<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM 10/A1
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
----------------
TUPPERWARE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-4062333
(I.R.S. EMPLOYER IDENTIFICATION NO.)
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
P.O. BOX 2353
ORLANDO, FLORIDA 32802
(ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (407) 826-5050
----------------
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON
TO BE SO REGISTERED WHICH EACH CLASS IS TO BE REGISTERED
------------------- ------------------------------------
<S> <C>
Common Stock, par value $.01 per share New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
</TABLE>
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
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<PAGE>
TUPPERWARE CORPORATION
PART I
INFORMATION INCLUDED IN INFORMATION STATEMENT
AND INCORPORATED IN FORM 10 BY REFERENCE
CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT
AND ITEMS OF FORM 10
<TABLE>
<CAPTION>
ITEM LOCATION IN INFORMATION
NO. CAPTION STATEMENT
---- ------- -----------------------
<C> <C> <S>
1. Business......................... "Summary of Certain Information";
"Introduction"; "Risk Factors"; "The
Distribution--Background and Reasons
for the Distribution"; "Business of
Tupperware" and "Management's
Discussion and Analysis of Financial
Condition and Results of Operations."
2. Financial Information............ "Summary of Certain Information"; "The
Distribution"; "Tupperware Corporation
Pro Forma Combined Financial
Information"; "Tupperware Corporation
Selected Financial Data" and
"Management's Discussion and Analysis
of Financial Condition and Results of
Operations."
3. Properties....................... "Properties."
4. Security Ownership of Certain
Beneficial Owners and
Management...................... "The Distribution--Listing and Trading
of Tupperware Common Stock";
"Management of Tupperware--Security
Ownership of Tupperware Common Stock
by Management" and "Security Ownership
of Tupperware Common Stock by Certain
Beneficial Owners."
5. Directors and Executive
Officers........................ "The Distribution--Future Management
of Tupperware"; "Arrangements Between
Premark and Tupperware Relating to the
Distribution--Distribution Agreement";
"Management of Tupperware" and
"Liability and Indemnification of
Directors and Officers."
6. Executive Compensation........... "Arrangements Between Premark and
Tupperware Relating to the
Distribution"; "Management of
Tupperware"; "Expected Compensation
and Employee Benefit Plans Following
the Distribution" and "Compensation
Committee Interlocks Disclosure and
Insider Participation."
7. Certain Relationships and Related
Transactions.................... "Summary of Certain Information";
"Arrangements Between Premark and
Tupperware Relating to the
Distribution"; and "Certain
Transactions."
8. Legal Proceedings................ "Business of Tupperware--Legal
Proceedings."
9. Market Price of and Dividends on
the Registrant's Common Equity
and Related Shareholder
Matters......................... "Summary of Certain Information";
"Risk Factors"; "Introduction" and
"The Distribution--Listing and Trading
of Tupperware Common Stock."
10. Recent Sales of Unregistered
Securities...................... Not Applicable.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM LOCATION IN INFORMATION
NO. CAPTION STATEMENT
---- ------- -----------------------
<C> <C> <S>
11. Description of Registrant's
Securities to be Registered..... "The Distribution--Listing and Trading
of Tupperware Common Stock";
"Description of Tupperware Capital
Stock"; and "Certain Antitakeover
Effects of Certain Provisions of the
Certificate of Incorporation, By-laws
and State Law."
12. Indemnification of Directors and
Officers........................ "Liability and Indemnification of
Directors and Officers"; "Annex A--
Form of Amended and Restated
Certificate of Incorporation of
Tupperware Corporation" and "Annex B--
Form of Amended and Restated By-laws
of Tupperware Corporation."
13. Financial Statements and
Supplementary Data.............. "Summary Selected Financial
Information"; "Tupperware Corporation
Pro Forma Combined Financial
Information"; "Tupperware Corporation
Selected Financial Data" and
"Management's Discussion and Analysis
of Financial Condition and Results of
Operations."
14. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure............ Not Applicable.
15. Financial Statements and
Exhibits........................ "Financial Statements" and "Index to
Financial Statements and Financial
Statement Schedule."
</TABLE>
<PAGE>
[PREMARK LETTERHEAD]
, 1996
Dear Shareholder:
We are pleased to inform you that on , 1996, the Board of Directors of
Premark International, Inc. approved a distribution to our shareholders of all
of the outstanding shares of common stock of Tupperware Corporation. The
distribution will be at the rate of one share of Tupperware common stock for
every share of Premark common stock held as of the close of business on
, 1996. The enclosed Information Statement explains the proposed
distribution in detail and provides important financial and other information
regarding Tupperware Corporation. Holders of Premark common stock are not
required to take any action to participate in the distribution. A shareholder
vote is not required in connection with this matter and, accordingly, your proxy
is not being sought.
The distribution will result in your ownership of shares of two very
different companies. Premark will focus on its food equipment, decorative
products and consumer products businesses, and Tupperware will focus on the
direct selling of Tupperware brand products. Your Board of Directors believes
that the distribution, by enabling Premark and Tupperware to develop their
respective businesses separately, should better position the two companies to
produce greater total shareholder value over the long term.
Sincerely,
Warren L. Batts
Chairman and Chief Executive
Officer
James M. Ringler
President and Chief Operating
Officer
<PAGE>
[TUPPERWARE LETTERHEAD]
, 1996
Dear Shareholder:
The enclosed Information Statement includes detailed information about
Tupperware Corporation, the company of which you will soon become a
shareholder.
We would like to take this opportunity to welcome you as a shareholder and
to introduce you to our company. Tupperware is a worldwide direct selling
consumer products company engaged in the manufacture and sale of Tupperware
brand products which traces its first operations back to 1946. Tupperware has
an experienced and enthusiastic management team with a proven track record of
solid performance.
We are excited about Tupperware's prospects as an independent public company
and look forward to your participation in our future.
Sincerely,
Warren L. Batts
Chairman and Chief Executive
Officer
E.V. Goings
President and Chief Operating
Officer
<PAGE>
SUBJECT TO COMPLETION; DATED APRIL 16, 1996
-- FOR INFORMATION ONLY
INFORMATION STATEMENT
TUPPERWARE CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
This Information Statement is being furnished to stockholders of Premark
International, Inc. in connection with the distribution by Premark
International, Inc. to its stockholders of all of the outstanding shares of
common stock of its wholly-owned subsidiary, Tupperware Corporation.
It is expected that the distribution will be made on , 1996, on the
basis of one share of common stock of Tupperware Corporation for one share of
common stock of Premark International, Inc. No consideration will be paid by
stockholders of Premark International, Inc. for the shares of common stock of
Tupperware Corporation to be received by them in the distribution, nor will
they be required to surrender or exchange shares of Premark International,
Inc. in order to receive common stock of Tupperware Corporation.
There is no current public market for the common stock of Tupperware
Corporation. Application will be made to list such shares on the New York
Stock Exchange.
IN REVIEWING THIS INFORMATION STATEMENT, YOU SHOULD CAREFULLY CONSIDER THE
MATTERS DESCRIBED UNDER THE CAPTION "RISK FACTORS."
----------------
NO VOTE OF STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THIS
DISTRIBUTION. WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
INFORMATION STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. ANY SUCH OFFERING MAY
ONLY BE MADE BY MEANS OF A SEPARATE PROSPECTUS PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND OTHERWISE IN COMPLIANCE
WITH APPLICABLE LAW.
The date of this Information Statement is , 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information.................................................... iii
Summary of Certain Information........................................... 1
The Distribution....................................................... 1
Tupperware Corporation................................................. 2
Summary Selected Financial Information................................. 4
Risk Factors............................................................. 6
No Operating History as an Independent Company......................... 6
Foreign Operations..................................................... 6
No Prior Market for Tupperware Common Stock............................ 6
Certain Antitakeover Effects........................................... 7
Effects on Premark Common Stock........................................ 7
Certain Federal Income Tax Considerations.............................. 7
Introduction............................................................. 7
The Distribution......................................................... 8
Background and Reasons for the Distribution............................ 8
Manner of Effecting the Distribution................................... 8
Listing and Trading of Tupperware Common Stock......................... 9
Future Management of Tupperware........................................ 9
Certain Federal Income Tax Consequences of the Distribution............ 10
Conditions; Termination................................................ 10
Arrangements Between Premark and Tupperware Relating to the Distribu-
tion.................................................................... 11
Distribution Agreement................................................. 11
Tax Sharing Agreement.................................................. 12
Benefits Agreement..................................................... 13
Interim Services Agreement............................................. 13
Financing................................................................ 14
Business of Tupperware................................................... 14
Background............................................................. 14
Description of the Tupperware Business................................. 14
Legal Proceedings...................................................... 16
Properties............................................................... 17
Tupperware Corporation Pro Forma Combined Financial Information.......... 18
Tupperware Corporation Notes to the Pro Forma Combined Financial Informa-
tion.................................................................... 20
Tupperware Corporation Selected Financial Data........................... 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 22
Financial Review....................................................... 22
Overall--Results of Operations......................................... 22
Regional Results--Results of Operations................................ 22
1994 vs. 1993.......................................................... 23
Financial Condition.................................................... 24
New Accounting Standard................................................ 25
Impact of Inflation and Foreign Operations............................. 25
Management of Tupperware................................................. 27
Directors of Tupperware................................................ 27
Committees of the Board of Directors................................... 29
Compensation of Directors.............................................. 30
Executive Officers of Tupperware....................................... 31
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Ownership of Tupperware Common Stock by Management...................... 33
Compensation of Executive Officers...................................... 34
Expected Compensation and Employee Benefit Plans Following the Distribu-
tion..................................................................... 38
Employment Agreements................................................... 38
Tupperware Corporation 1996 Incentive Plan.............................. 39
Tupperware Corporation Director Stock Plan.............................. 43
Employee Pension and Retirement Savings Plans........................... 45
Compensation Committee Interlocks Disclosure and Insider Participation.... 46
Ownership of Tupperware Common Stock by Certain Beneficial Owners......... 47
Certain Transactions...................................................... 47
Hart-Scott-Rodino Filing Requirement...................................... 47
Description of Tupperware Capital Stock................................... 48
Authorized Capital Stock................................................ 48
Tupperware Common Stock................................................. 48
Tupperware Preferred Stock.............................................. 48
Tupperware Rights Agreement............................................. 48
Certain Antitakeover Effects of Certain Provisions of the Certificate of
Incorporation, By-laws
and State Law............................................................ 51
Certificate of Incorporation and By-laws................................ 51
Antitakeover Legislation................................................ 55
Liability and Indemnification of Directors and Officers................... 56
Limitation of Liability of Directors.................................... 56
Indemnification of Directors and Officers............................... 56
Additional Information.................................................. 58
Index to Defined Terms.................................................... 59
Index to Combined Financial Statements and Financial Statement Schedule... F-1
Annexes
</TABLE>
A Form of Amended and Restated Certificate of Incorporation of Tupperware
Corporation
B Form of Amended and Restated By-laws of Tupperware Corporation
C Form of Tupperware Corporation 1996 Incentive Plan
D Form of Tupperware Corporation Director Stock Plan
E Form of Tupperware Corporation Rights Agreement
ii
<PAGE>
AVAILABLE INFORMATION
Tupperware Corporation has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form 10 (the "Registration
Statement") under the Securities Exchange Act of 1934, as amended, and the
rules promulgated thereunder (the "Exchange Act"), with respect to its common
stock and preferred stock purchase rights described herein. This Information
Statement does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information, reference is made hereby to the Registration Statement, exhibits
and schedules. Copies of these documents may be inspected without charge at
the principal office of the Commission at 450 5th Street, N.W., Washington,
D.C. 20549, and copies of all or any part thereof may be obtained from the
Commission upon payment of the charges prescribed by the Commission.
Following the Distribution (as defined herein), Tupperware Corporation will
be required to comply with the reporting requirements of the Exchange Act and
will file annual, quarterly and other reports with the Commission. Tupperware
Corporation will also be subject to the proxy solicitation requirements of the
Exchange Act and, accordingly, will furnish audited financial statements to
its stockholders in connection with its annual meetings of stockholders.
NO PERSON IS AUTHORIZED BY PREMARK INTERNATIONAL, INC. OR TUPPERWARE
CORPORATION TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED IN THIS INFORMATION STATEMENT, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
iii
<PAGE>
SUMMARY OF CERTAIN INFORMATION
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial information set
forth elsewhere in this Information Statement. The location of the definitions
of defined terms used herein may be found in the Index to Defined Terms.
THE DISTRIBUTION
Premark International, Inc., a Delaware corpo-
Distributing Company.......... ration ("Premark").
Approximately 61.6 million shares of common
Shares to be Distributed...... stock, par value $.01 per share (the Tupperware
common stock and the Rights (as defined below)
are collectively referred to herein as the
"Tupperware Common Stock"), of Tupperware Cor-
poration, a Delaware corporation
("Tupperware"), based on the number of shares
of common stock, par value $1.00 per share, of
Premark ("Premark Common Stock") outstanding as
of March 1, 1996. See "The Distribution -- Man-
ner of Effecting the Distribution."
One share of Tupperware Common Stock for one
Distribution Ratio............ share of Premark Common Stock. See "The Distri-
bution -- Manner of Effecting the Distribu-
tion."
Premark has requested a ruling (the "Tax Rul-
Federal Income Tax ing") from the Internal Revenue Service ("IRS")
Consequences................. to the effect that the Distribution will qual-
ify as a tax-free spin-off under Section 355 of
the Internal Revenue Code of 1986, as amended
(the "Code"). See "The Distribution -- Certain
Federal Income Tax Consequences of the Distri-
bution."
Trading Market................ Application has been made to list the
Tupperware Common Stock on the New York Stock
Exchange, Inc. ("NYSE"). See "The Distribu-
tion -- Listing and Trading of Tupperware Com-
mon Stock."
Expected to be in [ ], 1996.
Record Date...................
Expected to be in [ ], 1996. On the Distribu-
Distribution Date............. tion Date (as defined below), the Distribution
Agent (as defined below) will commence mailing
share certificates for Tupperware Common Stock
to holders of Premark Common Stock on the rec-
ord date for the Distribution (the "Record
Date"). Premark stockholders will not be re-
quired to make any payment or to take any other
action to receive their Tupperware Common
Stock. See "The Distribution -- Manner of Ef-
fecting the Distribution."
Distribution Agent, Transfer
Agent and Registrar.......... Norwest Bank Minnesota, N.A.
1
<PAGE>
TUPPERWARE CORPORATION
The Company................... Tupperware, a worldwide direct selling consumer
products company engaged in the manufacture and
sale of Tupperware brand products, was formed
on February 8, 1996 to serve as a holding com-
pany for Dart Industries Inc., a Delaware cor-
poration and wholly-owned subsidiary of Premark
("Dart"), and its subsidiaries. Prior to the
Distribution Date any operations and assets
owned by Premark related to the Tupperware
Business (as defined below) which are not cur-
rently owned by Dart or its subsidiaries will
be transferred to Tupperware. On the Distribu-
tion Date, Tupperware will become a publicly
held corporation by virtue of the distribution
of the shares of Tupperware Common Stock to the
holders of Premark Common Stock on the Record
Date. See "Tupperware Corporation Pro Forma
Combined Financial Information" and "Business
of Tupperware." The principal corporate offices
of Tupperware are located at 14901 South Orange
Blossom Trail, Orlando, Florida 32837 (mailing
address, P.O. Box 2353, Orlando, Florida
32802); telephone number (407) 826-5050.
Pre-Distribution Dividend
Payment...................... Prior to the Distribution Date, Dart will pay
approximately $[ ] million in cash to Premark
through a special dividend (the "Dividend Pay-
ment") so that the total debt less cash ("Net
Debt") of Premark existing as of the Cut-Off
Date will equal approximately $50,000,000. The
purpose of the Dividend Payment is to effec-
tively allocate the existing indebtedness of
Premark between Tupperware and post-Distribution
Premark. See "Arrangements Between Premark and
Tupperware Relating to the Distribution -- Dis-
tribution Agreement" and "Financing."
Management of Tupperware...... The executive officers of Tupperware will be
drawn from the executive officers of the
Tupperware segment of Premark and the officers
and employees of Premark. See "Management of
Tupperware."
Trading Market................ There is not currently a public market for
Tupperware Common Stock, although a "when-is-
sued" trading market is expected to develop
prior to the Distribution Date. Tupperware will
apply for listing of the Tupperware Common
Stock on the NYSE. See "The Distribution --
Listing and Trading of Tupperware Common
Stock."
Certain Provisions of the
Certificate of Incorporation
and By-laws; Rights
Agreement....................
Certain provisions of Tupperware's Amended and
Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Amended and
Restated By-laws (the "By-laws"), as each will
be in effect following the Distribution, may
have the effect of making more difficult an ac-
quisition of control of Tupperware in a
2
<PAGE>
transaction not approved by the Board of Direc-
tors of Tupperware (the "Tupperware Board").
See "Certain Antitakeover Effects of Certain
Provisions of the Certificate of Incorporation,
By-laws and State Law." The Certificate of In-
corporation would eliminate certain liabilities
of Tupperware directors in connection with the
performance of their duties. See "Liability and
Indemnification of Directors and Officers --
Limitation on Liability of Directors." The
Rights Agreement (as defined below) will make
more difficult an acquisition of control of
Tupperware in a transaction not approved by the
Tupperware Board. See "Description of
Tupperware Capital Stock -- Tupperware Rights
Agreement."
Post-Distribution Dividend
Policy....................... It is anticipated that, following the Distribu-
tion, Tupperware will pay quarterly cash divi-
dends which, on an annual basis, will initially
be within a range of approximately $.80 to $.90
per share. It is anticipated that, following
the Distribution, Premark will pay quarterly
cash dividends which, on an annual basis, will
initially be within a range of approximately
$.30 to $.40 per share. The current dividend
rate on Premark Common Stock is $1.08 per annum
per share. However, no formal action with re-
spect to any such dividends has been taken and
the declaration and payment of dividends by
Tupperware and Premark will be at the discre-
tion of each company's Board of Directors. See
"The Distribution -- Listing and Trading of
Tupperware Common Stock."
3
<PAGE>
SUMMARY SELECTED FINANCIAL INFORMATION
The following table sets forth summary selected historical financial
information for Tupperware that has been derived from the financial statements
of Tupperware for the three years ended December 30, 1995, and the unaudited
pro forma combined financial information as of and for the year ended December
30, 1995. The historical financial information presented below may not
necessarily be indicative of the results of operations or financial position
that would have been obtained if Tupperware had been an independent company
during the periods shown or of Tupperware's future performance as an
independent company. The financial data set forth below should be read in
conjunction with Tupperware's financial statements and the notes thereto, and
the unaudited pro forma combined financial information and the notes thereto
found elsewhere in this Information Statement. For selected historical
financial information of Tupperware for the five years ended December 30, 1995,
see "Tupperware Corporation Selected Financial Data." For pro forma financial
information of Tupperware for the year ended December 30, 1995, see "Tupperware
Corporation Pro Forma Combined Financial Information." See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
1995 1994 1993
(IN MILLIONS, EXCEPT PER SHARE AMOUNT) -------- -------- --------
<S> <C> <C> <C>
Geographic Information(l)
Net sales:
Europe, Africa, and Middle East................. $ 595.1 $ 540.1 $ 505.1
Americas........................................ 409.2 405.2 379.8
Asia Pacific.................................... 355.1 329.3 286.9
-------- -------- --------
Total......................................... $1,359.4 $1,274.6 $1,171.8
======== ======== ========
Segment profit:
Europe, Africa, and Middle East................. $ 156.8 $ 125.0 $ 110.3
Americas........................................ 29.7 31.7 28.2
Asia Pacific.................................... 59.4 46.3 40.3
-------- -------- --------
Total ........................................ $ 245.9 $ 203.0 $ 178.8
======== ======== ========
Historical Combined Information(2)
Net sales......................................... $1,359.4 $1,274.6 $1,171.8
Income before income taxes........................ 224.9 191.2 148.4
Net income........................................ 171.4 149.2 117.9
Total assets...................................... 944.0 882.6 785.1
Total shareholder's equity........................ 415.6 395.1 163.3
Pro Forma Combined Information(3)
Net sales......................................... $1,359.4
Income before income taxes........................ 212.9
Net income........................................ 164.1
Net income per share(4)........................... 2.57
Total assets...................................... 944.0
Long-term debt.................................... 100.4
Total shareholders' equity........................ 230.7
</TABLE>
- --------
(1) See Note 10 of "Tupperware Corporation -- Notes to the Combined Financial
Statements" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
(2) See "Tupperware Corporation Selected Financial Data," "Tupperware
Corporation Combined Financial Statements" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
4
<PAGE>
(3) See introduction to "Tupperware Corporation Pro Forma Combined Financial
Information," and Note 2 to "Tupperware Corporation Notes to the Pro Forma
Combined Financial Information (Unaudited)." The pro forma financial
information presented is for informational purposes only and may not
necessarily reflect future earnings and financial position or what the
earnings or financial position would have been had Tupperware been operated
as a separate, stand-alone company during the period shown.
(4) Pro forma net income per share is based upon the 63.8 million common and
common equivalent shares reflected in Premark's consolidated statement of
income for the year ended December 30, 1995. See Note 3 to "Tupperware
Corporation Notes to the Pro Forma Combined Financial Information
(Unaudited)."
5
<PAGE>
RISK FACTORS
Certain statements in this Information Statement constitute "foward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward looking statements involve known and unknown risks,
including, but are not limited to, general economic and business conditions,
competition, advertising and promotional efforts, brand awareness, changing
trends in customer tastes, changes in governmental regulations, and
unfavorable foreign currency fluctuations. Although Tupperware believes that
its expectations with respect to the forward looking statements are based upon
reasonable assumptions within the bounds of its knowledge of its business and
operations, there can be no assurance that actual results, performance or
achievements of Tupperware will not differ materially from any future results,
performance or achievements expressed or implied by such forward looking
statements.
NO OPERATING HISTORY AS AN INDEPENDENT COMPANY
Tupperware does not have an operating history as an independent public
company. While Tupperware has been profitable as part of Premark and its
predecessors, there is no assurance that as a stand-alone company profits will
continue at the same level. The Tupperware Business has historically relied on
Premark for various financial and administrative services. After the
Distribution, Tupperware will maintain its own lines of credit, banking
relationships and administrative functions.
FOREIGN OPERATIONS
Significance of Foreign Operations. For fiscal 1995, approximately 85% of
Tupperware's revenue and 96% of segment profit were from non-United States
operations, a portion of which was generated by non-United States branch
operations of entities incorporated in the United States. At December 30,
1995, approximately 70% of total assets were attributable to these operations.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Impact of Inflation and Foreign Operations."
Inherent Risks. Tupperware's international operations are subject to the
usual risks inherent in operating abroad, including, but not limited to, risks
with respect to currency exchange rates, economic and political
destabilization, other disruptions of markets, restrictive actions by foreign
governments (such as restrictions on direct selling activities, transfer of
funds, and special price offers, and export duties and quotas, international
customs and tariffs, and unexpected changes in regulatory environments),
difficulty in obtaining distribution and support, nationalization, the laws
and policies of the United States affecting trade, foreign investment and
loans, and foreign tax laws. There can be no assurance that these factors will
not have a material adverse impact on Tupperware's ability to increase or
maintain its international sales or on its results of operations.
Foreign Cash Flows, Debt Service and Certain Tax Considerations. Tupperware's
ability to service its domestic indebtedness may be dependent, in part, on its
ability to utilize the cash flow generated by its non-United States operations.
In general, United States federal tax laws provide that income of non-United
States subsidiaries is subject to tax only in the local jurisdiction and is
subject to United States federal income tax only to the extent, such income is
distributed as a dividend to the United States parent company. Thus, to the
extent Tupperware's debt service obligations are satisfied by dividends from
non-United States subsidiaries, United States tax costs may be incurred in
addition to foreign taxes on the income of such subsidiaries.
NO PRIOR MARKET FOR TUPPERWARE COMMON STOCK
There has been no prior trading market for Tupperware Common Stock and there
can be no assurance as to the prices at which the Tupperware Common Stock will
trade before or after the Distribution Date. Until the Tupperware Common Stock
is fully distributed and an orderly market develops, the prices at which the
Tupperware Common Stock trades may fluctuate significantly. Prices for the
Tupperware Common Stock will be determined in the trading markets and may be
influenced by many factors, including the depth and liquidity of
6
<PAGE>
the market for Tupperware Common Stock, investor perceptions of Tupperware and
its business, Tupperware's dividend policy, and general economic and market
conditions. See "The Distribution -- Listing and Trading of Tupperware Common
Stock."
CERTAIN ANTITAKEOVER EFFECTS
The Certificate of Incorporation, By-laws and Rights Agreement and the
General Corporation Law of the State of Delaware ("Delaware Law") contain
several provisions that could make more difficult a change of control of
Tupperware in a transaction not approved by the Tupperware Board. In addition,
the Tupperware Board will adopt certain other programs, plans and agreements
with its management and/or employees which may make such a change of control
more expensive. See "Certain Antitakeover Effects of Certain Provisions of the
Certificate of Incorporation, By-Laws and State Law" and "Expected
Compensation and Employee Benefit Plans Following the Distribution--Employment
Agreements."
EFFECTS ON PREMARK COMMON STOCK
After the Distribution, the Premark Common Stock will continue to be listed
and traded on the NYSE and certain other stock exchanges. As a result of the
Distribution, the trading prices of Premark Common Stock will be lower than
the trading prices of Premark Common Stock immediately prior to the
Distribution. The combined trading prices of Premark Common Stock and
Tupperware Common Stock after the Distribution may be less than, equal to or
greater than the trading prices of Premark Common Stock prior to the
Distribution. In addition, until the market has fully analyzed the operations
of Premark without the Tupperware Business, the prices at which the Premark
Common Stock trades may fluctuate significantly.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
Premark has requested a Tax Ruling from the IRS to the effect that, among
other things, for United States federal income tax purposes the Distribution
will be tax-free under Section 355 of the Code. See "The Distribution --
Certain Federal Income Tax Consequences of the Distribution." The continuing
validity of any such ruling is subject to certain factual representations and
assumptions. Tupperware is not aware of any facts or circumstances which
should cause such representations and assumptions to be untrue. The Tax
Sharing Agreement (as defined below) provides that neither Premark nor
Tupperware is to take any action inconsistent with, nor fail to take any
action required by, the request for the Tax Ruling or the Tax Ruling unless
required to do so by law or the other party has given its prior written
consent or, in certain circumstances, a supplemental ruling permitting such
action is obtained. Premark and Tupperware have indemnified each other with
respect to any tax liability resulting from their respective failures to
comply with such provisions. See "Arrangements Between Premark and Tupperware
Relating to the Distribution -- Tax Sharing Agreement."
INTRODUCTION
On November 1, 1995, the Board of Directors of Premark (the "Premark Board")
authorized management to proceed with a plan to separate Premark into two
companies by means of a spin-off of its Tupperware Business. The spin-off will
be effected through a distribution (the "Distribution") to holders of Premark
Common Stock of all of the outstanding shares of Tupperware Common Stock. At
the time of the Distribution, Tupperware will own, primarily through Dart and
its subsidiaries, the assets, liabilities and operations which prior to the
Distribution Date comprise the Tupperware segment of Premark's operations (the
"Tupperware Business"). See "Business of Tupperware." On the date of the
Distribution (the "Distribution Date"), Premark will effect the Distribution
by delivering all of the outstanding shares of Tupperware Common Stock to
Norwest Bank Minnesota, N.A., as the distribution agent (the "Distribution
Agent") for distribution to the holders of record of Premark Common Stock at
the close of business on the Record Date. Tupperware's principal executive
offices are located at 14901 South Orange Blossom Trail, Orlando, Florida
32837 (mailing address, P.O. Box 2353, Orlando, Florida 32802), and its
telephone number is (407) 826-5050. Unless the context otherwise
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indicates, as used in this Information Statement the term "Tupperware" means
the Tupperware segment of Premark for periods prior to the Distribution Date
and Tupperware Corporation and its consolidated subsidiaries for the periods
following the Distribution Date, and all references to "Premark" include
Premark and its subsidiaries as of the relevant date.
