financial Statements."

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion summarizes the significant factors affecting the consolidated operating results
and financial condition of the Company and subsidiaries for the three years ended December 31, 2002. This discussion
should be read in conjunction with the consolidated financial statements and notes to the consolidated financial
statements.

Critical Accounting Policies; Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Estimates are used for, but not limited to: allowance for doubtful
accounts; inventory valuation; purchase accounting allocations; restructuring amounts; asset impairments; depreciable
lives of assets; goodwill impairments; pension assumptions and tax valuation allowances. Future events and their effects
cannot be perceived with certainty. Accordingly, our accounting estimates require the exercise of management's current
best reasonable judgment based on facts available. The accounting estimates used in the preparation of the consolidated
financial statements will change as new events occur, as more experience is acquired, as more information is obtained and
as the Company's operating environments change. Significant business or customer conditions could cause material changes
to the amounts reflected in our financial statements. Accounting policies requiring significant management judgments
include those related to revenue recognition, inventory valuation, accounts receivable allowances, goodwill impairment,
restructuring reserves, tax valuation allowances, pension benefit obligations and interest rate exposure.

The Company's critical accounting policies are described in Note (2) to the Consolidated Financial
Statements. Significant business or customer conditions could cause material changes to the amounts reflected in our
financial statements. For example, the Company enters into contractual agreements with certain of its customers for
rebates, generally based on annual sales volumes. Should the Company's estimates of the customers' annual sales volumes
vary materially from the sales volumes actually realized, revenue may be materially impacted. Similarly, a large portion
of the Company's inventory is manufactured to customer specifications. Other inventory is generally less specific and
saleable to multiple customers. However, losses may result should the Company manufacture customized products which it is
unable to sell. Management also estimates allowances for collectibility related to its accounts receivable. These
allowances are based on the customer relationships, the aging and turns of accounts receivable, credit worthiness of
customers, credit concentrations and payment history. Despite our best efforts, the inability of a particular customer to
pay its debts could impact collectibility of receivables and could have an impact on future revenues if the customer is
unable to arrange other financing.

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other
Intangible Assets" on January 1, 2002. Under this standard, goodwill and "indefinite-lived" intangibles are no longer
amortized, but are tested at least annually for impairment. The Company identifies potential impairments of goodwill by
comparing an estimated fair value for each applicable business unit to its respective carrying value. Although the
values were assessed using a variety of internal and external sources, future events may cause reassessments of these
values and related goodwill impairments.

During the first six months of 2002, the Company completed the initial transitional goodwill impairment
test as of January 1, 2002 required under SFAS No. 142, and reported that a non-cash impairment charge was required in
the Custom & Specialty and International segments. During the fourth quarter of 2002, the Company determined the amount
of the goodwill impairment and recorded a pre-tax goodwill impairment charge of $39.1 million ($18.3 million, net of tax)
relating to the Custom & Specialty and International segments. The charge has been presented as a cumulative effect of a
change in accounting principle effective as of January 1, 2002 and is primarily due to competitive pressures in the
Custom & Specialty and International segment marketplaces. To determine the amount of goodwill impairment, the Company
measured the impairment loss as the excess of the carrying amount of goodwill over the implied fair value of goodwill.
The impairment charge has no impact on covenant compliance under the Senior Secured Credit Agreement. As of December 31,
2002, the Company had $27.4 million of goodwill remaining on its balance sheet.

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," was issued in August
2001. SFAS No. 144, which addresses financial accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of, supercedes SFAS No. 121 and is effective for fiscal years beginning after December
15, 2001. The Company adopted this pronouncement on January 1, 2002. In accordance with SFAS 144, we continually review
whether events and circumstances subsequent to the acquisition of any long-lived assets have occurred that indicate the
remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may
not be recoverable. If events and circumstances indicate that the long-lived assets should be reviewed for possible
impairment, we use projections to assess whether future cash flows or operating income (before amortization) on an
undiscounted basis related to the tested assets is likely to exceed the recorded carrying amount of those assets, to
determine if a write-down is appropriate. Should an impairment be identified, a loss would be reported to the extent that
the carrying value of the impaired assets exceeds their fair values as determined by valuation techniques appropriate in
the circumstances that could include the use of similar projections on a discounted basis.

As more fully described in Note (4) to the Consolidated Financial Statements, several restructuring
programs were implemented in order to streamline operations and reduce costs. The Company has established reserves and
recorded charges against such reserves, to cover the costs to implement the programs. The estimated costs were
determined based on contractual arrangements, quotes from contractors, similar historical activities and other judgmental
determinations. Actual costs may differ from those estimated and, in 2002, an additional net charge of $8.7 million was
recorded related to the reassessment of the 2001 restructuring programs, 2002 employee terminations, and the sale of the
Daegeling, Germany facility. See Note (4) to the Consolidated Financial Statements for a description of the additional
net charge. SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal Activities" was issued in July 2002.
SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the
liability is incurred. SFAS No. 146 supercedes the guidance of Emerging Issues Task Force ("EITF") Issue No. 94-3
"Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity", which required that
liabilities for exit costs be recognized at the date of an entity's commitment to an exit plan. SFAS No. 146 is
effective for exit or disposal activities that are initiated after December 31, 2002. The Company will adopt SFAS No.
146 for any exit disposal activities initiated after such date.

The Company accounts for income taxes using the asset and liability method under which deferred income tax
assets and liabilities are recognized for the tax consequences of "temporary differences" between the financial statement
carrying amounts and the tax bases of existing assets and liabilities and operating losses and tax credit carry
forwards. On an ongoing basis, the Company evaluates its deferred tax assets to determine whether it is more likely
than not that such assets will be realized in the future and records valuation allowances against the deferred tax assets
for amounts which are not considered more likely than not to be realized. The estimate of the amount that is more likely
than not to be realized requires the use of assumptions concerning the amounts and timing of the Company's future income
by taxing jurisdiction. Actual results may differ from those estimates.

Due to a history of operating losses in certain countries coupled with the deferred tax assets that arose
in connection with the restructuring programs and goodwill impairment charges, the Company has determined that it cannot
conclude that it is "more likely than not" that all of the deferred tax assets of certain of its foreign operations will
be realized in the foreseeable future. Accordingly, during the fourth quarter of 2002, the Company established a
valuation allowance of $44.7 million to provide for the estimated unrealizable amount of its net deferred tax assets as
of December 31, 2002. The Company will continue to assess the valuation allowance and, to the extent it is determined
that such allowance is no longer required, these deferred tax assets will be recognized in the future.

The Company relies upon actuarial models to calculate its pension benefit obligations and the related
effects on operations. Accounting for pensions and postretirement benefit plans using actuarial models requires the use
of estimates and assumptions regarding numerous factors, including discount rate, the long-term rate of return on plan
assets, health care cost increases, retirement ages, mortality and employee turnover. On an annual basis, the Company
evaluates these critical assumptions and makes changes to them as necessary to reflect the Company's experience. In any
given year, actual results could differ from actuarial assumptions made due to economic and other factors which could
impact the amount of expense or liability for pensions or postretirement benefits the Company reports.

Two of the critical assumptions in determining the Company's reported expense or liability for pensions or
postretirement benefits are the discount rate and the long-term expected rate of return on plan assets. The use of a
lower discount rate and a lower long-term expected rate of return on plan assets would increase the present value of
benefit obligations and increase pension expense and postretirement benefit expense. In 2002, the Company reduced its
U.S. and foreign discount rates to reflect market interest rate conditions.

To manage interest rate exposure, the Company enters into interest rate agreements. The net interest paid
or received on these agreements is recognized as interest income or expense. Our interest rate agreements are reported in
the Consolidated Financial Statements at fair value using a mark-to-market valuation. Changes in the fair value of the
contracts are recorded each period as a component of other comprehensive income. Gains or losses on our interest rate
agreements are reclassified as earnings or losses in the period in which earnings are affected by the underlying hedged
item. This may result in additional volatility in reported earnings, other comprehensive income and accumulated other
comprehensive income. Our interest rate swaps and collars were entered into in 2000, when interest rates were higher
than current rates. Accordingly, these contracts are "out of the money" and may require future payments if market
interest rates do not return to historical levels. In addition, if rates do increase above historical levels and the
counterparties to the agreements default on their obligations under the agreements, our interest expense would increase.
The Company does not use financial instruments for trading or speculative purposes.

Year Ended December 31, 2002 Compared To Year Ended December 31, 2001

Consolidated net sales for the year ended December 31, 2002 were $796.5 million as compared to $772.2
million in 2001, an increase of 3.1%. Along business segment lines, Aerosol net sales in 2002 increased to $364.1 million
from $334.7 million in 2001, an increase of 8.8%, due principally to increased unit volume ($37.4 million) partially
offset by the pricing impacts resulting from a change in customer mix and the 2002 effect of pricing concessions granted
in 2001 ($8.0 million). International net sales increased to $241.2 million in 2002 from $229.5 million in 2001, an
increase of $11.7 million or 5.1% primarily due to the positive impact of the translation of sales made in foreign
currencies based upon using the same average U.S. dollar exchange rates in effect during the year ended December 31,
2001. The Paint, Plastic & General Line segment net sales decreased 8.0%, from $130.4 million in 2001 to $120.0 million
in 2002. This decrease was due to changes in product and customer mix along with falling resin prices in our plastics
business that are contractually passed on to customers ($11.3 million) and decreased paint volume ($2.2 million) offset
by increased volume in plastics ($3.1 million). In 2002, the Company reduced manufacturing capacity in its paint
business as part of the Company's restructuring programs. In the Custom & Specialty segment, sales decreased 8.2% from
$77.6 million in 2001 to $71.2 million in 2002 driven primarily by a change in product mix ($7.6 million) partially
offset by an increase in volume ($1.2 million).

Consolidated cost of goods sold increased $14.9 million to $710.4 million for 2002. The principal reasons
for the increase were increased volume experienced in our domestic Aerosol business ($32.1 million), operating
inefficiencies in the U.K. and Germany ($3.2 million) and the foreign currency translation impact on costs ($11.9
million) based upon using the same average U.S dollar exchange rates in effect during the year ended December 31, 2001.
These increases were partially offset by cost containment programs and changes in product mix in U.S. production
facilities ($30.6 million) and the decline in resin prices ($2.0 million). As anticipated, the tariffs imposed in 2001
on imported steel did not have a material impact on the Company's cost of goods sold in 2002. The impact of higher steel
prices due to the tariffs will increase the Company's costs of goods sold in 2003, however the Company cannot determine
the effect on steel purchase prices for 2004 and later years. For further discussion on the tariffs see "Business - Raw
Materials". Gross profit margin of 10.8% in 2002 increased 0.9 percentage points from 2001. The increase in the gross
margin rate is due to the $9.6 million of benefits achieved from the restructuring programs (1.2 percentage points),
volume related efficiencies (0.4 percentage points) partially offset by operating costs and inefficiencies in the U.K.
and Germany (0.7 percentage points).

Selling, general and administrative costs decreased from $46.6 million in 2001 to $37.9 million in 2002
due to the lack of goodwill amortization during the year and positive results from management's focus on Company-wide
cost saving programs initiated in 2001. As previously discussed, the Company has ceased the amortization of goodwill.
Goodwill amortization for the year ended December 31, 2001 was $2.8 million.

During 2002, the Company substantially completed the restructuring programs initiated in 2001. The
Company offered voluntary termination programs to corporate office salaried employees, opened a new plastics plant in
Atlanta, Georgia and closed six planned manufacturing facilities. The Burns Harbor, Indiana lithography facility was
closed in the fourth quarter, completing the facility closure program. In addition, during the fourth quarter of 2002,
the Company sold its Daegeling, Germany facility.

During 2002, the Company recorded a net charge of $8.7 million related to restructuring. The net charge
of $8.7 million consists of new restructuring reserves of $11.9 million less reversals of $3.2 million due to the
reassessment of restructuring reserves established in 2001. Included in the 2002 net restructuring charge are executive
position elimination costs and the loss on the sale of the Daegeling, Germany facility. While the majority of the
restructuring initiatives have been completed in 2002, certain portions of the programs will not be completed until 2003,
and the Company does not expect to realize the full earnings benefits until 2004. Certain long-term liabilities
(approximately $3.7 million as of December 31, 2002), consisting primarily of employee termination costs and future
ongoing facility carrying costs will be paid over many years. The Company initiated the restructuring programs in 2001
and recorded a net restructuring charge of $36.2 million for the year.

The table below presents the reserve categories and related activity as of December 31, 2002:

January 1, 2002 Net December 31, 2002
(in millions) Balance Additions(d) Deductions(c) Other (b) Balance
----------------- --------------- ---------------- ------------- --------------------
----------------- --------------- ---------------- ------------- --------------------
Employee Separation $21.2 $4.9 ($17.6) $0.7 $9.2

Facility Closing Costs 10.7 3.8 (9.6) 1.6 6.5
----------------- --------------- ---------------- ------------- --------------------
----------------- --------------- ---------------- ------------- --------------------
Total $31.9 $8.7 ($27.2) $2.3 $15.7
(a)
================= =============== ================ ============= ====================
================= =============== ================ ============= ====================

(a) Includes $3.7 million classified as other long-term liabilities as of December 31, 2002.
(b) Non-cash foreign currency translation impact and the reversal of $1.5 million of asset write-offs
previously expensed in 2001.
(c) Includes cash payments of $20.8 million. The remaining non-cash deductions represent increased pension
and post-retiree benefits transferred to Other Long-Term Liabilities and the non-cash loss recorded on the sale of
the Daegeling facility.
(d) Includes reversals of $3.2 million due to the re-assessment of reserves

Interest expense in 2002 decreased 3.4%, or $1.9 million, versus 2001 due to lower interest rates ($3.4
million) partially offset by the interest expense impact of higher average borrowings ($1.5 million). See Note (6) to the
Consolidated Financial Statements for a further discussion of the Company's debt position.

Payment in kind dividends of $12.5 million and $11.3 million on the redeemable preferred stock issued in
connection with the recapitalization were recorded in 2002 and 2001, respectively. See Note (12) to the Consolidated
Financial Statements.

Year Ended December 31, 2001 Compared To Year Ended December 31, 2000

Consolidated net sales for the year ended December 31, 2001 were $772.2 million as compared to $809.5
million in 2000, a decrease of 4.6%. Along business segment lines, Aerosol net sales in 2001 decreased to $334.7 million
from $357.7 million in 2000, a 6.4% decline, due principally to decreased unit volume ($13.6 million), a change in the
mix of sales volume towards lower selling value products ($4.0 million) and pricing concessions granted in the first half
of 2001 ($5.3 million). The pricing concessions granted in the first part of the year will continue to negatively impact
the first half of 2002, both in sales and gross profit. International net sales decreased to $229.5 million in 2001 from
$239.6 million in 2000, a decrease of $10.1 million or 4.2%. There was a $9.7 million negative impact in 2001 due to
U.S. dollar translation on sales made in foreign currencies. The Paint, Plastic & General Line segment net sales
decreased 4.1%, from $136.1 million in 2000 to $130.4 million in 2001 due primarily to decreased unit volume of paint and
general line. In the Custom & Specialty segment, sales increased 2.0% from $76.1 million in 2000 to $77.6 million in
2001, due to additional sales as the result of the acquisition of Olive Can ($12.1 million see Note (5) to the
Consolidated Financial Statements) offset by the sale of the Wheeling metal closure and Warren lithography businesses
($3.4 million) and an overall decline in volume ($6.5 million).

Consolidated cost of goods sold increased $2.3 million to $695.5 million for 2001. The principal reasons
for the increase included additional volume as a result of the Olive Can acquisition ($11.8 million) and a one-time
inventory write-off relating to discontinued Custom & Specialty products ($3.2 million) offset by decreased costs caused
by volume and mix ($12.7 million). Gross profit margin of 9.9% in 2001 decreased 4.5 percentage points from 2000. The
primary reasons for the decline in gross margin rate include the impact of volume declines (0.5 percentage points),
selling price and product mix (2.0 percentage points) and manufacturing inefficiencies resulting from volume softness
(0.9 percentage points) and the delay in the sale of the Southall, U.K facility (0.4 percentage points).

Selling, general and administrative costs increased from $45.9 million in 2000 to $46.6 million in 2001.
The Company expects a reduction to selling, general and administration costs as a result of the Company offering a
voluntary termination program in connection with the restructuring initiatives discussed in Note (4) to the Consolidated
Financial Statements.

During 2001, the Company initiated several restructuring programs. These programs will result in (a) the
closure of five manufacturing facilities, (b) the additional consolidation of two facilities into one new facility, (c)
the reversal of a previous decision to close a Custom & Specialty lithography facility due to changing business needs and
(d) the elimination of approximately 600 jobs. The restructuring programs, which are more fully described in Note (4) to
the Consolidated Financial Statements, resulted in a net charge of $36.2 million in 2001. The programs are expected to
result in improved operating income in 2002 and future years as a result of reduced payroll costs and the elimination of
fixed overhead costs. A pre-tax charge of $3.4 million for severance and other termination-related costs was recorded in
the third quarter of 2000. There also was an $18.9 million charge in the fourth quarter of 2000 related to the
recapitalization. See Notes (3) and (4) to the Consolidated Financial Statements for further discussion on the
recapitalization and the special charge, respectively.

The tables below present the reserve categories and related activity as of December 31, 2001 respectively:

January 1, 2001 December 31, 2001
(in millions) Balance Additions(a) Deductions(c) Balance
-------------------- ------------------ ------------------ --------------------
Employee Separation $19.8 ($4.7) $21.2
$6.1
Facility Closing Costs 9.3 11.2 (9.8) 10.7
Other Asset Write-Offs -- 5.2 (5.2)(d) --
--------------------
------------------ ------------------ --------------------
Total $15.4 $36.2 ($19.7) $31.9(b)
==================== ================== ================== ====================
------------------ ------------------ --------------------

(a) Includes a re-assessment of prior programs of $7.2 million
(b) Includes $6.0 million of other long-term liabilities as of December 31, 2001
(c) Includes cash payments of $ 8.3 million
(d) Net of proceeds from sale of Southall facility of $11.7 million

Interest expense in 2001 increased 41.6%, or $16.8 million, versus 2000 due to borrowings made in
connection with the recapitalization transactions that occurred in October 2000. The recapitalization resulted in
increased borrowings for all 2001 versus the fourth quarter of 2000. See "Liquidity and Capital Resources" and Notes
(3), (5) and (6) to the Consolidated Financial Statements for a further discussion of the recapitalization and the
Company's debt position.

Payment in kind dividends of $11.3 million and $2.6 million on the redeemable preferred stock issued in
connection with the recapitalization were recorded in 2001 and 2000, respectively. See Note (12) to the Consolidated
Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

During 2002, liquidity needs were met through internally generated cash flow and borrowings made under
lines of credit. Principal liquidity needs included operating costs, working capital, including restructuring costs and
capital expenditures. Cash flow provided by operations was $6.2 million for the year ended December 31, 2002, compared
to cash used of $7.0 million for the year ended December 31, 2001. The decreased use of cash is primarily due to the
decrease in the net loss before income taxes (as discussed earlier).

Net cash used in investing activities was $21.7 million in 2002, as compared to $24.4 million in 2001.
Investing activities for 2002 relate primarily to capital spending of $27.2 million, including $11.5 million in
conjunction with the Company's restructuring programs, offset by the proceeds received from the sale of property of $5.7
million, including the final payment received for the sale of our Southall facility of $4.8 million. Total capital
expenditures in 2001 were $19.5 million. Base capital expenditures are expected to range from $20.0 million to $24.0
million each year during the five years commencing 2003. 2003 capital expenditures include approximately $3.0 million to
complete the Company's 2001 restructuring programs. Capital expenditures are expected to be funded from cash on hand,
operations and borrowings under the revolving credit facility. Capital investments have historically yielded reduced
operating costs and improved profit margins, and management believes that the strategic deployment of capital will enable
overall profitability to improve by leveraging the economies of scale inherent in the manufacturing of containers.

Net cash provided from financing activities in 2002 was $12.0 million versus $35.1 million in 2001. The
primary 2002 financing sources were borrowings under the revolving credit portion of the Senior Secured Credit Facility
("the Facility") and unsecured revolving lines of credit granted by various banks to fund the seasonal working capital
requirements of May Verpackungen. The Senior Secured Credit Facility and the Notes contain a number of financial and
restrictive covenants. The Company was in compliance with all of the required financial ratios and other covenants as of
December 31, 2002. The unsecured revolving lines granted to May Verpackungen may be terminated by the offering banks
upon given notice periods. As agreed, May repaid(euro)2.0 million during 2002 and(euro)0.7 million in January 2003. No further
repayments have been committed. See Note (6) to the Consolidated Financial Statements for further discussion on the
Company's debt obligations.

Primary sources of liquidity are cash flow from operations and borrowings under revolving credit
facilities. United States Can Company, as Borrower, is a party to a Credit Agreement among United States Can, U.S. Can
Corporation and Domestic Subsidiaries of U.S. Can Corporation as Domestic Guarantors, and certain lenders including Bank
of America, N.A., Citicorp North America, Inc., and Bank One NA as of October 4, 2000 (the "Senior Secured Credit
Facility"). As amended, the Senior Secured Credit Facility provides for aggregate borrowings of $395.0 million
consisting of: (i) $80.0 million Tranche A loan; (ii) $180.0 million Tranche B loan; (iii) $25.0 million Tranche C
facility and (iv) $110.0 million under a revolving credit facility. All of the Tranche A and Tranche B debt and
approximately $20.5 million under the revolving credit facility were used to finance the recapitalization. The borrowings
under the revolving credit portion of the facility are available to fund working capital requirements, capital
expenditures and other general corporate purposes. The revolving loan facility also includes a subfacility for the
issuance of Letters of Credit. The Tranche C borrowings in December 2001 provided additional liquidity.

Principal repayments required under the Senior Secured Credit Facility are $10.0 million in 2003
increasing to $218.8 million at the maturity date in 2006. Also due in 2006 are any amounts outstanding at that time
under the Company's revolving line of credit. Additionally, the Facility requires a prepayment in the event that excess
cash flow (as defined) exists and following certain other events, including certain asset sales and issuances of debt and
equity.

Amounts outstanding under the Senior Secured Credit Facility bear interest at a rate per annum equal to
either: (1) the base rate (as defined in the Senior Secured Credit Facility) or (2) the LIBOR rate (as defined in the
Senior Secured Credit Facility), in each case, plus an applicable margin. The applicable margins were increased in
connection with the 2001 amendments and are subject to future reductions based on the achievement of certain leverage
ratio targets and on the credit rating of the Senior Secured Credit Facility.

Borrowings under the Tranche A term loan are due and payable in quarterly installments, which are $2.0
million for each of the first three quarters in 2003 and $3.0 million for the fourth quarter of 2003 and increase over
time to $8.0 million per quarter, until the final balance is due. Borrowings under the Tranche B term loan are due and
payable in quarterly installments of nominal amounts until the final payment is due on January 4, 2006. No payments are
due on borrowings under the Tranche C term loan prior to its final maturity. The revolving credit facility is available
until January 4, 2006. In addition, the Company is required to prepay a portion of the facilities under the Senior
Secured Credit Facility upon the occurrence of certain specified events.

United States Can also issued $175.0 million aggregate principal amount of 12 3/8% Senior Subordinated
Notes due October 1, 2010 ("Notes"). The Notes are unsecured obligations of United States Can and are subordinated in
right of payment to all of United States Can's senior indebtedness. The Notes are guaranteed by U.S. Can and all of
United States Can's domestic restricted subsidiaries.

The Senior Secured Credit Facility and the Notes contain a number of financial and restrictive covenants.
Under our Senior Secured Credit Facility, the Company is required to meet certain financial tests, including achievement
of a minimum EBITDA level, a minimum interest coverage ratio, a minimum fixed charge coverage ratio and a maximum
leverage ratio. The restrictive covenants limit the Company's ability to incur debt, pay dividends or make distributions,
sell assets or consolidate or merge with other companies. The Company was in compliance with all of the required
financial ratios and other covenants under both facilities, as amended, at December 31, 2002 and anticipates being in
compliance in 2003. However, the minimum EBITDA covenant increases significantly in each of the first three quarters of
2003. Although management believes that it will be in compliance with these and other covenants under the Senior Secured
Credit Facility, factors beyond our control, such as sudden downturns in the demand for our products or significant cost
increases that we cannot quickly pass through to customers or offset through cost reductions, may cause our earnings
levels to not achieve those forecasted. If we believe that we would be unable to achieve our minimum EBITDA or other
financial covenants, we would expect to negotiate with the lenders an amendment to our Senior Secured Credit Facility.
We cannot be assured however, that the lenders would agree to an amendment if one were required. Without such an
amendment or a waiver, we would be in default on almost all of our borrowings, which would have severe consequences to
the Company regarding its sources of liquidity and its ability to continue operations.

At December 31, 2002, $69.7 million was outstanding under the $110.0 million revolving loan portion of the
Senior Secured Credit Facility. Letters of Credit of $10.2 million were outstanding securing the Company's obligations
under various insurance programs and other contractual agreements. Additionally, unsecured revolving lines of credit
granted by various banks of approximately $25.0 million are available to fund the seasonal working capital requirements
of our international operations. Borrowings outstanding under these facilities at December 31, 2002 were $13.4 million.
The lines may be terminated by the offering banks upon given notice periods.

As more fully described in Note (4) to the Consolidated Financial Statements, the Company has implemented
several restructuring programs. Future cash requirements to complete these programs are estimated to be approximately
$12.0 million in 2003 and $3.7 million in 2004 and beyond. The Company expects to fund these cash requirements from cash
on hand, operations and borrowings under the revolving credit facility. Upon completion, the programs are expected to
yield annual improvements in operating income exceeding $17.0 million, primarily through the reduction of payroll and
fixed overhead expenses.

The Company has a number of contractual commitments to make future cash payments. Under existing
agreements, contractual obligations as of December 31, 2002 are as follows (000's omitted):

Payments due by period
Contractual Obligations 1st year 2-3 years 4-5 years After 5 years
-------------------------------------
----------------------------------------------------------
Long Term Debt $25,074 $52,601 $ 291,140 $ 179,000
Capital lease obligations 1,079 788 - -
Operating leases 4,997 8,209 5,952 3,628
----------------------------------------------------------
Total Contractual Commitments $ 31,150 $61,598 $ 297,092 $ 182,628

See Note (6) to the Consolidated Financial Statements for further information on obligations under the
Senior Secured Credit Facility and 12 3/8% Senior Subordinated Notes due October 1, 2010 ("Notes") and Note (10) for
further information on capital and operating leases.

At existing levels of operations, cash generated from operations together with amounts to be drawn from
the revolving credit facility, are expected to be adequate to meet anticipated debt service requirements, restructure
costs, capital expenditures and working capital needs. Future operating performance, including the impact, if any, of
the tariff described under "Raw Materials", and the ability to service or refinance the notes, to service, extend or
refinance the senior secured credit facility and to redeem or refinance our preferred stock will be subject to future
economic conditions and to financial, business and other factors, many of which are beyond management's control.

The Company's Senior Secured Credit Facility prohibits the redemption of the subordinated debt. The
Company may consider making such repurchases upon the expiration or amendment of the Facility.

INFLATION

Tin-plated steel represents the primary component of the Company's raw materials requirement.
Historically, the Company has not always been able to immediately offset increases in tinplate prices with customer price
increases. The Company's capital spending programs and manufacturing process upgrades are designed to increase operating
efficiencies and mitigate the impact of inflation on the Company's cost structure.

Effective March 20, 2002, the President of the United States imposed 30% ad valorem tariffs under Section
201 of the Trade Act of 1974 on tin mill imports from most foreign producers. The tariffs are scheduled to remain in
effect for three years, declining to 24% in the second year and 18% in the third year. Tin mill imports from Canada,
Mexico and certain developing countries are excluded from the tariffs. The tariffs did not materially effect the
Company's costs for 2002. However, the Company does purchase the vast majority of its domestic steel from domestic
sources and since the tariff curtails foreign competition, a negative impact to the Company could arise from price
increases from domestic suppliers.

In response to the U.S. tariffs imposed under Section 201of the Trade Act of 1974, in March of 2002 Europe
established a steel safeguard initiative whereby imports of steel into Europe from designated countries are assessed a
duty of 17% versus the previous duty of 1%. The new duty on some European imports remains in effect for the duration of
the U.S. imposed tariffs under Section 201. Due to the fact that the Company's European operations do not import steel
from any of the countries affected by the new European duty, in 2002 the Company's international operations were not
affected by the new duty. Likewise, the Company does not anticipate the new duty to affect its operations in 2003 as the
Company has no plans to begin purchasing steel from these countries.

NEW ACCOUNTING PRONOUNCEMENTS

During July 2001, the Financial Accounting Standards Board (FASB) issued and the Company adopted Statement
of Financial Accounting Standards (SFAS) No. 141, Business Combinations. SFAS No. 141 modifies the method of accounting
for business combinations entered into after June 30, 2001 and addresses the accounting for acquired intangible assets.
All business combinations entered into after June 30, 2001, are accounted for using the purchase method.

The Company adopted SFAS No. 142 "Goodwill and Other Intangible Assets" on January 1, 2002. This standard
provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill and
"indefinite-lived" intangibles are no longer amortized, but are tested at least annually for impairment. Effective
January 1, 2002, the Company ceased amortization of its goodwill. The Company recorded goodwill amortization of $2.8
million and $2.9 million for the years ended December 31, 2001 and 2000. SFAS No. 142 required the Company to make an
initial assessment of goodwill impairment within six months after the adoption date. The initial step was designed to
identify potential goodwill impairment by comparing an estimated fair value for each applicable reporting unit to its
respective carrying value. For the reporting units where the carrying value exceeds fair value, a second step was
performed by to measure the amount of the goodwill impairment.

During the first six months of 2002, the Company completed the initial transitional goodwill impairment
test as of January 1, 2002, and reported that a non-cash impairment charge was required in the Custom & Specialty and
International segments. During the fourth quarter of 2002, the Company determined the amount of the goodwill impairment
and recorded a pre-tax goodwill impairment charge of $39.1 million relating to the Custom & Specialty and International
segments. The charge has been presented as a cumulative effect of a change in accounting principle effective as of
January 1, 2002 and is primarily due to competitive pressures in the Custom & Specialty and International segment
marketplaces. To determine the amount of goodwill impairment, the Company measured the impairment loss as the excess of
the carrying amount of goodwill over the implied fair value of goodwill. The impairment charge has no impact on covenant
compliance under the Senior Secured Credit Agreement. For further discussion of the goodwill impairment charge see Note
(15) to the Consolidated Financial Statements.

SFAS No. 145 "Recission of FASB Statements No. 4, 44, and 46, Amendment of FASB Statement No. 13, and
Technical Corrections" was issued in April 2002 and is effective for fiscal years beginning after May 15, 2002. This
statement eliminates the current requirement that gains and losses on extinguishment of debt be classified as
extraordinary items in the statement of operations. Instead, the statement requires that gains and losses on
extinguishment of debt be evaluated against the criteria in APB Opinion 30 to determine whether or not such gains or
losses should be classified as an extraordinary item. The statement also contains other corrections to authoritative
accounting literature in SFAS 4, 44 and 46. In accordance with the pronouncement, the Company will adopt the standard
for the year ended December 31, 2003 and is in the process of reviewing the criteria in Opinion 30 as it relates to the
Company's early extinguishment of debt in 2000.

The FASB issued SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal Activities", in July
2002. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when
the liability is incurred. SFAS No. 146 supercedes the guidance of Emerging Issues Task Force ("EITF") Issue No. 94-3
"Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity", which required that
liabilities for exit costs be recognized at the date of an entity's commitment to an exit plan. SFAS No. 146 is
effective for exit or disposal activities that are initiated after December 31, 2002. The Company will adopt SFAS No.
146 for any exit disposal activities initiated after such date.

In December of 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based Compensation - Transition
and Disclosure". SFAS No. 148 amends FASB Statement No. 123 "Accounting for Stock-Based Compensation" to provide
alternative methods of transition for companies who voluntarily change to the fair value based method of accounting for
stock-based employee compensation. The statement also increases stock-based compensation quarterly and annual disclosure
requirements for all companies and is effective for financial statements of companies with fiscal years ending after
December 15, 2002. The Company adopted this statement in December of 2002 and there was no impact to the financial
position and results of operations of the Company as a result of the adoption. See Note (11) to the Consolidated
Financial Statements for the additional disclosures required by this pronouncement.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Foreign Currency and Interest Rate Risk

Foreign Currency Risk

The Company has engaged in transactions that carry some degree of foreign currency risk. As such, a series
of forward hedge contracts were entered into to mitigate the foreign currency risks associated with the financing of a
production facility in the United Kingdom. Pursuant to the agreement under which the contracts had been issued, the
counterparty elected to terminate the contracts in January 2003. In connection with the termination, the Company paid
$1.0 million to the counterparty which will be reflected in 2003 interest expense in accordance with the original
contract terms.

The Company bears foreign exchange risk because much of the financing is currently obtained in United
States dollars, but a portion of the Company's revenues and expenses are earned in the various currencies of our foreign
subsidiaries' operations. The revolving credit facility allows certain foreign subsidiaries to borrow up to $75 million
in British Pounds Sterling, and Euros. The Company has not made borrowings in any of these currencies.

Interest Rate Risk

Interest rate risk exposure results from our floating rate borrowings. A portion of the interest rate
risks have been hedged by entering into swap and collar agreements. Since the counterparties to the agreements are also
lenders under the senior secured credit facility, obligations under these agreements are subject to the security interest
under the terms of the senior secured credit facility.

The table below provides information about the Company's derivative financial instruments and other
financial instruments that are sensitive to changes in interest rates, including interest rate swaps and debt
obligations. For debt obligations, the table presents principal cash flows and related weighted average interest rates
by expected maturity dates. For interest rate swaps and collars, the table presents notional amounts and weighted
average interest rates by expected (contractual) maturity dates. Notional amounts are used to calculate the contractual
payments to be exchanged under the contract.

2003 2004 2005 2006 2007 Thereafter Fair Value
----------- ------------ ----------- ------------ ------------ ----------- -------------
Debt Obligations (dollars in millions)
- --------------------------
Fixed rate $16.2 $17.8 $0.6 $1.4 $1.3 $175.0 $115.7
Average interest rate 8.35% 8.58% 6.10% 12.38%
8.14% 6.12%
Variable rate $10.0 $14.0 $21.0 $288.5 $ -- $ 4.0 $337.5
Average interest rate 5.42% 5.64% 1.40%
5.43% 5.41% 0.00%

Interest Rate Swaps-
Variable to Fixed
- --------------------------
Notional Amount $83.3 $ -- $ -- $ -- $ -- $ -- $(3.4)
Pay / receive rate 6.63% -- -- -- -- --

Interest Rate Collars
- --------------------------
Notional Amount $41.7 -- -- -- -- -- $(1.5)
Cap Rate 7.25% -- -- -- -- --
Floor Rate 6.10% -- -- -- -- --

The interest rate swaps and collars were entered into in 2000, when interest rates were higher than
current rates. Accordingly, these contracts are "out-of-the-money" and may require future payments if market interest
rates do not return to historical levels. In addition, if rates do increase above historical levels and the
counterparties to the agreements default on their obligations under the agreements, our interest expense would increase.
The Company does not use financial instruments for trading or speculative purposes. No quoted market value is available
(except on the 12 3/8% Senior Subordinated Notes). Fair value amounts, because they do not include certain costs such as
prepayment penalties, do not represent the amount the Company would have to pay to reacquire and retire all of its
outstanding debt in a current transaction.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Page
----

Independent Auditors' Report for 2002...................................................................... 26

Report of Independent Accountants for 2001 and 2000........................................................ 27

Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000................. 28

Consolidated Balance Sheets as of December 31, 2002 and 2001............................................... 29

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2002, 2001 and 2000....... 30

Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000................. 31

Notes to Consolidated Financial Statements................................................................. 32

INDEPENDENT AUDITORS' REPORT

To U.S. Can Corporation:
Lombard, Illinois

We have audited the accompanying consolidated balance sheet of U.S. Can Corporation and Subsidiaries ("the Company")
as of December 31, 2002, and the related consolidated statements of operations, stockholders' equity, and cash flows
for the year then ended. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audit. The consolidated financial
statements of the Company as of December 31, 2001 and 2000 and for each of the two years then ended, before the
inclusion of the disclosures discussed in Note 15 to the financial statements, were audited by other auditors, who
have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in their
report dated March 6, 2002.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, such 2002 consolidated financial statements present fairly, in all material respects, the financial
position of U.S. Can Corporation and Subsidiaries as of December 31, 2002, and the consolidated results of their
operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted
in the United States.

As discussed in Note 2, in 2002 the Company changed its method of accounting for goodwill as required by Statement of
Financial Accounting Standards (Statement) No. 142, "Goodwill and Other Intangible Assets."

As discussed above, the financial statements of U.S. Can Corporation as of December 31, 2001 and 2000, and for the
years then ended were audited by other auditors who have ceased operations. As described in Note 15, these financial
statements have been revised to include the transitional disclosures required by Statement No. 142, which was adopted
by the Company as of January 1, 2002. Our audit procedures with respect to the disclosures in Note 15 with respect
to 2001 and 2000 included (i) agreeing the previously reported net income to the previously issued financial
statements and the adjustments to reported net income representing amortization expense (including any related tax
effects) recognized in those periods related to goodwill, to the Company's underlying records obtained from
management, and (ii) testing the mathematical accuracy of the reconciliation of adjusted net income to reported net
income. In our opinion, the disclosures for 2001 and 2000 in Note 15 are appropriate. However, we were not engaged
to audit, review, or apply any procedures to the 2001 or 2000 financial statements of the Company other than with
respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001
or 2000 financial statements taken as a whole.

Deloitte & Touche LLP
Chicago, Illinois
February 21, 2003

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The following report is a copy of a report previously issued by Arthur Andersen LLP and has not been reissued by
Arthur Andersen LLP. In fiscal 2002, the Company adopted the provisions of Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142). As discussed in Note 15 to the
consolidated financial statements, the Company has presented the transitional disclosures for 2001 and 2000 required
by SFAS No. 142. The Arthur Andersen LLP report does not extend to these transitional disclosures. These
disclosures are reported on by Deloitte & Touche LLP as stated in their report appearing herein.

TO U.S. CAN CORPORATION:

We have audited the accompanying consolidated balance sheets of U.S. CAN CORPORATION (a Delaware corporation) AND
SUBSIDIARIES as of December 31, 2001 and 2000, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended December 31, 2001*. These financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of U.S. Can Corporation and Subsidiaries as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP
Chicago, Illinois
March 6, 2002

* The 1999 consolidated financial statements are not required to be presented in the 2002 annual report.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted)

For the Year Ended
-------------------------------------------------------
December 31, December 31, December 31,
2002 2001 2000
----------------- ----------------- -----------------

Net Sales................................................. $796,500 $772,188 $809,497

Cost of Sales............................................. 710,395 695,514 693,158
----------------- ----------------- -----------------

Gross Income......................................... 86,105 76,674 116,339

Selling, General and Administrative Expenses.............. 37,853 46,581 45,887

Special Charges........................................... 8,705 36,239 3,413

Recapitalization Charges.................................. - - 18,886
----------------- ----------------- -----------------

Operating Income (Loss).............................. 39,547 (6,146) 48,153

Interest Expense.......................................... 55,384 57,304 40,468
----------------- ----------------- -----------------

Income (Loss) Before Income Taxes.................... (15,837) (63,450) 7,685

Provision (Benefit) for Income Taxes...................... 37,637 (23,034) 4,344
----------------- ----------------- -----------------

Income (Loss) from Operations Before Extraordinary
Item and Cumulative Effect of Accounting Change...... (53,474) (40,416) 3,341

Extraordinary Item, net of income taxes

Net Loss from Early Extinguishment of Debt........... - - (14,863)

Cumulative Effect of Accounting Change, net of income taxes (18,302) - -
----------------- ----------------- -----------------

Net Loss Before Preferred Stock Dividends............ (71,776) (40,416) (11,522)

Preferred Stock Dividend Requirement...................... (12,521) (11,345) (2,601)
----------------- ----------------- -----------------

Net Loss Attributable to Common Stockholders......... $(84,297) $(51,761) $(14,123)
================= ================= =================

The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(000's omitted, except per share data)

December 31, December 31,
ASSETS 2002 2001
--------------------- ---------------------
CURRENT ASSETS:
Cash and cash equivalents............................................ $11,790 $14,743
Accounts receivable, net of allowances............................... 89,986 95,274
Inventories, net..................................................... 105,635 100,676
Deferred income taxes................................................ 7,730 21,977
Other current assets................................................. 14,466 15,732
--------------------- ---------------------
Total current assets............................................ 229,607 248,402

PROPERTY, PLANT AND EQUIPMENT, less accumulated
depreciation and amortization........................................ 241,674 239,234

GOODWILL, less accumulated amortization................................... 27,384 66,437

DEFERRED INCOME TAXES..................................................... 29,340 20,515

OTHER NON-CURRENT ASSETS.................................................. 50,821 59,762

--------------------- ---------------------
Total assets.................................................... $578,826 $634,350
===================== =====================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and capital lease obligations... $26,153 $14,983
Accounts payable..................................................... 94,537 96,685
Accrued expenses..................................................... 51,446 45,437
Restructuring reserves............................................... 11,990 25,945
Income taxes payable................................................. 958 1,055
--------------------- ---------------------
Total current liabilities....................................... 185,084 184,105

LONG TERM DEBT............................................................ 523,529 521,793

LONG TERM LIABILITIES PURSUANT TO EMPLOYEE
BENEFIT PLANS.......................................................... 74,574 38,000

OTHER LONG-TERM LIABILITIES............................................... 6,352 16,963
--------------------- ---------------------

Total liabilities............................................... 789,539 760,861

REDEEMABLE PREFERRED STOCK, 200,000 shares authorized, 106,667 shares
issued & outstanding................................................ 133,133 120,613

STOCKHOLDERS' EQUITY:
Common stock, $10.00 par value, 100,000 shares authorized, 53,333
shares issued & outstanding......................................... 533 533
Additional paid-in-capital........................................... 52,800 52,800
Accumulated other comprehensive loss................................. (51,076) (38,651)
Accumulated deficit.................................................. (346,103) (261,806)
--------------------- ---------------------
Total stockholders' equity / (deficit).......................... (343,846) (247,124)
--------------------- ---------------------
Total liabilities and stockholders' equity................. $578,826 $634,350
===================== =====================

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(000's omitted)
Common Paid-in-CapitUnearned Treasury Accumulated Accumulated Comprehensive
Other
Restricted Common Comprehensive
Stock Stock Stock Loss Deficit Income (Loss)
---------------------------------------------------------------------------------------------
BALANCE AT $ 135 $112,840 $ (629) $ (1,380) $ (7,771) $(34,639)
DECEMBER 31, 1999.......
Net loss before preferred
stock dividends......... - - - - - (11,522) $ (11,522)
Redemption of common stock
and exercise of stock
options in connection
with
the recapitalization.... (134) (110,973) 305 - - (159,220) -
Purchase of treasury stock. - - - (488) - - -
Retirement of treasury stock (1) (1,867) - 1,868 - - -
Issuance of common stock in
recapitalized company... 533 52,800 - - - - -
Preferred stock dividends.. - - - - - (2,601) -
Amortization of unearned
restricted stock........ - - 324 - - - -
Cumulative translation
adjustment.............. - - - - (11,903) - (11,903)
----------------
Comprehensive loss......... $ (23,425)
-----------------------------------------------------------------------------================
BALANCE AT 533 52,800 - - (19,674) (207,982)
DECEMBER 31, 2000.......
Net loss before preferred
stock dividends......... - - - - - (40,416) $ (40,416)
Settlement of shareholder
litigation in
connection
with the
recapitalization........... - - - - - (2,063) -
Unrealized loss on cash flow
hedge.................. - - - - (3,862) - (3,862)
Preferred stock dividends.. - - - - - (11,345) -
Equity adjustment to
reflect
minimum pension liability - - - - (288) - (288)
Cumulative translation
adjustment.............. - - - - (14,827) - (14,827)
----------------
----------------
Comprehensive loss......... $ (59,393)
------------------------------------------------------------------------------================
------------------------------------------------------------------------------================
BALANCE AT 533 52,800 - - (38,651) (261,806)
DECEMBER 31, 2001.......
Net loss before preferred
stock dividends......... - - - - - (71,776) $ (71,776)
Unrealized gain (loss) on
cash flow hedge......... - - - - 176 - (6,783)
Preferred stock dividends.. - - - - - (12,521) -
Equity adjustment to
reflect
minimum pension liability - - - - (22,058) - (22,058)
Cumulative translation
adjustment.............. - - - - 9,457 - 9,457
----------------
Comprehensive loss......... $ (91,160)
================
------------------------------------------------------------------------------
BALANCE AT $ 533 $ 52,800 $ - $ - $ (51,076) $(346,103)
DECEMBER 31, 2002.......
==============================================================================

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)

For the Year Ended December 31,
------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 2002 2001 2000
--------------- --------------- ---------------
Net loss before preferred stock dividends requirements................ $(71,776) $(40,416) $(11,522)
Adjustments to reconcile net loss to net cash provided by
operating activities -
Depreciation and amortization...................................... 36,086 34,626 33,670
Special Charge..................................................... 8,705 36,239 3,413
Recapitalization Charge............................................ - - 18,886
Extraordinary loss on extinguishment of debt....................... - - 14,863
Cumulative effect of accounting change, net of tax................. 18,302 - -
Deferred income taxes.............................................. 35,724 (24,369) 3,874
Change in operating assets and liabilities, net of effect of
acquired and disposed of businesses:
Accounts receivable................................................ 11,859 (5,677) (11,869)
Inventories........................................................ 2,432 11,070 (3,587)
Accounts payable................................................... (9,220) (3,366) 10,733
Accrued expenses................................................... (21,357) (12,838) (7,363)
Other, net......................................................... (4,591) (2,261) (22,366)
---------------
--------------- --------------- ---------------
Net cash provided by (used in) operating activities............. 6,164 (6,992) 28,732
--------------- --------------- ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, including restructuring capital................. (27,235) (19,537) (24,504)
Acquisition of business, net of cash acquired......................... - (4,198) -
Proceeds from sale of business........................................ - - 12,088
Proceeds from sale of property........................................ 5,662 7,208 8,755
Investment in Formametal S.A.......................................... (133) (7,891) (4,914)
--------------- --------------- ---------------
Net cash used in investing activities.......................... (21,706) (24,418) (8,575)
--------------- --------------- ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock ............................................. - - 53,333
Issuance of preferred stock .......................................... - - 106,667
Retirement of common stock and exercise of stock options.............. - - (270,022)
Settlement of shareholder litigation.................................. - (2,063) -
Purchase of treasury stock............................................ - - (488)
Issuance of 12 3/8% notes............................................. - - 175,000
Repurchase of 10 1/8% notes........................................... - - (254,658)
Net borrowings (payments) under the revolving line of credit.......... 13,600 37,600 (56,100)
Borrowing of Tranche A loan........................................... - - 80,000
Borrowing of Tranche B loan........................................... - - 180,000
Borrowing of Tranche C loan........................................... - 20,000 -
Borrowing of other long-term debt..................................... 11,079 - 19,286
Payments of long-term debt, including capital lease obligations....... (12,689) (14,102) (22,528)
Payment of debt financing costs....................................... - (6,294) (16,137)
Payment of recapitalization costs..................................... - - (18,886)
--------------- --------------- ---------------
--------------- --------------- ---------------
Net cash provided by (used in) financing activities............ 11,990 35,141 (24,533)
--------------- --------------- ---------------
--------------- --------------- ---------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH................................. 599 228 (537)
--------------- --------------- ---------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................ (2,953) 3,959 (4,913)
CASH AND CASH EQUIVALENTS, beginning of year............................ 14,743 10,784 15,697
---------------
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS, end of year.................................. $11,790 $14,743 $10,784
=============== =============== ===============

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

(1) Basis of Presentation and Operations

The consolidated financial statements include the accounts of U.S. Can Corporation (the "Corporation" or
"U.S. Can"), its wholly owned subsidiary, United States Can Company ("United States Can"), and United States Can's
subsidiaries (the "Subsidiaries"). All significant intercompany balances and transactions have been eliminated. The
consolidated group is referred to herein as "the Company". Certain prior year amounts have been reclassified to conform
with the 2002 presentation. The reclassifications had no effect on net loss attributable to common stockholders or total
assets.

