<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-26178
BWAY Corporation
(Exact name of registrant as specified in its charter)
DELAWARE 36-3624491
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8607 Roberts Drive, Suite 250
Atlanta, Georgia 30350
(Address of principal executive offices)
(Zip Code)
(770) 587-0888
(Registrant's telephone number, including area code)
-------------------
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 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
------ ------
There were 6,531,750 shares of Common Stock ($.01 par value) outstanding as of
August 9, 1996.
<PAGE>
BWAY Corporation
QUARTERLY REPORT ON FORM 10-Q
For the quarter ended
June 30, 1996
<TABLE>
<CAPTION>
INDEX
Page Number
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 1996 (Unaudited)
and October 1, 1995 3
Consolidated Statements of Income for the three and
nine month periods ended June 30, 1996 and
July 2, 1995 (Unaudited) 4
Consolidated Statements of Cash Flows for the nine
month periods ended June 30, 1996 and July 2, 1995
(Unaudited) 5-6
Notes to Consolidated Financial Statements (Unaudited) 7-10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11-13
PART II. OTHER INFORMATION 14
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
2
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Part I. Financial Information
Item 1. Financial Statements
BWAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In Thousands, Except Share and per Share Data)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, October 1,
ASSETS 1996 1995
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,113 $ 23,538
Accounts receivable, net of allowance
of $475 at June 30, 1996 and $386 at
October 1, 1995 44,683 29,782
Inventories 40,198 19,388
Other current assets 1,481 1,103
Deferred tax asset 731 389
-------- --------
Total Current Assets 89,206 74,200
-------- --------
PROPERTY, PLANT AND EQUIPMENT - Net 98,893 67,668
-------- --------
OTHER ASSETS:
Intangible assets, net 78,998 22,011
Deferred financing costs, net of
accumulated amortization $10 at June
30, 1996 and $1,400 at October 1, 1995 1,237 2,908
Other assets 2,275 1,171
-------- --------
Total Other Assets 82,510 26,090
-------- --------
$270,609 $167,958
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 35,117 $ 22,194
Accrued salaries & wages 3,733 3,134
Accrued income taxes 651 910
Other current liabilities 18,169 8,996
Current maturities of long-term debt 812 155
-------- --------
Total Current Liabilities 58,482 35,389
-------- --------
LONG TERM DEBT 105,625 50,063
LONG TERM LIABILITIES:
Deferred income taxes 15,276 14,632
Other long-term liabilities 14,031 2,037
-------- --------
29,307 16,669
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; authorized
24,000,000 shares, issued 6,595,541
(June 30, 1996) and 6,409,750 (October 1, 1995) 66 64
Additional paid-in capital 37,606 31,734
Retained earnings 40,724 34,385
-------- --------
78,396 66,183
Less treasury stock, at cost, 63,791
(June 30, 1996) and 69,563 (October 1, 1995) (1,201) (346)
-------- --------
Total Stockholders' Equity 77,195 65,837
-------- --------
$270,609 $167,958
======== ========
</TABLE>
See notes to consolidated financial statements
3
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BWAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, Except per Share Data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
---------------------- ------------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
NET SALES $ 73,715 $ 64,522 $ 193,637 $ 184,802
COST OF SALES 61,158 54,645 162,421 157,572
------- ------- -------- --------
GROSS PROFIT 12,557 9,877 31,216 27,230
------- ------- -------- --------
EXPENSES:
Selling, general and administrative 4,393 2,808 12,442 8,724
Management fees and expenses --- 2,442 --- 3,393
Amortization of intangibles 421 280 964 820
------- ------- -------- --------
Total Expenses 4,814 5,530 13,406 12,937
------- ------- -------- --------
INCOME FROM OPERATIONS 7,743 4,347 17,810 14,293
------- ------- -------- --------
OTHER (INCOME) EXPENSE - Net:
Interest 1,005 1,400 3,108 4,164
Other 225 (56) (262) 9
------- ------- -------- --------
Total Other Expense 1,230 1,344 2,846 4,173
------- ------- -------- --------
INCOME BEFORE TAXES AND
EXTRAORDINARY ITEMS 6,513 3,003 14,964 10,120
PROVISION FOR INCOME TAXES 2,646 1,229 6,090 4,149
------- ------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 3,867 1,774 8,874 5,971
------- ------- -------- --------
EXTRAORDINARY LOSS RESULTING FROM
THE EARLY EXTINGUISHMENT OF DEBT (2,535) --- (2,535) ---
------- ------- -------- --------
NET INCOME $ 1,322 $ 1,774 $ 6,339 $ 5,971
======= ======= ======== ========
EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 0.63 $ 0.41 $ 1.44 $ 1.42
======= ======= ======== ========
Net Income $ 0.22 $ 0.41 $ 1.03 $ 1.42
======= ======= ======== ========
WEIGHTED AVERAGE COMMON SHARES 6,119 4,327 6,173 4,219
OUTSTANDING ======= ======= ======== ========
</TABLE>
See notes to consolidated financial statements
4
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BWAY CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended
---------------------
June 30, July 2,
OPERATING ACTIVITIES: 1996 1995
<S> <C> <C>
Net Income $ 6,339 $ 5,971
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation 4,357 3,348
Amortization 1,416 1,291
Provisions for doubtful accounts 525 107
Write-off of deferred financing costs
related to debt extinguishment 2,466 ---
Payment of interest related to debt extinguishment 1,670 ---
(Gain)/Loss on disposition of property,
plant and equipment (19) 68
Termination of AB Leasing contract through
issuance of common shares --- 1,995
Provision for deferred income taxes 1,845 ---
Changes in assets and liabilities, net of
effects of business acquisitions:
Accounts receivable (1,505) (6,260)
Inventories (3,461) (5,362)
Other assets (98) 561
Accounts payable 3,493 1,731
Accrued liabilities 573 972
Income taxes, net (2,065) 726
-------- -------
Net cash provided by operating activities 15,536 5,148
-------- -------
INVESTING ACTIVITIES:
Capital expenditures (11,301) (7,380)
Proceeds from property, plant and equipment
disposals 19 ---
Acquisitions, net of cash acquired (67,539) ---
------- -------
Net cash used in investing activities (78,821) (7,380)
------- -------
FINANCING ACTIVITIES:
Net borrowings (repayments) under bank
revolving credit agreement 103,600 (5,000)
Extinguishment of long-term debt (50,000) ---
Net proceeds from initial public offering --- 20,295
Proceeds from issuance of common stock --- 505
Repayments on long-term debt (265) (207)
Increase (Decrease) in unpresented bank
drafts 1,023 (1,617)
Purchases of treasury stock (9,469) (44)
Payment of deferred financing costs (1,247) ---
Payment of interest related to debt extinguishment (1,670) ---
Other (112) ---
------- -------
Net cash provided by financing activities 41,860 13,932
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
(21,425) 11,700
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$ 23,538 $ 4,618
CASH AND CASH EQUIVALENTS, END OF PERIOD ======== ========
$ 2,113 $ 16,318
======== ========
</TABLE>
5
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<TABLE>
<CAPTION>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
<S> <C> <C>
Cash paid during the period for:
Interest $5,127 $3,128
------ ------
Income taxes $4,529 $3,423
====== ======
Details of businesses acquired were as follows:
Fair value of assets acquired $ 114,370
Liabilities assumed (31,231)
Value of common stock issued (2,787)
Value of treasury stock reissued (11,813)
Long-term note issued (1,000)
---------
Net cash paid for acquisitions $ 67,539
=========
</TABLE>
See notes to consolidated financial statements
6
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BWAY CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
________________________________________________________________________________
1. GENERAL
The accompanying consolidated financial statements have been prepared by
the Company without audit. Certain information and footnote disclosures,
including significant accounting policies, normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The consolidated financial
statements as of June 30, 1996 and for the nine months ended June 30, 1996
and July 2, 1995 include all normal recurring adjustments necessary for a
fair presentation of the financial position and results of operations for
these periods. Operating results for the nine months ended June 30, 1996
are not necessarily indicative of the results that may be expected for the
entire year. It is suggested that these unaudited consolidated financial
statements and the accompanying notes be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K (File No. 0-26178).
The Company operates on a 52/53-week fiscal year ending on the Sunday
closest to September 30 of the applicable year. The first three quarterly
fiscal periods end on the Sunday closest to December 31, March 31 or
June 30 of the applicable quarter.