Stockholders of Premark with inquiries relating to the Distribution should
contact the Distribution Agent, telephone number (612) 450-4064 or Premark
International, Inc., Corporate Secretary's Department, 1717 Deerfield Road,
Deerfield, Illinois 60015, telephone number (847) 405-6000. After the
Distribution Date, stockholders of Tupperware with inquiries relating to the
Distribution or their investment in Tupperware should contact Tupperware
Corporation, Corporate Secretary's Department, P.O. Box 2353, Orlando, Florida
32802, telephone number (407) 826-5050 or Norwest Bank Minnesota, N.A.,
Tupperware's transfer agent and registrar, at 161 North Concord Exchange,
South St. Paul, Minnesota 55075-0738, telephone number (612) 450-4064.
THE DISTRIBUTION
BACKGROUND AND REASONS FOR THE DISTRIBUTION
Premark was organized on August 29, 1986 in connection with a corporate
reorganization of Dart & Kraft, Inc., a Delaware corporation, which is now
known as Kraft Foods, Inc. ("Dart & Kraft, Inc."). As part of that
reorganization, Premark became a publicly held company on October 31, 1986
through a pro rata distribution by Dart & Kraft, Inc. to its stockholders of
all of the then outstanding shares of Premark Common Stock (the "DKI
Distribution") pursuant to the Reorganization and Distribution Agreement,
dated as of September 4, 1986, by and among Dart & Kraft, Inc., Premark and
certain subsidiaries of Dart & Kraft, Inc. (the "DKI Distribution Agreement").
The Distribution is intended to increase the long-term value of Premark
stockholders' investment. Premark believes that, in addition to the benefits
described below, the Distribution will allow investors to better evaluate the
merits of the Tupperware Business, on the one hand, and the Premark Remaining
Businesses (as defined below), on the other hand. This will enhance the
likelihood that each will achieve more appropriate market recognition of its
performance. In addition, the Premark Board believes that, as a result of the
division of Premark into two separate companies, each company will be better
able to establish compensation and incentives for its officers and employees,
including, without limitation, employee stock and cash incentive plans, that
will directly relate to their performance.
Premark believes that the four business segments through which it currently
conducts its business, Tupperware, the Food Equipment Group, the Decorative
Products Group and the Consumer Products Group, have developed two distinct
sets of financial, management, marketing and investment characteristics. The
Tupperware Business is primarily a direct selling business which over the past
five years has generated, on average, 81% of its revenue outside the United
States. On the other hand, the Food Equipment Group, the Decorative Products
Group and the Consumer Products Group (collectively, the "Premark Remaining
Businesses") are primarily manufacturing operations which over the past five
years have generated, on average, 76% of their revenue domestically. The
Tupperware Business and the Premark Remaining Businesses require different
management experience and capabilities, especially as related to their
distinct marketing and selling techniques and strategic planning, in order to
maximize their respective potential growth. Premark also believes that the
Distribution will allow the management of each company to better develop their
businesses.
MANNER OF EFFECTING THE DISTRIBUTION
The Distribution is expected to be declared by the Premark Board on ,
1996 and will be made on the Distribution Date to stockholders of record of
Premark as of the close of business on the Record Date. On or prior to the
Distribution Date, share certificates for Tupperware Common Stock will be
delivered to the
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Distribution Agent. Commencing on the Distribution Date, the Distribution
Agent will begin mailing such share certificates to holders of Premark Common
Stock as of the close of business on the Record Date on the basis of one share
of Tupperware Common Stock for every one share of Premark Common Stock held on
the Record Date. All such shares of Tupperware Common Stock will be fully paid
and nonassessable and holders thereof will not be entitled to preemptive
rights. See "Description of Tupperware Capital Stock -- Tupperware Common
Stock."
NO HOLDER OF PREMARK COMMON STOCK WILL BE REQUIRED TO PAY ANY CASH OR OTHER
CONSIDERATION FOR THE SHARES OF TUPPERWARE COMMON STOCK TO BE RECEIVED IN THE
DISTRIBUTION OR TO SURRENDER OR EXCHANGE SHARES OF PREMARK COMMON STOCK OR TO
TAKE ANY OTHER ACTION IN ORDER TO RECEIVE TUPPERWARE COMMON STOCK.
The Distribution will not affect the number of, or the rights attaching to,
outstanding shares of Premark Common Stock. Certificates representing
outstanding shares of Premark Common Stock will continue to represent rights
to purchase shares of Premark Common Stock pursuant to the Rights Agreement,
dated as of March 7, 1989 between Premark and Manufacturers Hanover Trust
Company (now known as Chase Manhattan Bank), as rights agent. As a result of
the Distribution, the purchase price payable upon exercise of the rights and
the number of shares of Premark Common Stock covered by each right will be
adjusted in accordance with such rights agreement.
LISTING AND TRADING OF TUPPERWARE COMMON STOCK
There is not currently a public market for Tupperware Common Stock. Prices
at which Tupperware Common Stock may trade prior to the Distribution on a
"when-issued" basis or after the Distribution cannot be predicted. Until the
Tupperware Common Stock is fully distributed and an orderly market develops,
the prices at which trading in such stock occurs may fluctuate significantly.
The prices at which Tupperware Common Stock trades will be determined by the
marketplace and may be influenced by many factors, including, among others,
the depth and liquidity of the market for Tupperware Common Stock, investor
perception of Tupperware and its businesses, Tupperware's dividend policy and
general economic and market conditions.
An application has been filed for listing the Tupperware Common Stock on the
NYSE. Tupperware initially will have approximately 23,000 stockholders of
record, based on the number of record holders of Premark Common Stock as of
March 1, 1996. The transfer agent and registrar for the Tupperware Common
Stock will be Norwest Bank Minnesota, N.A. For certain information regarding
options to purchase Tupperware Common Stock that may become outstanding after
the Distribution, see "Management of Tupperware -- Compensation of Directors"
and "Management of Tupperware -- Compensation of Executive Officers."
Shares of Tupperware Common Stock distributed to Premark stockholders in the
Distribution will be freely transferable, except for shares received by
persons who may be deemed to be "affiliates" of Tupperware under the
Securities Act of 1933, as amended, and the rules promulgated thereunder (the
"Securities Act"). Persons who may be deemed to be affiliates of Tupperware
after the Distribution generally include individuals or entities that control,
are controlled by, or are under common control with, Tupperware, and may
include certain officers and directors of Tupperware as well as principal
stockholders of Tupperware, if any. Persons who are affiliates of Tupperware
will be permitted to sell their shares of Tupperware Common Stock only
pursuant to an effective registration statement under the Securities Act or an
exemption from the registration requirements of the Securities Act, such as
the exemption afforded by Section 4(2) of the Securities Act or by Rule 144
under such Act.
It is anticipated that, following the Distribution, Tupperware will pay
quarterly cash dividends which, on an annual basis, will initially be within a
range of approximately $.80 to $.90 per share. However, no formal action with
respect to any such dividend has been declared, and the declaration and
payment of dividends is at the discretion of the Tupperware Board. After the
Distribution, Tupperware will hold the principal assets of the
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Tupperware Business through its subsidiaries; thus, Tupperware's ability to
pay dividends to holders of Tupperware Common Stock and to make other payments
will depend, at least in part, on its receiving funds from such subsidiaries.
FUTURE MANAGEMENT OF TUPPERWARE
Following the Distribution Tupperware will have substantially the same
operating management as the Tupperware Business currently has. In addition to
Warren L. Batts, who has served as Chairman and Chief Executive Officer of
Premark since 1986 and will serve as Tupperware's Chairman and Chief Executive
Officer, E.V. Goings, who is currently an Executive Vice President of Premark
and President of the Tupperware segment of Premark, will be President and
Chief Operating Officer of Tupperware. The other executive officers of
Tupperware will also be drawn from the executive officers of the Tupperware
segment of Premark and the officers and employees of Premark. See "Management
of Tupperware -- Executive Officers of Tupperware."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION
Premark has requested a Tax Ruling from the IRS to the effect that, among
other things, the Distribution will qualify as a tax-free spin-off under
Section 355 of the Code. So long as the Distribution qualifies under Section
355 of the Code, the material United States federal income tax consequences of
the Distribution will be as follows:
(i) no gain or loss will be recognized by or be includible in the income
of a holder of Premark Common Stock solely as a result of the receipt of
Tupperware Common Stock upon the Distribution;
(ii) no gain or loss will be recognized by Premark upon the Distribution
of the Tupperware Common Stock;
(iii) assuming that a holder of Premark Common Stock holds such Premark
Common Stock as a capital asset, such holder's holding period for the
Tupperware Common Stock received in the Distribution will include the
period during which such Premark Common Stock was held; and
(iv) the tax basis of Premark Common Stock held by a Premark stockholder
immediately prior to the Distribution will be apportioned (based upon
relative fair market values at the time of the Distribution) between such
Premark Common Stock and the Tupperware Common Stock received by such
stockholder in the Distribution.
THE FOREGOING IS ONLY A SUMMARY OF CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES OF THE DISTRIBUTION UNDER CURRENT LAW AND IS INTENDED FOR GENERAL
INFORMATION ONLY. EACH STOCKHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO
THE PARTICULAR CONSEQUENCES OF THE DISTRIBUTION TO SUCH STOCKHOLDER, INCLUDING
THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS, AND AS TO POSSIBLE
CHANGES IN TAX LAWS THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED ABOVE.
The Tax Sharing Agreement provides that neither Premark nor Tupperware is to
take any action inconsistent with, nor fail to take any action required by,
the request for the Tax Ruling or the Tax Ruling unless required to do so by
law or the other party has given its prior written consent or, in certain
circumstances, a supplemental ruling permitting such action is obtained. See
"Arrangements Between Premark and Tupperware Relating to the Distribution --
Tax Sharing Agreement."
As soon as practicable following the Distribution, information with respect
to the allocation of tax basis between Tupperware Common Stock and Premark
Common Stock will be made available to the holders of Premark Common Stock.
CONDITIONS; TERMINATION
The Distribution is subject to certain conditions as set forth in the
Distribution Agreement. Even if all such conditions are satisfied, the Premark
Board, in its sole discretion, without approval of the Premark stockholders,
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may terminate the Distribution Agreement and abandon the Distribution at any
time prior to the Distribution Date. See "Arrangements Between Premark and
Tupperware Relating to the Distribution -- Distribution Agreement."
ARRANGEMENTS BETWEEN PREMARK AND TUPPERWARE RELATING TO THE DISTRIBUTION
For the purpose of governing certain of the relationships between Premark
and Tupperware relating to the Distribution, and to provide mechanisms for an
orderly transition, Premark and Tupperware will enter into the various
agreements described in this section. The agreements summarized below have
been filed as exhibits to the Registration Statement, of which this
Information Statement is a part, and the following summaries are qualified in
their entirety by reference to the agreements as filed.
DISTRIBUTION AGREEMENT
Premark, Tupperware and Dart will enter into a distribution agreement (the
"Distribution Agreement") providing for, among other things, the principal
corporate transactions required to effect the separation of the Tupperware
Business from the Premark Remaining Businesses and the Distribution, and
certain other agreements governing the relationship between Premark and
Tupperware with respect to or in consequence of the Distribution.
Pursuant to the Distribution Agreement Dart will pay immediately prior to
the Distribution the Dividend Payment to Premark in an amount sufficient to
leave Premark with Net Debt of approximately $50 million. The amount of the
Dividend Payment is dependent upon Premark's financial position as of the Cut-
off Date. The purpose of the Dividend Payment is to effectively allocate the
existing indebtedness of Premark between Tupperware and post-Distribution
Premark. In addition, Tupperware will fund 65% of the amount necessary to pay
any dividend declared on the Premark Common Stock on May 1, 1996, Premark's
next regularly scheduled dividend declaration date. The necessary funds for
the Dividend Payment will be obtained from bank borrowings. The Dividend
Payment has been reflected on Tupperware's Pro Forma Combined Balance Sheet
dated December 30, 1995. See "Tupperware Corporation Pro Forma Combined
Financial Information" and "Financing."
Subject to certain exceptions, the Distribution Agreement provides for
certain cross-indemnities (including an indemnity of Premark by Tupperware
with respect to certain guarantees by Premark in connection with certain
Tupperware franchise agreements and certain financial guarantees) principally
designed to place financial responsibility for the liabilities of Tupperware
and its subsidiaries with Tupperware and financial responsibility for the
liabilities of Premark and its other subsidiaries with Premark. The
Distribution Agreement also provides that, under certain circumstances, if
Tupperware is unable to enforce certain indemnities contained in the DKI
Distribution Agreement with respect to certain losses (the "DKI Indemnity"),
Premark will indemnify Tupperware for such losses to the extent Premark is
able to enforce the DKI Indemnity. In addition, the Distribution Agreement
provides that each of Premark and Tupperware will indemnify the other in the
event of certain liabilities arising under the Exchange Act.
The Distribution Agreement also provides for the allocation of benefits
between Premark and Tupperware under existing insurance policies after the
Distribution Date and sets forth procedures for the administration of insured
claims. In addition, the Distribution Agreement provides that Premark will use
its reasonable efforts to maintain directors' and officers' insurance at
substantially the level of Premark's current directors' and officers'
insurance policy for a period of three years with respect to the directors and
officers of Premark who will become directors and officers of Tupperware as of
the Distribution Date for acts relating to periods prior to the Distribution
Date.
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The Distribution Agreement provides that, in general, except as otherwise
set forth therein, in the Tax Sharing Agreement or in the Benefits Agreement
(as defined below) (i) costs and expenses related to the Distribution arising
prior to or on the last fiscal day of the calendar month immediately preceding
the Distribution Date (the "Cut-off Date") will be paid by Premark, (ii) as of
the Cut-off Date, accruals relating to such costs and expenses, identified as
relating to Tupperware, will be transferred to Tupperware, and (iii) following
the Cut-off Date the party which benefits from such costs and expenses will
pay such costs and expenses.
The Distribution Agreement provides that prior to the Distribution Date the
Certificate of Incorporation and By-laws will be substantially in the forms
attached hereto as Annexes A and B, respectively, and that as of the
Distribution Date the directors of Tupperware will be the nine persons
indicated herein. See "Management of Tupperware -- Directors of Tupperware."
The Distribution Agreement also provides that each of Premark and Tupperware
will be granted access to certain records and information in the possession of
the other, and requires the retention by Premark and Tupperware, for a period
of seven years following the Distribution, of the information in its
possession relating to the other, and, thereafter, requires that prior notice
of the intention to dispose of such information be given by the party in
possession thereof.
The Distribution Agreement provides that the Distribution will not be made
until all of the following conditions are satisfied or waived by the Premark
Board in its sole discretion: (i) the receipt of the Tax Ruling or an
acceptable opinion of tax counsel as to the tax-free status of the
Distribution; (ii) final approval by the Premark Board of the Distribution;
(iii) receipt of all material consents required to effect the Distribution;
(iv) the Registration Statement being declared effective; (v) the Tupperware
Board, composed of the persons identified herein as the Tupperware directors,
being duly elected; (vi) the Certificate of Incorporation and the By-Laws of
Tupperware, substantially in the form attached hereto as Annexes A and B,
respectively, and the Rights Agreement being adopted; (vii) the Tupperware
Common Stock being approved for listing on the NYSE and any other exchange
selected by Tupperware; (viii) the transactions contemplated by the
Distribution Agreement in connection with separating the Tupperware Business
and the Premark Remaining Businesses being consummated in all material
respects; (ix) Premark and Tupperware having entered into each of the
agreements, instruments, understandings, assignments and other arrangements to
be entered into in connection with the transactions contemplated by the
Distribution Agreement, including, without limitation, any conveyance
documents, the Benefits Agreement, any Interim Services Agreement (as defined
below), and the Tax Sharing Agreement, and each such agreement being in full
force and effect; (x) a no action letter from the Commission regarding certain
aspects of the Distribution being issued and in full force and effect; and
(xi) no order, injunction or decree having been issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
consummation of the Distribution being in effect. Even if all the conditions
are satisfied, the Distribution Agreement may be terminated and the
Distribution abandoned by the Premark Board, in its sole discretion, without
the approval of the Premark stockholders, at any time prior to the
Distribution Date.
TAX SHARING AGREEMENT
Through the Distribution Date, the results of the operations of the
Tupperware Business have been and will be included in Premark's consolidated
United States federal income tax returns. As part of the Distribution, Premark
and Tupperware will enter into a tax sharing agreement (the "Tax Sharing
Agreement") which provides, among other things, for the allocation between the
parties thereto of federal, state, local and foreign tax liabilities for all
periods through the Distribution Date. In general, the Tax Sharing Agreement
provides that Tupperware will be liable for United States federal, state,
local and foreign tax liabilities, including any such liabilities resulting
from the audit or other adjustment to previously filed tax returns, which are
attributable to Tupperware through the Distribution Date, and that Premark
will be responsible for all such taxes of Premark (excluding Tupperware).
The Tax Sharing Agreement also allocates between Premark and Tupperware
liability for any taxes which may arise in connection with separating the
Tupperware Business and the Premark Remaining Businesses.
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The Tax Sharing Agreement also provides for the allocation of certain
matters in connection with the tax sharing agreement that was entered into by
Premark and Dart & Kraft, Inc. in connection with the spin-off of Premark by
Dart & Kraft, Inc. pursuant to the DKI Distribution Agreement.
The Tax Sharing Agreement provides that neither Premark nor Tupperware is to
take any action inconsistent with, nor fail to take any action required by,
the request for the Tax Ruling or the Tax Ruling unless required to do so by
law or the other party has given its prior written consent or, in certain
circumstances, a supplemental ruling permitting such action is obtained.
Premark and Tupperware have indemnified each other with respect to any tax
liability resulting from their respective failures to comply with such
provisions.
Though valid as between the parties thereto, the Tax Sharing Agreement is
not binding on the IRS and does not affect the several liability of
Tupperware, Premark and their respective subsidiaries to the IRS for all
federal taxes of the consolidated group relating to periods prior to the
Distribution Date.
BENEFITS AGREEMENT
Premark and Tupperware will enter into an employee benefits and compensation
allocation agreement (the "Benefits Agreement") providing for the treatment of
employee benefit matters and other compensation arrangements for certain
former and current Tupperware employees and their beneficiaries and
dependents, as well as certain former employees of certain former Tupperware
businesses and their beneficiaries and dependents (collectively, the
"Tupperware Participants").
The Benefits Agreement contemplates that Tupperware will establish certain
pension, retirement savings and welfare plans effective on or before the
Distribution Date (the "Tupperware Plans") which will be similar to the
benefit plans currently maintained by Premark. The Benefits Agreement provides
that Tupperware's new Base Retirement Plan, Retirement Savings Plan and
Canadian Unified Pension Plan will assume all liabilities under the Premark
Base Retirement Plan, the Premark Retirement Savings Plan and the Premark
Canadian Unified Pension Plan, respectively, related to substantially all
Tupperware Participants and that plan assets related to such liabilities will
be transferred to that Plan. The Benefits Agreement provides that after the
Cut-off Date Tupperware will assume all liabilities for benefits under any
welfare plans related to Tupperware Participants. The Benefits Agreement also
provides that, subject to receipt of any necessary consents, any stock options
for Premark Common Stock, Premark restricted stock and other Premark stock-
based awards held by Tupperware employees, other than Mr. Batts, and
Tupperware non-employee directors who are not also directors of Premark, and
half of such options held by Tupperware non-employee directors who are also
directors of Premark will, as of the Distribution Date, be replaced with stock
options, restricted stock or other stock-based awards, as the case may be, for
Tupperware Common Stock, in each case adjusted so that the value thereof after
the Distribution Date will equal the value of the replaced award before the
Distribution Date. With respect to options held by Mr. Batts, see "Expected
Compensation and Employee Benefit Plans Following the Distribution--Employment
Agreements." Finally, the Benefits Agreement provides that, effective as of
the Cut-off Date, Tupperware will become responsible for all other liabilities
to Tupperware Participants (including, without limitation, unfunded
supplemental retirement benefits).
INTERIM SERVICES AGREEMENT
Premark and Tupperware may, if it is determined necessary, enter into an
interim services agreement (the "Interim Services Agreement") prior to the
Distribution Date. Pursuant to any such Interim Services Agreement, Premark
would provide to Tupperware, after the Distribution Date, certain services
which prior to the Distribution Date have been provided to Tupperware by
Premark (the "Services"). The Services would be provided on mutually agreed
terms.
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FINANCING
Tupperware has received a commitment letter from its lead bank relating to a
$300,000,000 five year unsecured multicurrency facility for Tupperware and
certain of its subsidiaries. Tupperware's lead bank has committed, subject to
certain conditions, to provide up to $75,000,000 of the facility and to
syndicate the remainder of the facility. It is expected that the funds
necessary for the payment by Dart of the Dividend Payment to Premark (which is
being made to effectively allocate the existing indebtedness of Premark
between Tupperware and post-Distribution Premark), as well as funds for
additional working capital and other financing needs of Tupperware and its
subsidiaries, will be obtained through this credit facility. The commitment
letter provides for a revolving credit at a floating rate and, at Tupperware's
option fixed rate bid loans. The interest rate on the revolving credit is
based, at Tupperware's option, on the London Interbank Offered Rate, plus a
spread, which will vary depending on Tupperware's long-term public debt rating
("Tupperware Debt Rating") or the prime rate. The interest rate on fixed rate
borrowings is to be set through an auction procedure. The commitment letter
provides that Tupperware is to pay an annual facility fee which will vary
based on the Tupperware Debt Rating. The commitment letter also provides that
the credit facility will contain financial covenants requiring a minimum
interest coverage and a maximum leverage ratio based on earnings before
interest, taxes, depreciation and amortization.
Subject to the provisions set forth in the Tax Sharing Agreement with
respect to actions taken by Tupperware after the Distribution, borrowings
under such agreement may be refinanced, in whole or in part, through proceeds
of the issuance of commercial paper and/or a public offering after the
Distribution Date. See "Arrangements Between Premark and Tupperware Relating
to the Distribution -- Tax Sharing Agreement."
BUSINESS OF TUPPERWARE
Tupperware Corporation was organized under the laws of the State of Delaware
on February 8, 1996 as part of the corporate reorganization of Premark in
which Dart and its subsidiaries (which own substantially all the domestic and
international operations of the Tupperware Business) will be transferred to
Tupperware along with certain other assets of Premark that are used in the
Tupperware Business. Tupperware, which will be a worldwide direct selling
consumer products company engaged in the manufacture and sale of Tupperware
brand products, will become a publicly held company through the Distribution.
BACKGROUND
Premark became a publicly held company in October 1986 through the corporate
reorganization of Dart & Kraft, Inc., which was organized in 1980 by the
combination of Kraft, Inc. and Dart. In the 1986 reorganization, Premark
became a diversified holding company composed of five businesses: the
Tupperware Business (conducted through Dart and its subsidiaries); food
equipment business (conducted through Hobart Corporation and its
subsidiaries); decorative plastic laminates business (conducted through Ralph
Wilson Plastics Company, now known as Wilsonart International, Inc.); small
electric appliances and cookware business (conducted through The West Bend
Company); and physical fitness equipment business (conducted through Precor
Incorporated).
Dart was organized in Delaware in 1928 as a successor to a business
originally established in 1902. Set forth below is a description of the
Tupperware Business and certain other matters.
DESCRIPTION OF THE TUPPERWARE BUSINESS
Principal Products. Tupperware conducts its business through a single
business segment, manufacturing and marketing a broad line of highest-quality
consumer products for the home and for personal care. The core of the product
line continues to be food storage containers which preserve freshness of food
through the well-known Tupperware seals. Tupperware also has an established
line of children's educational toys, serving products and gifts. The line of
products has expanded over the years into kitchen, home storage and organizing
uses with products such as Modular Mates (TM), Fridge Stackables (TM),
OneTouch (TM) canisters and many specialized containers. In recent years,
Tupperware has expanded its offerings in the food preparation and service
areas through the addition of a number of products, including double
colanders, tumblers and mugs, mixing and serving bowls, serving centers,
microwaveable cooking and serving products, and kitchen utensils.
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Tupperware continues to introduce new designs and colors in its products
lines, and to extend existing products into new markets around the world. The
development of new products varies in different markets around the world, in
order to address differences in cultures, lifestyles, tastes and needs of the
markets. New product development and introduction will continue to be an
important part of Tupperware's strategy.
Products sold by Tupperware are primarily produced by Tupperware in its
manufacturing facilities around the world. In some markets, Tupperware sources
certain products from third parties and/or contracts with local manufacturers
to manufacture its products, utilizing high-quality molds which are supplied
by Tupperware. Promotional items provided at product demonstrations include
items obtained from outside sources.
Markets. Tupperware's business is operated on the basis of three geographic
segments: Europe, Africa and the Middle East; the Americas; and Asia Pacific.
Tupperware's products are sold in more than 100 foreign countries and in the
United States. For the past five years, sales in foreign countries represented
on average 81% of total Tupperware revenues. See "Tupperware Corporation
Selected Financial Data."
During 1995, Tupperware entered several new international markets, including
Poland and several countries in southern Africa. During 1996, Tupperware will
establish operations in China, additional Eastern European countries and
several Middle Eastern countries. Additionally, Tupperware has received
approval to do business in India. Market penetration varies throughout the
world. Several "developing" areas which have low penetration, such as Latin
America, Asia and Eastern Europe, provide significant growth potential for
Tupperware. Tupperware's strategy continues to include aggressive expansion
into new markets throughout the world during the balance of the decade.
Distribution of Tupperware Products. Tupperware's products are distributed
worldwide through the "direct selling" method of distribution, in which
products are sold to consumers outside traditional retail store channels. The
distributorship system is intended to facilitate the timely distribution of
products to the consumer, and to establish uniform practices regarding the use
of TupperwareTM trademarks and the administrative arrangements with
Tupperware, such as order entry and delivery, payment, recruitment and
training of dealers.
TupperwareTM products are sold directly to distributors or dealers
throughout the world. Distributors are granted the right to market
TupperwareTM products using the demonstration method and utilizing the
TupperwareTM trademark. The vast majority of Tupperware's distributorship
system is composed of distributors, managers and dealers who are independent
contractors and not employees of Tupperware. In certain limited circumstances
Tupperware owns the distributorship for a period of time until an independent
distributor can be installed, in order to maintain market presence.
Key aspects of Tupperware's strategy are expanding its business by enlarging
the number of distributors, and at the same time increasing the business of
existing distributors. Under the Tupperware system, distributors recruit,
train and motivate a large sales force to cover the distributor's geographic
area. Managers are developed and promoted by distributors to assist the
distributor in recruiting, training and motivating dealers, as well as
continuing to hold their own demonstrations.
As of December 30, 1995, the Tupperware distribution system had over 1,670
distributors, 44,000 managers and 790,000 dealers worldwide. The dealer force
continues to increase each year.
Tupperware relies primarily on the "demonstration" method of sales, which is
designed to enable the purchaser to appreciate through demonstration the
features and benefits of TupperwareTM products. Demonstrations, which are
sometimes referred to as "Tupperware parties," are held in homes, offices,
social clubs and other locations. In excess of 13 million demonstrations were
held in 1995 worldwide. TupperwareTM products are also promoted through
monthly brochures mailed to persons invited to attend Tupperware parties and
various other types of demonstrations. Sales of TupperwareTM products are
supported by Tupperware through a program of sales promotions, sales and
training aids and motivational conferences for the independent sales force. In
addition, to support its sales force, Tupperware utilizes catalogs, magazine
advertising and toll-free telephone ordering, which helps increase its sales
levels with hard-to-reach customers.
