-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MEcv1EfMSKluaiZfMIKrsdnmSXP86HhcED9XHl4Kt3/FdL/eyWOyf/Riq8Rj8SNp o6zfPmw936421SmwEng69w== 0000931763-01-500826.txt : 20010612 0000931763-01-500826.hdr.sgml : 20010612 ACCESSION NUMBER: 0000931763-01-500826 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010611 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BWAY CORP CENTRAL INDEX KEY: 0000943897 STANDARD INDUSTRIAL CLASSIFICATION: METAL CANS [3411] IRS NUMBER: 363624491 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: SEC FILE NUMBER: 005-45105 FILM NUMBER: 1658728 BUSINESS ADDRESS: STREET 1: 8607 ROBERTS DR STREET 2: STE 250 CITY: ATLANTA STATE: GA ZIP: 30350 BUSINESS PHONE: 4045870888 MAIL ADDRESS: STREET 1: 8607 ROBERTS DRIVE SUITE 250 CITY: ATLANTA STATE: GA ZIP: 30350 FORMER COMPANY: FORMER CONFORMED NAME: BROCKWAY STANDARD HOLDINGS CORP DATE OF NAME CHANGE: 19950413 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BWAY CORP CENTRAL INDEX KEY: 0000943897 STANDARD INDUSTRIAL CLASSIFICATION: METAL CANS [3411] IRS NUMBER: 363624491 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 8607 ROBERTS DR STREET 2: STE 250 CITY: ATLANTA STATE: GA ZIP: 30350 BUSINESS PHONE: 4045870888 MAIL ADDRESS: STREET 1: 8607 ROBERTS DRIVE SUITE 250 CITY: ATLANTA STATE: GA ZIP: 30350 FORMER COMPANY: FORMER CONFORMED NAME: BROCKWAY STANDARD HOLDINGS CORP DATE OF NAME CHANGE: 19950413 SC TO-I 1 dsctoi.txt SCHEDULE TO-I SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE TO (Rule 13e-4) TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 --------------- BWAY CORPORATION (Name of Subject Company (Issuer) and Filing Person (Offeror) --------------- Options Under Bway Corporation's 1995 Long-Term Incentive Plan to Purchase Common Stock, Par Value $.01 Per Share, Held by Option Holders (Title of Class of Securities) --------------- 056039100 (CUSIP Number of Underlying Class of Securities) --------------- copies to: Kevin C. Kern Jeffrey L. Schulte, Esq. Vice President, Administration and Heath D. Linsky, Esq. Chief Financial Officer Morris, Manning & Martin, L.L.P. Bway Corporation 1600 Atlanta Financial Center 8607 Roberts Drive, Suite 250 3343 Peachtree Road, N.E. Atlanta, Georgia 30350 Atlanta, Georgia 30326 (770) 645-4800 (404) 233-7000 (Name, address and telephone number of person authorized to receive notices and communications on behalf of filing person)
CALCULATION OF FILING FEE ________________________________________________________________________________ Transaction Valuation* Amount of Filing Fee ______________________ ____________________ $16,721,930 $3,345 ________________________________________________________________________________ * Calculated solely for purposes of determining the filing fee. This amount assumes that options to purchase 1,235,915 shares of common stock of Bway Corporation having a weighted average exercise price of $13.53 will be exchanged pursuant to this offer. The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the value of the transaction. [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount previously paid: Not applicable. Form or Registration No.: Not applicable. Filing party: Not applicable. Date filed: Not applicable. [ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [ ] third party tender offer subject to Rule 14d-1. [X] issuer tender offer subject to Rule 13e-4. [ ] going-private transaction subject to Rule 13e-3. [ ] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [ ] ________________________________________________________________________________ INTRODUCTORY STATEMENT This Tender Offer Statement on Schedule TO (this "Schedule TO") relates to our offer to exchange options to purchase shares of our common stock, par value $.01 per share, held by certain employees, directors and other eligible option holders for new options to purchase shares of our common stock at a per share exercise price equal to the fair market value of one share of our common stock on the date of issuance upon the terms and subject to the conditions in the Offer to Exchange dated June 11, 2001, attached hereto as Exhibit (a)(1)(A) (the "Offer to Exchange") and the related Letter of Transmittal attached hereto as Exhibit (a)(1)(B) (the "Letter of Transmittal"). The information in the Offer to Exchange and the Letter of Transmittal is incorporated herein by reference in answer to all applicable items in this Schedule TO, except as otherwise set forth below. ITEM 1. Summary Term Sheet The information set forth under "Summary Term Sheet" in the Offer to Exchange is incorporated herein by reference. ITEM 2. Subject Company Information (a) Name and Address. The name of the issuer is Bway Corporation, a Delaware corporation (the "Company"). The Company's principal executive offices are located at 8607 Roberts Drive, Suite 250, Atlanta, Georgia, 30350, and its telephone number is (770) 645-4800. The information set forth in the Offer to Exchange under "Information Concerning Bway" is incorporated herein by reference. (b) Securities. This Schedule TO related to an offer by the Company to exchange all options outstanding under the Company's 1995 Long-Term Incentive Plan, dated June 1995, as amended and restated, to purchase shares of the Company's common stock, par value $.01 per share (the "Common Stock"), having an exercise price of $9.00 or more (the "Eligible Options") for new options (the "New Options") to purchase shares of the Common Stock to be granted pursuant to the Plan, upon the terms and conditions described in the Offer to Exchange and the related Letter of Transmittal. The Letter of Transmittal and the Offer to Exchange, as they may be amended from time to time, are together referred to as the "Offer." The number of shares of Common Stock subject to the New Options will be equal to the number of shares of Common Stock subject to the Eligible Options that are accepted for exchange and canceled. The information set forth in the Offer to Exchange under "Summary Term Sheet," "Introduction," Section 1 ("Number of Options; Expiration Date"), Section 5 ("Acceptance of Options for Exchange and Issuance of New Options") and Section 8 ("Source and Amount of Consideration; Terms of New Options") is incorporated herein by reference. (c) Trading Market and Price. The information set forth in the Offer to Exchange under Section 7 ("Price Range of Common Stock Underlying the Options") is incorporated herein by reference. ITEM 3. Identity and Background of Filing Person. (a) Name and Address. The information set forth under Item 2(a) above is incorporated herein by reference. ITEM 4. Terms of the Transaction. (a) Material Terms. The information set forth in the Offer to Exchange under "Summary Term Sheet," "Introduction," Section 1 ("Number of Options; Expiration Date"), Section 3 ("Procedures for Tendering Options"), Section 4 ("Withdrawal Rights"), Section 5 ("Acceptance of Options for Exchange and Issuance of New Options"), Section 6 ("Conditions of the Offer"), Section 11 ("Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer"), Section 12 ("Legal Matters; Regulatory Approvals"), Section 13 ("Material Federal Income Tax Consequences") and Section 14 ("Extension of Offer; Termination; Amendment") is incorporated herein by reference. (b) Purchases. The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") and Schedule A is incorporated herein by reference. ITEM 5. Past Contacts, Transactions, Negotiations and Agreements. (e) Agreements Involving the Subject Company's Securities The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") is incorporated herein by reference. ITEM 6. Purposes of the Transaction and Plan or Proposals. (a) Purposes. The information set forth in the Offer to Exchange under Section 2 ("Purpose of the Offer") is incorporated herein by reference. (b) Use of Securities Acquired. The information set forth in the Offer to Exchange under Section 5 ("Acceptance of Options for Exchange and Issuance of New Options) and Section 11 ("Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer") is incorporated herein by reference. (c) Plans. The information set forth in the Offer to Exchange under Section 2 ("Purpose of the Offer") is incorporated herein by reference. ITEM 7. Source and Amount of Funds or Other Consideration. (a) Source of Funds. The information set forth in the Offer to Exchange under Section 8 ("Source and Amount of Consideration; Terms of New Options") and Section 15 ("Fees and Expenses") is incorporated herein by reference. (b) Conditions. The information set forth in the Offer to Exchange under Section 6 ("Conditions of the Offer") is incorporated herein by reference. (d) Borrowed Funds. Not applicable ITEM 8. Interests in Securities of the Subject Company. (a) Securities Ownership. Not applicable (b) Securities Transactions. The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") is incorporated herein by reference. ITEM 9. Person/Assets, Retained, Employed, Compensated or Used. (a) Solicitations or Recommendations Not applicable ITEM 10. Financial Statements. (a) Financial Information The information set forth in the Offer to Exchange under Section 9 ("Information About Bway") and Section 14 ("Exhibits, Financial Statement Schedules, and Reports on Form 8-K" on page 15 and F-1 through F-25), of Bway's Annual Report on Form 10-K, for its fiscal year ended October 1, 2000, and on pages 2 through 10 of Bway's Quarterly Report on Form 10-Q, for its fiscal quarter ended April 1, 2001, is incorporated herein by reference. ITEM 11. Additional Information. (a) Agreements, Regulatory Requirements and Legal Proceedings. The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") and Section 12 ("Legal Matters; Regulatory Approvals") is incorporated herein by reference. (b) Other Material Information. Not applicable ITEM 12 Exhibits. (a)(1)(A) Offer to Exchange dated June 11, 2001. (a)(1)(B) Form of Letter of Transmittal. (a)(1)(C) Form of Letter to Eligible Option Holders Regarding Offer. (a)(1)(D) Form of Notice of Withdrawal by Option Holder. (a)(1)(E) Form of Letter to Tendering Option Holders Regarding Acceptance of Tendered Options. (a)(1)(F) Bway Corporation Annual Report on Form 10-K for its fiscal year ended October 1, 2000, filed with the Securities and Exchange Commission on December 22, 2000, and incorporated herein by reference. (a)(1)(G) Bway Corporation Quarterly Report on Form 10-K for its fiscal quarter ended April 1, 2001, filed with the Securities and Exchange Commission on May 16, 2001, and incorporated herein by reference. (b) Not applicable. (d)(1) Bway Corporation Fourth Amended and Restated 1995 Long-Term Incentive Plan, filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended April 2, 2000, filed with the Securities and Exchange Commission on May 5, 2000, and incorporated herein by reference. (d)(2) Form of New Non-Qualified Option Agreement related to the Fourth Amended and Restated 1995 Long-Term Incentive Plan. (d)(3) Form of New Incentive Stock Option Agreement related to the Fourth Amended and Restated 1995 Long-Term Incentive Plan. (g) Not applicable. (h) Not applicable. ITEM 13. Information Required by Schedule 13e-3 Not Applicable SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule TO is true, complete and correct. Bway Corporation /s/ Kevin C. Kern ----------------- Kevin C. Kern Vice President, Administration and Chief Financial Officer Date: June 11, 2001 INDEX TO EXHIBITS Exhibit Number Description - ---------------------- (a)(1)(A) Offer to Exchange dated June 11, 2001. (a)(1)(B) Form of Letter of Transmittal. (a)(1)(C) Form of Letter to Eligible Option Holders Regarding Offer. (a)(1)(D) Form of Notice of Withdrawal by Option Holder. (a)(1)(E) Form of Letter to Tendering Option Holders Regarding Acceptance of Tendered Options. (a)(1)(F) Bway Corporation Annual Report on Form 10-K for its fiscal year ended October 1, 2000, filed with the Securities and Exchange Commission on December 22, 2000, and incorporated herein by reference. (a)(1)(G) Bway Corporation Quarterly Report on Form 10-Q for its fiscal quarter ended April 1, 2001, filed with the Securities and Exchange Commission on May 16, 2001, and incorporated herein by reference. (d)(1) Bway Corporation Fourth Amended and Restated 1995 Long-Term Incentive Plan, filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended April 2, 2000, filed with the Securities and Exchange Commission on May 5, 2000, and incorporated herein by reference. (d)(2) Form of New Non-Qualified Option Agreement related to the Fourth Amended and Restated 1995 Long-Term Incentive Plan. (d)(3) Form of New Incentive Stock Option Agreement related to the Fourth Amended and Restated 1995 Long-Term Incentive Plan. EX-99.(A)(1)(A) 2 dex99a1a.txt OFFER TO EXCHANGE DATED JUNE 11, 2001 EXHIBIT (a)(1)(A) BWAY CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING OPTIONS TO PURCHASE COMMON STOCK ISSUED UNDER THE BWAY 1995 LONG-TERM STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED, THAT HAVE AN EXERCISE PRICE OF $9.00 PER SHARE OR MORE FOR NEW OPTIONS TO BE GRANTED UNDER THE BWAY 1995 LONG-TERM INCENTIVE PLAN, AS AMENDED AND RESTATED. ================================================================================ THIS OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON JULY 12, 2001, UNLESS BWAY EXTENDS THE OFFER ================================================================================ Bway Corporation ("Bway" or "we") is inviting all holders, including employees and directors, of outstanding options to purchase shares of our common stock granted under the Bway 1995 Long-Term Incentive Plan dated June 1995, as amended and restated (the "Plan") that have an exercise price of at least $9.00 per share, to tender those options for exchange for new options we will grant under the Plan after our acceptance of the tendered options. We are extending this offer upon the terms and subject to the conditions set forth in this offer to exchange (the "offer to exchange") and in the related letter of transmittal (which together, as each may be amended or supplemented from time to time, constitute the "offer"). We intend to grant options to acquire the same number of shares as are covered by the options you tender. We will grant the new options on or about the first business day that is at least six months and one day following the date we cancel the options accepted for exchange. This offer is not conditioned upon a minimum number of options being tendered, but is subject to conditions that we describe in Section 6 of this offer to exchange, including our right to accept or reject any options tendered in response to this offer. Participation in this offer is completely voluntary. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept, promptly after the expiration of the offer, all properly tendered options that have not been validly withdrawn. If you tender options for exchange and we accept them, we will grant you new options under the Plan, and a new option agreement between us and you, all as more fully described in the offer. The exercise price per share of the new options will equal the fair market value of our common stock on the date of the grant. One half of the new options will be exercisable immediately and the rest will become exercisable on the first anniversary of the grant date. ALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR OUR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT YOU SHOULD TENDER YOUR OPTIONS FOR EXCHANGE. YOU MUST MAKE YOUR OWN DECISION WHETHER TO TENDER YOUR OPTIONS. Shares of our common stock are quoted on the New York Stock Exchange under the symbol "BY." On June 8, 2001, the last reported sale price of the common stock on the New York Stock Exchange was $5.35 per share. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFER TO EXCHANGE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should direct questions about this offer or requests for assistance or for additional copies of the offer to exchange or the letter of transmittal to Kevin C. Kern, Vice President, Administration and Chief Financial Officer, at Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350 (telephone number: (770) 645-4800). IMPORTANT If you wish to tender your options for exchange, you must complete and sign the letter of transmittal in accordance with its instructions, and mail, fax or hand deliver it and any other required documents to us before midnight, Eastern time, on July 12, 2001, at Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350, Attn: Kevin C. Kern, Vice President, Administration and Chief Financial Officer (facsimile number: (770) 587-0186). We are not making this offer to, nor will we accept any tender of options from or on behalf of, option holders in any jurisdiction in which the offer to exchange or the acceptance of any tender of options would not be in compliance with the laws of such jurisdiction. However, we may, at our discretion, take any actions necessary for us to make this offer to option holders in any such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER OR NOT YOU SHOULD TENDER YOUR OPTIONS PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. 2 TABLE OF CONTENTS SUMMARY TERM SHEET.................................................... 4 INTRODUCTION.......................................................... 10 THE OFFER............................................................. 10 1. Number Of Options; Expiration Date.............................. 10 2. Purpose Of The Offer............................................ 