2. INVENTORIES
Inventories are carried at the lower of cost or market, with cost
determined under the last-in, first-out (LIFO) method of inventory
valuation and are summarized as follows:
<TABLE>
<CAPTION>
June 30, October 1,
1996 1995
<S> <C> <C>
Inventories at FIFO Cost:
Raw materials $ 8,731 $ 4,183
Work-in-process 19,333 11,189
Finished goods 13,138 5,020
------- --------
$41,202 $ 20,392
Reduction to LIFO valuation (1,004) ( 1,004)
------- --------
$40,198 $ 19,388
======= ========
</TABLE>
3. EARNINGS PER COMMON SHARE
Earnings per common share are based on the weighted average number of
common shares outstanding during each period presented, including vested
and unvested shares issued under the Company's Management Stock Purchase
Plan. Common stock sold during the twelve-month period prior to the initial
filing in March 1995 of the registration statement in connection with the
Company's initial public offering ("Initial Public Offering") have been
included in the earnings per share calculation for all periods presented in
accordance with Staff Accounting Bulletin No. 83. Weighted average shares
outstanding for the third quarter of fiscal 1996 and 1995 were 6.1 million
and 4.3 million, respectively.
4. STOCKHOLDERS' EQUITY
Initial Public Offering
On June 26, 1995, the Company completed its Initial Public Offering with
the sale of 1,657,866 shares of common stock and realized net proceeds of
approximately $20.3 million. On July 25, 1995, an additional 359,086 shares
of the Company's stock were sold to cover over-allotments providing
additional net proceeds of approximately $4.8 million.
Upon the completion of the Initial Public Offering, the Company's
Management Agreement with AB Leasing and Management, Inc. ("AB Leasing"),
an affiliate, was terminated. In connection with the termination, the
Company paid $1,995,000, through the issuance of 133,000 shares of Common
Stock to AB Leasing prior to the effectiveness
7
<PAGE>
of the Offering. The Company recorded a non-recurring, non-cash, pre-tax
charge to operations of $1,995,000 in connection therewith in the third
quarter of fiscal 1995. Additionally, the Company also paid AB Leasing
$1,398,000 in cash representing the accrued management fee and expenses for
the period from October 1, 1994 to and including the date of termination.
Immediately prior to the Initial Public Offering in June 1995, the Company
adopted the Brockway Standard Holdings Corporation 1995 Long-Term Incentive
Plan and the Formula Plan for Non-Employee Directors (the "Plans") for its
directors, officers, and key employees. An aggregate of 590,000 shares of
common stock are authorized for issuance under these Plans.
Stock Options
On May 14, 1996, the Board of Directors granted a total of 267,800 options
to purchase shares of of the Company's common stock to certain officers and
key employees of the Company exercisable at $19.00 per share. The schedule
for vesting extends over a 3 year period in accordance with the individual
option grants. The options were issued pursuant to the 1995 Brockway
Standard Holdings Corporation Long-Term Incentive Plan.
401(k) Plan
The Company filed a Form S-8 on April 29, 1996 registering 500,000 shares
with regard to the Company's 401(k) plan.
5. ACQUISITIONS
Milton Can Company
On May 28, 1996, the Company acquired all of the outstanding stock of
Milton Can Company, Inc. ("MCC"). The Company paid $13.4 million in cash,
$1 million in notes and $14.6 million in BWAY stock for 100% equity in MCC.
MCC is a manufacturer of paint, oblong and specialty cans within the
general line segment of the North American metal container industry. The
Company issued a total of 810,970 shares in connection with the merger,
comprised of 656,174 shares of its treasury stock and 154,796 newly issued
shares. The consideration given to Milton's shareholders is subject to an
adjustment based on the change in working capital from December 31, 1995
through May 28, 1996. In addition, the Company repaid MCC's approximately
$12.3 million in term and revolving bank debt concurrent with consummation
of the purchase transaction. The acquisition was funded with existing cash
and approximately $5 million in borrowings from the Company's then existing
Revolving Credit Facility. Effective May 28, 1996, James W. Milton, the
controlling shareholder of MCC, became an officer and director of the
Company, and president of BWAY's wholly-owned subsidiary Milton Can
Company, Inc.
Davies Can Company
On June 17, 1996, the Company acquired substantially all of the assets and
assumed certain of the liabilities of Davies Can Company ("Davies"), an
unincorporated division of the Van Dorn Company (a wholly-owned subsidiary
of Crown Cork & Seal Company, Inc.). Davies manufactures paint, oblong and
utility cans within the general line segment of the North American metal
container industry. The purchase price was approximately $41.7 million,
subject to an adjustment based on the change in working capital from
December 31, 1995 through June 17, 1996. The transaction was financed
through the Company's new Credit Agreement (see Note 6).
The purchase method of accounting was used to establish and record a new
cost basis for the assets acquired and liabilities assumed. Accordingly, the
operating results for both MCC and Davies have been included in the
Company's consolidated financial statements since the date of acquisition.
The excess purchase price over the fair market value of net assets acquired
was in aggregate, of approximately $56 million. The excess was recognized as
goodwill, amortized over 30 years using the straight line method, and other
intangible assets, amortized over the expected lives which range from 5 - 17
years using the straight line method. The allocation of the purchase price
and acquisition costs to the assets acquired and liabilities assumed is
preliminary as of June 30, 1996, and is subject to change pending
finalization of appraisals and other studies of fair value and finalization
of management's plans which may result in the recording of additional
liabilities as part of the allocation of the purchase price.
8
<PAGE>
Plans for integration of all acquired facilities have been developed by
management. Certain components of the plan are currently being implemented.
The Company has established a reserve based on preliminary estimates of $16
million to account for closing facilities, moving equipment, severance and
relocation costs. Ultimate completion of the integration plan may result in
further adjustments to this reserve.
The following pro forma results assume the acquisitions of MCC and Davies
occurred at the beginning of the fiscal year ended October 1, 1995, after
giving affect to certain pro forma adjustments including, an adjustment to
reflect the amortization of cost in excess of the net assets acquired,
increased interest expense and the estimated related income tax effects.
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
June 30, 1996 July 2, 1995 June 30, 1996 July 2, 1995
(In thousands, except per share amounts)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 95,595 $ 96,757 $ 272,576 $ 279,137
Income before extraordinary item 1,342 480 3,539 1,908
Net income (1,193) 480 1,004 1,908
Earnings per common share:
Income before extraordinary item $ .20 $ .07 $ .51 $ .28
Net income ($ .18) $ .07 $ .15 $ .28
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The pro forma financial information is not necessarily indicative of the
operating results that would have occurred had the acquisition been
consummated as of the acquisition date, nor is it necessarily indicative
of future operating results.
6. LONG-TERM DEBT
On June 17, 1996, the Company terminated its bank agreement and entered
into a new credit agreement with Bankers Trust Company, NationsBank,
N.A., Milton Can Company, Inc., Brockway Standard, Inc. ("BSI"), Davies
Acquisition Corp. and certain financial institutions (the "Credit
Agreement"). Initial borrowings under the Credit Agreement were used to
repay all obligations pursuant to the Third Amended and Restated Revolving
Credit Agreement among BWAY, BSI, certain financial institutions and
Bankers Trust Company as agent, dated June 29, 1994, as amended ("Revolving
Credit Facility"). Funds from the Credit Agreement were also used to prepay
the $50 million private placement of 8.35% Senior Secured Notes maturing
September 1, 2001, pursuant to the Secured Note Agreement among BWAY, BSI
and the note purchasers named therein dated as of August 15, 1993, as
amended ("Senior Secured Notes"), and for the Davies acquisition.
In conjunction with the prepayment of the Senior Secured Notes, the
Company recorded an extraordinary loss related to the early extinguishment
of debt in the amount of $2.5 million, net of taxes.
The Credit Agreement allows the Company and its subsidiaries to borrow up
to $150 million. The interest rates under the Credit Agreement are based
on rate margins for either prime rate, as announced by NationsBank from
time to time, ("Prime") or LIBOR, at the option of the borrower.
The applicable rate margin is determined on a quarterly basis by a review
of the Company's leverage ratio. The Company's initial borrowing rate is at
its option either LIBOR plus 1.0%, or Prime. Loans under the Credit
Agreement are unsecured and can be prepaid at the option of the Company
without premium or penalty. The Credit Agreement is subject to certain
restrictive covenants, including covenants which require the Company to
maintain a certain minimum level of net worth and a maximum ratio for
leverage. In addition, the Company is restricted in its ability to pay
dividends and to make other certain restricted payments. As of June
30, 1996, the outstanding balance on the Credit Agreement was $103.6
million. The interest rate being paid by the Company as of June 30, 1996
was LIBOR plus 1.0%.
7. CONTINGENCIES
Environmental
The Company is subject to a broad range of federal, state and local
environmental and workplace health and safety requirements, including those
governing discharges to air and water, the handling and disposal of solid
and hazardous wastes and the remediation of contamination associated with
the releases of hazardous substances.
Environmental investigations voluntarily conducted by the Company at its
Homerville, Georgia facility in 1993 and
9
<PAGE>
1994 detected certain conditions of soil and groundwater contamination,
principally involving chlorinated solvents, at the facility property.