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The distribution of products to consumers is the responsibility of
distributors, who are required to maintain their own inventory of Tupperware
products, the necessary warehouse facilities and delivery systems. In certain
markets, Tupperware offers distributors the use of a delivery system of direct
product shipment to consumers or dealers, which is intended to reduce the
distributor's investment in inventory and enable distributors to be more cost-
efficient.
Competition. There are two primary competitive factors which affect the
Tupperware Business: (i) competition with other "direct sales" companies for
sales personnel and demonstration dates and (ii) competition in the markets
for food storage and serving containers, toys, personal care items, and gifts
in general. Tupperware believes that it holds a significant market share in
each of these markets in many countries. This has been facilitated by
innovative product development and a large, dedicated worldwide sales force.
Tupperware's competitive strategies are to continue to expand its direct
selling distribution system, and to provide high-quality, high-value products
throughout the world.
Employees. Tupperware employs approximately 6,600 people, of whom
approximately 1,000 are based in the United States. Tupperware's United States
work force is not unionized. In certain countries, Tupperware's work force is
covered by collective arrangements decreed by statute. The terms of most of
these arrangements are determined on an annual basis. Additionally,
approximately 138 Tupperware manufacturing employees in the Australian mold
manufacturing operation are covered by a collective bargaining agreement which
is negotiated annually. There have been no work stoppages or threatened work
stoppages in over three years and Tupperware believes its relations with its
employees to be good. The independent consultants, dealers, managers and
distributors engaged in the direct sale of Tupperware products are not
employees of Tupperware.
Research and Development. For fiscal years ended 1995, 1994 and 1993,
Tupperware spent approximately $6.3 million, $8.9 million and $9.8 million,
respectively, on research and development activities for new products.
Raw Materials. Products manufactured by Tupperware require plastic resins
meeting its specifications. These resins are purchased from a number of large
chemical companies, and Tupperware has experienced no difficulties in
obtaining adequate supplies. Research and development relating to resins used
in Tupperware products is performed by both Tupperware and its suppliers.
Trademarks and Patents. Tupperware considers its trademarks and patents to
be of material importance to its business. However, except for the
Tupperware(TM) trademark, Tupperware is not dependent upon any single patent
or trademark, or group of patents or trademarks. The trademark on the
Tupperware name is registered on a country by country basis. The current
duration for such registration ranges from seven years to 15 years, however
each such registration may be renewed an unlimited number of times. The
patents and trademarks used in the Tupperware Business are registered and
maintained on a worldwide basis, with a variety of durations. Tupperware has
followed the practice of applying for design and utility patents with respect
to most of the significant patentable developments.
Environmental Laws. Compliance with federal, state and local environmental
protection laws has not in the past had, and is not expected to have in the
future, a material effect upon Tupperware's capital expenditures, liquidity,
earnings or competitive position. See "-- Legal Proceedings."
Other. Tupperware sales do not vary significantly on a quarterly basis,
however third quarter sales are generally lower than the other quarters in any
year due to vacations by Tupperware's sales consultants and their customers as
well as Tupperware's reduced promotional activities during such quarter. Sales
generally increase in the fourth quarter as it includes traditional gift
giving occasions in many of Tupperware's markets and as children return to
school and households refocus on activities that include the use of
Tupperware's products. There are no working capital practices or backlog
conditions which are material to an understanding of the Tupperware Business.
The Tupperware Business is not dependent on a small number of customers, nor
is any of its business subject to renegotiation of profits or termination of
contracts or subcontracts at the election of the United States government.
LEGAL PROCEEDINGS
A number of ordinary course legal and administrative proceedings against
Tupperware are pending. In addition to such proceedings, there are certain
proceedings which involve the discharge of materials into or
16
<PAGE>
otherwise relating to the protection of the environment. Certain of such
proceedings involve federal environmental laws such as the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as well as
state and local laws. Tupperware establishes reserves with respect to certain
of such proceedings. Because of the involvement of other parties and the
uncertainty of potential environmental impacts, the eventual outcomes of such
actions and the cost and timing of expenditures cannot be estimated with
certainty. It is not expected that the outcome of such proceedings, either
individually or in the aggregate, will have a materially adverse effect upon
Tupperware.
In connection with the DKI Distribution in 1986, Kraft Foods, Inc. assumed
any liabilities arising out of any legal proceedings in connection with
certain divested or discontinued former Dart businesses, including matters
alleging product liability, environmental liability and infringement of
patents.
PROPERTIES
The principal executive office of Tupperware, which is owned by Tupperware,
is located in Orlando, Florida. Tupperware owns and maintains manufacturing
plants in Argentina, Belgium, Brazil, France, Greece, Japan, Korea, Mexico,
the Philippines, Portugal, South Africa, Spain, and the United States, and
leases manufacturing facilities in Venezuela. Tupperware conducts a continuing
program of new product design and development at its facilities in Florida,
Japan and Belgium. Most of the principal properties of Tupperware and its
subsidiaries are owned, and none of the owned principal properties is subject
to any encumbrance material to the consolidated operations of Tupperware.
Tupperware considers the condition and extent of utilization of its plants,
warehouses and other properties to be good, the capacity of its plants and
warehouses generally to be adequate for its needs, and the nature of its
properties to be suitable for its needs.
17
<PAGE>
TUPPERWARE CORPORATION
PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
The unaudited Pro Forma Combined Balance Sheet and Pro Forma Combined
Statement of Income for Tupperware as of and for the year ended December 30,
1995, present the combined financial position and results of operations of
Tupperware, assuming that the transactions contemplated by the Distribution
had been completed as of the end of and the beginning of the year,
respectively. In the opinion of management, they include all material
adjustments necessary to restate Tupperware's historical results. The
adjustments required to reflect such assumptions are described in Note 2 of
the Tupperware Corporation Notes to the Pro Forma Combined Financial
Information (Unaudited) and are set forth in the "Pro Forma Adjustments"
column.
The unaudited Pro Forma Combined Financial Information of Tupperware should
be read in conjunction with the historical financial statements of Tupperware
contained elsewhere in this Information Statement. The pro forma information
presented is for informational purposes only and may not necessarily reflect
future results of operations or financial position or what the results of
operations or financial position would have been had the Distribution occurred
as assumed herein, or had Tupperware been operated as a separate, stand-alone
company during the period shown.
TUPPERWARE CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 30, 1995
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
(IN MILLIONS, EXCEPT PER SHARE AMOUNT) ---------- ----------- ---------
<S> <C> <C> <C>
Net sales...................................... $1,359.4 $ -- $1,359.4
-------- ------ --------
Costs and expenses:
Cost of products sold........................ 481.5 -- 481.5
Delivery, sales, and administrative expense.. 653.5 -- 653.5
Interest expense............................. 3.1 11.5 (2a) 14.6
Interest income.............................. (5.0) -- (5.0)
Other expense, net........................... 1.4 -- 1.4
-------- ------ --------
Total costs and expenses................... 1,134.5 11.5 1,146.0
-------- ------ --------
Income before income taxes..................... 224.9 (11.5) 213.4
Provision for income taxes..................... 53.5 (4.5)(2b) 49.0
-------- ------ --------
Net income..................................... $ 171.4 $ (7.0) $ 164.4
======== ====== ========
Net income per common and common equivalent
share......................................... $ 2.58
========
</TABLE>
See Notes to the Pro Forma Combined Financial Information (Unaudited).
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<PAGE>
TUPPERWARE CORPORATION
PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
AS OF DECEMBER 30, 1995
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
(IN MILLIONS) ---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents................. $ 97.3 $ -- $ 97.3
Accounts and notes receivable, net........ 147.5 -- 147.5
Inventories............................... 206.6 -- 206.6
Deferred income tax benefits.............. 58.1 -- 58.1
Prepaid expenses.......................... 16.9 -- 16.9
------- ------- -------
Total current assets.................. 526.4 -- 526.4
------- ------- -------
Deferred income tax benefits.............. 21.7 -- 21.7
Property, plant, and equipment, net....... 317.7 -- 317.7
Long-term receivables, net, and other as-
sets..................................... 78.2 -- 78.2
------- ------- -------
Total assets.......................... $ 944.0 $ -- $ 944.0
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable.......................... $ 88.0 $ -- $ 88.0
Short-term borrowings and current portion
of long-term debt........................ 83.8 84.9 (2a) 168.7
Accrued liabilities....................... 266.5 10.0 (2c) 276.5
------- ------- -------
Total current liabilities............. 438.3 94.9 533.2
------- ------- -------
Long-term debt............................ 0.4 100.0 (2a) 100.4
Accrued postretirement benefit cost....... 36.1 -- 36.1
Other liabilities......................... 53.6 -- 53.6
Shareholders' equity:
Net investment by Premark............... 533.5 (184.9)(2a) --
(10.0)(2c)
(338.6)(2d)
Common shareholders' equity............. -- 338.6 (2d) 338.6
Cumulative foreign currency adjust-
ments.................................. (117.9) -- (117.9)
------- ------- -------
Total shareholders' equity............ 415.6 (194.9) 220.7
------- ------- -------
Total liabilities and shareholders'
equity............................... $ 944.0 $ -- $ 944.0
======= ======= =======
</TABLE>
See Notes to the Pro Forma Combined Financial Information (Unaudited).
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<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
Note 1.
The accompanying unaudited Pro Forma Combined Financial Information reflects
all adjustments that, in the opinion of management, are necessary to present a
fair statement of financial position and results of operations. This
information does not include certain disclosures required under generally
accepted accounting principles and, therefore, should be read in conjunction
with Tupperware's historical financial statements and notes thereto.
Note 2.
The pro forma adjustments to the accompanying financial information as of
and for the year ended December 30, 1995, are described below:
(a) To record the payment of a $184.9 million special dividend to Premark,
and the associated increase in debt and interest expense from the
borrowings incurred to fund the payment. An interest rate of 6.2% is
assumed on the incremental borrowings, which is the weighted average of
the expected interest rates on long-term borrowings, which are expected
to have fixed rates, and short-term borrowings, which are expected to
have floating rates. The effect of a one-eighth percentage point change
in the interest rate on variable rate borrowings on interest expense
and net income would be approximately $0.1 million.
(b) To record the estimated income tax benefit on the income effect of pro
forma adjustment (a) above at the combined federal, state, and local
income tax rate of 39%.
(c) To accrue $10 million of costs directly related to the Distribution
that Tupperware expects to incur in 1996. Such costs have not been
reflected in the Pro Forma Combined Statement of Income because they
are non-recurring.
(d) To reflect the distribution of Premark's 100% equity interest in
Tupperware to Premark's stockholders.
Note 3.
Net income per share information is based upon the 63.8 million common and
common equivalent shares reflected in Premark's consolidated statement of
income for the year ended December 30, 1995. When the Distribution is
completed, it is expected that the outstanding options to purchase Premark
Common Stock that are held by Tupperware officers and employees will be
converted to options to purchase solely Tupperware Common Stock (other than
Mr. Batts, who will have two-thirds of his options on Premark Common Stock
replaced with options on Tupperware Common Stock). The number of shares under
option and their exercise prices will be set in a manner that will maintain in
the aggregate the excess of market value over exercise price of the existing
options as of immediately prior to the Distribution. The number of common and
common equivalent shares used to compute earnings per share after the
Distribution will depend on the market price of Tupperware Common Stock at
that time, but is expected to be lower than 63.8 million.
20
<PAGE>
TUPPERWARE CORPORATION
SELECTED FINANCIAL DATA
The following table summarizes certain selected historical financial
information of Tupperware that has been derived from the financial statements
of Tupperware for the five years ended December 30, 1995. The historical
financial information may not be indicative of Tupperware's future performance
as a stand-alone company. The information set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and Tupperware's Pro Forma Combined Financial
Information and Notes thereto included elsewhere in this Information
Statement. Per share data for net income (loss) before cumulative effect of
accounting changes and dividends have not been presented because the
Tupperware Business was operated through wholly-owned subsidiaries of Premark
during the periods presented.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
(IN MILLIONS) -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales.................... $1,359.4 $1,274.6 $1,171.8 $1,104.8 $1,101.8
Income (loss) before income
taxes and cumulative effect
of accounting changes....... 224.9 191.2 148.4 (41.8)** 97.8
Income (loss) before
cumulative effect of
accounting changes.......... 171.4 149.2 117.9 (43.7)** 60.8
Capital expenditures......... 69.3 78.6 85.6 80.0 49.9
Depreciation................. 61.3 55.7 44.7 50.1 46.0
Working capital (deficit).... 88.1 72.9 (49.4)* (11.3) 85.2
Total assets................. 944.0 882.6 785.1 661.1 741.4
Long-term debt............... 0.4 0.5 45.6 153.3 156.3
Net investment by Premark.... 533.5 508.1 282.0 168.8 302.8
</TABLE>
- --------
*Includes $105.0 million of the $150.0 million of 8 3/8% notes that were
called at par on February 1, 1994.
**In 1992, Tupperware recorded a $136.7 million pretax charge ($111.4 million
after tax) primarily related to consolidation of manufacturing capacity and
restructuring of the United States distribution system.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FINANCIAL REVIEW
The information contained in this financial review should be read in
conjunction with the Tupperware Corporation Combined Financial Statements
contained elsewhere in this Information Statement.
OVERALL -- RESULTS OF OPERATIONS
Net Sales and Net Income. Net sales in 1995 of $1.4 billion were 7% higher
than 1994 net sales of $1.3 billion due to improvement in international
operations and a $33.2 million benefit of favorable foreign exchange, which
more than offset a decline in the United States. In 1994, sales increased by
9% over 1993 sales of $1.2 billion, led by Asia Pacific and Europe, Africa,
and the Middle East. Net income increased by 15%, to $171.4 million in 1995,
compared with $149.2 million in 1994, also on the strength of international
operations and an $8.5 million benefit of favorable foreign exchange.
Partially offsetting these factors was lower profit in the United States. Net
income in 1994 improved by 27% from $117.9 million in 1993 as a result of the
higher sales, along with lower cost of products and lower interest expense. In
1995 and 1994, respectively, 85% and 82% of Tupperware's sales and 96% and 92%
of its segment profit were from operations outside the United States.
Costs and Expenses. The cost of products sold in relation to sales was
35.4%, 36.2%, and 37.5% in 1995, 1994, and 1993, respectively. 1995's
improvement was the result of reduced manufacturing costs along with selected
price increases, which outweighed significant increases in raw material costs.
The 1994 decrease resulted from manufacturing efficiencies in Asia Pacific and
Latin America. Delivery, sales, and administrative expense as a percentage of
sales was 48.1%, 48.9%, and 48.7% in 1995, 1994, and 1993, respectively. The
ratio improved in 1995 compared with 1994 due to the higher 1995 sales while
costs were contained.
Tax Rate. The effective tax rates for 1995, 1994, and 1993, were 23.8%,
22.0%, and 20.6%, respectively. The 1995 increase reflects the absence of the
1994 reduction of valuation allowances against certain deferred tax assets,
partially offset by the effect of the favorable resolution of certain tax
contingencies. The higher effective rate in 1994 compared with 1993 reflects a
lower realization of foreign tax benefits.
Net Interest. In 1995 and 1994, Tupperware had net interest income of $1.9
million and $0.2 million, respectively. In 1993, Tupperware had net interest
expense of $12.6 million. As a subsidiary of Premark, Tupperware's income only
reflects interest on legal obligations owed or on amounts held by Tupperware.
As more fully described in the "Financial Condition" section of Management's
Discussion and Analysis of Financial Condition and Results of Operations, Dart
will pay the Dividend Payment to Premark immediately prior to the
Distribution, which will substantially increase the debt of Tupperware.
REGIONAL RESULTS -- RESULT OF OPERATIONS
1995 VS. 1994
Europe, Africa, and the Middle East. Sales increased by 10% in 1995, to
$595.1 million from $540.1 million in 1994, due to a $56.9 million favorable
impact of foreign exchange largely attributable to Germany. Additionally, on a
local currency basis, a 20% sales increase in Italy and sales decreases in the
United Kingdom and Spain of 27% and 31%, respectively, occurred but did not
significantly affect the year-to-year comparison for the region either
individually or in the aggregate.
Segment profit increased by 25%, to $156.8 million in 1995 from $125.0
million in 1994, led by a $15.3 million benefit of foreign exchange, as well
as higher profit in Germany on a local currency basis, a smaller loss in the
United Kingdom, and lower area administrative costs. Germany's segment profit
increased by 14% from the impact of foreign exchange and by an additional 7%
from operations due primarily to improved gross margins. Operating
efficiencies in the United Kingdom and Spain resulted in a reduction in the
loss in the United Kingdom and a small profit in Spain, despite the lower
sales in these countries. In 1995 and 1994, respectively, the region accounted
for 64% and 61% of Tupperware's segment profit.
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<PAGE>
The Americas. Sales in the Americas totaled $409.2 million in 1995, an
increase of 1% over 1994 sales of $405.2 million. Segment profit decreased by
6%, to $29.7 million from $31.7 million in 1994. The region accounted for 30%
and 32% of Tupperware's sales, and 12% and 16% of its segment profit in 1995
and 1994, respectively.
United States sales in 1995 were $208.6 million, a 9% decrease from $228.8
million in 1994, due to lower volume. Segment profit decreased by 36%, to $10.3
million from $16.0 million in 1994, primarily reflecting the lower sales
volume. The number of consultants grew by 4%, and the average active sales
force grew by 2%, but there was a large decrease in the productivity of the
sales force. Productivity in 1995 was down due to weakness in response by the
sales force to certain promotional programs. Steps have been taken to improve
those promotional programs in 1996.
In the Americas, excluding the United States, sales increased by 14% in 1995
to $200.6 million compared with $176.4 million in 1994, despite a $39.9 million
negative impact from foreign exchange, led by operating improvements in Brazil,
Mexico and Venezuela. In Latin America, a net of 69 new distributors were added
in 1995. The total number of consultants more than doubled, and the average
active sales force grew by 68%. Sales grew by 169% in Brazil and 66% in
Venezuela. Mexico's sales increased by 39% in local currency terms, although
they decreased overall due to the negative impact of the peso devaluation,
which reduced sales by $40.0 million.
Segment profit in the Americas, other than the United States, increased by
24% to $19.4 million in 1995 from $15.7 million in 1994. Foreign exchange had a
$9.8 million negative impact on the comparison because of the Mexican peso's
devaluation. Profit in Brazil increased substantially, from a small base in
1994, and Venezuela had a profit in 1995 versus a loss in 1994. Despite a
weaker Mexican peso, the improvement in Latin America, particularly in Brazil,
was attributable to relatively stable economic conditions, a focus on
recruiting and distributor expansion, streamlining of operations, and
simplified promotional programs.
Asia Pacific. Sales in Asia Pacific were $355.1 million in 1995, an 8%
improvement compared with 1994 sales of $329.3 million. The increase was the
result of favorable foreign exchange of $16.1 million, along with operational
improvements in Korea, the Philippines, and some of the region's smaller
markets. Sales in Japan increased by 5% overall, but, excluding the effect of
foreign exchange, decreased by 3% due to an estimated $9 million impact from
the Kobe earthquake at the beginning of the year. Sales in Korea and the
Philippines increased by 18% and 13%, respectively. The increase in the
Philippines was the result of a substantial increase in the average active
sales force, while the Korean increase reflects a strong improvement in sales
force productivity. The region accounted for 26% of Tupperware's sales in both
1995 and 1994.
Segment profit increased by 28% in 1995, to $59.4 million from $46.3 million
in 1994, due primarily to a 52% increase in Korea and a profit in Australia
versus a loss in 1994. Foreign exchange contributed $3.1 million to the
region's improvement. The increase in Korea was due to the higher sales, along
with improved margins. Australia's favorable profit comparison was primarily
due to lower promotional costs and the absence of 1994's costs incurred to shut
down a manufacturing plant. Profit in Japan increased by 8% compared with 1994,
despite the negative impact of the Kobe earthquake which affected profit by
approximately $5 million. The region's segment profit accounted for 24% and 23%
of Tupperware's profit in 1995 and 1994, respectively.
1994 VS. 1993
Europe, Africa and the Middle East. Sales increased by 7% in 1994 to $540.1
million from $505.1 million in 1993. The improvement was due primarily to
operational improvements in Germany, Austria, and Switzerland along with a $9.2
million favorable impact of foreign exchange. These factors were partially
offset by a decrease in sales in the United Kingdom. Sales in Germany increased
by 13%, of which 3 percentage points were due to foreign exchange. The
operational improvement in Germany was due to a higher volume, despite slower
sales in the fourth quarter as distributors reduced their inventories. Sales in
Austria and Switzerland increased by 18% and 23%, respectively, as a result of
larger sales forces. Sales in the United Kingdom fell by 19% reflecting a lower
number of recruits.
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<PAGE>
Segment profit increased by 13%, to $125.0 million in 1994 from $110.3
million in 1993, led by improvement in Germany, along with a $2.3 million
benefit from foreign exchange, which was partially offset by higher area
manufacturing costs and a larger loss in the United Kingdom. The 26% increase
in profit in Germany was attributable to the higher sales, reflecting a larger
active sales force, improved recruiting, and lower promotional costs. The loss
in the United Kingdom was nearly three times greater than the 1993 loss
reflecting the lower level of sales and higher promotional costs.
The Americas. Sales in the Americas totaled $405.2 million, an increase of
7% over 1993 sales of $379.8 million. Segment profit improved by $3.5 million,
or 12%, to $31.7 million in 1994 from $28.2 million in 1993.
United States sales in 1994 were $228.8 million, a 2% increase from $225.4
million in 1993. Segment profit increased by 28% to $16.0 million from $12.5
million in 1993. Sales rose slightly as a successful effort to increase the
size of the sales force was substantially offset by lower sales force
productivity. Profit improved as higher sales and reduced promotional spending
offset the negative impact on margins from the lower level of production.
In the Americas, excluding the United States, sales increased by 14% in 1994
to $176.4 million compared with 1993's $154.4 million. Foreign exchange had a
$8.3 million negative impact on the comparison. Brazil's sales increased by
more than 150%, and Mexican sales increased by 29% in local currency terms and
17% including the negative impact of foreign exchange. The improvement
resulted from increasing the number of distributors, managers, and dealers in
both countries, as well as aggressive product pricing in Brazil.
Segment profit in the Americas, excluding the United States, was even with
1993 at $15.7 million. Profit improved by 15% in Mexico, despite a 12
percentage point negative impact from foreign exchange, and Brazil's profit
was an improvement from a loss in 1993. The profit improvements in these
countries followed from the higher sales but were offset by a loss in Canada
from higher product costs and declines in Argentina and Venezuela.
Asia Pacific. Sales in Asia Pacific were $329.3 million in 1994, a 15%
improvement compared with 1993 sales of $286.9 million. The increase reflects
a $17.7 million benefit from favorable foreign exchange, along with
operational improvements in Japan, the Philippines, and Korea, which were
partially offset by lower sales in Australia. The 20%, 24%, and 18% increases
in the sales of Japan, the Philippines and Korea, respectively, were the
result of successful recruiting efforts and corresponding increases in sales
force size, and favorable foreign exchange in Japan, which was responsible for
10 percentage points of that country's improvement. The lower sales in
Australia resulted from ineffective promotional programs.
Segment profit also rose by 15% to $46.3 million in 1994 from $40.3 million
in 1993. Profits rose in Japan, Korea, and the Philippines by 29%, 60% and
33%, respectively, while Australia had a loss in 1994 compared with a profit
in 1993. The improvements in Japan, Korea, and the Philippines were the result
of the higher sales volume, generated through increased promotional spending,
along with favorable foreign exchange in Japan, which accounted for 11
percentage points of the increase. The loss in Australia was the result of
decreased sales along with a $3.8 million charge to shut down a manufacturing
plant.
FINANCIAL CONDITION
Liquidity and Capital Resources. Under the Distribution Agreement between
Premark, Tupperware, and Dart, immediately prior to the Distribution Dart will
pay the Dividend Payment to Premark. The amount of the Dividend Payment is
dependent upon Premark's financial position as of the Cut-off Date. Based on
Premark's financial position as of December 30, 1995, the dividend would have
been $184.9 million. The purpose of the Dividend Payment is to effectively
allocate the existing indebtedness of Premark between Tupperware and post-
Distribution Premark.
24
<PAGE>
Tupperware's domestic cash requirements, including working capital and
capital expenditures, have historically been financed by Premark through its
centralized cash management system. This relationship will be terminated
shortly before the Distribution under the provisions of the Distribution
Agreement. Tupperware and certain of its subsidiaries intend to enter into a
$300 million unsecured multicurrency credit facility, which along with cash
generated from operating activities and continuing, foreign uncommitted lines
of credit, which totaled $184.0 million at December 30, 1995, is expected to
be adequate to fund the Dividend Payment, as well as to finance any additional
working capital needs and capital expenditure requirements. See "Financing."
Operating Activities. Net cash provided by operating activities totaled
$179.0 million, $142.7 million, and $105.3 million in 1995, 1994, and 1993,
respectively. Working capital was $88.1 million at the end of 1995, compared
with $72.9 million and negative $49.4 million at the end of 1994 and 1993,
respectively. In 1995, the impact of higher income on net cash provided by
operating activities was offset by increases in working capital to support
growth in the Latin America business and higher sales activity in December,
along with higher inventory levels in the United States and Europe. The $37.4
million improvement in net cash provided by operating activities in 1994
compared with 1993 primarily reflects the $31.3 million improvement in net
income. Dart's 8 3/8% long-term notes were called at par on February 1, 1994.
At the end of 1993, $105 million of this debt was classified as current,
leading to the negative working capital position. Excluding this factor,
working capital was $17.3 million higher at the end of 1994 than at the end of
1993, reflecting a somewhat higher level of inventory and current deferred tax
assets.
Investing Activities. Cash used for capital expenditures totaled $69.3
million, $78.6 million, and $85.6 million in 1995, 1994, and 1993,
respectively. Capital expenditures declined during each of the three years as
the result of decreases in the necessity of expenditures in Europe. Capital
expenditures are expected to be approximately $85 million in 1996.
NEW ACCOUNTING STANDARD
In October 1995, the Financial Accounting Standards Board adopted Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," which governs the accounting for stock-based compensation
plans, including employee stock options. The statement allows companies the
choice of adopting a new fair value based method of accounting for such plans
that includes expensing related compensation cost in the income statement, or
continuing to apply the method currently specified under existing accounting
guidelines under which generally no compensation expense is recorded. If
companies elect to follow existing guidelines, the new rule requires that the
notes to the financial statements include pro forma information on net income
and earnings per share as if the fair value based method were being used.
Tupperware intends to continue to measure compensation expense under the
preexisting guidelines. Adoption of this new standard will be required for
Tupperware's 1996 financial statements.
IMPACT OF INFLATION AND FOREIGN OPERATIONS
Inflation as measured by consumer price indices has continued at a low level
in most of the countries in which Tupperware operates. Nevertheless,
Tupperware experienced substantial price increases for many of its raw
materials during 1995. A portion of these increased costs have been absorbed
by Tupperware through increased operating and production efficiency and lower
margins, and, a portion of the higher costs have been recovered through
selected price increases in some of its markets.
A significant portion of Tupperware's sales and profits come from its
international operations. Although these operations are geographically
dispersed, which partially mitigates the risks associated with operating in
particular countries, Tupperware is subject to the usual risks associated with
international operations. These risks include the local political and economic
environment, and relations between the foreign and United States governments.
See "Risk Factors--Foreign Operations."
25
<PAGE>
One of the economic risks associated with operating internationally is the
exposure to fluctuation in foreign currency exchange rates on the earnings,
cash flows, and financial position of Tupperware's international operations.