11 3. Procedures For Tendering Options................................ 13 4. Withdrawal Rights............................................... 13 5. Acceptance Of Options For Exchange And Issuance Of New Options.. 14 6. Conditions Of The Offer......................................... 15 7. Price Range Of Common Stock Underlying The Options.............. 16 8. Source And Amount Of Consideration; Terms Of New Options........ 17 9. Information Concerning Bway..................................... 22 10. Interests Of Directors And Officers; Transactions An Arrangements Concerning The Options.......................... 23 11. Status Of Options Acquired By Us In The Offer; Accounting Consequences Of The Offer.................................... 24 12. Legal Matters; Regulatory Approvals............................. 25 13. Material Federal Income Tax Consequences........................ 25 14. Extension Of Offer; Termination; Amendment...................... 26 15. Fees And Expenses............................................... 26 16. Additional Information.......................................... 27 17. Miscellaneous................................................... 27 SCHEDULE A INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF BWAY CORPORATION 3 SUMMARY TERM SHEET Below we provide answers to some of the questions that you may have about this offer. We urge you to read carefully the remainder of this offer to exchange and the accompanying letter of transmittal because the information in this summary is not complete and additional important information is contained in the remainder of this offer to exchange and the letter of transmittal. We have included page references to the remainder of this offer to exchange where you can find a more complete description of the topics in this summary. What Securities Are We Offering Holders To Exchange? We are offering option holders to exchange all outstanding stock options having an exercise price of $9.00 per share or more, that are outstanding under the Plan, for new options we will grant under the Plan. (Page 10) Why Are We Making The Offer? Many of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our common stock. We believe these options are unlikely to be exercised in the foreseeable future. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the fair market value of our common stock on the grant date, we intend to provide our option holders with the benefit of owning options that over time may have a greater potential to increase in value in order to create better performance incentives for option holders, most of which whom are employees, and thereby maximize shareholder value. (Page 11) Why Don't We Simply Reprice The Current Options? "Repricing" existing options would result in "variable" accounting treatment for such options, which would require us, for financial reporting purposes, to record additional compensation expense each quarter until the repriced options are exercised, canceled or expired. This would be unfavorable to the Company and its shareholders. (Page 24) What Are The Conditions To The Offer? The offer is not conditioned upon a minimum number of options being tendered. Participation in this offer is completely voluntary. However, the offer is subject to a number of other conditions with regard to events that could occur prior to the expiration of the offer. These events include a change in accounting principles or a lawsuit challenging the offer. These and various other conditions are more fully described in Section 6. (Page 15) Who Is Eligible to Participate In The Offer? The offer is available to option holders who hold options that have an exercise price of $9.00 per share or more. As of June 8, 2001, there were outstanding options to purchase 1,235,915 shares of our common stock that have an exercise price of $9.00 per share or more. (Page 10) 4 If I Tender Options In This Offer, Are There Any Eligibility Requirements I Must Satisfy In Order To Receive The New Options? To receive a grant of new options pursuant to the offer and under the terms of the Plan, you must be eligible to receive options pursuant to the Plan (if you are an employee or director of Bway or any of our subsidiaries) from the date you tender options through the date we grant the new options. We anticipate the new options will be granted on or about January 14, 2002. As discussed below, we will not grant the new options until a date that is on or about the first business day that is at least six months and one day following the date we cancel the options accepted for exchange. IF, FOR ANY REASON, YOU ARE NOT AN EMPLOYEE OR DIRECTOR OF BWAY OR ANY OF OUR SUBSIDIARIES, FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS OR ANY OTHER CONSIDERATION IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT WE HAVE ACCEPTED FOR EXCHANGE. PARTICIPATION IN THE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN THE EMPLOY OF BWAY OR ANY OF OUR SUBSIDIARIES. (Page 10) If I Tender Options In This Offer, How Many New Options Will I Receive In Exchange For My Tendered Options? Provided you meet the eligibility requirements and subject to the terms of this offer, we will grant to you new options to purchase a number of shares of our common stock equal to the number of shares of common stock subject to the options that you tender and that we accept for exchange. All new options will be granted under the Plan and will be subject to the terms and conditions of the Plan and of a new option agreement between you and us. The new option agreement will be in substantially the same form as the option agreement or agreements for your current options, except for the exercise schedule and the exercise price. You must execute the new option agreement prior to receiving new options. (Page 10) If I Tender Options In This Offer, When Will I Receive My New Options? We will grant the new options on or about the first business day that is at least six months and one day after the date we cancel the options accepted for exchange. Our Board of Directors will select the actual grant date for the new options. If we cancel tendered options on July 13, 2001, the business day following the scheduled expiration date, the grant date of the new options will be on or about January 14, 2002. You must be an employee, director, or otherwise be eligible to receive options pursuant to the Plan to receive the new options. (Page 14) What If I Tender Options and Bway Undergoes A Change of Control, Such As A Merger, Prior To The Grant of the New Options? If we undergo a change of control, such as a merger, prior to the grant of the new options, it would be our intent to negotiate the terms of that change of control transaction such that you could receive options to purchase securities of the acquiror. However, we have the right to take any actions we deem necessary or appropriate to complete a transaction that our Board of 5 Directors believes is in our best interest and our stockholders' best interest, and this could result in your not being granted the new options. (Page 19) Are There Other Circumstances Under Which I Would Not Be Granted New Options? It is possible that even if we accept your tendered options, we will not issue new options to you if we are prohibited by applicable law or regulations from doing so. We will use reasonable efforts to avoid such prohibition. Also, if you are no longer an employee, director or otherwise eligible to receive options pursuant to the Plan, you will not be granted the new options. (Page 15) Why Won't I Receive My New Options Immediately After The Expiration Date Of The Offer? If we were to grant the new options on any date that is earlier than six months and one day after the date we cancel the options accepted for exchange, we would be required to employ what is called variable plan accounting, which is an unfavorable accounting treatment for financial reporting purposes. We have been advised that by deferring the grant of the new options for at least six months and one day, we will not be subject to that accounting treatment. (Page 24) What Will The Exercise Price Of The New Options Be? The exercise price of the new options will equal the fair market value of our common stock on the date we grant the new options (except where the rules of Incentive Stock Options granted to significant stockholders require a higher price). This will be determined based upon the last reported sale price of our common stock on the New York Stock Exchange on the date of grant for options granted under the Plan. Accordingly, we cannot predict the exercise price of the new options. BECAUSE WE WILL NOT GRANT NEW OPTIONS UNTIL AT LEAST SIX MONTHS AND ONE DAY AFTER THE DATE WE CANCEL THE OPTIONS ACCEPTED FOR EXCHANGE, IT IS POSSIBLE THAT THE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE THAN SOME OR ALL OF YOUR CURRENT OPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. (Page 17) If I Tender Options In This Offer, When Will The New Options Be Exercisable? One half of each option grant will be exercisable as of the grant date and the rest will become exercisable on the first anniversary of the grant date. (Page 18) Will The Terms Of The New Options Be The Same As The Terms Of The Options Tendered For Exchange? Generally yes, although the terms of the new options will differ from the terms of the options tendered for exchange as follows: 6 . Exercise Price. Although the method for determining the exercise price of the new options is the same as the method used for determining the exercise price of the options tendered for exchange (i.e., based on the fair market value of our common stock on the date of grant for options granted), it is likely that the exercise price of the new options will be different from the exercise price of the tendered options. . Vesting. The options granted in the exchange will be vested (that is, they will be exercisable) as to 50% on the date of grant and will vest as to the remaining 50% on the first anniversary of the grant date. . Term. While the expiration date of both the new options and the options tendered for exchange is 10 years from the date of grant, the new options will expire on a later date than the tendered options would have because they will be granted on a later date. (Page 17) If I Tender Options In The Offer, Will I Be Eligible To Receive Other Option Grants Before I Receive My New Options? If we accept options you tender in the offer, we will defer until the grant date for your new options our grant to you of other options, such as annual, bonus or promotional options, for which you may be eligible between the date hereof and the new option grant date. We will defer the grant to you of these other options if we determine it is necessary for us to do so to avoid incurring adverse accounting treatment because of accounting rules that could apply to these interim option grants as a result of the offer. If you do not tender options in the offer, however, we may grant you promptly following the expiration of the offer options that you were eligible to receive between the date hereof and the expiration date. (Page 14) If My Current Options Are Incentive Stock Options, Will My New Options Be Incentive Stock Options? If your current options are incentive stock options, your new options will be granted as incentive stock options to the maximum extent that they may qualify as incentive stock options under the tax laws on the date of the grant. For options to qualify as incentive stock options under the current tax laws, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the aggregate option exercise price. Any options beyond that will be non- qualified stock options, which are options that are not qualified to be an incentive stock option under the current tax laws. If the exercise price of your new options is equal to or less than the exercise price of the options you tender, the new options may qualify as incentive stock options to the extent the options tendered qualified as incentive stock options before being tendered. If the new options have a higher exercise price than some or all of your current eligible options, or if the exercise schedule of the new options overlaps with other grants of incentive stock options, a portion of the new options may exceed the limits for incentive stock options and will have to be granted as non- qualified stock options. (Page 22) 7 Will I Have To Pay Taxes If I Exchange My Options In The Offer? If you exchange your current options for new options, we believe you will not be required under current law to recognize income for federal income tax purposes at the time of the exchange. Further, at the date of grant of the new options, we believe you will not be required under current law to recognize income for federal income tax purposes. We recommend that you consult with your own tax advisor to determine the tax consequences of tendering options pursuant to the offer. (Page 25) What Happens To Options That I Choose Not To Tender Or That Are Not Accepted For Exchange? Nothing. An option that you choose not to tender for exchange or that we do not accept for exchange remains outstanding until it is exercised or expires in accordance with its terms and retains its current exercise price and current exercise schedule. How Long Do I Have To Decide Whether To Tender Options In The Offer? Can The Offer Be Extended, And If So, How Will I Be Notified If It Is Extended? You have until at least 12:00 midnight, Eastern time, on July 12, 2001 to tender your options in the offer. We may, in our discretion, extend the offer to exchange at any time, but we cannot assure you that the offer will be extended or, if extended, for how long. If we extend the offer, we will make a public announcement of the extension no later than 9:00 a.m. on the next business day following the previously scheduled expiration date. If we extend the offer, we may delay the acceptance of any options that have been tendered. (Page 26) How Do I Tender My Options? If you decide to tender your options, you must deliver, before the offer expires, a properly completed and duly executed letter of transmittal and any other documents required by the letter of transmittal to Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350, Attn: Kevin C. Kern, Vice President, Administration and Chief Financial Officer, (facsimile number: (770) 587-0186). This is a one-time offer, and we will strictly enforce the tender offer period. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. We also reserve the right to waive any of the conditions of the offer or any defect or irregularity in any tender. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept all properly tendered options promptly after the expiration of the offer. (Page 12) During What Period Of Time May I Withdraw Previously Tendered Options? You may withdraw your tendered options at any time before the offer expires at midnight, Eastern time, on July 12, 2001. If we extend this offer beyond that time, you may withdraw your tendered options at any time until the extended expiration of this offer. To withdraw tendered options, you must deliver to us at the address or facsimile number listed 8 above a written notice of withdrawal with the required information while you still have the right to withdraw the tendered options. Once you have withdrawn options, you may re-tender options only by again following the delivery procedures described above. (Page 13) What Do We And Our Board Of Directors Think Of The Offer? Although our Board of Directors has approved this offer, neither we nor our board of directors makes any recommendation as to whether or not you should tender your options. You must make your own decision whether to tender options. For questions regarding tax implications or other investment-related questions, you should talk to your own legal counsel, accountant and/or financial advisor. Who Can I Talk To If I Have Questions About The Offer? For additional information or assistance, you should contact: Kevin C. Kern Vice President, Administration and Chief Financial Officer Bway Corporation 8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350 (telephone number: (770) 645-4800) 9 INTRODUCTION Bway Corporation ("Bway") is inviting all holders of outstanding options to purchase shares of our common stock granted under the Bway 1995 Long-Term Incentive Plan dated June 1995, as amended and restated, (the "Plan") that have an exercise price of at least $9.00 per share, to tender those options for exchange for new options we will grant under the Plan. We are making this offer upon the terms and subject to the conditions set forth in this offer to exchange and in the related letter of transmittal (which together, as they may be amended or supplemented from time to time, constitute the "offer"). This offer is not conditioned upon a minimum number of options being tendered, but is subject to conditions that we describe in Section 6 of this offer to exchange, including our right to accept or reject any options tendered in response to this offer. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that have not been validly withdrawn. As of June 8, 2001, options to purchase 1,997,604 shares of our common stock were issued and outstanding under the Plan, of which options to purchase 1,235,915 shares of our common stock, constituting 61.9%, are eligible to be exchanged in the offer. The number of shares of common stock subject to new options to be granted to each option holder will be equal to the number of shares subject to the options tendered by such option holder and accepted for exchange. We will grant the new options on or about the first business day that is at least six months and one day following the date we cancel the options accepted for exchange. If you tender options for exchange and we accept such options, we will grant you new options under the Plan and enter into a new option agreement between us and you, all as more fully described below. The exercise price of the new options will equal the fair market value of our common stock on the date of the grant. One half of the new options will be exercisable on the grant date and the rest will be exercisable on the first anniversary of the grant date. THE OFFER 1. Number Of Options; Expiration Date. Upon the terms and subject to the conditions of the offer including our right to accept or reject any options tendered in response to this offer, we will exchange for new options to purchase common stock under the Plan all outstanding options under the Plan that have an exercise price of at least $9.00 per share, that are properly tendered and not validly withdrawn in accordance with Section 4 before the "expiration date," as defined below. If your options are properly tendered and accepted for exchange, unless we terminate this offer pursuant to the terms and conditions hereof, you will be entitled to receive, on or about the first business day that is at least six months and one day following the date we accept the options tendered for exchange, new options to purchase the number of shares of our common stock that is equal to the number of shares subject to the options that you tendered and we accepted, subject to adjustments for any stock splits, stock dividends and similar events that occur prior 10 to the grant date of the new options. IF, FOR ANY REASON, YOU ARE NOT AN EMPLOYEE OF BWAY OR ONE OF OUR SUBSIDIARIES FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS OR ANY OTHER CONSIDERATION IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT HAVE BEEN ACCEPTED FOR EXCHANGE. PARTICIPATION IN THE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN THE EMPLOY OF BWAY OR ANY OF OUR SUBSIDIARIES. This means that if you die or quit, with or without a good reason, or we terminate your employment, with or without cause, prior to the date we grant the new options, you will not receive anything for the options that you tendered and we canceled. The term "expiration date" means 12:00 midnight, Eastern time, on July 12, 2001, unless and until we, in our discretion, have extended the period of time during which the offer will remain open, in which event the term "expiration date" refers to the latest time and date at which the offer, as so extended, expires. See Section 14 for a description of our rights to extend, delay, terminate and amend the offer. 2. Purpose Of The Offer. We issued the options outstanding under the Plan to: . provide our option holders an opportunity to acquire or increase a proprietary interest in us, thereby creating a stronger incentive to expend maximum effort for our growth and success; and . encourage our employees to continue their employment by us. Many of our outstanding options, whether or not they are currently exercisable, have exercise prices that are higher than the market price of our common stock as of the date immediately prior to the date we commenced the offer. As of June 8, 2001, all of the options that were eligible to be exchanged in the offer to exchange had an exercise price above $5.35, the last reported sale price of our common stock on the New York Stock Exchange on that date. These eligible options have a weighted average exercise price equal to $13.53, which is $8.18, or approximately 253%, above the last reported sale price of our common stock on the New York Stock Exchange on June 8, 2001. We believe many of these options are unlikely to be exercised in the foreseeable future. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the fair market value of our common stock on the grant date, we intend to provide our option holders with the benefit of owning options that over time may have a greater potential to increase in value, to create better performance incentives for option holders and thereby maximize stockholder value. Subject to the foregoing, and except as otherwise disclosed in this offer or in our filings with the SEC, and other than transactions among or between our subsidiaries and our affiliates, we presently have no plans or proposals that relate to or would result in: (a) any extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving us or any of our subsidiaries; 11 (b) any purchase, sale or transfer of a material amount of our assets or the assets of any of our subsidiaries; (c) any material change in our present dividend rate or policy, or our indebtedness or capitalization; (d) any change in our present board of directors or management, including a change in the number or term of directors or to fill any existing board vacancies or to change any executive officer's material terms of employment; (e) any other material change in our corporate structure or business; (f) our common stock not being authorized for quotation in an automated quotation system operated by a national securities association; (g) our common stock becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act; (h) the suspension of our obligation to file reports pursuant to Section 15(d) of the Securities Exchange Act; (i) the acquisition by any person of any material amount of our securities or the disposition of any material amount of our securities; or (j) any change in our certificate of incorporation or bylaws, or any actions which may impede the acquisition of control of us by any person. From time to time we entertain proposals from third parties regarding potential strategic relationships or transactions, which in some cases could include a merger or sale of Bway. We have no definitive plans with respect to any such strategic relationship or transaction as of the date hereof. Neither we nor our Board of Directors makes any recommendation as to whether you should tender your options, nor have we authorized any person to make any such recommendation. You are urged to evaluate carefully all of the information in this offer to exchange and to consult your own legal, investment and/or tax advisors. You must make your own decision whether to tender your options for exchange. 3. Procedures For Tendering Options. Proper Tender of Options. To validly tender your options pursuant to the offer, you must, in accordance with the terms of the letter of transmittal, properly complete, duly execute and deliver to us the letter of transmittal, or a facsimile thereof, along with any other required documents. We must receive all of the required documents at Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350, Attn: Kevin C. Kern, Vice President, Administration and Chief Financial Officer, before the expiration date. 12 THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING LETTERS OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT YOUR ELECTION AND RISK. IF YOU DELIVER BY MAIL, WE RECOMMEND THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND PROPERLY INSURE THE MATERIALS. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Determination of Validity; Rejection of Options; Waiver of Defects; No Obligation to Give Notice of Defects. We will determine, in our sole discretion, all questions as to form of documents and the validity, form, eligibility, including time of receipt, and acceptance of any tender of options. Our determination of these matters will be final and binding on all parties. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we will accept properly and timely tendered options that are not validly withdrawn. We also reserve the right to waive any of the conditions of the offer or any defect or irregularity in any tender with respect to any particular options or any particular option holder. No tender of options will be deemed to have been properly made until all defects or irregularities have been cured by the tendering option holder or waived by us. Neither we nor any other person is obligated to give notice of any defects or irregularities in tenders, nor will anyone incur any liability for failure to give any such notice. Our Acceptance Constitutes an Agreement. Your tender of options pursuant to the procedures described above constitutes your acceptance of the terms and conditions of the offer. OUR ACCEPTANCE FOR EXCHANGE OF YOUR OPTIONS TENDERED BY YOU PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN US AND YOU UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that have not been validly withdrawn. 4. Withdrawal Rights. You may only withdraw your tendered options in accordance with the provisions of this Section 4. You may withdraw your tendered options at any time before the expiration date. In addition, unless we accept your tendered options for exchange before 12:00 midnight, Eastern time, on July 12, 2001, you may withdraw your tendered options at any time after 12:00 midnight, Eastern time, on August 9, 2001. To validly withdraw tendered options, an option holder must deliver to us at the address set forth in Section 3 a written notice of withdrawal, or a facsimile thereof, with the required information, while the option holder still has the right to withdraw the tendered options. The notice of withdrawal must specify the name of the option holder who tendered the options to be withdrawn, the number of option shares to be withdrawn and the exercise price. Except as 13 described in the following sentence, the notice of withdrawal must be executed by the option holder who tendered the options to be withdrawn exactly as such option holder's name appears on the option agreement or agreements evidencing such options. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact or another person acting in a fiduciary or representative capacity, the signer's full title and proper evidence of the authority of such person to act in such capacity must be identified on the notice of withdrawal. You may not rescind any withdrawal. Any options you withdraw will thereafter be deemed not properly tendered for purposes of the offer, unless you properly re-tender those options before the expiration date by following the procedures described in Section 3. Neither we nor any other person is obligated to give notice of any defects or irregularities in any notice of withdrawal, nor will anyone incur any liability for failure to give any such notice. We will determine, in our discretion, all questions as to the form and validity, including time of receipt, of notices of withdrawal. Our determination of these matters will be final and binding. 5. Acceptance Of Options For Exchange And Issuance Of New Options. Upon the terms and subject to the conditions of this offer and as promptly as reasonably practicable following the expiration date, we will accept for exchange and cancel options properly tendered and not validly withdrawn before the expiration date. If your properly tendered options are accepted for exchange on July 13, 2001, the business day following the scheduled expiration date of the offer, you will be granted new options on or about January 14, 2002, which is the first business day that is at least six months and one day following the date we anticipate accepting options for exchange. The exercise price of the new options will equal the fair market value of our common stock on the date of grant. If we accept options you tender in the offer, we will defer until the grant date for your new options our grant to you of other options, such as annual, bonus or promotional options, for which you may be eligible between the date hereof and the new option grant date. We will defer the grant to you of these other options if we determine it is necessary for us to do so to avoid incurring adverse accounting treatment because of accounting rules that could apply to these interim option grants as a result of the offer. If you do not tender options in the offer, however, we may grant you promptly following the expiration of the offer options that you were eligible to receive between the date hereof and the expiration date. For purposes of the offer, we will be deemed to have accepted for exchange options that are validly tendered and not properly withdrawn as, if and when we give oral or written notice to the option holders of our acceptance for exchange of such options, which may be by press release. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that are not validly withdrawn. Promptly after we accept tendered options for exchange, we will send each tendering option holder a letter indicating the number of shares subject to the options that we have accepted for exchange, the corresponding number of shares that will be subject to the new options and the expected grant date of the new options. 14 6. Conditions Of The Offer. Notwithstanding any other provision of the offer, we will not be required to accept any options tendered for exchange, and we may terminate or amend the offer, or postpone our acceptance and cancellation of any options tendered for exchange, in each case, subject to Rule 13e-4(f)(5) under the Securities Exchange Act, if at any time on or after June 11, 2001 and prior to the expiration date (1) any of the following events has occurred, or has been determined by us to have occurred, and, (2) in our reasonable judgment in any such case and regardless of the circumstances giving rise thereto, including any action or omission to act by us, the occurrence of such event or events makes it inadvisable for us to proceed with the offer or with such acceptance and cancellation of options tendered for exchange: (a) there shall have been threatened or instituted or be pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, before any court, authority, agency or tribunal that directly or indirectly challenges the making of the offer, the acquisition of some or all of the tendered options pursuant to the offer, the issuance of new options, or otherwise relates in any manner to the offer or that, in our reasonable judgment, could materially and adversely affect the business, condition (financial or other), income, operations or prospects of Bway or our subsidiaries, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the contemplated benefits of the offer to us; (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the offer or Bway or any of our subsidiaries, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might directly or indirectly: (1) make the acceptance for exchange of, or issuance of new options for, some or all of the tendered options illegal or otherwise restrict or prohibit consummation of the offer or otherwise relates in any manner to the offer; (2) delay or restrict our ability, or render us unable, to accept for exchange, or issue new options for, some or all of the tendered options; (3) materially impair the contemplated benefits of the offer to us; or (4) materially and adversely affect the business, condition (financial or other), income, operations or prospects of Bway or our subsidiaries, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the contemplated benefits of the offer to us. (c) there shall have occurred any change, development, clarification or position taken in generally accepted accounting principles which could or would require us to record compensation expense against our earnings in connection with the offer for financial reporting purposes; 15 (d) a tender or exchange offer with respect to some or all of our common stock, or a merger or acquisition proposal for us, shall have been proposed, announced or made by another person or entity or shall have been publicly disclosed; or (e) any change or changes shall have occurred in the business, condition (financial or other), assets, income, operations, prospects or stock ownership of Bway or our subsidiaries that, in our reasonable judgment, is or may be material to Bway or our subsidiaries or materially impairs or may materially impair the contemplated benefits of the offer to us. The conditions to the offer are for our benefit. We may assert them in our discretion regardless of the circumstances giving rise to them prior to the expiration date. We may waive them, in whole or in part, at any time and from time to time prior to the expiration date, in our discretion, whether or not we waive any other condition to the offer. Our failure at any time to exercise any of these rights will not be deemed a waiver of any such rights. The waiver of any of these rights with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances. Any determination we make concerning the events described in this Section 6 will be final and binding upon all persons. 7. Price Range Of Common Stock Underlying The Options. Our common stock is traded on the New York Stock Exchange under the symbol "BY." Our common stock began trading on the New York Stock Exchange on November 20, 1996. Prior to that, our stock had been traded on the Nasdaq Stock Market beginning on June 20, 1995, in connection with the initial public offering of our common stock. The following table shows, for the periods indicated, the high and low sales prices per share of our common stock as reported by the New York Stock Exchange.
