AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT
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This is AMENDMENT NO.1, effective as of June 1, 1998, to the Employment
Agreement (the "Agreement"), dated as of June 1, 1995, between BWAY Corporation,
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f/k/a Xxxxxxxx Standard Holdings Corporation, a Delaware corporation (the
"Company") and Xxxx X. Xxxxxxx ("Executive"). Capitalized terms not otherwise
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defined herein have the meaning given to such terms in the Agreement.
Executive and the Company desire to extend the term of the Agreement for
a year, update the Executive's Base Salary and provide for a one-year period
after the expiration of the Employment Period during which time Executive will
provide services to the Company as a consultant.
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:
1. Employment. Paragraph 2 of the Agreement is hereby amended by adding
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the following sentence to the end thereof:
Subject to the terms and conditions set forth herein, after the expiration
of the Employment Period, the Company shall engage Executive as an
independent contractor, and not as an employee, to render Consulting
Services during the Consulting Period (each as defined below); provided
that, if the Employment Period is terminated by Executive's resignation,
death, disability or incapacity or by the Company for Cause or without
Cause, no Consulting Period shall occur and no compensation shall be due or
payable by the Company with respect thereto.
2. Duties. Paragraph 3 of the Agreement is hereby amended by deleting
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the last sentence thereof and replacing it with the following:
During the Consulting Period, Executive shall render such consulting
services to the Company (and its Subsidiaries) in connection with the
Company's business as the Chairman of the Company from time to time
reasonably requests, which services shall include, but not be limited to,
providing advice to the Chairman and assistance to the Company (and its
Subsidiaries) regarding operational, managerial, strategic and other
matters within Executive's expertise (the "Consulting Services"). During
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the Consulting Period, Executive shall be an independent contractor and not
an employee. During the Consulting Period, Executive shall devote his best
efforts and such business time and attention as is necessary to the
performance of the Consulting Services, but Executive shall not be an
employee of the Company; it is understood that Executive shall be solely
responsible for paying in a timely fashion all applicable taxes with
respect to the compensation paid to him during such period. The Parties
agree that Executive will not have any authority to bind or act on behalf
of the
Company (and its Subsidiaries) at any time during the Consulting Period
without specific advance authorization from the Chairman.
3. Base Salary; Consulting Payment. Paragraph 4(a) of the Agreement is
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hereby amended by replacing "$220,000" in the first sentence thereof with
"$350,000" and by adding the following to the end of paragraph (a):
Following the end of the Company's 1999 fiscal year, the Board, in
accordance with the immediately preceding sentence, may award Executive a
bonus which, if awarded, would be prorated to reflect that Executive was
not an employee during the entire fiscal year.
In consideration of Executive's Consulting Services during the Consulting
Period, so long as Executive has not breached any covenants or other
obligations hereunder, the Company shall pay Executive at the rate of
$350,000 per annum until the termination of the Consulting Period in
accordance with the terms hereof (the "Consulting Payment"). No bonus
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shall be payable during the Consulting Period.
4. Benefits. Paragraph 4 is hereby amended by i) adding the words
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"(including the applicable gross-up on taxes for that portion of the premium
cost related to the death benefit being more than the amount of the Base
Salary)" after the words "term life insurance" in the first line of Section
4(b)(ii) of the Agreement, ii) deleting the work "twice" in the third line of
Section 4(b)(ii) of the Agreement and replacing it with the words "three times",
iii) adding to the end of Section 4 (b)(ii) the following, "Executive shall have
the option to reject the third segment of death benefit (Executive would receive
a death benefit equal to twice the amount of Base Salary) and receive from the
Company in cash the cost (including the applicable gross-up on taxes) the
Company would otherwise pay in premium for such third segment of death benefit
and iv) adding thereto a new paragraph (e) as follows:
(e) During the Consulting Period, the Company shall reimburse
Executive for (i) the premium cost of medical coverage under (S)4980(B) of
the Internal Revenue Code of 1986 (as amended), (ii) the premium cost
(including the applicable gross-up on taxes for that portion of the
premium cost related to the death benefit being more than the amount of
the Consulting Payment) of Executive's term life insurance coverage having
a death benefit equal to three times the amount of the Consulting Payment
(subject to applicable insurance policy provisions or coverage rules),
Executive shall have the option to reject the third segment of death
benefit (Executive would receive a death benefit equal to twice the amount
of Consulting Payment) and receive from the Company in cash the cost
(including the applicable gross-up on taxes) the Company would otherwise
pay in premium for such third segment of death benefit and (iii)
reasonable out-of-pocket
travel and lodging expenses in accordance with the Company's policies and
requirements. However, Executive's participation in the BWAY Corporation
Profit Sharing and Savings Plan shall end upon the termination of the
Employment Period. Executive shall receive no other payments, benefits or
reimbursements during the Consulting Period other than the Consulting
Payment and those expressly stated in this Paragraph 4 (e).