Tupperware is not able to project in any meaningful way the possible effect of
these fluctuations on translated amounts or future earnings. This is due to the
large number of currencies involved, the constantly changing exposure in these
currencies, and the fact that all foreign currencies do not react in the same
manner in relation to the United States dollar. In response to the fact that a
strengthening United States dollar generally has a negative impact on
Tupperware, Tupperware has used, through Premark, and will continue to use as
an independent company, financial instruments, such as forward contracts, to
hedge its exposure to certain foreign exchange risks as appropriate. See Note 6
to the Combined Financial Statements for a description of the nature of risks
associated with Tupperware's derivative financial instruments.
26
<PAGE>
MANAGEMENT OF TUPPERWARE
DIRECTORS OF TUPPERWARE
Immediately after the Distribution Date, the Tupperware Board is expected to
consist of the individuals named in the table below. The Tupperware Board will
be divided into three classes. Under the classified board provisions of the
By-laws, these individuals will not be required to stand for re-election to
the Tupperware Board until the year in which their respective terms expire.
See "Certain Antitakeover Effects of Certain Provisions of the Certificate of
Incorporation, By-laws and State Law -- Certificate of Incorporation and By-
laws."
<TABLE>
<CAPTION>
YEAR TERM
NAME AGE EXPIRES BACKGROUND
---- --- --------- ----------
<S> <C> <C> <C>
Warren L. Batts (3)...... 63 1998 Mr. Batts is the Chairman and Chief
Executive Officer of Tupperware. Mr.
Batts has served as Chairman and Chief
Executive Officer of Premark since
1986. Effective as of the Distribution
Date, he will cease to be Chief Execu-
tive Officer of Premark, but will con-
tinue as Chairman of Premark. Mr.
Batts currently serves as a director
of The Allstate Corporation, Cooper
Industries, Inc., Premark, Sears, Roe-
buck and Co. and Sprint Corporation.
William O. Bourke 68 1997 Mr. Bourke served as Chairman and
(1)(3).................. Chief Executive Officer of Reynolds
Metals Company, an aluminum, gold and
consumer products company from 1988
until his retirement in 1992. Mr.
Bourke currently serves as a director
of Merrill Lynch & Co., Premark, Reyn-
olds Metals Company and Sonat, Inc.
Mr. Bourke will continue on the
Premark Board after the Distribution.
Ruth M. Davis, Ph.D. 67 1999 Dr. Davis has served as President and
(1)(3).................. Chief Executive Officer of The
Pymatuning Group, Inc., a technology
management services firm, since 1981.
Dr. Davis is Chairman of the Board of
Trustees of the Aerospace Corporation.
Dr. Davis currently serves as a
Trustee of Consolidated Edison Company
of New York and as a director of Air
Products and Chemicals, Inc., BTG,
Inc., Ceridian Corporation, Giddings
and Lewis, Inc., Premark, Principal
Mutual Life Insurance Company, Sprint
Corporation and Varian Associates. Dr.
Davis will continue on the Premark
Board after the Distribution.
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
YEAR TERM
NAME AGE EXPIRES BACKGROUND
---- --- --------- ----------
<S> <C> <C> <C>
Lloyd C. Elam, M.D. (2)... 67 1999 Dr. Elam retired in 1995 from his po-
sition as Distinguished Professor
(having served previously as Chancel-
lor and as President) of Meharry Medi-
cal College. Dr. Elam was affiliated
with Meharry Medical College since
1963. Dr. Elam currently serves as a
director of First Union National Bank
of Tennessee, Bell South Telecommuni-
cations, Inc., Merck & Co., Inc.,
Phoenix Health Systems, Inc. and
Premark. Dr. Elam will continue on the
Premark Board after the Distribution.
E.V. Goings (3)........... 50 1998 Mr. Goings is the President and Chief
Operating Officer of Tupperware. It is
anticipated that upon Mr. Batts' re-
tirement from the position of Chief
Executive Officer of Tupperware Mr.
Goings will be elected to such posi-
tion. Mr. Goings has served as Execu-
tive Vice President of Premark and
President of Tupperware Worldwide
since November 1992. From June 1992 to
November 1992, Mr. Goings served as
Senior Vice President of Sara Lee Cor-
poration. From 1986 to June 1992, Mr.
Goings served in various executive po-
sitions with Avon Products, Inc. Mr.
Goings is currently a director of
Premark. He will resign from his posi-
tion as a director of Premark effec-
tive as of the Distribution Date.
Clifford J. Grum (2)(3)... 61 1999 Mr. Grum has served as Chairman and
Chief Executive Officer of Temple-In-
land, Inc., a forest products company,
since 1984. Mr. Grum currently serves
as a director of Cooper Industries,
Inc., Premark, Temple-Inland, Inc. and
Trinity Industries, Inc. Mr. Grum will
resign from his position as a director
of Premark effective as of the Distri-
bution Date.
Joseph E. Luecke (2)...... 69 1997 Mr. Luecke served as Chairman of the
Board and Chief Executive Officer of
Kemper Corporation, an insurance and
financial services company, from May
1986 until his retirement in 1992. Mr.
Luecke currently serves as a director
of Premark. Mr. Luecke will continue
on the Premark Board after the Distri-
bution.
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
YEAR TERM
NAME AGE EXPIRES BACKGROUND
---- --- --------- ----------
<S> <C> <C> <C>
Bob Marbut (2)............. 60 1997 Mr. Marbut has served as Chairman and
Chief Executive Officer of Argyle
Television, Inc., a television station
operating company, since 1994, as well
as Chairman and Chief Executive Offi-
cer of Argyle Communications, Inc., a
communications investment and operat-
ing company, since January 1992. He
also served as Chief Executive Officer
of Argyle Television Holding, Inc., a
television station operating company,
from 1993 to 1995. Prior to joining
Argyle Communications, Inc. in 1992,
Mr. Marbut served in various executive
positions since 1972 with Harte-Hanks
Communications, Inc. Mr. Marbut cur-
rently serves as a director of Argyle
Communications, Inc., Argyle Televi-
sion, Inc., Diamond Shamrock, Inc.,
Katz Media Group Inc., Premark and
Tracor, Inc. Mr. Marbut will resign
from his position as a director of
Premark effective as of the Distribu-
tion Date.
Robert M. Price (1)........ 65 1998 Mr. Price has served as President of
PSV, Inc., a firm which assists public
and private organizations in the uti-
lization and commercialization of new
technology, since 1995. He retired as
Chairman of the Board of Control Data
Corporation, a computer products com-
pany, in 1990. Mr. Price currently
serves as a director of Fourth Shift
Corporation, International Multifoods
Corporation, Premark, Public Service
Company of New Mexico and Rohr Indus-
tries, Inc. Mr. Price will resign from
his position as a director of Premark
effective as of the Distribution Date.
</TABLE>
- --------
(1) Anticipated member of Audit and Corporate Responsibility Committee.
(2) Anticipated member of Compensation and Directors Committee.
(3) Anticipated member of Executive Committee.
COMMITTEES OF THE BOARD OF DIRECTORS
Tupperware will be managed under the direction of its Board of Directors.
The Tupperware Board will meet on a regular basis to review Tupperware's
operations, strategic and business plans, acquisitions and dispositions, and
other significant developments affecting Tupperware, and to act on matters
requiring Tupperware Board approval. It will also hold special meetings when
an important matter requires Tupperware Board action between scheduled
meetings. Members of senior management will be regularly invited to Tupperware
Board meetings to discuss the progress of and future plans relating to their
areas of responsibility.
To facilitate independent director review, and to make the most effective
use of the directors' time and capabilities, the Tupperware Board is expected
to establish various committees, including those described below.
29
<PAGE>
The Audit and Corporate Responsibility Committee will review the scope and
results of the audit by the independent auditors, make recommendations to the
Tupperware Board as to the selection of independent auditors, and have
approval authority with respect to services provided by the independent
auditors and fees therefor. In addition, it will review the investment
performance of Tupperware's pension plan assets, and Tupperware's systems of
internal control and accounting policies. The Audit and Corporate
Responsibility Committee will be composed solely of directors who are not
employees of Tupperware or any of its subsidiaries. The Audit and Corporate
Responsibility Committee will also monitor Tupperware's relationships with,
and support of, various outside interests, including the communities within
which it operates, and recommend corporate policies with respect to
affirmative action, equal opportunity and similar issues of social
significance. The Audit and Corporate Responsibility Committee will also
review Tupperware's adherence to both the spirit and letter of the law in the
areas of employee safety and health, and environmental responsibility. Members
of this committee are expected to be Mr. Bourke (Chairperson), Dr. Davis and
Mr. Price.
The Compensation and Directors Committee will evaluate the performance of,
and make compensation recommendations for, senior management, including the
Chief Executive Officer, and will identify and review qualifications of, and
make recommendations to the Tupperware Board regarding candidates for election
as directors of Tupperware. It will also direct the administration of, and
make various determinations under, the management incentive plans and will
appoint members of senior management to have responsibility for the design,
administration and funding of employee benefit plans and the investment of
pension plan assets. The Compensation and Directors Committee will also
consider recommendations of stockholders as to candidates for Tupperware Board
membership. Members of this committee are expected to be Mr. Grum
(Chairperson), Dr. Elam, Mr. Luecke, and Mr. Marbut.
The Executive Committee will have most of the powers of the Tupperware Board
and can act when the Tupperware Board is not in session. Members of this
committee are expected to be Mr. Batts (Chairperson), Mr. Bourke, Dr. Davis,
Mr. Goings and Mr. Grum.
COMPENSATION OF DIRECTORS
Non-employee directors of Tupperware will receive (i) an annual retainer fee
of $26,000, (ii) an additional retainer fee for serving on Tupperware Board
committees (other than the Executive Committee) of $4,000 per year, in the
case of the committee chairperson, and $2,000 per year, in the case of the
other members, and (iii) a fee of $1,500 for each meeting of the Tupperware
Board and for each meeting of any Tupperware Board committee attended.
Such directors may elect to defer payment of all or part of the retainer and
attendance fees, in which event interest would be credited at the prime rate.
Under Tupperware's Director Stock Plan (as defined below), non-employee
directors may elect to receive their annual retainers in cash or in shares of
Tupperware Common Stock, or they may elect to forego the retainer in exchange
for a reduced price on stock options. The Director Stock Plan also provides
that a grant of 1,000 shares of Tupperware Common Stock is made to each new
non-employee director after three months of service on the Tupperware Board.
See "Expected Compensation and Employee Benefit Plans Following the
Distribution -- Tupperware Corporation Director Stock Plan."
30
<PAGE>
EXECUTIVE OFFICERS OF TUPPERWARE
Set forth below is information with respect to those individuals who are
expected to serve as executive officers of Tupperware immediately following
the Distribution. Those individuals named below who are currently officers or
employees of Premark will resign from all such positions prior to or as of the
Distribution Date. However, Mr. Batts will continue to serve as Chairman of
Premark.
<TABLE>
<CAPTION>
NAME AND AGE OFFICE AND EXPERIENCE
------------ ---------------------
<S> <C>
Warren L. Batts, age 63.. Chairman and Chief Executive Officer. Mr. Batts has
served as Chairman and Chief Executive of Premark
since 1986. Effective as of the Distribution Date,
he will cease to be Chief Executive Officer of
Premark, but will continue as Chairman.
E.V. Goings, age 50...... President and Chief Operating Officer. It is antici-
pated that upon Mr. Batts' retirement from the posi-
tion of Chief Executive Officer of Tupperware Mr.
Goings will be elected to such position. Mr. Goings
has served as Executive Vice President of Premark
and President of Tupperware Worldwide since November
1992. From June 1992 to November 1992, Mr. Goings
served as Senior Vice President of Sara Lee Corpora-
tion. From 1986 to June 1992, Mr. Goings served in
various executive positions with Avon Products, Inc.
Mr. Goings is currently a director of Premark. He
will resign his position as a director of Premark
effective as of the Distribution Date.
Brian R. Biggin, age 50.. Vice President, Internal Audit. Mr. Biggin currently
serves as Director, Computer Systems Audit for
Premark, a position he has held since 1986.
Mark H. Bobek, age 33.... Vice President and Treasurer. Mr. Bobek has served
as Director of International and Corporate Finance
since 1994 and served in various other financial po-
sitions with Premark starting in 1989.
Luis G. Campos, age 43... President, Tupperware Americas. Mr. Campos is cur-
rently, and has been since November 1995, President,
Tupperware Americas. From April 1994 to November
1995 he served as President, Tupperware
IberoAmerica. Mr. Campos served as President and
Chief Executive Officer of Sara Lee-House of Fuller-
Mexico from 1992 to April 1994. From 1985 to 1992 he
served as Managing Director of Hasbro Mexico.
David T. Halversen, age Senior Vice President, Planning, Business Develop-
51...................... ment and Financial Relations. Mr. Halversen is cur-
rently, and has been since February 1995, Vice Pres-
ident, Business Development and Planning for
Tupperware. From April 1985 until joining Tupperware
in 1995, Mr. Halversen served in various planning
and strategy positions with Avon Products, Inc.
Christine J. Hanneman, Vice President, Financial Relations. Ms. Hanneman is
age 40.................. currently, and has been since June 1994, Director,
Investor Relations for Premark. From February 1990
to June 1994 she served as Manager Investor Rela-
tions of Premark.
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
NAME AND AGE OFFICE AND EXPERIENCE
------------ ---------------------
<S> <C>
Carol A. Kiryluk, age Senior Vice President, Human Resources. Ms. Kiryluk
49...................... is currently, and has been since March 1992, Vice
President, Human Resources Worldwide for Tupperware.
From November 1989 until joining Tupperware in 1992,
Ms. Kiryluk served as Vice President, Human Re-
sources, Corporate Relations for JI Case.
Gaylin L. Olson, age 50.. President, Tupperware U.S. Mr. Olson is currently,
and has been since December 1995, President,
Tupperware U.S. Mr. Olson joined Tupperware in 1981
and has served in various executive positions re-
lated to the Tupperware Business.
Thomas M. Roehlk, age Senior Vice President, General Counsel and Secre-
45...................... tary. Mr. Roehlk is currently, and has been since
December 1995, Senior Vice President, General Coun-
sel and Secretary, Tupperware. From 1990 to December
1995, Mr. Roehlk served as Assistant General Counsel
and Assistant Secretary of Premark.
James E. Rose, Jr., age Vice President, Taxes and Government Affairs for
53...................... Tupperware. Mr. Rose is currently, and has been
since August 1994, Vice President, Taxes and Govern-
ment Affairs for Premark. Prior to assuming that po-
sition, Mr. Rose served as Vice President, Taxes for
Premark.
Hans Joachim Schwenzer, Senior Vice President, Tupperware Worldwide. Mr.
age 59.................. Schwenzer is currently President, Tupperware Germa-
ny; President, Sales Programs and Promotions,
Tupperware Europe, Africa and Middle East; and Re-
gional General Manager, Austria and Eastern Europe
Region and has been since May 1995, Senior Vice
President, Tupperware Worldwide. Prior to assuming
those positions, Mr. Schwenzer served starting in
November 1990 as President, Tupperware Germany, and
has held several other area positions since joining
Premark.
Christian E. Skroeder, President, Tupperware Europe, Africa and Middle
age 47.................. East. Mr. Skroeder is currently, and has been since
May 1995, President, Tupperware Europe, Africa and
Middle East. Prior to assuming that position Mr.
Skroeder served starting in 1988 in various execu-
tive positions with Tupperware.
Jose R. Timmerman, age Vice President, Operations, Tupperware Worldwide.
47...................... Mr. Timmerman is currently, and has been since Octo-
ber 1993, Vice President, Operations, Tupperware
Worldwide. Prior to assuming that position, Mr. Tim-
merman served as Vice President, Manufacturing,
Tupperware Asia Pacific starting in November 1992.
From 1985 to 1992, he served as Plant Manager of the
Tupperware manufacturing facility in Aalst, Belgium.
Paul B. Van Sickle, age Senior Vice President, Finance and Operations. Mr.
56...................... Van Sickle is currently, and has been since November
1992, Senior Vice President, Finance and Operations
of Tupperware. Prior to assuming that position, he
served as Vice President -- Finance of Tupperware.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
NAME AND AGE OFFICE AND EXPERIENCE
------------ ---------------------
<S> <C>
Robert W. Williams, age President, Tupperware Asia Pacific. Mr. Williams is
52...................... currently, and has been since April 1995, President,
Tupperware Asia Pacific. Prior to assuming that po-
sition, Mr. Williams served in various management
positions in Tupperware Asia Pacific starting in Au-
gust 1993. From 1991 until joining Tupperware, Mr.
Williams served as Vice President, Marketing for
Cameo Coutures, Inc. From 1989 to 1991 he served as
President of Impact Business Systems.
</TABLE>
OWNERSHIP OF TUPPERWARE COMMON STOCK BY MANAGEMENT
All Tupperware Common Stock is currently owned by Premark and no officer or
director of Tupperware owns any shares of Tupperware Common Stock. The
following table sets forth the expected beneficial ownership of Tupperware
Common Stock as of the Distribution Date by the individuals expected to be
directors and named executive officers and by all directors and officers as a
group of Tupperware based on the number of outstanding shares of Premark
Common Stock on March 4, 1996. With respect to options, the numbers reflect
the actual number of shares of Premark Common Stock subject to options (other
than, with respect to Mr. Batts, in which case the numbers reflect two-thirds
of such shares and, with respect to Mr. Bourke, Dr. Davis and Dr. Elam, which
in each case, the numbers reflect one-half of such shares). See " --
Compensation of Executive Officers." Each of the following individuals and
members of the group would have sole voting and investment power with respect
to the shares shown unless otherwise indicated. No director or officer would
own more than 1% of Tupperware Common Stock, other than Mr. Batts, who would
own 1.14% of Tupperware Common Stock.
<TABLE>
<CAPTION>
SHARED SHARES THAT
OWNERSHIP MAY BE RETIREMENT
OR HELD FOR ACQUIRED WITHIN SAVINGS TOTAL SHARES
SOLE FAMILY 60 DAYS OF RESTRICTED PLAN-- BENEFICIALLY
NAME OWNERSHIP MEMBERS MARCH 4, 1996(1) STOCK 401(K) OWNED
---- --------- ----------- ---------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Warren L. Batts......... 569,432 -- 114,667 -- 20,698 704,797
William O. Bourke....... 2,450 4,000 4,000 -- -- 10,450
Luis G. Campos.......... -- 5,000 -- 6,902 -- 11,902
Ruth M. Davis........... 3,037 -- 1,035 -- -- 4,072
Dr. Lloyd C. Elam....... 6,067 -- 2,000 -- -- 6,067
E.V. Goings............. 28,416 -- 100,000 26,446 -- 154,862
Clifford J. Grum........ 4,124 8,000 12,000 -- -- 24,124
Joseph E. Luecke........ 2,000 2,000 -- -- -- 4,000
Bob Marbut.............. 11,470 -- 4,000 -- -- 15,470
Robert M. Price......... 2,000 -- 8,000 -- -- 10,000
Hans Joachim Schwenzer.. 7,600 -- 20,000 -- -- 27,600
Christian E. Skroeder... 600 -- 6,000 -- -- 6,600
All directors and
executive officers as a
group (23 including the
named individuals
above)................. 645,252 17,850(2) 453,372 33,348 98,739 1,244,391(2)
</TABLE>
- --------
(1) Includes stock options granted under Premark's management incentive plans
and Director Stock Plan. Also includes estimated shares of Premark Common
Stock that will be paid in lieu of fees under the Director Stock Plan.
(2) Excludes 2,720 shares for which voting and investment power is disclaimed.
33
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Effective as of the Distribution Date, Tupperware will assume the current
employment agreement between Premark and Mr. E.V. Goings. Tupperware has an
employment agreement with Mr. Luis Campos which will continue after the
Distribution Date. See "Expected Compensation and Employee Benefit Plans
Following the Distribution -- Employment Agreements." Tupperware has also
established a variety of compensation and benefit plans for executive
officers, as described below, which have generally been modeled after existing
Premark plans. See "Expected Compensation and Employee Benefit Plans Following
the Distribution."
Summary Compensation Table. The following table sets forth the annual and
long-term compensation for services rendered in fiscal 1995, 1994, and 1993
which was paid to, or deferred for the Chief Executive Officer of Tupperware
in 1995 and each of the other next four most highly compensated executive
officers of Tupperware (collectively, the "named executive officers") as of
December 30, 1995. The compensation described in this table was paid by
Premark or a subsidiary. References to "restricted stock" and "stock options"
relate to awards under the Premark 1994 Incentive Plan.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------- -----------------------
AWARDS
-----------------------
OTHER RESTRICTED ALL
ANNUAL STOCK SECURITIES OTHER
COMPENSATION AWARDS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) ($) ($)(2) OPTIONS(#) ($)(3)
- --------------------------- ---- ------------ ---------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
WARREN L. BATTS......... 1995 $750,000 $ 369,525 -- -- 30,000 $153,415
Chairman of the Board
and 1994 $708,333 $ 975,000 $682,500(4) -- 25,333 $143,832
Chief Executive Officer 1993 $683,333 $ 910,000 $500,000(5) -- 20,000 $ 91,272
E.V. GOINGS............. 1995 $366,346 $ 834,137(6) -- $459,137(6) 14,100 $ 59,989
Executive Vice President
and 1994 $347,500 $1,085,513 $243,750(4) $764,913 17,250 $ 58,707
President, Tupperware 1993 $325,000 $ 325,000 -- -- 17,000 $ 18,422
LUIS G. CAMPOS(7)....... 1995 $226,188 $ 257,985 -- $331,250(9) 9,750 $ 17,119
President, Tupperware
Americas 1994 $166,763 $ 92,018 $170,000(8) -- 26,200 --
1993 -- -- -- -- -- --
HANS JOACHIM
SCHWENZER(10)........... 1995 $323,425 $ 393,874 -- -- 6,500 --
Senior Vice President, 1994 $292,832 $ 130,597 $139,804(4) -- 5,200 --
Tupperware Worldwide 1993 $274,902 $ 173,959 -- -- 6,400 --
CHRISTIAN E.
SKROEDER(10)............ 1995 $302,986 $ 258,986 -- -- 7,050 --
President, Tupperware
Europe, 1994 $204,510 $ 129,485 -- -- 11,250 --
Africa and Middle East 1993 $166,029 $ 100,308 -- -- 4,400 --
</TABLE>
- --------
(1) Includes amounts held in the Premark Retirement Savings Plan that were
deferred pursuant to Section 401(k) of the Code and amounts deferred under
the Premark Supplemental Plan, as well as Code Section 125 contributions
to the Premark Flexible Benefits Plans.
(2) Represents the market value on the date of grant of restricted stock
awarded under Premark management incentive plans. The number, vesting
schedule and value of restricted stock held at the end of the 1995 fiscal
year are as follows:
<TABLE>
<CAPTION>
VESTING SCHEDULE
DATE OF NUMBER OF -----------------
NAME GRANT SHARES HELD VALUE SHARES DATE
---- -------- ----------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Mr. Batts.................... -- -- -- -- --
Mr. Goings................... 03/01/95 17,711 $895,512 17,711 03/01/97
Mr. Campos................... 10/31/95 5,000 $252,812 5,000 10/31/98
Mr. Schwenzer................ -- -- -- -- --
Mr. Skroeder................. -- -- -- -- --
</TABLE>
In the event of a change of control of Premark, all shares of restricted
stock become free of all restrictions and become nonforfeitable. Holders of
restricted stock receive the same dividends as other holders of Premark
Common Stock.
34
<PAGE>
(3) For the 1995 fiscal year, consists of annual contributions by Premark to
the Premark Retirement Savings Plan and amounts credited to the Premark
Supplemental Plan (which provides benefits to the named executive
officers to which they would have been entitled under the Premark
Retirement Savings Plan, but for the benefit limits imposed by the Code)
as follows: Mr. Batts, $10,847 and $142,568; Mr. Goings, $11,111 and
$48,878; and Mr. Campos, $7,164 and $9,955.
(4) Represents a 1994 payout based on 1993 performance under the Long-Term
Incentive Plan, but is included among the annual compensation data in
accordance with the incentive compensation reporting rules.
(5) Represents a special bonus award in recognition of Premark's progress
under Mr. Batts' leadership. It is not expected that this will be a
recurring event.
(6) In the Bonus column, $459,137 represents the cash portion of the 1995
gainsharing award under an employment agreement with Mr. Goings, and
$375,000 represents an annual bonus based on the performance of the non-
North American Tupperware operations. The other part of the gainsharing
award was paid in 8,735 shares of restricted stock, which will vest two
years from date of grant. Dividends will be paid on such shares. The
value of such shares is reflected in the restricted stock column. See
"Expected Compensation and Employee Benefit Plans Following the
Distribution."
(7) Mr. Campos joined Tupperware on April 18, 1994.
(8) Represents a special payment under Mr. Campos' employment agreement to
replace the annual incentive he forfeited when he left his previous
employer.
(9) Represents a restricted stock grant of 5,000 shares valued at $231,250
and a restricted stock grant of 1,902 shares valued at $100,000 under his
1995 gainsharing award.
(10) The compensation of Messrs. Schwenzer and Skroeder is paid in the local
currency, namely German marks and Swiss francs for Mr. Schwenzer, and
Swiss francs for Mr. Skroeder. For purposes of reporting, the local
currency has been translated to United States dollars as of the end of
each fiscal year.
Option/SAR Table. The following Options/SAR Grant Table sets forth, for each
of the named executive officers, options granted in respect of Premark Common
Stock during fiscal 1995 pursuant to Premark's 1994 Incentive Plan. The plan
permits the grant of stock appreciation rights ("SARs") in connection with all
or part of an option but no SARs have been granted. As set forth in the
Benefits Agreement, subject to any necessary consent, Tupperware employees,
other than Mr. Batts, who received options for Premark Common Stock while
employed by Premark will as of the Distribution Date have such options
replaced with options for Tupperware Common Stock having the same value. Two-
thirds of the options on Premark Common Stock held by Mr. Batts will be
replaced with options on Tupperware Common Stock. See "Arrangements Between
Premark and Tupperware Relating to the Distribution -- Benefits Agreement" and
"Expected Compensation and Employee Benefit Plans Following the Distribution."
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#)(1) FISCAL YEAR ($/SH)(2) DATE ($)(2)(3)
---- -------------- ---------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Warren L. Batts......... 30,000 4.75 $46.35 10/30/05 $625,050
E. V. Goings............ 14,100 2.23 $46.35 10/30/05 $195,849
Luis G. Campos.......... 9,750 1.54 $46.35 10/30/05 $135,428
Hans Joachim Schwenzer.. 5,000 0.79 $46.35 10/30/05 $ 69,450
Christian E. Skroeder... 7,050 1.12 $46.35 10/30/05 $ 97,925
</TABLE>
- --------
(1) These options will become exercisable on October 31, 1998.
(2) Stock options are granted with an exercise price equal to the average fair
market value of Premark Common Stock on the date of grant, rounded up to
the nearest nickel. The term of each option is 10 years. In the event of a
change of control of Premark, all options will become immediately
exercisable and the optionee will have the right to receive the difference
between the exercise price and the then fair market value of Premark
Common Stock in cash. Exercise prices will be adjusted at the time of the
Distribution.
35
<PAGE>
(3) The Black-Scholes option pricing model was used assuming a dividend yield
of 2%, a risk-free interest rate of 5.8%, an expected stock price
volatility based on Premark's historical experience of 30%, and an
expected option life based on Premark's historical experience of five
years. The attribution of values with the Black-Scholes model to stock
option grants requires adoption of certain assumptions, as described
above. While the assumptions are believed to be reasonable, the reader is
cautioned not to infer a forecast of earnings or dividends either from the
model's use or from the values adopted for the model's assumptions. Any
future values realized will ultimately depend upon the excess of the stock
price over the exercise price on the date the option is exercised.