Environmental assessment work conducted by the Company indicated that the
subject contamination is the result of operations prior to the Company's
acquisition of the facility from Owens-Illinois and is, therefore, subject
to indemnification under the 1989 purchase agreement. As required under the
Hazardous Sites Response Program of The Georgia Department of Natural
Resources ("DNR"), the Company has reported the subject contamination to
the DNR. In 1994, the DNR listed the facility on CERCLIS and designated the
facility as a Class II site, which means that further evaluation must be
completed before the DNR decides whether corrective action is needed.
Pursuant to the 1989 purchase agreement, the Company and Owens-Illinois
have entered into a supplemental agreement affirming Owens-Illinois'
responsibility for this matter including establishment of procedures for
the related investigation and remediation work to be conducted by Owens-
Illinois. As a result, Owens-Illinois is managing the remediation
activities and paying for such work directly. Preliminary consultant
estimates indicated that the cost of clean-up could range from $1 million
to $6 million, depending on the extent of contamination. Since Owens-
Illinois is conducting the remediation work, management has no way of
determining the actual costs related to the clean-up efforts. Management
does not believe that the final resolution of this matter will have a
material adverse effect on the results of operations or financial condition
of the Company, and has not accrued a liability with respect to this matter
because it believes that a loss contingency is not probable.
The Company was identified as a potentially responsible party ("PRP") for
liability associated with off-site waste disposal at three sites pursuant
to the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"). The Company has entered into consent decrees to settle its
liabilities at these sites, has paid its share of site-related costs, and
has received a release from future liability subject to standard reopener
provisions found in consent decrees under CERCLA. The consent agreements
for two of the sites do not cover liability for natural resource damage
claims, if any, relating to these sites. No natural resource damage claims
have been asserted to date. Accordingly, the Company has not recorded a
loss contingency.
The Company's subsidiary, MCC leases a manufacturing facility in Peabody,
Massachusetts which is subject to an ongoing groundwater remediation
pursuant to the Massachusetts Chapter 21E program. MCC's landlord at the
site has agreed to retain all liability for the ongoing cleanup. Pursuant
to the terms of the Agreement and Plan of Merger and Reorganization dated
March 21, 1996, as amended on April 30, 1996 (the "Agreement") by which the
Company acquired MCC, the Company is indemnified, subject to certain
limitation, for any liabilities associated with this matter.
Additionally, MCC has been named as a PRP at four sites. Pursuant to the
Agreement by which the Company acquired MCC, the Company is indemnified
with respect to such sites, subject to certain limitations.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Net sales during the third quarter of fiscal 1996 increased 14.2% to $73.7
million compared to $64.5 million in the third quarter of fiscal 1995. Net sales
for the nine months ended June 30, 1996 were $193.6 million; 4.8% higher than
the $184.8 million for the nine months ended July 2, 1995. The increase in
sales resulted in part from increased sales of the Company's products and
in part from incremental sales attributable to the recent acquisitions. In
addition, the quarter over quarter increase is attributable to a shift in sales
from the third fiscal quarter of 1995 to the second fiscal quarter of 1995 due
to warmer weather experienced earlier in that year.
Gross profit increased 27.1% in the third quarter of fiscal 1996 to $12.6
million from $9.9 million in the same period of fiscal 1995. Gross profit
increased 14.6% from $27.2 million to $31.2 million for the nine months ending
July 2, 1995 and June 30, 1996, respectively. The increase in gross profit
resulted from higher operating margin percentages and increased net sales. The
increase is also attributable to cost reductions and productivity improvements
achieved through the continuing application of the Company's "3-R" strategy to
Rationalize, Reengineer, and Recapitalize. Gross profit as a percentage of net
sales increased approximately 2% in the third quarter of fiscal 1996 compared to
the same period of fiscal 1995.
Selling, general and administrative ("SG&A") costs increased 35% for the third
quarter of fiscal 1996 compared to the same quarter of the previous year. SG&A
costs for the nine month period ending June 30, 1996 increased 23% over the
comparable period of the prior year. The increase is primarily due to costs
related to services previously provided by and included in the former management
agreement with AB Leasing, which are now reflected in the Company's SG&A
expenses. In addition, SG&A also includes the costs related to the
administrative and compliance requirements of a public company and the Company's
strategic growth initiatives and plans.
Net interest expense declined 29% from $1.4 million to $1.0 million in the third
quarter of fiscal 1996 as compared to the same period of 1995. For the nine
month period ended June 30, 1996, net interest expense declined 25.4% over the
same period during fiscal 1995. The decrease is primarily attributable to a
reduction of the outstanding loan balance under the Revolving Credit Facility,
through application of a portion of the proceeds received from the Company's
Initial Public Offering and interest income earned from the related cash on
hand. The Company expects increased interest expense in the fourth fiscal
quarter due to the increased debt from the acquisitions discussed above as well
as to provide the funds to meet the Company's operating needs as a larger
entity.
During the third quarter of fiscal 1996, BWAY Corporation terminated its
existing loan agreements and entered into a new 5 year, $150 million Credit
Agreement. As a result of this debt extinguishment, the Company incurred an
extraordinary loss of approximately $2.5 million, net of taxes, for the
extinguishment of the Company's $50 million Senior Secured Notes and Revolving
Credit Facility. This amount was comprised of $1.7 million (before taxes)
related to a make-whole provision and approximately $2.6 million (before taxes)
of related deferred financing costs.
Income before extraordinary item increased 116.8% to $3.9 million for the third
quarter of fiscal 1996 compared to $1.8 million for the third quarter of fiscal
1995. Income before extraordinary item for the nine month period was $8.9
million, an increase of 47.9% compared to the $6 million reported for the
comparable period of 1995. In addition to the changes described above this
increase quarter over quarter is also attributable to a non-recurring, non-cash,
pre-tax charge to operations of $1,995,000 in the third quarter of fiscal 1995
for the termination fee related to the Company's Management Agreement with AB
Leasing, an affiliate.
Net income for the third quarter of fiscal 1996 decreased 25.5% to $1.3 million
from $1.8 million for the same period of fiscal 1995. The decrease is
attributable to the extraordinary loss resulting from the extinguishment of
debt. Net income for the nine months ended June 30, 1996 was $6.3 million, an
increase of 6.2% compared to the $6 million reported for the same period of
fiscal 1995. This increase, given the $2.5 million one-time charge, reflects
the Company's continuing efforts to reduce costs and improve productivity.
Earnings per share before the extraordinary loss resulting from the repayment of
debt were $0.63 per share for the third quarter of fiscal 1996 compared to $0.41
per share for the comparable period of fiscal 1995, and $1.44 per share for the
first nine months of fiscal 1996 compared to $1.42 per share for the nine month
period ended June 30, 1995.
On a net income basis, earnings per share were $0.22 per share for the third
quarter of fiscal 1996 compared to $0.41 per share for the same period of 1995.
Earnings per share decreased from $1.42 per share to $1.03 per share for the
nine month periods ending July 2, 1995 and June 30, 1996, respectively. The
decrease is attributable to the extraordinary loss related to the extinguishment
of debt recorded in the third quarter of fiscal 1996 and to a significant
increase in weighted average shares
11
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outstanding. The weighted average shares outstanding in the third quarter of
fiscal 1996 and 1995 were 6.1 million and only 4.3 million, respectively,
reflecting the effect of the Company's June 1995 Initial Public Offering. The
weighted average shares outstanding were 6.2 million and 4.2 million for the
respective nine month periods.
With the recent acquisitions of Milton Can Company and Davies Can Company, BWAY
and its subsidiaries have expanded operations from 9 manufacturing facilities in
6 states to 15 facilities in 10 states. As part of the Company's rationalization
strategy, plans have been announced to close the Covington, Georgia facility
obtained in conjunction with the Davies Can acquisition, and to relocate the
facilities' equipment and business to other Company facilities. The closing is
expected to occur during the Company's fourth fiscal quarter of 1996. Charges
associated with severance costs and moving the equipment will be charged against
the reorganization reserve previously discussed. Management continues to review
opportunities to consolidate operations and to maximize production efficiencies
by rationalizing overlapping facilities. Rationalization may result in other
plant closings, relocation of assets, and significant related capital
expenditures and restructuring charges.
Liquidity and Capital Resources
The Company's cash requirements for operations and capital expenditures during
the nine month period ending June 30, 1996 were financed through three sources:
cash on hand, internally generated cash flows and the Credit Agreement
(discussed above). The new Credit Agreement facility provided the Company with
the funds to consummate the recent acquisitions and provides the resources
required to continue pursuing its acquisition and growth strategies. The Credit
Agreement allows the Company and its subsidiaries to borrow up to $150 million
limited by certain leverage tests.
The Company's working capital decreased $8.1 million to $30.7 million from $38.8
million for the nine months ending June 30, 1996. The decrease is primarily
attributable to the use of cash for the acquisitions, the Company's capital
expenditure program and the purchase of common stock under the Common Stock
Repurchase Program (discussed below).