The Company is a supplier of steel and plastic containers for personal care, household, food, automotive,
paint and industrial supplies, and other specialty products. The Company owns or leases 13 plants in the United States
and 8 plants located in Europe.

(2) Summary of Significant Accounting Policies

(a) Cash and Cash Equivalents - The Company considers all liquid interest-bearing instruments purchased
with an original maturity of three months or less to be cash equivalents.

(b) Accounts Receivable Allowances - Allowances for accounts receivable are based on the customer
relationships, the aging and turns of accounts receivable, credit worthiness of customers, credit concentrations and
payment history. Although management monitors collections and credit worthiness, the inability of a particular customer
to pay its debts could impact collectibility of receivables and could have an impact on future revenues if the customer
is unable to arrange other financing. Activity in the accounts receivable allowances accounts was as follows (000's
omitted):

2002 2001 2000
---- ---- ----

Balance at beginning of year........................................... $ 12,243 $ 10,971 $ 13,367
Provision for doubtful accounts..................................... 1,437 621 516
Change in discounts, allowances and rebates......................... 3,378 790 (2,449)
Write-offs of doubtful accounts, net of recoveries.................. (944) (139) (463)
------------- ----------- -----------
Balance at end of year................................................. $ 16,114 $ 12,243 $ 10,971
============= =========== ===========

(c) Inventories-- Inventories are stated at the lower of cost or market and include material, labor and
factory overhead. Costs for United States inventory have been determined using the last-in, first-out ("LIFO") method.
Had the inventories been valued using the first-in, first-out ("FIFO") method, the amount would not have differed
materially from the amounts as determined using the LIFO method. Costs for Subsidiaries' inventory has been determined
using the first-in, first-out ("FIFO") method. Subsidiaries' inventory was approximately $48.1 million as of December 31,
2002 and 2001. The Company estimates reserves for inventory obsolescence and shrinkage based on its judgment of future
realization.

Inventories reported in the accompanying balance sheets were classified as follows (000's omitted):

2002 2001
---- ----

Raw materials....................................................................... $ 23,492 $ 27,216
Work in progress.................................................................... 46,435 40,046
Finished goods...................................................................... 35,708 33,414
Total Inventory..................................................................... $ 105,635 $ 100,676
============== ===========

In addition to the 2001 restructuring initiatives, the Company charged $3.2 million to Cost of Goods Sold
for the write-off of inventory associated with discontinued product lines. See Note (4) for further information on
restructuring initiatives.

(d) Property, Plant and Equipment--Property, plant and equipment is recorded at cost. Major renewals and
betterments which extend the useful life of an asset are capitalized; routine maintenance and repairs are expensed as
incurred. Maintenance and repairs charged against earnings were approximately $27.4 million, $28.6 million and
$27.5 million in 2002, 2001 and 2000, respectively. Upon sale or retirement of these assets, the asset cost and related
accumulated depreciation are removed from the accounts and any related gain or loss is reflected in income.

Depreciation for financial reporting purposes is principally provided using the straight-line method over
the estimated useful lives of the assets, as follows: buildings-25 to 40 years; machinery and equipment-5 to 20 years.
Equipment under capital leases is amortized over the life of the lease. Depreciation expense was $32.0 million, $29.2
million and $28.7 million for 2002, 2001 and 2000, respectively.

Property reported in the accompanying balance sheets is classified as follows (000's omitted):

2002 2001
---- ----

Land ............................................................................... $ 5,086 $ 6,025
Buildings........................................................................... 60,364 62,483
Machinery and equipment............................................................. 409,052 396,843
Capital leases...................................................................... 9,036 13,135
Construction in process............................................................. 23,347 24,014
506,885 502,500
Accumulated depreciation and amortization........................................... (265,211) (263,266)
Total Property...................................................................... $ 241,674 $ 239,234
============== ============

(e) Goodwill - The Company adopted SFAS No. 142 "Goodwill and Other Intangible Assets" on January 1,
2002. This standard provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill
and "indefinite-lived" intangibles are no longer amortized, but are tested at least annually for impairment. Effective
January 1, 2002, the Company has ceased amortization of goodwill. The Company recorded goodwill amortization of $2.8
million and $2.9 million for the years ended December 31, 2001 and 2000. During the fourth quarter of 2002, the Company
completed its transitional impairment testing and recorded a non-cash, pre-tax impairment charge of $39.1 million ($18.3
million, net of tax) as the cumulative effect of a change in accounting, effective January 1, 2002. See Note (15) for
additional disclosure.

(f) Deferred Financing Costs - Costs related to the issuance of new debt are included in other
non-current assets and are deferred and amortized over the terms of the related debt agreements. Amortization of
financing costs in 2002, 2001, and 2000 were $4.1 million, $2.6 million and $1.7 million, respectively and are included
in interest expense. The Company did not incur any financing costs in 2002 and paid $6.3 million of financing costs in
2001.

(g) Impairment of Long-Lived Assets - SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," was issued in August 2001. SFAS No. 144, which addresses financial accounting and reporting for the
impairment of long-lived assets and for long-lived assets to be disposed of, supercedes SFAS No. 121 and is effective for
fiscal years beginning after December 15, 2001. The Company adopted this pronouncement on January 1, 2002. There was no
impact to the financial position and results of operations of the Company as a result of the adoption.

In accordance with SFAS 144, we continually review whether events and circumstances subsequent to the
acquisition of any long-lived assets have occurred that indicate the remaining estimated useful lives of those assets may
warrant revision or that the remaining balance of those assets may not be recoverable. If events and circumstances
indicate that the long-lived assets should be reviewed for possible impairment, we use projections to assess whether
future cash flows or operating income (before amortization) on an undiscounted basis related to the tested assets is
likely to exceed the recorded carrying amount of those assets, to determine if a write-down is appropriate. Should an
impairment be identified, a loss would be reported to the extent that the carrying value of the impaired assets exceeds
their fair values as determined by valuation techniques appropriate in the circumstances that could include the use of
similar projections on a discounted basis.

(h) Revenue - Revenue is recognized when goods are shipped, at which time, title and risk of loss pass to
the customer. Provisions for discounts, returns, allowances, customer rebates and other adjustments are provided for in
the same period as the related revenues are recorded. The Company enters into contractual agreements with certain of its
customers for rebates, generally based on annual sales volumes. As sales occur, a provision for rebates is accrued on
the balance sheet and is charged against net sales.

(i) Foreign Currency Translation - The functional currency for substantially all the Company's
Subsidiaries is the applicable local currency. The translation from the applicable foreign currencies to U.S. dollars is
performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and
expense accounts using an average exchange rate prevailing during the period. The gains or losses resulting from such
translation are included in accumulated other comprehensive loss. Gains or losses resulting from foreign currency
transactions are included in operating income and were not material in 2002, 2001 or 2000.

(j) Financial Instruments - To manage interest rate exposure, the Company enters into interest rate
agreements. The net interest paid or received on these agreements is recognized as interest income or expense. Our
interest rate agreements are reported in the consolidated financial statements at fair value using a mark to market
valuation. Changes in the fair value of the contracts are recorded each period as a component of other comprehensive
income. Gains or losses on interest rate agreements are reclassified as earnings or losses in the period in which
earnings are affected by the underlying hedged item. The Company does not use financial instruments for trading or
speculative purposes.

(k) Accumulated Other Comprehensive Loss - The components of accumulated other comprehensive loss
for 2002, 2001 and 2000 are as follows (000's omitted):

2002 2001 2000
----------------- ----------------- ----------------
Foreign Currency Translation Adjustment $(25,044) $(34,501) $(19,674)
Minimum Pension Liability Adjustment (22,346) (288) -
Unrealized Loss on Cash Flow Hedges (3,686) (3,862) -
----------------- ----------------- ----------------
Total Accumulated Other Comprehensive Loss $(51,076) $(38,651) $(19,674)

The components of comprehensive loss for 2002, 2001 and 2000 are included in the Statement of
Stockholder's Equity. The unrealized loss on cash flow hedge included in comprehensive loss is net of reclassifications
of losses included in interest expense of $7.0 million for the year ended December 31, 2002.

(l) Stock-Based Compensation - The Company currently issues stock-based compensation under its U.S. Can
2000 Equity Incentive Plan. The Company continues to use the intrinsic fair value method under APB Opinion No. 25 to
account for the plan; therefore, no compensation costs are recognized in the Company's financial statements for options
granted. In December of 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based Compensation - Transition and
Disclosure". SFAS No. 148 amends FASB Statement No. 123 "Accounting for Stock-Based Compensation" to provide alternative
methods of transition for companies who voluntarily change to the fair value based method of accounting for stock-based
employee compensation. The statement also increases stock-based compensation quarterly and annual disclosure
requirements for all companies and is effective for financial statements of companies with fiscal years ending after
December 15, 2002. The Company adopted this statement in December of 2002. In accordance with SFAS No. 148, the
following table presents (in thousands) what the Company's net loss would have been had the Company determined
compensation costs using the fair value-based accounting method.

Actual ro-forma 2002 Actual Pro-forma Actual ro-forma 2000
2002 P 2001 2001 2000 P
------------------------------------------------ ---------------- ------------------------------
Stock-Based $ $ $
Compensation Cost, net $ 5) $ 37) $ 4,266)
of tax - ( - ( - (

$
Net Loss $ (84,297) $ (84,302) $ (51,761) (51,798) $ (14,123) $ (18,389)

(m) Income Taxes - The Company accounts for income taxes using the asset and liability method under which
deferred income tax assets and liabilities are recognized for the tax consequences of "temporary differences" between the
financial statement carrying amounts and the tax bases of existing assets and liabilities and operating losses and tax
credit carry forwards. On an ongoing basis, the Company evaluates its deferred tax assets to determine whether it is
more likely than not that such assets will be realized in the future and records valuation allowances against the
deferred tax assets for amounts which are not considered more likely than not to be realized. The estimate of the amount
that is more likely than not to be realized requires the use of assumptions concerning the amounts and timing of the
Company's future income by taxing jurisdiction.

(n) New Accounting Pronouncements - SFAS No. 145 "Recission of FASB Statements No. 4, 44, and 46,
Amendment of FASB Statement No. 13, and Technical Corrections" was issued in April 2002 and is effective for fiscal years
beginning after May 15, 2002. This statement eliminates the current requirement that gains and losses on extinguishment
of debt be classified as extraordinary items in the statement of operations. Instead, the statement requires that gains
and losses on extinguishment of debt be evaluated against the criteria in APB Opinion 30 to determine whether or not such
gains or losses should be classified as an extraordinary item. The statement also contains other corrections to
authoritative accounting literature in SFAS 4, 44 and 46. The Company will adopt SFAS No. 145 for the year ended
December 31, 2003 and is in the process of reviewing the criteria in Opinion 30 as it relates to the Company's early
extinguishment of debt in 2000.

During July 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal
Activities". SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. SFAS No. 146 supercedes the guidance of Emerging Issues Task Force ("EITF")
Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity",
which required that liabilities for exit costs be recognized at the date of an entity's commitment to an exit plan. SFAS
No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002. The Company will adopt
SFAS No. 146 for any exit disposal activities initiated after such date.

(o) Use of Estimates - The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Estimates are used for, but not
limited to: allowance for doubtful accounts; inventory valuation; purchase accounting allocations; restructuring amounts;
asset impairments; depreciable lives of assets; goodwill impairments; pension assumptions and tax valuation allowances.
Future events and their effects cannot be perceived with certainty. Accordingly, our accounting estimates require the
exercise of management's current best reasonable judgment based on facts available. The accounting estimates used in the
preparation of the Consolidated Financial Statements will change as new events occur, as more experience is acquired, as
more information is obtained and as the Company's operating environments change. Significant business or customer
conditions could cause material changes to the amounts reflected in the Company's financial statements. Accounting
policies requiring significant management judgments include those related to revenue recognition, inventory valuation,
accounts receivable allowances, goodwill impairment, restructuring reserves, tax valuation allowances and interest rate
exposure. While actual results could differ from these estimates, management believes that these estimates are
reasonable.

(3) Recapitalization

On October 4, 2000, U.S. Can Corporation and Berkshire Partners LLC completed a recapitalization of the
Company through a merger. As a result of the recapitalization, all of U.S. Can's common stock, other than certain shares
held by designated continuing shareholders (the rollover shareholders), was converted into the right to receive $20.00 in
cash per share and options to purchase approximately 1.6 million shares of U.S. Can's common stock were retired in
exchange for a cash payment of $20.00 per underlying share, less the applicable option price. Certain shares held by the
rollover shareholders were converted into the right to receive $20.00 in cash per share and certain shares held by the
rollover shareholders were converted into the right to receive shares of capital stock of the surviving corporation in
the merger.

The recapitalization was financed by:

- a $106.7 million preferred stock investment by Berkshire Partners, its co-investors and certain of the
rollover stockholders;

- a $53.3 million common stock investment by Berkshire Partners, its co-investors, certain of the rollover
stockholders and management;

- $260.0 million in term loans under a new senior bank credit facility;

- $20.5 million in borrowings under a new revolving credit facility; and

- - $175.0 million from the sale of 12 3/8% Senior Subordinated Notes due 2010.

The recapitalization increased the Company's accumulated deficit as follows:

- - Accumulated deficit was charged for the difference between the redemption price and the paid in value of
the redeemed U.S. Can capital stock ($159.2 million).

- - The Company recorded a net charge of $14.9 million ($18.9 million pretax) for expenses related to their
recapitalization in the fourth quarter of 2000.

- - The extraordinary charge relating to the early redemption of the Company's 10 1/8% Notes due in 2006
($14.9 million).

- - In 2001, the shareholder litigation was settled resulting in a charge of $2.1 million.

Funds generated from the recapitalization were used to retire all of the borrowings outstanding under the
Company's former credit agreement, to repay the majority of the principal, accrued interest and tender premium applicable
to U.S. Can's 10 1/8% Notes due 2006, to purchase outstanding shares at $20 per share and to pay fees and expenses
associated with the transaction.

(4) Special Charges

The Company initiated several restructuring programs in 2001, consisting of a voluntary termination
program offered to all corporate office salaried employees, the closure of six manufacturing facilities and the
consolidation of two Georgia plastics facilities into a new plastics plant in Atlanta, Georgia.

During the year ended December 31, 2001, the Company closed a paint can manufacturing facility and a
warehouse in Baltimore, Maryland and ceased operations in Dallas, Texas. Also in conjunction with the restructuring
programs established in 2001, during 2002 the Company closed a Custom & Specialty plant located in the Baltimore,
Maryland area and closed its Southall, England manufacturing facility. The Company also closed two plastics facilities
in Georgia and consolidated production to a new facility in Atlanta, Georgia. As scheduled, in the fourth quarter of
2002, the Company closed its Burns Harbor, Indiana lithography facility, which completed the restructuring program
established in 2001, as originally planned. In addition, during the fourth quarter of 2002, the Company sold its
Daegeling, Germany facility.

During 2002, the Company recorded a net charge of $8.7 million related to restructuring. The net charge
of $8.7 million consists of new restructuring reserves of $11.9 million less reversals of $3.2 million due to the
reassessment of previously established reserves. The 2002 net charge included a reassessment of the restructuring
reserves established in 2001, position elimination costs and the loss on the sale of the Daegeling, Germany facility.
While the majority of the restructuring initiatives have been completed in 2002, certain portions of the programs will
not be completed until 2003, and the Company does not expect to realize the full earnings benefits until 2004. Certain
long-term liabilities (approximately $3.7 million as of December 31, 2002), consisting primarily of employee termination
costs and future ongoing facility carrying costs will be paid over many years.

Total cash payments in the twelve months ended December 31, 2002 were $20.8 million and the Company anticipates
spending another $15.7 million over the next several years. The remainder of the reserve consists primarily of employee
termination benefits paid over time for approximately 52 salaried and 67 hourly employees (approximately 600 positions
were originally identified for elimination), and other ongoing facility carrying costs.

The table below presents the reserve categories and related activity as of December 31, 2002:

(a) Includes $3.7 million classified as other long-term liabilities as of December 31, 2002.
(b) Non-cash foreign currency translation impact and the reversal of $1.5 million of asset write-offs previously
expensed in the 2001 restructuring.
(c) Includes cash payments of $20.8 million. The remaining non-cash deductions represent increased pension and
post-retiree benefits transferred to Other Long-Term Liabilities (see Notes 8 & 9) and the non-cash loss recorded on
the sale of the Daegeling facility.
(d) Includes reversals of $3.2 million due to the re-assessment of reserves

2001
- ----

During 2001, the Company closed a paint can manufacturing facility and a warehouse in Baltimore, Maryland
and ceased operations in Dallas, Texas. Also in connection with the restructuring programs established in 2001, during
2002 the Company closed a Custom & Specialty plant located in the Baltimore, Maryland area, closed the Southall, England
manufacturing facility and closed the Burns Harbor, Indiana lithography facility. The Company has also closed two
plastics facilities in Georgia and transferred production to a new facility in Atlanta, Georgia. The closure of the
Burns Harbor, Indiana lithography facility, in the fourth quarter of 2002 completed the restructuring program established
in 2001, as originally planned.
As of December 31, 2001, the remaining balance in the restructuring reserve included severance and related
termination benefits paid over time for approximately 159 salaried and 330 hourly employees. Net charges of $36.2
million were recorded in 2001 for the cost of these programs. The net charge of $36.2 million consists of new
restructuring reserves of $43.4 million less reversals of $7.2 million due to the reassessment of previously established
reserves. Cash charges consist primarily of employee termination costs, future cash payments for employee benefits as
required under union contracts, lease termination and other facility exit costs. Non-cash charges consist primarily of
write-offs of property, plant and equipment.

The following table summarizes the Company's 2001 restructuring programs:

Special Charge
-----------------------------------------------------------
Programs Cash Non-cash Total Charge Positions identified
for elimination
- ------------------------------------ ------------------- ----------------- --------------------- ---------------------------
(in millions)
Baltimore $0.6 $1.8 $2.4 1
Salaried Reduction in Force $4.6 -- $4.6 82
International Operations $3.4 (a) $5.8 $9.2 286
Burns Harbor $9.5 $3.8 $13.3 135
Other Facilities $4.9 $9.0 $13.9 89
Reassessment of Prior Programs -- ($7.2) ($7.2) --
------------------- ----------------- --------------------- ---------------------------
Total $23.0 $13.2 $36.2 593

(a) Net of cash proceeds of $ 11.7 million received from the sale of the Southall, UK site.

Baltimore
---------
The Company closed a paint can manufacturing facility and a warehouse in Baltimore, Maryland and
transferred a portion of its production capacity to another facility located in Baltimore, Maryland.

Salaried Reduction in Force
---------------------------
In the third quarter of 2001, the Company offered a voluntary termination program to all corporate office
salaried employees. Approximately 82 employees accepted the voluntary program.

International Operations
------------------------
After a review of its operating facilities in the United Kingdom, the Company decided to close its
Southall, England manufacturing facility. Production capabilities will be transferred to the Company's Merthyr Tydfil and
other European Aerosol plants. The European consolidation will reduce payroll and overhead costs in the U.K while
realigning capacity within Europe to meet customer demand. In connection with the realignment, the Company completed the
sale of its Southall, United Kingdom property in late December 2001 and the manufacturing facility was closed over the
first three-quarters of 2002. In addition, several other headcount reduction programs were initiated throughout the
Company's International operations, including May.

Burns Harbor
------------
The Company closed its Burns Harbor, Indiana lithography facility and transitioned its volume to other
existing operations. The closure will reduce excess capacity, overhead and related payroll costs as well as leverage
investments made in previous years in new technology in existing U.S. Can facilities.

Other Facilities
----------------
The Company reviewed its steel paint can capacity versus Company and industry requirements and decided to
permanently reduce capacity by closing its Dallas, Texas plant. The Company closed this operation in the fourth quarter
of 2001.

In 2001, the Company entered into a lease for a new plastics manufacturing plant. The Company closed its
two existing plastics plants (Newnan, Georgia and Morrow, Georgia) in the first quarter of 2002, and all goods are now
produced in our new Atlanta plant.

In order to better leverage resources and facilities, the Company closed its Columbia Specialty plant in
2002, exited certain product lines and transferred production capacity to its Steeltin and Olive Can operations. The
closure was planned to provide better operating efficiencies and reduce overhead and payroll costs associated with the
Columbia operation.

Reassessment of Prior Programs
------------------------------

Due to the Olive Can acquisition, the Company revised its plan to close a lithography operation for which
it had previously reserved closing costs. Accordingly, a reversal of previously provided restructuring reserves was
recorded.

The tables below present the reserve categories and related activity as of December 31, 2001 respectively:

In 2000, the Company announced a reduction in force program, under which 81 salaried and 39 hourly
positions were eliminated. A one-time pre-tax charge for severance and other termination related costs was recorded in
conjunction with the program.

(5) Acquisitions

On February 20, 2001, certain assets of Olive Can Company, a Custom & Specialty manufacturer, were
acquired for net cash consideration of $4.2 million. The Olive acquisition is not material to the Company's operations or
financial position.

In March 1998, a European Subsidiary acquired a 36.5% equity interest in Formametal S.A. ("Formametal"),
an aerosol can manufacturer located in Argentina, for $4.6 million. Including the initial investment, the Company has
made advances to and investments in Formametal totaling $19.5 million. The Company has also provided a $7.5 million loan
to Formametal, payable in installments through March 31, 2007.

In January 2002, Argentina enacted legislation which, among other things, repealed the one to one U.S.
dollar to Argentinean peso exchange rate. The Company has determined that the Argentinean peso denominated portion of
the investment in Formametal will not be settled in the foreseeable future and therefore has reduced the investment
balance by $17.0 million with an offsetting charge to accumulated other comprehensive income, representing the impact of
the devaluation.

(6) Debt Obligations

Long-term debt obligations of the Company at December 31, 2002 and 2001 consisted of the following (000's
omitted):
2002 2001
---- ----
Senior debt -
Revolving line of credit at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ $ 69,700 $ 56,100
Tranche A term loan at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ 66,000 74,000
Tranche B term loan at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ 177,750 178,750
Tranche C term loan at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ 20,000 20,000
Secured term loan at 8.5% interest rate, due serially to January 2004............ 18,220 19,912
Unsecured revolving lines of credit at adjustable interest rate, based on
market rates................................................................... 13,384 --
Industrial revenue bonds at adjustable interest rate, based on market rates,
due February 1, 2015........................................................... 4,000 4,000
Capital lease obligations........................................................ 1,867 4,290
Other............................................................................ 2,907 3,870
Senior Subordinated Series B Notes at 12 3/8% interest rate, due October 1, 2010....... 175,000 175,000
Senior Subordinated Series B Notes at 10 1/8% interest rate, due October 15, 2006...... 854 854
------------- -------------
Total Debt....................................................................... 549,682 536,776
Less--Current maturities......................................................... (26,153) (14,983)
-------------- --------------
Total long-term debt................................................................... $ 523,529 $ 521,793
============= =============

In connection with the recapitalization, United States Can Company, as Borrower, entered into a Credit
Agreement among United States Can, U.S. Can Corporation and Domestic Subsidiaries of U.S. Can Corporation as Domestic
Guarantors, and certain lenders including Bank of America, N.A., Citicorp North America, Inc., and Bank One NA as of
October 4, 2000 (the "Senior Secured Credit Facility"). The Senior Secured Credit Facility provides for aggregate
borrowings of $395.0 million consisting of: (i) $80.0 million Tranche A loan; (ii) $180.0 million Tranche B loan; (iii)
$25.0 million Tranche C facility and (iv) $110.0 million under a revolving credit facility. All of the Tranche A and
Tranche B debt and approximately $20.5 million under the revolving credit facility were used to finance the
recapitalization.

Principal repayments required under the Senior Secured Credit Facility are $10 million in 2003 increasing
to $218.8 million in 2006. Also due in 2006 are any amounts outstanding at that time under the Company's revolving line
of credit. Additionally, the Facility requires a prepayment in the event that excess cash flow (as defined) exists and
following certain other events, including asset sales and issuances of debt and equity.

Borrowings under the Tranche A term loan are due and payable in quarterly installments, which were
initially $1.0 million and increase over time to $8.0 million, until the final balance is due. Borrowings under the
Tranche B term loan are due and payable in quarterly installments of nominal amounts. No payments are due on borrowings
under the Tranche C term loan prior to its final maturity. The revolving credit facility is available until January 4,
2006. In addition, the Company is required to prepay a portion of the facilities under the Senior Secured Credit Facility
upon the occurrence of certain specified events.

The Senior Secured Credit Facility is secured by a first priority security interest in all existing and
after-acquired assets of the Company and its direct and indirect domestic subsidiaries' existing and after-acquired
assets, including, without limitation, real property and all of the capital stock owned of its direct and indirect
domestic subsidiaries (including certain capital stock of their direct foreign subsidiaries only to the extent permitted
by applicable law). In addition, if loans are made to foreign subsidiaries, they will be secured by the existing and
after-acquired assets of certain of our foreign subsidiaries.

The Senior Secured Credit Facility and the Notes contain a number of financial and restrictive covenants.
The covenants for the Senior Secured Credit Facility were amended in connection with the 2001 amendments. Under its
Senior Secured Credit Facility, the Company is required to meet certain financial tests, including achievement of a
minimum EBITDA level (as defined in the Senior Secured Credit Facility), a minimum interest coverage ratio, a minimum
fixed charge coverage ratio and a maximum leverage ratio. The restrictive covenants limit the Company's ability to incur
debt, pay dividends or make distributions, sell assets or consolidate or merge with other companies. The Company was in
compliance with all of the required financial ratios and other covenants at December 31, 2002 and anticipates being in
compliance in 2003. However, the minimum EBITDA level covenant increases significantly in each of the first three
quarters of 2003. Although management believes that the Company will be in compliance with these and other covenants
under the Senior Secured Credit Facility, factors beyond the Company's control, such as sudden downturns in the demand
for its products or significant cost increases that it cannot quickly pass through to customers or offset through cost
reductions, may cause the Company's earnings levels to not achieve those forecasted. If the Company believes that it
would be unable to achieve its minimum EBITDA level or other financial covenants, the Company would expect to negotiate
with the lenders an amendment to its Senior Secured Credit Facility. The Company cannot be assured however, that the
lenders would agree to an amendment if one were required. Without such an amendment or a waiver, the Company would be in
default on almost all of its borrowings, which would have severe consequences to the Company regarding its sources of
liquidity and its ability to continue operations.

In connection with the recapitalization, the Corporation completed a tender offer and consent solicitation
for all of its outstanding 10 1/8% notes due 2006, plus accrued interest and a bond tender premium. $235.7 million of the
$236.6 million principal amount of bonds outstanding were purchased by the Corporation in the tender offer. An
extraordinary charge of $14.9 million ($24.2 million pre-tax) was taken in the fourth quarter of 2000, related to the
tender premium and the write-off of related deferred financing charges.

Under existing agreements, contractual maturities of long-term debt as of December 31, 2002 (including
capital lease obligations), are as follows (000's omitted):

2003............................................................................................ $ 26,153
2004............................................................................................ 31,813
2005............................................................................................ 21,576
2006............................................................................................ 289,840
2007............................................................................................ 1,300
Thereafter...................................................................................... 179,000
-------------
$ 549,682
=============

See Note (10) for further information on obligations under capital leases. Other debt, consisting of
various governmental loans, unsecured foreign debt and secured equipment notes bearing interest at rates between 1.4% and
8.5% matures at various times through 2015, and was used to finance the expansion of several manufacturing facilities.

In an effort to limit foreign exchange risks, and as required by the Credit Agreement, the Company had
entered into several forward hedge contracts. The payments due on the secured term loan used to finance the acquisition
of the Merthyr Tydfil facility were hedged by a series of British Pound/Dollar forward contracts. Pursuant to the
agreement under which the contracts had been issued, the counterparty elected to terminate the contracts in January
2003. In connection with the termination, the Company paid $1.0 million to the counterparty, which will be reflected in
2003 interest expense in accordance with the original contract terms.

Based upon borrowing rates currently available to the Company for borrowings with similar terms and
maturities, the fair value of the Company's total debt was approximately $453.2 million and $472.9 million as of
December 31, 2002 and 2001, respectively. No quoted market value is available (except on the 12 3/8% and the 10 1/8%
Notes). These amounts, because they do not include certain costs such as prepayment penalties, do not represent the
amount the Company would have to pay to reacquire and retire all of its outstanding debt in a current transaction.

The Company paid interest on borrowings of $56.0 million, $55.2 million and $27.5 million in 2002, 2001
and 2000, respectively. Accrued interest payable of $8.2 million and $11.9 million as of December 31, 2002 and 2001
respectively, is included in accrued expenses on the consolidated balance sheet.

(7) Income Taxes

The provision (benefit) for income taxes before extraordinary items and the cumulative effect of a change
in accounting principle consisted of the following (000's omitted):
2002 2001 2000
---- ---- ----
Current
U.S......................................................... $ -- $ -- $ --
Foreign................................................... 1,913 1,335 470

Deferred
U.S. .................................................... 490 (19,789) 2,301
Foreign................................................ (9,484) (4,580) 1,573

Valuation Allowance............................................. 44,718 -- --
------------ ----------- -------------
Total....................................................... $ 37,637 $ (23,034) $ 4,344
============ ============ =============

The Company received refunds of $4.9 million, $0.3 million and $2.2 million in 2002, 2001 and 2000
respectively.

The components of income (loss) before income taxes for the three years ended December 31, 2002, 2001 and
2000 were as follows (000's omitted):
2002 2001 2000
---- ---- ----

U.S............................................................. $ (1,726) $ (44,839) $ 5,568
Foreign......................................................... (14,111) (18,611) 2,117
------------- ------------ -------------
Income (loss) before income taxes........................... $ (15,837) $ (63,450) $ 7,685
============= ============ =============

A reconciliation of the difference between taxes on pre-tax income from continuing operations before
extraordinary items and the cumulative effect of a change in accounting principle and computed at the Federal statutory
rate and the actual provision (benefit) for such income taxes for the years presented were as follows (000's omitted):

2002 2001 2000
---- ---- ----

Tax provision (benefit) computed at the statutory rates............ $ (5,385) $ (21,573) $ 2,613
Nondeductible recapitalization costs and amortization of
intangible assets............................................... (143) 398 1,658
State taxes, net of Federal tax effect............................. (880) (1,601) 113
Valuation allowance................................................ 44,718 -- --
Other, net......................................................... (673) (258) (40)
------------- ------------ --------------
Provision (benefit) for income taxes............................ $ 37,637 $ (23,034) $ 4,344
============ ============ =============

Deferred income taxes are determined based on the estimated future tax effects of differences between the
financial statement and tax bases of assets and liabilities given the provisions of the enacted tax laws. Significant
temporary differences representing deferred income tax benefits and obligations consisted of the following (including
$2.6 million and $3.8 million of deferred tax liabilities included in Other Long-Term Liabilities as of December 31, 2002
and 2001, respectively) (000's omitted):

December 31, 2002 December 31, 2001
----------------- -----------------
Benefits Obligations Benefits Obligations
-------- ----------- -------- -----------

Restructuring reserves.................................. $ 5,560 -- $ 17,355 --
Goodwill ............................................... 15,305 -- -- (6,174)
Retirement and post-employment benefits................. 26,554 -- 14,231 --
Accrued liabilities..................................... 8,528 -- 9,317 --
Tax credit carry-forwards............................... 6,112 -- 7,015 --
Capitalized leases...................................... -- (930) -- (255)
Property and equipment.................................. -- (23,745) -- (27,804)
Inventory valuation reserves............................ -- (6,054) -- (4,271)
Net operating losses.................................... 47,983 -- 30,173 --
Other................................................... 2,445 (2,589) 2,386 (3,262)
------------- ------------- ----------- ---------------
Total deferred income tax benefits (obligations)... 112,487 (33,318) 80,477 (41,766)
Valuation allowance..................................... (44,718) -- -- --
--------------- ------------ ----------- --------------
Total ............................................. $ 67,769 $ (33,318) $ 80,477 $
=========== ============= =========== ====
(41,766)
========

The Company's U.S. net operating losses expire as follows: $26.6 million in 2020 and $28.0 million in
2021 and $34.8 million in 2022 and management believes it is more likely than not that the tax benefit of the net
deferred tax assets will be realized prior to expiration. The Company has foreign net operating loss carryforwards in
Germany and the United Kingdom which have no expiration date. However, the Company has taken a valuation reserve against
the full amount of its foreign net operating loss carryforwards.

The Company does not provide for U.S. income taxes which would be payable if undistributed earnings of the
European Subsidiaries were remitted to the U.S. because the Company either considers these earnings to be invested for an
indefinite period or anticipates that if such earnings were distributed, the U.S. income taxes payable would be
substantially offset by foreign tax credits. On a net basis, there were no unremitted earnings at December 31, 2002.

(8) Employee Benefit Plans

The Company maintains separate noncontributory defined benefit and defined contribution pension plans
covering most domestic hourly employees and all domestic salaried personnel, respectively. It is the Company's policy to
fund accrued pension and defined contribution plan costs in compliance with ERISA or the applicable foreign requirements.

The following tables present the changes in the projected benefit obligations for the plan years ended
December 31, 2002 and 2001 (000's omitted):

U.S.
- ----
2002 2001
---- ----

Projected benefit obligation at the beginning of the year............................ $ 33,304 $ 33,510
Net increase (decrease) during the year attributed to:
Service cost...................................................................... 860 886
Interest cost..................................................................... 2,387 2,399
Actuarial losses .................................................................... 3,028 537
Benefits paid..................................................................... (2,055) (5,378)
Plan amendments................................................................... 286 1,350
Plan curtailment (a) ............................................................. 959
- --
Special termination benefit (a)................................................... 1,141 --
------------- -------------
Net increase (decrease) during the year.............................................. 6,606 (206)
------------- --------------
Projected benefit obligation at the end of the year.................................. $ 39,910 $ 33,304
============= =============

(a) The plan curtailment benefit and special termination benefit are associated with the closure of the Burns Harbor
lithography facility.

Non-U.S.
- --------
2002 2001
---- ----

Projected benefit obligation at the beginning of the year............................ $ 56,790 $ 53,196
Net increase during the year attributed to:
Service cost...................................................................... 635 717
Interest cost..................................................................... 3,224 2,786
Actuarial losses .................................................................... 5,259 2,715
Benefits paid..................................................................... (2,679) (1,830)
Plan amendments................................................................... 119 242
Plan curtailment (a) ............................................................. (1,003)
- --
Foreign currency translation impact............................................... 6,283 (1,036)
------------- --------------
Net increase during the year......................................................... 11,838 3,594
------------- -------------
Projected benefit obligation at the end of the year.................................. $ 68,628 $ 56,790
============= =============

(a) The plan curtailment is associated with the closure of the Southall, U.K. facility.

The following tables present the changes in the fair value of net assets available for plan benefits for
the plan years ended December 31, 2002 and 2001 (000's omitted):

U.S.
- ----
2002 2001
---- ----

Fair value of plan assets at the beginning of the year.................................. $ 32,104 $ 37,299
Increase (decrease) during the year:
Return on plan assets................................................................ (2,505) (1,304)
Sponsor contributions................................................................ -- 1,487
Benefits paid........................................................................ (2,055) (5,378)
-------------- ------------
Net decrease during the year............................................................ (4,560) (5,195)
------------- ------------
Fair value of plan assets at the end of the year........................................ $ 27,544 $ 32,104
============ ===========

Non-U.S.
- --------
2002 2001
---- ----

Fair value of plan assets at the beginning of the year.................................. $ 43,431 $ 49,462
Increase (decrease) during the year:
Return on plan assets................................................................ (7,474) (4,272)
Sponsor contributions................................................................ 845 1,072
Participant contributions............................................................ 119 242
Benefits paid........................................................................ (2,679) (1,830)
Foreign currency translation impact.................................................. 4,584 (1,243)
------------- ------------
Net decrease during the year............................................................ (4,605) (6,031)
------------- ------------
Fair value of plan assets at the end of the year........................................ $ 38,826 $ 43,431
============ ===========

The following tables set forth the funded status of the Company's defined benefit pension plans, at
December 31, 2002 and 2001 (000's omitted):

U.S.
- ----
2002 2001
---- ----
Actuarial present value of benefit obligation --
Vested benefits................................................................... $ (34,921) $ (27,489)
Nonvested benefits................................................................ (4,989) (5,815)
------------- ------------
Accumulated benefit obligation....................................................... (39,910) (33,304)
Fair value of plan assets............................................................... 27,544 32,104
------------ -----------
Fair value of plan assets in excess of accumulated benefit obligation................ (12,366) (1,200)
Unrecognized net loss................................................................ 8,464 288
Unrecognized prior-service costs..................................................... 2,929 3,181
------------ -----------
Net amount recognized................................................................... $ (973) $ 2,269
============= ===========
Amounts recognized in the consolidated balance sheet consist of:
Accrued benefit liability............................................................ $ (12,366) $ (1,200)
Intangible asset..................................................................... 2,930 3,181
Deferred Tax Asset................................................................. 3,395 --
Accumulated other comprehensive income............................................... 5,068 288
------------ -----------
Net amount recognized................................................................ $ (973) $ 2,269
============= ===========

Non-U.S.
- --------
2002 2001
---- ----
Actuarial present value of benefit obligation --
Vested benefits................................................................... $ (68,569) $ (53,818)
Nonvested benefits................................................................ (6) (39)
------------- ------------
Accumulated benefit obligation....................................................... (68,575) (53,857)
Additional amounts related to projected increases in compensation levels................ (53) (2,933)
------------- ------------
Projected benefit obligation......................................................... (68,628) (56,790)
Fair value of plan assets............................................................ 38,826 43,431
------------ -----------
Fair value of plan assets in excess of projected benefit obligation.................. (29,802) (13,359)
Unrecognized net loss................................................................ 26,354 7,083
------------ -----------
Net amount recognized................................................................ $ (3,448) $ (6,276)
============= ============
Amounts recognized in the consolidated balance sheet consist of:
Accrued benefit liability............................................................ $ (29,654) $ (6,277)
Deferred Tax Asset (a)............................................................. 9,172 --
Accumulated other comprehensive income............................................... 17,034 --
------------ -----------
Net amount recognized................................................................ $ (3,448) $ (6,277)
============= ============

(a) Prior to recognition of valuation allowance.

The projected benefit obligation as of December 31, 2002, 2001 and 2000 was determined using the following
assumed discount rates and expected long-term rate of return on plan assets:

U.S. 2002 2001 2000
- ---- ---- ---- ----

Discount Rate...................................................... 6.75% 7.25%
7.50%
Long-Term Rate of Return on Plan Assets............................ 8.50% 8.50%
8.50%

Non-U.S. 2002 2001 2000
- -------- ---- ---- ----

Discount Rate...................................................... 5.00 - 5.75% 5.00 - 6.00% 5.50 - 6.00%
Long-Term Rate of Return on Plan Assets............................ 7.00% 7.00%
7.00%

The plan has a non-pay related dollar multiplier benefit formula; accordingly, the effect of projected
future compensation levels is zero. The plan's assets consist primarily of shares of equity and bond funds, corporate
bonds and cash and cash equivalents.

The net periodic pension cost was as follows (000's omitted):
U.S.
- ----
2002 2001 2000
---- ---- ----

Service costs...................................................... $ 860 $ 886 $ 782
Interest costs..................................................... 2,387 2,399 2,296
Return on assets................................................... (2,644) (2,981) (2,454)
Amortization of unrecognized transition obligation..................... -- 2 1
Recognized (gains) / loss.......................................... -- 250 (318)
Recognized prior service cost ..................................... 392 372 246
Curtailment loss and special termination benefits (a).............. 2,247 -- --
------------- -------------- -----------
Net periodic pension cost.......................................... $ 3,242 $ 928 $ 553
============= ============== ===========

(a) The curtailment loss and special termination benefits include a plan curtailment benefit of $1.0 million, special
termination benefit of $1.1 million, and recognition of prior service cost of $0.1 million, associated with the closure
of the Burns Harbor lithography facility.

Non-U.S.
- --------
2002 2001 2000
---- ---- ----

Service costs...................................................... $ 635 $ 717 $ 825
Interest costs..................................................... 3,224 2,786 2,844
Return on assets................................................... (3,301) (3,358) (3,693)
Recognized (gains) / loss.......................................... 235 -- --
------------- -------------- -----------
Net periodic pension cost.......................................... $ 793 $ 145 $ (24)
============= ============== ============

In addition, hourly employees at four plants are covered by union-sponsored collectively bargained,
multi-employer pension plans. The Company contributed to these plans and charged to expense approximately $1.1 million,
$1.1 million and $1.2 million in 2002, 2001 and 2000, respectively. The contributions are generally determined in
accordance with the provisions of the negotiated labor contracts and are generally based on a per employee, per week
amount. The Company's liability, if any, is not presently determinable and therefore no amount has been recorded for any
contingent unfunded liability.