Aggregated Option Exercises and Fiscal Year-End Option Values. The following
table sets forth information with respect to the named executive officers,
regarding the exercise of options for Premark Common Stock during fiscal 1995
and unexercised options held as of the end of fiscal 1995 pursuant to
Premark's 1994 Incentive Plan. As set forth in the Benefits Agreement,
Tupperware employees who received options for Premark Common Stock while
employed by Premark will have such options replaced with options for
Tupperware Common Stock as of the Distribution Date, the number and price of
such Tupperware options will be set in a manner that will maintain in the
aggregate the excess of market value over exercise price of the Premark
options immediately prior to the Distribution. See "Arrangements Between
Premark and Tupperware Relating to the Distribution -- Benefits Agreement" and
"Expected Compensation and Employee Benefit Plans Following the
Distribution -- Tupperware Corporation 1996 Incentive Plan."
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES VALUE OPTIONS AT FY-END(#) FY-END($)(2)
ACQUIRED ON REALIZED ------------------------- -------------------------
NAME EXERCISE(#)(1) ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Warren L. Batts......... 0 0 114,667 75,333 $5,797,430 $772,213
E. V. Goings............ 0 0 100,000 48,350 3,318,250 364,239
Luis G. Campos.......... 0 0 0 35,950 0 300,479
Hans Joachim Schwenzer.. 2,000 $79,525 20,000 18,100 669,450 134,494
Christian E. Skroeder... 0 0 6,000 22,700 200,835 148,717
</TABLE>
- --------
(1) Upon the exercise of an option, the optionee must pay the exercise price
in cash or stock.
(2) Represents the difference between the fair market value of the common
stock underlying the option and the exercise price at exercise, or fiscal
year-end, respectively. Exercise prices will be adjusted at the time of
the Distribution.
Long-Term Incentive Plan Awards. The following table sets forth long-term
incentive awards under Premark's 1994 Incentive Plan made during fiscal 1995.
It is anticipated that Tupperware will have a long-term incentive plan similar
to Premark's 1994 Incentive Plan. See "Expected Compensation and Employee
Benefit Plans Following the Distribution -- Tupperware Corporation 1996
Incentive Plan."
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-
PERFORMANCE OR OTHER BASED PLANS
PERIOD UNTIL ---------------------------
NAME MATURATION OR PAYOUT THRESHOLD TARGET MAXIMUM
---- -------------------- --------- -------- --------
<S> <C> <C> <C> <C>
Warren L. Batts............... 3 years 0 $243,750 $731,250
E. V. Goings.................. 3 years 0 $ 93,750 $281,250
Luis G. Campos................ 3 years 0 $ 65,000 $195,000
Hans Joachim Schwenzer........ 3 years 0 $ 86,820 $260,461
Christian Skroeder............ 3 years 0 $ 75,829 $227,489
</TABLE>
- --------
The named executive officers participate in a 3-year Long-Term Program under
Premark's 1994 Incentive Plan. The program provides for an incentive
opportunity based on meeting or exceeding financial measures established
36
<PAGE>
by the Compensation and Directors Committee of the Premark Board. Performance
measurements are based on economic value added performance which is defined as
net operating profit after taxes less a capital charge. Awards are subject to
forfeiture if the participant's employment is terminated. The above estimated
future payouts are based on a percentage of current salary which may change
between the date hereof and time of payout.
Pension Plans. After the Distribution, none of the employees of Tupperware,
including the named executive officers, will participate in any plans of
Premark, but are expected to be eligible to participate in Tupperware's newly
adopted plans. See "Arrangements Between Premark and Tupperware Relating to
the Distribution -- Benefits Agreement" and "Expected Compensation and
Employee Benefit Plans Following the Distribution."
Messrs. Batts, Goings and Campos (the "U.S. named executive officers"),
participate in the Premark International, Inc. Base Retirement Plan (the "Base
Plan") at 1% of career average pay. Compensation covered by the Base Plan
includes salary and annual bonus paid in the calendar year, but does not
include any long-term incentive or other cash payments. Credited years service
for each of the U.S. named executive officers are: Mr. Batts, 15.33; Mr.
Goings, 3.08; and Mr. Campos, 1.58. Benefits are computed on a straight-life
annuity basis and are not subject to any deductions for Social Security or
other offset amounts. The estimated annual benefits payable upon retirement at
normal retirement age for each of the U.S. named executive officers are: Mr.
Batts, $208,317; Mr. Goings, $120,355; and Mr. Campos, $80,919. The estimates
take into account participation in the Base Plan, any predecessor plan
formula, and the Premark Supplemental Plan, which provides benefits from
general assets of Premark that would otherwise be payable from plans but for
the benefit limits imposed by the Code.
Mr. Skroeder currently participates, and will continue after the
Distribution to participate in, the Premiere Products Inc. Pension Plan (the
"TEAM pension plan") at 1.75% of pay of the average best five salaries in the
final 10 years prior to retirement per year of service. Compensation covered
by the TEAM pension plan includes salary plus management bonus, but does not
include any overtime, commissions or occasional premiums. Mr. Skroeder has
7.42 years credited service under the TEAM pension plan. Benefits are computed
on a straight-life annuity basis and are subject to integration with social
security through an offset with covered compensation. The estimated annual
benefits payable upon retirement at normal retirement age for Mr. Skroeder is
SFr 217,636. The estimate takes into account participation in the TEAM pension
plan and any predecessor plan formulas.
Mr. Schwenzer currently participates, and will continue after the
Distribution to participate in, the Tupperware GmbH Pension Plan (the "German
pension plan") at 0.5% of final five year average pay up to the Social
Security ceiling, plus 1.67% of final five year average pay in excess of the
Social Security ceiling per year of service. Compensation covered by the
German pension plan includes salary plus average management bonuses over the
last five years, but does not include any overtime, commissions and occasional
premiums. Mr. Schwenzer has 32.4 years credited service under the German
pension plan. Benefits are computed on a straight-life annuity basis and are
not subject to deductions for Social Security or other offset amounts. The
estimated annual benefits payable upon retirement at normal retirement age for
Mr. Schwenzer is DM 418,750. The estimate takes into account participation in
the German pension plan and any predecessor plan formulas.
37
<PAGE>
GERMAN PENSION PLAN
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------
FINAL
AVERAGE PAY 15 20 25 30 35
- ----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$200,000........................... $ 50,100 $ 66,800 $ 83,500 $100,200 $116,900
225,000........................... 56,363 75,150 93,938 112,725 131,513
250,000........................... 62,625 83,500 104,375 125,250 146,125
300,000........................... 75,150 100,200 125,250 150,300 175,350
400,000........................... 100,200 133,600 167,000 200,400 233,800
450,000........................... 112,725 150,300 187,875 225,450 263,025
500,000........................... 125,250 167,000 208,750 250,500 292,250
600,000........................... 150,300 200,400 250,500 300,600 350,700
700,000........................... 175,350 233,800 292,250 350,700 409,150
800,000........................... 200,400 267,200 334,000 400,800 467,600
</TABLE>
Mr. Schwenzer participates in the Retirement Plan for Employees of the
Tupperware GmbH Group. Compensation covered by the Plan includes salary and
average management bonus over the last five years, but does not include any
overtime, commissions, or other cash payments. Mr. Schwenzer has been credited
with 32.4 years of service. Benefits are computed on a straight-life annuity
basis and are not subject to deductions for social security or other offset
amounts.
EXPECTED COMPENSATION AND EMPLOYEE BENEFIT PLANS FOLLOWING THE DISTRIBUTION
EMPLOYMENT AGREEMENTS
Effective as of the Distribution Date, Tupperware will assume the current
employment agreement between Premark and Mr. Goings pursuant to which Mr.
Goings will be employed as President and Chief Operating Officer of
Tupperware. For the years 1994, 1995 and 1996, Mr. Goings participates in an
annual gainsharing program based on pre-tax segment income of Tupperware North
America. Any gainsharing awards earned are payable 50% in cash and 50% in
Restricted Stock (as defined below). Gainsharing awards for 1994 and 1995 are
reflected in the Summary Compensation Table. Also, Mr. Goings participates in
annual incentive programs based on non-North-American Tupperware operations.
To replace stock compensation forfeited when Mr. Goings left his previous
employer, he was granted a stock option for 100,000 shares of Premark Common
Stock which became exercisable in 1995. He was awarded 40,000 shares of
Restricted Stock which vested in one-third increments annually ending in 1995.
In the event Mr. Goings is terminated without cause, he will receive an amount
equal to two times his base salary, offset by the amounts due under
Tupperware's severance pay plan.
Tupperware has an employment agreement with Mr. Campos which will continue
after the Distribution Date. Pursuant to his employment agreement, Mr. Campos
received a starting annual base salary of $215,000. In addition, he is
entitled to participate in an annual gainsharing program through 1997 under
which he will receive, if certain performance levels are met, an award of
Restricted Stock. The maximum annual value for any such award is $100,000,
with a maximum cumulative gainsharing award during the three-year period for
the program of $300,000.
Additionally, under the terms of their respective employment agreements,
Messrs. Goings and Campos are each entitled to incentive bonus payments
pursuant to the 1996 Incentive Plan (as defined below). Mr. Goings and Mr.
Campos will also be entitled to participate in and receive all benefits under
any and all savings and retirement plans and welfare benefit plans, practices,
policies and programs maintained or provided by Tupperware for the benefit of
senior executives.
Tupperware has an agreement with Mr. Schwenzer which will continue after the
Distribution Date. Pursuant to such agreement, on October 31, 1998, Mr.
Schwenzer will receive 5,000 shares of Tupperware Common Stock in exchange for
his agreement not to compete with Tupperware or hire away any of its employees
for a one-year period following his retirement which is expected to occur in
2001.
38
<PAGE>
It is anticipated that Tupperware will enter into a change of control
employment agreement (collectively, the "Change of Control Agreements") with
each of its executive officers. The purpose of these agreements is to assure
stockholders that the business of Tupperware will continue with a minimum
amount of disruption in the event of a change of control of Tupperware. Under
the terms of the Change of Control Agreements a change of control is defined
as the acquisition of 20% or more of Tupperware Common Stock or voting
securities of Tupperware by a person or group, certain changes in the majority
of the Tupperware Board, certain mergers involving Tupperware, or the
liquidation, dissolution or sale of all or substantially all of the assets of
Tupperware. If within three years of a change of control, Tupperware
terminates any such officer's employment (other than for cause or disability)
or any such officer terminates his employment for good reason, or, during the
30-day period beginning one year after a change in control, any such officer
terminates his employment for any reason, such officer will be entitled to,
among other things, his or her base salary and pro rata bonus through the date
of termination; the amount of any compensation previously deferred and any
accrued vacation pay, in each case, to the extent not yet paid; three times
his or her base salary and highest incentive award; and continued
participation in Tupperware welfare plans for the remainder of such three-year
period (other than medical benefits which will, under certain circumstances,
be continued for the lifetime of such officer). Additionally, if any payment
or distribution by Tupperware or any subsidiary or affiliate to an officer who
is party to a Change of Control Agreement would be subject to any excise tax
as an "excess parachute payment", then such officer will be entitled to
receive an additional gross-up payment in an amount such that after payment of
all taxes by such officer attributable to such additional gross-up payment,
such officer is in the same after-tax position as if no excise tax had been
imposed on such officer. Pursuant to the terms of the Change of Control
Agreements, if a change of control occurred that resulted in termination of
employment, based on their respective compensation during fiscal 1995, the
named executive officers would be entitled to payments as follows: Mr. Batts,
$4,344,434; Mr. Goings, $2,940,071; Mr. Campos, $1,272,582; Mr. Skroeder,
$1,162,304; and Mr. Schwenzer, $1,519,835.
It is anticipated that, following the Distribution Date, Mr. Batts will be
an employee of both Premark and Tupperware. Mr. Batts' salary and benefits
will be paid by Tupperware, with one-third of the cost thereof reimbursed by
Premark. Two-thirds of the stock options on Premark Common Stock held by Mr.
Batts will, as of the Distribution Date, be replaced with stock options on
Tupperware Common Stock, the number and price of such Tupperware options will
be set in a manner that will maintain in the aggregate the excess of market
value over exercise price of the Premark options immediately prior to the
Distribution.
TUPPERWARE CORPORATION 1996 INCENTIVE PLAN
Prior to the Distribution Date, the Tupperware Board and the Premark Board
will adopt, and Premark will submit to its stockholders for approval, the
Tupperware Corporation 1996 Incentive Plan (the "1996 Incentive Plan"). The
1996 Incentive Plan is designed to promote the success and enhance the value
of Tupperware by linking the interests of certain of the full-time employees
of Tupperware ("Participants") to those of Tupperware's stockholders and by
providing Participants with an incentive for outstanding performance. The 1996
Incentive Plan is further intended to provide flexibility to Tupperware in its
ability to motivate, attract and retain Participants upon whose judgment,
interest and special efforts Tupperware's successful operation largely is
dependent. As determined by the Compensation and Directors Committee, or any
other designated committee of the Tupperware Board, Tupperware employees,
including employees who are members of the Tupperware Board, are eligible to
participate in the 1996 Incentive Plan. Non-employee directors are not
eligible to participate in the 1996 Incentive Plan. The Tupperware Board has
provided for the 1996 Incentive Plan to remain in effect for 10 years, to
2006. The description below is intended as a summary only and is qualified in
its entirety by reference to the 1996 Incentive Plan, a copy of which is
attached hereto as Annex C.
General. The 1996 Incentive Plan will be administered by the Compensation
and Directors Committee of the Tupperware Board or, at the discretion of the
Tupperware Board, any other committee appointed by the Tupperware Board for
such purpose (the "Committee"). Four types of awards may be granted to
Participants under the 1996 Incentive Plan: (i) stock options (both non-
qualified and incentive) ("Options"), (ii) SARs, (iii) restricted Tupperware
Common Stock ("Restricted Stock") and (iv) performance awards ("Performance
Awards," and together with the Options, SARs and Restricted Stock, the
"Awards").
The 1996 Incentive Plan provides that the total number of shares of
Tupperware Common Stock available for grant under the 1996 Incentive Plan may
not exceed 6,100,000 shares; provided that if during the term of the
39
<PAGE>
1996 Incentive Plan Tupperware repurchases shares of Tupperware Common Stock,
additional shares equal to the number of such repurchased shares, up to
1,500,000 shares, will be available for Options; and provided further that the
total number of shares of Tupperware Common Stock available for Restricted
Stock awards is not to exceed 300,000. No Participant may be granted Awards
covering in excess of 10% of the shares of Tupperware Common Stock available
for issuance over the life of the 1996 Incentive Plan. If any Award is
cancelled or forfeited or terminates, expires, or lapses (other than a
termination of a Tandem SAR (as defined below) upon exercise of the related
Option or the termination of a related Option upon exercise of the
corresponding Tandem SAR), shares subject to such Award will be available for
the grant of an Award under the 1996 Incentive Plan.
In the event of any change in corporate capitalization, such as a stock
split, or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property
of Tupperware, or any reorganization or partial or complete liquidation of
Tupperware, the Committee or the Tupperware Board may make such substitutions
or adjustments in the aggregate number, and class of shares reserved for
issuance or subject to outstanding Awards and in the price of shares subject
to outstanding Options or SARs as it may determine to be appropriate.
The 1996 Incentive Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and is not
qualified under Section 401(a) of the Code.
Options. The term of Options granted under the 1996 Incentive Plan may not
exceed 10 years. The exercise price for each Option granted will be determined
by the Committee; provided that the exercise price may not be less than 100%
of the fair market value (as defined in the 1996 Incentive Plan) of a share of
Tupperware Common Stock on the date of grant.
A Participant exercising an Option may pay the exercise price in full in
cash, or, if approved by the Committee with previously acquired shares of
Tupperware Common Stock. The Committee, in its discretion, may allow cashless
exercise of Options.
Options are nontransferable other than by will or laws of descent and
distribution (and, in the case of a nonqualified Option, pursuant to a
domestic relations order or by gift to members of the holder's immediate
family, whether directly or indirectly or by means of a trust or partnership),
and, during the Participant's lifetime, may be exercised only by the
Participant or his legal representative.
SARs. SARs may be granted by the Committee in connection with all or part of
any Option grant ("Tandem SARs") or granted separately and unrelated to any
Option ("Freestanding SARs"). A Tandem SAR may be exercised only with respect
to the shares for which its related Option is then exercisable. SARs permit
the Participant to receive in cash or shares of Tupperware Common Stock (or a
combination of both) an amount equal to the excess of the fair market value of
a share of Tupperware Common Stock on the date the SAR is exercised over the
exercise price for the SAR times the number of shares of Tupperware Common
Stock with respect to which such SAR is exercised.
The term of SARs granted under the 1996 Incentive Plan may not exceed 10
years. The exercise price of a Freestanding SAR will be determined by the
Committee. The exercise price of a Tandem SAR will equal the exercise price of
the related Option.
SARs are nontransferable other than by will or laws of descent and
distribution, and, during the Participant's lifetime, may be exercised only by
the Participant; provided that at the discretion of the Committee, an award
agreement may permit transfer of a SAR by a Participant solely to members of
the Participant's immediate family or trusts or partnerships for the benefit
of such persons.
Restricted Stock. The Committee may grant Restricted Stock to eligible
employees in such amounts as the Committee determines. At the time of each
award of Restricted Stock the Committee will establish a restricted period,
which may not, unless specified conditions described below are satisfied, be
less than three years from the grant date (the "Restricted Period"), during
which such stock may not be sold, transferred, pledged, assigned or otherwise
alienated; provided that the Committee may permit transfers of Restricted
Stock during such period
40
<PAGE>
to members of the Participant's immediate family or trusts or partnerships for
the benefit of such persons. If a Participant terminates his employment or is
involuntarily terminated for cause during the Restricted Period, all
Restricted Stock held by such Participant will be forfeited. If a Participant
is involuntarily terminated other than for cause, the Committee may waive all
or part of any remaining restrictions on such Participant's Restricted Stock.
Up to one-third of the shares of Tupperware Common Stock available for grant
under the 1996 Incentive Plan as Restricted Stock awards may be issued without
a minimum Restricted Period. After the Restricted Period has expired, the
related Restricted Stock is freely transferable.
The Committee has discretion to determine whether holders of Restricted
Stock will be entitled to dividends or other distributions thereon. If any
such dividends or distributions are in shares of Tupperware Common Stock such
shares will be subject to the same restrictions as the related Restricted
Stock. In the event the holder of Restricted Stock on which dividends or
distributions are made is subject to Section 16 of the Exchange Act, the
vesting period for such dividend or distribution will be the longer of (i) the
remaining vesting period on the related Restricted Stock and (ii) six months.
Performance Awards. The Committee may from time to time grant Performance
Awards, which, as determined by the Committee, may include, without
limitation, cash, Tupperware Common Stock, performance units, performance
shares, or any combination thereof. The Committee will set the performance
goals and restrictions applicable to each Performance Award, including
establishing the applicable performance period and the value of the
Performance Award. After the applicable performance period has ended, the
holder of a Performance Award will be entitled to receive the payout earned to
the extent to which the corresponding performance goals were satisfied.
Performance Awards are nontransferable other than by will or laws of descent
and distribution and during the Participant's lifetime may be exercised only
by the Participant; provided that at the discretion of the Committee, an award
agreement may permit transfer of a Performance Award by a Participant solely
to members of the Participant's immediate family or trusts or partnerships for
the benefit of such persons.
Change of Control. In the event of a Change of Control (as defined in the
1996 Incentive Plan), (i) so long as an Option or SAR has been outstanding for
at least six months as of the date of such Changes of Control, any such Option
or SAR that is not then exercisable and vested will become fully exercisable
and vested, (ii) the restrictions on any Restricted Stock will lapse and (iii)
all Performance Awards will be deemed earned. If a Participant's employment is
terminated as a consequence of a Change of Control, any Option granted to such
Participant will remain exercisable until the earlier of seven months
following such termination or until the expiration of the stated term of such
Option.
During the sixty-day period following a Change of Control, any Participant
will have the right to surrender all or part of any Option held by such
Participant, in lieu of payment of the exercise price, and to receive cash in
an amount equal to the difference between (i) the higher of the price received
for Tupperware Common Stock in connection with the Change of Control and the
fair market value of a share of Tupperware Common Stock on the date, if any,
that such Option or Award is cancelled (the "Change of Control Price"), and
(ii) the exercise price (the difference between (i) and (ii) being referred to
as, the "Spread") multiplied by the number of shares of Tupperware Common
Stock granted in connection with the exercise of such Option; provided that
such Change of Control transaction would not thereby be made ineligible for
pooling of interests accounting; and provided further that if the Change of
Control is within six months of the grant date for any such Option, no such
election may be made prior to six months from such grant date; and provided
further that if the Option is an "incentive stock option" under Section 422 of
the Code, the "Change of Control Price" will equal the fair market value of a
share of the Tupperware Common Stock on the date, if any, that such Option is
cancelled. If such sixty-day period ends within the period six months after
the grant date for an Option or Award, any such Option or Award held by a
Participant subject to Section 16 of the Exchange Act will be cancelled and
the holder
41
<PAGE>
thereof will receive six months and one day after the grant of such Option or
Award, in the case of such Option, an amount equal to the Spread and, in the
case of such Award, the Change of Control Price, in each case multiplied times
the number of shares of Tupperware Common Stock granted under or comprising
such Option or Award, as the case may be.
Deferrals. The Committee may permit a Participant to elect, or the Committee
may require, at its sole discretion, subject to the proviso set forth below,
any one or more of the following: (i) the deferral of a Participant's receipt
of cash, (ii) a delay in the exercise of an Option or SAR, (iii) a delay in
the lapse or waiver of restrictions with respect to Restricted Stock, or (iv)
a delay of the satisfaction of any requirements or goals with respect to
Performance Awards; provided that the Committee's authority to take such
actions exists only to the extent necessary to reduce or eliminate a
limitation on the deductibility of compensation paid to a Participant pursuant
to (and so long as such action in and of itself does not constitute the
exercise of impermissible discretion under) Section 162(m) of the Code, or any
successor provision thereunder. If any such deferral is required or permitted,
the Committee will establish rules and procedures for such deferrals,
including provisions relating to periods of deferral, the terms of payment
following the expiration of the deferral periods, and the rate of earnings, if
any, to be credited to any amounts deferred thereunder.
Amendments. The Tupperware Board may at any time terminate, amend, or modify
the 1996 Incentive Plan; provided that no amendment, alteration or
discontinuation will be made which will disqualify the 1996 Incentive Plan
from the exemption provided by Rule 16b-3 promulgated under the Exchange Act,
and, to the extent required by law, no such amendment will be made without the
approval of the Tupperware stockholders.
Federal Income Tax Considerations. The following brief summary of the United
States federal income tax rules currently applicable to nonqualified stock
options, incentive stock options, SARs, restricted stock and performance
awards is not intended to be specific tax advice to Participants under the
1996 Incentive Plan.
Two types of stock options may be granted under the 1996 Incentive Plan:
nonqualified stock options ("NQOs") and incentive stock options ("ISOs").
SARs, restricted stock and performance awards may also be granted under the
Plan. The grant of an Award generally has no immediate tax consequences to the
Participant or Tupperware. Generally, participants will recognize ordinary
income upon: (i) the exercise of NQOs or SARs; (ii) the vesting of shares of
restricted stock; and (iii) the actual receipt of cash or stock pursuant to
performance awards. In the case of NQOs and SARs, the amount of income
recognized is measured by the difference between the exercise price and the
fair market value of Tupperware Common Stock on the date of exercise. In the
case of restricted stock and performance awards, the amount of income is equal
to the fair market value of the stock or other property (including cash)
received. The exercise of an ISO for cash generally has no immediate tax
consequences to a Participant or to Tupperware. Participants may in certain
circumstances recognize ordinary income upon the disposition of shares
acquired by exercise of an ISO, depending upon how long such shares were held
prior to disposition. Special rules apply to shares acquired by exercise of
ISOs for previously held shares. In addition, special tax rules may result in
the imposition of a 20% excise tax on any "excess parachute payments" that
result from the acceleration of the vesting or exercisability of Awards upon a
Change of Control.
Tupperware is generally required to withhold applicable income and Social
Security taxes ("employment taxes") from ordinary income which a Participant
recognizes on the exercise or receipt of an Award. Tupperware thus may either
require Participants to pay to Tupperware an amount equal to the employment
taxes Tupperware is required to withhold or retain or sell without notice a
sufficient number of the shares to cover the amount required to be withheld.
Tupperware generally will be entitled to a deduction for the amount
includible in a Participants' gross income for federal income tax purposes
upon the exercise or actual receipt of an Award. However, such deduction
generally is available only if Tupperware timely complies with applicable
information reporting
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requirements under Sections 6041 and 6041A of the Code. Furthermore, Section
162(m) of the Code and the regulations thereunder may in some circumstances
limit deductibility with respect to "covered employees" whose total annual
compensation exceeds one million dollars, and Section 280G of the Code and the
regulations thereunder may render nondeductible amounts includible in income
by employees that are contingent upon a Change of Control and that are
characterized as "excess parachute payments".
Resale of Shares. The registration requirements of any applicable state
securities laws and the resale restrictions of Rule 144 under the Securities
Act may restrict the sale of shares of Tupperware Common Stock acquired
pursuant to the exercise of Awards by "affiliates" of Tupperware within the
meaning of the Securities Act. For purposes of creating short-swing profit
liability under Section 16 of the Exchange Act, sales of such shares by
affiliates will be matchable with market purchases within less than six months
before or after such sales. Affiliates should consult their legal advisors
prior to engaging in such transactions.
TUPPERWARE CORPORATION DIRECTOR STOCK PLAN
Prior to the Distribution Date the Tupperware Board will adopt, and Premark,
as Tupperware's sole stockholder, will approve, the Tupperware Corporation
Director Stock Plan (the "Director Stock Plan"). The purposes of the Director
Stock Plan are to (i) promote a greater identity of interest between
Tupperware's non-employee directors and its stockholders and (ii) attract and
retain persons to serve as directors and to provide a more direct link between
directors' compensation and stockholder value. The description below is
intended as a summary only and is qualified in its entirety by reference to
the Director Stock Plan, a copy of which is attached hereto as Annex D.
General. The Director Stock Plan will be administered by the Tupperware
Board or a committee of the Tupperware Board designated for such purpose.
Pursuant to the terms of the Director Stock Plan, non-employee directors of
Tupperware will be eligible to participate in the Director Stock Plan
following the Distribution (each, an "Eligible Director"). A total of 300,000
shares of Tupperware Common Stock will be reserved for issuance and available
for grants under the Director Stock Plan.
In the event of any change in corporate capitalization (such as a stock
split) or a corporate transaction (such as a merger, consolidation, separation
including a spin-off or other distribution of stock or property of Tupperware,
any reorganization or any complete liquidation of Tupperware) the Tupperware
Board may make such substitution or adjustments in the aggregate number and
class of shares reserved for issuance under the Director Stock Plan, in the
number, kind and option price of shares subject to outstanding Options, in the
number and kind of shares subject to other outstanding awards granted under
the Director Stock Plan and/or such other equitable substitution or
adjustments as it may determine to be appropriate in its sole discretion;
provided, however, that the number of shares subject to any award must always
be a whole number.
Pursuant to the Director Stock Plan, each Eligible Director will receive an
initial award of 1,000 shares of Tupperware Common Stock after serving the
first three months as a member of the Tupperware Board.
