Exhibit 10

 
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Memorandum

May 2, 2006

TO:
     
FROM:
R. David Hoover
   
SUBJECT:
Acquisition-Related, Special Incentive Plan - Combined Metal Food & Household
Products Packaging Division and Plastics Packaging Division

I am pleased to advise you that you have been selected to participate in the
Acquisition-Related, Special Incentive Plan (“Plan”). This program is available
only to selected executives and senior managers who are in a position to impact
significantly the successful integration of U.S. Can and Alcan Plastics into our
business or to enhance and sustain the success of our other business units while
the integration efforts proceed.

The terms of the Plan are as follows:

1.    (a)    Payment Contingent. Except as provided otherwise by paragraph 4
below, this Plan will pay you an amount of money determined in accordance with
the provisions of paragraph 2 below, if (and only if) (i) the combination of the
Company’s Metal Food & Household Products Packaging Division and Plastics
Packaging Division (“Combined Divisions”) exceeds the Threshold EBIT Goal or the
Threshold Cash Flow Goal for a Performance Period (as such terms are defined in
paragraphs 1(b) and 1(c) below), and (ii) you are continuously employed full
time by the Company from the effective date of this Plan, January 1, 2006, until
the close of such Performance Period in your current position or another
position eligible for inclusion in this Plan. If the Combined Divisions exceeds
the Threshold EBIT Goal and the Threshold Cash Flow Goal for none of the
Performance Periods, or if you are not continuously employed full time by the
Company as provided above from January 1, 2006, until the close of a Performance
Period for which the Combined Divisions exceeds the Threshold EBIT Goal or the
Threshold Cash Flow Goal, you will not be paid any amount of money pursuant to
this Plan, unless paragraph 4 below expressly provides otherwise.

(b)    Performance Periods Defined.

(i) The term “Performance Period” means the Twelve-Month Performance Period, the
Twenty-Four Month Performance Period, or the Thirty-Six Month Performance Period
as hereafter defined;

(ii) The term “Twelve-Month Performance Period” means the period that begins on
January 1, 2006, and that ends on December 31, 2006;

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May 2, 2006
Page 2

(iii) The term “Twenty-Four Month Performance Period” means the period that
begins on January 1, 2006, and that ends on December 31, 2007; and

(iv) The term “Thirty-Six Month Performance Period” means the period that begins
on January 1, 2006, and that ends on December 31, 2008.

(c)    Cumulative EBIT and Cash Flow Defined.

(i) “Cumulative EBIT” means, with respect to any Performance Period, the
cumulative earnings before interest and taxes of the Combined Divisions for such
Performance Period (including, without limitation, expenses for this Plan and
any other similar or dissimilar compensation arrangement). Such amount will
exclude all interest and provisions for taxes based on income and without giving
effect to any extraordinary gains or losses, or gains or losses from sales of
assets other than inventory sold in the ordinary course of business, all as
determined in accordance with generally accepted accounting principles and as
included in the audited financial statements of the Company and its consolidated
subsidiaries for such Performance Period; and

(ii) “Cumulative Cash Flow” means, with respect to any Performance Period,
Cumulative EBIT for such Performance Period as defined in paragraph 1(c)(i)
above with the following additions and deductions: (a) add an amount equal to
the cumulative charges for depreciation and amortization of the Combined
Divisions for such Performance Period, (b) add an amount equal to the cumulative
decreases in working capital of the Combined Divisions in such Performance
Period, (c) deduct an amount equal to the cumulative capital expenditures
(including cash rationalization costs, net of any cash tax benefits) of the
Combined Divisions for such Performance Period, and (d) deduct an amount equal
to the cumulative increases in working capital of the Combined Divisions in such
Performance Period, all as determined in accordance with generally accepted
accounting principles and as included in the audited financial statements of the
Company and its consolidated subsidiaries for such Performance Period.

(iii) For purposes of (i) and (ii) above, Cumulative EBIT and Cumulative Cash
Flow shall be based on the results of the Combined Divisions measured from
January 1, 2006, to the end of the Performance Period. These results include
only the results as consolidated into Ball Corporation for Financial Reporting,
which generally would include approximately 9 months of Aerosol & Specialty
Packaging and Alcan Plastics performance, and 12 months of the legacy Ball Metal
Food Packaging and Ball Plastics performance during 2006. Additionally (ii)(b)
and (ii)(d) above, any increase or decrease in working capital shall be also
measured from January 1, 2006, to the end of the Performance Period as described
above. The Ball Corporation Chief Financial Officer shall make all
determinations related to the final EBIT and Cash Flow calculations under this
Plan.