The Company used approximately $68 million of cash to complete the acquisitions
during its third fiscal quarter. The funds were provided by cash obtained
through cash on hand and the Credit Agreement which allows borrowings up to $150
million subject to certain restrictions based on the Company's total
indebtedness. As of June 30, 1996, the outstanding balance on the Credit
Agreement was approximately $104 million.
During the first nine months of fiscal 1996, the Company's operating activities
provided $15.5 million of cash. Operating activities for the same period during
the prior year reflected cash provided of $5.1 million. The increase in funds
provided during the nine months ended June 30, 1996 reflect an improvement in
the company's working capital as well as higher earnings combined with the
additional sales from the companies acquired. The recent acquisitions
contributed an additional amount of depreciation and amortization during the
third fiscal quarter of 1996. The increase was primarily attributable to the
fixed assets acquired and the related intangibles derived from recording the
acquisitions through use of the purchase method of accounting. A typical
seasonal build-up of inventory and accounts receivable represented a significant
use of funds in the first nine months of fiscal 1996. The increase in inventory,
consistent with the increase in sales, was partially off-set by the resulting
increase in accounts payable. Improvements in the Company's cash provided by
operating activities are also due to cost reductions and improved asset
utilization.
Capital expenditures of $11.3 million in the first nine months of fiscal 1996
represent an increase of $3.9 million over the first nine months of fiscal 1995.
This increase is consistent with the Company's intention to accelerate the rate
of spending on its targeted capital investment program, designed to increase
productivity and reduce operating costs. The Company expects to maintain its
current levels of capital expenditures related to current operations and the
integration of the recently acquired facilities throughout the remainder of the
fiscal year.
Cash provided by financing activities during the nine month period ended June
30, 1996 was $41.9 million compared to $13.9 million provided during the
comparable nine month period of the prior year. Cash provided during the third
quarter of fiscal 1996 was obtained through operations and from the Credit
Agreement. Funds were used to consummate the acquisitions discussed above as
well as repaying its indebtedness under the previous credit agreements. The
Credit Agreement will provide the Company with additional financial flexibility
to continue pursuing acquisition opportunities and for capital expenditures as
well as being used to satisfy its ongoing liquidity needs for the next 18
months.
On November 21, 1995, the Company announced Board approval of a limited Common
Stock Repurchase Program to accommodate employee and open market transactions.
All shares repurchased under the program prior to May 28, 1996, were issued as
partial consideration for the acquisition of Milton Can Company. Subsequently,
the Company has repurchased an additional 63,791 shares for approximately $1.2
million through June 30, 1996. The Company expects to continue making periodic
repurchases of stock. The cash used for these activities will be provided by
cash generated through
12
<PAGE>
operations, cash on hand and borrowings against the Credit Agreement, as
necessary.
The Company has historically financed its operations through cash provided by
operations and by borrowings under its credit agreements. BWAY's future
principal uses of cash will be for payment of operating expenses, funding
capital investments, payment for additional acquisitions, repurchase of common
stock, and servicing debt.
13
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
The Credit Agreement dated June 17, 1996 places certain restrictions on the
payment of dividends.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Effective May 1996, David P. Hayford was appointed Senior Vice President and
Chief Financial Officer, succeeding the Company's previous Chief Financial
Officer, Perry H. Schwartz.
Item 6. Exhibits and Reports on Form 8-K
(a) See Index of Exhibits.
(b) Reports on Form 8-K were filed during the period covered by this filing
reporting the acquisition of Milton Can Company and the acquisition of
Davies Can Division from Crown Cork & Seal Company, Inc. on June 12, 1996
and July 1, 1996, respectively. An amendment to the initial Current Report
on Form 8-K reporting the Milton Can Company acquisition was filed on
August 12, 1996. Reports on Form 8-K are incorporated in this document by
reference to the respective filings.
14
<PAGE>
SIGNATURE
Pursuant to the requirements 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.
Bway Corporation
(Registrant)
Date: August 13, 1996 By: /s/ David P. Hayford
----------------------
David P. Hayford
Senior Vice President &
Chief Financial Officer
15
<PAGE>
INDEX TO EXHIBITS
----------------------------------------
<TABLE>
<CAPTION>
Location of Document
Exhibit in Sequential
No. Description of Document Numbering System
------- ------------------------------ --------------------
<S> <C> <C>
10.1 Employment Agreement between the Company and
David P. Hayford*
10.2 Employment Agreement between the Company and
James W. Milton*
10.3 Amended and Restated Registration Rights Agreement
dated as of May 28, 1996, between BWAY Corporation
and certain shareholders.
10.4 Merger Agreement with Milton Can Company, Inc. (1)
dated March 21, 1996.
10.5 Amendment #1 to the Merger Agreement with Milton (1)
Can Company, Inc. dated April 30, 1996.
10.6 Asset Purchase Agreement dated April 29, 1996, (1)
between Brockway Standard, BWAY Corporation,
Van Dorn Company and Crown Cork & Seal, Inc.
10.7 Credit Agreement dated June 17, 1996 by and among (2)
BWAY Corporation, Brockway Standard, Inc., Milton
Can Company, Inc., the additional borrowers,
Bankers Trust Company, and NationsBank, N.A.
</TABLE>
___________
* Management contract or compensatory plan or arrangement.
(1) Incorporated by reference to the respective exhibit to the Company's Form
10-Q for the period ending March 31, 1996.
(2) Incorporated by reference to the respective exhibit to the Company's Form
8-K, originally filed on July 1, 1996.
<PAGE>
Exhibit 10.1
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is made as of June 15, 1995, between Brockway Standard
Holdings Corporation, a Delaware corporation (the "Company"), and David P.
Hayford ("Executive"). The Company and Executive are referred to collectively
herein as the "Parties" and individually as a "Party".
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
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").
2. Position, Duties and Places of Employment. During the Employment
Period, Executive shall render such administrative and other executive services
to the Company and its Subsidiaries as the Company's board of directors (the
"Board"), its Chief Executive Officer, or its Chief Financial Officer may 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. For purposes of this Agreement,
"Subsidiaries" shall mean any corporation of which the securities having a
majority of the voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one of more
Subsidiaries. Executive's place of employment shall be at the Company's or its
Subsidiary's offices in Atlanta, Georgia.
3. Base Salary, Bonus and Benefits.
(a) During the Employment Period, Executive's base salary shall be
$120,000 per annum or such higher rate as the Board
<PAGE>
designates from time to time (the "Base Salary"). The Base Salary shall be
payable in regular installments in accordance with the Company's general payroll
practices. The Board shall review Executive's performance in December, 1995, and
at the end of each fiscal year 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 $120,000). Following the end of each fiscal year
during the Employment Period, the Board will 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.
(b) In addition to the Base Salary and any bonuses payable to
Executive pursuant to Section 4(a), during the Employment Period Executive shall
be entitled to participate in the Company's 1995 Long-Term Incentive 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 three weeks of paid vacation each year.
(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.
(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.
(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,
-2-
<PAGE>
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 second anniversary of the date of such termination, so
long as Executive has not breached in any material respects the provisions of
Sections 5, 6 and 7. 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 (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) 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
Company within 30 days after Executive delivers written notice of such breach to
the Chairman of the Board and the Chief Financial Officer 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 or the Executive
resigns for Good Reason, such termination shall be deemed to be a termination by
the Company without Cause.
(f) "IPO" shall mean the effectiveness of the registration of the
Company's Common Stock pursuant to the
-3-
<PAGE>
Securities Act of 1933, as amended. "Cause" shall mean (i) a material breach of
this Agreement by 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 Company's Chief Financial Officer or (v) gross negligence or
willful misconduct with respect to the Company or any of its Subsidiaries.
"Change in Control" shall occur, after the IPO, 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 than the Chairman of the Board on the
date hereof and his affiliates and associates, of more than twenty five percent
(25%) 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. "Good Reason" shall mean (i) any reduction in Executive's Base Salary
below the amount the Executive is then being paid or (ii) any unconsented change
in title, powers, duties or responsibilities which the Executive (in the
exercise of his good faith judgment) believes to be a material reduction of
status, responsibility or authority.
5. Confidential Information. Executive acknowledges that the
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.
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 Chairman of the Board, 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 (including, but not limited to, in connection with treasury and
investor relations functions). Executive shall deliver to the Company at the
termination of the Employment Period, or at any other time the Company may
request,
-4-
<PAGE>
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,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to the Company's
or any of its Subsid iaries' 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")
belong to the Company or such Subsidiary. Executive shall promptly disclose such
Work Product to the Chairman of the Board and perform all actions reasonably
requested by the Chairman of the Board (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.