Tupperware Common Stock. With respect to the annual retainer paid to
directors (the "Annual Retainer"), each Eligible Director may make an annual
irrevocable election to receive shares of Tupperware Common Stock in lieu of
all or any portion (in 25% increments) of the Annual Retainer; provided that
the election of cash, Tupperware Common Stock and Options under the Director
Stock Plan are alternatives and, taken together, may not exceed 100% of such
Annual Retainer. The number of shares of Tupperware Common Stock granted to an
Eligible Director will be equal to the appropriate percentage of the Annual
Retainer payable in each fiscal quarter divided by the fair market value (as
defined in the Director Stock Plan) of a share of Tupperware Common Stock on
the last business day of such fiscal quarter rounded to nearest number of
shares of Tupperware Common Stock. Fractional shares of Tupperware Common
Stock will not be granted and any remainder in Annual Retainer which otherwise
would have purchased fractional shares will be paid in cash.
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Options. Each Eligible Director may also make an irrevocable election to
receive an Option for Tupperware Common Stock in lieu of all or any portion
(in 25% increments) of the Annual Retainer equal to:
<TABLE>
<CAPTION>
PERCENT OF ANNUAL
NUMBER OF OPTIONS RETAINER FORGONE
----------------- -----------------
<S> <C>
2,000 100%
1,500 75%
1,000 50%
500 25%
</TABLE>
The election of cash, Tupperware Common Stock and Options under the Director
Stock Plan are alternatives and, taken together, may not exceed 100% of such
Annual Retainer. The exercise price for the Options will be based on the fair
market value of Tupperware Common Stock on the date of the grant of such
Option adjusted for the percentage of the Annual Retainer forgone, but in no
event will the exercise price be less than 50% of such fair market value. The
date of grant of any Option will be the later of (i) the date of the annual
stockholders' meeting following the Eligible Director's election to receive an
Option in lieu of the Annual Retainer and (ii) six months and one day after
such election.
Except in the case of death, disability, retirement or termination, Options
granted under the Director Stock Plan will have a term of ten years and will
vest and become exercisable on the last day of the fiscal year in which such
Option is granted, provided that the Eligible Director remains on the
Tupperware Board. An Option shall vest immediately in the event of death. In
the event that an Eligible Director terminates his or her membership on the
Tupperware Board due to disability or retirement, the amount of any
outstanding Options which are not then vested will be adjusted to reflect that
portion of such Eligible Director's Annual Retainer actually earned in the
year. In the event that an Eligible Director's membership on the Tupperware
Board is terminated by Tupperware for cause, any Options which have not become
vested will be forfeited. As used in the Director Stock Plan, "cause" means
(i) the conviction of a felony, or (ii) dishonesty in the course of performing
the duties as a director.
Transferability. Grants and awards under the Director Stock Plan are not
assignable or transferable nor may they be pledged or hypothecated. Any grant
or award that constitutes a "derivative security" within the meaning of the
Exchange Act may not be transferred other than by will or laws of descent and
distribution or pursuant to a domestic relations order or qualified domestic
relations order.
Amendments. The Director Stock Plan may be amended by the Tupperware Board,
provided that to the extent required to qualify transactions under the
Director Stock Plan for exemption under Rule 16b-3 promulgated under the
Exchange Act, no amendment to the Director Stock Plan may be adopted without
further approval by the holders of at least a majority of the shares of
Tupperware Common Stock present, or represented, and entitled to vote at a
meeting held for such purpose, and provided further that if and to the extent
required for the Director Stock Plan to comply with Rule 16b-3, no amendment
to the Director Stock Plan shall be made more than once in any six-month
period that would change the amount, price or timing of the grants of awards
or Options thereunder other than to comply with changes in the Code, ERISA, or
the regulations thereunder.
Termination. The Director Stock Plan may be terminated at any time by either
the Tupperware Board or by holders of a majority of the shares of Tupperware
Common Stock present and entitled to vote at a duly convened meeting of
stockholders.
Change of Control. In the event of a Change of Control (as defined in the
Director Stock Plan), any outstanding Options that are not then exercisable
and vested will become fully exercisable and vested. During the sixty-day
period following a Change of Control, any Eligible Director will have the
right to surrender all or part of any Option or award of Tupperware Common
Stock held by such Eligible Director, and in the case of an Option, in lieu of
payment of the exercise price, to receive cash in an amount equal to the
Spread multiplied by the number of shares of Tupperware Common Stock granted
in connection with the exercise of such Option so surrendered or, in the case
of an award of Tupperware Common Stock, to receive cash in an amount equal to
the
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Change of Control Price multiplied by the number of shares of Tupperware
Common Stock so surrendered; provided that if the Change of Control is within
six months of the grant date for any such Option or award, no such election
may be made prior to six months from such grant date. If such sixty-day period
ends within the period six months after the grant date for an Option or award,
such Option or award will be cancelled and the holder thereof will receive six
months and one day after the grant of such Option or award, an amount equal,
in the case of an Option, to the Spread multiplied times the number of shares
of Tupperware Common Stock granted under such Option and in the case of an
award, the Change of Control Price multiplied by the number of Tupperware
Common Stock so awarded.
Federal Income Tax Considerations. Eligible Directors electing Tupperware
Common Stock in lieu of cash fees will be taxed on the value of the Tupperware
Common Stock at the time of receipt. Eligible Directors making an irrevocable
election to receive an Option in lieu of cash fees will be taxed at the time
of exercise of the Option on the difference between the exercise price and the
fair market value of the Tupperware Common Stock covered by the Option. In
each case, Tupperware will receive a corresponding deduction; provided that
Section 280G of the Code and the regulations thereunder may render
nondeductible amounts that are contingent upon a Change of Control and are
characterized as "excess parachute payments."
Resale of Shares. The holders of shares of Tupperware Common Stock received
upon the exercise of an Option must comply with the resale requirements of the
Securities Act and the rules and regulations promulgated thereunder.
Securities registration requirements under the Securities Act may be
applicable to resales by any Eligible Director. The restrictions imposed by
Section 16 of the Exchange Act upon any Eligible Director and the registration
requirements of any applicable state securities laws may restrict the resales
of shares acquired pursuant to the exercise of Options by an Eligible
Director.
EMPLOYEE PENSION AND RETIREMENT SAVINGS PLANS
Prior to the Distribution Date, the Tupperware Board will adopt and Premark,
as Tupperware's sole stockholder, will approve, certain pension plans and
retirement savings plans for United States payroll employees, similar to the
pension and retirement savings plans currently maintained by Premark. Assets
attributable to employees of Tupperware will be transferred from the
corresponding Premark plans and credit will be given to such employees under
Tupperware's plans for periods during which they were employed by Premark, its
predecessors and their subsidiaries. See "Arrangements between Premark and
Tupperware Relating to the Distribution -- Benefits Agreement." Tupperware
employees who are not on the United States payroll are currently, and will
continue to be after the Distribution, covered by plans in their respective
countries.
Each of the United States plans described below has limitations on
contributions and benefits complying with the restrictions contained in the
Code. Supplemental payments will be made in certain instances to provide the
benefits that would be payable under such plans but for such limitations.
These supplemental payments are generally deductible by Tupperware for federal
income tax purposes when made.
Pension Plan. Substantially all United States payroll employees of
Tupperware (including U.S. named executive officers) will be eligible to
participate in the Tupperware Base Retirement Plan (the "Pension Plan"). Under
the Pension Plan the basic annual pension benefit payable to a participant
upon attainment of age 65 ("normal retirement") will be equal to 1% of his or
her compensation for each year of service. A participant's accrued benefit
becomes nonforfeitable after 5 years of service. Participants will be
credited, for all purposes under the Pension Plan, with service prior to the
Distribution Date with Premark, its predecessors and their subsidiaries.
Application of the joint and survivor form of benefit or the election of other
payment options would reduce annual pension benefits, as would early
retirement in cases where payments commence before age 65.
Messrs. Skroeder and Schwenzer currently participate, and will continue
after the Distribution to participate, in pension plans in Switzerland and
Germany, respectively. See "Compensation of Executive Officers -- Pension
Plans."
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Retirement Savings Plan. Substantially all United States payroll employees
of Tupperware (including the U.S. named executive officers) will be eligible
to participate in the Tupperware Retirement Savings Plan (the "Savings Plan").
Under the provisions of the Savings Plan, participants will be permitted,
pursuant to a qualified cash or deferred arrangement described in Section
401(k) of the Code, to elect to defer receipt of up to 16% of compensation.
Employer contributions under the provisions of the Savings Plan will be (a)
based upon participant contributions and will amount to 50% of each
participant's contributions up to 6% of covered compensation and (b) based
upon participant covered compensation up to the Social Security wage base plus
6% of covered compensation above the Social Security wage base. (Employee and
employer contributions may also be limited by Code provisions.) Participants
will be credited, for all purposes under the Savings Plan, with service with
Premark, its predecessors and their subsidiaries prior to the Distribution.
Subject to certain restrictions, salary deferral contributions and employer
contributions will be invested by the Savings Plan trustee in (i) a fund
consisting primarily of Tupperware Common Stock or (ii) a "mix fund". A "mix
fund" is either one of the four "mix" funds established by Tupperware, each of
which has different investment characteristics, or a fund for which the
participant has designated the mix of investments from a designated list of
investments. Employer contributions vest at the rate of 20% per year of
service; participant contributions will always be 100% vested. Distribution of
participant contributions and vested employer contributions, together with all
accruals thereon, normally will be made upon termination of employment in the
form of a single sum payment or, if the participant elects, an annuity.
Mr. Schwenzer currently participates, and will continue after the
Distribution to participate, in a German savings plan.
Supplemental Plan. United States payroll employees of Tupperware (including
certain named executive officers) whose benefits are restricted due to Code
limitations are eligible to participate in Tupperware's Supplemental Plan (the
"Supplemental Plan"). The Supplemental Plan is an unfunded, non-qualified
deferred compensation arrangement designed to complement Tupperware's
qualified plans.
An employee who is covered by the Supplemental Plan will receive a
supplemental benefit which, when combined with the benefit under the Pension
Plan, will equal the full pension to which he or she would be entitled in the
absence of the limitations imposed under the Code. In addition, employees who
are covered by the Supplemental Plan may elect to defer before-tax
contributions above the annual limitations imposed on qualified contribution
plans such as the Savings Plan. Tupperware currently estimates that as of the
Distribution Date, approximately 43 employees will be eligible to receive
benefits under the Supplemental Plan.
COMPENSATION COMMITTEE INTERLOCKS DISCLOSURE AND INSIDER PARTICIPATION
There are no compensation committee interlocks. The members of the
Tupperware Compensation and Directors Committee are expected to be Mr. Grum
(Chairperson), Dr. Elam, Mr. Luecke, and Mr. Marbut.
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<PAGE>
OWNERSHIP OF TUPPERWARE COMMON STOCK BY CERTAIN BENEFICIAL OWNERS
Premark currently owns all of the outstanding shares of Tupperware Common
Stock. The following table sets forth information with respect to persons
anticipated to be the beneficial owner of more than 5% of Tupperware Common
Stock outstanding as of the Distribution Date based upon the number of
outstanding shares of Premark Common Stock on December 31, 1995.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------------------------ -------------------- ----------
<S> <C> <C>
Bankers Trust New York Corporation 5,418,899(1) 8.8%
Post Office Box 318
Church Street Station
New York, New York 10008
Loomis Sayles & Company, L.P. 4,014,040(2) 6.6%
One Financial Center
Boston, Massachusetts 02111-26600
</TABLE>
- --------
(1) As of December 31, 1995, Bankers Trust New York Corporation and its wholly-
owned subsidiary, Bankers Trust Company (the "Bank"), were the beneficial
owners of 1,348,823 shares of Premark Common Stock. The Bank also acts as
trustee for various employee benefit plan trusts, including the Premark
International, Inc. Master Defined Contribution Trust which holds 4,070,076
shares of Premark Common Stock for the individual accounts of approximately
6,400 Premark employees who participate in the Premark stock fund in
Premark-sponsored plans. With respect to Tupperware, the Bank is expected
to serve as the trustee of the Tupperware Corporation Defined Contribution
Trust which is expected, based on December 31, 1995 figures, to hold
approximately 390,000 shares of Tupperware Common Stock for the individual
accounts of approximately 990 employees of Tupperware who are expected to
participate in the Tupperware stock fund in Tupperware-sponsored plan, and
3,680,076 shares of Tupperware Common Stock with respect to Premark Plans.
The Bank is expected, based on December 31, 1995 figures, to be the
beneficial owner of 1,348,823 shares of Tupperware Common Stock.
(2) As of December 31, 1995, Loomis Sayles & Company, L.P. ("Loomis"), a
wholly-owned subsidiary of New England Investment Companies, Inc.,
beneficially owned 4,014,040 shares of Premark Common Stock. On the
Distribution Date, Loomis will receive shares of Tupperware Common Stock
equal to the number of shares of Premark Common Stock it holds. Based upon
December 31, 1995 figures, it is anticipated Loomis would become the
beneficial owner of 4,014,040 of Tupperware Common Stock.
CERTAIN TRANSACTIONS
Tupperware has in the past engaged in numerous transactions with Premark.
Such transactions have included, among other things, the extension of
intercompany loans, the provision of various other types of financial support
by or to Premark, and the sharing of services and administration and the costs
thereof.
Prior to the Distribution, Dart will make the Dividend Payment to Premark.
See "Arrangements Between Premark and Tupperware Relating To The
Distribution -- Distribution Agreement."
HART-SCOTT-RODINO FILING REQUIREMENT
Any person receiving shares of Tupperware Common Stock pursuant to the
Distribution and meeting the criteria set forth below may be required to file a
Premerger Notification and Report pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). In general, if (i) a
person receiving shares of Tupperware Common Stock pursuant to the Distribution
would own, upon consummation of the
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<PAGE>
Distribution, Tupperware Common Stock that exceeds $15 million in value, (ii)
certain jurisdictional requirements are met and (iii) no exemption applies,
then the HSR Act would require that such person file a Premerger Notification
and Report Form and observe the applicable waiting periods under the HSR Act
prior to acquiring Tupperware Common Stock pursuant to the Distribution. If
such waiting periods have not expired or been terminated at the Distribution
Date with respect to such recipient, Premark may be required to deliver such
recipient's shares of Tupperware Common Stock into an escrow facility pending
the expiration or termination of such waiting period. Holders of Premark
Common Stock are urged to consult their legal counsel to determine whether the
requirements of the HSR Act will apply to the receipt by them of shares of
Tupperware Common Stock in the Distribution.
DESCRIPTION OF TUPPERWARE CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The authorized capital stock of Tupperware consists of 600,000,000 shares of
Tupperware Common Stock and 200,000,000 shares of preferred stock, no par (the
"Tupperware Preferred Stock"). No shares of Tupperware Preferred Stock will be
issued in connection with the Distribution. Based on the number of shares of
Premark Common Stock outstanding as of , 1996, up to approximately
million shares of Tupperware Common Stock will be issued to stockholders of
Premark in the Distribution. All of the shares of Tupperware Common Stock
issued in the Distribution will be validly issued, fully paid and
nonassessable. The following summary description of the capital stock of
Tupperware is qualified in its entirety by reference to the proposed forms of
the Certificate of Incorporation and By-Laws of Tupperware, forms of which are
attached hereto as Annexes A and B, respectively.
TUPPERWARE COMMON STOCK
Holders of Tupperware Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of stockholders and, except as
described below, a majority vote is required for all action to be taken by
stockholders. Holders of Tupperware Common Stock do not have cumulative voting
rights in the election of directors and have no preemptive, subscription,
redemption, sinking fund or conversion rights. Subject to preferences that may
be applicable to holders of any outstanding shares of any Tupperware Preferred
Stock, holders of Tupperware Common Stock are entitled to such dividends as
may be declared by the Tupperware Board out of funds legally available
therefor. Upon any liquidation, dissolution or winding-up of Tupperware, the
assets legally available for distribution to stockholders are distributable
ratably among the holders of Tupperware Common Stock at that time outstanding,
subject to prior distribution rights of creditors of Tupperware and to the
preferential rights of any outstanding shares of Tupperware Preferred Stock.
TUPPERWARE PREFERRED STOCK
Under the Certificate of Incorporation the Tupperware Board is authorized to
provide for the issuance of Tupperware Preferred Stock, in one or more series,
and to determine, with respect to any such series, the designations, voting
powers, preferences and rights of such series, and such qualifications,
limitations or restrictions thereof, as the Tupperware Board shall determine.
See "Certain Antitakeover Effects of Certain Provisions of the Certificate of
Incorporation, By-laws and State Law -- Certificate of Incorporation and By-
laws." In connection with the Rights Agreement to be adopted by Tupperware,
the Tupperware Board will designate a series of Preferred Stock (the
"Preferred Shares"). See " -- Tupperware Rights Agreement."
TUPPERWARE RIGHTS AGREEMENT
Prior to the Distribution, the Tupperware Board will adopt a Rights
Agreement (the "Rights Agreement") between Tupperware and Norwest Bank
Minnesota, N.A. (the "Rights Agent") and cause to be issued one preferred
share purchase right (a "Right") with each share of Tupperware Common Stock
issued to holders of Premark Common Stock on the Record Date. Each Right will
entitle the registered holder to purchase from
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Tupperware one one-hundredth of a Preferred Share at a price of $ per one
one-hundredth of a Preferred Share (the "Purchase Price") subject to
adjustment. The terms of the Rights will be set forth in the Rights Agreement.
The description set forth below is intended as a summary only and is qualified
in its entirety by reference to the Rights Agreement, which is attached hereto
as Annex E.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
shares of Tupperware Common Stock or (ii) 10 business days (or such later date
as may be determined by action of the Tupperware Board prior to such time as
any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the outstanding
shares of Tupperware Common Stock (the earlier of such dates being the "Rights
Distribution Date"), the Rights will be evidenced, with respect to any shares
of Tupperware Common Stock certificates outstanding as of the Record Date, by
such Tupperware Common Stock certificate with a copy of a summary of rights
attached thereto.
The Rights Agreement provides that, until the Rights Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the shares of Tupperware Common Stock. Until
the Rights Distribution Date (or earlier redemption or expiration of the
Rights), new Tupperware Common Stock certificates issued after the Record Date
upon transfer or new issuance of Tupperware Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Rights
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Tupperware Common Stock
outstanding as of the Record Date, even without such notation or a copy of the
summary of rights being attached thereto, will also constitute the transfer of
the Rights associated with the Tupperware Common Stock represented by such
certificate. As soon as practicable following the Rights Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of Tupperware Common Stock as of the close of
business on the Rights Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Rights Distribution Date. The
Rights will expire on , 2006 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by Tupperware, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion
price, less than the then-current market price of the Preferred Shares, or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Tupperware Common Stock or a
stock dividend on the Tupperware Common Stock payable in Tupperware Common
Stock or subdivisions, consolidations or combinations of the Tupperware Common
Stock occurring, in any such case, prior to the Rights Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per share of Tupperware
Common Stock. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $100 per
share but will be entitled to an aggregate payment of 100 times the payment
made per share of
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<PAGE>
Tupperware Common Stock. Each Preferred Share will have 100 votes, voting
together with the Tupperware Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Tupperware
Common Stock are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per shares of Tupperware Common Stock. The
Rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one share of Tupperware Common Stock.
In the event that Tupperware is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of shares of Tupperware
Common Stock having a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
shares of Tupperware Common Stock, the Tupperware Board may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Tupperware
Common Stock, or one one-hundredth of a Preferred Share (or of a share of a
class or series of Tupperware Preferred Stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of Tupperware, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
shares of Tupperware Common Stock, the Tupperware Board may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on
such basis with such conditions as the Tupperware Board in its sole discretion
may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Tupperware Board without the
consent of the holders of the Rights, including an amendment to lower certain
thresholds described above to not less 10%, except that from and after such
time as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of Tupperware, including, without limitation, the right to
vote or to receive dividends.
The Rights will have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Tupperware
on terms not approved by the Tupperware Board. The Rights should not interfere
with any merger or other business combination approved by the Tupperware Board
since the Rights may be redeemed by Tupperware at the Redemption Price prior
to the time that a person or group has become an Acquiring Person.
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CERTAIN ANTITAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE CERTIFICATE OF
INCORPORATION, BY-LAWS AND STATE LAW
CERTIFICATE OF INCORPORATION AND BY-LAWS
The Certificate of Incorporation and the By-laws contain certain provisions
that could make more difficult the acquisition of Tupperware by means of a
tender offer, proxy contest or otherwise. The description set forth below is
intended as a summary only and is qualified in its entirety by reference to
the Certificate of Incorporation and the By-laws, forms of which are attached
hereto as Annex A and Annex B, respectively.
Classified Board of Directors. The Certificate of Incorporation and By-laws
of Tupperware provide that the Tupperware Board will be divided into three
classes of directors, with the classes to be as nearly equal in number as
possible. Immediately after the Distribution, the Tupperware Board will
consist of the persons referred to in "Management of Tupperware -- Directors
of Tupperware." The Certificate of Incorporation and the By-laws provide that,
of the initial directors of Tupperware, approximately one-third will continue
to serve until the 1997 Annual Meeting of Stockholders, approximately one-
third will continue to serve until the 1998 Annual Meeting of Stockholders,
and approximately one-third will continue to serve until the 1999 Annual
Meeting of Stockholders.
The classification of directors will have the effect of making it more
difficult for stockholders to change the composition of the Tupperware Board.
At least two annual meetings of stockholders, instead of one, will generally
be required to effect a change in a majority of the Tupperware Board. Such a
delay may help ensure that Tupperware's directors, if confronted by a holder
attempting to force a proxy contest, a tender or exchange offer or an
extraordinary corporate transaction, would have sufficient time to review the
proposal as well as any available alternatives to the proposal and to act in
what they believe to be the best interest of the stockholders. The
classification provisions will apply to every election of directors, however,
regardless of whether a change in the composition of the Tupperware Board
would be beneficial to Tupperware and its stockholders and whether or not a
majority of Tupperware's stockholders believe that such a change would be
desirable.
The classification provisions could also have the effect of discouraging a
third party from initiating a proxy contest, making a tender offer or
otherwise attempting to obtain control of Tupperware, even though such an
attempt might be beneficial to Tupperware and its stockholders. The
classification of the Tupperware Board could thus increase the likelihood that
incumbent directors will retain their position. In addition, because the
classification provisions may discourage accumulations of large blocks of
Tupperware's stock by purchasers whose objective is to take control of
Tupperware and remove a majority of the Tupperware Board, the classification
of the Tupperware Board could tend to reduce the likelihood of fluctuations in
the market price of the Tupperware Common Stock that might result from
accumulations of large blocks. Accordingly, stockholders could be deprived of
certain opportunities to sell their shares of Tupperware Common Stock at a
higher market price than might otherwise be obtainable.
Number of Directors; Removal; Filling Vacancies. The Certificate of
Incorporation provides that, subject to any rights of holders of Tupperware
Preferred Stock to elect additional directors under specific circumstances,
the number of directors will be fixed in the manner provided in the By-laws.
The By-laws provide that, subject to any rights of holders of Preferred Stock
to elect directors under specified circumstances, the number of directors will
be fixed from time to time exclusively pursuant to a resolution adopted by
directors constituting a majority of the total number of directors that
Tupperware would have if there were no vacancies on the Tupperware Board (the
"Whole Board"), but must consist of not less than three directors. In
addition, the By-laws provide that, subject to any rights of holders of
Tupperware Preferred Stock, and unless the Tupperware Board otherwise
determines, any vacancies will be filled only by the affirmative vote of a
majority of the remaining directors, though less than a quorum. Accordingly,
absent an amendment to the Tupperware By-laws, the Tupperware Board could
prevent any stockholder from enlarging the Tupperware Board and filling the
new directorships created thereby with such stockholder's own nominees.
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Under the Delaware Law, unless otherwise provided in the Certificate of
Incorporation, directors serving on a classified board may only be removed by
the stockholders for cause. In addition, the Certificate of Incorporation and
the By-laws of Tupperware provide that directors may be removed only for cause
and only upon the affirmative vote of holders of at least 80% of the voting
power of all the then outstanding shares of stock entitled to vote generally
in the election of directors ("Voting Stock"), voting together as a single
class.
No Stockholder Action by Written Consent; Special Meetings. The Certificate
of Incorporation and the By-laws of Tupperware provide that, subject to the
rights of any holders of Tupperware Preferred Stock to elect additional
directors under specific circumstances, stockholder action can be taken only
at an annual or special meeting of stockholders and prohibit stockholder
action by written consent in lieu of a meeting. The By-laws provide that,
subject to the rights of holders of any series of Tupperware Preferred Stock
to elect additional directors under specific circumstances, special meetings
of stockholders can be called only by the Tupperware Board pursuant to a
resolution adopted by a majority of the Whole Board. Stockholders are not
permitted to call a special meeting or to require that the Tupperware Board
call a special meeting of stockholders. Moreover, the business permitted to be
conducted at any special meeting of stockholders is limited to the business
brought before the meeting pursuant to the notice of meeting given by
Tupperware.
The provisions of the Certificate of Incorporation and the By-laws of
Tupperware prohibiting stockholder action by written consent may have the
effect of delaying consideration of a stockholder proposal until the next
annual meeting unless a special meeting is called at the request of a majority
of the Whole Board. These provisions would also prevent the holders of a
majority of the voting power of the Voting Stock from unilaterally using the
written consent procedure to take stockholder action. Moreover, a stockholder
could not force stockholder consideration of a proposal over the opposition of
the Tupperware Board by calling a special meeting of stockholders prior to the
time a majority of the Whole Board believes such consideration to be
appropriate.
Advance Notice Provisions for Stockholder Nominations and Stockholder
Proposals. The By-laws establish an advance notice procedure for stockholders
to make nominations of candidates for election as directors, or bring other
business before an annual meeting of stockholders of Tupperware (the
"Stockholder Notice Procedure").
The Stockholder Notice Procedure provides that only persons who are
nominated by, or at the direction of, the Tupperware Board, or by a
stockholder who has given timely written notice to the Secretary of Tupperware
prior to the meeting at which directors are to be elected, will be eligible
for election as directors of Tupperware. The Stockholder Notice Procedure
provides that at an annual meeting only such business may be conducted as has
been brought before the meeting by, or at the direction of, the Tupperware
Board or by a stockholder who has given timely written notice to the Secretary
of Tupperware of such stockholder's intention to bring such business before
such meeting. Under the Stockholder Notice Procedure, for notice of
stockholder nominations to be made at an annual meeting to be timely, such
notice must be received by Tupperware not less than 70 days nor more than 90
days prior to the first anniversary of the previous year's annual meeting (if
the date of any other annual meeting is advanced by more than 30 days, or
delayed by more than 70 days, from such anniversary date, not earlier than the
90th day prior to such meeting and not later than the later of (i) the 70th
day prior to such meeting and (ii) the 10th day after public announcement of
the date of such meeting is first made). Notwithstanding the foregoing, in the
event that the number of directors to be elected is increased and there is no
public announcement naming all of the nominees for directors or specifying the
size of the increased Board of Directors made by Tupperware at least 80 days
prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice will be timely, but only with respect to nominees for any
new positions created by such increase, if it is received by Tupperware not
later than the 10th day after such public announcement is first made by
Tupperware. Under the Stockholder Notice Procedure, for notice of a
stockholder nomination to be made at a special meeting at which directors are
to be elected to be timely, such notice must be received by Tupperware not
earlier than the 90th day before such meeting and not later than the later of
(i) the 70th day prior to such meeting and (ii) the 10th day after public
announcement of the date of such meeting is first made. For the purpose of
determining whether a stockholder's notice is timely delivered in connection
with the 1997 annual meeting, the first anniversary of the previous year's
annual meeting is deemed to be May 2, 1997.
