EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of October 6, 1997, between BWAY
Corporation, a Delaware corporation (the "Company") and Xxxxx X. Xxxx
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("Executive"). The Company and Executive are referred to collectively herein as
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the "Parties" and individually as a "Party".
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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. The Company shall employ Executive, and Executive
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accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof (the "Employment
Date") and ending as provided in Section 4 (the "Employment Period").
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2. Position and Duties. During the Employment Period, Executive
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shall be Executive Vice President of the Company and President of the Company's
Xxxxxxxx Standard, Inc. ("BSI") subsidiary and shall render such administrative
and other executive services to the Company and its Subsidiaries as the
Company's board of directors (the "Board") or its Chief Operating Officer may
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from time to time direct. Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company and its Subsidiaries. Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner. Executive shall report to the Chief
Operating Officer of the Company. For purposes of this Agreement,
"Subsidiaries" shall mean any corporation of which the securities having a
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majority of the voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one or more
Subsidiaries.
3. Base Salary, Bonus and Benefits.
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(a) During the Employment Period, Executive's base salary shall be
$200,000 per annum or such higher rate as the Board designates from time to time
(the "Base Salary"). The Base Salary shall be payable in regular installments
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in accordance with the Company's general payroll practices. The Board shall
review Executive's performance in April, 1999, and at the end of each eighteen
month period thereafter during the Employment Period. Based on such review, the
Board may, in its sole discretion, increase or decrease the Base Salary (but not
below $200,000). Following the end of each fiscal year during the Employment
Period, the Board may award the Executive a bonus for such year based on
Executive's performance, the amount of which will be determined by the Board in
its sole judgment. Executive's "target" under the Company's Management
Incentive Plan shall be forty percent (40%) of Base Salary with a maximum of
sixty percent (60%) of Base Salary. Executive shall receive a "sign-on" bonus
of $16,666.67 from the Company.
(b) In addition to the Base Salary and any bonuses payable to
Executive pursuant to Section 3(a), during the Employment Period Executive shall
be entitled to participate in the Company's 1995 Amended and Restated Long-Term
Incentive Plan (the "Plan") and all of the Company's other employee benefit
programs for which senior executive employees of the Company are generally
eligible, and Executive shall be entitled to (4) weeks of paid vacation
each year. Executive shall be recommended, one time, to be granted 10,000
options to purchase the Company's Common Stock pursuant to the Plan. The option
price and vesting period shall be determined by
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the Board in accordance with the Plan. Executive shall be entitled to the
Company's full relocation package. Executive shall have the option of the
Company purchasing his home in Wilmington, North Carolina, pursuant to the
Company's policies. The Company will "gross-up" the non-deductible relocation
expenses in an effort to minimize the impact of any income taxes related to
reimbursement of Executive's relocation expenses with the intent of making
Executive whole.
(c) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
4. Term.
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(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on the third anniversary of the
Employment Date; provided that (i) the Employment 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
Employment Period may be terminated by the Company at any time prior to such
date for Cause (as defined below) or without Cause. If either party hereto does
not desire to extend the Employment Period beyond the third anniversary of the
Employment Date, then such party shall provide the other written notice thereof
at least six (6) months prior to the third anniversary of the Employment Date.
(b) If the Employment Period is terminated by the Company without
Cause prior to the third anniversary of the Employment Date, subject to the
limitations set forth below, Executive shall be entitled to receive his Base
Salary and health, disability and life insurance benefits until the later of the
third anniversary of the Employment Date or the first anniversary of the date of
such termination, so long as Executive has not breached in any material respects
the provisions of Sections 5, 6, 7 and 11(a) hereof. The amounts payable
pursuant to this Section 4(b) shall be reduced by the amount of any compensation
Executive receives with respect to any other employment during the period in
which the Company is making such payments to Executive or, in the event the
Employment Period is terminated as a result of Executive's permanent disability
or incapacity, by the amount Executive receives with respect to any Company
disability policy. Upon request from time to time, Executive shall furnish the
Company with a true and complete certificate specifying any such compensation
due to or received by him. Executive has no obligation to seek employment
during the period that he is receiving compensation pursuant to this Section
4(b).
