EXHIBIT 10.3
August 9, 2001
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Change in Control Agreement
Dear ▇▇▇▇▇:
The purpose of this letter agreement (the "Agreement") is to set forth the terms
upon which you may be entitled to certain benefits upon a change in control of
Bway Corporation (the "Company")./1/ The Company agrees to provide the
following benefits to you in exchange for your continued employment with the
Company. Specifically, you ("You" or "Your") and the Company (collectively, the
"Parties") agree:
1. The term of this Agreement shall commence on August 9, 2001 (the "Effective
Date") and end on the earlier of (i) the date Your employment with the
Company terminates, or (ii) the date that is twenty-four (24) months
following a Change in Control.
2. Upon a Change in Control, the Company will accelerate vesting of all stock
options and stock grants held by You as of the Change in Control so that
such options and awards are fully vested and exercisable, provided that You
are employed by the Company at any time during the thirty (30) day period
prior to the date of the Change in Control. Notwithstanding any terms and
provisions of such stock options, you will have at least ninety (90) days
following the Change in Control in which to exercise vested options.
3. If, within thirty (30) days prior to or twenty-four (24) months following a
Change in Control, You have been continuously employed by the Company from
the date of this Agreement and (i) You terminate Your employment for Good
---
Reason, or (ii) the Company or its successor entity terminates Your
employment for any reason other than For Cause, then the Company will:
(a) within ninety (90) days following the Separation Date, pay you a lump
sum payment equivalent to the sum of one and a half (1.5) times Your
annual base salary in effect as of the date of the Change in Control,
and (ii) one (1) times Your target incentive bonus in effect as of the
date of the Change in Control (collectively, the "Separation Payment");
/1/ Unless otherwise indicated, all capitalized terms used in this Agreement are
defined in the "Definitions" section of Exhibit A. Exhibit A is incorporated by
reference and is included in the definition of "Agreement."
----------
[initials] Page 1 of 5 - Letter Agreement
(b) continue paying for any Executive Perquisites that You are receiving as
of the Separation Date until the later of (i) the date that is six (6)
months from the Separation Date, or (ii) the end of the calendar year
in which the Separation Date occurs; provided, however, that the
Company shall not be obligated to pay such Executive Perquisites that
it has already paid in full for the applicable time period referenced
in preceding sub-clause (i) or (ii);
(c) reimburse Your COBRA premium under the Company's group health plan and
dental plan (if any) on a monthly basis for the lesser of (i) the
period in which You are eligible to receive such continuation coverage,
or (ii) one and a half (1.5) years (the "COBRA Period");
(d) procure and pay the premiums for individual life insurance coverage for
You on substantially similar terms as the coverage provided to You by
the Company as of the Separation Date under the Company's group life
insurance plan for a period of one and a half (1.5) years following the
Separation Date;
(e) fully vest You in any retirement benefits to which You may be entitled
pursuant to any nonqualified retirement or nonqualified deferred
compensation plans maintained by the Company in which you are a
participant as of the Separation Date; and
(f) provide outplacement services from an outplacement company approved by
the Company for a period of 12 months. All fees will be paid directly
to the outplacement company. All requests for payment of outplacement
services must be accompanied by a written invoice indicating what
services were rendered. The Company will only pay for reasonably
necessary business expenses associated with outplacement services. You
acknowledge that the Company is not responsible for the quality of
services provided by the outplacement company.
4. If, during the Restricted Period, You, on Your own behalf or on behalf of
any person or entity engaged in the Business, engage in or perform within
the Territory any activities deemed to be in competition with the Company,
either directly or as a consultant (the "Restricted Activities"), then, upon
written notice to You (the "Notice"), (i) this Agreement shall be rescinded;
(ii) You shall, within two (2) days of receiving the Notice, return to the
Company the entire amount of the Separation Payment You received under
Section 3(a) above, (iii) the exercise, payment, delivery, or sale pursuant
to any stock options and/or stock grants referenced in Section 2 above shall
be rescinded and You shall return to the Company any amounts You received in
connection therewith, (iv) the Company's obligation to continue to provide
to You any payments or benefits under Sections 3(b) through 3(f) above shall
cease as of the date You receive the Notice and You shall forfeit Your right
to receive any such payments and/or benefits, and (v) You shall reimburse
the Company for the full cost of any benefits the Company provided to You
under Sections 3(b) through 3(f) above during the period beginning on the
date You commenced the Restricted Activities and ending on the date the You
received the Notice. Any waiver of the restrictions set forth in this
Section 5 will be in the sole discretion of the Company or the successor
entity to the Company, and
----------
[initials] Page 2 of 5 - Letter Agreement
must be in writing, signed by the Chairman of the Compensation Committee of
the Company or the successor entity to the Company.
The payment and vesting of any benefits set forth in Section 2 and 3 above shall
be subject to the satisfaction of all applicable withholding requirements which
may necessitate a cash payment from You to the Company.
In addition, the payments and benefits set forth in Section 3 above shall be
conditioned upon Your execution of a Separation and Release Agreement in a form
acceptable to the Company whereby You release the Company from any and all
liability and claims of any kind.
If You have any outstanding obligations to the Company at the time any payments
and/or benefits become payable to You pursuant to this Agreement, You
acknowledge that the Company is authorized to deduct any amounts owed to the
Company from any amounts that would otherwise be due to You pursuant to this
Agreement, to the extent permitted by law.
This Agreement does not create a contract of employment. This Agreement does
not create a contract for benefits, except as set forth in this Agreement. Your
employment relationship with the Company is at-will. This means that at either
Your option or the Company's option, Your employment may be terminated at any
time, with or without cause or notice. This Agreement does not alter the at-
will employment relationship.