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Under the Stockholder Notice Procedure, a stockholder's notice to Tupperware
proposing to nominate a person for election as a director must contain certain
information including, without limitation, the identity and address of the
nominating stockholder, the class and number of shares of stock of Tupperware
which are owned by such stockholder, and all information regarding the
proposed nominee that would be required to be included in a proxy statement
soliciting proxies for the proposed nominee. Under the Stockholder Notice
Procedure, a stockholder's notice relating to the conduct of business other
than the nomination of directors must contain certain information about such
business and about the proposing stockholders, including, without limitation,
a brief description of the business the stockholder proposes to bring before
the meeting, the reasons for conducting such business at such meeting, the
name and address of such stockholder, the class and number of shares of stock
of Tupperware beneficially owned by such stockholder, and any material
interest of such stockholder in the business so proposed. If the Chairman of
the Board or other officer presiding at a meeting determines that a person was
not nominated, or other business was not brought before the meeting, in
accordance with the Stockholder Notice Procedure, such person will not be
eligible for election as a director, or such business will not be conducted at
such meeting, as the case may be.
By requiring advance notice of nominations by stockholders, the Stockholder
Notice Procedure will afford the Tupperware Board an opportunity to consider
the qualifications of the proposed nominees and, to the extent deemed
necessary or desirable by the Tupperware Board, to inform Stockholders about
such qualifications. By requiring advance notice of other proposed business,
the Stockholder Notice Procedure will also provide a more orderly procedure
for conducting annual meetings of stockholders and, to the extent deemed
necessary or desirable by the Tupperware Board, will provide the Tupperware
Board with an opportunity to inform stockholders, prior to such meetings, of
any business proposed to be conducted at such meetings, together with any
recommendations as to the Board's position regarding action to be taken with
respect to such business, so that stockholders can better decide whether to
attend such a meeting or to grant a proxy regarding the disposition of any
such business.
Although the By-laws do not give the Tupperware Board any power to approve
or disapprove stockholder nominations for the election of directors or
proposals for action, they may have the effect of precluding a contest for the
election of directors or the consideration of stockholder proposals if the
proper procedures are not followed, and of discouraging or deterring a third
party from conducting a solicitation of proxies to elect its own slate of
directors or to approve its own proposal, without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to
Tupperware and its stockholders.
Fair Price Provision. The Certificate of Incorporation requires certain
Business Combinations (as defined in the Certificate of Incorporation) with
Interested Stockholders (as defined in the Certificate of Incorporation) or
affiliates thereof be approved by the affirmative vote of the holders of at
least 80% of the Voting Stock of Tupperware, voting together as a single
class. Such affirmative vote is required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified, by law or in
any agreement with any national securities exchange or otherwise. The
requirement that a Business Combination with an Interested Stockholder be
approved by the affirmative vote of 80% of the voting power of the outstanding
Voting Stock does not apply if either (i) the Business Combination has been
approved by a majority of the Continuing Directors (as defined below), or (ii)
certain price and procedural requirements designated to ensure that
Tupperware's stockholders receive a "fair price" for their Common Stock are
satisfied. An "Interested Stockholder" is any person (other than Tupperware or
any subsidiary of Tupperware) who or which: (i) is the beneficial owner,
directly or indirectly, of 10% or more of the voting power of the outstanding
Voting Stock; or (ii) is an affiliate or associate of Tupperware and at any
time within the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 10% or more of the voting
power of the then outstanding Voting Stock; or (iii) is an assignee of or has
otherwise succeeded to any shares of Voting Stock which were at any time
within the two-year period immediately prior to the date in question
beneficially owned by any Interested Stockholder, if such assignment or
succession shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning of the
Securities Act. A "Continuing Director" means any member of the Tupperware
Board who is unaffiliated with the Interested Stockholder and was a member of
the
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Tupperware Board prior to the time that the Interested Stockholder became an
Interested Stockholder, and any Tupperware director who is thereafter chosen
to fill any vacancy on the Tupperware Board or who is elected and who, in
either event, is unaffiliated with the Interested Stockholder and, in
connection with his or her initial assumption of office, is recommended for
appointment or election by a majority of Continuing Directors then on the
Tupperware Board.
Preferred Stock. The Certificate of Incorporation authorizes the Tupperware
Board to establish one or more series of Preferred Stock and to determine,
with respect to any series of Preferred Stock, the terms and rights of such
series, including (i) the designation of the series, (ii) the number of shares
of the series, which number the Tupperware Board may thereafter (except where
otherwise provided in the related Preferred Stock Designation) increase or
decrease (but not below the number of shares thereof then outstanding), (iii)
whether dividends, if any, will be cumulative or noncumulative and the
dividend rate of the series, (iv) the dates at which dividends, if any, will
be payable, (v) the redemption rights and price or prices, if any, for shares
of the series, (vi) the terms and amounts of any sinking fund provided for the
purchase or redemption of shares of the series, (vii) the amounts payable on
shares of the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of Tupperware, (viii) whether the
shares of the series will be convertible into shares of any other class or
series, or any other security, of Tupperware or any other corporation, and, if
so, the specification of such other class or series or such other security,
the conversion price or prices or rate or rates, any adjustments thereof, the
date or dates as of which such shares shall be convertible and all other terms
and conditions upon which such conversion may be made, (ix) restrictions on
the issuance of shares of the same series or of any other class or series, and
(x) the voting rights, if any, of the holders of such series.
The authorized shares of Tupperware Preferred Stock, as well as shares of
Tupperware Common Stock, will be available for issuance without further action
by Tupperware's stockholders, unless such action is required by applicable law
or the rules of any stock exchange or automated quotation system on which
Tupperware's securities may be listed or traded. The NYSE currently requires
stockholder approval as a prerequisite to listing shares in several instances,
including where the present or potential issuance of shares could result in an
increase in the number of shares of common stock, or in the amount of voting
securities, outstanding of at least 20%.
Although the Tupperware Board has no intention at the present time of doing
so, it could issue a series of Tupperware Preferred Stock that could,
depending on the terms of such series, impede the completion of a merger,
tender offer or other takeover attempt. The Tupperware Board will make any
determination to issue such shares based on its judgment as to the best
interests of Tupperware and its stockholders. The Tupperware Board, in so
acting, could issue Tupperware Preferred Stock having terms that could
discourage an acquisition attempt through which an acquirer may be able to
change the composition of the Tupperware Board, including a tender offer or
other transaction that some, or a majority, of Tupperware's stockholders might
believe to be in their best interests or in which stockholders might receive a
premium for their stock over the then current market price of such stock.
Rights to Purchase Securities and Other Property. The Certificate of
Incorporation authorizes the Tupperware Board to create and issue rights
entitling the holders thereof to purchase from Tupperware shares of stock or
other securities of Tupperware or any other corporation. The times at which
and terms upon which such rights are to be issued would be determined by the
Tupperware Board and set forth in the contracts or other instruments that
evidence such rights. The authority of the Tupperware Board with respect to
such rights includes, but is not limited to, determination of (i) the initial
purchase price per share or other unit of the stock or other securities or
property to be purchased upon exercise of such rights, (ii) provisions
relating to the times at which and the circumstances under which such rights
may be exercised or sold or otherwise transferred, either together with or
separately from any other stock or other securities of Tupperware, (iii)
provisions that adjust the number or exercise price of such rights or amount
or nature of the stock or other securities or property receivable upon
exercise of such rights in the event of a combination, split or
recapitalization of any stock of Tupperware, a change in ownership of
Tupperware's stock or other securities or a reorganization, merger,
consolidation, sale
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of assets or other occurrence relating to Tupperware or any stock of
Tupperware, and provisions restricting the ability of Tupperware to enter into
any such transaction absent an assumption by the other party or parties
thereto of the obligations of Tupperware under such rights, (iv) provisions
that deny the holder of a specified percentage of the outstanding stock or
other securities of Tupperware the right to exercise such rights and/or cause
such rights held by such holder to become void, (v) provisions that permit
Tupperware to redeem or exchange such rights, and (vi) the appointment of the
rights agent with respect to such rights. This provision is intended to
confirm the Tupperware Board's authority to issue share purchase rights or
other rights to purchase stock or securities of Tupperware or any other
corporation. See "Description of Tupperware Capital Stock -- Tupperware Rights
Agreement."
Amendment of Certain Provisions of the Certificate of Incorporation and By-
laws. Under the Delaware Law, the stockholders have the right to adopt, amend
or repeal the by-laws and, with the approval of the board of directors, the
certificate of incorporation of a corporation. In addition, under Delaware Law
if the certificate of incorporation so provides, the by-laws may be adopted,
amended or repealed by the board of directors. The Certificate of
Incorporation provides that the affirmative vote of the holders of at least
80% of the voting power of the outstanding shares of Voting Stock, voting
together as a single class, is required to amend provisions of the Certificate
of Incorporation relating to the prohibition of stockholder action without a
meeting; the number, election and term of Tupperware's directors; the removal
of directors; issuance of rights; and approval of business combinations; with
the vote of the holders of a majority of the voting power of the outstanding
shares of Voting Stock required to amend all other provisions of the
Certificate of Incorporation. The Certificate of Incorporation further
provides that the By-laws may be amended by the Tupperware Board or by the
affirmative vote of the holders of at least 80% of the voting power of the
outstanding shares of Voting Stock, voting together as a single class. These
80% voting requirements will have the effect of making more difficult any
amendment by stockholders of the By-laws or of any of the provisions of the
Certificate of Incorporation described above, even if a majority of
Tupperware's stockholders believe that such amendment would be in their best
interests.
Other Provisions. The Certificate of Incorporation expressly authorizes the
Tupperware Board to take such action as it may determine to be reasonably
necessary or desirable to encourage any person or entity to enter into
negotiations with the Tupperware Board and management of Tupperware respecting
any transaction which may result in a change of control of Tupperware, and to
contest or oppose any such transaction which the Tupperware Board determines
to be unfair, abusive or otherwise undesirable to Tupperware, its businesses
or shareholders. In this connection, the Certificate of Incorporation
specifically permits the Tupperware Board to adopt plans or to issue
securities of Tupperware (including Tupperware Common Stock or Tupperware
Preferred Stock, rights or debt securities), which securities may be
exchangeable or convertible into cash or other securities on such terms as the
Board determines and may provide for differential and unequal treatment of
different holders or classes of holders. The existence of this authority or
the actions which may be taken by the Tupperware Board pursuant thereto may
deter potential acquirers from proposing unsolicited transactions not approved
by the Tupperware Board and might enable the Tupperware Board to hinder or
frustrate such a transaction if proposed. These provisions are included in the
Certificate of Incorporation to confirm and support the authority of the
Tupperware Board to take the various actions authorized thereby. It is also
designed to enable the Tupperware Board to utilize such other tactics or
mechanisms as are developed in the future to carry out the general
authorization set forth therein.
ANTITAKEOVER LEGISLATION
Section 203 of the Delaware Law provides that, subject to certain exceptions
specified therein, a corporation shall not engage in any business combination
with any interested stockholder for a three-year period following the date
that such stockholder becomes an interested stockholder unless (i) prior to
such date, the board of directors of the corporation approved either the
business combination or the transaction which resulted in the stockholder
becoming an interested stockholder; (ii) upon consummation of the transaction
which resulted in the stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding
certain shares); or (iii) on or subsequent to such date, the business
combination is approved by the board of directors of the corporation
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and by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder. Except as specified in
Section 203 of the Delaware Law, an "interested stockholder" is defined to
include (x) any person that is the owner of 15% or more of the outstanding
voting stock of the corporation, or is an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting stock
of the corporation, at any time within three years immediately prior to the
relevant date and (y) the affiliates and associates of any such person.
Under certain circumstances, Section 203 of the Delaware Law makes it more
difficult for a person who would be an interested stockholder to effect
various business combinations with a corporation for a three-year period,
although the stockholders may elect to exclude a corporation from the
restrictions imposed thereunder. The Certificate of Incorporation does not
exclude Tupperware from the restrictions imposed under Section 203 of the
Delaware Law. It is anticipated that the provisions of Section 203 of the
Delaware Law may encourage companies interested in acquiring Tupperware to
negotiate in advance with the Tupperware Board, since the stockholder approval
requirement would be avoided if a majority of the directors then in office
approves either the business combination or the transaction which results in
the stockholder becoming an interested stockholder.
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
LIMITATION OF LIABILITY OF DIRECTORS
The Certificate of Incorporation provides that a director of Tupperware will
not be personally liable to Tupperware or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to Tupperware or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware Law, which concerns unlawful payments of dividends, stock
purchases or redemptions, or (iv) for any transaction from which the director
derived an improper personal benefit.
While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does
not eliminate such duty. Accordingly, the Certificate of Incorporation will
have no effect on the availability of equitable remedies such as an injunction
or rescission based on a director's breach of his or her duty of care. The
provisions of the Certificate of Incorporation described above apply to an
officer of Tupperware only if he or she is a director of Tupperware and is
acting in his or her capacity as director, and do not apply to officers of
Tupperware who are not directors.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation provides that each person who is or was or
had agreed to become a director or officer of Tupperware, or each such person
who is or was serving or who had agreed to serve at the request of the
Tupperware Board or an officer of Tupperware as an employee of Tupperware or
as a director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise (including the heirs, executors,
administrators or estate of such person), will be indemnified by Tupperware,
in accordance with the By-laws, to the fullest extent permitted from time to
time by Delaware law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
Tupperware to provide broader indemnification rights than said law permitted
Tupperware to provide prior to such amendment) or any other applicable laws as
presently or hereafter in effect. In addition, Tupperware may enter into one
or more agreements with any person providing for indemnification greater or
different than that provided in the Certificate of Incorporation.
The By-laws provide that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit, or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he or she or a person of whom he or
she is the legal representative is or was a director, officer or employee of
Tupperware or is or was serving at the request of Tupperware as a director,
officer or employee of another corporation or of a partnership, joint venture,
trust or other enterprise,
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including service with respect to employee benefit plans, whether the basis of
such Proceeding is alleged action in an official capacity as a director,
officer or employee or in any other capacity while serving as a director,
officer or employee, will be indemnified and held harmless by Tupperware to
the fullest extent authorized by Delaware law as the same exists or may in the
future be amended (but, in the case of any such amendment, only to the extent
that such amendment permits Tupperware to provide broader indemnification
rights than said law permitted Tupperware to provide prior to such amendment),
against all expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such person in connection therewith and
such indemnification will continue as to a person who has ceased to be a
director, officer or employee and will inure to the benefit of his or her
heirs, executors and administrators; however, except as described in the
following paragraph with respect to Proceedings to enforce rights to
indemnification, Tupperware will indemnify any such person seeking
indemnification in connection with a Proceeding (or part thereof) initiated by
such person only if such Proceeding (or part thereof) was authorized by the
Tupperware Board.
Pursuant to the By-laws, if a claim described in the preceding paragraph is
not paid in full by Tupperware within thirty days after a written claim has
been received by Tupperware, the claimant may at any time thereafter bring
suit against Tupperware to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant will be entitled to be paid also
the expense of prosecuting such claim. The By-laws provide that it will be a
defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any Proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to Tupperware) that the claimant has not met the standards of conduct
which make it permissible under the Delaware Law for Tupperware to indemnify
the claimant for the amount claimed, but the burden of proving such defense
will be on Tupperware. Neither the failure of Tupperware (including the
Tupperware Board, independent legal counsel or stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware Law, nor an actual
determination by Tupperware (including the Tupperware Board, independent legal
counsel or stockholders) that the claimant has not met such applicable
standard of conduct, will be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
The By-laws provide that the right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final
disposition conferred in the By-laws will not be exclusive of any other right
which any person may have or may in the future acquire under any statute,
provision of the Certificate of Incorporation, the By-laws, agreement, vote of
stockholders or disinterested directors or otherwise. The By-laws permit
Tupperware to maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of Tupperware or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not Tupperware would have the power to indemnify
such person against such expense, liability or loss under the Delaware Law.
Tupperware intends to obtain directors and officers liability insurance
providing coverage to its directors and officers. In addition, the By-laws
authorize Tupperware, to the extent authorized from time to time by the
Tupperware Board, to grant rights to indemnification, and rights to be paid by
Tupperware the expenses incurred in defending any Proceeding in advance of its
final disposition, to any agent of Tupperware to the fullest extent of the
provisions of the By-laws with respect to the indemnification and advancement
of expenses of directors, officers and employees of Tupperware.
The By-laws provide that the right to indemnification conferred therein is a
contract right and includes the right to be paid by Tupperware the expenses
incurred in defending any such Proceeding in advance of its final disposition,
except that if Delaware Law requires, the payment of such expenses incurred by
a director or officer in his or her capacity as a director or officer (and not
in any other capacity in which service was or is rendered by such person while
a director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a Proceeding, will be
made only upon delivery to Tupperware of an undertaking by or on behalf of
such director or officer, to repay all amounts so advanced if it is ultimately
determined that such director or officer is not entitled to be indemnified
under the By-laws or otherwise.
57
<PAGE>
ADDITIONAL INFORMATION
There has not been in the past and there is not presently pending any
litigation or proceeding involving a director, officer, employee or agent of
Tupperware in which indemnification would be required or permitted by the
Indemnification Agreements.
The Delaware Law provides that a contract between a corporation and a
director thereof is not void or voidable solely because the interested
director is present at the meeting authorizing the contract if the material
facts relating to the contract are known to the board of directors and the
board of directors in good faith authorizes the contract by the affirmative
vote of a majority of the disinterested directors, or the material facts
relating to the contract are known to the stockholders and the stockholders in
good faith authorize the contract, or the contract is fair to the corporation
at the time it is authorized or approved.
58
<PAGE>
INDEX TO DEFINED TERMS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
1996 Incentive Plan........... 39
Acquiring Person.............. 49
Annual Retainer............... 43
Awards........................ 39
Bank.......................... 47
Base Plan..................... 37
Benefits Agreement............ 13
By-laws....................... 2
cause......................... 44
Certificate of Incorporation.. 2
Change of Control Agreements.. 39
Change of Control Price....... 41
Code.......................... 1
Commission.................... iii
Committee..................... 39
Continuing Director........... 53
Cut-off Date.................. 12
Dart.......................... 2
Dart & Kraft, Inc............. 8
Delaware Law.................. 7
Director Stock Plan........... 43
Distribution.................. 7
Distribution Agent............ 7
Distribution Agreement........ 11
Distribution Date............. 7
Dividend Payment.............. 2
DKI Distribution.............. 8
DKI Distribution Agreement.... 8
DKI Indemnity................. 11
Eligible Director............. 43
employment taxes.............. 42
ERISA......................... 40
Exchange Act.................. iii
Final Expiration Date......... 49
Freestanding SARs............. 40
Germany pension plan.......... 37
HSR Act....................... 47
Interested Stockholder........ 53
interested stockholder........ 56
Interim Services Agreement.... 13
IRS........................... 1
ISOs.......................... 42
Loomis........................ 47
mix fund...................... 46
named executive officers...... 34
Net Debt...................... 2
</TABLE>
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
normal retirement............................. 45
NQOs.......................................... 42
NYSE.......................................... 1
Options....................................... 39
Participants.................................. 39
Pension Plan.................................. 45
Performance Awards............................ 39
Preferred Shares.............................. 48
Premark....................................... 1
Premark Board................................. 7
Premark Common Stock.......................... 1
Premark Remaining Businesses.................. 8
Proceeding.................................... 56
Purchase Price................................ 49
Record Date................................... 1
Redemption Price.............................. 50
Registration Statement........................ iii
Restricted Period............................. 40
Restricted Stock.............................. 39
Right......................................... 48
Rights Agent.................................. 48
Rights Agreement.............................. 48
Rights Certificates........................... 49
Rights Distribution Date...................... 49
SARs.......................................... 35
Savings Plan.................................. 46
Securities Act................................ 9
Services...................................... 13
Spread........................................ 41
Stockholder Notice Procedure.................. 52
Supplemental Plan............................. 46
Tandem SARs................................... 40
Tax Ruling.................................... 1
Tax Sharing Agreement......................... 12
TEAM pension plan............................. 37
Tupperware.................................... 1
Tupperware Board.............................. 2
Tupperware Business........................... 7
Tupperware Common Stock....................... 1
Tupperware Debt Rating........................ 14
Tupperware Participants....................... 13
Tupperware Plans.............................. 13
Tupperware Preferred Stock.................... 48
U.S. named executive officers................. 37
Voting Stock.................................. 52
Whole Board................................... 51
</TABLE>
59
<PAGE>
TUPPERWARE CORPORATION
INDEX TO COMBINED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
Tupperware Corporation
<TABLE>
<S> <C>
Report of Independent Accountants........................................ F-2
Combined Statement of Income............................................. F-3
Combined Statement of Cash Flows......................................... F-4
Combined Balance Sheet................................................... F-5
Combined Statement of Shareholders' Equity............................... F-6
Notes to the Combined Financial Statements............................... F-7
Schedule II--Valuation and Qualifying Accounts........................... F-19
Premark International, Inc.
Pro Forma Consolidated Financial Information (Unaudited)................. F-20
Notes to the Pro Forma Consolidated Financial Information................ F-22
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Premark International, Inc.:
In our opinion, the accompanying combined balance sheet and the related
combined statements of income, of cash flows and of shareholder's equity
present fairly, in all material respects, the financial position of Tupperware
Corporation and its subsidiaries at December 30, 1995 and December 31, 1994,
and the results of their operations and their cash flows for each of the three
years in the period ended December 30, 1995, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits of the combined financial statements of Tupperware Corporation
also included an audit of the Financial Statement Schedule appearing on page
F-19 of this Form 10. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related combined financial statements.
PRICE WATERHOUSE LLP
Chicago, Illinois
February 23, 1996, except as to Note 13, which is as of April 9, 1996
F-2
<PAGE>
TUPPERWARE CORPORATION
COMBINED STATEMENT OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------
(IN MILLIONS) DEC. 30, DEC. 31, DEC. 25,
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Net sales..................................... $ 1,359.4 $ 1,274.6 $ 1,171.8
--------- --------- ---------
Costs and expenses
Cost of products sold....................... 481.5 460.9 438.9
Delivery, sales, and administrative ex-
pense...................................... 653.5 622.7 570.7
Interest expense............................ 3.1 3.7 16.7
Interest income............................. (5.0) (3.9) (4.1)
Other expense, net.......................... 1.4 -- 1.2
--------- --------- ---------
Total costs and expenses.................. 1,134.5 1,083.4 1,023.4
--------- --------- ---------
Income before income taxes.................... 224.9 191.2 148.4
Provision for income taxes.................... 53.5 42.0 30.5
--------- --------- ---------
Net income.................................... $ 171.4 $ 149.2 $ 117.9
========= ========= =========
Pro forma net income per common and common
equivalent
share (unaudited)............................ $ 2.58
=========
</TABLE>
See "Notes to the Combined Financial Statements."
F-3
<PAGE>
TUPPERWARE CORPORATION
COMBINED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
---------------------------
(IN MILLIONS) DEC. 30, DEC. 31, DEC. 25,
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................ $ 171.4 $149.2 $117.9
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation.................................... 61.3 55.7 44.7
Loss on sale of assets.......................... 5.3 2.1 3.7
Foreign exchange gain (loss), net............... 0.6 0.1 (1.9)
Changes in assets and liabilities:
(Increase) decrease in accounts and notes re-
ceivable....................................... (36.1) 10.3 (23.9)
Increase in inventory........................... (24.5) (6.7) (40.8)
Decrease (increase) in net deferred income tax-
es............................................. 7.8 (19.6) (16.3)
Increase (decrease) in accounts payable and
accruals....................................... 4.1 (23.7) 15.6
Increase in income taxes payable................ 2.0 5.8 8.8
Other........................................... (12.9) (30.5) (2.5)
------- ------ ------
Net cash provided by operating activities..... 179.0 142.7 105.3
------- ------ ------
Cash flows from investing activities:
Capital expenditures.............................. (69.3) (78.6) (85.6)
Other............................................. 0.2 5.7 3.9
------- ------ ------
Net cash used in investing activities......... (69.1) (72.9) (81.7)
------- ------ ------
Cash flows from financing activities:
Net transactions with Premark..................... (146.0) 76.9 (4.7)
Repayment of long-term debt (net of proceeds of
$0.3 in 1994).................................... -- (153.2) (2.8)
Net increase in short-term debt................... 31.4 28.0 14.8
------- ------ ------
Net cash (used in) provided by financing ac-
tivities..................................... (114.6) (48.3) 7.3
------- ------ ------
Effect of exchange rate changes on cash and cash
equivalents...................................... (0.3) (7.5) (5.6)
------- ------ ------
Net (decrease) increase in cash and cash equiva-
lents............................................ (5.0) 14.0 25.3
Cash and cash equivalents at beginning of year.... 102.3 88.3 63.0
------- ------ ------
Cash and cash equivalents at end of year.......... $ 97.3 $102.3 $ 88.3
======= ====== ======
</TABLE>
See "Notes to the Combined Financial Statements."
F-4
<PAGE>
TUPPERWARE CORPORATION
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
(IN MILLIONS) PRO FORMA
DEC. 30,
1995 DEC. 30, DEC. 31,
(UNAUDITED) 1995 1994
----------- -------- --------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents........................ $ 97.3 $ 97.3 $ 102.3
Accounts and notes receivable, less allowances of
$26.1 in 1995 and
$25.8 in 1994................................... 147.5 147.5 111.5
Inventories...................................... 206.6 206.6 184.6
Deferred income tax benefits..................... 58.1 58.1 60.9
Prepaid expenses................................. 16.9 16.9 14.0
------- ------- -------
Total current assets......................... 526.4 526.4 473.3
------- ------- -------
Deferred income tax benefits..................... 21.7 21.7 25.3
Property, plant, and equipment, net.............. 317.7 317.7 310.2
Long-term receivables, net of allowances of $24.8
in 1995 and $22.2 in 1994, and other assets..... 78.2 78.2 73.8
------- ------- -------
Total assets................................. $ 944.0 $ 944.0 $ 882.6
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable................................. $ 88.0 $ 88.0 $ 99.5
Short-term borrowings and current portion of
long-term debt.................................. 168.7 83.8 58.3
Accrued liabilities.............................. 276.5 266.5 242.6
------- ------- -------
Total current liabilities.................... 533.2 438.3 400.4
------- ------- -------
Long-term debt................................... 100.4 0.4 0.5
Accrued postretirement benefit cost.............. 36.1 36.1 35.7
Other liabilities................................ 53.6 53.6 50.9
Shareholders' equity:
Net investment by Premark...................... -- 533.5 508.1
Common shareholders' equity.................... 338.6 -- --
Cumulative foreign currency adjustments........ (117.9) (117.9) (113.0)
------- ------- -------
Total shareholders' equity................... 220.7 415.6 395.1
------- ------- -------
Total liabilities and shareholders' equity... $ 944.0 $ 944.0 $ 882.6
======= ======= =======
</TABLE>
See "Notes to the Combined Financial Statements."
F-5
<PAGE>
TUPPERWARE CORPORATION
COMBINED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
NET CUMULATIVE
INVESTMENT FOREIGN TOTAL
(IN MILLIONS) BY CURRENCY SHAREHOLDER'S
PREMARK ADJUSTMENTS EQUITY
---------- ----------- -------------
<S> <C> <C> <C>
December 26, 1992.......................... $ 168.8 $(100.5) $ 68.3
Net income............................... 117.9 117.9
Net transactions with Premark............ (4.7) (4.7)
Translation adjustments.................. (18.2) (18.2)
------- ------- -------
December 25, 1993.......................... 282.0 (118.7) 163.3
Net income............................... 149.2 149.2
Net transactions with Premark............ 76.9 76.9
Translation adjustments.................. 5.7 5.7
------- ------- -------
December 31, 1994.......................... 508.1 (113.0) 395.1
Net income............................... 171.4 171.4
Net transactions with Premark............ (146.0) (146.0)
Translation adjustments.................. (4.9) (4.9)
------- ------- -------
December 30, 1995.......................... $ 533.5 $(117.9) $ 415.6
======= ======= =======
</TABLE>
See "Notes to the Combined Financial Statements."