(c) If the Employment Period is terminated by the Company for Cause or
is terminated pursuant to clause 4 (a) (i) above, Executive shall be entitled to
receive his Base Salary through the date of termination.
(d) All of Executive's rights to fringe benefits and bonuses hereunder
(if any) accruing after the termination of the Employment Period shall cease
upon such termination, except for benefits required by law.
(e) Notwithstanding anything in Section 4(c) to the contrary, the
Company shall be deemed to have terminated the Employment Period without Cause
in the event that (i) Executive resigns as a result of a material breach of this
Agreement by the Company which is not cured by the
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Company within 30 days after Executive delivers written notice of such breach to
the Chief Operating Officer and General Counsel or (ii) the Company terminates
the Employment Period as a result of the permanent disability or incapacity of
Executive pursuant to 4(a) (i) above. After a Change in Control, if the Company
terminates the Employment Period for any reason, such termination shall be
deemed to be a termination by the Company without Cause.
(f) "Cause" shall mean (i) a material breach of this Agreement by
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Executive, (ii) the conviction of the Executive by a court of competent
jurisdiction of a felony or a crime involving moral turpitude, (iii) conduct
which, if known to the general public, would likely bring the Company or any of
its Subsidiaries into substantial public disgrace or disrepute, (iv) substantial
and repeated failure to perform duties as reasonably directed by the Board or
the Chief Operating Officer or (v) gross negligence or willful misconduct with
respect to the Company or any of its Subsidiaries. "Change in Control" shall
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occur upon (x) the acquisition by any person or group of persons (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Exchange Act")), other
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than the Chairman of the Board on the date hereof and his affiliates and
associates, of more than thirty five percent (35%) of the Company's Common Stock
or (y) the election of a majority of directors to the Board that were not
recommended to the stockholders by the Board.
5. Confidential Information. Executive acknowledges that the
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information, observations and data obtained by him while employed by the Company
concerning the business or affairs of the Company or any Subsidiary
("Confidential Information") are the property of the Company or such Subsidiary.
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Therefore, Executive agrees that he shall not disclose to any unauthorized
person or use for his own account any Confidential Information without the prior
written consent of the Chief Operating Officer, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions to act.
Nothing herein shall prevent Executive from making (i) any disclosure that is
required by applicable law or the order of a court of competent jurisdiction, or
(ii) any disclosure, in good faith, to properly fulfill Executive's duties under
this Agreement. Executive shall deliver to the Company at the termination of
the Employment Period, or at any other time the Company may request, all
memoranda, notes, plans, records, reports, computer tapes and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product or the business of the Company or any Subsidiary which
he may then possess or have under his control.
6. Inventions and Patents. Executive agrees that all inventions,
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innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to the Company's
or any of its Subsidiaries' actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Executive while employed by the Company ("Work Product")
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belong to the Company or such Subsidiary. Executive shall promptly disclose
such Work Product to the Chief Operating Officer and perform all actions
reasonably requested by the Chief Operating Officer (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
7. Non-Compete, Non-Solicitation.
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(a) Executive acknowledges that in the course of his employment with
the Company he will become familiar with the Company's and it Subsidiaries'
trade secrets and with
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other Confidential Information concerning the Company and the Subsidiaries and
that his services will be of special, unique and extraordinary value to the
Company and the Subsidiaries. Therefore, Executive agrees that, during the
Employment Period and during the period that Executive is receiving compensation
pursuant to Section 4(b) (but in no event for a period of less than twelve
months after the termination of the Employment Period) (the "Noncompete
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Period"), he shall not directly or indirectly own, manage, control, participate
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in, consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or its Subsidiaries as such
businesses exist or are in process on the date of the termination of Executive's
employment, within any geographical area in which the Company or its
Subsidiaries engage in such businesses. Nothing herein shall prohibit Executive
from being a passive owner of not more than 2% of the outstanding stock of any
class of a corporation which is publicly traded, so long as Executive has no
active participation in the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly (i) induce or attempt to induce any employee of the Company or any
Subsidiary to leave the employ of the Company or such Subsidiary, or in any way
interfere with the relationship between the Company or any Subsidiary and any
employee thereof, (ii) hire any person who was an employee of the Company or any
Subsidiary at any time during the Employment Period, or (iii) induce or attempt
to induce any customer, supplier, licensee or other business relation of the
Company or any Subsidiary to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Subsidiary.