The Company provides a 401(k) defined contribution plan to eligible employees. Company matching
contributions for employees and related administration costs associated with the plan were $2.4 million, $2.5 million and
$2.3 million for 2002, 2001 and 2000, respectively.

(9) Postretirement Benefit Plans

The Company provides health and life insurance benefits for certain domestic retired employees in
connection with collective bargaining agreements.

The following presents the changes in the accumulated postretirement benefit obligations for the plan
years ended December 31, 2002 and 2001 (000's omitted):

2002 2001
---- ----
Accumulated postretirement benefit obligations at the beginning
of the year............................................................................ $ 26,833 $ 25,351
Net increase (decrease) during the year attributable to:
Service cost........................................................................... 408 225
Interest cost.......................................................................... 1,734 1,871
Actuarial loss......................................................................... 8,497 1,060
Benefits paid.......................................................................... (1,947) (1,674)
Plan amendments........................................................................ (4,506) --
Plan curtailment (a)................................................................... 479 --
Special termination benefit (a)........................................................ 727 --
------------ -----------
Net increase for the year.................................................................. 5,392 1,482
------------ -----------
Accumulated postretirement benefit obligations at the end of the year...................... $ 32,225 $ 26,833
============ ===========

(a) The plan curtailment benefit and special termination benefit are associated with the closure of the Burns Harbor
lithography facility.

Effective January 1, 2002 the Company amended the postretiree health care plan. The amendment resulted in
a reduction in the accumulated postretirement benefit obligation of $4.5 million by capping the Company's contribution
toward retiree medical costs at 150% of the expected 2003 medical costs.

The Company's postretirement benefit plans are not funded. The status of the plans at December 31, 2002
and 2001, is as follows (000's omitted):
2002 2001
---- ----
Accumulated postretirement benefit obligations:
Active employees....................................................................... $ 9,812 $ 5,777
Retirees............................................................................... 22,413 21,056
------------ -----------
Total accumulated postretirement benefit obligations....................................... 32,225 26,833
Unrecognized net gain/(loss)............................................................... (6,953) 1,544
Unrecognized prior-service costs........................................................... 4,125 --
------------ -----------
Net liability recognized................................................................... $ 29,397 $ 28,377
============ ===========

Net periodic postretirement benefit costs for the Company's U.S. postretirement benefit plans for the
years ended December 31, 2002, 2001 and 2000, included the following components (000's omitted):

2002 2001 2000
---- ---- ----

Service cost........................................................... $ 407 $ 225 $ 243
Interest cost.......................................................... 1,734 1,871 1,764
Recognized gain........................................................ -- -- (152)
Recognized prior-service cost.......................................... (382) -- --
Curtailment and Special termination benefit............................ 1,206 -- --
------------ ---------- ----------
Net periodic postretirement benefit cost............................... $ 2,965 $ 2,096 $ 1,855
============ ========== ==========

The assumed health care cost trend rate used in measuring the accumulated postretirement benefit
obligation was 9% to 4% in 2002 and 7% in 2001 and 2000. The 2002 health care assumption was based upon emerging health
care trends, and begins at a 9% increase in 2003, reducing by 1% each year thereafter, until 2008. A one percentage
point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement
benefit obligation as of December 31, 2002 and 2001, by approximately $3.6 million and $2.3 million, respectively, and
the total of the service and interest cost components of net postretirement benefit cost for each year then ended by
approximately $0.3 million, $0.3 million and $0.2 million in 2002, 2001 and 2000. A one percentage point decrease in the
assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of
December 31, 2002 and 2001, by approximately $3.2 million and $2.1 million in 2002 and 2001 respectively, and the total
of the service and interest cost components of net postretirement benefit cost for each year then ended by approximately
$0.3 million in 2002 and $0.2 million in both 2001 and 2000. The assumed discount rate used in determining the
accumulated postretirement benefit obligation was 6.75%, 7.25% and 7.5%, in 2002, 2001 and 2000, respectively. The
increased health care cost trends, along with the decreased discount rate assumptions are the primary drivers of the $8.5
million actuarial loss disclosed above.

As of December 31, 2002, 2001 and 2000, the Company has recorded a liability of $3.0 million, $3.1 million
and $3.2 million, respectively, for benefit obligations for which a former executive was fully eligible to receive on a
periodic payment basis beginning August 1, 1998. In 2002, the Company also recorded a $244,000 charge to accumulated
other comprehensive loss in conjunction with the benefit obligations. The principal source of funding for this
obligation is an insurance policy on the executive's life.

(10) Commitments and Contingencies

Environmental

United States Can has been named as a potentially responsible party for costs incurred in the clean-up of
a groundwater plume partially extending underneath United Sates Can's former site in San Leandro, California. We are a
party to an indemnity agreement related to this matter with the owner of the property. Extensive soil and groundwater
investigative work has been performed at this site in a coordinated sampling event in 1999. The results of the sampling
were inconclusive as to the source of the contamination. While the State of California has not yet commented on the
sampling results, we believe that the principal source of contamination is unrelated to our past operations. At the
request of the State of California, the Company will provide the State with samples from monitoring wells located at the
San Leandro site as part of a coordinated sampling event that is currently scheduled for the first quarter of 2003.

Through corporate due diligence and the Company's compliance management system, a potential noncompliance
with the environmental laws at our New Castle, Pennsylvania facility related to the possible use of a coating or coatings
inconsistent with the conditions in the facility's Clean Air Act Title V permit was identified. In February 2001, the
Company voluntarily self-reported the potential noncompliance to the Pennsylvania Department of Environmental Protection
(PDEP) and the Environmental Protection Agency (EPA) in accordance with PDEP's and EPA's policies. The Company undertook
a full review, revised its emissions calculations based on its review and determined that it had not exceeded its
emissions cap for any reporting year. In September 2001, the Company reported to PDEP and EPA certain deviations from the
requirements of its Title V permit related to the use of non-compliant coatings and corresponding recordkeeping and
reporting obligations, and certain recordkeeping deviations stemming from the malfunction of the temperature recorder for
an oxidizer. The Company met with PDEP officials in October 2001, and provided some supplemental information requested by
PDEP in November 2001. On May 21, 2002, the Company met with PDEP officials and reached an agreement to resolve the past
reported deviations by entering into a Consent Assessment of Civil Penalty for $30,000. The Company and PDEP signed a
definitive agreement in October 2002 and the Company paid the first installment. The second installment is due in April
2003.

Legal

The Company is involved in litigation from time to time in the ordinary course of our business. In our
opinion, the litigation is not material to our financial condition or results of operations.

In May 1998, the National Labor Relations Board issued a decision ordering the Company to pay
$1.5 million in back pay, plus interest, for a violation of certain sections of the National Labor Relations Act. The
violation was a result of the Company's closure of several facilities in 1991 and its failure to offer inter-plant job
opportunities to 25 affected employees. The Company appealed this decision on the ground that we are entitled to a
credit against this award for certain supplemental unemployment benefits and pension payments. On June 19, 2001, the
Court of Appeals issued a written decision. While the Court enforced the award of backpay, with interest, it agreed with
the Company's position that the NLRB should permit the Company to present actuarial calculations of any credit due it
because of overpayments or early payments of supplemental unemployment benefits or pension. On March 1, 2002, the Company
settled this case. Under the settlement agreement, the Company paid approximately $1.8 million in backpay and interest,
as well as certain pension adjustments that are not expected to have a material effect on the Company. The National
Labor Relations Board approved the settlement on May 30, 2002. The Company made substantially all payments due under the
settlement in July 2002. In October 2002, the NLRB entered an Order officially closing this matter.

Walter Schmidt, former finance director at May Verpackungen GmbH ("May") sued for unfair dismissal
following termination of his employment contract. The contract had a five-year term and Schmidt remains in pay status
through its notice period, ending January 31, 2005. Mr. Schmidt claims that he also is due a severance settlement of
five years' salary at the end of the notice period. In July 2002, the labor courts of first instance ruled that Mr.
Schmidt notice date and termination should be effective December 31, 2005, and that the severance settlement is due at
that time. On January 7, 2003, May appealed this ruling. In its appeal, May contends that the labor courts' ruling is
erroneous on four bases. The appeals court will review the ruling of the labor courts of first instance de novo, meaning
that it is not bound by the prior ruling and may render an independent decision. Since the appeals court's review is not
complete, the Company is unable, at this time, to determine the appeals court's position or the effect on the Company of
the initial decision.

Leases

The Company has entered into agreements to lease certain property under terms which qualify as capital
leases. Capital leases consist primarily of various production machinery and equipment. Most capital leases contain
renewal options and some contain purchase options. As of December 31, 2002 and 2001, capital lease assets were
$1.4 million and $3.3 million, net of accumulated amortization of $7.6 million and $9.8 million, respectively.

The Company also maintains operating leases on various plant and office facilities, vehicles and office
equipment. Rent expense under operating leases for the years ended December 31, 2002, 2001 and 2000, was $7.0 million,
$8.3 million and $7.2 million, respectively.

At December 31, 2002, minimum payments due under these leases were as follows (000's omitted):

Capital Operating
Leases Leases
------ ------
2003 .............................................................................. $ 1,143 $ 4,997
2004 .............................................................................. 764 4,326
2005 .............................................................................. 41 3,883
2006 .............................................................................. -- 3,125
2007 .............................................................................. -- 2,827
Thereafter.......................................................................... -- 3,628
------------- ------------
Total minimum lease payments.................................................. 1,948 $ 22,786
============
Amount representing interest........................................................ (81)
-------------
Present value of net minimum capital lease payments................................. $ 1,867
=============

(11) Equity Incentive Plans

In connection with the recapitalization, the Board of Directors and stockholders of U.S. Can Corporation
approved the U.S. Can 2000 Equity Incentive Plan. The Board of Directors administers the plan and may, from time to time,
grant option awards to directors of U.S. Can Corporation, including directors who are not employees of U.S. Can
Corporation, all executive officers of U.S. Can Corporation and its subsidiaries, and other employees, consultants, and
advisers who, in the opinion of the Board, are in a position to make a significant contribution to the success of U.S.
Can and its subsidiaries. The Board of Directors may grant options that are time-vested and options that vest based on
the attainment of performance goals specified by the Board of Directors. All previous plans were terminated in
connection with the recapitalization.

In prior years, the Company made grants of restricted shares which were charged to stockholders' equity at
their fair value and amortized as expense on a straight-line basis over the period earned. In 2000, all unvested
outstanding restricted stock was accelerated and issued or otherwise retired in connection with the recapitalization.

A summary of the status of the Company's stock option plans (as restated for the reverse stock split) at
December 31, 2002, 2001 and 2000, and changes during the years then ended, are presented in the tables below:

Options Outstanding Exercisable Options
------------------- -------------------
Wtd. Avg. Wtd. Avg.
Exercise Exercise
Shares (in 000s) Price Shares (in 000s) Price
---------------- ----- ---------------- -----
December 31, 1999.............................. 1,438.150 $ 16,820 801.212$
15,900
Granted..................................... 433.500 14,190
Exercised................................... (1,855.859) 16,290
Canceled.................................... (15.791) 6,200
---------------------- ----------

October 4, 2000................................ -- --
Granted..................................... 2,476.542 1,000 -- $ --
Exercised................................... -- --
Canceled.................................... -- --
-------------- ----------

December 31, 2000.............................. 2,476.542 1,000 -- $ --
Granted..................................... 154.000 1,000
Exercised................................... -- --
Canceled.................................... (387.622) 1,000
---------------------- ----------

December 31, 2001.............................. 2,242.920 1,000 325.547 $ 1,000
Granted..................................... 25.000 1,000
Exercised................................... -- --
Canceled.................................... (461.186) 1,000
--------------------- ----------
December 31, 2002 ............................. 1,806.734 1,000 551.744 $ 1,000

Exercisable Options
Options Outstanding at December 31,
at December 31, 2002 2002
-------------------- ----
Remaining Wtd. Wtd.
Contractual Avg. Avg.
Life Exercise Exercise
Shares (Years) Price Shares Price
------ ------- ----- ------ -----

$1,000.00...................... 1,806.734 7.40 1,000.00 551.744 $1,000.00
========= ======= =========

The Company accounts for the plan using the intrinsic fair value method under APB Opinion No. 25;
therefore, no compensation costs have been recognized for options granted. Had compensation costs been determined on the
fair value-based accounting method for options granted in 2002, 2001 and 2000, pro forma net income (loss) would have
been $(84.3) million, $(51.8) million and $(18.4) million for 2002, 2001 and 2000, respectively.

The weighted-average estimated fair value of options granted during 2002, 2001, and 2000 after and before
the recapitalization was $341.10, $388.42, $440.02, and $13,515.71, respectively. The fair value of each option grant is
determined on the date of grant using the Black-Scholes option pricing model with the following weighted-average
assumptions for options granted in 2002, 2001, and 2000 after and before the recapitalization, respectively: risk-free
interest rate of 4.26%, 5.04%, 6.0% and 6.0%; expected lives of 10 years in all cases; expected volatility of 0%, 0%, 0%,
and 35.2%; and no dividends for any year.

(12) Redeemable Preferred Stock

As part of the recapitalization, U.S. Can Corporation issued shares of preferred stock having an aggregate
value of $106.7 million to Berkshire Partners and its affiliates and the rollover stockholders. Dividends accrue on the
preferred stock at an annual rate of 10%, are cumulative from the date of issuance and compounded quarterly, on March 31,
June 30, September 30 and December 31 of each year and are payable in cash when and as declared by our Board of
Directors, so long as sufficient cash is available to make the dividend payment and has been obtained in a manner
permitted under the terms of our new senior secured credit facility and the indenture. As of December 31, 2002 and 2001,
dividends of approximately $26.5 million and $13.9 million, respectively, have been accrued. Holders of the preferred
stock have no voting rights, except as otherwise required by law. The preferred stock has a liquidation preference equal
to the purchase price per share, plus all accrued and unpaid dividends. The preferred stock ranks senior to all classes
of U.S. Can Corporation common stock and is not convertible into common stock.

The Company is required to redeem the preferred stock, at the option of the holders, at a price equal to
its liquidation preference, plus accrued and unpaid dividends, upon the occurrence of any of the following events and so
long as sufficient cash is available to the Company or available from dividend payments permitted under the terms of the
Company's debt agreement:

o the bankruptcy of the Company

o the acceleration of debt under any major loan agreement to which the Company or any of its subsidiaries is
a party; or

o public offerings of shares of capital stock of the Company

The Company's certificate of incorporation expressly states that any redemption rights of holders of
preferred stock shall be subordinate or otherwise subject to prior rights of the lenders under the Company's Senior
Secured Credit Facility and the holders of the exchange notes.

At this time, the Company's Senior Secured Credit Facility prohibits the Company's ability to redeem the
preferred stock and the debt agreement restricts the Company's ability to obtain funds that may be necessary to redeem
the preferred stock.

(13) Related Parties

Berkshire Partners is the majority shareholder (77.3%) of the Company. Berkshire received a fee of
$2.0 million upon the completion of the recapitalization and receives a management fee of $750,000 per year.

Under the provisions of the second amendment to the Senior Secured Credit Facility, Berkshire Partners may
be required to cash collateralize and ultimately repurchase the Tranche C term loan facility. In consideration for
Berkshire's agreement to purchase a participation in the Tranche C term loan, the Company has agreed to accrue for and
pay to Berkshire an annual fee of 2.75% of the amount of the Tranche C term loan then outstanding, which was $550,000 for
2002. This amount was included in accrued liabilities in the accompanying balance sheet. This fee is payable in
advance, is non-refundable and may not be paid in cash (without the requisite senior lenders' consent) so long as the
Company's current senior bank debt is outstanding. If Berkshire were required to purchase a Tranche C term loan
participation in the future, the Company would be required to pay Berkshire the amount of such Tranche C term loan, plus
accrued interest, to the extent of Berkshire's participation. The Company also agreed to reimburse Berkshire's
out-of-pocket costs and expenses incurred in connection with the purchase agreement and the second amendment to the
credit agreement.

Salomon Smith Barney currently beneficially owns 4.90% of the Company's common stock. Salomon Smith Barney
was paid $2.0 million in fees in 2000 for financial advisory services provided in connection with the recapitalization.

(14) Reverse Stock Split

On December 5, 2002, the board of directors authorized (i) a reverse stock split in which each issued
share of the Company's common stock and Series A preferred stock, $0.01 par value per share, would be reclassified as and
converted into 1/1000th of a share of common stock and preferred stock, $10.00 par value per share, subject to approval
of the Company's shareholders and (ii) a corresponding reduction in the number of its authorized shares of common stock
from 100,000,000 shares to 100,000 shares and in the number of its authorized shares of preferred stock from 200,000,000
shares to 200,000 shares. During December, the Company obtained the necessary shareholder consents and on December 20,
2002, U.S. Can Corporation, upon filing with the Secretary of State of the State of Delaware, amended its certificate of
incorporation to effect the reverse stock split. The reverse stock split did not affect the relative percentages of
ownership for any shareholders. The reverse stock split did not affect the annual rate at which dividends on preferred
stock accrue, their cumulation or quarterly compounding. Dividends remain payable in cash when and as declared by our
Board of Directors, so long as sufficient cash is available to make the dividend payment and such payment would not
violate the terms of the Facility and the Notes.

(15) Accounting Change

The Company adopted SFAS No. 142 "Goodwill and Other Intangible Assets" on January 1, 2002. This standard
provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill and
"indefinite-lived" intangibles are no longer amortized, but are tested at least annually for impairment. Effective
January 1, 2002, the Company has ceased amortization of goodwill. The Company recorded goodwill amortization of $2.8
million and $2.9 million for the years ended December 31, 2001 and 2000. SFAS No. 142 required the Company to make an
initial assessment of goodwill impairment within six months after the adoption date. The initial step was designed to
identify potential goodwill impairment by comparing an estimated fair value for each applicable reporting unit to its
respective carrying value. For the reporting units where the carrying value exceeds the fair value, a second step was
performed to measure the amount of the goodwill impairment.

During the first six months of 2002, the Company completed the initial transitional goodwill impairment
test as of January 1, 2002, and reported that a non-cash impairment charge was required in the Custom & Specialty and
International segments. During the fourth quarter of 2002, the Company determined the amount of the goodwill impairment
and recorded a pre-tax goodwill impairment charge of $39.1 million ($18.3 million, net of tax) relating to the Custom &
Specialty and International segments. The charge has been presented as a cumulative effect of a change in accounting
principle effective as of January 1, 2002 and is primarily due to competitive pressures in the Custom & Specialty and
International segment marketplaces. To determine the amount of goodwill impairment, the Company measured the impairment
loss as the excess of the carrying amount of goodwill over the implied fair value of goodwill. The impairment charge has
no impact on covenant compliance under the Senior Secured Credit Agreement.

The changes in the carrying amount of goodwill by segment for the year ended December 31, 2002 were as
follows (in 000's):
Paint, Plastic Custom &
-
Aerosol International & General Line Specialty Total
------- ------------- -------------- --------- -----

$ $
Balance, Dec. 31, 2001 $ 7,255 25,826 $ 20,129 13,227 $ 66,437
Impairment write-offs - (25,826) - (13,227) (39,053)
---------------- ----------------- ----------------- ----------------- -------------

$ $
Balance, December 31, 2002 $ 7,255 - $ 20,129 - $ 27,384
================ ================= ================= ================= =============

Pursuant to SFAS No. 142, the results for 2001 and 2000 have not been restated. A reconciliation of net
loss as if SFAS 142 had been adopted is presented below for the years ended December 31, 2001 and 2000.

Year Ended Year Ended
December 31, 2001 December 31, 2000
-------------------------- --------------------------
(in thousands) (in thousands)
Reported Net Loss Attributable to Common Stockholders $ (51,761) $ (14,123)
Add back: Goodwill amortization (net of tax) 1,858 1,914
-------------- --------------
Adjusted Net Loss Attributable to Common Stockholders $ (49,903) $ (12,209)
=============== ===============

(16) Business Segments

Management monitors and evaluates performance, customer base and market share for four business segments.
The segments have separate management teams and distinct product lines. The Aerosol segment primarily produces steel
aerosol containers in the U.S. for personal care, household, automotive, paint and industrial products. The International
segment produces aerosol cans in the Europe and Latin America (through Formametal S.A., a joint venture in Argentina) as
well as steel food packaging in Europe. The Paint, Plastic & General Line segment produces round cans in the U.S. for
paint and coatings, oblong cans for items such as lighter fluid and turpentine as well as plastic containers for paint
and industrial and consumer products. The Custom & Specialty segment produces a wide array of functional and decorative
tins, containers and other products in the U.S. In 2002, the Company realigned certain plants from the Paint, Plastic &
General Line to the Custom & Specialty segments. The amounts for 2001 and 2000 were reclassified to reflect the
realignment.

The accounting policies of the segments are the same as those described in Note (2) to the Consolidated
Financial Statements. No single customer accounted for more than 10% of the Company's total net sales during 2002, 2001
or 2000.

Financial information relating to the Company's operations by geographic area was as follows (000's
omitted):

United
States Europe Consolidated
------ ------ ------------
2002
Net sales......................................... $555,303 $ 241,197 $ 796,500
Identifiable assets............................. 359,737 219,089 578,826
2001
Net sales......................................... $542,722 $ 229,466 $ 772,188
Identifiable assets............................. 395,150 239,200 634,350
2000
Net sales......................................... $569,870 $ 239,627 $ 809,497
Identifiable assets............................. 388,918 248,946 637,864

The following is a summary of revenues from external customers, income (loss) from operations, capital
spending, depreciation and amortization and identifiable assets for each segment as of December 31, 2002, 2001 and 2000
(000's omitted):
2002 2001 2000
---- ---- ----
Revenues from external customers:
Aerosol....................................................... $ 364,133 $ 334,716 $ 357,688
International................................................. 241,197 229,466 239,627
Paint, Plastic, & General Line................................ 119,952 130,412 136,054
Custom & Specialty............................................ 71,218 77,594 76,128
------------- ------------ -------------
Total revenues.......................................... $ 796,500 $ 772,188 $ 809,497
============= ============ =============
Income (loss) from operations:
Aerosol....................................................... $ 59,545 $ 47,299 $ 66,395
International................................................. 742 (267) 12,802
Paint, Plastic, & General Line................................ 11,378 12,544 14,348
Custom & Specialty............................................ 734 (998) 7,559
------------- ------------- -------------
Total Segment Income From Operations.......................... 72,399 58,578 101,104
Corporate and eliminations (a) (b)............................ (32,852) (64,724) (52,951)
Interest Expense.............................................. (55,384) (57,304) (40,468)
-------------- ------------- --------------
Total income (loss) before income taxes................. $ (15,837) $ (63,450) $ 7,685
============== ============= =============
Capital spending:
Aerosol....................................................... $ 6,879 $ 3,514 $ 6,499
International................................................. 11,996 4,556 8,063
Paint, Plastic, & General Line................................ 3,770 6,536 3,650
Custom & Specialty............................................ 3,002 1,043 609
Corporate..................................................... 1,588 3,888 5,683
------------- ------------ -------------
Total capital spending.................................. $ 27,235 $ 19,537 $ 24,504
============= ============ =============
Depreciation and amortization:
Aerosol....................................................... $ 12,014 $ 11,856 $ 10,842
International................................................. 10,182 9,355 9,288
Paint, Plastic, & General Line................................ 5,561 5,462 5,025
Custom & Specialty............................................ 1,942 2,165 2,182
Corporate..................................................... 6,387 5,788 6,333
------------- ------------ -------------
Total depreciation and amortization..................... $ 36,086 $ 34,626 $ 33,670
============= ============ =============
Identifiable assets:
Aerosol....................................................... $ 166,136 $ 168,214 $ 183,150
International................................................. 219,089 239,200 248,946
Paint, Plastic, & General Line................................ 80,566 82,627 91,209
Custom & Specialty............................................ 27,087 45,125 50,017
Corporate..................................................... 85,948 99,184 64,542
------------- ------------ -------------
Total identifiable assets............................... $ 578,826 $ 634,350 $ 637,864
============= ============ =============

(a) Includes special charges and recapitalization costs. Management does not evaluate segment performance including
such charges.

(b) Selling, general and administrative costs are not allocated to the domestic segments.

(17) Subsidiary Guarantor Information

The following presents the condensed consolidating financial data for U.S. Can Corporation (the "Parent
Guarantor"), United States Can Company (the "Issuer"), USC May Verpackungen Holding Inc. (the "Subsidiary Guarantor"),
and the Issuer's European subsidiaries, including May Verpackungen GmbH & Co., KG (the "Non-Guarantor Subsidiaries"), as
of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001 and 2000. Investments in subsidiaries are
accounted for by the Parent Guarantor, the Issuer and the Subsidiary Guarantor under the equity method for purposes of
the supplemental consolidating presentation. Earnings of subsidiaries are, therefore, reflected in their parent's
investment accounts and earnings. This consolidating information reflects the guarantors and non-guarantors of the 12
3/8% senior subordinated notes due 2010.

The 12 3/8% senior subordinated notes due 2010 are guaranteed on a full, unconditional, unsecured, senior
subordinated, joint and several basis by the Parent Guarantor, the Subsidiary Guarantor and any other domestic restricted
subsidiary of the Issuer. USC May Verpackungen Holding Inc., which is wholly owned by the Issuer, currently is the only
Subsidiary Guarantor. The Parent Guarantor has no assets or operations separate from its investment in the Issuer.

Separate financial statements of the Issuer or the Subsidiary Guarantors have not been presented as
management has determined that such information is not material to the holders of the 12 3/8% senior subordinated notes
due 2010.

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)
CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2002
(000's omitted)

USC Europe/
USC May May
United Verpackungen Verpackungen
U.S. Can States Can Holding GmbH U.S. Can
Corporation Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Eliminations Consolidated
-------------- ------------- --------------- ---------------- --------------- --------------

NET SALES.................................. $ - $ 555,303 $ - $ 241,197 $ - $ 796,500
COST OF SALES.............................. - 483,647 (406) 227,154 - 710,395
-------------- ------------- --------------- ---------------- --------------- --------------
Gross income.......................... - 71,656 406 14,043 - 86,105
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - 24,146 - 13,707 - 37,853
SPECIAL CHARGES............................ - 3,080 - 5,625 - 8,705
-------------- ------------- --------------- ---------------- --------------- --------------
Operating income (loss)............... - 44,430 406 (5,289) - 39,547
INTEREST EXPENSE........................... - 46,156 6,465 2,763 - 55,384
EQUITY EARNINGS (LOSS) FROM
SUBSIDIARY............................... (71,776) (59,871) (19,837) - 151,484 -
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) before income taxes...... (71,776) (61,597) (25,896) (8,052) 151,484 (15,837)
PROVISION FOR INCOME TAXES................. - 2,005 22,197 13,435 - 37,637
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) BEFORE (71,776) (63,602) (48,093) (21,487) 151,484 (53,474)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
AND PREFERRED STOCK
DIVIDENDS................................
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE, NET OF TAX - (8,174) 4,717 (14,845) - (18,302)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME BEFORE PREFERRED STOCK DIVIDENDS (71,776) (71,776) (43,376) (36,332) 151,484 (71,776)
PREFERRED STOCK DIVIDENDS.................. (12,521) - - - - (12,521)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) ATTRIBUTABLE TO $ (84,297) $ (71,776) $ (43,376) $ (36,332) $ 151,484 $ (84,297)
COMMON STOCKHOLDERS......................
============== ============= =============== ================ =============== ==============

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)
CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2001
(000's omitted)

U.S. Can United USC May USC Europe/ Eliminations U.S. Can
May
Verpackungen Verpackungen
States Can Holding GmbH
Corporation Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
-------------- ------------- --------------- ---------------- --------------- --------------

NET SALES.................................. $ - $ 542,722 $ - $ 229,466 $ - $ 772,188
COST OF SALES.............................. - 483,878 - 211,636 - 695,514
-------------- ------------- --------------- ---------------- --------------- --------------
Gross income.......................... - 58,844 - 17,830 - 76,674
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - 28,484 1,423 16,674 - 46,581
SPECIAL CHARGES............................ - 27,063 - 9,176 - 36,239
-------------- ------------- --------------- ---------------- --------------- --------------
Operating income (loss)............... - 3,297 (1,423) (8,020) - (6,146)
INTEREST EXPENSE........................... - 48,136 6,500 2,668 - 57,304
EQUITY EARNINGS (LOSS) FROM
SUBSIDIARY............................... (40,416) (13,010) (1,198) - 54,624 -
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) before income taxes...... (40,416) (57,849) (9,121) (10,688) 54,624 (63,450)
PROVISION FOR INCOME TAXES................. - (17,433) (3,506) (2,095) - (23,034)
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) BEFORE (40,416) (40,416) (5,615) (8,593) 54,624 (40,416)
PREFERRED STOCK DIVIDENDS................
PREFERRED STOCK DIVIDENDS.................. (11,345) - - - - (11,345)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) ATTRIBUTABLE TO $ (51,761) $ (40,416) $ (5,615) $ (8,593) $ 54,624 $ (51,761)
COMMON STOCKHOLDERS......................
============== ============= =============== ================ =============== ==============

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)
CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2000
(000's omitted)

NET SALES.................................. $ - $ 569,870 $ - $ 239,627 $ - $ 809,497
COST OF SALES.............................. - 481,217 - 211,941 - 693,158
-------------- ------------- --------------- ---------------- --------------- --------------
Gross income.......................... - 88,653 - 27,686 - 116,339
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - 29,525 1,478 14,884 - 45,887
SPECIAL CHARGES............................ - 3,413 - - - 3,413
Recapitalization Charges................... 18,886 - - - - 18,886
-------------- ------------- --------------- ---------------- --------------- --------------
Operating income (loss)............... (18,886) 55,715 (1,478) 12,802 - 48,153
INTEREST EXPENSE........................... - 31,261 6,220 2,987 - 40,468
EQUITY EARNINGS (LOSS) FROM
SUBSIDIARY............................... 55 (135) 4,476 - (4,396) -
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) before income taxes...... (18,831) 24,319 (3,222) 9,815 (4,396) 7,685
PROVISION FOR INCOME TAXES................. (7,309) 9,401 (178) 2,430 - 4,344
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) from operations before (11,522) 14,918 (3,044) 7,385 (4,396) 3,341
extraordinary item...................
NET LOSS FROM EARLY
EXTINGUISHMENT OF DEBT................... - (14,863) - - - (14,863)
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) BEFORE (11,522) 55 (3,044) 7,385 (4,396) (11,522)
PREFERRED STOCK DIVIDENDS................
PREFERRED STOCK DIVIDENDS.................. (2,601) - - - - (2,601)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) ATTRIBUTABLE TO $ (14,123) $ 55 $ (3,044) $ 7,385 $ (4,396) $ (14,123)
COMMON STOCKHOLDERS......................
============== ============= =============== ================ =============== ==============

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2002
(000s omitted)

U.S. Can United States USC May USC Europe/ May Eliminations U.S. Can
Verpackungen Verpackungen
Holding GmbH
Corporation Can Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
-------------- --------------- ------------------ ----------------- -------------- ------------------
CURRENT ASSETS:
Cash and cash equivalents $ - $ 5,707 $ - $ 6,083 $ - $ 11,790
Accounts receivable...... - 43,623 - 46,363 - 89,986
Inventories.............. - 57,500 (600) 48,735 - 105,635
Prepaid expenses and
other
assets................. - 11,719 1,977 8,500 - 22,196
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current assets - 118,549 1,377 109,681 - 229,607
NET PROPERTY, PLANT AND
EQUIPMENT................... - 147,588 - 94,086 - 241,674
INTANGIBLE ASSETS............. - 27,384 - - - 27,384
OTHER ASSETS.................. - 66,216 606 13,339 - 80,161
INTERCOMPANY
ADVANCES.................... - 249,649 - - (249,649) -
INVESTMENT IN
SUBSIDIARIES................ - (48,265) 61,360 - (13,095) -
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total assets........ $ - $ 561,121 $ 63,343 $ 217,106 $ (262,744) $ 578,826
============== =============== ================== ================= ============== ==================

CURRENT LIABILITIES
Current maturities of
long-term debt......... $ - $ 11,078 $ - $ 15,075 $ - $ 26,153
Accounts payable......... - 47,901 - 46,636 - 94,537
Other current liabilities - 48,389 31 15,974 - 64,394
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current - 107,368 31 77,685 - 185,084
liabilities...................
TOTAL LONG TERM DEBT.......... 854 503,238 - 19,437 - 523,529
OTHER LONG-TERM
LIABILITIES................. - 48,317 673 31,936 - 80,926
PREFERRED STOCK............... 133,133 - - - - 133,133
INTERCOMPANY LOANS............ 112,057 - 114,863 22,729 (249,649) -
INVESTMENT IN
SUBSIDIARIES................ 97,802 - - - (97,802) -
STOCKHOLDERS' EQUITY.......... (343,846) (97,802) (52,224) 65,319 84,707 (343,846)
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total liabilities $ - $ 561,121 $ 63,343 $ 217,106 $ (262,744) $ 578,826
and
stockholders'
equity........................
============== =============== ================== ================= ============== ==================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2001
(000s omitted)

U.S. Can United States USC May USC Europe/ May Eliminations U.S. Can
Verpackungen Verpackungen
Holding GmbH
Corporation Can Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
-------------- --------------- ------------------ ----------------- -------------- ------------------
CURRENT ASSETS:
Cash and cash equivalents $ - $ 8,249 $ - $ 6,494 $ - $ 14,743
Accounts receivable...... - 51,806 - 43,468 - 95,274
Inventories.............. - 52,625 (600) 48,651 - 100,676
Prepaid expenses and
other
assets................. - 26,518 1,049 10,142 - 37,709
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current assets - 139,198 449 108,755 - 248,402
NET PROPERTY, PLANT AND
EQUIPMENT................... - 152,779 - 86,455 - 239,234
INTANGIBLE ASSETS............. - 40,611 1,544 24,282 - 66,437
OTHER ASSETS.................. - 62,561 - 17,716 - 80,277
INTERCOMPANY
ADVANCES.................... - 239,414 - - (239,414) -
INVESTMENT IN
SUBSIDIARIES................ - 11,044 72,287 - (83,331) -
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total assets........ $ - $ 645,607 $ 74,280 $ 237,208 $ (322,745) $ 634,350
============== =============== ================== ================= ============== ==================

CURRENT LIABILITIES
Current maturities of
long-term debt......... $ - $ 12,801 $ - $ 2,182 $ - $ 14,983
Accounts payable......... - 47,995 - 48,690 - 96,685
Other current liabilities - 51,834 (1,759) 22,362 - 72,437
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current - 112,630 (1,759) 73,234 - 184,105
liabilities...................
TOTAL LONG TERM DEBT.......... 854 499,339 - 21,600 - 521,793
OTHER LONG-TERM
LIABILITIES................. - 47,239 514 7,210 - 54,963
PREFERRED STOCK............... 120,613 - - - - 120,613
INTERCOMPANY LOANS............ 112,056 - 93,283 34,075 (239,414) -
INVESTMENT IN
SUBSIDIARIES................ 13,601 - - - (13,601) -
STOCKHOLDERS' EQUITY.......... (247,124) (13,601) (17,758) 101,089 (69,730) (247,124)
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total liabilities $ - $ 645,607 $ 74,280 $ 237,208 $ (322,745) $ 634,350
and
stockholders'
equity........................
============== =============== ================== ================= ============== ==================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2002
(000s omitted)

U.S. Can United USC Europe / U.S. Can
USC May May
States Can Verpackungen Verpackungen
Corporation Company Holding (Non-Guarantor Corporation
(Parent) (Issuer) (Subsidiary-GuaraSubsidiaries) Consolidated
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM OPERATING ACTIVITIES.........................$ - $ 19,114 $ (41,410) $ 28,460 $ 6,164
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures....................................... - (15,239) - (11,996) (27,235)
Proceeds on the sale of property........................... - 817 - 4,845 5,662
Investment in Formametal S.A............................... - (133) - - (133)
--------------- ------------- --------------- ----------------
----------------
Net cash used in investing activities.................. - (14,555) - (7,151) (21,706)
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in intercompany advances........................... - (10,195) 41,410 (31,215) -
Net borrowings under the revolving line of credit.......... - 13,600 - - 13,600
Borrowing of long-term debt - - - 11,079 11,079
Payments of long-term debt, including capital lease - -
obligations.................................................. (10,506) (2,183) (12,689)
--------------- ------------- ---------------- --------------- ----------------
Net cash (used in) provided by financing activities.... - (7,101) 41,410 (22,319) 11,990
--------------- ------------- --------------- ----------------
--------------- ------------- ---------------- --------------- ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH...................... - - - 599 599
--------------- ------------- ---------------- --------------- ----------------
INCREASE (DECREASE) IN CASH AND - (2,542) - (411) (2,953)
CASH EQUIVALENTS...........................................
CASH AND CASH EQUIVALENTS, beginning of year................. - 8,249 - 6,494 14,743
--------------- ------------- ---------------- ----------------
--------------- ----------------
CASH AND CASH EQUIVALENTS, end of period.....................$ - $ 5,707 $ - $ 6,083 $ 11,790
=============== ============= ================ =============== ================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2001
(000s omitted)

CASH FLOWS FROM OPERATING ACTIVITIES.........................$ - $ 3,658 $ (10,186) $ (464) $ (6,992)
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures....................................... - (14,981) - (4,556) (19,537)
Acquisition of business, net of cash acquired.............. - (4,198) - - (4,198)
Proceeds on the sale of property........................... - - - 7,208 7,208
Investment in Formametal S.A............................... - (7,891) - - (7,891)
--------------- ------------- --------------- ----------------
----------------
Net cash used in investing activities.................. - (27,070) - 2,652 (24,418)
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in intercompany advances........................... - (10,289) 10,186 103 -
Settlement of shareholder litigation....................... - (2,063) - - (2,063)
Net borrowings under the revolving line of credit.......... - 37,600 - - 37,600
Borrowing of Term C loan................................... 20,000 20,000
Payments of long-term debt, including capital lease - -
obligations.................................................. (9,569) (4,533) (14,102)
Payment of debt financing costs................ - (6,294) - - (6,294)
--------------- ------------- ---------------- --------------- ----------------
Net cash (used in) provided by financing activities.... - 29,385 10,186 (4,430) 35,141
--------------- ------------- --------------- ----------------
--------------- ------------- ---------------- --------------- ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH...................... - - - 228 228
--------------- ------------- ---------------- --------------- ----------------
INCREASE (DECREASE) IN CASH AND - 5,973 - (2,014) 3,959
CASH EQUIVALENTS...........................................
CASH AND CASH EQUIVALENTS, beginning of year................. - 2,276 - 8,508 10,784
--------------- ------------- ---------------- ----------------
--------------- ----------------
CASH AND CASH EQUIVALENTS, end of period.....................$ - $ 8,249 $ - $ 6,494 $ 14,743
=============== ============= ================ =============== ================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2000
(000s omitted)

U.S. Can United USC May USC Europe / U.S. Can
Verpackungen May
States Can Holding Verpackungen
Corporation Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
--------------- -------------- ---------------- ----------------- -----------------

CASH FLOWS FROM OPERATING
ACTIVITIES..................................... $ 18,886 $ 14,231 $ (8,809) $ 4,424 $ 28,732
--------------- -------------- ---------------- ----------------- -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... - (16,371) - (8,133) (24,504)
Proceeds on sale of business................... - 12,088 - - 12,088
Proceeds on the sale of property............... - 8,755 - - 8,755
Investment in Formametal S.A................... - - - (4,914) (4,914)
--------------- -------------- ---------------- ----------------- -----------------
Net cash used in investing activities...... - 4,472 - (13,047) (8,575)
--------------- -------------- ---------------- ----------------- -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in intercompany advances............... 365,168 (392,408) 8,809 18,431 -
Issuance of common stock....................... 53,333 - - - 53,333
Issuance of preferred stock.................... 106,667 - - - 106,667
Retirement of common stock and exercise
of stock options............................. (270,022) - - - (270,022)
Purchase of treasury stock..................... (488) - - - (488)
Issuance of 12 3/8% notes...................... - 175,000 - - 175,000
Repurchase of 10 1/8% notes.................... (254,658) - - - (254,658)
Net borrowings (payments) under the old
revolving
line of credit and changes in cash overdrafts - (56,100) - - (56,100)
Borrowing of Tranche A loan.................... - 80,000 - - 80,000
Borrowing of Tranche B loan.................... - 180,000 - - 180,000
Borrowing of other long-term debt, including
capital lease obligations.................... - 18,500 - 786 19,286
Payments of long-term debt, including
capital lease obligations.................... - (7,377) - (15,151) (22,528)
Payment of debt financing costs................ - (16,137) - - (16,137)
Payment of recapitalization costs.............. (18,886) - - - (18,886)
--------------- -------------- ---------------- ----------------- -----------------
Net cash (used in) provided by
financing activities..................... (18,886) (18,522) 8,809 4,066 (24,533)
--------------- -------------- ---------------- ----------------- -----------------
--------------- -------------- ---------------- ----------------- -----------------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH........................................ - - - (537) (537)
--------------- -------------- ---------------- ----------------- -----------------
INCREASE (DECREASE) IN CASH AND CASH - 181 - (5,094) (4,913)
EQUIVALENTS....................................
CASH AND CASH EQUIVALENTS, beginning
of year........................................ - 2,095 - 13,602 15,697
--------------- -------------- ---------------- -----------------
----------------- -----------------
CASH AND CASH EQUIVALENTS, $ - $ 2,276 $ - $ 8,508 $ 10,784
end of period..................................
=============== ============== ================ ================= =================

(18) Quarterly Financial Data (Unaudited)

The following is a summary of the unaudited interim results of operations for each of the quarters in 2002
and 2001 (000's omitted).

First Quarter Second Quarter Third Quarter Fourth Qtr
----------------- ------------------ ------------------ ----------------
2002 2001 2002 2001 2002 2001 2002 2001
---- ---- ---- ---- ---- ---- ---- ----

Net Sales........... $ 186,038 $ 191,168 $ 203,624 $ 193,329 $ 205,474 $ 204,175 $ 201,364 $ 183,516
Gross Income........ 18,968 24,451 22,893 26,361 19,800 23,730 24,444 2,132
Special Charges(a).. -- -- -- -- 5,071 (284) 3,634 36,523
Income (loss) from
Operations before
Accounting Change (2,382) (1,328) (876) 423 (5,229) (1,426) (44,987)
(38,085)
Net Income (Loss)
Available for Common
Shareholders (b) $ (23,658)$ (4,053) $ (3,957) $ (2,369) $ (8,387) $ (4,288) $ (48,295) $
============= ========== =========== =========== ========== ========== =========== ==
(41,051)
========

(a) See Note (4)

(b) Amount has been restated to reflect the Company's $18.3 million goodwill impairment charge, net of tax,
effective as of January 1, 2002. See Note (15) for further detail.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company filed a Current Report on Form 8-K on July 26, 2002 reporting that on July 24, 2002, the
Company's board of directors, upon the recommendation of the audit committee, agreed to dismiss Arthur Andersen LLP as
the Company's independent auditors and engaged Deloitte & Touche LLP as the Company's new independent auditors.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the name, age as of March 15, 2003 and position of each of our directors,
executive officers and other key employees. Each of our directors will hold office until the next annual meeting of
shareholders or until his successor has been elected and qualified. Our officers are elected by our Board of Directors
and serve at the discretion of the Board of Directors.

Name Age Position
---- --- --------
Carl Ferenbach............................ 60 Director, Chairman of the Board
John L. Workman........................... 51 Director, Chief Executive Officer
Thomas A. Scrimo.......................... 54 Executive Vice President and General Manager, Aerosol, Paint and
General Line
Roger B. Farley........................... 59 Senior Vice President, Human Resources
Larry S. Morrision........................ 49 Senior Senior Vice President and General Manager, Plastics,
Lithography and Specialty Products
James J. Poehling......................... 55 Senior Vice President, North American Sales and Channel
Development
Francois J. Vissers....................... 42 Senior Senior Vice President, International and President of
European Operations
Sandra K. Vollman......................... 45 Senior Vice President and Chief Financial Officer
W. Brien Berberich........................ 53 Vice President, Supply Chain Management
Sarah T. Macdonald........................ 38 Vice President, Global Accounts
Emil P. Obradovich........................ 56 Vice President and Chief Technical Officer
Thomas J. Olander......................... 54 Vice President, Human Resources
Sheleen Quish............................. 54 Chief Information Officer and Vice President, Corporate Marketing
Richard K. Lubin.......................... 56 Director
Philip R. Mengel.......................... 58 Director
Francisco A. Soler........................ 57 Director
Louis B. Susman........................... 65 Director

Carl Ferenbach. Mr. Ferenbach became Chairman of the Board in October 2002. Mr. Ferenbach, who was one of our founding
directors in 1983 and served as a member of our Board of Directors until February 2000, was elected as a Director at the
time of the recapitalization. Mr. Ferenbach is also a Managing Director of Berkshire Partners, which he co-founded in
1986. He has been a director of many of Berkshire Partners' manufacturing, transportation and telecommunications
investments, serves as a director of Crown Castle International Corporation and is Chairman of English Welsh & Scottish
Railway.