High Low Fiscal 1999: First Quarter...................................... $18.31 $11.50 Second Quarter..................................... $16.00 $10.88 Third Quarter...................................... $15.88 $11.38 Fourth Quarter..................................... $13.69 $ 8.50 Fiscal 2000 First Quarter...................................... $ 9.69 $ 5.50 Second Quarter..................................... $ 8.50 $ 3.81 Third Quarter...................................... $ 8.44 $ 5.94 Fourth Quarter..................................... $ 7.44 $ 4.38 Fiscal 2001 First Quarter.................................... $ 5.31 $ 2.75 Second Quarter................................... $ 4.13 $ 3.35
As of June 8, 2001, the last trading day prior to the commencement of this offer, the last reported sale price of our common stock, as reported by the New York Stock Exchange, was $5.35 per share and there were 8,737,706 shares outstanding. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. 16 8. Source And Amount Of Consideration; Terms Of New Options. Consideration. We will issue new options to purchase common stock under the Plan in exchange for outstanding eligible options properly tendered and accepted for exchange by us. We will grant the new options on or about the first business day that is at least six months and one day following the date we cancel the options accepted for exchange. The number of shares of common stock subject to new options to be granted to each option holder will be equal to the number of shares subject to the options tendered by such option holder and accepted for exchange, subject to adjustments for any stock splits, stock dividends and similar events that occur prior to the grant date of the new options. However, we will not issue any options exercisable for fractional shares. Instead, we will round down to the nearest whole number. If we receive and accept tenders of all outstanding eligible options, we will grant new options to purchase a total of approximately 1,235,915 shares of our common stock and the common stock issuable upon exercise of the new options will equal approximately 14% of the total shares of our common stock outstanding as of June 8, 2001. Terms of New Options. The new options will be issued under the Plan in the case of options under the Plan tendered for exchange. The new options will be issued pursuant to option agreements that are substantially similar to those used for the options tendered for exchange. Accordingly, except as otherwise noted in the offer and except with respect to (1) the exercise price, (2) the exercise schedule and (3) the expiration date, we expect that the terms and conditions of the new options will be the same as the terms and conditions of the options tendered for exchange. The date the new options are granted, we will deliver a new option agreement to each tendering option holder whose tendered options were accepted for exchange and canceled by us. After receipt of the new option agreement, option holders will be expected to execute and deliver to us their option agreements as soon as practical. The following description summarizes the material terms of the Plan and the options granted under the Plan. . General. The aggregate number of shares of common stock available for issuance pursuant to the exercise of options granted under the Plan is currently 2,425,000. The Plan permits the granting of stock options that are incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")) and non-qualified stock options (i.e., stock options that do not qualify as incentive stock options). . Administration. The Plan is administered by the compensation committee of our board of directors and provides the committee with broad discretion to fashion the terms of grants of options, including type, size and exercise price, as it deems appropriate. The committee also selects the persons to whom options are granted. . Term. All outstanding option grants under the Plans have terms of 10 years. Subject to the provisions of the Plans and your option agreement, all new options to be granted pursuant to the offer will have a term of, and therefore expire, 10 years from the date of grant. . Exercise Price. The exercise price of each option is determined by the compensation committee of the board of directors. To the extent that the exercise price of an option grant is less than the fair market value of our common stock on the date of grant, we would incur 17 compensation expense. Consistent with our prior grants under the Plan, the exercise price of the new non-qualified options to be granted pursuant to the offer will equal the fair market value of our common stock on the date of the grant to avoid recognizing compensation expense. For Incentive Stock Options, the exercise price will be not less than the Fair Market Value of our common stock at the close of market on the day next preceding the start of the option, unless the price must be higher pursuant to tax regulations if the grant is to a significant stockholder. This means that assuming our common stock is still listed on the New York Stock Exchange at that time, the exercise price of the new options will equal the last reported sale price of our common stock on the New York Stock Exchange on the date of grant for options (other than Incentive Stock Option, the exercise price of which will equal the last reported sale price on the date next preceding the date of grant) granted under the Plan. BECAUSE WE WILL NOT GRANT NEW OPTIONS UNTIL AT LEAST SIX MONTHS AND ONE DAY AFTER THE DATE WE CANCEL THE OPTIONS ACCEPTED FOR EXCHANGE, IT IS POSSIBLE THAT THE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE THAN SOME OR ALL OF YOUR CURRENT OPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. . Vesting and Exercise. The compensation committee determines at what time or times each option may be exercised and the period of time, if any, during which options may be exercised after retirement, death, disability or termination of employment of an option holder. The exercisability of options may be accelerated by the compensation committee. One half of the options granted in connection with this exchange offer will be exercisable on the date granted and the rest will become exercisable on the first anniversary of the grant date. That means that, assuming we grant the new options on or about January 14, 2002, the new option grants will be fully exercisable on or about January 14, 2003, subject to the terms and conditions of the Plan and your option agreement. While 50% of the new options will be exercisable as of the grant date, you will lose the benefits of any exercisable options you tender in the offer to the extent they are exercisable in excess of 50%. . Method of Exercising Options. After the new options are exercisable, the option holder may exercise the options in accordance with the terms of the Plan and the option holder's option agreement by providing to us (1) a written notice identifying the option and stating the number of shares of common stock that the option holder desires to purchase and (2) payment in full of the option price per share for the shares of common stock then being acquired by certified or cashier's check payable to the order of Bway in full payment for the shares of common stock being purchased. We may also in our discretion provide for alternate means of exercise of the options. . Prohibition Against Transfer, Pledge and Attachment. The options, and the rights and privileges conferred by them, are personal to the option holder and may not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise), and during the option holder's lifetime shall be exercisable only by the option holder. The option holder may transfer the options, and the rights and privileges conferred by it, upon the option holder's death, either by will or under the laws of descent and distribution. All 18 transferees shall be subject to all of the terms and conditions of the options to the same extent as the option holder. . Termination of Employment. IF, FOR ANY REASON, YOU ARE NOT AN EMPLOYEE, DIRECTOR, OR CONSULTANT ELIGIBLE TO RECEIVE OPTIONS PURSUANT TO THE PLAN, OF BWAY OR ONE OF OUR SUBSIDIARIES FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS OR ANY OTHER CONSIDERATION IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT HAVE BEEN ACCEPTED FOR EXCHANGE. This means that if you die or quit, with or without good reason, or we terminate your employment, with or without cause, prior to the date we grant the new options, you will not receive anything for the options that you tendered and we canceled. After the grant date of the new options, if the option holder ceases to be an employee of Bway for any reason other than disability or death, then the option holder shall have until the earlier of (1) the expiration date of such option, or (2) 30 days from the date of termination to exercise the options to the extent to which the option holder would otherwise have been entitled to exercise the option on or prior to the date of such termination. To the extent the option holder is not entitled to exercise the options prior to the date of the option holder's termination, such outstanding and unexercised option shall immediately lapse and the option holder shall have no further rights with respect to it, effective as of the date of termination of the option holder's employment. After the date of grant of the new options, if the option holder's employment or service as a director or consultant with Bway is terminated due to disability or death, the options shall be exercisable until the earlier of (1) the expiration date of such option, or (2) 90 days from the date of such disability or death to the extent to which the option holder would otherwise be entitled to exercise the options on or prior to the date of such termination. To the extent the option holder is not entitled to exercise any portion of the options prior to the date of the option holder's termination due to disability or death, such unexercised portion of the options shall immediately lapse, effective as of the date of termination of the option holder's employment, on account of disability or death. . Registration of Option Shares. All shares of common stock issuable upon exercise of options under the Plans, including the shares that will be issuable upon exercise of all new options to be granted pursuant to the offer, have been registered under the Securities Act on a registration statement on Form S-8 filed with the SEC. . Effect of Change of Control. If we merge or are consolidated with, or sell substantially all of our assets or stock to, another entity before we grant the new options, it would be our intent to negotiate the terms of that change of control transaction such that option holders who tender options pursuant to the offer would receive options to purchase securities of the acquiror. However, we have the right to take any actions we deem necessary or appropriate to complete a transaction that our board of directors believes is in our best interest and our stockholders' best interest. This could include terminating the offer and any obligation to grant the new options. If we were to terminate the offer in connection with a change of control transaction, tendering option holders would not receive options to purchase securities 19 of the acquiror or any other consideration for their tendered options. A change of control transaction will not accelerate the grant date of the new options granted pursuant to the offer. . Amendment of Plan. Under the terms of the Plan, we can amend the terms of the Plan. However, we cannot amend the Plan to adversely affect the rights of the holders of options granted under the Plan. . Federal Income Tax Consequences of Non-Qualified Stock Options. Under current law, neither the Company nor the option holder has income tax consequences from the issuance of non-qualified stock options. Generally, in the tax year when an option holder exercises non-qualified stock options, the option holder recognizes ordinary income in the amount by which the fair market value of the shares at the time of exercise exceeds the option price for such shares. However, if the option holder is subject to suit under Section 16(b) of the Securities Exchange Act of 1934 (the short swing profits rule), the option holder recognizes ordinary income in the amount by which the fair market value of the shares determined as of a later date exceeds the option price for such shares, with such later date being the earlier of (i) the expiration of 6 months from the date of exercise, or (ii) the first day on which the disposition of such property would not subject such option holder to suit under Section 16(b) of the Securities Exchange Act of 1934, unless the option holder makes a timely election under Section 83 of the Internal Revenue Code of 1986, as amended (the "Code"), in which event the fair market value of the shares will be determined on the date of exercise. The Company generally will be entitled to a deduction in the same amount as the ordinary income recognized by the option holder in the Company's tax year during which the option holder recognizes ordinary income, provided the Company satisfies applicable federal income tax reporting requirements or the option holder actually reports such income on his or her federal income tax return. Depending upon the period shares of common stock are held after exercise, the sale or other taxable disposition of the shares acquired through the exercise of a non-qualified stock option generally will result in a short-term or long-term capital gain or loss equal to the difference between the amount realized on such disposition and the fair market value of such shares when the non-qualified stock option was exercised (or if the option holder was subject to Section 16(b) of the Securities Exchange Act of 1934 and did not make a timely Code (S)83(b) election, the fair market value on the delayed determination date, if applicable. Special rules apply to an employee who exercises a non-qualified stock option by paying the exercise price, in whole or in part, by the transfer of shares of common stock to the Company. If an option holder exercises a non-qualified stock option by paying the option price with previously acquired common stock of the Company, the option holder will generally recognize income (relative to the new shares he is receiving) in two steps. In the first step, a number of new shares equivalent to the number of older shares tendered (in payment of the non-qualified stock option exercised) is considered to have been exchanged in accordance with Code (S)1036 and the rulings thereunder. Accordingly, no gain or loss is recognized upon the exchange, and the new shares received in the exchange obtain the same holding period and the same basis the option holder had in the old tendered shares. In the second step, with respect to the number of new shares acquired in excess of the number of old shares 20 tendered, the option holder will recognize income on those new shares equal to their fair market value less any nonstock consideration tendered. The excess new shares received will obtain a basis equal to the amount of income recognized by the option holder by exercise, increased by any nonstock consideration tendered. Their holding period for the excess new shares commences upon the exercise of the option. . Federal Income Tax Consequences of Incentive Stock Options. An option holder has no tax consequences upon issuance or, generally, upon exercise of an option that qualifies as an incentive stock option under Code (S)422. However, the excess of the fair market value of the shares transferred upon the exercise of an incentive stock option over the exercise price for such shares generally will constitute an item of alternative minimum tax adjustment to the option holder for the year in which the option is exercised, and thus may increase the federal income tax liability of the option holder as a result of the exercise of an incentive stock option under the alternative minimum tax rules of the Code. An option holder will recognize income when he sells or exchanges the shares acquired upon exercise of an incentive stock option. This income will be taxed at the applicable capital gains rate if the sale or exchange occurs after the expiration of the requisite holding periods. Generally, the requisite holding periods expire two years after the date of grant of the incentive stock option and one year after the date of acquisition of the common stock pursuant to the exercise of the incentive stock option. If an option holder disposes of the common stock acquired pursuant to exercise of an incentive stock option before the expiration of the requisite holding periods, the option holder will recognize ordinary income in an amount equal to the difference between the option price and the lesser of (i) the fair market value of the shares on the date of exercise and (ii) the price at which the shares are sold. However, if the option holder is subject to suit under Section 16(b) of the Securities Exchange Act of 1934 (the short swing profits rule), the option holder will recognize ordinary income in an amount equal to the difference between the option price and the lesser of (i) the fair market value of the shares as of a later date (such later date being the earlier of (1) the expiration of 6 months from the date of exercise, or (2) the first day on which the disposition of such property would not subject such option holder to suit under Section 16(b) of the Securities Exchange Act of 1934, unless the option holder makes a timely Code (S)83(b) election in which event the fair market value of the shares will be