2.
Special Incentive Plan Award Opportunity and Performance Goals

(a)    For the Thirty-Six Month Performance Period your award opportunity
(“Special Incentive Factor”) is 60 percent of your average annual base salary
earned in calendar years 2006, 2007 and 2008. Actual awards (including interim
awards) under this Plan may range from zero to 150 percent of your Special
Incentive Factor and are based on achievement of performance goals for the
combination of the Combined Divisions as outlined below:

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May 2, 2006
Page 3

Cumulative Performance Goals
($ millions)

   
12-Month
Performance
Period Ending
December 31, 2006
 
24-Month
Performance
Period Ending
December 31, 2007
 
36-Month
Performance
Period Ending
December 31, 2008
 
Performance Measure
 
Threshold
 
Target
 
Maximum
 
Threshold
 
Target
 
Maximum
 
Threshold
 
Target
 
Maximum
     
 
Confidential Information1
 
 
Confidential Information
 
 
Confidential Information
 
 
Cumulative EBIT
   

*****
   

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
 
 
Cumulative Cash Flow
   

*****
   

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
 
 

*****
                                                           

The cumulative Performance Goals are based on the Combined Divisions measured
from January 1, 2006, to the end of the Performance Period, which would include
approximately 9 months of Aerosol & Specialty Packaging and Alcan Bottles
projected performance and 12 months of the legacy Ball Metal Food Packaging and
Ball Plastics projected performance during 2006.

Depending upon actual cumulative performance for each of the Performance Periods
above, interim awards may be made at the end of each Performance Period as
follows:

1 Portions of the exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by asterisks (“*****”) and the omitted text has
been filed separately with the Securities and Exchange Commission.

Percentage of Special Incentive Factor Awarded Based on
Actual Cumulative Performance During Performance Periods

   
12-Month
Performance
Period Ending
December 31, 2006
 
24-Month
Performance
Period Ending
December 31, 2007
 
36-Month
Performance
Period Ending
December 31, 2008
 
Percent of Special Incentive Factor Awarded
 
Threshold
 
Target
 
Maximum
 
Threshold
 
Target
 
Maximum
 
Threshold
 
Target
 
Maximum
     
 
Confidential Information3
 
 
Confidential Information3
 
 
Confidential Information3
 
 
Based upon Cumulative EBIT
   

*****3
 
 

*****3
 
 

*****1
 
 

*****
 
 

*****2
 
 

*****1
 
 

*****
 
 

*****2
 
 

*****2
 
 
Based upon Cumulative Cash Flow
   

*****
 
 

*****
 
 

*****1
 
 

*****
 
 

*****2
 
 

*****1
 
 

*****
 
 

*****2
 
 

*****2
                                                           

   

1
Payments at the end of the 12-Month and 24-Month Performance Periods will be
limited to no more than target payments. Amounts which are payable for
performance in excess of target performance are calculated and payable only on
the basis of cumulative performance over the 36-Month Performance Period.

2
Minus awards, if any, previously made under this Special Incentive Plan.

3 Portions of the exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by (“*****”) and the omitted text has been filed
separately with the Securities and Exchange Commission.

 

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May 2, 2006
Page 4

For each Performance Period, if actual performance under each measure is greater
than Threshold Performance, but is less than Target Performance, awards shall be
calculated pursuant to the table above, determined on a straight line
interpolation between Threshold Performance and Target Performance levels. For
the Thirty-Six Month Performance Period only, if actual performance under each
measure is greater than Target Performance, but is less than Maximum
Performance, awards shall be calculated pursuant to the table above, determined
on a straight line interpolation between Target Performance and Maximum
Performance levels.

Payment of amounts earned under this Plan with respect to any Performance Period
shall take place on or before March 15 of the calendar year next following the
close of such Performance Period.

3.    Payment Contingent on Continued Service with the Company. Except to the
extent otherwise expressly provided by paragraph 4, in order to be eligible to
receive an award under this Plan, you must be employed full time by the Company
from the date you begin participating in the Plan, until the close of the
Performance Period in respect of which the payment is to be made. If your
full-time employment by the Company terminates for any reason before the close
of the Performance Period in respect of which a payment is to be made pursuant
to any of the preceding paragraph, then, except to the extent otherwise
expressly provided by paragraph 4 below, upon such termination of employment you
shall relinquish any right to be paid any money that would otherwise thereafter
be paid to you pursuant to this Plan in respect of such Performance Period.