John L. Workman. Mr. Workman was named Chief Executive Officer in February 2003. Mr. Workman had been serving as the
Company's Chief Operating Officer since October 2002. Prior thereto, Mr. Workman had served as our Executive Vice
President and Chief Financial Officer since August 1998. Prior to his appointment, Mr. Workman served as Executive Vice
President and Chief Restructuring Officer at Montgomery Ward Holding Corporation. Montgomery Ward was one of the nation's
largest privately-held retailers. Mr. Workman joined Montgomery Ward in 1984 as a general auditor and held a variety of
financial positions with Montgomery Ward, including Vice President--Controller, Vice President--Finance and Chief Financial
Officer. Prior to joining Montgomery Ward, Mr. Workman was a partner in Main Hurdman, a CPA firm that subsequently
merged with KPMG.

Thomas A. Scrimo. Mr. Scrimo became Executive Vice President and General Manager for Aerosol, Paint and General Line in
February 2003. Mr. Scrimo had been serving as the Company's Senior Vice President and General Manager of Operations,
Americas since November 2002. Mr. Scrimo served as our Senior Vice President and General Manager, Aerosol Operations and
Business Support since February 2000. From August 1998 to February 2000, Mr. Scrimo served as our Vice President,
Business Support Operations. Prior to joining us, he served as Vice President of Operations for Greenfield
Industries, Inc., an international tool manufacturer, from January 1997 to August 1998.

Roger B. Farley. Mr. Farley, who will be retiring from the Company on April 1, 2003, has served as our Senior Vice
President, Human Resources since August 1998. Prior to joining us, Mr. Farley was Senior Vice President, Human Resources
from July 1997 to July 1998 and Vice President, Human Resources from June 1994 to June 1997 of Greenfield
Industries, Inc., an international tool manufacturer.

Larry S. Morrison. Mr. Morrison became Senior Vice President and General Manager for Plastics, Lithography and Specialty
Products in February 2003. Mr. Morrison had been serving as Vice President of Specialty Products and Litho Services
since June 2002. From February 2000 to June 2002, Mr. Morrison served as Vice President, Operational Excellence. From
1998 to February 2000, Mr. Morrison served as our Vice President and General Manager, Custom & Specialty Products. From
July 1995 to 1998, Mr. Morrison served as our Vice President of Manufacturing of Custom & Specialty Products.

James J. Poehling. Mr. Poehling was named Senior Vice President, North American Sales and Channel Development in
February 2003. Mr. Poehling served as Senior Vice President, North American Sales and Marketing since May 2002. Prior
thereto, Mr. Poehling was Senior Vice President North American Sales and Channel Development since September 2001. From
1990 until joining U.S. Can, Mr. Poehling held senior management positions of Vice President Sales and Marketing and Vice
President and General Manager Indexable Cutting Tools for Greenfield Industries, Inc., an international cutting tool
manufacturer. Prior to working for Greenfield Industries, Inc., Mr. Poehling spent 21 years with General Electric in
various sales and marketing assignments.

Francois Vissers. Mr. Vissers was named Senior Vice President, International and President of European Operations in
February 2003. Mr. Vissers previously served as Vice President Europe and Managing Director May Verpackungen since
September 2002. Prior thereto, Mr. Vissers served as Vice President, Aerosol Division - Europe since May 2001. Before
joining the Company, he held various senior management positions with GE Plastics in Europe, including General Manager
for the European ABS business from 2000 through May 2001, European productivity leader from 1999 through 2000 and global
process improvement leader (1997 through 1999).

Sandra K. Vollman. Ms. Vollman was named Senior Vice President and Chief Financial Officer in February 2003. Ms.
Vollman had been serving as the Company's Primary Financial Officer since October 2002. Since February 2002, Ms Vollman
had served as our Senior Vice President--Finance. She joined the Company in July 1999 as Vice President - Business
Development and was named Vice President - Finance in September 2000. From 1997 to 1999, Ms. Vollman was Vice President
and Corporate Controller for Montgomery Ward and Co.

W. Brien Berberich. Mr. Berberich has served as our Vice President, Supply Chain Management since September 2001. Prior
to joining U.S. Can, Mr. Berberich held various positions with Emerson Electric Company, in St. Louis, Missouri from 1993
through 2001. He was Director, Material and Logistics from 1998 through 2001 and Manager, Materials and Logistics from
1995 through 1998 and Manager of Material Planning from 1993 through 1995.

Sarah T. Macdonald. Ms. Macdonald has been our Vice President, Global Accounts since May 2001. Prior thereto, she
served as Vice President, Marketing, Aerosol and Paint, Plastic & General Line from August 2000 through May 2001 and Vice
President, Marketing, Paint, Plastic & General Line from December 1999 to August 2000. From October 1998 to December of
1999, Ms. Macdonald was the Sales and Marketing Director of the Company's U.K. operations. Before joining the Company,
Ms. Macdonald held a number of different sales and marketing positions with Crown, Cork & Seal and Carnaud Metalbox.

Emil P. Obradovich. Mr. Obradovich has served as our Vice President and Chief Technical Officer since February 2000.
From 1996 to February 2000, Mr. Obradovich served as our Managing Director of Technical Services.

Thomas J. Olander. Mr. Olander became Vice President Human Resources in March 2003. Previously, Mr. Olander held the
position of Vice President Organization & Staffing, Compensation & Benefits for U.S. Can since December 1999. Prior to
joining the company, Mr. Olander held positions as Vice President Human Resources for Draper and Kramer, Inc., a
Chicago-based real estate firm from 1996 through 1999.

Sheleen Quish. Ms. Quish was named Chief Information Officer and Vice President, Corporate Marketing in February 2003.
Ms. Quish had been serving as our Vice President and Chief Information Officer since December 2000. Prior to joining
U.S. Can, Ms. Quish served as Managing Director of Leapnet, an Internet company from June 2000 to December 2000, and as
Senior Vice President of Administration and Systems of Unitrin, an insurance and financial services company, from 1998
through June 2000. From 1996 through 1998, Ms. Quish was Executive Vice President, Corporate Planning and Information
Services of Signature Financial / Marketing Inc., a direct response marketing company.

Richard K. Lubin. Mr. Lubin has served as a Director since the recapitalization. Mr. Lubin is a Managing Director of
Berkshire Partners, which he co-founded in 1986. He has been a director of many of Berkshire Partners' manufacturing,
retailing and transportation investments and currently serves as a director of The Holmes Group, Inc., English Welsh &
Scottish Railway and Fresh Start Bakeries, Inc.

Philip R. Mengel. Mr. Mengel was elected a Director in 2001. Mr. Mengel has been the Chief Executive Officer of English
Welsh & Scottish Railway since January 2000. From 1996 to January 2000 Mr. Mengel was the Chief Executive Officer of
Ibstock plc, an international building products company. Mr. Mengel is also a director of The Economist Newspaper Group.

Francisco A. Soler. Mr. Soler has served as a Director since 1983. Since 1985, Mr. Soler has served as the Chairman of
International Bancorp of Miami, Inc., the holding company for The International Bank of Miami, N.A. Mr. Soler is also
President of Harbour Club Milano Spa and a director of various industrial and commercial companies in the United Kingdom
and El Salvador.

Louis B. Susman. Mr. Susman has served as a Director since 1998. Mr. Susman is a Vice Chairman of the Citigroup Global
Corporate Investment Bank, Chairman of the Citigroup North American Customer Committee, and a Vice Chairman of Investment
Banking and Managing Director of Salomon Smith Barney Inc. Prior to joining Salomon Brothers Inc (one of the predecessors
of Salomon Smith Barney) in June 1989, Mr. Susman was a senior partner at the St. Louis-based law firm of Thompson &
Mitchell. Mr. Susman is a Director of Drury Inns and has previously served on the boards of the St. Louis National
Baseball Club, Inc., Silver Eagle, Inc., Hasco International, PennCorp Financial, Avery, Inc. and other publicly-held
corporations.

ITEM 11. EXECUTIVE COMPENSATION

The following tables set forth information concerning compensation paid to our Chief Executive Officer and
our other four most highly compensated executive officers during fiscal years 2002, 2001 and 2000. Information is also
included for our former Chief Executive Officer, who would have been among the most highly compensated officers but for
his resignation in October 2002.

Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payout
------------------- ------ ------
Securities
Underlying
Other Annual Options/SARs (#)(c) All Other
-------------------
Name and Principal Position Year Salary Bonus Compensation Compensation
---- ------ ----- ------------ ------------

John L. Workman 2002 $424,723 $45,000 $7,215 none $ 24,148(a)
Chief Executive Officer 2001 $412,915 $20,000 $7,215 none $ 46,600(b)
2000 $398,088 $39,000 $7,521 353.669 $1,055,782(d)

Thomas A. Scrimo 2002 $252,677 $35,000 $5,506 none $ 14,478(a)
Executive Vice President and G.M., 2001 $245,754 $12,000 $5,506 none $ 22,016(b)
Aerosol, Paint & Business Support 2000 $225,919 $22,000 $6,685 339.522 $ 360,548(d)

James J. Poehling (f) 2002 $242,292 $80,000 $5,506 none $ 87,461(a)
Senior Vice President, North 2001 $71,282 $35,000 $2,169 50.000 $ 9,751(b)
American Sales and Channel
Development

Francois Vissers (f) 2002 $270,948 $31,209 $5,457 none $
Senior Vice President, International 2001 $240,085 $20,530 $3,291 25.000 -(e)
and President of European Operations $
-(e)

Roger B. Farley (g) 2002 $249,569 $24,500 $6,194 none $ 22,962(a)
Senior Vice President, Human 2001 $244,877 $12,000 $6,194 none $ 35,398(b)
Resources 2000 $234,992 $22,600 $7,521 none $ 771,785(d)

Paul W. Jones (h) 2002 $625,292 $112,100 $6,105 none $ 157,186(a)
Former President and Chief 2001 $653,108 $32,500 $7,215 none $ 103,098(b)
Executive Officer 2000 $614,473 $122,000 $7,521 212.202 $2,351,037(d)

(a) 2002 amounts shown for Messrs. Jones, Workman, Scrimo, Poehling and Farley include contributions or payments for
their benefit to U.S. Can Corporation's Salaried Employee Savings and Retirement Accumulation Plan ("SRAP") and
pursuant to nonqualified retirement plans ($41,660, $24,148, $14,478, $8,423 and $15,327 respectively). Amounts
for Mr. Jones and Mr. Farley include the cost of life insurance in excess of our standard benefit of $3,934 and
$5,635, respectively and payments for personal financial planning of $5,150 and $2,000, respectively. The 2002
amount for Mr. Jones also includes payments made by the Company of $106,442 to Mr. Jones in accordance with his
Severance Agreement. The 2002 amount shown for Mr. Poehling includes reimbursement for relocation expenses
claimed under his Employment Agreement of $79,038.

(b) 2001 amounts shown for Messrs. Jones, Workman, Scrimo, Poehling and Farley include contributions or
payments for their benefit to U.S. Can Corporation's Salaried Employee Savings and Retirement Accumulation Plan
("SRAP") and pursuant to nonqualified retirement plans ($92,995, $46,600, $22,016, $987 and $27,036
respectively). Amounts for Mr. Jones and Mr. Farley include the cost of life insurance in excess of our standard
benefit of $5,803 and $6,362, respectively and payments for personal financial planning of $4,300 and $2,000,
respectively. The amount for Mr. Poehling represents reimbursements for relocation expenses claimed under his
employment agreement of $8,764, respectively.

(c) Options granted in 2000 exclude options for 50.000, 30.000 and 20.000 shares issued to Messrs. Jones, Workman and
Scrimo, respectively, under the plans in effect prior to the recapitalization. All of the foregoing options were
cancelled at the time of the recapitalization, and each holder received a cash payment equal to the product of
(i) the $20.00 price per share paid to shareholders in connection with the recapitalization less the exercise
price of the option and (ii) the number of shares of common stock subject to the option. Options reflected in
this table for 2000 were granted on October 4, 2000 under the U.S. Can Corporation 2000 Equity Incentive Plan in
connection with the recapitalization and were restated for the reverse stock split.

(d) The 2000 amounts include one-time bonuses in connection with the recapitalization of $697,500,
$309,000, $103,400 and $226,100 for Messrs. Jones, Workman, Scrimo and Farley respectively, cash proceeds from
the cancellation of employee stock options in the recapitalization of $1,291,312, $624,713, $208,945 and $470,437
for Messrs. Jones, Workman, Scrimo and Farley respectively, distribution of cash from U.S. Can Corporation's
executive deferred compensation program to the extent not reported as 1999 bonuses, of $124,384, $38,852, $13,462
and $23,712 for Messrs. Jones, Workman, Scrimo and Farley, respectively, contributions or payments for their
benefit to U.S. Can Corporation's Salaried Employee Savings and Retirement Accumulation Plan ("SRAP") of $10,200
for each named executive officer and $214,538, $68,614, $24,541 and $33,201 for Messrs. Jones, Workman, Scrimo
and Farley respectively, pursuant to nonqualified retirement plans. The 2000 amounts shown for Mr. Jones and Mr.
Farley include the cost of life insurance in excess of our standard benefit ($5,803 and $5,635, respectively) and
the imputed value of Mr. Workman's company-provided life insurance benefit of $810. The 2000 amounts shown for
Messrs. Jones, Workman and Farley include payments for personal financial planning of $7,300, $3,593 and $2,500,
respectively.

(e) Mr. Vissers is compensated partially in euros and partially in British pounds. The amounts shown for
Mr. Vissers have been converted to U.S. dollars at the applicable exchange rate in effect as of the calendar
year-end for the year in which payment was made. During 2002 and 2001 the Company did not make any contributions
for the benefit of Mr. Vissers to any type of executive retirement plan or overseas employee benefit trust. All
such contributions are made by Mr. Vissers through salary deductions.

(f) Mr. Poehling joined the Company in September 2001. Mr. Vissers joined the Company in May 2001.

(g) Mr. Farley has announced his retirement effective April 1, 2003.

(h) Mr. Jones' employment terminated on October 24, 2002.

Option Grants

There were no option or stock appreciation right ("SAR") grants to our former or current Chief Executive
Officer or our four most highly compensated employees in 2002.

Aggregated Option/SAR Exercises in 2002 and 2002-End Option/SAR Values

No shares were acquired as a result of option exercises by the named executive officers during 2002. The
numbers shown in the below table are after the reverse stock split on December 20, 2002.

Number of Securities
Underlying Value of Unexercised
Unexercised Options In-The-Money Options
at 2002-Year End (#) at 2002-Year End ($)(a)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------

John L. Workman.......................................... 28.294/325.375 $0/$0
Thomas A. Scrimo......................................... 90.540/248.983 $0/$0
James J. Poehling........................................ 10.000/50.000 $0/$0
Francois Vissers......................................... 5.000/20.000 $0/$0
Roger B. Farley.......................................... 0.000/0.000 $0/$0
Paul W. Jones............................................ 28.294/56.587 $0/$0
- -----------

(a) There was no established trading market for U.S. Can Corporation's common stock as of December 31, 2002.
Management has determined that the fair market value of the common stock underlying these options did not exceed
$1,000.00 (the exercise price of these options) and, accordingly, none of the options were in-the-money.

Compensation of Directors

Directors Fees

Each outside Director of U.S. Can receives an annual retainer of $30,000 and full Board meeting fees of
$1,500 for meetings attended in person or telephonically. Directors are also reimbursed for reasonable expenses incurred
in the course of their service. There are five regularly scheduled full Board meetings each year and at least one
regularly scheduled board meeting is held each quarter.

Committee Fees

The Board has standing Audit, Compensation and Nominating Committees. Each outside Director serving on a
Committee receives meeting fees of $1,000 for meetings attended in person and $500 for meetings attended telephonically.
Committee members are also reimbursed for reasonable expenses incurred in the course of their service.

Compensation Committee Interlocks and Insider Participation

Mr. Lubin served as Chairman of U.S. Can Corporation's Compensation Committee during 2002. Mr. Lubin and
Mr. Ferenbach are managing directors of Berkshire Partners. Mr. Mengel is Chief Executive Officer of a Berkshire
Partners portfolio company. Upon the completion of the recapitalization, Berkshire Partners received a fee of
$2.0 million. In addition, Berkshire Partners receives a management fee of $750,000 per year.

The second amendment to the Senior Secured Credit Facility includes an additional Tranche C term loan of
$25.0 million. Under certain circumstances, the Company's majority shareholder may be required to cash collateralize and
ultimately repurchase the new term loan facility. The Company borrowed $20.0 million under the Tranche C facility on
December 18, 2001. In consideration for Berkshire's agreement to purchase a participation in the Tranche C term loan,
the Company has agreed to accrue for and pay to Berkshire an annual fee of 2.75% of the amount of the Tranche C term loan
then outstanding, which initially is $550,000. This fee is payable in advance, is non-refundable and may not be paid in
cash (without the requisite senior lenders' consent) so long as the Company's current senior bank debt is outstanding. If
Berkshire were required to purchase a Tranche C term loan participation in the future, the Company would be required to
pay Berkshire the amount of such Tranche C term loan, plus accrued interest, to the extent of Berkshire's participation.
The Company also agreed to reimburse Berkshire's out-of-pocket costs and expenses incurred in connection with the
purchase agreement and the second amendment to the credit agreement.

None of our executive officers serves:
(1) as a member of the compensation committee of any entity that has one or more executive officers serving as
a member of our Compensation Committee;
(2) as a member of the board of directors of any entity that has one or more executive officers serving as a
member of our Compensation Committee; and
(3) as a member of the compensation committee of any entity that has one or more executive
officers serving as a member of our Board of Directors.

Transactions with Management

Executive Severance Plan

Several of our executive officers are eligible to participate in our executive severance plan. The
executive severance plan provides an executive with a severance payment equal to 12 months (18 months for certain
executives) of the executive's base salary in the event the executive is terminated without cause or leaves for good
reason. In the cases of Messrs. Scrimo and Workman, the executive severance plan will not provide a severance benefit if
these executives are entitled to receive a severance benefit under their change in control agreements (described below).

U.S. Can Corporation 2000 Equity Incentive Plan

In connection with the recapitalization, the Board of Directors and stockholders of U.S. Can Corporation
approved the U.S. Can Corporation 2000 Equity Incentive Plan. The Board of Directors administers the plan and may, from
time to time, grant option awards to directors of U.S. Can Corporation, including directors who are not employees of U.S.
Can Corporation, all executive officers of U.S. Can Corporation and its subsidiaries, and other employees, consultants,
and advisers who, in the opinion of the Board, are in a position to make a significant contribution to the success of
U.S. Can and its subsidiaries. The Board of Directors may grant options that are time-vested and options that vest based
on the attainment of performance goals specified by the Board of Directors.

Change in Control Agreements

Mr. Obradovich is a party to a change in control agreement. The agreement with Mr. Obradovich provides
that upon termination by us or constructive termination by Mr. Obradovich within two years of a change in control, he
will be entitled to:

o a severance payment equal to one times the greater of his current annual base salary or the annual base
salary immediately before the change in control;

o a pro-rated bonus based on the target bonus; and

o continuation of health and welfare benefits for one year following termination.

Employment Agreements with Messrs. Scrimo, Workman and Farley

In October of 2002, the Company renewed its existing employment agreements with Messrs. Scrimo, Workman
and Farley, referred to as the executives, for an additional year. Under the terms of these employment agreements,
Messrs. Scrimo, Workman and Farley will be paid an annual base salary of at least $220,000, $390,000 and $226,000
respectively, which have been adjusted to $285,000, $525,000 and $245,000, respectively. Each executive's base salary
and other compensation will be reviewed annually by that executive's supervisor. Each executive also participates in our
management incentive plan with an opportunity to receive a bonus payment equal to 50% of his or her base salary. The
Company also agreed to provide each executive with term life insurance coverage with death benefits at least equal to
twice his or her base salary, an automobile allowance and employee benefits comparable to those provided to our other
senior executives.

In the event of the termination of an executive's employment with us due to his death or permanent
disability, we will pay him or his estate:

(1) an amount equal to one year's base salary reduced by any amounts received from any life or
disability insurance provided by us; and

(2) if the executive is entitled to receive a bonus payment under the management incentive plan, a bonus
payment prorated to reflect any partial year of employment.

In the event an executive terminates his employment for good reason or we terminate his employment without
cause, we will pay him:

(1) his base salary and benefits for the earliest to occur of 18 months, his death or the date that he
breaches the provisions of his employee agreement (relating to non-competition, confidentiality and
inventions); and

(2) if the executive is entitled to receive a bonus payment under the management incentive plan, a bonus
payment prorated to reflect any partial year of employment.

If an executive's employment is terminated for cause or by voluntary resignation, he will receive no
further compensation.

Separation Agreements with Mr. Jones and Mr. Farley

The Company entered into a severance agreement with Mr. Jones on November 26, 2002, who resigned on October
24, 2002 (the "Separation Date"). Under the terms of this severance agreement, we agreed to provide to Mr. Jones
severance benefits, including:

(1) his salary for a period of 18 months after the Separation Date;

(2) an award, if any, to him under our Management Incentive Plan for the performance period in which
the Separation Date occurred, subject to a pro rata reduction for the period following the
Separation Date;

(3) an extension of his ability to exercise vested options beyond the period provided for in our 2000 Equity
Incentive Plan;

(4) an aggregate of $10,000 for reasonable attorneys' fees, costs and expenses;

(5) up to $25,000 for reasonable outplacement services until he obtains other employment;

(6) continuing his participation and that of his eligible dependents in our medical and dental plans for 18
months following the Separation Date, if he was enrolled as of the Separation Date, at a level of
coverage no less favorable than that offered to our other executives; and

(7) waiving our exercise of the call right of any securities held by him on the Separation Date.

Mr. Jones also agreed to standard confidentiality, nonsolicitation, nondisparagement and release provisions.

The separation agreement with Mr. Farley has not been completed. The severance agreement to be provided to
Mr. Farley is expected to be substantially comparable to his Employment Agreement described previously.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Following the recapitalization on October 4, 2000, United States Can had one class of issued and
outstanding common stock, and U.S. Can Corporation owned all of it. On December 20, 2002, U.S. Can Corporation amended
its certificate of incorporation to (i) effect a reverse stock split which, upon filing with the Secretary of State of
the State of Delaware, reclassified and converted each preexisting share of common stock and Series A preferred stock
into 1/1000th of a share of common and preferred stock, respectively, and (ii) a corresponding reduction in the number of
its authorized shares of common stock from 100,000,000 shares to 100,000 shares and in the number of its authorized
shares of preferred stock from 200,000,000 shares to 200,000 shares. The reverse stock split did not affect the relative
percentages of ownership for any shareholders.

The following table sets forth certain information with respect to the ownership of U.S. Can Corporation's
common stock as of March 15, 2003. As of March 15, 2003, U.S. Can Corporation had 53,333.333 shares of issued and
outstanding common stock.

U.S. Can Corporation's preferred stock, which has no voting rights other than those provided by Delaware
law, is owned by Berkshire Partners and its co-investors, Salomon Smith Barney and affiliates of Francisco Soler. See
"Certain Relationships and Related Party Transactions--Preferred Stock."

Notwithstanding the beneficial ownership of common stock presented below, the stockholders agreement
entered into upon consummation of the transactions governs the stockholders' exercise of their voting rights with respect
to the election of directors and other material events. The parties to the stockholders agreement have agreed to vote
their shares to elect the Board of Directors as set forth therein. See "Certain Relationships and Related Party
Transactions - Stockholders Agreement."

The following table describes the beneficial ownership, after giving effect to the reverse stock split, of
each class of issued and outstanding common stock of U.S. Can Corporation by each of our directors and executive
officers, our directors and executive officers as a group and each person who beneficially owns more than 5% of the
outstanding shares of common stock of U.S. Can Corporation as of March 15, 2003. As used in the table, beneficial
ownership has the meaning set forth in Rule 13d-3(d)(1) of the Exchange Act.

Beneficial Owner Number of Shares Percent Ownership
---------------- ---------------- -----------------

Berkshire Partners LLC (1)............................................ 41,229.278 77.30%
Paul W. Jones (2) .................................................... 1,961.628 3.68
John L. Workman (2) .................................................. 1,028.294 1.93
Roger B. Farley....................................................... 533.333 1.00
Thomas A. Scrimo (3).................................................. 303.873 *
James J. Poehling (4)................................................. 10.000 *
Francois Vissers (4).................................................. 5.000 *
Carl Ferenbach (5).................................................... 41,229.278 77.30
Richard K. Lubin (5).................................................. 41,229.278 77.30
Philip R. Mengel...................................................... -- *
Francisco A. Soler (6)................................................ 951.485 1.78
Louis B. Susman (7)................................................... 2,613.332 4.90
All officers and directors as a group (17 persons) (8)................ 46,812.745 87.77

- -----------

* Less than 1%

(1) Includes 25,847.737 shares of common stock held by Berkshire Fund V Limited Partnership; 2,584.771 shares of
common stock held by Berkshire Investors LLC; and 12,796.770 shares of common stock held by Berkshire Fund
V Coinvestment Fund, Limited Partnership. The address of Berkshire Partners LLC is One Boston Place, Suite
3300, Boston, Massachusetts 02108.

(2) Includes 28.294 shares subject to currently exercisable options.

(3) Includes 90.540 shares subject to currently exercisable options.

(4) Number of shares represents currently exercisable options.

(5) Mr. Ferenbach and Mr. Lubin are Managing Directors of Berkshire Partners LLC.

(6) Mr. Soler beneficially owns 951.485 shares of U.S. Can Corporation common stock as a result of his relationship
to (i) Windsor International Corporation, a company of which Mr. Soler is a director and executive officer
and which is the record holder of 424.460 shares, (ii) Atlas World Carriers S.A., a company of which
Mr. Soler is a director and executive officer and which is the record holder of 250.172 shares, (iii) The
World Financial Corporation S.A., a company of which Mr. Soler is a director and executive officer and
which is the record holder of 250.172 shares, and (iv) Scarsdale Company N.V., Inc., a company of which
Mr. Soler is an executive officer and which is the record holder of 26.681 shares.

(7) Mr. Susman is the Vice Chairman of Investment Banking and Managing Director of Salomon Smith Barney Inc.
Salomon Smith Barney owns 2,613.332 shares of common stock.

(8) Includes 271.983 shares subject to currently exercisable options.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Relationship with Berkshire Partners

Mr. Lubin and Mr. Ferenbach are managing directors of Berkshire Partners. Mr. Mengel is Chief Executive
Officer of a Berkshire Partners portfolio company. Upon the completion of the recapitalization, Berkshire Partners
received a fee of $2.0 million. In addition, Berkshire Partners will receive a management fee of $750,000 per year.

Relationship with Salomon Smith Barney

Salomon Smith Barney currently beneficially owns 4.62% of the Company's common stock and provides
investment banking and financial advisory services. Salomon Smith Barney was paid $2.0 million in fees for financial
advisory services provided in connection with the recapitalization. Mr. Susman is Vice Chairman of Investment Banking and
Managing Director of Salomon Smith Barney Inc. The Company did not make any payments to Salomon Smith Barney in 2001 or
2002 and has not agreed to make any payments to it in 2003.

Stockholders Agreement

In connection with the recapitalization, the Company entered into a stockholders agreement with
stockholders which provides for, among other things, certain restrictions and rights related to the transfer, sale or
purchase of common stock and preferred stock. The stockholders agreement has the following provisions:

o Prior to the third anniversary of the closing of the recapitalization, no stockholder may transfer
shares of U.S. Can Corporation capital stock (other than limited exceptions including permitted
transfers to an affiliate or in connection with estate planning).

o After the third anniversary of the closing of the recapitalization, a stockholder may only transfer
shares of U.S. Can Corporation capital stock (other than limited exceptions including permitted
transfers to an affiliate or in connection with estate planning) after the transferring stockholder
first gives U.S. Can Corporation, and then the other stockholders on a pro rata basis, a right of first
refusal to purchase all or a portion of the shares at the same price.

o U.S. Can Corporation has the right to purchase U.S. Can Corporation equity securities held by a
management stockholder (as defined) in the event the management stockholder's employment with U.S. Can
Corporation is terminated for any reason.

o If a management stockholder's employment with U.S. Can Corporation is terminated by virtue of death,
disability or retirement in accordance with U.S. Can Corporation policy, the management stockholder will
have the right to require U.S. Can Corporation to purchase his or her equity securities of U.S. Can
Corporation.

o If, at any time, specified stockholders holding 75% of the outstanding common stock equivalents (as
defined) (i.e., Berkshire Partners, its affiliates and another stockholder) elect to consummate the sale
of 50% or more of the common stock of U.S. Can Corporation to an unaffiliated third party, the remaining
stockholders will be obligated to consent to and take all actions necessary to complete the proposed
sale of the same proportion of their stock on the same terms.

o After the third anniversary of the closing of the recapitalization, a stockholder (or a group of
stockholders together) owning more than 4% of the outstanding shares of U.S. Can Corporation capital
stock may only (other than in connection with estate planning transfers) transfer the shares to an
unaffiliated third party, so long as other stockholders are given the option to participate in the
proposed transfer on the same terms and conditions on a pro rata basis (except in connection with
transfers permitted by the stockholders agreement).

o The stockholders have agreed to elect directors of U.S. Can Corporation such that the Board of Directors
will consist of two designees of Berkshire and its affiliates so long as the Berkshire stockholders
maintain ownership of at least 25% of the U.S. Can Corporation common stock, two designees of management
stockholders, Louis Susman, Ricardo Poma, Francisco Soler (or another designee of the Scarsdale Group if
Francisco Soler and Ricardo Poma both no longer serve on the Board of Directors so long as the Scarsdale
Group owns at least 5% of the U.S. Can Corporation common stock) and up to two other independent
directors acceptable to the other directors. Mr. Poma resigned from membership on the Board in April
2001 and chose not to designate a replacement.

o Following an initial public offering of U.S. Can Corporation common stock, specified stockholders will
have either one or two demand registration rights. The stockholders will be entitled to "piggy-back"
registration rights on all registrations of U.S. Can Corporation common stock by U.S. Can Corporation or
any other stockholder, subject to customary underwriter cutback.

o So long as U.S. Can Corporation is not paying default interest under any of its financing arrangements,
an 80% vote of the common stockholders will be required to approve and adopt mergers, acquisitions,
charter or bylaw amendments, extraordinary borrowings, dividends, stock issuances and other specified
matters. An 80% vote will be required at all times for a financial restructuring that treats the
management stockholders differently and adversely from the rest of the common stockholders.

o Stockholders have pre-emptive rights to subscribe for newly issued shares on a pro rata basis, subject
to certain exclusions.

o Most of the restrictions contained in the stockholders agreements terminate upon consummation of a
qualified initial public offering of common stock by U.S. Can Corporation or specified changes in
control of U.S. Can Corporation.

Preferred Stock

As part of the recapitilization transactions, U.S. Can Corporation issued and sold in a private placement
shares of preferred stock having an aggregate value of $106.7 million to Berkshire Partners and its affiliates and the
rollover stockholders. The principal terms of the preferred stock are summarized below. This summary, however, is not
complete and is qualified in its entirety by reference to the provisions of U.S. Can Corporation's certificate of
incorporation, as in effect at the time of the closing of the transactions.

Dividends. Dividends accrue on the preferred stock at an annual rate of 10%, are cumulative from the date
of issuance and compounded quarterly, on March 31, June 30, September 30 and December 31 of each year and are payable in
cash when and as declared by our Board of Directors, so long as sufficient cash is available to make the dividend payment
and has been obtained in a manner permitted under the terms of our senior secured credit facility and the indenture.

Voting Rights. Holders of the preferred stock have no voting rights, except as otherwise required by law.

Ranking. The preferred stock has a liquidation preference equal to the purchase price per share, plus all
accrued and unpaid dividends. The preferred stock ranks senior to all classes of U.S. Can Corporation common stock and is
not convertible into common stock.

Redemption. U.S. Can Corporation is required to redeem the preferred stock, at the option of the holders,
at a price equal to its liquidation preference, plus accrued and unpaid dividends, upon the occurrence of any of the
following events and so long as sufficient cash is available at U.S. Can or available from dividend payments permitted
under the terms of the indenture:

o the bankruptcy of either U.S. Can Corporation or United States Can Company;

o the acceleration of debt under any major loan agreement to which U.S. Can Corporation or any of its
subsidiaries is a party; or

o public offerings of shares of capital stock of U.S. Can Corporation.

No holder of preferred stock, however, may require U.S. Can Corporation to redeem the preferred stock if
doing so would cause the bankruptcy of U.S. Can Corporation or United States Can Company or a breach of the indenture. In
addition, if proceeds from public offerings of U.S. Can Corporation's stock are insufficient to redeem all of the shares
of the preferred stock that the holders wish to be redeemed, U.S. Can Corporation is required to redeem the remaining
shares at a price equal to its liquidation preference, 366 days after the tenth anniversary of the closing of the
transactions or the payment in full of the notes and the debt outstanding under the senior secured credit facility,
whichever is earlier.

U.S. Can Corporation's certificate of incorporation expressly states that any redemption rights of holders
of preferred stock shall be subordinate or otherwise subject to prior rights of the lenders under our senior secured
credit facility and the holders of the exchange notes.

Upon a change of control of U.S. Can Corporation (as defined in the indenture), the shares of preferred
stock may be redeemed at the option of either the holders or U.S. Can Corporation, subject to the terms of our senior
secured credit facility and after the holders of the notes have been made and completed the requisite offer to repurchase
following a change of control under the indenture.

The senior secured credit facility prohibits our ability to redeem the preferred stock, and the indenture
restricts U.S. Can Corporation's ability to obtain funds that may be necessary to redeem the preferred stock.

PART IV

ITEM 14. CONTROLS AND PROCEDURES

Within the 90-day period prior to the date of this report, under the supervision and with the participation of the Chief Executive
Officer and the Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934. Based on and as
of the time of such evaluation, the Company's management, including the Chief Executive Officer and the Chief Financial
Officer, concluded that the Company's disclosure controls and procedures are effective and timely in alerting them to
material information relating to the Company required to be included in the Company's reports filed or submitted under
the Exchange Act. There have been no significant changes in the Company's internal controls or in other factors which
could significantly affect internal controls subsequent to the time of such evaluation.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) (1) Financial Statements commence on p. 22.

(2) Financial Statement Schedules

All schedules are omitted as they are inapplicable or not required, or the required information
is included in the financial statements or in the notes thereto.

(3) Exhibits: A list of Exhibits is included in the Exhibit Index, which appears following the
signature pages and is incorporated by reference herein.

(i) Reports on Form 8-K

The Company filed a Current Report on Form 8-K on October 25, 2002 reporting that on October 24, 2002, Paul Jones
had resigned as Chief Executive Officer and Chairman of the Board of the Company and from all other management and board
positions with the Company and its subsidiaries.

(j) See Item 15 (a) (3) above.

(d) See Item 15 (a) (2) above.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March
26, 2003.

U.S. CAN CORPORATION

By: /s/ Sandra K. Vollman
-------------------------------------------------

Sandra K. Vollman
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

Each of the undersigned officers and directors of U.S. Can Corporation hereby severally constitutes and
appoints and each of them singly, his or her true and lawful attorneys with full power to them, and each of them singly,
to execute on behalf of the undersigned in the capacities indicated below any and all amendments to this Report on Form
10-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report and power of attorney
have been signed below by the following persons in the capacities and on the date indicated.

Signature Title
- --------- -----

/s/ Carl Ferenbach Director and Chairman of the Board
- -----------------------------------------------------
Carl Ferenbach

/s/ John L. Workman Director and Chief Executive Officer
- -----------------------------------------------------
John L. Workman

/s/ Sandra K. Vollman Senior Vice President and Chief Financial Officer
- -----------------------------------------------------
Sandra K. Vollman

/s/ Richard K. Lubin Director
- -----------------------------------------------------
Richard K. Lubin

/s/ Philip R. Mengel Director
- -----------------------------------------------------
Philip R. Mengel

/s/ Francisco A. Soler Director
- -----------------------------------------------------
Francisco A. Soler

/s/ Louis B. Susman Director
- -----------------------------------------------------
Louis B. Susman

Dated: March 26, 2003

CERTIFICATIONS

Chief Executive Officer Certification
-------------------------------------

I, John L. Workman, certify that:

1. I have reviewed this annual report on Form 10-K of U.S. Can Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual
report, fairly present in all material respects the financials condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
days prior to the filing date of this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent function);

a) all significant deficiencies in the design or operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this annual report whether or not there
were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.

Date: March 26, 2003

/s/ John L. Workman
-------------------

John L. Workman
Chief Executive Officer

Chief Financial Officer Certification
-------------------------------------

I, Sandra K. Vollman, certify that:

1. I have reviewed this annual report on Form 10-K of U.S. Can Corporation;

a. designed such disclosure controls and procedures to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
days prior to the filing date of this annual report (the "Evaluation Date"); and

c. presented in this annual report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

a. all significant deficiencies in the design or operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and

b. any fraud, whether or not material, that involves management or other employees who have significant role
in the registrant's internal controls; and

Date: March 26, 2003

/s/ Sandra K. Vollman
----------------------

Sandra K. Vollman
Senior Vice President and
Chief Financial Officer

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are either filed with this registration statement or incorporated by reference:

Exhibit
Number ................Exhibit Description

2.1 Agreement and Plan of Merger (the "Merger Agreement ") dated as of June 1, 2000 between U.S. Can Corporation and
Pac Packaging Acquisition Corporation (Exhibit 2 to the current report on Form 8-K, filed on June 15, 2000).(1)
2.2 First Amendment to Merger Agreement dated as of June 28, 2000 (Exhibit 2.2 to the current report on Form 8-K,
filed on June 30, 2000).(1)
2.3 Second Amendment to Merger Agreement dated as of August 22, 2000 (Exhibit 2.3 to the current report on Form 8-K,
filed on August 31, 2000).(1)
3.1 Restated Certificate of Incorporation of U.S. Can Corporation (Exhibit 3.1 to the registration statement on Form
(No. 333-53276), declared effective on March 5, 2001).(1)
3.2 Amended and Restated By-laws of U.S. Can Corporation (Exhibit 3.2 to the registration statement on Form (No.
333-53276), declared effective on March 5, 2001).(1)
3.3 Restated Certificate of Incorporation of United States Can Company (Exhibit 3.3 to the registration statement on
Form (No. 333-53276), declared effective on March 5, 2001).(1)
3.4 Amended and Restated By-laws of United States Can Company (Exhibit 3.4 to the registration statement on Form (No.
333-53276), declared effective on March 5, 2001).(1)
3.5 Certificate of Incorporation of USC May Verpackungen Holding Inc (Exhibit 3.5 to the registration statement on
Form (No. 333-53276), declared effective on March 5, 2001).(1)
3.6 By-Laws of USC May Verpackungen Holding Inc (Exhibit 3.6 to the registration statement on Form (No. 333-53276),
declared effective on March 5, 2001).(1)
4.1 Indenture dated as of October 4, 2000 between the Company and Bank One Trust Company, N.A., as Trustee (Exhibit
4.1 to the current report on Form 8-K, filed on October 18, 2000).(1)
10.1 Credit Agreement dated as of October 4, 2000, among United States Can Company, the guarantors and Bank of
America, N.A. and the other financial institutions listed therein, as Lenders (Exhibit 10.1 to the current report
on Form 8-K, filed on October 18, 2000).(1)
10.2 Pledge Agreement dated as of October 4, 2000 among U.S. Can Corporation, United States Can Company, each of the
domestic subsidiaries of United States Can Company and Bank of America, N.A (Exhibit 10.2 to the registration
statement on Form (No. 333-53276), declared effective on March 5, 2001).(1)
10.3 Security Agreement dated as of October 4, 2000 among U.S. Can Corporation, United States Can Company, each of the
domestic subsidiaries of United States Can Company and Bank of America, N.A (Exhibit 10.3 to the registration
statement on Form (No. 333-53276), declared effective on March 5, 2001).(1)
10.4 Sublease Agreement, dated 2/10/89, relating to the Commerce, CA property (Exhibit 10.10 to the quarterly report
on Form 10-Q for the quarter ended April 6, 1997, filed on May 20, 1997).(1)
10.5 Lease Agreement, dated 1/1/76, as amended, relating to the Weirton, WV property (Exhibit 10.11 to the quarterly
report on Form 10-Q, for the quarter ended April 6, 1997, filed on May 20, 1997).(1)
10.6 First Amendment to Credit Agreement dated as of April 1, 2001 (Exhibit 10.27 to the quarterly report on Form 10-Q
for the period ended April 1, 2001, filed on May 15, 2001). (1)
10.7 Amendment No. 4 to the Lease Agreement, dated 1/1/76, as amended, relating to the Weirton, WV property (Exhibit
10.7 to the registration statement on Form (No. 333-53276), declared effective on March 5, 2001).(1)
10.8 Lease relating to Dragon Parc Industrial Estate, Merthyr Tydfil, Wales, dated November 27, 1996 (Exhibit 10.24 to
the annual report on Form 10-K for the fiscal year ended December 31, 1996, filed on March 26, 1997).(1)
10.9 Nonqualified Supplemental 401(k) Plan (Exhibit 10.33 to the annual report on Form 10-K for the fiscal year ended
December 31, 1995, filed on March 26, 1996).(1)
10.10 Nonqualified Benefit Replacement Plan (Exhibit 10.34 to the annual report on Form 10-K for the fiscal year ended
December 31, 1995, filed on March 26, 1996).(1)

Exhibit
Number ................Exhibit Description

10.11 Lease Agreement between May Grundbesitz GmbH & Co. KG and May Verpackungen GmbH & Co. KG (Exhibit 10.1 to the
quarterly report on Form 10-Q for the quarter ended July 2, 2000, filed on August 15, 2000).(1)
10.12 Amendment No. 3 to the Lease Agreement, dated 1/1/76, as amended, relating to the Weirton, WV property (Exhibit
10.55 to the annual report on Form 10-K for the fiscal year ended December 31, 1995, filed on March 26, 1996).(1)
10.13 Employment Agreement dated October 4, 2000 by and among John L. Workman, United States Can Company and U.S. Can
Corporation (Exhibit 10.14 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.14 Lease Agreement dated June 15, 2000, related to Atlanta, GA plastics facility (Exhibit 10.15 to the annual report
on Form 10-K for the fiscal year ended December 31, 2001, filed on March 22, 2002). (1)
10.15 Employment Agreement dated October 4, 2000 by and among Roger B. Farley, United States Can Company and U.S. Can
Corporation (Exhibit 10.16 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.16 Employment Agreement dated October 4, 2000 by and among Thomas A. Scrimo, United States Can Company and U.S. Can
Corporation (Exhibit 10.18 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.17 U.S. Can Corporation Executive Deferred Compensation Plan (Exhibit 10.30 to the annual report on Form 10-K for
the fiscal year ended December 31, 1998, filed on March 31, 1999).(1)*
10.18 Amendment No. 1 to the U.S. Can Corporation Executive Deferred Compensation Plan, dated as of October 4, 2000
(Exhibit 10.23 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.19 U.S. Can Corporation 2000 Equity Incentive Plan (Exhibit 10.24 to the registration statement on Form S-4 (No.
333-53276), filed January 5,2001).(1)*
10.20 United States Can Company Executive Severance Plan, dated as of October 13, 1999 (Exhibit 10.34 to the annual
report on Form 10-K for the fiscal year ended December 31, 1999, filed on March 30, 2000).(1)*
10.21 U.S. Can Corporation Stockholders Agreement, dated as of October 4, 2000 (Exhibit 10.26 to the registration
statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.22 Berkshire Fee Letter dated December 18, 2001 (Exhibit 10.27 to the annual report on Form 10-K for the fiscal
year ended December 31, 2001, filed on March 22, 2002). (1)
10.23 Second Amendment to Credit Agreement dated December 18, 2001 (Exhibit 10.28 to the annual report on Form 10-K
for the fiscal year ended December 31, 2001, filed on March 22, 2002). (1)
10.24 Sale Agreement of the Scotts Road, Southall, United Kingdom factory premises dated December 18, 2001 (Exhibit
10.29 to the annual report on Form 10-K for the fiscal year ended December 31, 2001, filed on March 22, 2002). (1)
10.25 Compromise Agreement and General Release between the Company and David R. Ford dated June 30, 2002. (Exhibit
10(a) to the quarterly report on Form 10-Q, for the quarter ended September 29, 2002, filed on November 12,
2002).(1)*
10.26 Compromise Agreement and General Release between the Company an J. Michael Kirk dated October 16, 2002
(Exhibit 10(b) to the quarterly report on Form 10-Q, for the quarter ended September 29, 2002, filed on November
12, 2002).(1)*
10.27 Separation Agreement and General Release between the Company and Paul W. Jones dated November 26, 2002
(filed herewith).*
10.28 Amendment No. 1 to the U.S. Can Corporation Nonqualified Supplemental 401(k), dated as of February 25,
2002 (filed herewith).
99.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350
99.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350

21 Subsidiaries of the Registrant (filed herewith).
22 Power of Attorney (included as part of the Signature Pages).
................
- --------------------------------------------------------------------------------
(1) Incorporated by reference.
(b) Other financial statement schedules are omitted because the information called for is not required or is shown either
in the financial statements or the accompanying notes.
* Indicates a management contract or compensatory plan or arrangement.