determined on the date of exercise) and (ii) the price at which the shares are sold. This amount will be taxed at ordinary income rates. If the sale price of the shares is greater than the fair market value on the date of exercise, the difference will be recognized as gain by the option holder and taxed at the applicable capital gains rate. If the sale price of the shares is less than the option price, the option holder will recognize a capital loss equal to the excess of the option price over the sale price. Such capital gain or loss will be treated as long-term or short-term capital gain or loss depending upon whether the holding period applicable to the long-term capital assets has been satisfied. For these purposes, the use of shares acquired upon exercise of an incentive stock option to pay the option price of another option (whether or not it is an incentive stock option) will be considered a disposition of the shares. If this disposition occurs before the expiration of the 21 requisite holding periods, the option holder will have the same tax consequences as are described above in the preceding paragraph. If the option holder transfers any such shares after holding them for the requisite holding periods or transfers shares acquired pursuant to exercise of a non-qualified stock option or on the open market, he generally will not recognize any income upon the exercise. Whether or not the transferred shares were acquired pursuant to an incentive stock option and regardless of how long the option holder has held such shares, the basis of the new shares received pursuant to the exercise will be computed in two steps. In the first step, a number of new shares equal to the number of older shares tendered (in payment of the option's exercise) is considered exchanged under Code (S)1036 and the rulings thereunder. Accordingly, these new shares receive the same holding period and the same basis the option holder had in the old tendered shares, if any, plus the amount included in income from the deemed sale of the old shares and the amount of cash or other nonstock consideration paid for the new shares, if any. In the second step, the number of new shares received by the option holder in excess of the old tendered shares receives a basis of zero, and the option holder's holding period with respect to such shares commences upon exercise. An option holder may have tax consequences upon exercise of an incentive stock option if the aggregate fair market value of shares of the common stock subject to incentive stock option's which first become exercisable by an option holder in any one calendar year exceeds $100,000. If this occurs, the excess shares will be treated as though they are subject to a non-qualified stock option instead of an incentive stock option. Upon exercise of an option with respect to these shares, the option holder will have the tax consequences described below with respect to the exercise of non-qualified stock options. There will be no tax consequences to the Company upon issuance or, generally, upon exercise of an incentive stock option. However, to the extent that an option holder recognizes ordinary income upon exercise, as described above, the Company generally will have a deduction in the same amount, provided the Company satisfies applicable federal income tax reporting requirements or the option holder actually reports such income on his or her federal income tax return. Our statements in this offer concerning the Plan and the new options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of the Plan and the forms of option agreement under the Plan, each of which is filed as an exhibit to the Tender Offer Statement on Schedule TO, of which this offer to exchange is a part. See Section 16 for a discussion of how to obtain copies of the Plan and forms of option agreement. 9. Information Concerning Bway. Bway Corporation and its significant subsidiaries are leading developers, manufacturers, and marketers of steel containers for the general line category of the North American container industry. The Company also provides external customers related material center services (coating, lithography, and metal shearing) which exceed internal needs. The Company's principal products include a wide variety of steel cans and pails used for packaging paint and related products, lubricants, cleaners, roof and driveway sealants, food (principally coffee and 22 vegetable oil) and household and personal care aerosol products. The Company also manufactures steel ammunition boxes and provides material center services. We were incorporated on December 8, 1988, under the name BS Holdings Corporation. Our principal executive offices are located at 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350 and our telephone number is (770) 645-4800. Our web site is located at www.bwaycorp.com. The information on our web site is not a part of this offer to exchange. The financial information included in our Annual Report on Form 10-K for the fiscal year ended October 1, 2000 under the caption "Consolidated Financial Statements of Bway Corporation" and is incorporated herein by reference and may be inspected at, and copies may be obtained from, the same places and in the same manner as set forth under "The Offer - Additional Information." 10. Interests Of Directors And Officers; Transactions And Arrangements Concerning The Options. A list of our directors and executive officers as of June 7, 2001 is attached to this offer to exchange as Schedule A. As of June 7, 2001, our executive officers and non-employee directors as a group beneficially owned options outstanding under the Plans to purchase a total of 1,515,600 shares of our common stock, which represented approximately 75.9% of the shares subject to all options outstanding under the Plans as of that date. Of these options held by executive officers and directors, only 982,300 options (809,234 of which are held by non-employee directors), constituting 64.8% of their total options, are eligible to be tendered in the offer. The following table sets forth the beneficial ownership by each of our executive officers and directors of options outstanding under the plan as of June 7, 2001:
Number of Options to Percentage of Total Name of Beneficial Owners Purchase Common Stock Options Outstanding - ------------------------------ ------------------------------- ------------------------------- Jean-Pierre Ergas 476,700 23.9% Warren J. Hayford 335,417 16.8 James W. Milton 52,633 2.6 Thomas Eagleson 80,000 4.0 Kenneth Roessler 56,000 2.8 Thomas A. Donahoe 82,500 4.1 Alexander P. Dyer 86,700 4.3 John E. Jones 82,500 4.1 John W. Puth 86,700 4.3 John T. Stirrup 135,417 6.7 Kevin C. Kern 41,033 2.1
- ---------------- * Represents less than 1% of our outstanding options. During the 60 days prior to June 11, 2001, we have not granted any options to purchase shares of our common stock. During the 60 days prior to June 11, 2001, no individuals have exercised options to acquire any shares of our common stock. 23 During the past 60 days, Jean-Pierre Ergas purchased 10,000 shares of common stock at prices between $2.95 and $2.99 per share, Alexander P. Dyer purchased 10,600 shares of common stock at a price of $2.80 per share, John W. Puth purchased 5,000 shares of common stock a price of $3.091 per share, and John E. Jones purchased 17,000 shares of common stock at prices between $3.00 and $3.467 per share. Except as otherwise described above, there have been no transactions in options to purchase our common stock or in our common stock which were effected during the 60 days prior to June 11, 2001 by us, or to our knowledge, by any executive officer, director, affiliate or subsidiary of us. In addition, except as otherwise described above, neither we nor, to our knowledge, any of our executive officers or directors is a party to any agreement, arrangement or understanding with respect to any of our securities (including, but not limited to, any agreement, arrangement or understanding concerning the transfer or the voting of any of our securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations). 11. Status Of Options Acquired By Us In The Offer; Accounting Consequences Of The Offer. Many of our option holders hold options with exercise prices significantly higher than the current market price of our common stock. We believe it is in our best interest to invite these option holders to exchange these options to provide an opportunity to more effectively participate in the potential growth in our stock price. We could accomplish this goal by repricing existing options, which would enable option holders to immediately receive replacement options with a lower exercise price. However, the repriced options would be subject to variable accounting, which would require us to record additional compensation expense each quarter until the repriced options were exercised, canceled or expired. Furthermore, if we were to cancel a stock option and issue another option with an exercise price that is lower than the exercise price of the canceled option within the shorter of (1) the six-month period immediately prior to the date on which the option was required to be tendered for cancellation or (2) the period from the date of grant of the canceled option to the date on which the option was required to be tendered for cancellation, the cancellation and exchange would be deemed a repricing that results in variable accounting. The cancellation of an existing option and the issuance of another option within this time period will be deemed a repricing even if the issuance of the second option occurs before the cancellation of the first option. We believe that we can accomplish our goals of providing option holders the benefit of choosing whether they want to receive options that over time may have a greater potential to increase in value, without incurring additional current or future compensation expense because: . we will not grant any new options until a day that is at least six months and one day after the date that we accept and cancel options tendered for exchange; and . the exercise price of all new options will equal the fair market value of our common stock on the future date we grant the new options. 24 12. Legal Matters; Regulatory Approvals. We are not aware of any license or regulatory permit that appears to be material to our business that might be adversely affected by our exchange of options and issuance of new options as contemplated by the offer, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of our options as contemplated herein. Should any such approval or other action be required, we presently contemplate that we will seek such approval or take such other action. We cannot assure you that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to our business. Our obligation under the offer to accept tendered options for exchange and to issue new options for tendered options is subject to the conditions described in Section 6. 13. Material Federal Income Tax Consequences. The following is a general summary of the material federal income tax consequences of the exchange of options pursuant to the offer. This discussion is intended as a promulgated general summary based upon the Code, its legislative history, Treasury regulations thereunder, and administrative and judicial interpretations thereof, all as of the date of the offer and all of which are subject to change, possibly with retroactive effect. This summary does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders. Furthermore, this summary does not address any tax aspects of the offer other than the federal income tax consequences, such as state, local or foreign tax consequences. You are urged to consult your own tax advisor with respect to the tax consequences associated with your participation in the offer. We believe, based on advice of counsel, that the exchange of tendered options, whether incentive stock options or non-qualified stock options, for the commitment to grant new options is a non-taxable event. Administrative and judicial interpretations of Section 83 of the Code indicate that the exchange of an option without a readily ascertainable fair market value, as defined in the Treasury regulations, for a commitment to grant a new option without a readily ascertainable fair market value is a non-taxable event. As the value of neither the tendered options nor the commitment to grant the new options is readily ascertainable at the time of the exchange, the exchange should be a non-taxable event. Therefore, we believe the option holders who exchange outstanding options for the commitment to grant new options will not be required to recognize income for federal tax purposes at the time of the exchange. We do not believe that our offer to you will change any of the terms of your eligible incentive stock options if you do not accept the offer. However, if you choose not to accept this offer, it is possible that the IRS would decide that your right to exchange your incentive stock options under this offer is a "modification" of your incentive stock options, even if you do not exchange the options. A successful assertion by the IRS that the options are modified could extend the options' holding period to qualify for favorable tax treatment and cause a portion of your incentive stock options to be treated as non-qualified stock options. 25 We also believe, based on the advice of counsel, that the grant of new options, whether incentive stock options or non-qualified stock options, should not be recognized as taxable income. The Treasury regulations promulgated under Section 83 of the Code generally provide that the grant of an option without a readily ascertainable fair market value is a non-taxable event. Therefore, we believe that, at the date of grant of the new options, the option holders will not be required to recognize additional income for federal income tax purposes. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND OTHER TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER. 14. Extension Of Offer; Termination; Amendment. We expressly reserve the right, in our discretion, at any time and from time to time, and regardless of whether or not any event set forth in Section 6 has occurred or is deemed by us to have occurred, to extend the period of time during which the offer is open and thereby delay the acceptance for exchange of any options by giving oral or written notice of such extension to the option holders and making a public announcement thereof. We also expressly reserve the right, in our reasonable judgment, prior to the expiration date to terminate or amend the offer and to postpone our acceptance and cancellation of any options tendered for exchange upon the occurrence of any of the conditions specified in Section 6, by giving oral or written notice of such termination or postponement to the option holders and making a public announcement thereof. Our reservation of the right to delay our acceptance and cancellation of options tendered for exchange is limited by Rule 13e-4(f)(5) promulgated under the Securities Exchange Act of 1934, which requires that we must pay the consideration offered or return the options tendered promptly after termination or withdrawal of the offer. Amendments to the offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment must be issued no later than 9:00 a.m., Eastern time, on the next business day after the last previously scheduled or announced expiration date. Any company-wide announcement made pursuant to the offer will be disseminated promptly to option holders in a manner reasonably designed to inform option holders of such change. If we materially change the terms of the offer or the information concerning the offer, or if we waive a material condition of the offer, we will extend the offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Securities Exchange Act of 1934. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in percentage of securities sought, will depend on the facts and circumstances, including the relative materiality of such terms or information. 15. Fees And Expenses. We will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of options pursuant to this offer to exchange. 26 16. Additional Information. With respect to the offer, we have filed with the SEC a Tender Offer Statement on Schedule TO, as amended, of which this offer to exchange is a part. This offer to exchange does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that you review the Schedule TO, including its exhibits, before making a decision on whether to tender your options. We are subject to the informational filing requirements of the Securities Exchange Act of 1934 and, in accordance therewith, are obligated to file reports, proxy statements and other information with the SEC relating to our business, financial condition and other matters. Such reports, proxy statements and other information, including the Schedule TO, our annual report on Form 10-K for the fiscal year ended October 1, 2000, our quarterly report on Form 10-Q for the fiscal period ended April 1, 2001 can be inspected and copied at the public reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Room 2120, Washington D.C. 20549; and at its regional offices located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661- 2511 and at 7 World Trade Center, New York, New York 10048. Copies of such materials may also be obtained (1) at no charge from our web site at http://www.bwaycorp.com or (2) by mail, upon payment of the SEC's customary charges, from the SEC's Public Reference Room at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549. Information about the operation of this public reference room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information statements and other information regarding registrants, including Bway, that file electronically with the SEC. 17. Miscellaneous. This offer to exchange and our SEC reports referred to above, include forward-looking statements that reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using words including "may," "will," "expects," "anticipates," "believes," "intends", "could", "should" and "estimates" and similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities in 2001 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements. For information about risks, uncertainties and other factors that may affect our business, please review the disclosure included under the captions "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Factors that Could Affect our Operations" in our annual report on Form 10-K for the fiscal year ended October 1, 2000 and in our quarterly report on Form 10-Q for the fiscal period ended April 1, 2001. Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this offer to exchange. 27 We are not aware of any jurisdiction where the making of the offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the offer is not in compliance with any valid applicable law, we will make a good faith effort to comply with such law. If, after such good faith effort, we cannot comply with such law, the offer will not be made to, nor will tenders be accepted from or on behalf of, the option holders residing in such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER OR NOT YOU SHOULD TENDER YOUR OPTIONS PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. Bway Corporation June 11, 2001 28 SCHEDULE A INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF BWAY CORPORATION The directors and executive officers of Bway Corporation and their positions and offices as of June 11, 2001, are set forth in the following table:
Name Age Position - ---- --- -------- Jean-Pierre M. Ergas 61 Chairman of the Board and Chief Executive Officer James W. Milton 61 Executive Vice President and Director Thomas A. Donahoe(1)(2) 65 Director Alexander P. Dyer(1)(2) 68 Director Warren J. Hayford 71 Director John E. Jones(1)(2) 66 Director John W. Puth(1)(2) 71 Director John T. Stirrup 65 Director Thomas Eagleson 59 Executive Vice President-Manufacturing/Engineering Kenneth Roessler 38 Executive Vice President of Sales and Marketing Kevin C. Kern 42 Vice President, Administration and Chief Financial Officer
- ------------------ (1) Member of the Audit Committee (2) Member of the Compensation Committee The address of each director and executive officer is: c/o Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350. OFFER TO EXCHANGE OPTIONS UNDER THE BWAY STOCK OPTION PLAN ------------------------- If you wish to tender your options for exchange, you must complete and sign the letter of transmittal in accordance with its instructions, and mail, fax or hand deliver it and any other required documents to us at Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350, Attn: Kevin C. Kern, Vice President, Administration and Chief Financial Officer (facsimile number: (770) 587-0186). Any questions, requests for assistance or additional copies of any documents referred to in the offer to exchange may be directed to Kevin C. Kern, Vice President, Administration and Chief Financial Officer, at Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350 (telephone number: (770) 645-4800). ------------------------- June 11, 2001 EX-99.(A)(1)(B) 3 dex99a1b.txt FORM OF LETTER OF TRANSMITTAL EXHIBIT (a)(1)(B) LETTER OF TRANSMITTAL TO TENDER OPTIONS IN EXCHANGE FOR NEW OPTIONS UNDER THE BWAY 1995 LONG-TERM INCENTIVE PLAN PURSUANT TO THE OFFER TO EXCHANGE DATED JUNE 11, 2001 - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON JULY 12, 2001, UNLESS BWAY CORPORATION EXTENDS THE OFFER. - -------------------------------------------------------------------------------- To: Bway Corporation 8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350 Attn: Kevin C. Kern, Vice President, Administration and Chief Financial Officer Telephone: (770) 645-4800 Facsimile: (770) 587-0186 Pursuant to the terms and subject to the conditions of the Offer to Exchange dated June 11, 2001, and this Letter of Transmittal, I hereby tender the following options to purchase shares of common stock, par value $.01 per share ("Option Shares"), of Bway Corporation (the "Company") outstanding under the Company's 1995 Long-Term Incentive Plan, dated June 1995, as amended and restated (the "Plan"), (to validly tender such options you must complete the following table according to the Instructions attached to this Letter of Transmittal):
Number of Option Shares Subject to Grant Date of Option to be Exercise Price of Option to be Option to be Tendered (1)(2)(3) Tendered Tendered (1) - -------------------------------- -------------------------------- ------------------------------- - -------------------------------- -------------------------------- ------------------------------- - -------------------------------- -------------------------------- ------------------------------- - -------------------------------- -------------------------------- -------------------------------
(1) You may only tender options that have an exercise price of at least $9.00 per share. (2) List each option that you wish to tender. See Instruction 4. (3) List each option on a separate line even if more than one option was issued on the same grant date. You must complete and sign the following exactly as your name appears on the option agreement or agreements evidencing the options listed above. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact or another person acting in a fiduciary or representative capacity, please set forth the signer's full title and include with this Letter of Transmittal proper evidence of the authority of such person to act in such capacity. See Instructions 1 and 5 attached to this Letter of Transmittal. Signature: Date: -------------------------- ----------------------------- Name: Address: ------------------------------- -------------------------- Capacity: --------------------------- -------------------------- Tax ID/SSN: Telephone No.: ------------------------- -------------------- Upon the terms and subject to the conditions set forth in the Offer to Exchange dated June 11, 2001 (the "Offer to Exchange") and in this Letter of Transmittal (this "Letter" and, together with the Offer to Exchange, as each may be amended or supplemented from time to time, the "Offer"), I hereby tender to the Company the options to purchase Option Shares specified in the table on page 1 of this Letter (the "Tendered Options") in exchange for new options to purchase the same number of the Option Shares subject to the Tendered Options that the Company accepts for exchange (the "New Options"). Subject to, and effective upon, the Company's acceptance for exchange of the Tendered Options in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), I hereby sell, assign and transfer to, or upon the order of, the Company all right, title and interest in and to the Tendered Options. I hereby represent and warrant that I have full power and authority to tender the Tendered Options and that, when and to the extent the Tendered Options are accepted for exchange by the Company, the Tendered Options will be free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof (other than pursuant to the applicable option agreement) and the Tendered Options will not be subject to any adverse claims. Upon request, I will execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the exchange of the Tendered Options pursuant to the Offer. The name of the registered holder of the Tendered Options appears on the signature line above exactly as it appears on the option agreement or agreements representing the Tendered Options. In the appropriate boxes of the table on page 1 of this Letter, I have listed for each Tendered Option the total number of Option Shares subject to the Tendered Option, the grant date of the Tendered Option and the exercise price. I understand and acknowledge that: (1) I may only tender options with an exercise price of at least $9.00 per share. (2) All Tendered Options properly tendered prior to 12:00 midnight, Eastern time, on July 12, 2001, unless the Company has extended the period of time the Offer will remain open (the "Expiration Date"), and not properly withdrawn, will be exchanged for New Options, upon the terms and subject to the conditions of the Offer, including the conditions described in Sections 1 and 6 of the Offer to Exchange. (3) Upon the Company's acceptance of the Tendered Options for exchange, this Letter will constitute an amendment to the option agreement or agreements to which the Tendered Options are subject. (4) The New Options will not be granted until on or about the first business day that is at least six months and one day after the date the Company accepts for exchange and cancels the Tendered Options and will have (a) an exercise price equal to the fair market value of the Company's common stock on that grant date (unless tax regulations require Incentive Stock Options granted to significant employees to have a higher exercise price) and (b) 50% will be exercisable on the grant date and the remaining 50% will be exercisable on the first anniversary of the grant date. (5) I must be an employee or director of the Company or one of its subsidiaries, or otherwise continue to be eligible under the Plan, from the date I tender the Tendered Options through the date the New Options are granted in order to receive the New Options, and, if for any reason I do not remain an so eligible I will not receive any New Options or any other consideration for the Tendered Options. If the Company undergoes a change of control, I may not receive any New Options or any other consideration for the Tendered Options. (6) By tendering the Tendered Options pursuant to the procedure described in Section 3 of the Offer to Exchange and in the instructions to this Letter, I accept the terms and conditions of the Offer. The Company's acceptance for exchange of the Tendered Options will constitute a binding agreement between the Company and me upon the terms and subject to the conditions of the Offer. (7) Under certain circumstances set forth in the Offer to Exchange, the Company may terminate or amend the Offer and postpone its acceptance and cancellation of any Tendered Options, and in any such event, the Tendered Options delivered herewith but not accepted for exchange will be returned to me at the address indicated above. -2- (8) All options that I choose not to tender for exchange or that are not accepted for exchange shall remain outstanding and retain their current exercise price and exercise schedule. (9) The Company has advised me to consult with my own advisors as to the consequences of participating or not participating in the Offer. (10) I have read, understand and agree to all of the terms and conditions of the Offer. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, my death or incapacity, and all of my obligations hereunder shall be binding upon my heirs, personal representatives, successors and assigns. Except as stated in the Offer, this tender is irrevocable. The Offer is not being made to (nor will Tendered Options be accepted from or on behalf of) holders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. -3- INSTRUCTIONS THESE INSTRUCTIONS FORM PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Delivery of Letter of Transmittal. The Letter, properly completed and duly executed, and any other documents required by this Letter, must be received by the Company at its address or facsimile number set forth on the front cover of this Letter on or before the Expiration Date. The Company will not accept any alternative or contingent tenders. By execution of this Letter, you waive any right to receive any notice of the acceptance of the Tendered Options, except as provided in the Offer to Exchange. DELIVERY OF THIS LETTER TO AN ADDRESS OTHER THAN AS SET FORTH ON PAGE 1 OF THIS LETTER OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ON PAGE 1 OF THIS LETTER WILL NOT CONSTITUTE A VALID DELIVERY. THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE COMPANY. IF YOU ELECT TO DELIVER YOUR DOCUMENTS BY MAIL, THE COMPANY RECOMMENDS THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND THAT YOU PROPERLY INSURE THE DOCUMENTS. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. 2. Withdrawal of Tendered Options. Tenders of Tendered Options made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. If the Offer is extended by the Company beyond that time, you may withdraw the Tendered Options at any time until the extended expiration of the Offer. In addition, unless the Company accepts the Tendered Options before 12:00 midnight, Eastern time, on July 12, 2001, you may withdraw the Tendered Options at any time after 12:00 midnight, Eastern time, on August 9, 2001. To withdraw Tendered Options, you must deliver a written notice of withdrawal with the required information to the Company while you still have the right to withdraw the Tendered Options. Withdrawals may not be rescinded and any Tendered Options withdrawn will thereafter be deemed not properly tendered for purposes of the Offer unless such withdrawn Tendered Options are properly re-tendered prior to the Expiration Date by following the procedures described above. 3. Inadequate Space. If the space provided in the table on page 1 of this Letter is inadequate, the information requested should be provided on a separate schedule attached to this Letter. 4. Tenders. If you intend to tender options pursuant to the Offer, you must complete the table on page 1 of this Letter by providing the number of Option Shares subject to each Tendered Option, the grant date of each Tendered Option and the exercise price of each Tendered Option. See Section 5 of the Offer to Exchange for a more detailed explanation of these requirements. 5. Signatures on this Letter of Transmittal. If this Letter is signed by the holder of the Tendered Options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the Tendered Options are subject without alteration, enlargement or any change whatsoever. If this Letter is signed by a trustee, executor, administrator, guardian, attorney-in-fact or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of the authority of such person so to act must be submitted with this Letter. 6. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for additional copies of the Offer to Exchange or this Letter, may be directed to Kevin C. Kern, Vice President, Administration and Chief Financial Officer, at the address and telephone number given on page 1 of this Letter. The Company will promptly furnish copies at its expense. 7. Irregularities. All questions as to the number of Option Shares subject to Tendered Options to be accepted for exchange, and the validity, form, eligibility (including time of receipt) and acceptance for exchange of any Tendered Options will be determined by the Company in its discretion, which determinations shall be final and binding on all parties. The Company reserves the right to reject any or all Tendered Options the Company determines not to be in proper form or the acceptance of which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular Tendered Options, and the Company's interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of Tendered Options will be deemed to be properly made until all defects and irregularities have been cured or waived to the Company's satisfaction. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company shall determine. Neither the Company nor any other person is or will be obligated to give notice of any defects or irregularities in tenders, and no person will incur any liability for failure to give any such notice. 8. Important Tax Information. You should carefully review Sections 8 and 13 of the Offer to Exchange, which contains important tax information. -2- EX-99.(A)(1)(C) 4 dex99a1c.txt FORM OF LETTER TO ELIGIBLE OPTION HOLDERS EXHIBIT (a)(1)(C) [LETTERHEAD OF BWAY] June 11, 2001 Subject Line: Instructions for Participating in Bway's Stock Option Replacement Program As we announced to you several days ago by letter, because Bway is committed to developing additional incentive programs for employees and directors, it has created a Stock Option Replacement Program for the benefit of option holders whose stock options are currently underwater (meaning their exercise or "strike" price is above the current market value of Bway's common stock). The Stock Option Replacement Program is an opportunity for eligible option holders to choose whether they want to keep their current options or have them replaced with a grant given at a later date that has the potential for a lower strike price. This letter gives another overview of the program and instructions on how, and materials needed, to participate. Bway's offer is being made under the terms and subject to the conditions of the Offer to Exchange and Letter of Transmittal that are attached to this letter. You should carefully read the entire Offer to Exchange and Letter of Transmittal before you decide whether to tender any of your options. A tender of options involves risks that are mentioned in this letter and further discussed in the Offer to Exchange. To tender options for exchange, you must properly complete and return to Kevin C. Kern, Bway's Vice President, Administration and Chief Financial Officer, the Letter of Transmittal and any other required documents prior to the expiration of Bway's offer, which is currently expected to be 12:00 midnight, Eastern time, on July 12, 2001. The Stock Option Replacement Program - What It Is The Stock Option Replacement Program allows eligible option holders to turn in options granted under the 1995 Long-Term Incentive Plan dated June 1995, as amended and restated (the "Plan"), that have an exercise price of at least $9.00 per share, in exchange for Bway committing to grant new options at a later date. That date will be on or about the first business day that is at least six months and one day following the date Bway cancels the tendered options (the "Cancellation Date," which is expected to be the day following the expiration of the offer). For example, if the Cancellation Date on which Bway accepts and cancels the tendered options is July 13, 2001, the business day following the scheduled expiration date, Bway will grant the new options on or about January 14, 2002. Under this program, for every option a holder turns in, he or she will receive one option at a strike price equal to the fair market value of Bway common stock on the grant date (unless tax regulations require a higher strike price for Incentive Stock Options granted to significant stockholders). For example, if a holder returns a grant of 3,000 options with a strike price of $15.00 per share prior to the scheduled expiration date of July 12, 2001, that holder will receive a new grant of 3,000 stock options on or about January 14, 2002 with a strike price equal to the fair market value of Bway common stock on the future grant date. The new options will have an exercise schedule that begins on or about January 14, 2002, the scheduled date of the grant. 