(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 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 Period"), he shall not directly or indirectly own, manage, control,
participate 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 or plan to 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
-5-
<PAGE>
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,
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
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
-6-
<PAGE>
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
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.
11. General Provisions.
(a) Notices. All notices, requests, demands, claims, and other
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: with a copy to:
Brockway Standard Holdings Kirkland & Ellis
Corporation 200 East Randolph Drive
8607 Roberts Drive Chicago, IL 60601
Suite 250 Telephone: 312/861-2000
Atlanta, Georgia 30350 Telecopy: 312/861-2200
Telephone: 404/587-0888 Attention: William S. Kirsch
Attention: Chief Financial
Officer
If to Executive:
David P. Hayford
739 Walden Road
Winnetka, IL 60093
Telephone: 708/441-5130
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
-7-
<PAGE>
duly given unless and until it actually is received by the intended recipient.
Any Party may change the address to which notices, 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
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
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agree ments 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
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
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,
validity and interpretation of this Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Illinois without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Illinois
-8-
<PAGE>
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Illinois.
(g) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Executive.
(h) Survival. Sections 5, 6, 7 and 8 shall survive and continue in
full force in accordance with their terms notwithstanding any termination of
the Employment Period.
* * * * *
-9-
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
BROCKWAY STANDARD HOLDINGS
CORPORATION
By /s/ Perry Schwartz
-----------------------
Its
----------------------
/s/ David P. Hayford
--------------------------
David P. Hayford
-10-
<PAGE>
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is made as of May 28, 1996, between Milton Acquisition
Corp., a Delaware corporation (the "Company"), BWAY Corporation, a Delaware
corporation and the sole stockholder of the Company ("BWAY"), and James W.
Milton ("Executive"). BWAY, the Company and Executive are referred to
collectively herein as the "Parties" and individually as a "Party".
WHEREAS, the Company, Executive, BWAY and Milton Can Company, Inc., a
Delaware corporation (the "Target Corporation"), have entered into an Agreement
and Plan of Merger and Reorganization, dated as of March 21, 1996 as amended by
Amendment No. 1 dated April 30, 1996 (as amended, the "Merger Agreement"),
whereby the Company and Target Corporation will merge, with the Company as the
surviving corporation, and in connection therewith, the Parties have entered
into a Non-Competition Agreement, dated as of the date hereof (the "Non-
Competition Agreement");
WHEREAS, the Parties wish to provide for the orderly succession of
management of the Company following the Effective Time (as defined in the Merger
Agreement); and
WHEREAS, the Parties wish to provide for the employment by the Company
of the Executive, and the Executive wishes to serve the Company, in the
capacities and on the terms and conditions set forth in this Agreement.
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
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 paragraph 4 (the "Employment Period").
2. Position, Duties and Place of Employment. During the Employment
Period, Executive shall serve as the President and Chief Operating Officer of
the Company and shall render such services of an executive and administrative
character to BWAY, the Company and its Subsidiaries (as defined below) as BWAY's
board of directors (the "BWAY Board"), its Chairman of the Board, Chief
Executive Officer, President or Chief Operating Officer or the Company's board
of directors (the "Board") may from time to time
<PAGE>
direct. With respect to all regular elections of directors during the Employment
Period, the Company shall nominate, and use its best efforts to elect, Executive
to serve as a member of the Board and BWAY shall nominate, and use its best
efforts to elect, Executive to serve as a member of the BWAY Board. Executive
shall devote his best efforts and substantially all of his business time and
attention (except for vacation periods and reasonable periods of illness or
other incapacity) to the business of BWAY, the Company and any Subsidiary;
provided, however, that nothing contained herein shall prohibit Executive from
serving on the board of directors of an entity not in competition with BWAY, the
Company or any Subsidiary so long as such activities do not materially interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. Executive shall perform his duties
and responsibilities to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner. For purposes of this Agreement, "Subsidiary"
shall mean any corporation of which the securities having a majority of the
voting power in electing directors are, at the time of determination, owned by
BWAY, directly or through one or more subsidiaries, respectively. Executive's
place of employment shall be at the Company's headquarters, which are presently
located in Elizabeth, New Jersey, and his place of employment may not be moved
to any location that is either not in New Jersey or is more than 50 miles from
Newark, New Jersey, without Executive's prior written consent.
3. Base Salary, Bonus and Benefits.
(a) During the Employment Period, Executive's base salary shall be
$200,000 per annum or such higher rate as the Board may designate from time to
time (the "Base Salary"). The Base Salary shall be payable in regular
installments in accordance with the Company's general payroll practices.
Following the end of each fiscal year during the Employment Period, the BWAY
Board may award Executive a bonus of between 50% (the "Target Bonus") and 75% of
the Base Salary for such year if, as determined by the BWAY Board in its sole
judgment, Executive and the Company have met the goals and objectives approved
by the Board for such year; provided, however, that such goals and objectives
must be measurable by objective criteria. The Chairman of the Board, the
President of BWAY and Executive shall cooperate to develop mutually agreeable
goals and objectives for the Board's consideration.
(b) In addition to the Base Salary and any bonuses payable to
Executive pursuant to paragraph 3(a), during the Employment Period, Executive
shall be entitled to participate in all of the Company's employee benefit
programs for which senior
-2-
<PAGE>
executive employees of the Company are generally eligible. Such employee benefit
programs shall be substantially similar to those benefit programs available to
the senior executive employees of BWAY. Executive shall also be entitled to:
(i) four weeks of paid vacation each year; and
(ii) medical benefits providing coverage for any pre-existing
condition as well as illnesses which originate from any such pre-
existing condition. Such benefits shall be equivalent to the
benefits Executive received while with the Target Corporation.
(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.
(d) During the Employment Period, the Company shall pay all premiums,
costs and expenses due and payable to maintain the existing split-dollar
insurance policy on the life of Executive purchased by the Target Corporation
prior to the date hereof. Any distributions made under such policy shall be made
to Executive's beneficiaries, provided that the Company shall be reimbursed from
the proceeds of such distributions for the premiums, costs and expenses of such
policy. Executive shall have the right to purchase such policy from the Company
at the end of the fifth anniversary of the Employment Date if the Employment
Period has not terminated prior to such time.
4. Term.
(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on the fifth 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 Board at any time prior to such date
for Cause (as defined below) or without Cause.
(b) If the Employment Period is terminated by the Company without
Cause prior to the fifth anniversary of the
-3-
<PAGE>
Employment Date, subject to the limitations set forth below, Executive shall be
entitled to continue to receive (a) his Base Salary, Target Bonus and health,
disability and life insurance benefits hereunder until the later to occur of the
fifth anniversary of the Employment Date or the first anniversary of the
termination date and (b) any other amount, right, bonus or benefit that has
accrued or is otherwise owed to Executive pursuant to this Agreement as of the
date of termination; provided that Executive does not breach in any material
respect the provisions of the Merger Agreement, the Non-Competition Agreement or
paragraphs 7, 8 or 9 herein. However, in the year of termination, the Executive
shall receive a bonus equal to the sum of (i) the bonus to which Executive would
have been entitled to receive pursuant to Section 3(a) of this Agreement had the
Employment Period not been terminated pursuant to this Section 4(b), prorated
for the number of months Executive worked during that fiscal year plus (ii) the
Target Bonus prorated for the number of months remaining in such fiscal year
following termination of the Employment Period. For example, if the Employment
Period is terminated without Cause at the end of May in any given year, the
Executive's bonus for such year would be equal to (5/12) times (the bonus
Executive would have been entitled to had the Employment Period not been
terminated) plus (7/12) times (the Target Bonus). The amounts payable pursuant
to this paragraph 4(b) shall be reduced by the amount of any compensation
Executive receives with respect to any other employ ment 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 paragraph 4(b).
(c) If the Employment Period is terminated by the Company for Cause or
by the death or resignation of Executive (subject to the paragraph 4(e) hereof),
Executive shall be entitled to receive his Base Salary through the date of
termination, along with any other amount, right, bonus or benefit that has
accrued or is otherwise owed to Executive pursuant to this Agreement as of such
date.
(d) Except as provided in paragraphs 4(b), 5 and 6, 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.
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(e) 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 BWAY or the Company which is not cured by
BWAY or the Company within 30 days after Executive delivers written notice of
such breach to the Chairman of the BWAY Board 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. In addition, any termination of the
Employment Period after a Change in Control (as defined below), including
without limitation Executive's resignation, shall be deemed to be a termination
by the Company without Cause.