EX-10 3 ex200210k_jones-agreement.htm JONES SEPARATION AGREEMENT Jones Separation Agreement

November 26, 2002



Dear Paul:

         You have resigned your employment, and all positions and offices (including, without limitation, all
positions on the Boards of Directors) held, with each of U.S. Can Corporation ("Holdings"), United States Can
                                                                                --------
Company ("USC") and their respective subsidiaries (collectively with Holdings and USC, the "Companies"), and the
          ---                                                                               ---------
Companies have accepted your resignation, effective as of October 24, 2002 (the "Separation Date").  The purpose
                                                                                 ---------------
of this letter is to confirm the agreement between you and the Companies concerning your severance arrangements,
as follows:

         1.       Final Salary and Vacation Pay.  You acknowledge that you have received pay for all work you have
                  -----------------------------
performed for the Companies through the Separation Date, to the extent not previously paid.  You will also be paid,
to the extent not previously paid, at your final base rate of pay, for the 25 vacation days you had earned, but not
used, as of the Separation Date determined in accordance with Companies' policies and as reflected on the books of
the Companies.

         2.       Severance Benefits.  In consideration of your acceptance of this Agreement and subject to your
                  ------------------
meeting in full your obligations under it and the Employee Agreement between you and USC which you signed on
October 4, 2000 (the "Employee Agreement"), the Companies will provide you the following severance pay and
                      ------------------
benefits:

                  (a)      USC will pay you your salary, at your final base rate, for the period of eighteen (18)
months following the Separation Date (the "Severance Pay Period").  Payments will made in the form of salary
                                           --------------------
continuation and will begin on the next regular payday for USC which is at least five business days following the
later of the effective date of this Agreement or the date this Agreement, signed by you, is received by USC.  The
first payment will be retroactive to the day following the Separation Date.

                  (b)  In the event of your death prior to the conclusion of the Severance Pay Period, USC will
pay to the beneficiary you designate in writing or, if none, to your spouse, or if your spouse does not survive
you, to your estate, the remainder of any salary continuation not yet paid to you under paragraph 2(a) above on
the payment dates such payments would have otherwise been made to you under paragraph 2(a) above.

                  (c)  USC will pay you an award, if any, under the Management Incentive Plan of USC for the
performance period in which the Separation Date occurred, based on actual performance for the entire period;
provided, however, that such award will be subject to a pro rata reduction to reflect the portion of the
performance period following the Separation Date.  The actual amount of any such award shall be determined in
accordance with the formulas for the 2002 bonus awards agreed upon by management and the Compensation Committee
of the Board of Directors and outlined in the 2002 Management Incentive Plan.  Payment of the award, if any,
shall be made at the regularly scheduled time for payment of such amounts to active employees.

                  (d)  Your rights and obligations with respect to any stock options granted to you by Holdings which had
 vested as of the Separation Date shall be governed by the U.S. Can Corporation 2000 Equity Incentive Plan, as in effect
 on the date hereof (the "Equity Incentive Plan"), the option certificates issued thereunder and any agreements or other
                          ---------------------
 requirements applicable to those options; provided, however, that the 105 day period set forth in Section 7(b)(i) of the
 Equity Incentive Plan shall be extended to the earliest of (a) the tenth anniversary of the date of the option grant, or
 (b) the termination of the option in accordance with (i) the certificate pursuant to which it was issued, (ii) the
 Stockholders Agreement of Holdings dated as of October 4, 2000 (the "Stockholders Agreement"), or (iii) the Equity
                                                                      ----------------------
 Incentive Plan (other than Section 7(b)(i) thereof).  All stock options which are unvested as of the Separation Date have
 been cancelled as of that date and you agree to return, no later than the effective date of this Agreement, the stock
 option certificates for all stock options granted you which were unvested on the Separation Date.  You will continue to
 hold all vested options and common stock of Holdings held by you or your Permitted Transferees (as defined in the
 Stockholders Agreement), pursuant to the terms of the Stockholders Agreement.  A list of such vested options and common
 stock is set forth on Exhibit A hereof.  You hereby agree, however, that as of the Separation Date, for all purposes of
 the Stockholders Agreement, you and your Permitted Transferees shall each be deemed to be an "Other Stockholder" rather
 than a "Management Stockholder" and that  from time to time after the date hereof, at the request of  Holdings and
 without further consideration, you shall execute and deliver further instruments and take such other actions, as Holdings
 may reasonably require, to more effectively evidence such designation.

                  (e)  USC agrees to pay for reasonable attorneys' fees, costs and expenses, up to an aggregate of
$10,000, incurred in connection with the review and negotiation of this Agreement for you.  Payments under this Section
2(e) shall be made by USC upon the submission to USC of documentation reasonably satisfactory to USC evidencing the
incurrence of such attorneys' fees, costs and expenses.

                  (f)  USC agrees to pay for costs and expenses of reasonable outplacement services, up to $25,000, until
you obtain other employment.  Payments under this Section 2(f) shall be made by USC to the outplacement vendor upon the
submission to USC of documentation reasonably satisfactory to USC evidencing the incurrence of such costs and expenses.
You may begin using the outplacement services after the expiration of the revocation period set forth in the last
paragraph of this Agreement, unless you have timely revoked this Agreement.

                  (g)  If you were enrolled in the Companies' medical and dental plans on the Separation Date, the
Companies' will continue your participation and that of your eligible dependents in those plans during the Severance Pay
Period, at a level of coverage no less favorable than that being offered to executives of the Companies generally.  After
the Severance Pay Period, you may elect to continue your participation and that of your eligible dependents in those
plans for a period of time under the federal law known as "COBRA" by paying the full premium cost of such coverage plus a
small administrative fee.

         (h)  Holdings agrees to waive its rights to call, pursuant to Section 2.2 of the Stockholders Agreement, any
securities of Holdings held by you on the Separation Date.

         3.       Withholding.   All payments made by the Companies under this Agreement shall be reduced by any tax or
                  -----------
other amounts required to be withheld by the Companies under applicable law and all other deductions authorized by you.

         4.       Acknowledgement of Full Payment.   You acknowledge and agree that the payments provided under paragraph
                  -------------------------------
1 of this Agreement are in complete satisfaction of any and all compensation due to you from any of the Companies,
whether for services provided to the Companies or otherwise, through the Separation Date and that, except as expressly
provided under this Agreement, no further compensation is owed to you.

         5.       Status of Employee Benefits, Paid Time Off.  Except as expressly provided in clause (g) of Section 2,
                  ------------------------------------------
your participation in all employee benefit plans of the Companies has ended as of the Separation Date, in accordance with
the terms of those plans; provided, however, that your rights under the U.S. Can Company Salaries Employees Savings and
Retirement Accumulation Plan, the U.S. Can Company Non-Qualified 401(k) Plan and the U.S. Can Company Benefit Replacement
Plan after the Separation Date will be governed by the terms and conditions of such benefit plans.  Also, you will not
continue to earn vacation or other paid time off after the Separation Date.

         6.       Performance by the Companies.  Where this Agreement requires performance by the Companies, such
                  ----------------------------
performance may be rendered by Holdings or USC or any of their respective subsidiaries, or any combination thereof, as
the Companies in their sole discretion shall determine.

         7.       Confidentiality, Non-Disparagement and No Solicitation.
                  ------------------------------------------------------

                  (a)      You agree that you will continue to protect Confidential Information, as defined herein, and
that you will not use or disclose any Confidential Information, directly or indirectly, unless approved in writing, in
advance, by the Board of Directors of Holdings; provided, however, that disclosure of Confidential Information (i) to
executives of Holdings or USC holding the title of Senior Vice President, or any such person's superior, or (ii) to any
member of the Board of Directors of Holdings or USC, in any such case, who requests information from you in such person's
capacity as an executive officer or director of Holdings or USC, shall not be a violation of this Section 7(a).  As used
in this Agreement, "Confidential Information" means any and all information of the Companies and their affiliates that is
                    ------------------------
not generally known to others with whom any of them competes or does business or with whom any of them plans to compete
or do business.  Confidential Information also includes all information received by the Companies or any of their
affiliates from customers or other third parties with any understanding, express or implied, that the information would
not be disclosed.

                  (b)      You agree that until such time as this Agreement may become publicly filed by USC, you will not
disclose this Agreement or any of its terms or provisions, directly or by implication, except to members of your
immediate family and to your legal, financial and tax advisors, and then only on condition that they agree not to further
disclose this Agreement or any of its terms or provisions to others.  You also agree that, during the Severance Pay
Period and thereafter, you will not disparage or criticize any of the Companies, their businesses, their management or
products, and that you will not otherwise do or say anything that could reasonably be expected to disrupt the good morale
of the Companies' employees or harm the interests or reputation of any of the Companies.  By execution hereof, you
acknowledge and agree that your resignation did not result from any disagreement with Holdings, USC or any of their
respective subsidiaries or affiliates on any matter relating to the operations, policies or practices of Holdings, USC or
any of their respective subsidiaries or affiliates.

                  (c)      You agree that during the period commencing on the date hereof and ending October 23, 2004, you
will not, directly or indirectly, solicit, induce or entice any individual who was an employee of any of the Companies as
of October 24, 2002 ("Covered Employees") to terminate his or her employment relationship with any of the Companies.
                      -----------------
Notwithstanding the prior sentence, you are not prohibited from hiring any Covered Employee so long as you did not
initiate contact with such Covered Employee for purposes of such hiring and did not, directly or indirectly, solicit,
induce or entice such Covered Employee to terminate his or her employment relationship with any of the Companies.

         8.       Return of Documents and Other Property.   In signing this Agreement, you represent and warrant that you
                  --------------------------------------
have returned to the Companies any and all documents, materials and information (whether in hardcopy, on electronic media
or otherwise) related to the business (whether present or otherwise) of the Companies or any of their affiliates (other
than (a) personal documents related to your employment arrangements, termination arrangements, compensation and benefits,
in each case, with the Companies and only to the extent the Companies retain copies of such information, and (b) your
personal contact lists) (collectively, the "Information") and all keys, access cards, credit cards, computer hardware and
                                            -----------
software, telephones and telephone-related equipment and all other property of the Companies or any of their affiliates
in your possession or control.  Further, you represent and warrant that you have not retained any copy of any Information
(whether in hardcopy, on electronic media or otherwise) of the Companies or any of their affiliates.  Recognizing that
your employment with the Companies has ended, you agree that you will not, for any purpose, attempt to access or use any
computer or computer network or system of any of them.  Further, you acknowledge that you have disclosed to the Companies
all passwords necessary or desirable to enable the Companies to access all information which you have password-protected
on any of their computer equipment or on their computer network or systems.

         9.       Employee Cooperation.  You agree to cooperate with the Companies hereafter with respect to all matters
                  --------------------
arising during or related to your employment, including but not limited to all matters in connection with any
governmental investigation, litigation or regulatory or other proceeding which may have arisen or which may arise
following the signing of this Agreement.  The Companies will reimburse your reasonable expenses incurred in complying
with the Companies' requests hereunder, provided such expenses are authorized by the Companies in advance.

         10.      Release of Claims.
                  -----------------

                  (a)      In exchange for the severance benefits provided to you under this Agreement to which you are
not otherwise entitled, and as an express condition thereof, you, on your own behalf and that of your heirs, executors,
administrators, beneficiaries, personal representatives and assigns, agree that this Agreement shall be in complete and
final settlement of any and all causes of action, rights or claims, whether known or unknown, that you have had in the
past, now have, or might now have, in any way related to, connected with or arising out of your employment with the
Companies or pursuant to the termination of such employment or  pursuant to Title VII of the Civil Rights Act, the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the fair employment practices statutes of the
state or states in which you have provided services to the Companies or any other federal, state or local law, regulation
or other requirement and you hereby release and forever discharge the Companies and their affiliates and all of their
respective past, present and future directors, shareholders, officers, members, managers, general and limited partners,
employees, agents, representatives, successors and assigns, and all others connected with any of them, both individually
and in their official capacities, from any and all such causes of action, rights or claims.  Excluded from the scope of
this release of claims are any rights you have under this Agreement after the effective date hereof.

                  (b)      This Agreement, including the release of claims set forth the paragraph immediately above,
creates legally binding obligations and the Companies therefore advise you to consult an attorney before signing this
Agreement.  In signing this Agreement, you give the Companies assurance that you have signed it voluntarily and with a
full understanding of its terms; that you have had sufficient opportunity, before signing this Agreement, to consider its
terms and to consult with an attorney, if you wished to do so, or to consult with any other of those persons to whom
reference is made in the first sentence of paragraph 7(b) above; and that, in signing this Agreement, you have not relied
on any promises or representations, express or implied, that are not set forth expressly in this Agreement.

         11.      Miscellaneous.
                  -------------

                  (a)      This Agreement constitutes the entire agreement between you and the Companies and
supersedes all prior and contemporaneous communications, agreements and understandings, whether written or oral,
with respect to your employment, its termination and all related matters, including, without limitation, the
Employment Agreement dated October 4, 2000 among you, Holdings and USC, and excluding only the Employee Agreement
and your rights and obligations, and those of Holdings, with respect to the securities of Holdings (including,
without limitation, pursuant to the terms of the Stockholders Agreement), all of which shall remain in full force
and effect in accordance with their terms.

                  (b)      This Agreement shall be governed by and construed in accordance with the domestic substantive
laws of Illinois, without giving effect to any choice or conflict of law provision or rule that would cause the
application of the laws of any other jurisdiction.

                  (c)      This Agreement may not be modified or amended, and no breach shall be deemed to be
waived, unless agreed to in writing by you and the Chairman of the Board of each of Holdings and USC or his
expressly authorized designee. The captions and headings in this Agreement are for convenience only and in no way
define or describe the scope or content of any provision of this Agreement.

                  (d)      The obligation of the Companies to make payments to you or on your behalf under this
Agreement is expressly conditioned upon your continued full performance of your obligations under this Agreement,
the Employee Agreement and the Stockholders Agreement.

         If the terms of this Agreement are acceptable to you, please sign, date and return it to Holdings within
twenty-one days of the date you receive it.  You may revoke this Agreement at any time during the seven-day period
immediately following the date of your signing.  If you do not revoke it, then, at the expiration of that seven-day
period, this letter will take effect as a legally-binding agreement between you and the Companies on the basis set forth
above.  The enclosed copy of this letter, which you should also sign and date, is for your records.

                                                     Sincerely,

                                                     U.S. CAN CORPORATION

                                                     By:         /s/ John Workman
                                                              -------------------
                                                                       Name: John Workman
                                                              Title: Chief Operating Officer


                                                     UNITED STATES CAN COMPANY

                                                     By:          /s/ John Workman
                                                              --------------------
                                                                       Name: John Workman
                                                              Title: Chief Operating Officer

Accepted and agreed:


/s/ Paul Jones
- --------------    ----------
  Paul Jones


Date: November 26, 2002
      -----------------





                                                                                                                  EXHIBIT A

                                              Vested Options and Common Stock
                                              -------------------------------


- ----------------------------------------------------------------------------------------------- ----------------------
Vested Shares of Time Equity                                                                              1,133,334.0
- ----------------------------------------------------------------------------------------------- ----------------------
- ----------------------------------------------------------------------------------------------- ----------------------
Vested Shares of Performance Equity (subject to earnings determination)                                     800,000.0
- ----------------------------------------------------------------------------------------------- ----------------------
- ----------------------------------------------------------------------------------------------- ----------------------
Vested Time Options                                                                                          28,293.6
- ----------------------------------------------------------------------------------------------- ----------------------
- ----------------------------------------------------------------------------------------------- ----------------------
Vested Performance Options (subject to earnings determination)                                               56,587.2
- ----------------------------------------------------------------------------------------------- ----------------------

EX-10 4 ex200210k_srap-amendment.htm SRAP AMENDMENT SRAP Amendment

                                                UNITED STATES CAN COMPANY
                                        SALARIED EMPLOYEES SAVINGS AND RETIREMENT
                                                    ACCUMULATION PLAN










                                             Amendment and Restatement as of
                                                     January 1, 1997











                                                UNITED STATES CAN COMPANY
                                        SALARIED EMPLOYEES SAVINGS AND RETIREMENT
                                                    ACCUMULATION PLAN





Pursuant to  resolutions  duly  adopted by the Board of  Directors of United  States Can  Company,  the United  States Can
Company Salaried  Employees Savings and Retirement  Accumulation Plan as amended and restated effective January 1, 1997 is
hereby adopted as of February 25, 2002.








                                                              United States Can Company





Date:___2/25/02____________________                           By:__/s/_Roger B. Farley________
        ---------------------------                                ---------------------------











                                                UNITED STATES CAN COMPANY
                                        SALARIED EMPLOYEES SAVINGS AND RETIREMENT
                                                    ACCUMULATION PLAN


                                                    Table of Contents
                                                    -----------------
                                                       (Continued)


                                                UNITED STATES CAN COMPANY
                                        SALARIED EMPLOYEES SAVINGS AND RETIREMENT
                                                    ACCUMULATION PLAN


                                                    Table of Contents
                                                    -----------------


ARTICLE 1.  DEFINITIONS...........................................................................................1
   1.01    "Accounts".............................................................................................1
   1.02    "Actual Deferral Percentage"...........................................................................1
   1.03    "Adjustment Factor"....................................................................................1
   1.04    "Affiliated Employer"..................................................................................1
   1.05    "After-Tax Contributions"..............................................................................2
   1.06    "Annuity Starting Date"................................................................................2
   1.07    "Beneficiary"..........................................................................................2
   1.08    "Board of Directors"...................................................................................2
   1.09    "Break in Service".....................................................................................2
   1.10    "Catch-up Contribution"................................................................................2
   1.11    "Code".................................................................................................2
   1.12    "Committee"............................................................................................2
   1.13    "Company"..............................................................................................2
   1.14    "Compensation".........................................................................................2
   1.15    "Contribution Percentage"..............................................................................3
   1.16    "Deferred Account".....................................................................................3
   1.17    "Deferred Cash Contributions"..........................................................................3
   1.18    "Disability"...........................................................................................4
   1.19    "Earnings".............................................................................................4
   1.20    "Effective Date".......................................................................................4
   1.21    "Employee".............................................................................................4
   1.22    "Employer".............................................................................................4
   1.23    "Employer Account".....................................................................................4
   1.24    "Employer Contributions"...............................................................................4
   1.25    "ERISA"................................................................................................4
   1.26    "Fund" or "Investment Fund"............................................................................5
   1.27    "Highly Compensated Employee"..........................................................................5
   1.28    "Hour of Service"......................................................................................6
   1.29    "Leased Employee"......................................................................................9
   1.30    "Leave of Absence".....................................................................................9
   1.31    "Matching Contributions"...............................................................................9
   1.32    "Month of Service".....................................................................................9
   1.33    "Participant"..........................................................................................9
   1.34    "Participant Account"..................................................................................9
   1.35    "Plan"................................................................................................10
   1.36    "Plan Year"...........................................................................................10
   1.37    "Qualified Joint and Survivor Annuity"................................................................10
   1.38    "Rollover Account"....................................................................................10
   1.39    "Rollover Contributions"..............................................................................10
   1.40    "Severance Date"......................................................................................10
   1.41    "Spousal Consent".....................................................................................10
   1.42    "Statutory Compensation"..............................................................................10
   1.43    "Transferred Contribution"............................................................................11
   1.44    "Trustee".............................................................................................11
   1.45    "Trust Fund" or "Trust"...............................................................................11
   1.46    "Valuation Date"......................................................................................11
   1.47    "Vested Portion"......................................................................................11
   1.48    "Vesting Service".....................................................................................11

ARTICLE 2.  PARTICIPATION........................................................................................13
   2.01    Participation.........................................................................................13
   2.02    [RESERVED]............................................................................................13
   2.03    Reemployment of Former Employees and Former Participants..............................................13
   2.04    Transferred Participants..............................................................................14
   2.05    Termination of Participation..........................................................................14

ARTICLE 3.  CONTRIBUTIONS........................................................................................15
   3.01    Deferred Cash Contributions...........................................................................15
   3.03    After-Tax Contributions...............................................................................17
   3.04    Employer Contributions................................................................................17
   3.05    Participant Rollover Contributions and Transferred Contributions......................................19
   3.06    Change in Contributions...............................................................................19
   3.07    Suspension of Contributions...........................................................................20
   3.08    Actual Deferral Percentage Test.......................................................................20
   3.09    Contribution Percentage Test..........................................................................22
   3.10    Aggregate Contribution Limitation.....................................................................25
   3.11    Additional Discrimination Testing Provisions..........................................................25
   3.12    Maximum Annual Additions..............................................................................26
   3.13    Return of Contributions...............................................................................29
   3.14    Contributions Not Contingent Upon Profits.............................................................30
   3.15    Contributions During Period of Military Leave.........................................................30

ARTICLE 4.  INVESTMENT OF CONTRIBUTIONS..........................................................................32
   4.01    Investment Funds......................................................................................32
   4.02    Investment of Participants' Accounts..................................................................33
   4.03    Responsibility for Investments........................................................................33
   4.04    Change of Election....................................................................................33
   4.05    Reallocation of Accounts Among the Funds..............................................................33
   4.06    Limitations...........................................................................................34
   4.07    ERISA Section 404(c) Compliance.......................................................................34
   4.08    Private Company.......................................................................................34

ARTICLE 5.  VALUATION OF THE ACCOUNTS............................................................................35
   5.01    Valuation of Accounts.................................................................................35
   5.02    Discretionary Power of the Committee..................................................................35
   5.03    Annual Statements.....................................................................................35

ARTICLE 6.  VESTED PORTION OF ACCOUNTS...........................................................................36
   6.01    Participant Account, Deferred Account and Rollover Account............................................36
   6.02    Employer Account......................................................................................36
   6.03    Disposition of Forfeitures............................................................................36







ARTICLE 7.  WITHDRAWA\LS WHILE STILL EMPLOYED....................................................................38
   7.01    Rules and Procedures..................................................................................38
   7.02    Withdrawal of After-Tax Contributions.................................................................38
   7.03    Withdrawal of Rollover Contributions..................................................................39
   7.04    Withdrawal After Age 59 1/2..............................................................................39
   7.05    Hardship Withdrawal...................................................................................39
   7.06    Separate Contracts....................................................................................41

ARTICLE 8.  LOANS TO PARTICIPANTS................................................................................42
   8.01    Amount Available......................................................................................42
   8.02    Terms.................................................................................................42

ARTICLE 9.  DISTRIBUTION AFTER TERMINATION OF EMPLOYMENT.........................................................44
   9.01    Eligibility...........................................................................................44
   9.02    Forms of Distribution.................................................................................44
   9.03    Commencement of Payments..............................................................................45
   9.04    [RESERVED]............................................................................................45
   9.05    Age 70 1/2Required Distribution.........................................................................45
   9.06    Death Benefits........................................................................................46
   9.07    Small Benefits........................................................................................48
   9.08    Status of Accounts Pending Distribution...............................................................48
   9.09    Proof of Death and Right of Beneficiary or Other Person...............................................48
   9.10    Distribution Limitation...............................................................................48
   9.11    Direct Rollover of Certain Distributions..............................................................48
   9.12    Waiver of Notice Period...............................................................................50
   9.13    Disposition of Employer Stock.........................................................................50

ARTICLE 10.  ADMINISTRATION OF PLAN..............................................................................53
   10.01   Appointment of Pension and Annuity Committee..........................................................53
   10.02   Duties of Committee...................................................................................53
   10.03   Individual Accounts...................................................................................53
   10.04   Meetings..............................................................................................53
   10.05   Action of Majority....................................................................................53
   10.06   Compensation and Bonding..............................................................................54
   10.07   Establishment of Rules................................................................................54
   10.08   Prudent Conduct.......................................................................................54
   10.09   Service in More Than One Fiduciary Capacity...........................................................54
   10.10   Limitation of Liability...............................................................................54
   10.11   Indemnification.......................................................................................54
   10.12   Appointment of Investment Manager.....................................................................55
   10.13   Named Fiduciary.......................................................................................55
   10.14   Claims Procedures.....................................................................................55

ARTICLE 11.  MANAGEMENT OF FUNDS.................................................................................57
   11.01   Trust Agreement.......................................................................................57
   11.02   Exclusive Benefit Rule................................................................................57
   11.03   Payment of Expenses...................................................................................57

ARTICLE 12.  AMENDMENT. MERGER AND TERMINATION...................................................................58
   12.01   Amendment of Plan.....................................................................................58
   12.02   Merger, Consolidation or Transfer.....................................................................59
   12.03   Additional Participating Employers....................................................................59
   12.04   Termination of Plan...................................................................................59
   12.05   Distribution of Accounts Upon a Sale of Assets or a Sale of a Subsidiary..............................60

ARTICLE 13.  GENERAL PROVISIONS..................................................................................61
   13.01   Nonalienation.........................................................................................61
   13.02   Conditions of Employment Not Affected by Plan.........................................................61
   13.03   Facility of Payment...................................................................................61
   13.04   Information...........................................................................................62
   13.05   Top-Heavy Provisions..................................................................................62
   13.06   Prevention of Escheat.................................................................................63
   13.07   Written Elections.....................................................................................64
   13.08   Construction..........................................................................................64
   13.09   Electronic Communications.............................................................................64













                                                UNITED STATES CAN COMPANY
                                        SALARIED EMPLOYEES SAVINGS AND RETIREMENT
                                                    ACCUMULATION PLAN


The United States Can Company,  a Delaware  corporation  (hereinafter  referred to as the  "Company")  established a money
purchase  pension  plan known as the United  States Can Company  Salaried  Employees  Retirement  Accumulation  Plan as of
January 1, 1984. As of January 1, 1988,  the Plan was amended and restated to eliminate the mandatory  money purchase plan
contributions,  add other employer  contributions  and employee  contributions  (including  Section 401(k) salary deferral
contributions),  and  re-named  the Plan as the United  States Can  Company  Salaried  Employees  Savings  and  Retirement
Accumulation  Plan (hereinafter  referred to as the "Plan").  The Company restated the Plan as of January 1, 1989 to bring
the Plan into  compliance with the  requirements  of the Tax Reform Act of 1986 as well as the applicable  requirements of
later statutes,  regulations,  court decisions and  pronouncements of the Internal Revenue Service and Department of Labor
affecting the Plan.  The Company amended the Plan on several occasions after the Plan was first amended and restated.


The Company has again restated the Plan as of January 1, 1997 to bring the Plan into compliance  with the  requirements of
the Uruguay Round Agreements Act of 1994, the Uniform Services  Employment and Reemployment  Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the Internal  Revenue  Restructuring  and Reform Act
of 1998 and the Community Renewal Tax Relief Act of 2000.


Effective  January  1,  2002,  the  Company  is  further  amending  the Plan to bring  the Plan into  compliance  with the
requirements of the Economic Growth and Tax Relief Reconciliation Act of 2001.











                                                                                                                   Page 31





                                                UNITED STATES CAN COMPANY
                                        SALARIED EMPLOYEES SAVINGS AND RETIREMENT
                                                    ACCUMULATION PLAN


                                           Amended and Restated January 1, 1989


                                                  ARTICLE 1. DEFINITIONS
                                                  ----------------------


1.01       "Accounts"(a)   relate to  compensation  that either would have been  received by the Employee in the Plan Year
                    but for the deferral  election,  or are attributable to services performed by the employee in the Plan
                    Year and would have been  received by the  employee  within  2-1/2  months after the close of the Plan
                    Year but for the deferral election,


           (b)      are  allocated  to the  Employee  as of a date  within  that  Plan  Year  and  the  allocation  is not
                    contingent on the participation or performance of service after such date, and


           (c)      are  actually  paid to the Trustee no later than 12 months after the end of the Plan Year to which the
                    contributions relate.


1.03       "Adjustment  Factor"For Plan Years  commencing  before January 1, 1997, if a Participant is a greater than five
           percent  (5%) owner of an  Employer or any  Affiliated  Employer  (within the meaning of Section  416(i) of the
           Code) or a person  who is a Highly  Compensated  Employee,  and one of the ten (10)  persons  paid the  highest
           compensation by an Employer and all its Affiliated  Employers during the Plan Year, the aggregate  Compensation
           of  the  Participant,  the  Participant's  spouse  (if  the  spouse  is  also  a  Participant)  and  any of the
           Participant's  lineal  descendants  who have not reached age nineteen  (19) before the end of the Plan Year (if
           the lineal  descendants are also  Participants)  shall not exceed the applicable dollar limit for the Plan Year
           under  Section  401(a)(17)  of  the  Code.  To  determine  the  maximum  amount  of  earnings  of  each  of the
           aforementioned  individuals  that shall be treated as  Compensation  for purposes of this Plan,  the applicable
           dollar limit on  aggregate  Compensation  shall be prorated  among the  affected  Participants  in the ratio of
           their  individual  Compensation  (without  limitation) to the total  Compensation  (without  limitation) of all
           aggregated Participants.


1.15       "Contribution  Percentage"For  Plan Years commencing on or after January 1, 1998, the  Contribution  Percentage
           will not take into account Matching Contributions.


1.16       "Deferred  Account"Effective  for Plan Years  commencing  on or after January 1, 1999,  Employee  shall mean an
           employee of the Employer who (i) is not eligible to  participate  in the United  States Can Company  Retirement
           Profit  Sharing Plan or the United  States Can Company for Hourly  Employees  Retirement,  (ii) is not a Leased
           Employee,  and (iii) is not an individual who performs  services for the Employer but is  characterized  by the
           Employer as an  independent  contractor or a contractor's  employee as evidenced by the  Employer's  failure to
           withhold  employment taxes from his or her compensation.  In the event any individual  initially  characterized
           by the Employer as an individual  described in (iii) above is subsequently  recharacterized  by the Employer or
           a Court of competent  jurisdiction  as an Employee within the meaning of this Section 1.21, for purposes of the
           Plan, such "Employee" shall be eligible for membership in the Plan on a prospective  basis only,  determined as
           of the date such individual is recharacterized  regardless of whether such  recharacterization  is applied on a
           retroactive basis for some other purpose.


1.22       "Employer"(i)   was at any time for such Plan Year or the prior Plan  Year,  a 5% owner of the  Employer  or an
                    Affiliated Employer (as defined in Section 416(i) of the Code); or


           (ii)     during the preceding  Plan Year received  Statutory  Compensation  from the Employer or the Affiliated
                    Employer in excess of $80,000;  and was a member of the "top-paid  group" for the preceding  year. The
                    $80,000  amount in the  preceding  sentence  shall be adjusted from time to time for cost of living in
                    accordance  with  Section  415(d) of the Code  except  that the base  period is the  calendar  quarter
                    ending  September  30,  1986.  For  this  purpose,  the  applicable  year  of the  Plan  for  which  a
                    determination  is being made is called a  "determination  year" and the preceding  12-month  period is
                    "look-back year."


                    The  "top-paid  group"  is the  highest  20% of  employees  for that year  when  ranked  by  Statutory
                    Compensation  paid by the Employer for that year excluding,  for purposes of determining the number of
                    employees in the top-paid  group,  for purpose of determining  the number of employees in the top-paid
                    group, the following employees:


                    (a)      employees who have not completed 6 months of service;


                    (b)      employees who normally work less than 17 1/2hours per week;


                    (c)      employees who normally work not more than 6 months during any year;


                    (d)      employees who have not attained age 21;


                    (e)      employees  who are  included  in a unit  of  employees  covered  by a  collective  bargaining
                             agreement between an Affiliated Employer and a union; and


                    (f)      employees  who are  nonresident  aliens and who receive no earned  income from an  Affiliated
                             Employer which constitutes income from services within the United States.


                    The Employer may elect to substitute a shorter  period of service,  time,  or age than that  specified
                    under (a), (b), (c) or (d) above.


                    The Employer's  top-paid group election as described above,  shall be used consistently in determining
                    Highly  Compensated  Employees for determination  years of all employee benefit plans for the Employer
                    and  Affiliated  Employers for which Section  414(q) of the Code applies  (other than a  multiemployer
                    plan)  that  begin  with or within the same  calendar  year  until  such  election  is changed by Plan
                    amendment  in  accordance  with IRS  requirements.  Notwithstanding  the  foregoing,  the  consistency
                    provision in the preceding  sentence  shall not apply for the Plan Year beginning in 1997 and for Plan
                    Years  beginning in 1998 and 1999,  shall apply only with respect to all  qualified  retirement  plans
                    (other than a multiemployer plan) of the Employer and Affiliated Employers.


           Determination of an individual's  classification as a Highly  Compensated former Employee is based on the rules
           applicable  to such  determination  as in  effect  for  that  determination  year in  accordance  with  Section
           1.414(q)-1T, A-4 of the temporary IRS Regulations and IRS Notice 97-45.


           The provisions of this Section shall be further subject to such  additional  requirements as shall be described
           in Section 414(q) of the Code and its applicable  regulations,  which shall override any aspect of this Section
           inconsistent therewith.


1.28       "Hour of Service"(a)     An employee  shall be credited  with one Hour of Service for each hour for which he is
                    directly or  indirectly  paid, or entitled to payment,  by the Employer or an Affiliated  Employer for
                    the performance of duties.


           (b)      (1)      An  employee  shall  be  credited  with  one  Hour of  Service  (on the  basis  set  forth in
                             subparagraph  (3)  below)  for each hour for which he is  directly  or  indirectly  paid,  or
                             entitled to payment,  by the  Employer  or an  Affiliated  Employer on account of a period of
                             time  during  which he  performs  no duties  (irrespective  of whether or not the  employment
                             relationship has terminated) due to vacation,  holiday,  illness,  incapacity,  layoff,  jury
                             duty or leave of absence; provided, however, that:


                             (A)      No more than 501  Hours of  Service  shall be  credited  under  this  Section  to an
                                      employee  on account of any single  continuous  period  during  which he performs no
                                      duties;


                             (B)      An hour for which an  employee  is  directly  or  indirectly  paid,  or  entitled to
                                      payment,  on account of a period  during  which he performs  no duties  shall not be
                                      credited  to the  employee  if such  payment is made or due under a plan  maintained
                                      solely  for the  purpose of  complying  with  applicable  worker's  compensation  or
                                      disability insurance laws; and


                             (C)      Hours of Service  shall not be credited  for a payment  which solely  reimburses  an
                                      employee for medical or medically related expenses incurred by the employee.


                    (2)      Notwithstanding  the  provisions  of the foregoing  paragraph  (b)(1),  an employee  shall be
                             credited  with Hours of Service (on the basis set forth in  paragraph  (3) below) for each of
                             the  following  periods of absence from active  employment,  whether or not he is directly or
                             indirectly paid, or entitled to payment, by the Employer or an Affiliated Employer:


                             (A)      That  portion of any period of absence  during  which an  employee is on an approved
                                      Leave of Absence which is designated as creditable service by the Committee; and


                             (B)      The first six  months  of any  period of  absence  due to  layoff.  Layoff  means an
                                      absence from work due to an approved layoff  pursuant to a formalized  policy of the
                                      Employer relating to layoffs.


                    (3)      For the purpose of this paragraph (b),  employees  shall be credited with Hours of Service on
                             the basis of their  regularly  scheduled  working hours per week (or per day if they are paid
                             on a daily  basis)  or, in the case of  employees  without a regular  work  schedule,  on the
                             basis of their  average  number of hours worked per week (or per day) during the  three-month
                             period  immediately  preceding  the  period of time  during  which he  performed  no  duties.
                             Notwithstanding  the foregoing  provisions of this  paragraph  (b), an employee  shall not be
                             credited  with a greater  number of Hours of Service for a period  during which no duties are
                             performed than the number of hours  regularly  scheduled for the performance of duties during
                             such period by his work group.


                    (4)      In the case of an  Employer  that does not  maintain  records  of  actual  hours  worked  for
                             certain  Employees,  such  Employees'  Hours  of  Service  hereunder  shall  be  equal to the
                             following:


                             (A)      the  Employee's  earnings for the calendar  year  divided by the  Employee's  lowest
                                      hourly rate of  compensation  (determined  in  accordance  with U.S.  Department  of
                                      Labor regulation 2530.200b-3(f)) during the calendar year;


                             (B)      if the  result of (A) above is 750 hours or more,  the  Employee  shall be  credited
                                      with 1,000 Hours of Service;


                             (C)      if the  result of (A) is less than 750 hours but more than 374 hours,  the  Employee
                                      shall be credited with 501 Hours of Service; or


                             (D)      if the result of (A) is 374 or less,  the Employee  shall be credited  with Hours of
                                      Service equal to the product of (A) above.


                             In  addition  to the  Hours  of  Service  credited  to an  Employee  pursuant  to  the  above
                             calculations,  such  Employee  will be  credited  with  Hours of  Service,  if any,  credited
                             pursuant to Section 1.28(b)(2).


           (c)      An  employee  shall  be  credited  with  one  Hour of  Service  for each  hour  for  which  back  pay,
                    irrespective  of  mitigation  of damages,  has been either  awarded or agreed to by the Employer or an
                    Affiliated Employer; provided, however, that:


                    (1)      hours shall not be  credited  under both  paragraphs  (a) or (b), as the case may be, and (c)
                             of this Section; and


                    (2)      the  crediting  of Hours of Service for back pay awarded or agreed to with respect to periods
                             described in  subparagraph  (b)(1) above shall be subject to the  limitations  and provisions
                             set forth in paragraph (b).


           (d)      Solely for  purposes of  determining  whether an employee  has  incurred a Break in Service  under the
                    Plan,  an  employee  shall be  credited  with one Hour of  Service  for each  hour for  which he would
                    normally be credited  under  paragraphs (a) through (c) above during a period in which the employee is
                    absent from work  because of the  pregnancy of the  employee,  the birth of a child of the employee or
                    the  placement  of a child with the  employee in  connection  with the  adoption of such child by such
                    employee,  or for purposes of caring for such child for a period beginning  immediately following such
                    birth or placement,  but not more than 501 hours for any single such period,  provided,  however, that
                    the number of hours  credited to an employee under this  paragraph (d) during the  computation  period
                    in which such absence  began,  shall be zero if 501 or more hours are  credited to the employee  under
                    paragraphs  (a) through (c) above  during such  computation  period.  In the event the number of hours
                    credited under this paragraph (d) for the  computation  period in which the absence began is zero, the
                    provisions  of this  paragraph  (d)  shall  apply as  though  the  absence  began  in the  immediately
                    following computation period.


           (e)      No hour shall be  credited  more than once or be counted as more than one Hour of Service  even though
                    the  employee  may receive more than  straight  time pay for such hour (e.g.  only one Hour of Service
                    shall be credited for an hour worked, even though a premium rate is paid for such hour of work).


           (f)      Hours of  Service  shall  be  credited  in  accordance  with the  provisions  of  Department  of Labor
                    Regulationss.2530.200b-2(c),  which  provisions are incorporated  herein by reference,  as they may be
                    amended from time to time.


           (g)      Notwithstanding  the  foregoing,   services  performed  for  Sherwin-Williams  Company,  Southern  Can
                    Company,  Continental Can Company,  Steeltin Can  Corporation,  Eastern  Container  Company,  Inc. and
                    General Can Company  ("predecessor  companies")  by employees  who were  employed by such  predecessor
                    companies  immediately before the acquisition date and by United States Can Company  immediately after
                    the acquisition date, at facilities acquired from such predecessor  companies,  shall be credited with
                    service for vesting  purposes  under Section 6.02.  With regard to Employer  Retirement  Contributions
                    and  Employer  Matching  Contributions,  said  service  shall be credited as if such  service with the
                    predecessor  companies was with an Employer or Affiliated Employer;  however,  with regard to Employer
                    Stock  Contributions  and  Employer  Additional  Cash  Contributions,  only such  service on and after
                    December 1, 1983 shall be so credited.


1.29       "Leased Employee"(a)     such  services  are  provided  pursuant to an  agreement  between the  Employer  and a
                    leasing organization;


           (b)      such person has  performed  such  services for the Employer (or for the Employer and related  persons)
                    on a substantially full-time basis for a period of at least one year; and


           (c)      such services are performed under the primary direction or control of the Employer.


           The entire  period  during which the Leased  Employee  has  performed  services for the Employer or  Affiliated
           Employer in such capacity shall be treated as  Eligibility  and Vesting  Service  hereunder for all purposes of
           the Plan, except that, by reason of such status as a Leased Employee, he shall not become a Participant.


           However,  a Leased  Employee  shall not be  considered  an employee of the  Employer  for any purpose if Leased
           Employees do not constitute  more than 20% of the Employer's  nonhighly  compensated  workforce and such Leased
           Employee is covered by a money purchase pension plan providing:


           (a)      a nonintegrated employer contribution rate of at least 10% of statutory Compensation,


           (b)      immediate participation, and


           (c)      full and immediate vesting.


1.30       "Leave  of  Absence"Statutory  Compensation  shall  not  exceed  the  applicable  dollar  limit  under  Section
           401(a)(17) of the Code for any Plan Year,  provided that such limit shall not be applied in determining  Highly
           Compensated Employees under Section 1.27.


For Plan Years  commencing  before  January 1, 1997,  if a  Participant  is a greater  than five  percent (5%) owner of an
           Employer or any  Affiliated  Employer  (within the meaning of Section  416(i) of the Code) or a person who is a
           Highly Compensated  Employee,  and one of the ten (10) persons paid the highest compensation by an Employer and
           all its Affiliated  Employers  during the Plan Year, the aggregate  Statutory  Compensation of the Participant,
           the  Participant's  spouse  (if  the  spouse  is  also a  Participant)  and  any of  the  Participant's  lineal
           descendants  who have not reached age nineteen (19) before the end of the Plan Year (if the lineal  descendants
           are also  Participants)  shall  not  exceed  the  applicable  dollar  limit  for the Plan  Year  under  Section
           401(a)(17) of the Code. To determine the maximum amount of earnings of each of the  aforementioned  individuals
           that shall be treated as Statutory  Compensation  for  purposes of this Plan,  the  applicable  dollar limit on
           aggregate  Statutory  Compensation  shall be prorated  among the  affected  Participants  in the ratio of their
           individual  Statutory   Compensation  (without  limitation)  to  the  total  Statutory   Compensation  (without
           limitation) of all aggregated Participants.


1.43       "Transferred Contribution"(a)    If his  employment  terminates  and he is  reemployed  after he has incurred a
                    Break in Service,  his Vesting  Service  after  reemployment  shall be  aggregated  with his  previous
                    period or periods of Vesting  Service  after he  completes  a Year of Vesting  Service if (i) he had a
                    balance in his  Deferred  Account,  (ii) he was fully or partially  vested in his Employer  Account or
                    (iii) the  period  from his Break in Service  date to his  subsequent  reemployment  does not equal or
                    exceed the greater of five years or his period of Vesting Service before his Break in Service date.


           (b)      If an  Employee  leaves or left work to enter into  active  service in the Armed  Forces of the United
                    States and thereafter  returns to work with reemployment  rights under federal law,  including without
                    limitation the Uniformed  Services  Employment and Reemployment  Rights Act of 1994 and Section 414(u)
                    of the Code,  his status with respect to  participation  and  benefits  under the Plan shall take into
                    account all rights to which he shall be entitled pursuant to such federal law.