4.    Exception for Certain Terms of Service during Performance Period. If,
before the close of the Thirty-Six Month Performance Period, you cease to be
continuously employed full time by the Company by reason of early or normal
retirement, as defined in the Company’s Pension Plan for Salaried Employees, or
other Company-sponsored pension plan, or for any other reason (including, but
not limited to, by reason of your being transferred to a position not eligible
for inclusion in this Plan) except (a) cause, or (b) your voluntary termination
of employment, then, the Company will pay you (or your Beneficiary, in the case
of your death) the amount of money which would have been paid to you pursuant to
paragraph 2 if your full-time employment and participation in the Plan had
continued until the close of the Thirty-Six Month Performance Period, multiplied
by a fraction the numerator of which shall be the number of full months of
continuous full-time employment that you actually served during the Thirty-Six
Month Performance Period, and the denominator of which shall be Thirty-Six
months. Any money payable pursuant to the preceding sentence shall be paid at
the same time, on the same terms, and subject to the same conditions that would
have applied if your full-time employment and participation in the Plan had
continued until the close of the Thirty-Six Month Performance Period.

5.    Withholding. All amounts of money that are payable pursuant to this Plan
shall be subject to the withholding of such amounts as the Company may, in its
sole discretion, determine are required to be withheld or collected under the
laws or regulations of any governmental authority, whether federal, state, or
local and whether domestic or foreign.

6.    Administration, Interpretation, and Construction. The terms and conditions
of the Plan shall be administered, interpreted, and construed by the Human
Resources Committee of the Board of Directors of the Company (“Human Resources
Committee”), whose decisions shall be final, binding, and conclusive. Without
limiting the generality of the foregoing, any determination as to whether or not
your employment has been terminated for cause, or has

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May 2, 2006
Page 5

been terminated voluntarily by you, or whether you have transferred to a
position not eligible for participation, shall be made in the good faith but
otherwise absolute discretion of the Human Resources Committee.

7.    No Employment Rights. No provision of the Plan shall confer upon you any
right to continue in the employ of the Company or any subsidiary of the Company,
or shall in any way affect the right and power of the Company or any subsidiary
of the Company to terminate your employment at any time for any reason or no
reason, or shall impose upon the Company or any subsidiary of the Company, any
liability not expressly provided for in the Plan if your employment is so
terminated.

8.    Rights Not Transferable. No rights under this Plan, contingent or
otherwise, shall be assignable or transferable other than to a “Beneficiary” (as
hereafter defined) upon your death, either voluntarily, or, to the full extent
permitted by law, involuntarily, by way of encumbrance, pledge, attachment,
levy, or charge of any nature. Any attempt to transfer, assign, encumber,
pledge, attach, levy upon, or charge any rights under the Plan, other than to a
Beneficiary in the event of your death, shall be null, void, and of no force or
effect and, in the event of any such attempt, the Human Resources Committee may
terminate your participation in the Plan. For this purpose, a “Beneficiary”
shall mean a person or entity (including a trust or estate), designated in
writing by you on the attached form or similar document to whom amounts that
would have otherwise been made to you shall pass in the event of your death. If
no such person or entity has been so designated, or if no person or entity so
designated is alive or in existence at the time any amount becomes payable
pursuant to this Plan, your “Beneficiary” shall mean the legal representative of
your estate.

9.    Successors and Mergers, Consolidation or Change in Control. The terms and
conditions of this Plan shall enure to the benefit of and bind you and the
Company, its successors assignees and personal representatives. If a change in
control should occur then the rights and obligations created hereunder shall be
the rights and obligations of the acquirer or successor corporation.

10.    Employment or Failure Eligibility to Participate Not Guaranteed. Nothing
contained in this Plan nor any action taken hereunder shall be construed as a
contract of employment or as giving you any right to be retained in the employ
of the Company. Designation as a Participant may be revoked at any time.

Finally, this Plan provides you the opportunity to earn special incentive
compensation on the terms and conditions set forth above. I am very pleased that
you have been chosen to participate in this Special Incentive Plan and am
confident that you will have a significant impact on our Company’s success.