Notwithstanding anything else contained in this Agreement, if the aggregate of
the amounts being paid to You pursuant to this Agreement and all other amounts
paid to You which constitute "parachute payments" (as defined in Code (S) 280G)
(hereinafter collectively referred to as "Parachute Payments") exceed 299% of
Your "Base Amount" (as defined in Code (S) 280G), the amount of Your Separation
Payment shall be reduced by the minimum amount necessary to reduce the Parachute
Payments to 299% of Your Base Amount. You agree to provide the Company with all
information the Company deems necessary, appropriate or useful to determine the
extent to which payments described in this Agreement could be subject to an
excise tax, and You agree that the Company may release such information to tax
professionals chosen by the Company to assist in making this determination.
The Board of Directors of the Company or of the successor entity to the Company
shall have sole and absolute discretion to interpret this Agreement with respect
to Your benefits (including, without limitation, by supplying omissions from,
correcting deficiencies in, or resolving inconsistencies or ambiguities in, the
language of this Agreement with respect to benefits under this Agreement), to
determine Your right to benefits hereunder, and to resolve all issues arising
under this Agreement with respect to Your benefits hereunder. To the extent
that You have a claim for benefits under this Agreement, You will be entitled to
assert Your claim, and to appeal from any adverse determination with respect to
Your claim, in accordance with the procedures set forth in 29 CFR (S)2560.503-1
(using in all cases involving a time limitation the maximum amount of time
permissible under such regulations). In all cases, Your claim should be
submitted and addressed to the Company or the successor entity to the Company,
and Your appeal of any adverse determination with respect to Your claim should
be submitted to the Board of Directors of the Company or the successor entity to
the Company.
----------
[initials] Page 3 of 5 - Letter Agreement
This Agreement, including Exhibit A which is incorporated by reference,
constitutes the entire agreement between the Parties concerning the subject
matter of this Agreement. This Agreement supersedes any prior communications,
agreements or understandings, whether oral or written, between the Parties
relating to the subject matter of this Agreement, provided, however, that this
Agreement does not supersede or modify any existing written employment agreement
or similar agreement between You and the Company, except to the extent expressly
provided in this Agreement. Other than terms of this Agreement, no other
representation, promise or agreement has been made with You to cause You to sign
this Agreement.
This Agreement shall be assignable to, and shall inure to the benefit of, the
Company's successors and assigns, including, without limitation, successors
through merger, name change, consolidation, or sale of a majority of the
Company's stock or assets, and shall be binding upon You and Your heirs and
assigns. You shall not have the right to assign Your rights or obligations under
this Agreement.
You agree that any claim arising out of or relating to this Agreement shall be
(i) brought in the Superior Court of ▇▇▇▇▇▇ County, Georgia, or (ii) brought in
or removed to the United States District Court for the Northern District of
Georgia, Atlanta Division. You consent to the personal jurisdiction of the
courts identified above. You waive (i) any objection to jurisdiction or venue,
or (ii) any defense claiming lack of jurisdiction or improper venue, in any
action brought in such courts.
The laws of the State of Georgia shall govern this Agreement. If Georgia's
conflict of law rules would apply another state's laws, the Parties agree that
Georgia law shall still govern.
If the terms set forth in this Agreement are acceptable, please sign below and
return the signed original to me on or before August 13, 2001.
Sincerely,
▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇
Chairman and Chief Executive Officer
I acknowledge the validity of this 4 page Agreement, including the attached
Exhibit, and represent that I have the legal capacity to enter into this
Agreement. I have carefully read the Agreement, know and understand the terms
and conditions, including its final and binding effect, and sign it voluntarily.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ August 13, 2001
---------------------------------- ----------------------------
Signature Date
----------
[initials] Page 4 of 5 - Letter Agreement
EXHIBIT A
Definitions
1. "Business" shall mean the business of manufacturing tinplate and steel
packaging for consumer and industrial goods, including, but not limited to,
aerosol cans, cold rolled and black plate steel pails, tinplate cans, steel
ammunition boxes, and material center services.
2. "Change in Control" shall mean (i) the sale, transfer, or other disposition
of eighty percent (80%) or more of the Company's assets, or (ii) a sale of
fifty percent (50%) or more of the then outstanding voting stock of the
Company in a single transaction or a series of related transactions.
3. "Code" shall mean the Internal Revenue Code of 1986, as amended.
4. "Company" shall mean Bway Corporation, its parents, subsidiaries,
affiliates and all related companies, as well as their respective officers,
directors, shareholders, employees, agents and any other representatives,
any employee benefits plan of the Company, and any fiduciary of those
plans.
5. "Executive Perquisites" shall mean any Company provided perquisites
provided to You by the Company as set forth in Your Employment Agreement.
6. "For Cause" shall mean a termination of Your employment by the Company
because of (i) Your conviction by a court of competent jurisdiction of a
felony or a crime involving moral turpitude, (ii) conduct by You which, if
known to the general public, would likely bring the Company or any of its
subsidiaries into substantial public disgrace or disrepute, (iii) Your
substantial and repeated failure to perform duties as reasonably directed
by the Board of Directors, or (iv) Your gross negligence or willful
misconduct with respect to the Company or any of its subsidiaries.
7. "Good Reason" shall exist if (a) the Company or its successor entity,
without Your written consent, terminates Your employment as Vice President,
Administration and Chief Financial Officer.
8. "Restricted Period" shall mean the time period during Your employment with
the Company and for a period of one (1) year after Your employment with the
Company ends.
9. "Separation Date" shall mean the date on which the Company terminates Your
employment other than For Cause, or the date on which You terminate Your
employment with the Company for Good Reason.
10. "Territory" shall mean North America.
----------
[initials] Page 5 of 5 - Letter Agreement