                                                 ARTICLE 2. PARTICIPATION
                                                 ------------------------


2.01       Participation


           (a)      Prior to January 1, 1995 an Employee,  and on and after January 1, 1995 a regular full-time  Employee,
                    shall become a Participant  entitled to make Deferred Cash  Contributions  or After-Tax  Contributions
                    on the later of: (i) his date of hire; or (ii) the date on which he becomes an Employee.


                    Notwithstanding  the  foregoing,  any  individual  who  became an  Employee  on  January  20,  1994 in
                    connection  with the Company's  acquisition  of the stock of Steeltin Can  Corporation  and of certain
                    assets of Eastern  Container  Company,  Inc.  became a  Participant  entitled  to make  Deferred  Cash
                    Contributions or After-Tax Contributions as of March 28, 1994.


                    For purposes of this Section,  a regular  full-time  Employee shall mean a regular  Employee  normally
                    scheduled to work 35 hours or more per week.


           (b)      On or after  January 1, 1995,  an  Employee,  other than a regular  full-time  Employee,  shall not be
                    entitled to make Deferred Cash Contributions or After-Tax  Contributions  until the first January 1 or
                    July 1 following the first  anniversary of his original  commencement  of employment.  Notwithstanding
                    any other  provision of this Section,  cooperative  education  students  employed by an Employer shall
                    not be entitled to make Deferred Cash Contributions or After-Tax Contributions.


           (c)      A Participant  shall be eligible to commence  Deferred Cash  Contributions or After-Tax  Contributions
                    on (or  as  soon  as  administratively  practicable  thereafter)  the  date  he:  (1)  designates  the
                    percentage  of  Compensation  he wishes to  contribute  under the Plan under Section 3.02 or makes the
                    election  described in Section  3.01, or both;  (2)  authorizes  the Employer to make regular  payroll
                    deductions or to reduce his Compensation,  or both; (3) makes an investment election;  and (4) names a
                    Beneficiary; in the manner prescribed by the Committee.


2.02       [RESERVED]


2.03       Reemployment of Former Employees and Former Participants


           A Participant  who has a Break in Service and has a  nonforfeitable  interest in a Plan Account shall  continue
           to be a Participant upon his reemployment.


           An  Employee  who  terminates  employment  and is later  reemployed  will be  eligible  to make  Deferred  Cash
           Contributions, Catch-up Contributions or After-Tax Contributions on his reemployment date.


           If a person who had no  nonforfeitable  interest  in any  Account at his prior  termination  of  employment  is
           reemployed after incurring five consecutive  one-year Breaks in Service,  he shall be treated as a new employee
           and his prior periods of employment  shall be disregarded  for purposes of  determining  whether he has met the
           requirements of Section 2.01.


2.04       Transferred Participants


           A  Participant  who  remains  in the  employ of the  Employer  or an  Affiliated  Employer  but ceases to be an
           Employee  shall  continue  to be a  Participant  of the  Plan  but  shall  not be  eligible  to make  After-Tax
           Contributions,  Catch-up  Contributions  or Deferred  Cash  Contributions  or receive  allocations  of Employer
           Contributions  (pursuant to Section 3.04) for any period of employment  during which his  employment  status is
           other than as an Employee.  Notwithstanding the preceding sentence,  a Participant's  participation in the Plan
           shall terminate if his benefits under the Plan are transferred to another plan or distributed.


2.05       Termination of Participation


           A  Participant's  participation  shall  terminate  on the date he is no longer  employed by the Employer or any
           Affiliated  Employer  unless the  Participant  is  entitled  to  benefits  under the Plan,  in which  event his
           participation shall terminate when those benefits are distributed to him.








                                                 ARTICLE 3. CONTRIBUTIONS
                                                 ------------------------


3.01       Deferred Cash Contributions

(a)      A Participant may elect on his designation  filed under Section 2.01 to reduce his  Compensation  payable while a
                    Participant  by at least 1% and not more than 50% (prior to January 1, 2002,  12%),  in  multiples  of
                    1%, and have that amount  contributed  to the Plan by the  Employer as  Deferred  Cash  Contributions.
                    Deferred  Cash  Contributions  shall be further  limited as provided  below and in  Sections  3.07(a),
                    3.08(a) and 3.09. Any Deferred Cash  Contributions  shall be paid to the Trustee  holding assets other
                    than those  attributable  to Employer Stock  Contributions  as soon as practicable and credited to the
                    electing Participant's Deferred Account.

(b)      In no event shall the Participant's  Deferred Cash Contributions and similar  contributions made on his behalf by
                    the  Employer  or an  Affiliated  Employer  to all plans,  contracts  or  arrangements  subject to the
                    provisions of Section  401(a)(30) of the Code in any calendar  year exceed  $11,000  multiplied by the
                    Adjustment  Factor,  except as provides in  subsection  (e) below (prior to  January 1,  2002,  $7,000
                    multiplied by the Adjustment  Factor).  If a Participant's  Deferred Cash  Contributions in a calendar
                    year reach that dollar  limitation,  his election of Deferred Cash  Contributions for the remainder of
                    the calendar  year will be canceled.  Each  Participant  affected by this  paragraph  (b) may elect to
                    change or suspend the rate at which he makes  After-Tax  Contributions.  As of the first pay period of
                    the  calendar  year  following  such  cancellation,   the  Participant's  election  of  Deferred  Cash
                    Contributions shall again become effective in accordance with his previous election.


           (c)      In the event that the sum of the Deferred Cash  Contributions  and similar  contributions to any other
                    qualified defined  contribution plan maintained by the Employer or an Affiliated  Employer exceeds the
                    dollar  limitation in Section 3.01(b) for any calendar year, the  Participant  shall be deemed to have
                    elected a return of Deferred Cash  Contributions  in excess of such limit  ("excess  deferrals")  from
                    this Plan.  The excess  deferrals,  together with  Earnings,  shall be returned to the  Participant no
                    later than the April 15 following  the end of the  calendar  year in which the excess  deferrals  were
                    made.  The amount of excess  deferrals to be returned  for any  calendar  year shall be reduced by any
                    Deferred  Cash  Contributions  previously  returned to the  Participant  under  Section  3.07 for that
                    calendar  year. In the event any Deferred Cash  Contributions  returned  under this paragraph (c) were
                    matched by Matching  Contributions,  those Matching  Contributions,  together with Earnings,  shall be
                    forfeited and used to reduce Employer contributions.


           (d)    If a Participant makes  tax-deferred  contributions  under another  qualified defined  contribution plan
                  maintained by an employer  other than the Employer or an  Affiliated  Employer for any calendar year and
                  those  contributions  when added to his Deferred Cash  Contributions  exceed the dollar limitation under
                  Section  3.01(b) for that calendar  year, the  Participant  may allocate all or a portion of such excess
                  deferrals  to this Plan.  In that  event,  such  excess  deferrals,  together  with  Earnings,  shall be
                  returned to the  Participant  no later than the April 15 following the end of the calendar year in which
                  such excess  deferrals  were made.  However,  the Plan shall not be required to return excess  deferrals
                  unless the Participant  notifies the Committee,  in writing,  by March 1 of that following calendar year
                  of the amount of the excess  deferrals  allocated to this Plan. The amount of any such excess  deferrals
                  to be returned for any  calendar  year shall be reduced by any Deferred  Cash  Contributions  previously
                  returned to the  Participant  under Section 3.07 for that calendar  year. In the event any Deferred Cash
                  Contributions returned under this paragraph (d) were matched by Matching  Contributions,  those Matching
                  Contributions, together with Earnings, shall be forfeited and used to reduce Employer contributions.


           (e)    For Plan Years  commencing on or after January 1, 2002, a Participant  may make a Catch-up  Contribution
                  for a Plan Year if he has  attained  age fifty  (50)  before the close of the Plan Year and may not make
                  any additional  Deferred Cash  Contributions  for the Plan Year because of the application of the annual
                  limit on elective  deferrals under Sections  402(g) and 415(c) of the Code or any comparable  limitation
                  or  restriction  contained  in the  terms  of the  Plan.  An  eligible  Participant  may  make  Catch-up
                  Contributions  at the same time and in the same  manner  as  Deferred  Cash  Contributions  pursuant  to
                  procedures  established by the Committee.  If a Participant makes any Catch-up  Contributions for a Plan
                  Year, such contributions shall be credited to the Participant's Deferred Cash Contribution Account.


                  For any Plan Year, a Participant may make Catch-up Contributions that equal the lesser of:


                  (1)      the "applicable dollar amount" or


                  (2)      the  Participant's  Compensation  for  the  Plan  Year  reduced  by  any  other  Deferred  Cash
                           Contributions of the Participant made for the Plan Year.


                  For purposes of this  subsection (e), the  "applicable  dollar amount" shall be the amount  described in
                  Section  414(v)(2)(C)  of the Code, but in no event shall exceed $1,000 for the Plan Year  commencing on
                  January 1, 2002.  The amount of Catch-up  Contributions  that a Participant  may  contribute  for a Plan
                  Year shall be  determined at the end of the Plan Year.  If the amount of Catch-up  Contributions  that a
                  Participant  makes for any Plan Year  exceeds  the  limits of (1) and (2)  above,  any  excess  shall be
                  either returned to the Participant  pursuant to procedures  specified in subsection (d) above or used to
                  make  additional  Deferred  Cash  Contributions  for the Plan Year, if possible  under this section,  as
                  determined by the Committee pursuant to guidelines established by the Internal Revenue Service.


                  Catch-up  Contributions shall not be subject to any other contribution  limits or any  nondiscrimination
                  tests  under  Section  401(k)  of the Code and  shall  not be  taken  into  account  in  applying  other
                  contribution  limits to other  contributions  or benefits as provided in Section  414(v)(6)  of the Code
                  and shall not be considered in determining the maximum amount deductible by the  Participating  Employer
                  for such Plan Year for federal tax purposes under Section 404 of the Code.


           (f)    The Committee shall implement the percentage  increase in Deferred Cash  Contributions  and the Catch-up
                  Contributions during the 2002 Plan Year in accordance with procedures established by the Committee.


           (g)    Catch-up  Contributions  shall be treated as Deferred  Cash  Contributions  for purposes of Section 3.02
                  and other provisions of the Plan.


3.02       After-Tax Contributions


           Any  Participant  may make  After-Tax  Contributions  under this Section  whether or not he has elected to have
           Deferred  Cash   Contributions  made  on  his  behalf  pursuant  to  Section  3.01.  The  amount  of  After-Tax
           Contributions  shall  be at  least  1% and not  more  than  10% of his  Compensation  while a  Participant,  in
           multiples of 1%;  provided,  however,  if the  Participant has made an election under Section 3.01, the maximum
           percentage of Compensation  which the Participant may elect to contribute  under this Section shall be equal to
           the  excess  of 12%  over  the  percentage  elected  by the  Participant  under  Section  3.01.  The  After-Tax
           Contributions  of a  Participant  shall be made  through  payroll  deductions  and shall be paid to the Trustee
           holding  assets  other  than  those  attributable  to  Employer  Stock  Contributions  as soon as  practicable.
           After-Tax Contributions shall be credited to the Participant Account of the contributing Participant.


3.03       Employer Contributions

(a)      Employer Matching  Contributions.  The Employer shall contribute on behalf of each Participant who is an eligible
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                    Employee  for the Plan Year and makes the  election  described  in Section  3.01 an amount  equal to a
                    percentage  of  his  Deferred  Cash  Contributions  for  the  Plan  Year  up to  the  first  6% of the
                    Participant's  Compensation  for the Plan  Year.  The  percentage  and the  portion of  Deferred  Cash
                    Contributions (up to the first 6% of the  Participant's  Compensation for the Plan Year) to be used in
                    computing the Matching  Contribution  shall be determined  from time to time by the Board of Directors
                    of the  Employer  based  on the  performance  of  the  Employer.  The  Compensation  Committee  of the
                    Employer shall recommend performance standards to the Board.


                    Effective  January 1, 1999,  the Employer  shall  contribute on behalf of each  Participant  who is an
                    eligible  Employee  for the Plan Year and makes the  election  described  in Section  3.01,  an amount
                    equal to 100% of his  Deferred  Cash  Contribution  for the Plan  Year up to the  first 3% of his Plan
                    Year  Compensation;  and 50% of his Deferred Cash Contributions for the Plan Year over 3% and up to 5%
                    of the  Participant's  Plan Year  Compensation.  The Employer  may at its  discretion  make  estimated
                    Matching Contributions during the Plan Year.


           (b)      Employer  Retirement  Contributions.  The Employer shall  contribute on behalf of each Participant who
                    -----------------------------------
                    is an eligible  Employee  for the Plan Year an amount to be  determined  by the Board of  Directors of
                    the Employer as of the last day of the Plan Year.  In the absence of a  determination  by the Employer
                    to the contrary,  the amount  contributed on behalf of each such  Participant  shall be equal to 4% of
                    such Participant's Compensation for the Plan Year.


                    Effective  January 1, 1999,  the Employer  shall  contribute on behalf of each  Participant  who is an
                    eligible  Employee  on the last day of each  calendar  quarter  (March 31, June 30,  September  30 and
                    December 31) or who terminated  employment  during the quarter after attaining age 65, an amount to be
                    determined  by the Board of  Directors of the  Employer as of the last day of such  calendar  quarter.
                    In the absence of a determination  by the Employer to the contrary,  the amount  contributed on behalf
                    of each such Participant  shall be equal to 2% of Compensation  paid the Participant for such calendar
                    quarter;  such Employer Retirement  Contributions  shall be made as soon as administratively  feasible
                    following the end of such calendar quarter.


           (c)      Employer Stock  Contributions  and Additional  Cash  Contributions.  The Employer may make  additional
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                    contributions  to the Plan for a Plan Year on behalf of each  Participant who is an eligible  Employee
                    for the Plan Year.  The amount to be  contributed,  if any, for a Plan Year shall be determined by the
                    Board of  Directors of the  Employer,  in its sole  discretion.  Contributions  made  pursuant to this
                    paragraph (d) for a Plan Year shall be credited to the Accounts of all  Participants  who are eligible
                    Employees in the same proportion as each such Participant's  Compensation  during that Plan Year bears
                    to the total  Compensation of all such Participants  during that Plan Year. A contribution made by the
                    Employer  pursuant to this  paragraph  (d) on account of any Plan Year may be made in the form of cash
                    or stock of U.S. Can Corporation  (of which the Company is a wholly-owned  subsidiary) or both, at the
                    discretion of the Board of Directors of the Employer.  To the extent that the  contribution is made in
                    stock, the  contribution  shall be known as the "Employer Stock  Contribution"  and to the extent that
                    the  contribution  is  made  in  cash,  the  contribution  shall  be  known  as the  "Additional  Cash
                    Contribution."  There shall be no Employer  Stock  Contributions  made by the Employer  after the Plan
                    Year ending on December 31, 1993.


           (d)      Payment of Contributions.  Contributions  other than Employer Stock  Contributions will be paid to the
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                    Trustee  holding assets other than those  attributable to Employer Stock  Contributions  only in cash.
                    Employer Stock  Contributions  shall be made to the Trustee  holding assets  attributable  to Employer
                    Stock  Contributions  only in the  form of the  common  stock  of U.S.  Can  Corporation,  a  Delaware
                    corporation.  All contributions made by the Employer shall be delivered to the appropriate  Trustee no
                    later than the due date (with  extensions)  of the  Employer's tax return for the fiscal year to which
                    the  contribution  relates.  A  Participant's  allocable  share  of  Employer  Contributions  shall be
                    credited to the Participant's Employer Account.


           (e)      Offset  for  Foreign  Contributions.  Notwithstanding  any  other  provision  of  Section  3.03 to the
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                    contrary,  Employer  Contributions  allocable to a Participant who is a non-resident  alien and who is
                    eligible to  participate in a retirement  plan sponsored by the Employer or an Affiliated  Employer in
                    a country other than the United  States,  shall have their Employer  Contributions  under the Plan for
                    any Plan Year  offset by, in the case of a defined  contribution  plan,  the  amount of  contributions
                    made on behalf of the  Participant  under  such  foreign  plan for such  year,  and,  in the case of a
                    defined benefit plan, the present value of the benefit  accrued by the Participant  under such foreign
                    plan for such year.  Such  offset  shall be applied  first  against  the  contributions  described  in
                    paragraph  (c) above,  then (b) then (a);  such offset shall be  determined  and applied in accordance
                    with  procedures  adopted by the  Committee.  Such offsets  shall not be applied to any Deferred  Cash
                    Contributions and/or After-tax Contributions made by such non-resident alien Participant.


3.04       Participant Rollover Contributions and Transferred Contributions


           With the  permission of the Committee  and without  regard to any  limitations  on  contributions  set forth in
           Section  3.08(a),  3.09 or 3.11 or limitations on After-Tax  Contributions  set forth in Section 3.02, the Plan
           may receive in cash:


           (i)      From  an  Employee,  any  amount  previously  received  by him as an  eligible  rollover  distribution
                    described in Section  9.11(b).  The Plan may receive such amount either  directly from the Participant
                    or employee,  or from an eligible  retirement plan described in Section 9.11(b).  Notwithstanding  the
                    foregoing,  the Plan shall not accept any amount from the  Participant or an eligible  retirement plan
                    described in Section 9.11(b) unless the Participant  provides  evidence  satisfactory to the Committee
                    that such amount is an eligible rollover  distribution.  If the Rollover Contributions are paid to the
                    Participant,  they must be paid to the  Trustee  on or before the 60th day after the day  received  by
                    the Participant  unless the Participant  qualifies for hardship exception for distributions made after
                    December 31, 2001.


           (ii)     From  a  trustee  of  another  qualified  plan  an  amount  that  is not  such  an  eligible  rollover
                    distribution.  In no event shall such  Transferred  Contributions  be received from a plan under which
                    the Participant or Employee was, at any time, an employee  within the meaning of Section  401(c)(1) of
                    the Code.


3.05       Change in Contributions


           The percentages of Compensation  designated by a Participant  under Sections 3.01 and 3.02 shall  automatically
           apply to increases and decreases in his  Compensation.  A Participant  may change his election  under  Sections
           3.01 and 3.02 only once each  calendar  quarter by giving notice to the Committee at the time and in the manner
           it prescribes.  The changed  percentage  shall become effective as of the first day of the first payroll period
           of the calendar quarter beginning after the expiration of the notice period.


3.06       Suspension of Contributions


           (a)      A  Participant  may suspend his  contributions  under  Section 3.02 and/or  revoke his election  under
                    Section 3.01 only once each calendar  quarter.  The suspension or revocation shall become effective as
                    soon as  administratively  possible  after  the  Participant  provides  the  Committee  notice  of the
                    suspension or revocation at the time and in the manner it prescribes.


           (b)      A Participant  who has suspended his  contributions  under Section 3.02 may elect to have them resumed
                    in  accordance  with  Section  3.02 as of the first day of the first  payroll  period of the  calendar
                    quarter  next  following  notice of that  intent  given at the time and in the  manner  the  Committee
                    prescribes.  A Participant  who has revoked his election under Section 3.01 may apply to the Committee
                    to have his  Compensation  reduction  resumed in  accordance  with Section 3.01 as of the first day of
                    the first payroll  period of the calendar  quarter next  following  notice of that intent given at the
                    time and in the manner the Committee prescribes.


3.07       Actual Deferral Percentage Test


           (a)      For Plan  Years  commencing  prior to  January 1, 1999,  the  Actual  Deferral  Percentage  for Highly
                    Compensated  Employees who are  Participants or eligible to become  Participants  shall not exceed the
                    Actual  Deferral  Percentage  for all other  Employees  who are  Participants  or  eligible  to become
                    Participants  multiplied by 1.25. If the Actual Deferral  Percentage for Highly Compensated  Employees
                    does not meet the foregoing  test, the Actual  Deferral  Percentage for Highly  Compensated  Employees
                    may not exceed  the  Actual  Deferral  Percentage  for all other  Employees  who are  Participants  or
                    eligible  to  become  Participants  by more  than  two  percentage  points,  and the  Actual  Deferral
                    Percentage  for  Highly  Compensated  Employees  may not be more than 2.0 times  the  Actual  Deferral
                    Percentage  for all other  Employees  (or such  lesser  amount as the  Committee  shall  determine  to
                    satisfy the provisions of Section 3.09).


                    The Committee  may implement  rules  limiting the Deferred  Cash  Contributions,  which may be made on
                    behalf of some or all Highly  Compensated  Employees  so that this  limitation  is  satisfied.  If the
                    Committee  determines  that the limitation  under this Section has been exceeded in any Plan Year, the
                    following provisions shall apply:


                    (i)      For  Plan  Years   commencing  prior  to  January  1,  1997,  the  amount  of  Deferred  Cash
                             Contributions  made on behalf of some or all Highly  Compensated  Employees  shall be reduced
                             until the  provisions  of this  paragraph  are  satisfied by leveling the highest  percentage
                             rates elected by the Highly  Compensated  Employees.  Such percentage  rates shall be rounded
                             to the nearest  one-hundredth  of one percent of the  Participant's  Statutory  Compensation.
                             Any excess  Deferral  Cash  Contributions  ("excess  contributions")  together  with Earnings
                             thereon,  shall be allocated to some or all Highly  Compensated  Employees in accordance with
                             paragraph (iii).


                    (ii)     For Plan Years  beginning  after  December 31, 1996 and prior to January 1,  1999, the Actual
                             Deferral  Percentage  of the Highly  Compensated  Employee with the highest  Actual  Deferral
                             Percentage  shall be reduced to the extent  necessary to meet the Actual Deferral  Percentage
                             test or to cause  such  percentage  to equal the  Actual  Deferral  Percentage  of the Highly
                             Compensated  Employee with the next highest  percentage.  This process will be repeated until
                             the Actual  Deferral  Percentage  test is  passed.  Each  percentage  shall be rounded to the
                             nearest  one-hundredth of one percent of the Employee's  Statutory  Compensation.  The amount
                             of Deferred  Cash  Contributions  made by each Highly  Compensated  Employee in excess of the
                             amount  permitted  under  his  revised  deferral  percentage  shall  be  added  together  and
                             allocated  to  some or all  Highly  Compensated  Employees  as  follows.  The  Deferred  Cash
                             Contributions of the Highly  Compensated  Employee with the highest dollar amount of Deferred
                             Cash  Contributions  shall be reduced by the lesser of (A) the amount  required to cause that
                             Employee's  Deferred  Cash  Contributions  to equal the dollar  amount of the  Deferred  Cash
                             Contributions  of the Highly  Compensated  Employee  with the next highest  dollar  amount of
                             Deferred  Cash  Contributions,  or (B) an  amount  equal to the total  excess  contributions.
                             This  procedure  is repeated  until all excess  contributions  are  allocated.  The amount of
                             excess  contributions  allocated to a Highly  Compensated  Employee,  together  with Earnings
                             thereon  shall be  distributed  to him in accordance  with the  provision of paragraph  (iii)
                             below.


                    (iii)    Excess  contributions  together  with  Earnings  thereon,  shall  be paid to the  Participant
                             before the end of twelve  months  following  the Plan Year in which the excess  contributions
                             were made and, to the extent  practicable,  within 2 1/2months after the close of the Plan Year
                             in which the excess  contributions  were made.  However,  any  excess  contributions  for any
                             Plan Year shall be reduced by any  Deferred  Cash  Contributions  previously  returned to the
                             Participant  under  Section  3.01  for  that  Plan  Year.  In the  event  any  Deferred  Cash
                             Contributions  returned  under this  Section  were  matched by Matching  Contributions,  such
                             corresponding Matching  Contributions,  with Earnings thereon, shall be forfeited and used to
                             reduce Employer Contributions.


                    (iv)     If the Committee  adopts  appropriate  rules in  accordance  with  regulations  issued by the
                             Secretary  of the  Treasury,  the  Participant  may elect,  in lieu of a return of the excess
                             contributions,  to  recharacterize  the excess  Deferred  Cash  Contributions  to the Plan as
                             After-Tax  Contributions  for the Plan  Year in which the  excess  contributions  were  made,
                             subject to the  limitations  of Section 3.02 and Section  3.08.  The  Participant's  election
                             shall  be made  within  2 1/2months  after  the  close of the Plan  Year in which  the  excess
                             Deferred Cash  Contributions  were made,  or within such shorter  period as the Committee may
                             prescribe.  In the absence of a timely election by the Participant,  the excess contributions
                             shall be paid to the Participant in the manner described in Section 3.07(b).


                    (v)      Current Year  Approach,  1997 Deferred Cash  Contributions  and Statutory  Compensation  were
                             used to determine the Actual  Deferral  Percentage for non-highly  compensated  employees for
                             the 1997 Plan Year Actual Deferral  Percentage Test and 1998 Deferred Cash  Contributions and
                             Statutory  Compensation were used to determine the Actual Deferral  Percentage for non-highly
                             compensated employees for the 1998 Plan Year Actual Deferral Percentage Test.


           (b)      For  Plan  Years   commencing  on  or  after  January  1,  1999,   the  Plan  shall  comply  with  the
                    nondiscrimination  requirements  of  Section  401(k)  of  the  Code  by the  use  of  the  alternative
                    nondiscrimination requirements under Section 401(k)(12) of the Code, as set forth in the Plan.


3.08       Contribution Percentage Test


           a.       For  Plan  Years  beginning  prior  to  January  1,  1999,  the  Contribution  Percentage  for  Highly
                    Compensated  Employees who are  Participants or eligible to become  Participants  shall not exceed the
                    Contribution  Percentage  for  all  other  Employees  who  are  Participants  or  eligible  to  become
                    Participants  multiplied by 1.25. If the Contribution  Percentage for the Highly Compensated Employees
                    does not meet the foregoing test, the  Contribution  Percentage for Highly  Compensated  Employees may
                    not exceed the  Contribution  Percentage of all other  Employees who are  Participants  or eligible to
                    become  Participants by more than two percentage  points,  and the Contribution  Percentage for Highly
                    Compensated  Employees  may not be more  than 2.0  times  the  Contribution  Percentage  for all other
                    Employees  (or such lesser  amount as the  Committee  shall  determine  to satisfy the  provisions  of
                    Section 3.09).


                    The Committee may implement  rules limiting the After-Tax  Contributions  which may be made by some or
                    all Highly  Compensated  Employees so that this limitation is satisfied.  If the Committee  determines
                    that the limitation  under this Section has been exceeded in any Plan Year,  the following  provisions
                    shall apply:


                    (i)      For Plan Years  beginning  prior to January 1, 1997,  the amount of  After-Tax  Contributions
                             and Matching  Contributions made by or on behalf of some or all Highly Compensated  Employees
                             in the Plan Year shall be reduced  until the  provisions  of this  Section are  satisfied  by
                             leveling the highest  percentage  rates  elected by the Highly  Compensated  Employees.  Such
                             percentage  rates  shall  be  rounded  to  the  nearest  one-hundredth  of one  percent  of a
                             Participant's  Statutory  Compensation.   Any  excess  After-Tax  Contributions  or  Matching
                             Contributions  ("excess aggregate  contributions"),  together with Earnings thereon, shall be
                             reduced and allocated in accordance with the provisions of paragraph (iii) below.


                    (ii)     For Plan  Years  beginning  after  December  31,  1996  and  prior to  January 1,  1999,  the
                             Contribution  Percentage of the Highly  Compensated  Employee  with the highest  Contribution
                             Percentage  shall be reduced  to the extent  necessary  to meet the  Contribution  Percentage
                             test or to  cause  such  percentage  to  equal  the  Contribution  Percentage  of the  Highly
                             Compensated  Employee with the next highest  percentage.  This process will be repeated until
                             the  Contribution  Percentage  test is  passed.  Each  percentage  shall  be  rounded  to the
                             nearest  one-hundredth of one percent of the Employee's  Statutory  Compensation.  The amount
                             of  After-Tax  Contributions  and  Matching  Contributions  made by each  Highly  Compensated
                             Employee in excess of the amount  permitted under his revised  contribution  percentage shall
                             be added  together  and  allocated  to some or all Highly  Compensated  Employees as follows.
                             The After-Tax  Contributions and Matching  Contributions of the Highly  Compensated  Employee
                             with the highest dollar amount of After-Tax  Contributions and Matching  Contributions  shall
                             be  reduced  by the  lesser  of (A) the  amount  required  to cause  the  Highly  Compensated
                             Employee's  After-Tax  Contributions  and  Matching  Contributions  to  equal  the  After-Tax
                             Contributions  and Matching  Contributions of the Highly  Compensated  Employee with the next
                             highest  dollar amount of After-Tax  Contributions  and Matching  Contributions,  or to equal
                             the dollar  amount of such  contributions  of the Highly  Compensated  Employee with the next
                             highest  dollar  amount of such  contributions,  or (B) an amount  equal to the total  excess
                             aggregate   contributions.   This   procedure   is  repeated   until  all  excess   aggregate
                             contributions  are  allocated.  Any excess  aggregate  contributions,  together with Earnings
                             thereon, shall be reduced and allocated in accordance with paragraph (iii) below.


                    (iii)    Excess  aggregate  contributions  together  with  earnings  thereon,  shall  be  reduced  and
                             allocated in the following order:


                             (A)      After-Tax  Contributions,  to the  extent  of the  excess  aggregate  contributions,
                                      together with Earnings, shall be paid to the Participant; and then, if necessary,


                             (B)      so much of the  Matching  Contributions  as shall be  necessary to equal the balance
                                      of the excess  aggregate  contributions,  together with Earnings,  shall be reduced,
                                      and to the extent such  Matching  Contributions  and  Earnings are vested they shall
                                      be paid to the Participant.  To the extent such Matching  Contributions and Earnings
                                      are not  vested  they  shall  be  forfeited  and  used  to  reduce  future  Employer
                                      Contributions.


                    (iv)     Any repayment or forfeiture of excess  aggregate  contributions  shall be made before the end
                             of twelve months  following the Plan Year for which the excess aggregate  contributions  were
                             made and, to the extent  practicable,  any  repayment or  forfeiture  shall be made within 12
                             months  after the close of the Plan Year in which the  excess  aggregate  contributions  were
                             made.


                    (v)      Current Year Approach,  1997 After-Tax  Contributions,  Matching  Contributions and Statutory
                             Compensation  were used to  determine  the  Actual  Contribution  Percentage  for  Non-Highly
                             Compensated  Employees  for the 1997 Plan Year  Actual  Contribution  Percentage  Test.  1998
                             After-Tax  Contributions,  Matching  Contributions  and Statutory  Compensation  were used to
                             determine the Actual  Contribution  Percentage for Non-Highly  Compensated  Employees for the
                             1998 Plan Year Actual Contribution Percentage Test.


           (b)      For Plan  Years  beginning  on or after  January  1,  1999,  the  Contribution  Percentage  for Highly
                    Compensated  Employees who are  Participants or eligible to become  Participants  shall not exceed the
                    Contribution  Percentage  for  all  other  Employees  who  are  Participants  or  eligible  to  become
                    Participants   multiplied  by  1.25.  If  the  Contribution  Percentage  for  the  Highly  Compensated
                    Employees  does not meet the  foregoing  test,  the  Contribution  Percentage  for Highly  Compensated
                    Employees may not exceed the  Contribution  Percentage of all other Employees who are  Participants or
                    eligible to become  Participants by more than two percentage points,  and the Contribution  Percentage
                    for Highly  Compensated  Employees may not be more than 2.0 times the Contribution  Percentage for all
                    other Employees.  The Committee may implement rules limiting the After-Tax  Contributions  that may be
                    made by some or all  Highly  Compensated  Employees  so that  this  limitation  is  satisfied.  If the
                    Committee  determines  that the limitation  under this Section has been exceeded in any Plan Year, the
                    following provisions shall apply:


                    (i)      The   Contribution   Percentage  of  the  Highly   Compensated   Employee  with  the  highest
                             Contribution  Percentage  shall be reduced to the extent  necessary to meet the  Contribution
                             Percentage  test or to cause such  percentage  to equal the  Contribution  Percentage  of the
                             Highly  Compensated  Employee  with  the  next  highest  percentage.  This  process  will  be
                             repeated  until  the  Contribution  Percentage  test is  passed.  Each  percentage  shall  be
                             rounded  to  the  nearest   one-hundredth   of  one  percent  of  the  Employee's   Statutory
                             Compensation.  The  amount  of  After-Tax  Contributions  made  by  each  Highly  Compensated
                             Employee in excess of the amount  permitted under his revised  contribution  percentage shall
                             be added  together  and  allocated  to some or all Highly  Compensated  Employees as follows.
                             The  After-Tax  Contributions  of the Highly  Compensated  Employee  with the highest  dollar
                             amount of such  contributions  shall be reduced by the lesser of (i) the amount  required  to
                             cause  that  Employee's   After-Tax   Contributions  to  equal  the  dollar  amount  of  such
                             contributions  of the Highly  Compensated  Employee  with the next highest  dollar  amount of
                             such  contributions,  or (ii)  an  amount  equal  to the  total  excess  contributions.  This
                             procedure is repeated until all excess contributions are allocated.


                    (ii)     Any excess contributions, together with Earnings thereon, shall be paid to the Participant.


                    (iii)    Any  repayment  of  excess  contributions  shall  be made  before  the end of  twelve  months
                             following  the Plan Year for which the  excess  contributions  were made and,  to the  extent
                             practicable,  any  repayment  shall be made within 2 1/2months after the close of the Plan Year
                             in which the excess contributions were made.


           (c)      For  Plan  Years   beginning  on  or  after   January  1,  1999,   the  Plan  shall  comply  with  the
                    nondiscrimination  requirements of Code Section 401(m) with respect to Matching  Contributions  by use
                    of the alternative  nondiscrimination  requirements under Code Section 401(m)(11), as set forth in the
                    Plan.


3.09       Aggregate Contribution Limitation


           For Plan Years  beginning  prior to January 1, 1999,  notwithstanding  the  provisions of Sections  3.07(a) and
           3.08(a),  in no  event  shall  the sum of the  Actual  Deferral  Percentage  of the  group of  eligible  Highly
           Compensated  Employees  and the  Contribution  Percentage  of such group,  after  applying  the  provisions  of
           Sections  3.07(a) and 3.08(a),  exceed the "aggregate  limit" as provided in Section  401(m)(9) of the Code and
           the  regulations  issued  thereunder.  In the event the  aggregate  limit is  exceeded  for any Plan Year,  the
           Contribution  Percentages  of the Highly  Compensated  Employees  shall be reduced to the extent  necessary  to
           satisfy the aggregate limit in accordance with the procedure set forth in Section 3.08(a).


3.10       Additional Discrimination Testing Provisions


           (a)      For Plan Years  beginning prior to January 1, 1997, if any Highly  Compensated  Employee is either (i)
                    a five  percent  owner or (ii) one of the 10  highest  paid  Highly  Compensated  Employees,  then any
                    contribution  trade by or on  behalf  of any  member of his  "family"  shall be  deemed  made by or on
                    behalf of such Highly  Compensated  Employee for purposes of Sections  3.07(a),  3.08(a) and 3.09,  to
                    the extent  required  under  regulations  prescribed  by the Secretary of the Treasury or his delegate
                    under Sections 401(k) and 401(m) of the Code. The  contributions  required to be aggregated  under the
                    preceding   sentence  shall  be  disregarded  in  determining  the  Actual  Deferral   Percentage  and
                    Contribution  Percentage  for the group of non-highly  compensated  employees for purposes of Sections
                    3.07(a),  3.08(a)  and 3.09.  Any return of excess  contributions  or excess  aggregate  contributions
                    required under Sections  3.07(a),  3.08(a) and 3.09, with respect to the family group shall be made by
                    allocating the excess  contributions  or excess  aggregate  contributions  among the family members in
                    proportion  to the  contributions  made by or on behalf of each family  member that is  combined.  For
                    purposes of this  paragraph,  the term "family" means,  with respect to any employee,  such employee's
                    spouse  and any  lineal  ascendants  or  descendants  and any  spouses of such  lineal  ascendants  or
                    descendants.


           (b)      If any Highly  Compensated  Employee is a participant in another  qualified plan of the Employer or an
                    Affiliated  Employer,  other than an employee stock ownership plan described in Section  4975(e)(7) of
                    the Code or any other qualified plan which must be mandatorily  disaggregated  under Section 410(b) of
                    the Code,  under which deferred cash  contributions  or matching  contributions  are made on behalf of
                    the Highly  Compensated  Employee  or under  which the Highly  Compensated  Employee  makes  after-tax
                    contributions,  the  Committee  shall  implement  rules,  which shall be uniformly  applicable  to all
                    employees similarly  situated,  to take into account all such contributions for the Highly Compensated
                    Employee under all such plans in applying the  limitations of Sections  3.07(a),  3.08(a) and 3.09. If
                    any other such  qualified  plan has a plan year other than the Plan Year defined in Section 1.36,  the
                    contributions  to be taken into account in applying the  limitations of Sections  3.07,  3.08 and 3.09
                    will be those made in the Plan Years ending with or within the same calendar year.


           (c)      In the event that this Plan is  aggregated  with one or more other plans to satisfy  the  requirements
                    of  Sections  401(a)(4)  and  410(b) of the Code  (other  than for  purposes  of the  average  benefit
                    percentage  test  and if such  requirements  apply  to this  Plan)  or if one or more  other  plans is
                    aggregated (in accordance with applicable  regulations)  with this Plan to satisfy the requirements of
                    such  sections  of the Code,  then the  provisions  of  Sections  3.07(a),  3.08(a)  and 3.09 shall be
                    applied by determining the Actual Deferral  Percentage and Contribution  Percentage of employees as if
                    all such plans were a single  plan.  Plans may be  aggregated  under this  paragraph  (c) only if they
                    have the same plan year.


           (d)      Notwithstanding  any provision of the Plan to the contrary,  employees included in a unit of employees
                    covered by a collective  bargaining  agreement  shall be  disregarded  in applying the  provisions  of
                    Sections  3.08(a) and 3.09 and the provisions of Section 3.07(a) shall be applied,  at the election of
                    the Committee,  either  separately to employees  included in each  collective  bargaining unit or as a
                    group to all employees included in any collective bargaining unit.


           (e)      For Plan Years  commencing on or after  January 1, 1999, if the Company  elects to apply the provision
                    of Section  410(b)(4)(B)  of the Code to satisfy the  requirements of Section  401(k)(3)(A)(1)  of the
                    Code,  the Company may apply the  provisions of Section  3.07(a),  3.08(a) and 3.09 by excluding  from
                    consideration all eligible  employees (other than Highly  Compensated  Employees) who have not met the
                    minimum age and service requirements of Section 410(a)(1)(A) of the Code.


3.12       Maximum Annual Additions


           (a)      The annual  addition to a  Participant's  Accounts for any Plan Year,  which shall be  considered  the
                    "limitation  year" for  purposes of Section 415 of the Code,  when added to the  Participant's  annual
                    addition for that Plan Year under any other  qualified  defined  contribution  plan of the Employer or
                    an  Affiliated  Employer,  shall not exceed an amount  which is equal to the lesser of (i) 25 % of his
                    aggregate  remuneration  for that Plan Year or (ii) $30,000 for Plan years  commencing  before January
                    1, 2002 and the lesser of (i) 100% of his aggregate  remuneration  on or after January 1, 2002 or (ii)
                    $40,000  for Plan  Years  commencing  on or after  January  1,  2002.  For any Plan  Year,  the dollar
                    limitations  specified in the previous  sentence  shall be  increased  by the  appropriate  Adjustment
                    Factor.


           (b)      For purposes of this Section,  the "annual  addition" to a  Participant's  Accounts under this Plan or
                    any other qualified  defined  contribution  plan maintained by the Employer or an Affiliated  Employer
                    shall be the sum of:


                    (i)      the total  contributions,  including  Deferred Cash  Contributions  (but  excluding  Catch-up
                             Contributions),  made  on  the  Participant's  behalf  by the  Employer  and  all  Affiliated
                             Employers,


                    (ii)     all  Participant  contributions,  exclusive  of any  Rollover  Contributions  or  Transferred
                             Contributions, and


                    (iii)    forfeitures, if applicable,


                    that have been  allocated to the  Participant's  Accounts  under this Plan or his  accounts  under any
                    other  such  qualified  defined  contribution  plan.  Annual  additions  also  shall  include  amounts
                    allocated to an  individual  medical  account as defined in Section  415(1)(1)  of the Code,  which is
                    part  of a  defined  benefit  plan  maintained  by the  Employer  or an  Affiliated  Employer.  Annual
                    additions also includes amounts derived from  contributions  which are attributable to  postretirement
                    medical  benefits  allocated  to a "key  employee,"  as defined in Section  419(A)(d)(3)  of the Code,
                    under a welfare  benefit  fund as defined  in Section  419(e) and  maintained  by the  Employer  or an
                    Affiliated Employer.  For purposes of this paragraph (b), any Deferred Cash Contributions  distributed
                    under  Section  3.07  and  any  After-Tax  Contributions  or  Matching  Contributions  distributed  or
                    forfeited  under the  provisions of Sections 3.01,  3.07(a),  3.08(a) or 3.09 shall be included in the
                    annual addition for the year allocated.


           (c)      For purposes of this Section,  the term  "remuneration" with respect to any Participant shall mean the
                    wages,  salaries  and  other  amounts  paid in  respect  of that  Participant  by the  Employer  or an
                    Affiliated  Employer  for personal  services  actually  rendered,  determined  after any  reduction of
                    Compensation  pursuant to Section 3.01 or pursuant to a cafeteria  plan as described in Section 125 of
                    the Code,  including (but not limited to) bonuses,  overtime  payments and commissions,  but excluding
                    deferred  compensation,  stock  options and other  distributions  which  receive  special tax benefits
                    under  the Code.  Effective  January  1,  1998,  such  remuneration  shall be  determined  before  any
                    reduction of  compensation  pursuant to Section  3.01 or pursuant to a cafeteria  plan as described in
                    Section 125 of the Code.  Effective  January 1, 2001,  such  remuneration  shall be determined  before
                    any reduction of compensation  pursuant to a qualified  transportation  fringe under Section 132(f)(4)
                    of the Code.


           (d)      If the annual  addition to a  Participant's  Accounts for any Plan Year,  prior to the  application of
                    the  limitation  set  forth  in  paragraph  (a)  above,   exceeds  that  limitation,   the  amount  of
                    contributions  credited  to the  Participant's  Accounts  in that Plan Year shall be  adjusted  to the
                    extent necessary to satisfy that limitation in accordance with the following order of priority:


                    (i)      The Participant's  After-Tax  Contributions under Section 3.02 shall be reduced to the extent
                             necessary.  The amount of the reduction shall be returned to the  Participant,  together with
                             any earnings on the contributions to be returned.


                    (ii)     The Employer  Additional  Cash  Contributions  allocated to the  Participant  and forfeitures
                             allocated to the  Participant  shall be reduced and the amount of the reduction shall be held
                             in a suspense account and shall be used to reduce future Employer Contributions.


                    (iii)    The Employer Stock  Contributions  allocated to the Participant and forfeitures  allocated to
                             the  Participant  shall be reduced  and the amount of the  reduction  shall be used to reduce
                             future Employer Contributions.


                    (iv)     The  Employer  Retirement   Contributions   allocated  to  the  Participant  and  forfeitures
                             allocated to the  Participant  shall be reduced and the amount of the reduction shall be used
                             to reduce future Employer Contributions.


                    (v)      The Matching  Contributions  and forfeitures  allocated to the Participant,  shall be reduced
                             and the amount of the reduction shall be used to reduce future Employer Contributions.


                    (vi)     The Participant's  Deferred Cash Contributions shall be reduced to the extent necessary.  The
                             amount of the reduction  attributable to the Participant's  Deferred Cash Contributions shall
                             be returned to the Participant, together with any earnings on those contributions.


           (e)      For Plan Years  beginning  prior to January 1, 2000,  if a Participant  is a participant  in a defined
                    benefit plan  maintained by an Employer or Affiliated  Employer,  the sum of his defined  benefit plan
                    fraction and his defined contribution plan fraction for any limitation year may not exceed 1.0.


                    For purposes of this Section,  the term "defined  contribution  plan fraction"  means a fraction,  the
                    numerator of which is the sum of all of the annual  additions to (a) the  Participant's  Account under
                    this Plan and (b) the Participant's  accounts under any other defined  contribution plans which may be
                    maintained by the Employers and  Affiliated  Employer as of the close of the  limitation  year and the
                    denominator  of  which  is  the  sum of the  lesser  of the  following  amounts  determined  for  such
                    limitation  year and for each prior  limitation  year of his  employment  by an Employer or Affiliated
                    Employer:


                             o        The product of 1.25 multiplied by the dollar  limitation under Section  415(c)(1)(A)
                                      of the Code for the limitation year; or


                             o        The  product  of  1.4  multiplied  by the  percentage  limitation  calculated  under
                                      Section   415(c)(1)(B)  of  the  Code  with  respect  to  the  Participant  for  the
                                      limitation year.