50% of the new options will be exercisable on the date of grant, and 50% of the new options will be exercisable on the first anniversary of the date of grant. That means that the new grant will be fully exercisable one year from the date of grant, subject to the terms and conditions discussed below. Please note that this exercise schedule will apply to all new options granted under this program, even those issued in exchange for currently exercisable options. Stock option grants that you choose not to tender will continue to be exercisable according to their current schedule. The new options will expire 10 years from the date of grant. For option grants under the Plan tendered pursuant to the Stock Option Replacement Program, new options will be granted pursuant to, and be subject to the terms and conditions of, the Plan and a stock option agreement with Bway that you will have to sign on the new grant date. Who is Eligible All holders of options, including employees and directors, are eligible to tender their options for exchange. How it Works If you choose to replace your stock options, please keep in mind the following: . All unexercised options with an exercise price of $9.00 per share or higher, whether exercisable or not exercisable, can be surrendered for exchange. . Only 50% of the new options will be immediately exercisable, even if you surrender currently exercisable options for replacement. How to Participate If you want to participate in the Stock Option Replacement Program, you need to fill out the attached Letter of Transmittal and send it by mail, fax, or hand delivery to Kevin C. Kern, Bway's Vice President, Administration and Chief Financial Officer, by 12:00 midnight, Eastern time, on July 12, 2001, unless Bway extends the offer. If you change your mind after you send in the form and wish to withdraw your tendered options from the program, you can do so by delivering a written notice to Bway prior to expiration of the offer. Frequently Asked Questions Why is Bway giving its eligible option holders the opportunity to replace current underwater options for new options? Bway realizes that many current outstanding options have strike prices that are significantly higher than the current market price of the common stock. Because of that, those options may not currently be providing the long-term performance incentives that Bway would like its key team members to have. This replacement program gives option holders a choice to receive options that over time may have a greater potential to increase in value. Why do I have to wait six months and one day for a new grant? Why can't I get a new grant immediately at the current stock price? So that we may avoid undesirable accounting treatment, accounting literature requires that we wait a minimum of six months and one day before we issue the replacement options. Further, we are not allowed to establish the exercise price for such replacement options prior to the actual issuance date if we are to avoid such unfavorable accounting treatment for this replacement program. This program balances our desire to make an opportunity available for employees while not creating a program that is fiscally irresponsible. Why doesn't Bway simply reprice current options? Based on accounting guidance, "repricing" existing options would result in adverse accounting treatment referred to above and would cause Bway to incur additional compensation expense each quarter until such repriced options are exercised, cancelled or expired. Also, this program lets employees make an individual decision about what they want to do with their options - repricing requires that everyone participate whether they want to or not. What do we expect the stock price to be in January of next year when the new options are granted? There's no way to predict what the stock price will be in January 2002, just as there's no way to predict market volatility. It's possible that the market price of Bway common stock could increase so that the exercise price of your replacement options to be granted in January 2002 could be higher than the current strike price of the options you surrender for exchange. -2- You need to make your decision on participating in the Stock Option Replacement Program based on the strike price of your current options, your expectations regarding the performance of our stock between now and January 2002, the revised exercise schedule, the deferral of additional grants during the waiting period and other factors disclosed in the Offer to Exchange. How can I find out the size and strike price of my current option grants? We will send you a letter indicating the size and strike price of your current options. In addition, you can review your current stock option agreement(s) or contact Kevin C. Kern at (770) 645-4800. What if I am no longer with the company (for any reason, including voluntary termination, involuntary termination or death) before the new options are granted in January 2002? If for any reason you are not eligible to receive options pursuant to the Plan (if you are no longer an employee or director of Bway or any of our subsidiaries) from the date you tender options through the date we grant the new options, you will not receive any new options or any other consideration for your tendered options. What if I tender options and Bway undergoes a change of control, such as a merger, prior to the grant of the new options? If we undergo a change of control, such as a merger, prior to the grant of the new options, it would be our intent to negotiate the terms of that change of control transaction such that you would receive options to purchase securities of the acquiror. However, we have the right to take any actions we deem necessary or appropriate to complete a transaction that our Board of Directors believes is in our best interest and our stockholders' best interest, and this could result in your not being granted the new options. What happens to other grants I may have that I choose not to replace? Nothing. They remain outstanding and retain their current exercise price and continue to vest. The portion that is exercisable may be exercised during the period after the Cancellation Date and prior to the grant date of the new options. Who do I contact with additional questions? If you need more information about the Bway Stock Option Replacement Program, please contact Kevin C. Kern at (770) 645-4800. Bway's Board of Directors makes no recommendation as to whether or not you should tender your options. You must make your own decision whether to tender your options. For questions regarding tax implications or other investment- related questions, you should talk to your own counsel, accountant and/or financial advisor. -3- EX-99.(A)(1)(D) 5 dex99a1d.txt FORM OF NOTICE OF WITHDRAWAL BY OPTION HOLDER EXHIBIT (a)(1)(D) BWAY CORPORATION OFFER TO EXCHANGE OPTIONS NOTICE OF WITHDRAWAL I previously received a copy of the Offer to Exchange, the Letter of Transmittal, and other related documents, dated June 11, 2001. I signed and returned the Letter of Transmittal, in which I elected to accept Bway Corporation's offer to exchange some or all of my options (the "Offer"). I now wish to change that election and reject Bway's Offer to exchange my options. I understand that by signing this Notice of Withdrawal and delivering it to Kevin C. Kern by 12:00 midnight, Eastern time on July 12, 2001, I will be able to withdraw my acceptance of the Offer and reject the Offer to exchange options instead. I have read and understand all the terms and conditions of the Offer to exchange options. I have read and understand the instructions attached to this Notice of Withdrawal. I understand that in order to reject the Offer, I must sign, date, and deliver this Notice of Withdrawal via facsimile (fax number (770) 587-0186), or by mail delivery, for receipt by Kevin C. Kern, by 12:00 midnight, Eastern time, on July 12, 2001. I understand that by rejecting the Offer to exchange options, I will not receive any New Options pursuant to the Offer and I will keep the Old Options that I have. These options will continue to be governed by the stock option plan under which they were granted and by the existing option agreements between Bway and me. I understand that I may not rescind this Notice of Withdrawal, and to once again accept the Offer to exchange options as to the withdrawn options, I must submit a new Letter of Transmittal to Kevin C. Kern via facsimile (fax number (770) 587-0186), or by mail delivery, for receipt prior to 12:00 midnight, Eastern time, on July 12, 2001. I am the person who signed the Letter of Transmittal. I have signed this Notice of Withdrawal and printed my name exactly as it appears on the Letter of Transmittal. I do not accept the Offer to exchange the listed options. - ------------------------------------ -------------------------------------- Please Sign Above Date and Time - ------------------------------------ -------------------------------------- Please Print or Type Your Name Above Home Telephone Number (with area code) - ------------------------------------ -------------------------------------- Options Withdrawing Exercise Price of Options Withdrawing INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Delivery of Notice of Withdrawal. A properly completed and executed original of this Notice of Withdrawal (or a facsimile of it) and any other documents required by this Notice of Withdrawal must be received by Kevin C. Kern either by hand delivery or by facsimile at the number listed on the front cover of this Notice of Withdrawal (fax number (770) 587-0186) on or before 12:00 midnight, Eastern time, on July 12, 2001 (the "Expiration Date"). The method by which you deliver any required documents is at your option and risk, and the delivery will be deemed made only when actually received by Bway. You may mail deliver your Notice of Withdrawal to Kevin C. Kern at Bway, 8607 Roberts Drive, Suite 250, Atlanta, Georgia, 30350, or you may fax it to him at (770) 587-0186). In all cases, you should allow sufficient time to ensure timely delivery. Although by submitting a Notice of Withdrawal you have withdrawn your tendered options from the Offer, you may change your mind and re-accept the Offer until the expiration of the Offer. Tenders of options made through the Offer may be made at any time before the Expiration Date. If the Offer is extended by Bway beyond that time, you may tender your options at any time until the extended expiration of the Offer. To change your mind and elect to participate in the Offer as to the withdrawn options, you must deliver a new signed and dated Letter of Transmittal, or a facsimile of the Letter of Transmittal, with the required information, to Bway, while you still have the right to participate in the Offer. The withdrawn options listed in this Notice of Withdrawal will not be properly tendered for purposes of the Offer unless you properly re-tender those options before the Expiration Date by delivery of the new Letter of Transmittal following the procedures described in the Instructions to the Letter of Transmittal. If you do not wish to withdraw all your tendered options from the Offer, you should fill out this Notice of Withdrawal as to the particular options you previously tendered, as listed on the Letter of Transmittal, that you wish to withdraw. By signing this Notice of Withdrawal (or a facsimile of it), you waive any right to receive any notice of the withdrawal of the tender of your options, except as provided for in the Offer to Exchange. 2. Signatures on This Notice of Withdrawal. If this Notice of Withdrawal is signed by the holder of the Options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the options are subject without alteration, enlargement or any change whatsoever. If this Notice of Withdrawal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, that person should so indicate when signing, and proper evidence satisfactory to Bway of the authority of that person so to act must be submitted with this Notice of Withdrawal. -2- 3. Other Information on This Notice of Withdrawal. In addition to signing this Notice of Withdrawal, you must print your name and indicate the date and time at which you signed. You must also include a current telephone number. 4. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for additional copies of the Offer to Exchange or this Notice of Withdrawal, may be directed to the Kevin C. Kern, Vice President, Administration and Chief Financial Officer at Bway Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350. Mr. Kern's telephone number is (404) 645-4800 and his fax number is (770) 587-0186. Copies will be furnished promptly at Bway's expense. 5. Irregularities. All questions as to the validity, form, eligibility (including time of receipt), and acceptance of this withdrawal from the Offer will be determined by Bway in its discretion. Bway's determinations shall be final and binding on all parties. Bway reserves the right to reject any or all Notices of Withdrawal that Bway determines not to be in proper form or the acceptance of which may, in the opinion of Bway's counsel, be unlawful. Bway also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the Notice of Withdrawal, and Bway's interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No Notice of Withdrawal will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with Notices of Withdrawal must be cured within the time as Bway shall determine. Neither Bway nor any other person is or will be obligated to give notice of any defects or irregularities in Notices of Withdrawal, and no person will incur any liability for failure to give any such notice. Important: The Notice of Withdrawal (or a facsimile copy of it) together with all other required documents, must be received by Bway on or before the Expiration Date. 6. Additional Documents to Read. You should be sure to read the Offer to Exchange and all documents referenced therein, dated June 11, 2001, before deciding whether or not to participate in the Offer. 7. Important Tax Information. You should refer to Section 13 of the Offer to Exchange, which contains important U.S. federal income tax information. -3- EX-99.(A)(1)(E) 6 dex99a1e.txt FORM OF LETTER TO TENDERING OPTION HOLDERS EXHIBIT (a)(1)(E) [LETTERHEAD OF BWAY] July __, 2001 Dear Option Holder: On behalf of Bway Corporation (the "Company"), I am writing to provide you with the results of the Company's recent offer to exchange (the "Offer") outstanding options (the "Old Options") granted under the Company's 1995 Long- Term Incentive Plan, dated June 1995, as amended and restated (the "Plan"), for new options the Company will grant under the Plan (the "New Options"). The Offer was consummated pursuant to the terms and conditions in the Company's offer to exchange dated June 11, 2001 (the "Offer of Exchange") and the related letter of transmittal. The Offer expired at 12:00 midnight, Eastern time, on July __, 2001. Promptly following the expiration of the Offer and pursuant to the terms and conditions of the Offer, the Company accepted for exchange on July __, 2001 tendered Old Options exercisable for a total of ____________ shares of Common Stock and canceled all such Old Options. The Company has accepted for exchange and canceled the Old Options tendered by you exercisable for the number of shares of Common Stock (the "Option Shares") set forth on Attachment A to this letter. In accordance with the terms and subject to the conditions of the Offer, you have the right to receive a New Option under the Plan exercisable for the number of Option Shares set forth on Attachment A, as adjusted for any stock splits, stock dividends and similar events that occur prior to the date on which the Company issues such New Option. For Old Options under the Plan tendered to the Company, New Options will be granted pursuant to, and be subject to the terms and conditions of, the Plan and a stock option agreement with the Company that you will receive before the New Options are granted. Also in accordance with the terms of the Offer, the terms and conditions of the New Option will be substantially the same as the terms and conditions of the Old Options you tendered for exchange, except that: . the per share exercise price under the New Option will equal the fair market value of the Common Stock on the date the Company grants the New Option; and . the New Option will be exercisable 50% on the grant date and 50% on the first anniversary of the grant date. In accordance with the terms and subject to the conditions of the Offer, the Company will grant you the New Option on or about January __, 2002. At that time, as described in the Offer to Exchange, you will receive a New Option agreement that will be executed by you and the Company. In accordance with the terms of the Offer, you must be an employee, director, or eligible consultant of the Company or one of its subsidiaries from the date you tendered Old Options through the date the Company grants the New Options to receive your New Option. If for any reason you do not remain an employee, director, or eligible consultant, you will not receive a New Option or any other consideration for the Old Options tendered by you and canceled by the Company. Participation in the Offer does not confer upon you the right to remain in the employ of the Company or any of its subsidiaries. If you have any questions about your rights in connection with the grant of a New Option, please call the undersigned at (770) 645-4800. Sincerely, KEVIN C. KERN Attachment A [Name of Option Holder]