(f) "Cause" shall mean (i) a material breach of this Agreement or the
Non-Competition Agreement by Executive, (ii) the conviction of Executive by a
court of competent jurisdiction of a felony, or (iii) substantial and repeated
failure to perform duties as reasonably directed by the BWAY Board, its Chairman
of the Board, Chief Executive Officer, President or Chief Operating Officer or
the Board which is not cured within thirty (30) days after Executive has been
notified in writing by such board or person that in its or his good faith
judgment Executive has failed to perform such duties. "Change in Control" shall
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
than by Executive or any of his Affiliates or Associates (as defined in Rule
12b-2 under the Exchange Act) and other than by Warren J. Hayford or any of his
Affiliates or Associates, of more than thirty-five percent (35%) of the BWAY's
common stock, or (y) the election of a majority of directors to the BWAY Board
that were not recommended to the stockholders by the BWAY Board.
5. Supplemental Retirement Benefit.
(a) Eligibility. If Executive's employment by the Company terminates
for a reason other than for Cause or death (the effective date of such
termination hereinafter referred to as Executive's "Retirement Date"), Executive
shall be entitled to receive a monthly supplemental retirement benefit for
services rendered to the Company, the amount of which shall be determined in
accordance with this paragraph 5.
(b) Amount. The amount of the monthly supplemental retirement benefit
payable to Executive shall be equal to 1/12th of the percentage determined below
of Executive's Base Salary in
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effect immediately preceding the Retirement Date or death (the "Monthly
Retirement Payment"), as follows:
<TABLE>
<CAPTION>
Age on Retirement Percentage of
Date or Death Base Salary
------------------- --------------
<S> <C>
58 5%
59 10%
60 20%
61 35%
62 50%
</TABLE>
(c) Commencement and Duration. Payment of Executive's monthly
supplemental retirement benefit shall commence as of the first day of the
calendar month that begins coincident with or immediately after the date on
which Executive attains the age of 65 and shall continue to be made to Executive
as of the first day of each subsequent month, with the last payment to be made
for the month during which Executive's death occurs; provided that no monthly
payment shall be made so long as Executive is in material breach of this
Agreement or the Non-Competition Agreement.
(d) Acceleration. In the event that the Employment Period is
terminated by the Company without Cause or because of Executive's permanent
disability or incapacity or by the Executive's resignation after a Change in
Control, Executive shall be entitled to the maximum Monthly Retirement Payment
(as if he were 65 or older on the Retirement Date) provided for in paragraph
5(b) above commencing with the month that begins immediately after the month in
which Executive's right to payments pursuant to paragraph 4(b) hereof
terminates; provided that Executive does not breach in any material respect the
provisions of the Merger Agreement, the Non-Competition Agreement or paragraphs
7, 8 or 9 herein.
6. Surviving Spouse Benefit.
(a) Eligibility. In the event that Executive's spouse as of the date hereof
survives Executive (the "Surviving Spouse"), she shall be entitled to receive a
monthly death benefit as described in this paragraph 6.
(b) Amount. The amount of the monthly death benefit payable to the
Surviving Spouse shall be equal to 50% of the Monthly Retirement Payment that
the Executive would have been entitled to had the Executive retired on the date
of his death, or
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<PAGE>
was receiving, at the time of his death under paragraph 5; provided that if
Executive dies before his 60th birthday, the Surviving Spouse will be entitled
to receive 10% of Executive's monthly Base Salary as a monthly death benefit,
which benefit shall commence in accordance with the provisions of paragraph
6(c).
(c) Commencement and Duration. If Executive's death occurs after the
Retirement Date, payment of the Surviving Spouse's monthly death benefit shall
commence as of the first day of the calendar month that begins immediately after
Executive's date of death. If Executive's death occurs prior to the Retirement
Date at a time when the term life insurance policy described in paragraph 3(b)
hereof is in effect, payment of the Surviving Spouse's monthly death benefit
shall commence on the second anniversary of Executive's death. Monthly payments
shall continue to be made to the Surviving Spouse as of the first day of each
subsequent month, with the last payment to be made for the month during which
the Surviving Spouse's death occurs.
7. Confidential Information. Executive acknowledges that the
information, observations and data obtained by him while employed by the Company
concerning the business or affairs of BWAY, the Company or any Subsidiary
("Confidential Information") are the property of BWAY, the Company or such
Subsidiary. 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 Board, 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 (including, but not limited to, in connection with treasury and
investor relations functions). 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 (as defined below) or the business of
BWAY, the Company or any Subsidiary which he may then possess or have under his
control.
8. Inventions and Patents. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to BWAY's, the
Company's or any Subsid iaries' actual or anticipated business, research and
development or
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<PAGE>
existing or future products or services and which are conceived, developed or
made by Executive while employed by the Company ("Work Product") belong to BWAY,
the Company or such Subsidiary. Executive shall promptly disclose such Work
Product to the Board and perform all actions reasonably requested by the Board
(whether during or after the Employment Period) to establish and confirm such
ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
9. Non-Compete, Non-Solicitation.
(a) Executive acknowledges that in the course of his employment with
the Company he will become familiar with BWAY's, the Company's and the
Subsidiaries' trade secrets and with other confidential information concerning
BWAY, the Company and the Subsidiaries and that his services will be of special,
unique and extraordinary value to BWAY, the Company and the Subsidiaries.
Therefore, Executive agrees that, for a period of thirty-six months after the
termination of the Employment Period (the "Noncompete Period"), he shall not
directly or indirectly own, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing with the
businesses of BWAY, the Company or their Subsidiaries as such businesses exist
or are in process on the date of the termination of Executive's employment,
within North America or any other geographical area in which BWAY, the Company
or their Subsidiaries engage or plan to engage in such businesses on the date of
such termination. Nothing herein shall prohibit Executive from being a passive
owner of not more than 5% 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 BWAY, the Company or
any Subsidiary to leave the employ of BWAY, the Company or such Subsidiary, or
in any way interfere with the relationship between BWAY, the Company or any
Subsidiary and any employee thereof, (ii) hire any person who was an employee of
BWAY, 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 BWAY, the Company or any Subsidiary to cease doing business
with BWAY, the Company or such Subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and BWAY, the Company or any Subsidiary.
10. Enforcement. If, at the time of enforcement of paragraphs 7, 8 or 9, a
court holds that the restrictions stated
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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).
11. Representations.
(a) Executive hereby represents and warrants to BWAY and 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 BWAY and the Company, this Agreement shall be the
valid and binding obligation of Executive, enforceable in accordance with its
terms.
(b) Each of BWAY and the Company hereby represents and warrants to
Executive that (i) the execution, delivery and performance of this Agreement by
it does not and will not conflict with, breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which it is a
party or by which it is bound and (ii) upon the execution and delivery of this
Agreement by it, this Agreement shall be its valid and binding obligation,
enforceable against it in accordance with its terms.
12. Indemnification of Executive. Each of BWAY and the Company shall
defend, hold harmless and indemnify Executive against any claims, liabilities or
losses accrued or incurred in connection with any actions taken by Executive in
his capacity as an officer or Director (or in any other capacity that Delaware
law permits indemnification) of the Company, BWAY or any Subsidiary in
accordance with, and to the fullest extent permitted under, Delaware General
Corporation Law as currently in effect or, if more favorable to Executive, as it
may be amended from time to time;
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<PAGE>
except as provided in the Merger Agreement, as amended (including Sections 10.7
and 11.6 thereof).
13. General Provisions.
(a) Notices. All notices, requests, demands, claims, and other
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 BWAY or the Company: with a copy to:
- ------------------------- --------------
BWAY Corporation Kirkland & Ellis
8607 Roberts Drive, Suite 250 200 East Randolph Drive
Atlanta, GA 30350 Chicago, IL 60601
Telephone: 770/587-0888 Telephone: 312/861-2200
Telecopy: 770/587-4075 Telecopy: 312973/9748
Attention: General Counsel Attention: William S. Kirsch,
P.C.
If to Executive: with a copy to:
- ----------------- ---------------
BWAY Corporation Nutter, McClennen & Fish, LLP
20 Hemlock Road One Industrial Place
Short Hills, New Jersey 07078 Boston, MA 02110-2699
Telephone: 201/379-7936 Telephone: 617/439-2889
Telecopy: 617/973-9748
Attention: Gene A. Blumenreich
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,
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
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
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<PAGE>
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 referred
to herein), together with the Merger Agreement and other agreements by and
between the Parties dated the date hereof constitute 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
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
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, BWAY, 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 and BWAY.
(f) CHOICE OF LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW JERSEY WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE
OF NEW JERSEY OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW JERSEY.
(g) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of BWAY, the Company and
Executive.
(h) Survival. Paragraphs 4, 5, 6, 7, 8, 9 and 10 shall survive and
continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.
(i) Taxes. Notwithstanding anything in this Agreement to the contrary,
the Company may withhold from payments due to Executive under this Agreement all
federal, state, local and
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<PAGE>
foreign taxes that are required to be withheld by applicable laws and
regulations.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
BWAY CORPORATION
By /s/ Warren J. Hayford
----------------------
Its Chief Executive Officer
-----------------------
MILTON ACQUISITION CORP.