5. Term. Paragraph 5 of the Agreement is hereby amended by deleting "the
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third anniversary of the Employment Date" from paragraph (a) thereof and
replacing it with "June 1, 1999", by adding the following to the end of
paragraph (a) and by replacing the first sentence of paragraph (b) with the
language set forth below:
If the Employment Period is not terminated by the Executive's resignation,
death, disability or incapacity or by the Company for Cause or without
Cause, then, upon the expiration of the Employment Period, the Company
shall engage Executive as a Consultant to perform Consulting Services from
June 2, 1999 until June 1, 2000 (the "Consulting Period"); provided that
(i) the Consulting Period shall terminate prior to such date upon
Executive's resignation, death or permanent disability or incapacity (as
determined by the Board in its good faith judgment) and (ii) the
Consulting Period may be terminated by the Company at any time for Cause.
If the Consulting Period terminates because of (i) or (ii) above, the
Consulting Payment shall also terminate as of such date. Notwithstanding
anything in the immediately preceding sentence to the contrary, upon the
termination of the Consulting Period due to permanent disability or
incapacity (as determined by the Board in its good faith judgment) of
Executive, Executive shall continue to receive the Consulting Payment,
reduced by the amount Executive receives with respect to any disability
policy.
(b) If the Employment Period is terminated by the Company without
Cause prior to June 1, 1999, subject to the limitations set forth below,
Executive shall be entitled to continue to receive his Base Salary, Target
Bonus (if any) and health, disability and life insurance benefits
hereunder until the second anniversary of the termination date; provided
that during the first year after the Company terminates the Employment
Period without Cause, Executive shall provide Consulting Services when, as
and if requested by the Chairman or the Company for no additional
consideration; and provided further that Executive does not breach in any
material respect any term of this Agreement, including without limitation
the provisions of paragraphs 7, 8 or 9 herein.
6. Confidential Information; Inventions and Patents. Paragraph 7 of the
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Agreement is hereby amended by inserting after "Employment Period" the
following: "Consulting Period". Paragraph 8 of the Agreement is hereby amended
by inserting after "Employment Period" the following: "or Consulting Period".
7. Non-Compete, Non-Solicitation. Paragraph 9 of the Agreement is hereby
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amended by deleting the definition of "Noncompete Period" and replacing it with
the following:
The "Noncompete Period" is the Employment Period, the Consulting Period and
thereafter until the later of (i) the first anniversary of the date on
which the Employment Period terminates or is terminated by either party
hereto for any reason, (ii) the first anniversary of the date on which the
Consulting Period terminates or is terminated by either party hereto for
any reason or (iii) the date on which Executive receives the final payment
from the Company pursuant to paragraph 5(b) hereof.
8. Executive Representations. Executive hereby remakes the
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representations set forth in paragraph 11 of the Agreement, except that all
references to "the Agreement" therein shall be deemed to be references to the
Agreement as amended by the Amendment No.1.
9. Notices. Paragraph 13 of the Agreement is hereby amended by deleting
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the addresses set forth therein and replacing those addresses with the
following:
If to the Company: with a copy to:
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BWAY Corporation Xxxxxxxx & Xxxxx
0000 Xxxxxxx Xxxxx, Xxxxx 000 200 East Xxxxxxxx Drive
Atlanta, GA 30350 Xxxxxxx, XX 00000
Telephone: 770/000-0000 Telephone: 312/000-0000
Telecopy: 770/587-0186 Telecopy: 312/861-2200
Attn: Chairman Attn: Xxxxxxx X. Xxxxxx, P.C.
Copy: General Counsel and Secretary
If to Executive: with a copy to:
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Xxxx X. Xxxxxxx
0000 Xxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone: 770/000-0000
10. Effect; Entire Agreement. Except as amended by this Amendment No.1,
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the Agreement remains in full force and effect. The Agreement and this Amendment
No.1 constitute the entire agreement between Parties and supersede any prior
understandings, agreements or representations by or between the Parties, written
or oral, that may have related in any way to the subject matter hereof.
11. Previous Option Grant. Executive has 11,667 options previously
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granted by the Company that are scheduled to vest on November 17, 2000. The
Company will recommend to the Compensation Committee that these options vest, i)
provided Executive complies with the terms of the Agreement as amended hereby,
and ii) subject to the terms and conditions of a) Executive's November 17, 1997
grant of 29,839 non-qualified options, b) Executive's November 17, 1997 grant of
5,161 incentive stock options and c) the Amended and Restated 1995 Long-Term
Incentive Plan, on June 1, 2000.
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IN WITNESS WHEREOF, the Parties have executed this Amendment No.1 as of
the date first written above.
BWAY CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Its Chairman & Chief Executive Officer
EXECUTIVE
/s/ Xxxx X. Xxxxxxx
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XXXX X. XXXXXXX