                    For  purposes of this  Section,  the term  "defined  benefit  plan  fraction"  means a  fraction,  the
                    numerator of which is the  Participant's  projected  annual benefit (as defined in the defined benefit
                    plan)  determined as of the close of the  limitation  year and the  denominator of which is the lesser
                    of:


                             o        The product of 1.25 multiplied by the dollar  limitation under Section  415(b)(1)(A)
                                      of the Code for the limitation year; or


                             o        The product of 1.4 multiplied by the percentage  limitation  which may be taken into
                                      account  pursuant  to  Section   415(b)(1)(A)  of  the  Code  with  respect  to  the
                                      Participant for the limitation year.


                    The limitation on aggregate  benefits from a defined benefit plan and a defined  contribution plan set
                    forth in this  Section  shall be complied  with by a reduction  (if  necessary)  in the  Participant's
                    benefits  under the  defined  benefit  plan in  accordance  with the  provisions  of that plan and his
                    benefits hereunder shall not be affected by the aggregate limitation.


                    This  limitation  will no longer apply in determining  aggregate  benefits from a defined benefit plan
                    and a defined contribution plan for any Plan Year beginning after December 31, 1999.


3.12       Return of Contributions


           (a)      The Employer's  contributions to the Plan are conditioned upon their  deductibility  under Section 404
                    of the  Code.  If all or  part  of  the  Employer's  deductions  for  contributions  to the  Plan  are
                    disallowed  by  the  Internal  Revenue  Service,  the  portion  of the  contributions  to  which  that
                    disallowance  applies  shall  be  returned  to  the  Employer  without  interest  but  reduced  by any
                    investment loss  attributable to those  contributions.  The return shall be made within one year after
                    the disallowance of deduction.


           (b)      The Employer's  contributions  to the Plan are also conditioned upon there being no mistake of fact in
                    making the  contributions.  The Employer may recover without interest the amount of its  contributions
                    to the Plan made on account  of a mistake of fact,  reduced by any  investment  loss  attributable  to
                    those contributions, if recovery is made within one year after the date of those contributions.


           (c)      In the event that  Deferred  Cash  Contributions  made under Section 3.01 are returned to the Employer
                    in accordance  with the provisions of this Section,  the elections to reduce  Compensation  which were
                    made by  Participants on whose behalf those  contributions  were made shall be void  retroactively  to
                    the  beginning  of  the  period  for  which  those   contributions   were  made.   The  Deferred  Cash
                    Contributions  so  returned  shall  be  distributed  in cash to  those  Participants  for  whom  those
                    contributions were made.


3.13       Contributions Not Contingent Upon Profits


           The  Employer may make  contributions  to the Plan  without  regard to the  existence or the amount of profits.
           Notwithstanding  the foregoing,  however,  this Plan is designed to qualify as a "profit-sharing  plan" for all
           purposes of the Code.


3.14       Contributions During Period of Military Leave


           (a)      Notwithstanding  any  provision of this Plan to the  contrary,  contributions,  benefits,  and service
                    credit with respect to qualified  uniformed  service duty will be provided in accordance  with Section
                    414(u) of the Code.  Without regard to any limitations on  contributions  set forth in this Article 3,
                    a Member who is  reemployed on or after  December 12, 1994 and is credited with Vesting  Service under
                    the  provisions of Section  1.48(b)  because of a period of service in the  uniformed  services of the
                    United  States  may  elect to  contribute  to the  Plan  the  Deferred  Cash  Contributions,  Catch-up
                    Contributions  and/or  After-Tax  Contributions  that  could  have  been  contributed  to the  Plan in
                    accordance  with the  provisions  of the Plan had he remained  continuously  employed by the  Employer
                    throughout  such  period of absence  ("make-up  contributions").  The amount of make-up  contributions
                    shall be determined on the basis of the  Participant's  Compensation  in effect  immediately  prior to
                    the  period of  absence  and the terms of the Plan at such  time.  Any  Deferred  Cash  Contributions,
                    Catch-up  Contributions  and/or After-Tax  Contributions so determined shall be limited as provided in
                    Sections 3.01(b),  3.01(e),  3.02, 3.07, 3.08, 3.09 and 3.10 with respect to the Plan Year or Years to
                    which such  contributions  relate rather than the Plan year in which  payment is made.  Any payment to
                    the Plan  described  in this  paragraph  shall be made during the  applicable  repayment  period.  The
                    repayment  period shall equal three times the period of absence,  but not longer than five years,  and
                    shall begin on the latest of: (i) the  Participant's  date of reemployment,  (ii) October 13, 1996, or
                    (iii) the date the  Employer  notifies the  Employee of his rights  under this  Section.  Earnings (or
                    losses) on make-up  contributions shall be credited commencing with the date the make-up  contribution
                    is made in accordance with the provisions of Article 4.


           (b)      With respect to a Participant  who makes the election  described in paragraph (a) above,  the Employer
                    shall make  Matching  Contributions,  on the  make-up  contributions  in the amount  described  in the
                    provisions  of  Section  3.03  respectively,  as in  effect  for the Plan Year to which  such  make-up
                    contributions  relate.  Employer  Matching  Contributions,  and if  applicable,  under this  paragraph
                    shall be made during the period  described  in paragraph  (a) above.  Earnings (or losses) on Matching
                    Contributions and Special  Contributions  shall be credited commencing with the date the contributions
                    are made in accordance  with the provisions of Article 4. Any  limitations  on Matching  Contributions
                    described  in Sections  3.03,  3.06,  3.07(a),  and 3.08(a)  shall be applied with respect to the Plan
                    Year or Years to which such  contributions  relate rather than the Plan Year or Years in which payment
                    is made.


           (c)      All  contributions  under  this  Section  are  considered  "annual  additions,"  as defined in Section
                    415(c)(2) of the Code,  and shall be limited in  accordance  with the  provisions of Section 3.11 with
                    respect  to the Plan Year or Years to which such  contributions  relate  rather  than the Plan Year in
                    which payment is made.








                                          ARTICLE 4. INVESTMENT OF CONTRIBUTIONS
                                          --------------------------------------


4.01       Investment Funds


           (a)      The Committee shall determine the number and types of Investment  Funds.  Unless  otherwise  specified
                    by the Committee, the Investment Funds made available shall include the following Funds:


                    o        Short-Term Investment Fund
                             --------------------------


                             The  Short-Term  Investment  Fund shall be invested  in  short-term  obligations  of the U.S.
                             Government, certificates of deposit, commercial paper and other short-term investments.


                    o        Guaranteed Investment Fund
                             --------------------------


                             The Guaranteed  Investment  Fund shall be based upon  contracts  between  selected  insurance
                             companies  or other  financial  institutions  and the  Trustee.  The Funds  held  under  each
                             contract  shall  be  guaranteed  by  the  insurance  company  as to  principal  and  rate  of
                             investment  income.  The  guarantee of the  principal  and  interest  shall be based upon the
                             financial stability of the insurance company that issues the contract.


                    o        Mutual Equity Fund
                             ------------------


                             The Mutual  Equity  Fund shall be a mutual fund  chosen by the  Committee.  The Fund shall be
                             classified as an index fund chosen to reflect a stipulated equity market index.


                    o        Diversified Investment Fund
                             ---------------------------


                             The  Diversified  Investment  Fund  shall be  invested  primarily  in  domestic  and  foreign
                             equities  (other  than  equities  of the  Employer  or an  Affiliated  Employer),  bonds  and
                             short-term investments.


                    o        U.S. Can Corporation Common Stock Fund
                             --------------------------------------


                             All shares of U.S.  Can  Corporation  common stock  contributed  to the Plan shall be held in
                             the U.S. Can Corporation  Common Stock Fund. The Trustee shall vote, in its  discretion,  all
                             shares of U.S. Can  Corporation  common stock held in this fund and all shares,  if any, paid
                             to the Trustee as dividends on shares held in the fund.


                             In addition to, or in lieu of, the Funds described above,  the Committee may establish,  from
                             time to time, one or more other Investment Funds as it may deem appropriate.  Moreover,  such
                             additional or alternative  Funds need not be of the same generic type as the Funds  described
                             above.


           (b)      The Trustee  may keep such  amounts of cash as it, in its sole  discretion,  shall deem  necessary  or
                    advisable as part of the Funds, all within the limitations specified in the trust agreement.


           (c)      Dividends,  interest,  and other  distributions  received on the assets held by the Trustee in respect
                    to each of the above Funds shall be reinvested in the respective Fund.


4.02       Investment of Participants' Accounts


           A  Participant  shall make an  investment  election  for each of his  Participant  Account,  Deferred  Account,
           Employer  Account  (other  than  Employer  Stock  Contributions  in such  Account)  and  Rollover  Account,  in
           accordance with one of the following options:


           (a)      100% in one of the  available  Investment  Funds  (which  shall not include the U.S.  Can  Corporation
                    Common Stock Fund);


           (b)      in more than one available Investment Fund allocated in whole percentages.


           In the event a Participant  does not make an investment  election,  any amounts  credited to his Accounts shall
           be invested in accordance with the last investment  instructions  properly filed by said  Participant (if any),
           and in the  absence of such  investment  instructions,  the amount  shall be  invested  in an  Investment  Fund
           consisting primarily of short-term investments.


4.03       Responsibility for Investments


           Except for investment of Employer  Stock  Contributions  in the U.S. Can  Corporation  Common Stock Fund,  each
           Participant is solely  responsible  for the selection of his investment  options.  The Trustee,  the Committee,
           the Employer,  and the officers,  supervisors and other employees of the Employer are not empowered to advise a
           Participant  as to the manner in which his Accounts  shall be  invested.  The fact that an  Investment  Fund is
           available  to  Participants  for  investment  under the Plan shall not be  construed  as a  recommendation  for
           investment in that Investment Fund.


4.04       Change of Election


           A Participant  may change his investment  election under Section 4.02 among the available  Investment  Funds in
           accordance  with rules and  procedures  established  by the Trustee.  A Participant  may change his election as
           frequently as the Trustee permits, which shall be no less frequently than once each calendar quarter.


4.05       Reallocation of Accounts Among the Funds


           Except for  investment of Employer  Stock  Contributions,  a Participant  may elect to reallocate  his Accounts
           among the available  Investment  Funds in accordance  with rules and procedures  established by the Trustee.  A
           Participant  may  reallocate  his  Accounts  as  frequently  as the  Trustee  permits,  which  shall be no less
           frequently than once each calendar quarter.


4.06       Limitations


           Notwithstanding  anything in this Article to the contrary,  a Participant's  elections under Section 4.02, 4.04
           or 4.05 shall be subject to any investment restrictions established by the Trustee or the Committee.


4.07       ERISA Section 404(c) Compliance


           This Plan is intended to constitute a Plan described in Section 404(c) of ERISA.


4.08       Private Company


           If as a result of a tender  offer or other  corporate  transaction,  the shares of U.S.  Can  Corporation,  the
           corporate  parent of the  Company,  held in the U.S.  Can  Corporation  Common Stock Fund are sold or otherwise
           exchanged for cash, then as soon as practicable after such transaction,  the U.S. Can Corporation  Common Stock
           Fund shall be dissolved and a  Participant's  Cash interest in such fund shall be allocated  among and invested
           in other Investment Funds maintained under the Plan in accordance with the  Participant's  investment  election
           under Section 4.02 and after such amounts are allocated to such  Investment  Funds,  they shall be eligible for
           reallocation  in  accordance  with  Section  4.05.  Any  separate  subaccount  established  to record U.S.  Can
           Corporation Common Stock contributed to the Plan shall be dissolved by merging it into the Employer Account.








                                           ARTICLE 5. VALUATION OF THE ACCOUNTS
                                           ------------------------------------


5.01       Valuation of Accounts


           (a)      All  assets  of the  Trust  Fund  shall be  valued  at fair  market  value as of the  Valuation  Date.
                    Effective  as of  April  1,  1993,  as of any  Valuation  Date,  the fair  market  value  of U.S.  Can
                    Corporation  common stock shall be the closing  price,  on such date, of U.S. Can  Corporation  common
                    stock as reported on the National Association of Securities Dealers automated quotation system.


           (b)      On each Valuation Date, the Account of a Participant in each Investment Fund shall equal:


                    (i)      the Participant's  account balance in that Account as of the immediately  preceding Valuation
                             Date; plus


                    (ii)     the net  earnings  thereon,  after  adjusting  for  expenses  and losses,  if any,  since the
                             immediately preceding Valuation Date; plus


                    (iii)    the  amount  of the  contributions,  if any,  made to that Fund on the  Participant's  behalf
                             since the immediately preceding Valuation Date; less


                    (iv)     the amounts of any  withdrawals  from the Account since the immediately  preceding  Valuation
                             Date.


5.02       Discretionary Power of the Committee


           The  Committee  reserves the right to change from time to time the  procedures  used in valuing the Accounts or
           crediting (or debiting) the Accounts if it determines,  after due  deliberation  and upon the advice of counsel
           and/or the  current  recordkeeper,  that such an action is  justified  in that it  results  in a more  accurate
           reflection  of the fair  market  value of assets.  In the event of a conflict  between the  provisions  of this
           Article and such new administrative procedures, those new administrative procedures shall prevail.


5.03       Annual Statements


           Each  Participant  shall be furnished  with a statement  setting forth the value of his Accounts and the Vested
           Portion of his Accounts no less frequently than annually.








                                          ARTICLE 6. VESTED PORTION OF ACCOUNTS
                                          -------------------------------------


6.01       Participant Account, Deferred Account and Rollover Account


           A  Participant  shall at all times be 100%  vested in,  and have a  nonforfeitable  right to,  his  Participant
           Account,  his Deferred Account,  his Rollover Account and that portion of his Employer Account  attributable to
           Employer Contributions for Plan Years prior to January 1, 1988.


6.02       Employer Account


           (a)      A  Participant  shall be vested  in,  and have a  nonforfeitable  right to,  his  Employer  Account in
                    accordance with the following schedule:


                             Years of Vesting Service                             Percent Vested
                             ------------------------                             --------------


                             less than 1 year                                               0%
                                        1 year                                             20
                                        2 years                                            40
                                        3 years                                            60
                                        4 years                                            80
                                        5 or more years                                   100


           (b)      Notwithstanding  the  foregoing,  a  Participant  shall be 100%  vested in, and have a  nonforfeitable
                    right to, his Accounts upon death,  Disability or the  attainment of his 65th birthday  while actively
                    employed by the Employer or an Affiliated Employer.


           (c)      As of January 1, 1999, a Participant  who is an Employee of the Employer or an Affiliated  Employer on
                    or after  January  1, 1999 shall be 100%  vested in and have a  nonforfeitable  right to his  Employer
                    Account.


                    Notwithstanding  the  foregoing,  a Participant  who terminated  employment  with an Employer prior to
                    January 1, 1999 and was not 100% vested in his Employee  account and who is  reemployed by an Employer
                    on or after  January 1,  1999 and after  incurring  five  consecutive  Breaks in Service  shall not be
                    vested in that portion of his Employee  account  attributable  to the prior period of Vesting  Service
                    with the Employer.


6.03       Disposition of Forfeitures


           (a)      Upon termination of employment of a Participant who was not 100% vested in his Employer  Account,  the
                    nonvested  portion  of the  Employer  Account  shall be  segregated  in a separate  account  until the
                    Participant  incurs five consecutive  one-year Breaks in Service.  The value of the segregated  amount
                    shall  equal the sum of (i) the value of the  nonvested  portion of the  Account  invested in the U.S.
                    Can  Corporation  Common Stock Fund determined  using the value of U.S. Can  Corporation  Common Stock
                    Fund determined as of the Valuation Date coincident  with or immediately  preceding the  Participant's
                    termination of employment and (ii) the value of the nonvested  portion of the Account  invested in any
                    other  investment  fund  determined as of the end of the calendar  quarter in which the termination of
                    employment  occurred  in the  case of a  termination  of  employment  prior  to  April  1,  1993;  and
                    determined  as of the last day of the month in which the  termination  of  employment  occurred in the
                    case of a termination of employment on and after April 1, 1993. The  Participant's  vested interest in
                    such separate account shall be determined in accordance with the following formula:


                                    X = P x [AB + (R x D)] - (R x D)


                    where X is the value of the  Participant's  vested portion of the account,  P is the vested percentage
                    at the relevant  time,  AB is the account  balance at the relevant  time, D is the amount of the prior
                    distribution,  R is the ratio of the  account  balance at the  relevant  time to the  account  balance
                    after the prior  distribution.  The  "relevant  time" is the date as of which such  vested  portion is
                    being determined.


                    If the  former  Participant  is not  reemployed  by the  Employer  or an  Affiliated  Employer  before
                    incurring five consecutive  one-year Breaks in Service,  the nonvested portion of his Employer Account
                    so segregated  shall be forfeited.  If the  Participant is reemployed by the Employer or an Affiliated
                    Employer before incurring five consecutive  one-year Breaks in Service,  the nonvested  portion of his
                    Employer Account shall be reinstated in full.


           (b)      As of the last day of each Plan Year,  any amounts which became  forfeitures  during the Plan Year and
                    which are  invested in the U.S.  Can  Corporation  Common Stock Fund shall be allocated in the form of
                    U.S.  Can  Corporation  common  stock to the Employer  Accounts of all  Participants  who are eligible
                    Employees   described  in  Section  3.03(b),  in  the  same  proportion  as  each  such  Participant's
                    Compensation  during that Plan Year bears to the total  Compensation of all such  Participants  during
                    that Plan Year.  Any  forfeited  amounts  invested  in any  investment  fund  other than the U.S.  Can
                    Corporation  Common  Stock  Fund shall be used to reduce  future  Employer  Contributions,  or, at the
                    discretion of the Committee effective January 1, 2002, used to pay Plan administrative expenses.








                                       ARTICLE 7. WITHDRAWALS WHILE STILL EMPLOYED
                                       -------------------------------------------


7.01       Rules and Procedures


           A withdrawal  under the following  provisions  of this Article 7 shall be subject to the  following  procedures
           and restrictions:


           (a)      To make a withdrawal,  a Participant must submit his written request and other required  documentation
                    no less  than 10 days  prior  to the  Valuation  Date as of which  the  withdrawal  is to be  made.  A
                    withdrawal shall be made as of the Valuation Date next following the expiration of the notice period.


           (b)      Not more than one withdrawal  may be made in any calendar half year. For purposes of this  limitation,
                    "one withdrawal"  means a single withdrawal  consisting of amounts  withdrawn  pursuant to one or more
                    of the following paragraphs of this Article 7.


           (c)      The  minimum  withdrawal  shall be $100 or the  total  value of the  Vested  Portion  of his  Accounts
                    available for withdrawal, if less.


           (d)      If a loan and a hardship  withdrawal are processed as of the Valuation Date, the amount  available for
                    the  hardship  withdrawal  will  equal  the  Vested  Portion  of the  Participant's  Accounts  on such
                    Valuation Date reduced by the amount of the loan.


           (e)      The amount of the  withdrawal  shall be allocated  among the  Investment  Funds in  proportion  to the
                    value of the  Participant's  Accounts (from which the withdrawal is made) in each  Investment  Fund as
                    of the date of the withdrawal.


           (f)      All payments to Participants under this Article shall be made in cash as soon as practicable.


           (g)      Any  withdrawal  by a married  Participant  shall be in the form of a  Qualified  Joint  and  Survivor
                    Annuity unless the  Participant's  election and Spousal Consent to another form of withdrawal has been
                    received by the Pension and Annuity  Committee.  Such  written  consent  shall be  witnessed by a Plan
                    representative  or notary  public and shall  acknowledge  the effect a withdrawal  by the  Participant
                    will have on the spouse.  The  requirement  for  spousal  consent  may be waived by the  Committee  in
                    accordance with applicable law.


7.02       Withdrawal of After-Tax Contributions


           A  Participant  may  elect to  withdraw  all or part of the  After-Tax  Contributions  made to his  Participant
           Account  and  all or  part  of his  Transferred  Contributions  attributable  to  After-Tax  Contributions.  No
           withdrawals  may be made from a  Participant's  Employer  Account  or  Deferred  Account,  except as  otherwise
           provided in this Article.


 7.03      Withdrawal of Rollover Contributions


            A  Participant  may  elect  to  withdraw  all or  part  of  his  Rollover  Account  attributable  to  Rollover
            Contributions  and  all or  part  of his  Transferred  Contributions  attributable  to his  former  employer's
            contribution  (other than  Transferred  Contributions  originally made pursuant to Section 401(k) of the Code)
            which have been credited to his Account for at least 24 months.


7.04       Withdrawal After Age 59 1/2


           A  Participant  who has withdrawn the total amount  available for  withdrawal  under Section 7.02 and who shall
           have  attained  age 59-1/2 as of the  effective  date of any  withdrawal  pursuant to this Section may elect to
           withdraw all or part of his Deferred Account,  attributable to Deferred Cash Contributions,  and all or part of
           his Transferred  Contributions  consisting of contributions  made pursuant to Section 401 (k) of the Code as if
           such  contributions were Deferred Cash  Contributions,  which have been credited to his Account for at least 24
           months.


7.05       Hardship Withdrawal


           (a)      A  Participant  who has  withdrawn  the total amount  available  for  withdrawal  under the  preceding
                    provisions of this Article may elect to withdraw all or part of the Deferred Cash  Contributions  made
                    on his behalf to his Deferred Account (but no earnings  credited to those  contributions),  and all or
                    part of his Transferred  Contributions  consisting of contributions made pursuant to Section 401(k) of
                    the  Code as if such  contributions  were  Deferred  Cash  Contributions,  upon  furnishing  proof  of
                    Hardship satisfactory to the Committee.


           (b)      A  Participant  shall be  considered  to have  incurred  a  "Hardship"  if,  and only if, he meets the
                    requirements of paragraphs (c) and (d) below.


           (c)      As a condition for Hardship  there must exist with respect to the  Participant  an immediate and heavy
                    need to draw upon his Deferred  Account.  The Committee  shall presume the existence of such immediate
                    and heavy need if the requested withdrawal is on account of any of the following:


                    (i)      expenses for medical  care  described in Section  213(d) of the Code  previously  incurred by
                             the  Participant,  his spouse or any of his  dependents  (as  defined  in Section  152 of the
                             Code) or necessary for those persons to obtain such medical care;


                    (ii)     costs  directly  related  to  the  purchase  of a  principal  residence  of  the  Participant
                             (excluding mortgage payments);


                    (iii)    payment of tuition  and  related  educational  fees for the next 12 months of  post-secondary
                             education of the Participant, his spouse or dependents;


                    (iv)     payment of amounts  necessary  to prevent  eviction  of the  Participant  from his  principal
                             residence or to avoid foreclosure on the mortgage of his principal residence; or


                    (v)      the inability of the  Participant  to meet such other  expenses,  debts or other  obligations
                             that the Internal  Revenue  Service has  specifically  recognized as giving rise to immediate
                             and heavy financial need for purposes of Section 401(k) of the Code.


                    The  Participant  shall  furnish to the  Committee  such  supporting  documents as the  Committee  may
                    request in accordance with uniform and nondiscriminatory rules prescribed by the Committee.


           (d)      As a condition for Hardship,  the  Participant  must  demonstrate  to the Committee that the requested
                    withdrawal  is necessary to satisfy the financial  need  described in paragraph  (c). The  Participant
                    must  request,  on  such  form  as  the  Committee  shall  prescribe,  that  the  Committee  make  its
                    determination  of the  necessity  for the  withdrawal  solely  on the  basis of his  application.  The
                    Committee shall make such determination, provided all of the following requirements are met:


                    (i)      the  distribution  is not in excess of the amount of the immediate and heavy  financial  need
                             of the  Participant  including  amounts  necessary to pay any federal,  state or local income
                             taxes or penalties reasonably anticipated to result from the distribution,


                    (ii)     the Participant has obtained all distributions,  other than  distributions  available only on
                             account of hardship,  and all nontaxable  loans  currently  available  under all plans of the
                             Employer and Affiliated Employers,


                    (iii)    the  Participant  is  prohibited  from  making  Deferred  Cash  Contributions  and  After-Tax
                             Contributions  to the Plan and all  other  plans of the  Employer  and  Affiliated  Employers
                             under the terms of such plans or by means of an otherwise legally  enforceable  agreement for
                             at  least 12  months  for  withdrawals  made  before  January  1,  2002  and six  months  for
                             withdrawals made after December 31, 2001 after receipt of the distribution, and


                    (iv)     for  withdrawals  made before January 1, 2002, the  limitation  described in Section  3.01(b)
                             under all plans of the Employer and  Affiliated  Employers  for the calendar  year  following
                             the year in which  the  withdrawal  is made must be  reduced  by the  Participant's  elective
                             deferral made in the calendar year of the distribution for Hardship.


                    For  purposes of clause  (iii),  "all other plans of the  Employer  and  Affiliated  Employers"  shall
                    include stock option plans, stock purchase plans,  qualified and non-qualified  deferred  compensation
                    plans and such other plans as may be designated under  regulations  issued under Section 401(k) of the
                    Code, but shall not include health and welfare  benefit plans or the mandatory  employee  contribution
                    portion of a defined benefit plan.


7.06       Separate Contracts


           Pursuant to procedures  adopted by the Committee,  After-Tax  Contributions  made by a Participant on and after
           January 1, 1987, and earnings  thereon,  shall  constitute a separate  contract  (Contract I) and all remaining
           amounts  in the Plan with  respect  to a  Participant  shall  constitute  another  contract  (Contract  II) for
           purposes of Section 72(e) of the Code. The Committee  shall  maintain  records of  withdrawals,  contributions,
           earnings and other  additions  and  subtractions  attributable  to each  separate  contract and shall credit or
           charge the appropriate contract,  and adjust the non-taxable basis of each contract,  for transactions properly
           allocable to such contract.








                                             ARTICLE 8. LOANS TO PARTICIPANTS
                                             --------------------------------


8.01       Amount Available


           (a)      On and after  October 15, 1989, a  Participant  who is a party in interest  described in Section 3(14)
                    of ERISA may borrow,  on written  application of the Committee and on approval by the Committee  under
                    such uniform rules as it shall adopt, an amount which,  when added to the  outstanding  balance of any
                    other loans to the Participant from the Plan, does not exceed the lesser of


                    (i)      50% of the Vested Portion of his Account, and


                    (ii)     $50,000  reduced by the excess,  if any, of (A) the highest  outstanding  balance of loans to
                             the  Participant  from the Plan during the one year  period  ending on the day before the day
                             the loan is made,  over (B) the  outstanding  balance  of loans to the  Participant  from the
                             Plan on the date on which the loan is made.


           (b)      The interest rate to be charged on loans shall be determined at the time of the loan  application  and
                    shall be based on the  interest  rates  charged by  persons  in the  business  of  lending  money,  as
                    determined in accordance  with rules and procedures  established  by the Committee.  The interest rate
                    so determined shall be fixed for the duration of each loan.


           (c)      The  amount of the loan is to be  transferred  from the  Investment  Funds in which the  Participant's
                    Accounts  are  invested to a special  "Loan Fund" for the  Participant  under the Plan.  The Loan Fund
                    consists  solely of the amount  transferred  to the Loan Fund and is invested  solely in the loan made
                    to the  Participant.  The amount  transferred  to the Loan Fund shall be pledged as  security  for the
                    loan.  Payments of principal on the loan will reduce the amount held in the  Participant's  Loan Fund.
                    Those payments,  together with the attendant  interest  payment,  will be reinvested in the Investment
                    Funds in accordance with the Participant's then effective investment election.


8.02       Terms


           (a)      In addition to such rules and  regulations  as the  Committee  may adopt,  all loans shall comply with
                    the following terms and conditions:


                    (i)      An application for a loan by a Participant  shall be made in writing to the Committee,  whose
                             action in. approving or disapproving the application shall be final;


                    (ii)     Each loan shall be  evidenced  by a  promissory  note  payable  to the Plan;  such note shall
                             convey to the Trustee a security  interest in 50% of the Vested Portion of the  Participant's
                             Accounts;


                    (iii)    The period of  repayment  for any loan shall be arrived at by mutual  agreement  between  the
                             Committee  and the  Participant,  but that period shall not exceed five years unless the loan
                             is  to be  used  in  conjunction  with  the  purchase  of  the  principal  residence  of  the
                             Participant, in which case the loan may be up to 30 years;


                    (iv)     Payments of principal and interest  will be made by payroll  deductions or in a manner agreed
                             to by the  Participant  and  the  Committee  in  substantially  level  amounts,  but no  less
                             frequently  than quarterly,  in an amount  sufficient to amortize the loan over the repayment
                             period;


                    (v)      A loan may be prepaid in full as of any date without penalty;


                    (vi)     Only two loans may be  outstanding  at any given time except that a third loan may be made in
                             conjunction with the purchase of the principal residence of the Participant; and


                    (vii)    A loan  under  this  Article  shall  not be made to a  married  Participant  without  Spousal
                             Consent  to the pledge of the  Participant's  Account  to the Loan Fund as  security  for the
                             loan.  Such Spousal  Consent shall be obtained no earlier than the 90-day period that ends on
                             the  date  on  which  such  loan  is to be so  secured  and  shall  be  witnessed  by a  Plan
                             representative  or  notary  public  and shall  acknowledge  the  effect  such a pledge of the
                             Participant's  Account may have on the spouse.  The  requirement  for Spousal  Consent may be
                             waived by the Committee in accordance with applicable law.


           (b)      If a loan is not repaid in accordance  with the terms  contained in the promissory  note and a default
                    occurs,  the Plan may execute upon its security interest in the Participant's  Accounts under the Plan
                    to  satisfy  the  debt;  however,  the Plan  shall  not levy  against  any  portion  of the Loan  Fund
                    attributable  to amounts held in the  Participant's  Account until such time as a distribution  of the
                    Account could otherwise be made under the Plan.


           (c)      Any  additional  rules or  restrictions  as may be  necessary  to implement  and  administer  the loan
                    program  shall be in writing and  communicated  to  employees.  Such further  documentation  is hereby
                    incorporated  into  the Plan by  reference,  and the  Committee  is  hereby  authorized  to make  such
                    revisions to these rules, as it deems necessary or appropriate, on the advice of counsel.


           (d)      Loan repayments will be suspended under the Plan as permitted under Section 414(u)(4) of the Code.








                                 ARTICLE 9. DISTRIBUTION AFTER SEVERANCE FROM EMPLOYMENT
                                 -------------------------------------------------------


9.01       Eligibility


           Upon a  Participant's  severance from  employment,  the Vested Portion of the  Participant's  Accounts shall be
           distributed as provided in this Article.


9.02       Forms of Distribution


           A  Participant  may elect,  in such manner as the  Committee  shall  prescribe,  to receive an optional form of
           benefit described below:


           (a)      A single lump sum cash payment; or


           (b)      Payments in  approximately  equal  installments  at least  annually but not more frequent than monthly
                    over a  period  of five  years,  ten  years or  fifteen  years,  provided,  however,  that the  period
                    designated  by the  Participant  does not  exceed  the life  expectancy  of the last  survivor  of the
                    Participant  and his  Beneficiary.  At any time during the  installment  period,  upon the filing of a
                    90-day advance written notice,  the Participant may elect that the  then-present  value of his Account
                    be paid  in a  single  sum,  in lieu  of  continuing  installment  payments.  In the  event  that  the
                    Participant dies before all installments have been paid, the remaining  installment  payments shall be
                    paid to his  Beneficiary  at the same time as such  payments  would have been made to the  Participant
                    had he survived; or


           (c)      The purchase of a  nonforfeitable  fixed annuity  providing a monthly  pension payable for the life of
                    the  Participant,  provided that if the Participant is married on his Annuity  Starting Date and if he
                    has not  elected  otherwise,  the  benefit  shall be in the form of a  Qualified  Joint  and  Survivor
                    Annuity  providing  for a monthly  pension  payable to the  Participant  during his life and after his
                    death a pension at the rate of 50%,  and on or after the date assets are  transferred  from the Profit
                    Sharing Plan for Employees of Steeltin Can  Corporation  to this Plan,  75% or 100% (as elected by the
                    Participant)  paid to the  Participant,  payable  during the life of, and to the spouse to whom he was
                    married on the Annuity  Starting  Date.  A married  Participant  may elect,  during the 90-day  period
                    preceding  his  Annuity  Starting  Date,  not to  take  the  Qualified  Joint  and  Survivor  Annuity.
                    Elections  under  this  paragraph  (c) shall be in  writing  and shall be  subject  to  receipt by the
                    Committee of a Spousal  Consent to that  election.  The Committee  shall furnish each  Participant  no
                    less than 30 days nor more than 90 days  before his Annuity  Starting  Date a written  explanation  of
                    the  Qualified  Joint and Survivor  Annuity in  accordance  with  applicable  law. A  Participant  may
                    revoke his  election and make a new  election  from time to time and at any time during the  aforesaid
                    election  period.  If the  annuity  form is not a  Qualified  Joint  and  Survivor  Annuity  with  the
                    Participant's  spouse as the  Beneficiary,  the annuity  payable to the  Participant and thereafter to
                    his  Beneficiary  shall be  subject to the  incidental  death  benefit  rule as  described  in Section
                    401(a)(9)(G) of the Code and its applicable regulations.


           In the event that one of the foregoing  methods is not selected by a Participant  at termination of employment,
           or if required Spousal Consent is not obtained,  the Participant  shall receive his distribution in the form of
           a single life annuity,  or if married on the date his benefits  commence,  in the form of a Qualified Joint and
           Survivor  Annuity paying a pension to the  Participant's  spouse after the  Participant's  death at the rate of
           50% of the pension payable during the Participant's life.


9.03       Commencement of Payments


           (a)      Except as otherwise  provided in this Article,  distribution  of the Vested Portion of a Participant's
                    Accounts  shall  commence  as soon as  administratively  practicable  following  the  later of (i) the
                    Participant's  termination  of employment or (ii) the 65th  anniversary of the  Participant's  date of
                    birth  (but not more  than 60 days  after the close of the Plan Year in which the later of (i) or (ii)
                    occurs).


           (b)      In lieu of a distribution  as described in paragraph (a) above, a Participant  may, in accordance with
                    such  procedures  as the  Committee  shall  prescribe,  elect to have the  distribution  of the Vested
                    Portion of his Accounts  commence as soon as  administratively  practicable  following his termination
                    of employment with the Employer and all Affiliated Employers.


           (c)      In the case of the death of a  Participant  before his benefits  commence,  the Vested  Portion of his
                    Accounts shall be distributed to his  Beneficiary as soon as  administratively  practicable  following
                    the Participant's date of death in accordance with Section 9.06(a).


9.04       [RESERVED]


9.05       Age 70 1/2Required Distribution


           (a)      Prior to January 1, 1997,  in no event shall the  provisions  of this  Article  operate so as to allow
                    the  distribution of a  Participant's  Accounts to begin later than the April 1 following the calendar
                    year in which he attains  age 70 1/2,  provided  that such  commencement  in active  status  shall not be
                    required  with  respect  to a  Participant  (i) who  does  not  own  more  than  five  percent  of the
                    outstanding  stock of the Employer (or stock  possessing  more than five percent of the total combined
                    voting power of all stock of the Employer), and (ii) who attained age 70 1/2prior to January 1, 1988.


           (b)      In the event a  Participant  is  required  to begin  receiving  payments  while in  service  under the
                    provisions  of  paragraph  (a) above or  paragraph  (c) below,  the  Participant  may elect to receive
                    payment of the entire balance of the Accounts in the manner described in Section 9.02.


           (c)      Effective  January 1, 1997,  distribution  of a  Participant's  Accounts shall be made or commenced no
                    later than the April 1 of the calendar  year  following  the later of the  calendar  year in which the
                    Participant  attains age 70 1/2or the calendar  year in which occurs the  Participant's  termination  of
                    employment as an Employee;  provided,  however, that such distribution for a Participant who owns more
                    than five  percent  of the  outstanding  stock of the  Employer  (or stock  possessing  more than five
                    percent of the total  combined  voting  power of all stock of the  Employer),  shall be required to be
                    made or commenced no later than April 1 following the calendar year in which the  Participant  attains
                    age 70 1/2.


           (d)      If a  Participant  who does not own more than five  percent of the  outstanding  stock of the Employer
                    (or stock  possessing  more than five percent of the total  combined  voting power of all stock of the
                    Employer)  attains  age 70 1/2prior to January 1, 1999 and  remains in service  after  April 1 following
                    the calendar  year in which he attains 70 1/2, he may elect to have the  provision of paragraph (b) apply
                    as if the  participant was a five-percent  owner.  Such election shall be made in accordance with such
                    administrative procedures, as the Committee shall prescribe.


           (e)      A  Participant  shall  elect a form of payment  under this  Section  by giving  written  notice to the
                    Committee  within  the 90-day  period  prior to his  required  beginning  date.  The  commencement  of
                    payment  under this Section  shall  constitute  an Annuity  Starting Date for purposes of Sections 72,
                    401(a)(11)  and 417 of the Code. If  applicable,  upon the  Participant's  subsequent  termination  of
                    employment,  payment of the  Participant's  Accounts  shall  continue in the manner elected under this
                    Section.  In the event a Member fails to make an election  under this  Section;  payment shall be made
                    in accordance with Section 9.02(c).


9.06       Death Benefits


           (a)      Upon the death of a  Participant  prior to the Annuity  Starting  Date of a  distribution  for reasons
                    other than death, the full value of the  Participant's  Accounts,  determined as of the Valuation Date
                    next  succeeding  his death,  shall be applied to purchase a fixed  annuity from an insurance  company
                    providing a monthly  pension to the  Participant's  surviving  spouse for the spouse's life unless the
                    spouse  elects  to  receive  the  value  of the  Participant's  Accounts  in the form of a lump sum or
                    installment  payments (as  described in Section  9.02(b))  prior to the Annuity  Starting  Date of the
                    life annuity.


                    If the Participant  has no surviving  spouse or the  Participant  designates a Beneficiary  other than
                    his spouse with proper Spousal Consent,  the value of the Participant's  Accounts shall be paid to the
                    deceased Participant's Beneficiary.


                    Subject to Section 9.10, the  Beneficiary may elect to receive  payment of the  Participant's  Account
                    in the form of a lump sum,  installment  payments  (as  described  in  Section  9.02(b))  or a monthly
                    annuity  payable  over the  Beneficiary's  lifetime.  In the  event a method  of  distribution  is not
                    selected by a Beneficiary,  such Beneficiary  shall receive his distribution in the form of an annuity
                    for the life of the Beneficiary with no benefit payable after his death.


                    Each  Participant  shall be provided an explanation  of the death benefit  payable to his spouse under
                    this Section unless  another  Beneficiary is  designated,  of the  Participant's  right to designate a
                    Beneficiary  other than his spouse  and of the  effect of such  election,  of the rights of the spouse
                    regarding the  designation and of the rights of the  Participant to revoke  Beneficiary  designations.
                    The  explanation  shall be  provided  no later than the latest of (i) the  period  beginning  with the
                    first day of the Plan Year in which the  Participant  attains  age 32 and ending  with the last day of
                    the Plan Year  preceding  the Plan Year in which the  Participant  attains age 35,  (ii) a  reasonable
                    time after the individual  becomes a  Participant,  or (iii) a reasonable  time after the  Participant
                    terminates employment before reaching age 35.


                    In the event that a married  Participant  who has not attained age 35 names a non-spouse  beneficiary,
                    such  beneficiary  designation  shall be invalid on the January 1 of the year the participant  attains
                    age 35 and the  Participant's  beneficiary  shall become the  Participant's  spouse until such time as
                    the Participant executes a new beneficiary designation with spousal consent.


                    Notwithstanding  any  provision  of this  Section  to the  contrary,  if the value of a  Participant's
                    Accounts upon his death prior to his Annuity  Starting Date ever exceeded $3,500,  for  determinations
                    made before January 1, 1998, no death benefit  payable to a surviving  spouse under this Section shall
                    commence  prior to what would  have been the date of the  Participant's  attainment  of age 65 without
                    the spouse's  written consent  obtained not earlier than 90 days prior to the Annuity Starting Date of
                    the  death  benefits.  For  purposes  of  this  section,  the  value  of  the  vested  portion  of the
                    participant's  account is increased from $3,500 to $5,000 for  determinations  made after December 31,
                    1997, such determination shall be made at the time of the distribution.


           (b)      In the event of the death of a Participant to whom  installment or annuity  payments are being made by
                    the  Trustee,  the  Committee  shall  notify the  Trustee of the death of such  Participant  and shall
                    direct the Trustee to pay any  undistributed  portion of the  interest in such  Participant's  account
                    held in  trust to the  Beneficiary  as and if  provided  by the  method  selected  by the  Participant
                    pursuant to Section 9.02.


           (c)      If the vested portion of a Participant's  Account  payable to a surviving  spouse does not exceed five
                    thousand dollars  ($5,000),  but is more than one thousand  dollars ($1,000) and is distributed  after
                    the  effective  date  of  the  final  regulations  under  Section   401(a)(31)(B)  of  the  Code,  the
                    Participant's  Account will be  transferred  to an  individual  retirement  account at an  institution
                    designated  by the Committee  unless the  Participant  elects  otherwise  according to the  procedures
                    established by the Committee.








9.07       Small Benefits


           Notwithstanding  any  provision  of the  Plan to the  contrary,  if the  value  of the  Vested  Portion  of the
           Participant's  Accounts  does not  exceed  $3,500  and has  never  exceeded  $3,500  at the  time of any  prior
           distribution,  for determination made before January 1, 1998, the Vested Portion of the Participant's  Accounts
           shall automatically be paid in a lump sum as soon as administratively  practicable  following the Participant's
           death or  termination  of  employment.  For purposes of this  Section,  the value of the Vested  Portion of the
           Participant's  Account is  increased  from $3,500 to $5,000 for  determination  made after  December  31, 1997.
           Such determination shall be made at the time of the distribution.


           If the vested portion of a Participant's  Account does not exceed five thousand dollars  ($5,000),  but is more
           than one thousand  dollars  ($1,000) and distributed  after the effective date of the final  regulations  under
           Section  401(a)(31)(B) of the Code, the Participant's  Account shall be transferred to an individual retirement
           account  of an  institution  designated  by  the  Committee  unless  the  Participant  elects  otherwise  under
           procedures provided by the Committee.


9.08       Status of Accounts Pending Distribution


           Until completely  distributed  under Sections 9.03, 9.04, or 9.06, the Accounts of a Participant shall continue
           to be invested as part of the Funds of the Plan (subject, however, to Section 9.04).


9.09       Proof of Death and Right of Beneficiary or Other Person


           The Committee  may require and rely upon such proof of death and such evidence of the right of any  Beneficiary
           or other  person to receive  the value of the  Accounts of a deceased  Participant  as the  Committee  may deem
           proper and its  determination  of the right of that  Beneficiary  or other person to receive  payment  shall be
           conclusive.


9.10       Distribution Limitation


           Further with respect to  distributions  under the Plan made for calendar years beginning on or after January 1,
           2001,  the  Plan  will  apply  the  minimum  distribution  requirements  of  Section  401(a)(9)  of the Code in
           accordance  with the  regulations  under  Section  401(a)(9)  that were  proposed  on January  17,  2001.  This
           provision  shall  continue in effect until the end of the last  calendar  year  beginning  before the effective
           date of the final  regulations  under  Section  401(a)(9) of the Code or such other date as may be specified in
           guidance published by the Internal Revenue Code.


9.11       Direct Rollover of Certain Distributions


           (a)      Notwithstanding  any provision of the Plan to the contrary that would  otherwise limit a distributee's
                    election under this Section,  on and after January 1, 1993, a distributee  may elect,  at the time and
                    in the manner prescribed by the Committee,  to have any portion of an eligible  rollover  distribution
                    paid directly to an eligible retirement plan specified by the distributee in a direct rollover.