Number of Option Shares Subject to Tendered Exercise Price of Tendered Old Option Accepted for Old Option Accepted for Exchange Exchange - ------------------------------------------ --------------------------------------------- - ------------------------------------------ --------------------------------------------- - ------------------------------------------ --------------------------------------------- - ------------------------------------------ ---------------------------------------------
Number of option shares subject to New Options to be granted to you on or about January __, 2002: ____________ EX-99.(D)(2) 7 dex99d2.txt FORM OF NEW NON-QUALIFIED OPTION AGREEMENT EXHIBIT (d)(2) OPTION GRANT UNDER BWAY CORPORATION FOURTH AMENDED AND RESTATED 1995 LONG-TERM INCENTIVE PLAN BWAY (the "Company") hereby grants, as of __________ (the "Grant Date"), to _________________ (the "Optionee"), pursuant to the Company's Fourth Amended and Restated 1995 Long-Term Incentive Plan (the "Plan"), a Non-Qualified Stock Option ("NQO") to purchase up to _________ shares of the common stock, par value $.01 per share, of the Company (the "Stock") at an exercise price of $_______ per share, on the terms and conditions set forth in the Plan. The NQOs shall vest as follows: 50% on the Grant Date and 50% on the first anniversary of the Grant Date. In the event of any conflict between the terms and conditions of the Plan and the description of such terms and conditions contained herein, the terms and conditions of the Plan shall prevail. 1. Payment. The NQOs may be exercised only by written notice to the Chief ------- Financial Officer and the Corporate Controller of the Company at its principal executive offices accompanied by payment, in cash, of the exercise price for the shares exercised or, in the discretion of the committee appointed to administer the Plan (the "Committee"), (i) in cash and/or shares of Stock, or (ii) by special arrangement through a broker selected by the Committee. The fair market value of shares of Stock tendered on exercise of the NQO shall be the Fair Market Value, as defined in the Plan, of such shares as of the close of the market on the day next preceding the exercise of the option. 2. Termination of Employment. ------------------------- (a) Except as provided in paragraph 2(b) below, all rights of the Optionee pursuant to the NQOs granted hereunder shall expire 90 days after the date of his or her termination as a director or employee for any reason, unless otherwise determined by the Committee, but in no event after the expiration date of the option; provided the Optionee does not engage in Competition (as defined in the Plan) during such 90-day period unless he or she receives written consent to do so from the board of directors of the Company or the Committee. (b) Notwithstanding paragraph 2(a) above, the following special vesting rules shall apply if the Optionee's employment with the Company terminates prior to the date that the NQO expires pursuant to paragraph 3 herein: (i) If the Optionee's employment is terminated due to death or full disability, all outstanding NQOs of the Optionee shall vest and become fully exercisable with respect to all of the shares of Stock relating thereto (subject to the terms of the Plan) and shall expire upon the first anniversary of the date of such termination but in no event after the expiration date of the NQO. (ii) If the Optionee retires from employment with the Company, the Optionee's NQOs shall be vested and fully exercisable with respect to that portion of the Optionee's NQOs that were exercisable on the date of the Optionee's retirement (subject to the terms of the Plan) for a period of up to five years after the date of such retirement but in no event after the expiration of the NQO; provided the Optionee does not engage in Competition (as defined in the Plan) during such five year period unless he or she receives written consent to do so from the board of directors of the Company or the Committee. Any portion of the Optionee's NQOs that were not exercisable on the date of the Optionee's retirement shall expire and be forfeited. (iii) Upon the termination of the Optionee's employment due to Cause, as defined in the Plan, all of his or her NQOs shall be forfeited immediately upon such termination. 3. Terms of Options. The NQOs shall, to the extent not theretofore ---------------- terminated or exercised, expire and become void after ten years and one day from the Grant Date. 4. Exercise of Option. The NQOs may not be exercised unless vested, and ------------------ then only in accordance with the terms of Paragraph 1 and 5, as well as other applicable provisions of the Plan. 5. Withholding Taxes. The Company may require, as a condition to any ----------------- exercise of the NQO or to the delivery of certificates for Stock issued thereunder, that the Optionee pay to the Company, in cash, any federal, state or local taxes of any kind required by law to be withheld with respect to any exercise of NQO or any delivery of Stock. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any exercise of NQO or to the delivery of Stock thereunder or to retain or sell without notice a sufficient number of the Stock to be issued to such Optionee to cover any such taxes, provided that the Company shall not sell any such Stock if such sale would be considered a sale by such Optionee for purposes of Section 16 of the Securities Exchange Act of 1934, as amended. 6. Transferability. The NQOs shall not be transferable by the Optionee --------------- otherwise than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code. The NQOs may be exercised only by the Optionee thereof or his or her guardian or legal representative; provided that NQOs may be exercised by such guardian or legal representative only if permitted by the Code and any regulations promulgated thereunder. 7. Adjustments. In the event of any change in the corporate structure or ----------- shares of the Company, the Committee shall make such adjustments to this award as it deems appropriate. In the event of any merger, consolidation or other reorganization in which the Company is not the surviving or continuing corporation or in which a Change in Control is to occur, as defined in the Plan, all of the Company's obligations regarding the NQOs that were granted hereunder and that are outstanding on the date of such event shall, on such terms as the Committee approves prior to such event, be assumed by the surviving or continuing corporation or canceled in exchange for property (including cash). 2 8. Amendment or Substitution of Awards under the Plan. The terms of the -------------------------------------------------- outstanding NQOs granted hereunder may be amended from time to time by the Committee in its discretion, provided that no such amendment shall adversely affect in a material manner any right of the Optionee without his or her written consent, unless the Committee determines in its discretion that there have occurred or are about to occur significant changes in the Optionee's position, duties or responsibility or significant changes which will have a substantial effect on the performance of the Company, its affiliates, subsidiaries, divisions or departments, the Plan or an award under the Plan. However, the Committee may not reduce the exercise price of an outstanding NQO. The Committee may amend or modify the grant of the outstanding NQOs, however no modification may be made that would materially adversely affect the NQOs without the approval of the Optionee. IN WITNESS WHEREOF, the Company has caused this Instrument to be executed as of the date written below. Date: BWAY CORPORATION ------------ By: ------------------------------------- Its: ------------------------------------ The undersigned hereby acknowledges having read this Instrument and the Plan and hereby agrees to be bound by all provisions set forth herein and in the Plan. Date: OPTIONEE ------------ ----------------------------------------- Name: 3 EX-99.(D)(3) 8 dex99d3.txt FORM OF NEW INCENTIVE STOCK OPTION AGREEMENT EXHIBIT (d)(3) OPTION GRANT UNDER BWAY CORPORATION FOURTH AMENDED AND RESTATED 1995 LONG-TERM INCENTIVE PLAN BWAY (the "Company") hereby grants, as of __________ (the "Grant Date"), to ____________________ (the "Optionee"), pursuant to the Company's Fourth Amended and Restated 1995 Long-Term Incentive Plan (the "Plan"), an Incentive Stock Option ("ISO") to purchase up to __________ shares of the common stock, par value $.01 per share, of the Company (the "Stock") at an exercise price of $______ per share, on the terms and conditions set forth in the Plan. The ISOs shall vest as follows: 50% on the Grant Date and 50% on the first anniversary of the Grant Date. In the event of any conflict between the terms and conditions of the Plan and the description of such terms and conditions contained herein, the terms and conditions of the Plan shall prevail. 1. Payment. The ISOs may be exercised only by written notice to the Chief ------- Financial Officer and the Corporate Controller of the Company at its principal executive offices accompanied by payment, in cash, of the exercise price for the shares exercised or, in the discretion of the committee appointed to administer the Plan (the "Committee"), (i) in cash and/or shares of Stock, or (ii) by special arrangement through a broker selected by the Committee. The fair market value of shares of Stock tendered on exercise of the ISO shall be the Fair Market Value, as defined in the Plan, of such shares as of the close of the market on the day next preceding the exercise of the option. 2. Termination of Employment. ------------------------- (a) Except as provided in paragraph 2(b) below, all rights of the Optionee pursuant to the ISOs granted hereunder shall expire 90 days after the date of his or her termination as a director or employee for any reason, unless otherwise determined by the Committee, but in no event after the expiration date of the option; provided the Optionee does not engage in Competition (as defined in the Plan) during such 90-day period unless he or she receives written consent to do so from the board of directors of the Company or the Committee. (b) Notwithstanding paragraph 2(a) above, the following special vesting rules shall apply if the Optionee's employment with the Company terminates prior to the date that the ISO expires pursuant to paragraph 3 herein: (i) If the Optionee's employment is terminated due to death or full disability, all outstanding ISOs of the Optionee shall vest and become fully exercisable with respect to all of the shares of Stock relating thereto (subject to the terms of the Plan) and shall expire upon the first anniversary of the date of such termination, but in no event after the expiration date of the ISO. Notwithstanding the foregoing, if the disability giving rise to the termination of employment is not within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), ISOs not exercised by such Optionee within 90 days after the date of termination of employment will cease to qualify as ISOs and will be treated as Nonqualified Stock Options ("NQOs") under the Plan if required to be so treated under the Code. (ii) If the Optionee retires from employment with the Company, the Optionee's ISOs shall be vested and fully exercisable with respect to that portion of the Optionee's ISOs that were exercisable on the date of the Optionee's retirement (subject to the terms of the Plan) for a period of up to five years after the date of such retirement but in no event after the expiration of the ISO; provided the Optionee does not engage in Competition (as defined in the Plan) during such five year period unless he or she receives written consent to do so from the board of directors of the Company or the Committee. Notwithstanding the foregoing, ISOs not exercised by such Optionee within 90 days after retirement will cease to qualify as ISOs and will be treated as NQOs under the Plan if required to be so treated under the Code. Any portion of the Optionee's ISOs that were not exercisable on the date of the Optionee's retirement shall expire and be forfeited. (iii) Upon the termination of the Optionee's employment due to Cause, as defined in the Plan, all of his or her ISOs shall be forfeited immediately upon such termination. 3. Terms of Options. The ISOs shall, to the extent not theretofore ---------------- terminated or exercised, expire and become void on the tenth anniversary of the Grant Date; provided, however, that an ISO granted hereunder to an Optionee owning more than 10% of the total combined voting power of all classes of stock of the Company or any of its subsidiaries as of the Grant Date shall become void at the fifth anniversary of the Grant Date. 4. Exercise of Option. The ISOs may not be exercised unless vested, and ------------------ then only in accordance with the terms of Paragraph 1 and 5, as well as other applicable provisions of the Plan. 5. Withholding Taxes. The Company may require, as a condition to any ----------------- exercise of the ISO or to the delivery of certificates for Stock issued thereunder, that the Optionee pay to the Company, in cash, any federal, state or local taxes of any kind required by law to be withheld with respect to any exercise of ISO or any delivery of Stock. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to an Optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any exercise of ISO or to the delivery of Stock thereunder or to retain or sell without notice a sufficient number of the Stock to be issued to such Optionee to cover any such taxes, provided that the Company shall not sell any such Stock if such sale would be considered a sale by such Optionee for purposes of Section 16 of the Securities Exchange Act of 1934, as amended. 6. Transferability. The ISOs shall not be transferable by the Optionee --------------- otherwise than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code. The ISOs may be exercised only by the Optionee thereof or his or her guardian or legal representative; provided that ISOs may be exercised by such 2 guardian or legal representative only if permitted by the Code and any regulations promulgated thereunder. 7. Adjustments. In the event of any change in the corporate structure or ----------- shares of the Company, the Committee shall make such adjustments to this award as it deems appropriate. In the event of any merger, consolidation or other reorganization in which the Company is not the surviving or continuing corporation or in which a Change in Control is to occur, as defined in the Plan, all of the Company's obligations regarding the ISOs that were granted hereunder and that are outstanding on the date of such event shall, on such terms as the Committee approves prior to such event, be assumed by the surviving or continuing corporation or canceled in exchange for property (including cash). 8. Amendment or Substitution of Awards under the Plan. The terms of the -------------------------------------------------- outstanding ISOs granted hereunder may be amended from time to time by the Committee in its discretion, provided that no such amendment shall adversely affect in a material manner any right of the Optionee without his or her written consent, unless the Committee determines in its discretion that there have occurred or are about to occur significant changes in the Optionee's position, duties or responsibility or significant changes which will have a substantial effect on the performance of the Company, its affiliates, subsidiaries, divisions or departments, the Plan or an award under the Plan. However, the Committee may not reduce the exercise price of an outstanding ISO. IN WITNESS WHEREOF, the Company has caused this Instrument to be executed as of the date written below. Date: BWAY CORPORATION ------------ By: ------------------------------------- Its: ------------------------------------ The undersigned hereby acknowledges having read this Instrument and the Plan and hereby agrees to be bound by all provisions set forth herein and in the Plan. Date: OPTIONEE ------------ ----------------------------------------- Name: 3 -----END PRIVACY-ENHANCED MESSAGE-----