By /s/ David P. Hayford
---------------------
Its Vice-President
----------------
EXECUTIVE
/s/ James W. Milton
-------------------------
JAMES W. MILTON
<PAGE>
Exhibit 10.3
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
--------------------------------------------------
AGREEMENT made as of May 28, 1996, between BWAY Corporation, a
Delaware corporation ("Company"), the Persons listed on Schedule I hereto
(collectively referred to herein as the "Original Stockholders" and individually
as an "Original Stockholder") and the Persons listed on Schedule II hereto
(collectively referred to herein as the "Milton Stockholders" and individually
as a "Milton Stockholder").
WHEREAS, the Company and the Original Stockholders are parties to a
Registration Agreement (the "Registration Agreement"), dated as of January 30,
1989, whereby the Company granted the Original Stockholders registration rights
with respect to their Registrable Securities (the "Original Stockholder
Shares");
WHEREAS, the Company and the Milton Stockholders are parties to an
Agreement and Plan of Merger and Reorganization, dated as of March 21, 1996, as
amended by Amendment No. 1 on April 30, 1996 (as amended, the "Merger
Agreement"), by and among the Company, Milton Acquisition Corp., a Delaware
Corporation (the "Purchaser"), Milton Can Company, Inc. ("Milton Can") and James
W. Milton, as Agent.
WHEREAS, in order to induce certain of Milton Can's stockholders to
enter into the Merger Agreement, the Company has agreed to amend the
Registration Agreement to provide piggy-back registration rights to the Milton
Stockholders with respect to their Registrable Securities no less favorable than
the piggy-back registration rights granted by the Company to the Original
Stockholders as set forth in the Registration Agreement.
Except as otherwise indicated, capitalized terms used herein are
defined in the Merger Agreement.
NOW THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, the parties hereto agree as follows:
1. Demand Registrations.
(a) Requests for Registration. The holders of a majority of the
Original Stockholder Shares may request registration under the Securities Act of
all or part of their Original Stockholder Shares on Form S-1 or any similar
long-form registration ("Long-Form Registrations"), or on Form S-2, S-3 or S-4
or any similar short-form registration ("Short-Form Registrations"), if
available. Within ten days after receipt of
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any such request, the Company will give written notice of such request to all
other holders of Registrable Securities and will include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 15 days after the receipt of the
Company's notice. All registrations requested pursuant to this paragraph l(a)
are referred to herein as "Demand Registrations".
(b) Long-Form Registrations. The holders of a majority of the
Original Stockholder Shares will be entitled to request (i) two Long-Form
Registrations in which the Company will pay all Registration Expenses (a
"Company-paid Long-Form Registration") and (ii) five Long-Form Registrations in
which the holders of Registrable Securities participating therein will pay their
share of the Registration Expenses as set forth in paragraph 5 hereof; provided
that the aggregate offering value of the Registrable Securities requested to be
registered in any Long-Form Registration must equal at least $5,000,000.
A registration will not count as one of the permitted Long-Form Registrations
until it has become effective (unless such Long-Form Registration has not become
effective due solely to the fault of the holders requesting such registration),
and no Company-paid Long-Form Registration will count as one of the permitted
Long-Form Registrations unless the holders of Registrable Securities are able to
register and sell at least 90% of the Registrable Securities in such
registration; provided that in any event the Company will pay all Registration
Expenses in connection with any registration initiated as a Company-paid Long-
Form Registration. All Long-Form Registrations shall be underwritten
registrations.
(c) Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to paragraph l(b) hereof, the holders of
Original Stockholder Shares will be entitled to request an unlimited number of
Short-Form Registrations in which the Company will pay all Registration
Expenses; provided that the aggregate offering value of the Registrable
Securities requested to be registered in any Short-Form Registration must equal
at least $3,000,000. Demand Registrations will be Short-Form Registrations
whenever the Company is permitted to use any applicable short form. The Company
will use its best efforts to make Short-Form Regis trations available for the
sale of Registrable Securities.
(d) Priority on Demand Registrations. The Company will not include in
any Demand Registration any securities which are not Registrable Securities
without the written consent of the holders of at least a majority of the
Registrable Securities participating in such registration. If other securities
are permitted to be included in a Demand Registration which is an underwritten
offering
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<PAGE>
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included exceeds the number
which can be sold in such offering, the Company will include in such
registration (i) first, the number of Registrable Securities requested to be
included which in the opinion of such underwriters can be sold, pro rata among
the respective holders on the basis of the amount of such Registrable Securities
and (ii) second, other securities permitted to be included in such registration.
Any Persons other than holders of Registrable Securities who participate in
Demand Registrations which are not at the Company's expense must pay their share
of the Registration Expenses as provided in paragraph 5 hereof.
(e) Restrictions on Demand Registrations. The Company will not be
obligated to effect any Demand Registration within six months after the
effective date of a previous Demand Registration. The Company may postpone for
up to six months the filing or the effectiveness of a registration statement for
a Demand Registration if the Company and the holders of at least a majority of
the Registrable Securities participating in such registration agree that such
Demand Registration might reasonably be expected to have an adverse effect on
any proposal or plan by the Company or any of its Subsidiaries to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction; provided that in
such event, the holders of Registrable Securities participating in such
registration will be entitled to withdraw such request and, if such request is
withdrawn, such Demand Registration will not count as a Demand Registration.
(f) Selection of Underwriters. Except as provided in paragraph 2(e),
the holders of a majority of the Original Stockholder Shares included in any
Demand Registration will have the right to select the investment banker(s) and
manager(s) to administer the offering.
(g) Other Registration Rights. Except as provided in this Agreement,
the Company will not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the written
consent of the holders of at least a majority of the Registrable Securities;
provided that the Company may grant rights to other Persons to (i) participate
in Piggyback Registrations so long as such rights are subordinate to the rights
of the holders of Registrable Securities with respect to such Piggyback
Registrations and (ii) request registrations so long as the holders of
Registrable Securities are entitled to participate in any such registrations
with such Persons pro rata on the basis of the number of shares owned.
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2. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any
of its securities under the Securities Act (including a Demand Registration) and
the registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), the Company will give prompt written
notice (in any event within five business days after its receipt of notice of
any exercise of other demand registration rights) to all holders of Registrable
Securities of its intention to effect such a registration and will include in
such registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 15 days after the
receipt of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities will be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by such holders, and (iii) third, other
securities requested to be included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering, the Company
will include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration and the Registrable
Securities requested to be included in such registration, pro rata among the
holders of such securities on the basis of the number of securities owned by
each such holder and (ii) second, other securities requested to be included in
such registration.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the selection of investment banker(s) and manager(s) for
the offering must be
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approved by the holders of a majority of the Registrable Securities included in
such Piggyback Registration. Such approval will not be unreasonably withheld.
(f) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
paragraph 1 hereof or pursuant to this paragraph 2, and if such previous
registration has not been withdrawn or abandoned, the Company will not file or
cause to be effected any other registration of any of its equity securities or
securities convertible or exchangeable into or exercisable for its equity
securities under the Securities Act (except on Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of such
securities, until a period of at least six (6) months has elapsed from the
effective date of such previous registration.
3. Holdback Agreements.
(a) Each holder of Registrable Securities agrees not to effect any
public sale or distribution of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to and the 90-day period beginning on the effective
date of any underwritten Demand Registration or any underwritten Piggyback
Registration in which Registrable Securities are included (except as part of
such underwritten registration), unless the underwriters managing the registered
public offering otherwise agree.
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 90-day period beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration or pursuant to registrations on Form S-8 or
any successor form), unless the underwriters managing the registered public
offering otherwise agree, and (ii) to cause each holder of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, purchased from the Company at any time after the date of
this Agreement (other than in a registered public offering) to agree not to
effect any public sale or distribution of any such securities during such period
(except as part of such underwritten registration, if otherwise permitted),
unless the underwriters managing the registered public offering otherwise agree.
4. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable
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Securities be registered pursuant to this Agreement, the Company will use its
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof and
pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective (provided
that within a reasonable time before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish to
the counsel selected by the holders of a majority of the Registrable Securities
covered by such registration statement copies of all such documents proposed to
be filed, which documents will be subject to the review of such counsel);
(b) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than three months and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) promptly notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is
-6-
<PAGE>
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of any such
seller, the Company will prepare a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) use its reasonable efforts to make available to its security
holders, as soon as reasonably practicable, an earnings statement concerning the
period of at least twelve months beginning with the Company's first full
calendar quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder; and
(k) use all reasonable efforts to facilitate the distribution and sale
of any Registrable Securities to be offered pursuant to this Agreement,
including without limitation, by making
-7-
<PAGE>
road show presentations, holding meetings with potential investors and taking
such other actions as shall be reasonably requested by the holders of a majority
of the Registrable Securities being sold.
5. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding underwriting discounts and commissions) and
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement, except
that the Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed.
(b) In connection with each Company-paid Long-Form Registration, the
Company will reimburse the holders of Stockholder Shares covered by such
registration for the reasonable fees and disbursements of one counsel chosen by
the holders of a majority of such Stockholder Shares.
(c) To the extent Registration Expenses are not required to be paid by
the Company, each holder of securities included in any registration hereunder
will pay those Registration Expenses allocable to the registration of such
holder's securities so included, and any Registration Expenses not so allocable
will be borne by all sellers of securities included in such registration in
proportion to the aggregate selling price of the securities to be so registered.
6. Indemnification.
(a) The Company agrees to indemnify, to the fullest extent permitted
by law, each holder of Registrable Securities, its officers and directors and
each Person who controls such holder (within the meaning of the Securities Act
or the Securities Exchange Act of 1934, as amended (the "Exchange Act")) against
all losses, claims, damages, liabilities and expenses caused by (i) any untrue
or alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or
-8-
<PAGE>
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to the Company by such holder
expressly for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same, or (ii) any other violation caused by the Company of the Securities
Act or any other securities law or rule or regulation promulgated thereunder. In
connection with an underwritten offering, the Company also will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing by such holder; provided that the obligation to indemnify
will be several, not joint and several, among such holders of Registrable
Securities and the liability of each such holder of Registrable Securities will
be in proportion to and limited to the net amount received by such holder from
the sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any
-9-
<PAGE>
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of the Registrable Securities.
The Company also agrees to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
7. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
8. Registrable Securities. The term "Registrable Securities" means
(a) any common stock of the Company (the "Common Stock") held by the Original
Stockholders, (b) any Common Stock held by the Milton Stockholders and (c) any
securities issued or issuable with respect to the Common Stock referred to in
clauses (a) and (b) above by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when they have been
distributed to the public pursuant to a offering registered under the Securities
Act or sold to the public through a broker, dealer or market maker in compliance
with Rule 144 under the Securities Act (or any similar rule then in force).
9. Availability of Rule 144. Without a view to making available to
the holders of the Registrable Securities the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the Securities and
Exchange Commission that may at
-10-
<PAGE>
any time permit such a holder to sell securities of the Company to the public
without registration and with a view to making it possible for such holders to
register the Registrable Securities pursuant to a registration statement on Form
S-3, the Company agrees to use its best efforts:
(a) to make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) to file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) to furnish to any such holder so long as the holder owns any
Registrable Securities forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act or as to its qualification as a registrant
whose securities may be resold pursuant to Form S-3, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
document so filed by the Company and (iii) such other information as may be
reasonably requested in availing such holder of any rule or regulation of the
Securities and Exchange Commission which permits the selling of any such
securities without registration or pursuant to such form.
10. Limitation on Registration Rights of Others. The Company
represents and warrants (which representation and warranty shall survive the
execution and delivery of this Agreement) that the execution, delivery and
performance by the Company of this Agreement will not violate, conflict with or
cause a default under any other agreement with any other registration rights
holder obligating the Company to register its securities under the Securities
Act or under applicable blue sky laws.
11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
-11-
<PAGE>
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of holders of at least
60% of the Registrable Securities as determined at the time of the proposed
amendment or waiver.
(d) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(e) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or mailed, by certified or registered mail, return receipt requested, first
class postage prepaid, or by Federal Express or some other reputable overnight
carrier, to the parties at the following addresses:
If to the Original Stockholders, addressed to:
Warren J. Hayford
1500 N. Sheridan Road
Suite 10E
Wilmette, IL 60091
If to the Milton Stockholders, addressed to:
James W. Milton
c/o Milton Can Company, Inc.
580 Division Street
Elizabeth, New Jersey 07201
With a copy (which shall not constitute notice
hereunder) to:
Nutter, McClennen & Fish, LLP
One International Place
Boston, Massachusetts 02210
Attention: Mr. Gene A. Blumenreich
-12-
<PAGE>
If to the Company, addressed to:
BWAY Corporation
8607 Roberts Drive
Suite 250
Atlanta, Georgia 30350
Attention: Mr. Warren J. Hayford
With a copy (which shall not constitute notice
hereunder) to:
Kirkland & Ellis
200 East Randolph Drive Suite 5700
Chicago, Illinois 60601
Attention: William S. Kirsch, P.C.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future law, rule, or
regulation, such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
had never comprised a part hereof. The remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision, there shall be
added automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible.
(h) Headings, Gender, Etc. The headings used in this Agreement have
been inserted for convenience and do not constitute matter to be construed or
interpreted in connection with this Agreement. Unless the context of this
Agreement otherwise requires, (a) words of any gender shall be deemed to include
each other gender, (b) words using the singular or plural number shall also
include the plural or singular number, respectively and (c) references to
"hereof," "herein," "hereby" and similar terms shall refer to this entire
Agreement.
(i) Choice of Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
Illinois except with respect to
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<PAGE>
matters of law concerning the internal corporate affairs of any corporation
which is a party to or the subject of this Agreement, and as to those matters
the law of the jurisdiction of incorporation of such corporation shall govern.
12. Amended and Restated Agreement. This Agreement amends and
restates the Registration Agreement in its entirety and the Registration
Agreement is hereby terminated and of no further force or effect, and no party
thereto shall have any further liability or obligation arising from or in any
way relating to the Registration Agreement.
* * * * * *
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
BWAY CORPORATION
By /s/ Warren J. Hayford
-----------------------------------
Its Chief Executive Officer
-----------------------------------
/s/ Warren J. Hayford
--------------------------------------
Warren J. Hayford
/s/ Mary Lou Hayford
--------------------------------------
Mary Lou Hayford
/s/ John T. Stirrup
--------------------------------------
John T. Stirrup
--------------------------------------
Harry F. Payton
--------------------------------------
C. Flemming Heilmann
Richard S. Levitt
Third Trust, Norwest Bank
South Dakota, N.A. as Trustee
By
------------------------------------
Its
------------------------------------
/s/ Jack S. Levin
--------------------------------------
Jack S. Levin
/s/ William S. Kirsch
--------------------------------------
William S. Kirsch
/s/ James W. Milton
--------------------------------------
James W. Milton
/s/ Mary Jane Milton
--------------------------------------
Mary Jane Milton
<PAGE>
/s/ Mary Jane Milton
--------------------------------------
Sean A. Milton Trust,
Mary Jane Milton, as Trustee
/s/ Mary Jane Milton
--------------------------------------
Daniel T. Milton Trust,
Mary Jane Milton, as Trustee
/s/ Dennis P. Milton
--------------------------------------
Dennis P. Milton
/s/ James J. Milton
--------------------------------------
James J. Milton
<PAGE>
SCHEDULE I
----------
ORIGINAL STOCKHOLDERS
---------------------
Warren J. Hayford
Mary Lou Hayford
John T. Stirrup
Harry F. Payton
C. Flemming Heilmann
Richard S. Levitt Third Trust,
Norwest Bank South Dakota, N.A. as Trustee
Jack S. Levin
William S. Kirsch
-17-
<PAGE>
SCHEDULE II
-----------
MILTON STOCKHOLDERS
-------------------
James W. Milton
Mary Jane Milton
Sean A. Milton Trust
Daniel T. Milton Trust
Dennis Milton
James J. Milton
-18-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS CUMMARY FINANCIAL INFORMATION EXTRACTED FROM BWAY
CORPORATION AND IS QUALIFIFED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> SEP-26-1996 SEP-26-1996
<PERIOD-START> APR-01-1996 JAN-01-1995
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 0 2,113
<SECURITIES> 0 0
<RECEIVABLES> 0 45,158
<ALLOWANCES> 0 475
<INVENTORY> 0 40,198
<CURRENT-ASSETS> 0 89,206
<PP&E> 0 118,096
<DEPRECIATION> 0 19,203
<TOTAL-ASSETS> 0 270,609
<CURRENT-LIABILITIES> 0 58,482
<BONDS> 0 0
0 0
0 0
<COMMON> 0 66
<OTHER-SE> 0 77,129
<TOTAL-LIABILITY-AND-EQUITY> 0 270,609
<SALES> 73,715 193,637
<TOTAL-REVENUES> 73,715 193,637
<CGS> 61,158 162,421
<TOTAL-COSTS> 4,814 13,406
<OTHER-EXPENSES> 225 (262)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,005 3,108
<INCOME-PRETAX> 6,513 14,964
<INCOME-TAX> 2,646 6,090
<INCOME-CONTINUING> 3,867 8,874
<DISCONTINUED> 0 0
<EXTRAORDINARY> (2,535) (2,535)
<CHANGES> 0 0
<NET-INCOME> 1,332 6,339
<EPS-PRIMARY> .22 1.03
<EPS-DILUTED> .22 1.03
</TABLE>