8. Enforcement. If, at the time of enforcement of Section 5, 6 or 7,
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a court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the Parties agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area. Because Executive's services are unique and
because Executive has access to Confidential Information and Work Product, the
Parties agree that money damages would be an inadequate remedy for any breach of
this Agreement. Therefore, in the event of a breach or threatened breach of
this Agreement, the Company or its successors or assigns may, in addition to
other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce, or prevent any violations of, the provisions hereof
(without posting a bond or other security).
9. Executive Representations. Executive hereby represents and
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warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive does not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms.
10. Indemnification of Executive. The Company shall indemnify and
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hold harmless Executive from all losses and claims incurred in connection with
any actions taken by Executive in his capacity as an officer of the Company in
accordance with, and to the fullest extent permitted under, Delaware General
Corporation Law as in effect from time to time.
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11. Investment.
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(a) Executive hereby agrees, subject to all applicable laws and
policies, to invest $200,000 (the Company will reimburse Executive for his
actual, customary and reasonable costs incurred in this investment) in the
Company's Common Stock within thirty (30) days of closing on the sale of the
Executive's home in Wilmington, North Carolina (the "Investment") and keep the
Investment invested in the Company's Common Stock for the entire Employment
Period.
(b) In the event i) there is a Change in Control of the Company, ii)
Executive is terminated by the Company for reasons other than Cause, or iii)
Executive dies, within three (3) years from the date hereof Executive or
Executive's heirs shall have the option, subject to compliance with all
applicable laws and policies, of "putting" to the Company the $200,000 worth of
purchased shares of the Company's Common Stock by giving the Company notice of
the exercise of such put option within ten (10) days of the occurrence of one of
the events mentioned above. If Executive's heirs properly exercise such "put"
option, the Company, subject to compliance with all applicable laws and
policies, shall pay for such shares within ten (10) days of the notice of
exercise.
In the event I) or ii) in this Section 11(b) occurs during the
Employment Period, the Company shall reimburse Executive for his actual,
customary and reasonable costs incurred in relocating his dependant family back
to Wilmington, North Carolina from Atlanta, Georgia.
12. General Provisions.
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(a) Notices. All notices, requests, demands, claims, and other
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communications hereunder shall be in writing. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly given when delivered
personally to the recipient, telecopied to the intended recipient at the
telecopy number set forth therefor below, or sent to the recipient by reputable
express courier service (charges prepaid) and addressed to the intended
recipient as set forth below:
If to the Company:
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BWAY Corporation
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: 770/000-0000
Attention: General Counsel
If to Executive:
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Xxxxx X. Xxxx After March 6, 1998:
8705 Xxxxx 000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000 Xxxxxxx, Xxxxxxx 00000
Telephone: Telephone:
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means, but no such notice, request, demand, claim or other communication
shall be deemed to have been duly given unless and until it actually is received
by the intended recipient. Any Party may change the address to which notices,
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requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
(b) Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Entire Agreement. This Agreement (including the documents
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referred to herein) constitutes the entire agreement between the Parties and
supersedes 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.
(d) Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this
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Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company and their respective successors, heirs, executors,
administrators and assigns; provided that the rights and obligations of
Executive under this Agreement shall not be assignable without the prior written
consent of the Company.
(f) Choice of Law. All questions concerning the construction,
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validity and interpretation of this Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Georgia without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Georgia or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Georgia.
(g) Amendment and Waiver. The provisions of this Agreement may be
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amended and waived only with the prior written consent of the Company and
Executive.
(h) Survival. Sections 5, 6, 7, 8 and 11 (b) shall survive and
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continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
BWAY CORPORATION
By /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Its Chief Operating Officer & President
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EXECUTIVE
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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