           (b)      The following definitions shall apply for purposes of paragraph (a):


                    (i)      eligible  rollover  distribution:  An eligible  rollover  distribution is any distribution of
                             all or any portion of the balance to the credit of the  distributee,  except that an eligible
                             rollover  distribution  does  not  include:  any  distribution  that  is one of a  series  of
                             substantially  equal periodic  payments (not less frequently than annually) made for the life
                             (or life  expectancy) of the distributee or the joint lives (or joint life  expectancies)  of
                             the distributee and the distributee's  designated  beneficiary,  or for a specified period of
                             ten years or more;  any  distribution  to the extent  such  distribution  is  required  under
                             Section  401(a)(9) of the Code;  the portion of any  distribution  that is not  includible in
                             gross income  (determined  without  regard to the exclusion for net  unrealized  appreciation
                             with  respect to  employer  securities),  unless it is  directly  rolled  over as provided in
                             Section   402(c)(2)  of  the  Code  after  December  31,  2001;  any   distribution   from  a
                             Participant's account constituting  a hardship withdrawal.


                    (ii)     eligible  retirement  plan:  For  distributions  made  before  January 1, 2002,  an  eligible
                             retirement  plan is an  individual  retirement  account  described  in Section  408(a) of the
                             Code, an individual  retirement  annuity  described in Section 408(b) of the Code, an annuity
                             plan  described  in Section  403(a) of the Code,  or a qualified  trust  described in Section
                             401(a) of the Code,  that  accepts the  distributee's  eligible  rollover  distribution.  For
                             distributions  made on or after  January  1, 2002,  an  eligible  retirement  plan shall also
                             include  eligible  deferred  compensation  plan  described  in  Section  457(b)  of the  Code
                             maintained by an eligible  employer as described in Section  457(e)(1)(A)  of the Code and an
                             annuity  contract  described  in  Section  403(b)  of the  Code.  However,  in the case of an
                             eligible rollover  distribution to the surviving  spouse,  an eligible  retirement plan is an
                             individual  retirement account or individual  retirement annuity for distributions made prior
                             to  January  1, 2002.  For  distributions  made on or after  January  1,  2002,  an  eligible
                             retirement plan shall include all of the plans described in this subparagraph (ii).


                    (iii)    distributee:  A  distributee  includes an  employee  or former  employee.  In  addition,  the
                             employee's or former  employee's  surviving  spouse and the  employee's or former  employee's
                             spouse or former  spouse who is the  alternate  payee  under a qualified  domestic  relations
                             order as  defined  in  Section  414(p)  of the  Code,  are  distributees  with  regard to the
                             interest of the spouse or former spouse.


                    (iv)     direct rollover:  A direct rollover is a payment by the Plan to the eligible  retirement plan
                             specified by the distributee.


           (c)      If a  distribution  is one to  which  Sections  401(a)(11)  and  417 of the  Code do not  apply,  such
                    distribution  may commence less than 30 days after the notice  required  under Section  1.411(a)-11(c)
                    of the Income Tax  Regulations is given,  provided that:  (1) the  Participant is clearly  informed of
                    his right to a period of at least 30 days after  receiving  the notice to  consider  the  decision  of
                    whether or not to elect a distribution  (and, if applicable,  a particular  form of payment),  and (2)
                    the Participant, after receiving the notice, affirmatively elects a distribution.


9.12       Waiver of Notice Period


           Except as provided in the following  sentence,  if the value of the vested portion of a Participant's  Accounts
           exceeds  (i) $3,500 if the date of  determination  is prior to  January  1, 1998 or (ii)  $5,000 if the date of
           determination  is on or after December 31, 1997 an election by the Participant to receive a distribution  prior
           to age 65 shall not be valid  unless the written  election is made (a) after the  Participant  has received the
           notice  required under Section  1.411(a)-11(c)  of the Income Tax  Regulations and (b) within a reasonable time
           before the effective date of the  commencement of the distribution as prescribed by said  regulations.  If such
           distribution  is one to which  Section  401(a)(11)  and 417 of the Code do not  apply,  such  distribution  may
           commence  less  than 30 days  after  the  notice  required  under  Section  1.411(a)-11(c)  of the  Income  Tax
           Regulations is given, provided that:


           (i)      the  Committee  clearly  informs the  Participant  that he has a right to a period of at least 30 days
                    after  receiving the notice to consider the decision of whether or not to elect a  distribution  (and,
                    if applicable, a particular distribution option), and


           (ii)     the Participant, after receiving the notice, affirmatively elects a distribution.


9.13       Disposition of Employer Stock


           Notwithstanding  any  provision of the Plan to the  contrary,  the  provisions of this Section shall apply to a
           distribution of Plan Accounts invested in the U.S. Can Corporation Common Stock Fund.


           (a)      In the event a  distribution  is payable  pursuant this Article to or on behalf of a  Participant  (a)
                    whose Date of Severance  occurred on or after  December 31, 1991 and before  January 1, 1993, at which
                    time he was at least  partially  vested in shares of stock  held in the U.S.  Can  Corporation  Common
                    Stock Fund on his behalf,  and such shares had not been sold by December 31,  1992,  or (b) whose Date
                    of  Severance  has  occurred  during  January,  February or March 1993,  on March 31, 1993 the Trustee
                    shall sell, to the Company or to U.S. Can  Corporation,  the Vested  Portion of all shares of U.S. Can
                    Corporation  common  stock held in the U.S.  Can  Corporation  Common Stock Fund which are credited to
                    such  Participant's  Account.  All such sales described in the preceding  sentence shall be at a price
                    equal to the value of such stock as of the December 31, 1992  Valuation  Date. The net proceeds of any
                    sale  pursuant to this  Section  9.12(a)  shall be credited  to the  Account of such  Participant  for
                    distribution,  if he or his legal representative has validly elected a lump sum distribution  pursuant
                    to this Article.  If such  Participant or his legal  representative  has validly  elected to receive a
                    distribution in annuity form or in  installments,  or has validly elected to defer the distribution of
                    such Account until such  Participant's  attainment of age 65 (where  permitted  under the Plan), or if
                    no valid  distribution  election  pursuant to this Article has been made,  such proceeds of sale shall
                    be transferred to the Short-Term Investment Fund.


           (b)      In the event a  distribution  is payable to or on behalf of a  Participant  pursuant to this  Article,
                    other than a Participant  described in Section  9.12(a),  the Trustee  shall sell, to the Company,  to
                    U.S.  Can  Corporation  or on the open market (if  permissible),  the Vested  Portion of all shares of
                    U.S.  Can  Corporation  common  stock held in the U.S.  Can  Corporation  Common  Stock Fund which are
                    credited to such  Participant's  Account.  The net proceeds of any sale pursuant to this Section shall
                    be credited to the Account of such  Participant for  distribution,  if he or his legal  representative
                    has validly  elected a lump-sum  distribution  pursuant to this Article.  If such  Participant  or his
                    legal   representative  has  validly  elected  to  receive  a  distribution  in  annuity  form  or  in
                    installments,  or  has  validly  elected  to  defer  the  distribution  of  such  Account  until  such
                    Participant's  attainment  of age 65 (where  permitted  under the Plan),  or if no valid  distribution
                    election  pursuant to this Article has been made,  such proceeds of sale shall be  transferred  to the
                    Short-Term  Investment  Fund. Any such sale to the Company or to U.S. Can  Corporation  shall be for a
                    price equal to the closing price for U.S. Can  Corporation  common stock,  as reported on the National
                    Association of Securities  Dealers  automated  quotation  system, on the date of sale. Such sale shall
                    occur as follows:


                    (1)      If such  Participant's  Date of Severance  occurs on the last day of the Plan Year (beginning
                             with the 1993 Plan  Year) and he or his  legal  representative  has  delivered  the  Required
                             Documentation  (as  hereinafter  defined) to the Pension and Annuity  Committee  on or before
                             the  following  March 15,  such sale  shall  occur on the last  business  day of the month of
                             March of the Plan Year  following his Date of Severance.  If such a Participant  or his legal
                             representative  has not  delivered  the  Required  Documentation  to the  Pension and Annuity
                             Committee  by such March 15, such sale shall occur on the last  business  day of the month of
                             April of the Plan Year following his Date of Severance.


                    (2)      If such Participant's  Date of Severance occurs during January,  February or March (beginning
                             with the 1994 Plan Year),  and he or his legal  representative  has  delivered  the  Required
                             Documentation  to the Pension and Annuity  Committee  on or before  March 15 of the Plan Year
                             in which his Date of  Severance  occurs,  such sale shall occur on the last  business  day of
                             the  month of  March in the Plan  Year in  which  his  Date of  Severance  occurs.  If such a
                             Participant or his legal  representative has not delivered the Required  Documentation to the
                             Pension and Annuity  Committee  on or before such March 15, such sale shall occur on the last
                             business day of the month of April in the Plan Year in which his Date of Severance occurs.


                    (3)      Beginning with the 1993 Plan Year, if such  Participant's  Date of Severance occurs after the
                             last day of March in any Plan Year,  other  than on the last day of the Plan Year,  and he or
                             his legal  representative  has  delivered  the  Required  Documentation  to the  Pension  and
                             Annuity  Committee  on or before  the 15th day of the  month in which  his Date of  Severance
                             occurs,  such sale  shall  occur on the last  business  day of the month in which his Date of
                             Severance  occurs.  If such  Participant  or his legal  representative  has not delivered the
                             Required  Documentation  to the  Pension and  Annuity  Committee  on or before such 15th day,
                             such sale shall occur as of the last  business day of the month next  following  the month in
                             which his Date of Severance occurs.

           (c)      For purposes of this Section, the term "Required  Documentation"  means all documentation  required by
                    the Pension and Annuity  Committee from a Participant or his legal  representative  in connection with
                    processing a  distribution  to such  Participant  or on his behalf (in lump sum or annuity form, or in
                    installments,  pursuant to a valid election in accordance  with this Article) or in connection  with a
                    valid  election by such  Participant  or his legal  representative  to defer the  distribution  of his
                    Account until his attainment of age 65 (where permitted under the Plan).








                                            ARTICLE 10. ADMINISTRATION OF PLAN
                                            ----------------------------------


10.01      Appointment of Pension and Annuity Committee


           The  Pension and Annuity  Committee  shall be  responsible  for the general  administration  of the Plan and be
           responsible  for carrying out the  provisions of the Plan.  The Committee  shall consist of not less than three
           persons who may be  directors  or  employees  of an  Employer.  The  members  shall be  appointed  by the Chief
           Executive  Officer of the Company  ("Chief  Executive  Officer").  Any person who is  appointed a member of the
           Committee shall signify his acceptance by filing a written  acceptance with the Chief  Executive  Officer.  Any
           member of the  Committee may resign by  delivering  his written  resignation  to the Chief  Executive  Officer.
           Members of the Committee may be removed at any time by the Chief Executive Officer.


10.02      Duties of Committee


           The members of the  Committee  shall elect a chairman from their number and a secretary who may be but need not
           be one of the members of the Committee;  may appoint from their number such  subcommittees  with such powers as
           they shall  determine;  may  authorize  one or more of their  number or any agent to  execute  or  deliver  any
           instrument  or make any  payment on their  behalf;  may retain  counsel,  employ  agents and  provide  for such
           clerical,  accounting and  consulting  services as they may require in carrying out the provisions of the Plan;
           and may allocate  among  themselves  or delegate to other persons all or such portion of their duties under the
           Plan,  other than those granted to the Trustee under the trust agreement  adopted for use in  implementing  the
           Plan, as they, in their sole discretion, shall decide.


10.03      Individual Accounts


           The Committee  shall  maintain,  or cause to be maintained,  records  showing the  individual  balances in each
           Participant's  Account.  However,  maintenance of those records and Accounts shall not require any  segregation
           of the funds of the Plan.


10.04      Meetings


           The Committee  shall hold meetings upon such notice,  at such place or places,  and at such time or times as it
           may from time to time determine.


10.05      Action of Majority


           Any act which the Plan  authorizes  or requires  the  Committee to do may be done by a majority of its members.
           The  action  of that  majority  expressed  from  time to time by a vote at a meeting  or in  writing  without a
           meeting  shall  constitute  the action of the  Committee  and shall have the same effect for all purposes as if
           assented to by all members of the Committee at the time in office.








10.06      Compensation and Bonding


           No member of the Committee  shall receive any  compensation  from the Plan for his services as such.  Except as
           may  otherwise be required by law, no bond or other  security  need be required of any member in that  capacity
           in any jurisdiction.


10.07      Establishment of Rules


           Subject  to the  limitations  of the Plan,  the  Committee  from  time to time  shall  establish  rules for the
           administration  of the Plan and the  transaction  of its  business.  The  Committee  shall  have  discretionary
           authority to construe and interpret the Plan (including,  but not limited to,  determination of an individual's
           eligibility  for Plan  participation,  the right and amount of any benefit  payable under the Plan and the date
           on  which  any  individual  ceases  to be a  Participant).  The  determination  of  the  Committee  as  to  the
           interpretation  of the Plan or any disputed  question shall be conclusive and final to the extent  permitted by
           applicable law.


10.08      Prudent Conduct


           The members of the Committee  shall use that degree of care,  skill,  prudence and diligence that a prudent man
           acting in a like capacity and familiar with such matters would use in his conduct of a similar situation.


10.09      Service in More Than One Fiduciary Capacity


           Any  individual,  entity or group of persons may serve in more than one fiduciary  capacity with respect to the
           Plan and/or the funds of the Plan.


10.10      Limitation of Liability


           The Employer, the Board of Directors, the members of the Committee,  and any officer,  employee or agent of the
           Employer shall not incur any liability  individually or on behalf of any other  individuals or on behalf of the
           Employer  for any act or failure to act,  made in good faith in  relation to the Plan or the funds of the Plan.
           However,  this limitation  shall not act to relieve any such  individual or the Employer from a  responsibility
           or liability for any fiduciary responsibility, obligation or duty under Part 4, Title I of ERISA.


10.11      Indemnification


           The members of the Committee,  the Board of Directors,  and the officers,  employees and agents of the Employer
           shall be  indemnified  against  any and all  liabilities  arising by reason of any act,  or failure to act,  in
           relation to the Plan or the funds of the Plan, including,  without limitation,  expenses reasonably incurred in
           the defense of any claim  relating to the Plan or the funds of the Plan,  and amounts paid in any compromise or
           settlement  relating  to the Plan or the funds of the Plan,  except for  actions or failures to act made in bad
           faith.  The foregoing  indemnification  shall be from the funds of the Plan to the extent of those funds and to
           the extent permitted under applicable law; otherwise from the assets of the Employer.


10.12      Appointment of Investment Manager


           The Company may, in its  discretion,  appoint one or more  investment  managers  (within the meaning of Section
           3(38) of ERISA) to manage  (including  the power to acquire  and  dispose  of) all or part of the assets of the
           Plan, as the Company shall  designate.  In that event authority over and  responsibility  for the management of
           the assets so designated shall be the sole responsibility of that investment manager.


10.13      Named Fiduciary


           For purposes of ERISA, the members of the Committee shall be the named fiduciaries of the Plan.


10.14      Claims Procedures


           The  Committee  shall  receive  all  applications  for  benefits.  Upon  receipt  by the  Committee  of such an
           application,  it shall  determine  all facts,  which are  necessary to  establish  the right of an applicant to
           benefits  under the provisions of the Plan and the amount thereof as herein  provided.  The applicant  shall be
           notified in writing of any adverse  decision  with  respect to his claim  within 90 days after its  submission.
           The notice shall be written in a manner calculated to be understood by the applicant and shall include:


           (a)      The specific reason or reasons for the denial;


           (b)      Specific references to the pertinent Plan provisions on which the denial is based;


           (c)      A description  of any additional  material or  information  necessary for the applicant to perfect the
                    claim and an explanation why such material or information is necessary; and


           (d)      An explanation of the Plan's claim review procedure.


           If special  circumstances  require an extension of time for  processing  the initial claim, a written notice of
           the extension and the reason  therefor shall be furnished to the claimant  before the end of the initial 90-day
           period. In no event shall such extension exceed 90 days.


           In the event a claim for  benefits is denied or if the  applicant  has had no response to such claim  within 90
           days of its  submission  (in which  case the  claim for  benefits  shall be  deemed to have been  denied),  the
           applicant or his duly  authorized  representative,  at the applicant's  sole expense,  may appeal the denial to
           the  Committee  within 60 days of the  receipt of written  notice of denial or 60 days from the date such claim
           is deemed to be denied. In pursuing such appeal the applicant or his duly authorized representative:


           (a)      May request in writing that the Committee review the denial;


           (b)      May review pertinent documents; and


           (c)      May submit issues and comments in writing.


           The  decision on review  shall be made within 60 days of receipt of the  request  for  review,  unless  special
           circumstances  require an extension of time for processing,  in which case a decision shall be rendered as soon
           as possible,  but not later than 120 days after  receipt of a request for review.  If such an extension of time
           is  required,  written  notice of the  extension  shall be  furnished  to the  claimant  before  the end of the
           original  60-day  period.  The  decision  on review  shall be made in  writing,  shall be  written  in a manner
           calculated to be understood by the claimant,  and shall include  specific  references to the  provisions of the
           Plan on which such  denial is based.  If the  decision  on review is not  furnished  within the time  specified
           above, the claim shall be deemed denied on review.








                                             ARTICLE 11. MANAGEMENT OF FUNDS
                                             -------------------------------


11.01      Trust Agreement


           All the funds of the Plan  shall be held by Trustee  appointed  from time to time by the  Company  under one or
           more trust  agreements  adopted,  or as amended,  by the Company for use in providing  the benefits of the Plan
           and paying its expenses  not paid  directly by the Company.  Said trust  agreements  shall be deemed to include
           the  provisions  of any group or common trust fund in which the assets of the trust are  invested,  but only so
           long as such group or common trust fund remains  exempt from  taxation  under  Section  501(a) of the Code,  in
           accordance  with Revenue  Ruling  81-100.  No Employer  shall have  liability for the payment of benefits under
           the Plan or for the administration of the funds paid over to a Trustee.


11.02      Exclusive Benefit Rule


           Except as  otherwise  provided  in the Plan,  no part of the corpus or income of the funds of the Plan shall be
           used for, or diverted to,  purposes  other than for the  exclusive  benefit of  Participants  and other persons
           entitled to benefits  under the Plan and paying the expenses of the Plan not paid directly by the Employer.  No
           person shall have any  interest in or right to any part of the earnings of the funds of the Plan,  or any right
           in, or to, any part of the assets held under the Plan,  except as and to the extent  expressly  provided in the
           Plan.


11.03      Payment of Expenses


           All  reasonable  costs,  charges  and  expenses  incurred in  connection  with the  administration  of the Plan
           including,  but not limited to, the fees of accountants,  counsel and other  specialists and any other costs of
           administration  may be paid by the Employer at its  discretion  and if not paid by the Employer,  shall be paid
           from the assets of the Trusts to the extent authorized by the Pension and Annuity Committee.








                                      ARTICLE 12. AMENDMENT. MERGER AND TERMINATION
                                      ---------------------------------------------


12.01      Amendment of Plan


           The  Board of  Directors  reserves  the right at any time and from time to time,  and  retroactively  if deemed
           necessary or appropriate,  to amend in whole or in part any or all of the provisions of the Plan.  However,  no
           amendment  shall  make it  possible  for any part of the  funds of the Plan to be used  for,  or  diverted  to,
           purposes  other than for the  exclusive  benefit of persons  entitled to benefits  under the Plan. No amendment
           shall be made  which has the  effect of  decreasing  the  balance  of the  Accounts  of any  Participant  or of
           reducing  the  nonforfeitable   percentage  of  the  balance  of  the  Accounts  of  a  Participant  below  the
           nonforfeitable  percentage  computed  under the Plan as in effect on the date on which the amendment is adopted
           or, if later,  the date on which the amendment  becomes  effective.  Further,  no amendment  shall eliminate or
           reduce an early  retirement  benefit or a  retirement-type  subsidy or  eliminate  an optional  form of benefit
           within the meaning of Section 411(d)(6) of the Code.


           The  procedure  for  amending  the Plan is approval of the  amendment by the Board of Directors of the Company;
           provided  however,  one or more  officers of the Company may amend the Plan without  obtaining  approval of the
           Board of Directors to:


           (i)      modify the  administration  or operation of the Plan in a manner  recommended by the Company's Pension
                    and Annuity Committee, provided such modification would not materially increase the cost of the Plan;


           (ii)     make those  modifications to the Plan that, on the advice of the Company's legal counsel,  the officer
                    or officers  deem  necessary  to comply with  federal and state laws,  regulations  or  pronouncements
                    issued by federal or state agencies; or


           (iii)    modify the Plan in the manner the  officers  deem  necessary to carry out or effect the benefits to be
                    provided hereunder pursuant to applicable collective bargaining agreements.


           Such an  amendment  shall be made by  execution  of a document  reflecting  the  amendment by an officer of the
           Company  and  shall be  subject,  where  applicable,  to any  approval  of a union  required  by the terms of a
           collective bargaining agreement.


           Any  amendment  which  modifies  the  vesting  provisions  of the Plan shall  either (i)  provide for a rate of
           vesting  which  is more  rapid  than  the  vesting  schedule  previously  in  effect,  or (ii)  provide  that a
           Participant  who has been  credited  with at least three years of Vesting  Service  may elect,  in writing,  to
           remain  under the vesting  schedule in effect prior to the  amendment.  Such  election  must be made in writing
           within 60 days after the latest of (a) adoption of the amendment,  (b) the effective date of the amendment,  or
           (c) issuance by the Employer or Committee of written notice of the amendment.








12.02      Merger, Consolidation or Transfer


           The Plan may not be merged or  consolidated  with, and its assets or liabilities may not be transferred to, any
           other plan unless  each person  entitled to  benefits  under the Plan would,  if the  resulting  plan were then
           terminated,  receive a benefit  immediately  after the merger,  consolidation  or transfer which is equal to or
           greater than the benefit he would have been entitled to receive  immediately  before the merger,  consolidation
           or transfer if the Plan had then terminated.


12.03      Additional Participating Employers


           (a)      If any company is or becomes a subsidiary  of or associated  with an Employer,  the Board of Directors
                    may include the employees of that subsidiary or associated  company in the  participation  of the Plan
                    upon  appropriate  action  by that  company  necessary  to adopt the Plan.  In that  event,  or if any
                    persons become  Employees of an Employer as the result of merger or  consolidation or as the result of
                    acquisition  of all or part of the assets or  business  of  another  company,  the Board of  Directors
                    shall determine to what extent,  if any,  previous  service with the  subsidiary,  associated or other
                    company shall be recognized  under the Plan, but subject to the continued  qualification  of the trust
                    for the Plan as tax-exempt under the Code.


           (b)      Any  subsidiary or associated  company may terminate its  participation  in the Plan upon  appropriate
                    action by it. In that  event the funds of the Plan held on account  of  Participants  in the employ of
                    that company,  and any unpaid  balances of the Accounts of all  Participants  who have  separated from
                    the employ of that company,  shall be determined by the  Committee.  Those funds shall be  distributed
                    as provided in Section 12.04 if the Plan should be  terminated,  or shall be segregated by the Trustee
                    as a separate trust,  pursuant to certification  to the Trustee by the Committee,  continuing the Plan
                    as a separate  plan for the  employees  of that  company  under which the board of  directors  of that
                    company  shall  succeed  to all the  powers  and  duties  of the  Board of  Directors,  including  the
                    appointment of the participants of the Committee.


12.04      Termination of Plan


           (a)      The Board of Directors may terminate the Plan or completely  discontinue  contributions under the Plan
                    for any reason at any time, subject to any restrictions  imposed by collective  bargaining  agreements
                    covering  Employees.  In  case  of  termination  or  partial  termination  of  the  Plan  or  complete
                    discontinuance  of Employer  contributions  to the Plan, the rights of affected  Participants to their
                    Accounts   under  the  Plan  as  of  the  date  of  the   termination  or   discontinuance   shall  be
                    nonforfeitable.  The  total  amount  in each  Participant's  Accounts  shall  be  distributed,  as the
                    Committee  shall  direct,  to  him  or for  his  benefit  or  continued  in  trust  for  his  benefit.
                    Distribution  of a  Participant's  Accounts  pursuant to this Section shall not limit a  Participant's
                    right to obtain  distribution  of his  Accounts  in the forms of payment  described  in Section  9.02.
                    Further,  the  distribution  of Plan Accounts  shall be made in accordance  with the  Participant  and
                    spousal  consent  requirements  of Section  411(a)(11)  and Section 417 of the Code to the extent such
                    provisions are applicable to Accounts having a value of more than $3,500,  for  distributions  made in
                    any Plan Year  beginning  before  January 1, 1998 and $5,000 for  distributions  made in any Plan Year
                    beginning after December 31, 1997.


           (b)      Upon  termination  of the Plan,  Deferred Cash  Contributions,  with earnings  thereon,  shall only be
                    distributed  to  Participants  if (i) neither the Employer nor an Affiliated  Employer  establishes or
                    maintains a successor  defined  contribution  plan and (ii) payment is made to the Participants in the
                    form of a lump sum  distribution  (as  defined in Section  402(e)(4)  of the Code,  without  regard to
                    clauses (i) through (iv) of  subparagraph  (A),  subparagraph  (B) or subparagraph  (H) thereof).  For
                    purposes of this paragraph,  a "successor defined  contribution  plan" is a defined  contribution plan
                    (other than an employee  stock  ownership  plan as defined in Section  4975(e)(7) of the Code ("ESOP")
                    or a simplified  employee  pension as defined in Section  408(k) of the Code ("SEP"))  which exists at
                    the time the Plan is  terminated  or within the 12 month  period  beginning on the date all assets are
                    distributed.  However,  in no event shall a defined  contribution  plan be deemed a successor  plan if
                    fewer than two percent of the  employees  who are eligible to  participate  in the Plan at the time of
                    its termination are or were eligible to participate  under another  defined  contribution  plan of the
                    Employer  or an  Affiliated  Employer  (other  than an ESOP or a SEP) at any time  during  the  period
                    beginning 12 months before and ending 12 months after the date of the Plan's termination.


12.05      Distribution of Accounts Upon a Sale of Assets or a Sale of a Subsidiary


           Upon the  disposition  by the  Employer  of at least 85 percent of the assets  (within  the  meaning of Section
           409(d)(2) of the Code) used by the Employer in a trade or business or upon the  disposition  by the Employer of
           its interest in a  subsidiary  (within the meaning of Section  409(d)(3)  of the Code) before  January 1, 2002,
           Deferred Cash  Contributions,  with earnings thereon,  may be distributed to those Participants who continue in
           employment  with  the  employer  acquiring  such  assets  or with the sold  subsidiary,  provided  that (a) the
           Employer  maintains the Plan after the  disposition,  (b) the buyer does not adopt the Plan or otherwise become
           a  participating  employer in the Plan and does not accept any transfer of assets or liabilities  from the Plan
           to a plan it maintains  in a  transaction  subject to Section  414(l)(1) of the Code and (c) payment is made to
           the Participant in the form of a lump sum  distribution (as defined in Section  402(d)(4) of the Code,  without
           regard to clauses (i) through (iv) of subparagraph (A), subparagraph (B) or subparagraph (H) thereof).








                                              ARTICLE 13. GENERAL PROVISIONS
                                              ------------------------------


13.01      Nonalienation


           Except as  required  by any  applicable  law,  no benefit  under the Plan  shall in any manner be  anticipated,
           assigned or  alienated,  and any attempt to do so shall be void.  However,  payment shall be made in accordance
           with the provisions of any judgment, decree or order which:


           (a)      creates for, or assigns to, a spouse,  former spouse,  child or other  dependent of a Participant  the
                    right to receive  all or a portion of the  Participant's  benefits  under the Plan for the  purpose of
                    providing  child  support,  alimony  payments  or marital  property  rights to that  spouse,  child or
                    dependent.


           (b)      is made pursuant to a State domestic relations law,


           (c)      does not  require  the Plan to provide any type of benefit,  or any  option,  not  otherwise  provided
                    under the Plan, and


           (d)      otherwise  meets the  requirements of Section 206(d) of ERISA,  as amended,  as a "qualified  domestic
                    relations order," as determined by the Committee.


           Any  distribution  due an alternate  payee under a qualified  domestic  relations  order may be made as soon as
           practicable  following the earliest date specified in such order,  or as otherwise  permitted  under such order
           pursuant to an agreement  between the Plan and the alternate payee,  provided,  however,  that if the amount of
           the distribution  exceeds $3,500,  for  distributions  made before January 1, 1998 and $5,000 for distributions
           made or on after January 1, 1998, the alternate payee must consent to the distribution.


           A  Participant's  benefits under the Plan shall be offset by the amount the  Participant is required to pay the
           Plan under the circumstances set forth in Section 401(a)(13)(C) of the Code.


13.02      Conditions of Employment Not Affected by Plan


           The  establishment  of the Plan shall not confer  any legal  rights  upon any  Employee  or other  person for a
           continuation  of  employment,  nor shall it interfere with the rights of the Employer to discharge any Employee
           and to treat him without  regard to the effect which that  treatment  might have upon him as a  Participant  or
           potential Participant of the Plan.


13.03      Facility of Payment


           If the  Committee  shall find that a  Participant  or other person  entitled to a benefit is unable to care for
           his affairs  because of illness or accident or is a minor,  the  Committee may direct that any benefit due him,
           unless  claim shall have been made for the benefit by a duly  appointed  legal  representative,  be paid to his
           spouse,  a child,  a parent or other blood  relative  or to a person with whom he resides.  Any payment so made
           shall be a complete discharge of the liabilities of the Plan for that benefit.


13.04      Information


           Each  Participant,  Beneficiary or other person  entitled to a benefit,  before any benefit shall be payable to
           him or on his account under the Plan,  shall file with the Committee the  information  that it shall require to
           establish his rights and benefits under the Plan.


13.05      Top-Heavy Provisions


           (a)      The following definitions apply to the terms used in this Section:


                    (i)      "applicable  determination  date"  means the last day of the later of the first  Plan Year or
                             the preceding Plan Year;


                    (ii)     "top-heavy  ratio" means the ratio of (A) the value of the  aggregate  of the Accounts  under
                             the Plan for key employees to (B) the value of the  aggregate of the Accounts  under the Plan
                             for all key employees and non-key employees;


                    (iii)    "key employee"  means an employee who is in a category of employees  determined in accordance
                             with  the  provisions  of  Section  416(i)(1)  and  (5)  of  the  Code  and  any  regulations
                             thereunder,  and where  applicable,  on the basis of the  Employee's  Statutory  Compensation
                             (defined as set forth in Section 1.42) from the Employer or an Affiliated Employer;


                    (iv)     "non-key employee" means any Employee who is not a key employee;


                    (v)      "applicable  Valuation  Date"  means  the  Valuation  Date  coincident  with  or  immediately
                             preceding  the last day of the first  Plan Year or the  preceding  Plan  Year,  whichever  is
                             applicable;


                    (vi)     "required  aggregation  group"  means any  other  qualified  plan(s)  of the  Employer  or an
                             Affiliated  Employer  in  which  there  are  participants  who are  key  employees  or  which
                             enable(s) the Plan to meet the requirements of Section 401(a)(4) and 410 of the Code; and


                    (vii)    "permissive  aggregation  group"  means each plan in the required  aggregation  group and any
                             other qualified  plan(s) of the Employer or an Affiliated  Employer in which all participants
                             are  non-key   employees,   if  the  resulting   aggregation  group  continues  to  meet  the
                             requirements of Sections 401(a)(4) and 410 of the Code.


           (b)      For purposes of this  Section,  the Plan shall be  "top-heavy"  with respect to any Plan Year if as of
                    the applicable  determination  date the top-heavy ratio exceeds 60 percent.  The top-heavy ratio shall
                    be determined as of the  applicable  Valuation  Date in accordance  with Section  416(g)(3) and (4) of
                    the Code and  Article 5 of this Plan,  and shall take into  account any  contributions  made after the
                    applicable  Valuation Date but before the last day of the Plan Year in which the applicable  Valuation
                    Date occurs.  For purposes of determining  whether the Plan is top-heavy,  the account  balances under
                    the Plan will be combined  with the account  balances or the present value of accrued  benefits  under
                    each  other  plan in the  required  aggregation  group,  and,  in the  Employer's  discretion,  may be
                    combined  with the  account  balances  or the  present  value of  accrued  benefits  under  any  other
                    qualified plan in the permissive  aggregation group.  Distributions made with respect to a Participant
                    under the Plan  during the  five-year  period  ending on the  applicable  determination  date shall be
                    taken into account for purposes of determining  the top-heavy  ratio;  distributions  under plans that
                    terminated  within such five-year period shall also be taken into account,  if any such plan contained
                    key employees and therefore would have been part of the required aggregation group.


                    For  determinations  made for Plan Years  commencing  after December 31, 2001,  the "one-year  period"
                    shall be substituted for the "five-year period" except in the case of in-service withdrawals.


           (c)      The following  provisions  shall be applicable to Participants for any Plan Year with respect to which
                    the Plan is top-heavy:


                    (i)      An additional  Employer  contribution  shall be allocated on behalf of each  Participant (and
                             each Employee  eligible to become a Participant) who is a non-key  employee,  and who has not
                             separated  from  service  as of the  last  day of the  Plan  Year,  to the  extent  that  the
                             contributions  made on his behalf  under  Section  3.03 for the Plan Year would  otherwise be
                             less  than 3% of his  remuneration.  However,  if the  greatest  percentage  of  remuneration
                             contributed  on  behalf  of a key  employee  under  Sections  3.01 and 3.03 for the Plan Year
                             would  be less  than  3%,  that  lesser  percentage  shall  be  substituted  for  "3%" in the
                             preceding sentence.  Notwithstanding  the foregoing  provisions of this subparagraph (ii), no
                             minimum  contribution  shall be made under this Plan with  respect  to a  Participant  (or an
                             Employee  eligible to become a  Participant)  if the required  minimum  benefit under Section
                             416(c)(1)  of the  Code  is  provided  to him by any  other  qualified  pension  plan  of the
                             Employer  or  an  Affiliated   Employer.   For  the  purposes  of  this  subparagraph   (ii),
                             remuneration has the same meaning as set forth in Section 3.12(c).


                    (ii)     For Plan Years  commencing  before January 1, 2000, the  denominators  of the defined benefit
                             plan fraction and defined  contribution  plan fraction  described in Section 3.11(e) shall be
                             determined  by  substituting  the  product of 1.0 rather than 1.25 of the  applicable  dollar
                             limits.


13.06      Prevention of Escheat


           If the Committee  cannot  ascertain the  whereabouts of any person to whom a payment is due under the Plan, the
           Committee  may,  no earlier  than five years from the date such  payment is due,  mail a notice of such due and
           owing  payment to the last known  address  of such  person,  as shown on the  records of the  Committee  or the
           Employer.  If such person has not made written claim  therefor  within three months of the date of the mailing,
           the  Committee  may,  if it so elects and upon  receiving  advice  from  counsel to the Plan,  direct that such
           payment and all  remaining  payments  otherwise  due such person be canceled on the records of the Plan and the
           amount thereof applied to reduce the contributions of the Employer.  Upon such  cancellation,  the Plan and the
           Trust shall have no further  liability  therefor except that, in the event such person or his beneficiary later
           notifies the Committee of his  whereabouts  and requests the payment or payments due to him under the Plan, the
           amount so applied shall be paid to him in accordance with the provisions of the Plan.


13.07      Written Elections


           Any  elections,  notifications  or  designations  made by a Participant  pursuant to the provisions of the Plan
           shall be made in writing and filed with the Committee in a time and manner  determined  by the Committee  under
           rules uniformly applicable to all employees similarly situated.


13.08      Construction


           (a)      The Plan shall be construed,  regulated and administered under ERISA and the laws of Illinois,  except
                    where ERISA controls.


           (b)      The masculine pronoun shall mean the feminine wherever appropriate.


           (c)      The titles and headings of the Articles and  Sections in this Plan are for  convenience  only.  In the
                    case of ambiguity or inconsistency, the text rather than the titles or headings shall control.


13.09      Electronic Communications


           Whenever an  Employee,  Participant,  spouse or  Beneficiary  is required to provide  information  or perform a
           written  process,  the Committee may, in its discretion,  permit or require that  electronic  means be used. In
           addition,  meetings of The  Committee  may be held in person or through  electronic  or  telephonic  means or a
           combination  thereof  and  written  actions of the  Committee  may be taken using  electronic  or  conventional
           means.  In the use of electronic  communication,  the Committee  shall follow all  guidelines  published by the
           Department of Labor and the Internal Revenue Service.








IN WITNESS  WHEREOF,  the  Company has caused this  document to be signed this  ___25__ day of  _____February____________,
                                                                                   --           -------------
2002.





                                                              UNITED STATES CAN COMPANY





                                                     By:_______/s/_Roger B. Farley_____    _
                                                        ------------------------------------





                                                     Its: Senior Vice President, Human Resources
                                                         ---------------------------------------














                                                UNITED STATES CAN COMPANY
                               SALARIED EMPLOYEES SAVINGS AND RETIREMENT ACCUMULATION PLAN


                                                         APPENDIX


All  headquarters  and plant  salaried  employees of U.S. Can Company who have  attained age 63 on or before  December 31,
1994 are eligible to  participate  in the United  States Can Company  Early Buyout  Program (the  "Program").  An eligible
employee who makes a written  election to  participate  in the Program by December 15, 1994 shall become a participant  in
the Program,  effective  January 1, 1995. A Participant shall receive monthly payments  ("Salary  Continuation  Payments")
for 24 months with the amount  dependent on  guidelines  established  by United States Can Company and shall be subject to
the following provisions:


           1.       A participant in the Program shall  continue to be eligible to be a Participant  under Section 2.01 of
                    the Plan, shall be eligible to make an election to make Deferred Cash  Contributions  and/or After-Tax
                    Contributions  under  Sections 3.01 and 3.02 of the Plan and shall be subject to the provisions of the
                    Plan except as otherwise stated.


           2.       A  participant  in the Program  shall be credited  with Hours of Service for the period of time during
                    which he receives Salary  Continuation  Payments on the basis of his regularly scheduled working hours
                    per week (or per day if he is paid on a daily basis) for the final month in 1994.


           3.       Compensation  with  respect  to a  participant  in the  Program,  shall  include  Salary  Continuation
                    Payments subject to the provisions of Section 1.13.











                                                       SUPPLEMENT A


                                                 Transfer of Assets From
                              Profit Sharing Plan for Employees of Steeltin Can Corporation


1.         Introduction;  Purpose.  Steeltin  Can  Corporation  was merged into the Company on February  28, 1994 and as a
           result of such  merger the  Company  became the  sponsor  and an  Employer  under the Profit  Sharing  Plan for
           Employees of Steeltin Can Corporation  ("Steeltin Profit Sharing Plan").  The Steeltin Profit Sharing Plan will
           be terminated  effective March 31, 1994  ("Termination  Date").  The purpose of this Supplement A is to provide
           for the  transfer of the  Elective  Contribution  Accounts of the  Steeltin  Profit  Sharing  Plan to the Plan.
           Participants  of the  Steeltin  Profit  Sharing  Plan on the  Termination  Date shall be  referred to herein as
           "Steeltin Participants."


2.         Participation.  Until their entire benefits are distributed,  Steeltin  Participants (or, in the event of their
           deaths,  their  beneficiaries)  whose Elective  Contribution  Accounts are  transferred to the Plan pursuant to
           paragraph 3 of this Supplement A shall be treated as Participants or  beneficiaries,  as the case may be, under
           the Plan.


3.         Transfer of Assets.  Assets of the Steeltin  Profit  Sharing Plan will be transferred to the Plan in accordance
           with the following provisions of this Supplement A:


           (a)      Transfer of Fund.  The assets of the funding  vehicle for the  Steeltin  Profit  Sharing Plan that are
                    attributable  to the Elective  Contribution  Accounts  shall be  transferred to the Trust Fund of this
                    Plan as soon as  practicable  after the  Termination  Date and the date the Internal  Revenue  Service
                    determines  that the Steeltin  Profit  Sharing Plan meets the  requirements  of Section 401 (a) of the
                    Code.  In no event,  however,  shall such  transfer  occur  earlier  than  thirty  (30) days after the
                    providing of any notice of such transfer that may be required by Section 6058(b) of the Code.


           (b)      Determination  and Transfer of Account  Balances.  As soon as practicable  after the date on which the
                    transfer  can be made,  and after all required  adjustments  have been made for  investment  gains and
                    losses,  the  Elective  Contribution  Accounts  under  the  Steeltin  Profit  Sharing  Plan  shall  be
                    transferred to the Plan and credited to the new Steeltin  Elective  Contribution  Accounts  maintained
                    for the  Steeltin  Participants  under the Plan.  The Steeltin  Participants  shall be fully vested in
                    such accounts.  Such accounts  shall be invested  pursuant to Section 4.02.  The  transferred  amounts
                    shall include  accounts  maintained  under the Steeltin Profit Sharing Plan for Steeltin  Participants
                    on the  Termination  Date  whose  employment  with  an  Employer  and  all  controlled  group  members
                    previously  had terminated but who had not received  distribution  of their entire  benefits under the
                    Steeltin Profit Sharing Plan at the time of such termination.








4.         Distribution.  The account of each Steeltin  Participant  which is  transferred  to the Plan under  paragraph 3
           above shall thereafter be held and distributed in accordance with the provisions of the Plan.


5.         Use of Terms.  Terms used in this  Supplement A with respect to the Plan or the  Steeltin  Profit  Sharing Plan
           shall,  unless  defined in this  Supplement  A, have the  meanings of those terms as defined in the Plan or the
           Steeltin Profit Sharing Plan, as the case may be.

EX-99 5 ex200210k_exhibit99-1.htm CEO CERTIFICATION Exhibit 99.1

                                                                                                       Exhibit 99.1


                                             CERTIFICATION PURSUANT TO
                             SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
                                              AS ADOPTED PURSUANT TO
                                   SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Pursuant to Section 1350,  Chapter 63 of Title 18,  United  States Code, as adopted  pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002, the undersigned,  as Chief Executive  Officer of U.S. Can Corporation (the "Company"),
does hereby certify that:

1)       the Company's Form 10-K fully complies with the  requirements  of Section 13(a) or 15(d) of the Securities
         Exchange Act of 1934; and

2)       the  information  contained in the Company's  Form 10-K fairly  presents,  in all material  respects,  the
         financial condition and results of operations of the Company.


                                                                /s/ John L. Workman

                                                                John L. Workman
                                                                Chief Executive Officer


                                                                Dated: March 26, 2003

EX-99 6 ex200210k_exhibit99-2.htm CFO CERTIFICATION Exhibit 99.2

                                                                                                               Exhibit 99.2


                                                 CERTIFICATION PURSUANT TO
                                 SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,
                                                  AS ADOPTED PURSUANT TO
                                       SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



Pursuant  to  Section  1350,  Chapter  63 of Title 18,  United  States  Code,  as adopted  pursuant  to Section  906 of the
Sarbanes-Oxley  Act of 2002, the undersigned,  as Chief Financial  Officer of U.S. Can Corporation  (the  "Company"),  does
hereby certify that:

1)       the Company's Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities  Exchange
         Act of 1934; and

2)       the information  contained in the Company's Form 10-K fairly  presents,  in all material  respects,  the financial
         condition and results of operations of the Company.


                                                                 /s/ Sandra K. Vollman

                                                                Sandra K. Vollman
                                                                Senior Vice President and
                                                                Chief Financial Officer


                                                                Dated: March 26, 2003

EX-21 7 ex200210k_exhibit21-1.htm SUBSIDIARIES OF THE REGISTRANT Exhibit 21.1

                                           SUBSIDIARIES OF U.S. CAN CORPORATION

- ------------------------------------- ----------------------------------- -----------------------------------
Name                                  Place of Organization               Trade Name
- ----                                  ---------------------               ----------
- ------------------------------------- ----------------------------------- -----------------------------------
- ------------------------------------- ----------------------------------- -----------------------------------
United States Can Company             State of Delaware, U.S.A.           U.S. Can
- ------------------------------------- ----------------------------------- -----------------------------------
- ------------------------------------- ----------------------------------- -----------------------------------
USC May Verpackungen Holding, Inc.    State of Delaware, U.S.A.           n/a
- ------------------------------------- ----------------------------------- -----------------------------------
- ------------------------------------- ----------------------------------- -----------------------------------
U.S.C. Europe N.V.                    Netherlands Antilles                n/a
- ------------------------------------- ----------------------------------- -----------------------------------
- ------------------------------------- ----------------------------------- -----------------------------------
U.S.C. Europe Netherlands B.V.        Netherlands                         n/a
- ------------------------------------- ----------------------------------- -----------------------------------
Note:  U.S.C. Europe Netherlands B.V. has nine foreign subsidiaries engaged in metal can manufacturing in Europe, and
- ----
also owns 36.5% of Formametal S.A., an Argentine metal can manufacturer.

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