F-6
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF COMBINATION
The combined financial statements include the assets, liabilities, revenues,
and expenses of the Tupperware Business (the "Company" or "Tupperware") of
Premark International, Inc. ("Premark"), which is expected to be distributed
by Premark to its shareholders (the "Distribution"). All significant
intercompany accounts and transactions of Tupperware have been eliminated. The
combined income statement includes amounts that management considers to be a
reasonable allocation of general corporate expenses for Tupperware by Premark.
Corporate expenses allocated to Tupperware were $14.5 million in 1995, $13.8
million in 1994, and $11.9 million in 1993. The Company's fiscal year ends on
the last Saturday of December, and included 52 weeks in 1995 and 1993, and 53
weeks in 1994.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
CASH MANAGEMENT
Premark uses a centralized domestic cash management system to provide
financing for its operations, including those of Tupperware. Cash and cash
equivalents, consisting of highly liquid investments with a maturity of three
months or less when purchased, reflected in the Combined Balance Sheet, are
the balances maintained by Tupperware's foreign subsidiaries. Tupperware's
domestic cash requirements have been satisfied by transactions with Premark.
These transactions are included in "Net transactions with Premark" in the
Combined Statement of Cash Flows.
INVENTORIES
Inventories are valued at the lower of cost or market. Inventory cost
includes cost of raw material, labor, and overhead. Approximately 28% of
inventories, including all domestic inventories, are valued on the last-in,
first-out ("LIFO") cost method. The first-in, first-out ("FIFO") cost method
is generally used for the remaining inventories. If inventories valued on the
LIFO method had been valued using the FIFO method, they would have been $21.3
million higher at the end of 1995 and $15.1 million higher at the end of 1994.
PROPERTY AND DEPRECIATION
Properties are stated at cost. Depreciation is determined on a straight-line
basis over estimated useful lives. Generally, the estimated useful lives are
10 to 45 years for buildings and improvements and 3 to 20 years for machinery
and equipment. Upon the sale or retirement of property, plant, and equipment,
a gain or loss is recognized. If the carrying value of an asset, including
associated intangibles, exceeds the sum of estimated undiscounted future cash
flows, then an impairment loss is recognized for the difference between
estimated fair value and carrying value. Expenditures for maintenance and
repairs are charged to expense.
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
("SFAS 121"), was adopted by the Financial Accounting Standards Board ("FASB")
in March 1995 and must be implemented by the Company in 1996. However, since
the Company's existing accounting policy is consistent with the provisions of
SFAS 121, there will be no material impact as a result of adopting the new
standard.
REVENUE RECOGNITION
Revenue is recognized when product is shipped.
F-7
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
ADVERTISING AND RESEARCH AND DEVELOPMENT COSTS
Advertising and research and development costs are charged to expense as
incurred. Advertising expense totaled $8.7 million, $8.5 million, and $11.3
million in 1995, 1994, and 1993, respectively. Research and development costs
totaled $6.3 million, $8.9 million, and $9.8 million in 1995, 1994, and 1993,
respectively.
INCOME TAXES
The results of the Company's domestic operations are included in Premark's
consolidated United States federal tax return. The provision for income taxes
included in these combined financial statements represents the Company's
allocated share of Premark's domestic income tax expense, which represents the
expense that the Company would have incurred on a separate return basis, and
the actual income tax provisions of its foreign subsidiaries.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts of assets and liabilities and their respective tax
bases. Deferred tax assets are also recognized for credit carryforwards.
Deferred tax assets and liabilities are measured using the rates expected to
apply to taxable income in the years in which the temporary differences are
expected to reverse and the credits are expected to be used. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. In determining the
amount of any valuation allowance required to offset deferred tax assets an
assessment is made, which includes anticipating future income of the Company,
in determining the likelihood of realizing deferred tax assets.
As part of the plan of Distribution, Tupperware and Premark will enter into
a tax sharing agreement. This agreement will generally provide that for
periods prior to the Distribution the two companies will retain the liability
for any unpaid taxes attributable to their respective operations.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company periodically uses derivative financial instruments, principally
over-the-counter forward exchange contacts with major international financial
institutions, to offset the effects of exchange rate changes on net
investments in foreign subsidiaries, firm purchase commitments, and certain
intercompany loan transactions.
Gains and losses on contracts designated as hedges of net investments in a
foreign subsidiary or intercompany transactions that are permanent in nature
are accrued as exchange rates change, and are recognized in shareholders'
equity as foreign currency translation adjustments. Gains and losses on
contracts designated as hedges of intercompany transactions that are not
permanent in nature are accrued as exchange rates change and are recognized in
income. Gains and losses on contracts designated as hedges of identifiable
foreign currency firm commitments are deferred and included in the measurement
of the related foreign currency transaction.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash and cash equivalents, accounts and notes
receivable, accounts payable, short-term borrowings, long-term debt, and
outstanding forward exchange contracts approximated their fair values at
December 30, 1995, and December 31, 1994, because of the short maturity of
those instruments or their insignificance.
FOREIGN CURRENCY TRANSLATION
Results of operations for foreign subsidiaries are translated into United
States dollars using the average exchange rates during the year. The assets
and liabilities of those subsidiaries, other than those of operations in
F-8
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
highly inflationary countries, are translated into United States dollars using
the exchange rates at the balance sheet date. The related translation
adjustments are recorded in a separate component of shareholders' equity,
"Cumulative Foreign Currency Adjustments." Foreign currency transaction gains
and losses, as well as translation of financial statements of subsidiaries in
highly inflationary countries, are included in income.
SHAREHOLDERS' EQUITY
Prior to the Distribution, Tupperware will amend its Certificate of
Incorporation so that the authorized capital stock of Tupperware will consist
of 600 million shares of common stock, par value $.01 per share ("Tupperware
Common Stock"), and 200 million shares of preferred stock. All of the shares
of Tupperware Common Stock distributed by Premark will be fully paid and
nonassessable. It is expected that Premark shareholders will receive one share
of Tupperware Common Stock for each share of Premark Common Stock that is held
on the record date for the Distribution. As of February 23, 1996 there were
61.6 million shares of Premark Common Stock outstanding. Allocation of common
shareholder's equity between Tupperware Common Stock, paid-in capital, and
retained earnings at the Distribution date has not yet been determined.
ACCOUNTING FOR STOCK-BASED COMPENSATION
In October 1995, the FASB adopted Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation," which governs
the accounting for stock-based compensation plans, including employee stock
options. The statement allows companies the choice of adopting a new fair
value based method of accounting for such plans that includes expensing
related compensation cost in the income statement, or continuing to apply the
method currently specified under existing guidelines under which generally no
compensation expense is recorded. If companies elect to follow existing
guidelines, the new rule requires that the notes to the financial statements
include pro forma information on net income and earnings per share as if the
fair value based method were being used. Tupperware intends to continue to
measure compensation expense under the preexisting guidelines. Adoption of
this new standard will be required for Tupperware's 1996 financial statements.
PRO FORMA BALANCE SHEET (UNAUDITED)
The unaudited pro forma balance sheet reflects the following transactions as
if the Distribution had occurred on December 30, 1995: a) payment of the
$184.9 million Dividend Payment described in Note 2; b) an increase in
borrowings to fund the Dividend Payment; and c) an accrual of $10 million for
non-recurring costs expected to be incurred by Tupperware in 1996 that are
directly related to the Distribution.
NET INCOME PER SHARE
Historical net income per share has been omitted since Tupperware was not a
separate entity with a capital structure of its own during the periods
presented.
Unaudited pro forma net income per common and common equivalent share is
calculated as if the Distribution had occurred on January 1, 1995 and is based
upon: a) the Company's historical 1995 net income, adjusted for $11.5 million
of additional interest expense, net of $4.5 million of tax benefits, related
to the Company's increase in borrowings to fund the Dividend Payment described
in Note 2; and b) an assumed 63.8 million weighted average common and common
equivalent shares. The actual number of common and common equivalent shares
used to compute earnings per share after the Distribution will depend on
Tupperware's stock price at that time, but is expected to be lower than 63.8
million.
F-9
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2: RELATIONSHIP AND TRANSACTIONS WITH PREMARK INTERNATIONAL, INC.
Pursuant to the plan to distribute the shares of Tupperware to Premark
shareholders, Premark and Tupperware will enter into several agreements,
including the Distribution Agreement, an employee benefits and compensation
allocation agreement (the "Benefits Agreement"), a tax sharing agreement, and,
if necessary, an interim services agreement. Reference is made to the
summaries of these agreements contained on pages 11, 12, and 13 of this
Information Statement. Under the terms of the Distribution Agreement, Dart
will pay immediately prior to the Distribution a special dividend (the
"Dividend Payment") to Premark. The purpose of the Dividend Payment is to
effectively allocate the existing indebtedness of Premark between Tupperware
and post-Distribution Premark. The amount of the Dividend Payment is dependent
upon Premark's financial position as of the Cut-off Date. Based on Premark's
financial position as of December 30, 1995, the dividend would have been
$184.9 million.
Included in the Combined Statement of Income is an allocation of general
corporate expenses related to services provided for Tupperware by Premark.
This allocation was based on an estimate of the proportion of corporate
expenses related to the Tupperware Business for the periods presented and, in
the opinion of management, has been made on a reasonable basis and
approximates the incremental costs that would have been incurred had
Tupperware been operating on a stand-alone basis.
All related-party transactions between Tupperware and Premark have been
reflected in these financial statements as though on a stand-alone basis,
except that no interest income or expense has been allocated on intercompany
balances.
NOTE 3: INVENTORIES
<TABLE>
<CAPTION>
1995 1994
(IN MILLIONS) ------ ------
<S> <C> <C>
Finished goods................................................ $100.3 $ 82.0
Work in process............................................... 40.1 35.0
Raw materials and supplies.................................... 66.2 67.6
------ ------
Total inventories............................................. $206.6 $184.6
====== ======
</TABLE>
NOTE 4: PROPERTY, PLANT, AND EQUIPMENT
<TABLE>
<CAPTION>
1995 1994
(IN MILLIONS) ------ ------
<S> <C> <C>
Land.......................................................... $ 12.7 $ 12.5
Buildings and improvements.................................... 173.1 161.3
Machinery and equipment....................................... 732.5 674.3
Construction in progress...................................... 19.7 33.0
------ ------
Total property, plant, and equipment.......................... 938.0 881.1
Less accumulated depreciation................................. 620.3 570.9
------ ------
Property, plant, and equipment, net........................... $317.7 $310.2
====== ======
</TABLE>
NOTE 5: ACCRUED LIABILITIES
<TABLE>
<CAPTION>
1995 1994
(IN MILLIONS) ------ ------
<S> <C> <C>
Compensation and employee benefits............................ $ 61.3 $ 53.9
Advertising and promotion..................................... 52.3 44.9
Taxes other than income taxes................................. 40.9 28.2
Income taxes.................................................. 29.8 25.9
Other......................................................... 82.2 89.7
------ ------
Total accrued liabilities..................................... $266.5 $242.6
====== ======
</TABLE>
F-10
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 6: FINANCING ARRANGEMENTS
BORROWINGS
The short-term borrowings and long-term debt of Tupperware relate to
borrowings of foreign subsidiaries and those domestic borrowings that will
continue to be outstanding after the Distribution. Accordingly, the amounts
shown do not include the borrowings to be incurred to fund a special dividend
to be paid to Premark prior to the Distribution. See Note 13 regarding the
credit facility that Tupperware expects to establish prior to the
Distribution.
<TABLE>
<CAPTION>
1995 1994 1993
(DOLLARS IN MILLIONS) ----- ----- -----
<S> <C> <C> <C>
Total short-term borrowings at year-end................. $83.8 $58.3 $32.1
Weighted average interest rate at year-end.............. 3.6% 3.7% 5.0%
Average borrowings during the year...................... $75.3 $48.4 $22.7
Weighted average interest rate for the year............. 3.3% 4.3% 8.3%
Maximum borrowings during the year...................... $95.8 $70.2 $38.1
</TABLE>
The average borrowings and weighted average interest rates were determined
using month-end borrowings and the interest rates applicable to them. As of
December 30, 1995, all short-term borrowings were from banks, and of the $83.8
million outstanding, $48.6 million was payable in Japanese yen, $17.5 million
in German marks, and $16.3 million in French francs.
In addition, certain of Tupperware's foreign subsidiaries have uncommitted
bank lines, which totaled $184.0 million at December 30, 1995.
Long-term debt totaled $0.4 million and $0.5 million at December 30, 1995
and December 31, 1994, respectively. Interest paid in 1995, 1994, and 1993 was
$2.8 million, $9.0 million, and $16.6 million, respectively.
OPERATING LEASES
Rental expense for operating leases (reduced by sublease income of
approximately $1.4 million in 1995, $1.3 million in 1994, and $0.8 million in
1993) totaled $37.9 million in 1995, $45.4 million in 1994, and $41.3 million
in 1993. Approximate minimum rental commitments under noncancelable operating
leases in effect at December 30, 1995, were: 1996 -- $19.0 million; 1997 --
$10.2 million; 1998 -- $4.8 million; 1999 -- $2.2 million; 2000 -- $2.2
million; after 2000 -- $2.0 million.
F-11
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
DERIVATIVE FINANCIAL INSTRUMENTS
The Company's derivative financial instruments at December 30, 1995
consisted solely of the forward exchange contacts summarized below. All of the
material contracts mature within three months. The "buy" amounts represent the
U.S. dollar equivalent of commitments to purchase foreign currencies and the
"sell" amounts represent the U.S. dollar equivalent of commitments to sell
foreign currencies, all translated at the year end market exchange rates for
the United States dollar.
<TABLE>
<CAPTION>
CONTRACT RATE
BUY SELL OF EXCHANGE
(DOLLARS IN MILLIONS) ----- ----- -------------
<S> <C> <C> <C>
Japanese yen with U.S. dollars..................... $32.3 85.0450
Japanese yen with U.S. dollars..................... 10.0 100.5000
Japanese yen for U.S. dollars...................... $19.9 101.5450
German marks for Belgian francs.................... 17.4 0.0487
German marks for U.S. dollars...................... 14.0 1.4460
Spanish pesetas for Belgian francs................. 9.6 4.1540
Belgian francs for U.S. dollars.................... 6.8 29.7420
German marks for U.S. dollars...................... 6.3 1.4458
British pounds for U.S. dollars.................... 4.7 0.6542
German marks for Swiss francs...................... 3.5 1.2367
Other currencies................................... 13.4 Various
----- -----
Total............................................ $42.3 $95.6
===== =====
</TABLE>
The $10.0 million contract to buy Japanese yen is hedging a yen-denominated
bank loan held in the United States. The contracts to sell German marks
(equivalent US$14 million) and Belgian francs (equivalent US$6.8 million) for
United States dollars are hedging a portion of the Company's net investments
in those countries. All other contracts are hedging cross-currency
intercompany loans that are not permanent in nature.
The Company's theoretical credit risk for each forward exchange contract is
its replacement cost, but management believes that the risk of incurring
credit losses is remote and that such losses, if any, would not be material.
The Company is also exposed to market risk on its forward exchange contracts
due to potential changes in foreign exchange rates; however, such market risk
would be substantially offset by changes in the valuation of the underlying
items being hedged. At December 30, 1995, the net accrued loss on all forward
exchange contracts was $6.8 million, and at December 31, 1994, the net accrued
gain was $0.6 million. The aggregate impact of all foreign currency
transactions was not material to the Company's income.
F-12
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 7: INCOME TAXES
For income tax purposes, the domestic and foreign components of income
before income taxes were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
(IN MILLIONS) ------ ------ ------
<S> <C> <C> <C>
Domestic............................................. $106.4 $105.7 $ 77.9
Foreign.............................................. 118.5 85.5 70.5
------ ------ ------
Total................................................ $224.9 $191.2 $148.4
====== ====== ======
The provision for income taxes was as follows:
<CAPTION>
1995 1994 1993
(IN MILLIONS) ------ ------ ------
<S> <C> <C> <C>
Current:
Federal............................................ $(40.6) $ 1.2 $ (9.9)
Foreign............................................ 84.4 54.8 44.4
State.............................................. -- 0.9 1.0
------ ------ ------
43.8 56.9 35.5
------ ------ ------
Deferred:
Federal............................................ 38.3 (6.1) (1.0)
Foreign............................................ (30.6) (7.7) (4.0)
State.............................................. 2.0 (1.1) --
------ ------ ------
9.7 (14.9) (5.0)
------ ------ ------
Total................................................ $ 53.5 $ 42.0 $ 30.5
====== ====== ======
</TABLE>
The differences between the provision for income taxes and income taxes
computed using the United States federal statutory rate were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
(IN MILLIONS) ----- ----- -----
<S> <C> <C> <C>
Amount computed using statutory rate...................... $78.7 $66.9 $51.9
Increase (reduction) in taxes resulting from:
Net benefit from repatriating foreign earnings.......... (22.6) (15.7) (23.0)
Foreign income taxes.................................... 5.7 5.9 9.9
Changes in valuation allowance for federal deferred tax
assets................................................. -- (19.0) (11.3)
Resolution of contingencies............................. (10.4) -- --
Other................................................... 2.1 3.9 3.0
----- ----- -----
$53.5 $42.0 $30.5
===== ===== =====
</TABLE>
In 1995 and 1994, Tupperware recognized $5.7 million and $9.4 million,
respectively, of benefits for deductions associated with the exercise of
employee stock options granted to certain Tupperware employees under Premark's
stock option plan. These benefits were added directly to "Net Investment by
Premark," and are not reflected in the provision for income taxes.
F-13
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred tax assets (liabilities) are composed of the following:
<TABLE>
<CAPTION>
1995 1994
(IN MILLIONS) ------ ------
<S> <C> <C>
Depreciation................................................ $(29.7) $(24.1)
Deferred costs.............................................. (4.4) --
Undistributed earnings of subsidiaries...................... -- (3.8)
Other....................................................... (3.9) --
------ ------
Gross deferred tax liabilities.............................. (38.0) (27.9)
------ ------
Fixed assets basis differences.............................. 17.5 23.0
Inventory reserves.......................................... 17.0 14.0
Postretirement benefits..................................... 15.1 14.9
Employee benefits accruals.................................. 13.6 12.1
Bad debt reserves........................................... 9.9 11.4
Tax carryforwards........................................... 9.1 15.4
Computer leasing transactions............................... 9.1 7.2
Other accruals.............................................. 38.3 34.1
------ ------
Gross deferred tax assets................................... 129.6 132.1
------ ------
Valuation allowance......................................... (25.9) (28.7)
------ ------
Net deferred tax assets..................................... $ 65.7 $ 75.5
====== ======
</TABLE>
At December 30, 1995, the Company had foreign net operating loss
carryforwards of $9.1 million. Of the total, $4.2 million of carryforwards
expire at various dates from 1996 to 2001, and the remainder have unlimited
lives. During 1995, the Company recognized net benefits of $6.7 million
related to foreign net operating loss carryforwards. Repatriation of foreign
earnings would not result in a significant incremental cost to the Company. At
December 30, 1995 and December 31, 1994, the Company had valuation allowances
against certain deferred tax assets totaling $25.9 million and $28.7 million,
respectively. These valuation allowances relate to tax assets in jurisdictions
where it is management's best estimate that there is not a greater than 50%
probability that the benefit of the assets will be realized in the associated
tax returns.
The Company's foreign subsidiaries paid income taxes in 1995, 1994, and
1993, of $75.2 million, $47.9 million, and $29.8 million, respectively.
NOTE 8: RETIREMENT BENEFIT PLANS
PENSION PLANS
Tupperware participates in a pension plan, sponsored by Premark, which
covers substantially all domestic employees (the "Plan"). Additionally, the
Company has various pension plans covering certain employees in other
countries.
Under the Benefits Agreement, Tupperware will agree to assume or retain
pension liabilities related to substantially all Tupperware participants.
Assets of the Plan will be allocated in accordance with ERISA rules between
Premark's plan and a plan to be established by the Company. Management
believes that its allocation method used for purposes of the following
disclosure is not significantly different from the ERISA method.
The actuarial cost method used in determining pension expense is the
projected unit credit method. Generally, annual cash contributions are equal
to the minimum funding amounts required by ERISA for the United States plan.
F-14
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Net pension expense included the following components:
<TABLE>
<CAPTION>
1995 1994 1993
(IN MILLIONS) ----- ----- -----
<S> <C> <C> <C>
Service cost on benefits earned during the year............ $ 4.8 $ 3.2 $ 4.0
Interest cost on benefits earned in prior years............ 5.8 3.9 5.0
Return on plan assets:
Actual (gain) loss....................................... (6.7) 1.0 (3.4)
Deferred loss (gain)..................................... 3.2 (3.9) 0.5
----- ----- -----
Net gain recognized........................................ (3.5) (2.9) (2.9)
Net amortization........................................... 0.8 0.3 --
----- ----- -----
Net pension expense........................................ $ 7.9 $ 4.5 $ 6.1
===== ===== =====
</TABLE>
The assumed long-term rates of return on assets used in determining net
pension expense were: United States plan -- 9.0%; foreign-funded plans --
various rates from 4.0% to 11.0%. The assumed discount rates used in
determining the actuarial present value of the projected benefit obligation
were: United States plan -- 7.25% at December 30, 1995; 8.75% at December 31,
1994; and 7.25% at December 25, 1993; foreign plans -- various rates from 3.5%
to 10.0%. The assumed rates of increase in future compensation levels were:
United Statesplan -- 6.0%; foreign plans -- various rates from 3.0% to 8.0%.
The funded status of the plans was as follows:
<TABLE>
<CAPTION>
UNITED STATES FOREIGN
PLAN PLANS
-------------- --------------
1995 1994 1995 1994
(IN MILLIONS) ------ ------ ------ ------
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits.............................. $ 20.0 $ 15.2 $ 49.8 $ 39.7
Nonvested benefits........................... 0.9 0.7 6.3 4.1
------ ------ ------ ------
Accumulated benefit obligation................. 20.9 15.9 56.1 43.8
Effect of projected future salary increases.... 4.0 3.3 14.6 15.6
------ ------ ------ ------
Projected benefit obligation................... 24.9 19.2 70.7 59.4
Plan assets at fair value -- primarily equity
securities and corporate and government
bonds......................................... 20.8 18.9 28.0 23.9
------ ------ ------ ------
Plan assets less than projected benefit obliga-
tion.......................................... (4.1) (0.3) (42.7) (35.5)
Unrecognized prior service (benefit) cost...... (0.3) (0.3) 0.1 0.2
Unrecognized net loss (gain)................... 2.2 (0.8) 11.2 8.8
Unrecognized net transition (asset) obliga-
tion.......................................... (0.5) (0.6) 3.9 4.1
------ ------ ------ ------
Accrued pension cost........................... $ (2.7) $ (2.0) $(27.5) $(22.4)
====== ====== ====== ======
</TABLE>
At December 30, 1995, and December 31, 1994, the accumulated benefit
obligations of certain foreign plans exceeded plan assets. For those plans,
the obligations were $47.1 million and $42.7 million for 1995 and 1994,
respectively. The fair value of those plans' assets at the end of 1995 and
1994 was $17.1 million and $21.3 million, respectively.
The Company also has several savings, thrift, and profit-sharing plans. Its
contributions to these plans are based upon various levels of employee
participation. The total cost of these plans was $2.8 million in 1995, $3.9
million in 1994, and $3.4 million in 1993.
MEDICAL AND LIFE INSURANCE BENEFITS
In addition to providing pension benefits, the Company provides certain
postretirement health care and life insurance benefits for selected United
States and Canadian employees. Most employees and retirees outside the
F-15
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
United States are covered by government health care programs. Employees may
become eligible for these benefits if they reach normal retirement age while
working for the Company and satisfy certain years of service requirements. The
medical plans are contributory, with retiree contributions adjusted annually,
and contain other cost-sharing features, such as deductibles and coinsurance.
The medical plans include an allowance for Medicare for post-65 retirees.
The net periodic postretirement benefit costs for 1995, 1994 and 1993 were:
<TABLE>
<CAPTION>
1995 1994 1993
(IN MILLIONS) ----- ---- ----
<S> <C> <C> <C>
Service cost.............................................. $ 0.3 $0.4 $0.4
Interest on accumulated postretirement benefit obliga-
tion..................................................... 3.0 3.0 3.3
Net amortization.......................................... (0.2) -- --
----- ---- ----
Total..................................................... $ 3.1 $3.4 $3.7
===== ==== ====
</TABLE>
The projected liabilities, which are not funded, are reconciled with the
amounts recognized in Tupperware's combined balance sheet, as follows:
<TABLE>
<CAPTION>
1995 1994
(IN MILLIONS) ----- -----
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees..................................................... $33.8 $33.5
Other fully eligible participants............................ 1.2 0.9
Other active participants.................................... 6.1 3.5
----- -----
41.1 37.9
Unrecognized prior service benefit............................. 2.3 2.4
Unrecognized loss.............................................. (4.5) (2.5)
----- -----
Accrued postretirement benefit cost............................ 38.9 37.8
Less current portion........................................... 2.8 2.1
----- -----
Total long-term accrued post retirement benefit cost........... $36.1 $35.7
===== =====
</TABLE>
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% at December 30, 1995 and 8.75% at
December 31, 1994. The assumed health care cost trend rate is 11% for the pre-
65 plan and 8% for the post-65 plan for 1995. These rates are assumed to
decrease by one percentage point per year until an ultimate level of 6% is
reached. The rate is assumed to remain at that level thereafter. The health
care cost trend rate assumption has a significant effect on the amounts
reported. For example, increasing the assumed health care cost trend rates by
one percentage point in each year would increase the accumulated
postretirement benefit obligation for the medical plan as of December 30,
1995, by $4.5 million. The effect of a one percentage point increase on the
aggregate of the service and interest cost components of net periodic
postretirement benefit cost for 1995 would be $0.4 million.
The Company continues to evaluate ways in which it can improve management of
these benefits and control the costs. Any changes in the plans or revisions to
assumptions that affect the amount of expected future benefits may have a
significant effect on the amount of the reported obligation and future annual
expense.
NOTE 9: INCENTIVE COMPENSATION PLANS
Certain current and future officers and other key employees of Tupperware
participate in Premark's 1994 Incentive Plan (the "1994 Plan") under which
performance awards and awards of stock options to purchase Premark shares and
restricted stock are made. Performance awards earned by Tupperware employees
of $12.9
F-16
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
million, $9.0 million, and $12.1 million, are included in the combined
statement of income for 1995, 1994, and 1993, respectively.
The exercise prices of options granted to date have been the fair market
value of the shares on the date of grant. Options granted under the 1994 Plan
have a term of 10 years, and all options that are not exercisable at December
30, 1995 become exercisable three years after the date of grant. Options
outstanding will expire during the period December 26, 1996 through October
30, 2005. No charges have been reflected in income for any period with respect
to these options.
As of December 30, 1995, current and future Tupperware officers and
employees had options to purchase 1,620,550 Premark shares at an average price
per share of $28.97. Options to purchase 812,367 shares were exercisable at
December 30, 1995. When the Distribution is completed, it is expected that,
subject to receipt of any necessary consents, the outstanding options to
purchase Premark Common Stock held by Tupperware employees (other than Mr.
Batts, who will be Chairman and Chief Executive Officer of Tupperware) will be
converted to options to purchase solely Tupperware Common Stock. Two-thirds of
such options held by Mr. Batts will be so converted. The number of shares
under option and their exercise prices will be set in a manner that will
maintain in the aggregate the excess of market value over exercise price of
the existing options immediately prior to the Distribution.
NOTE 10: GEOGRAPHIC INFORMATION
Tupperware operates worldwide in one business segment: the manufacture and
distribution, through independent direct sales forces, of plastic food storage
and serving containers, microwave cookware, and educational toys.
<TABLE>
<CAPTION>
1995 1994 1993
(IN MILLIONS) -------- -------- --------
<S> <C> <C> <C>
Net sales:
Europe, Africa, and Middle East................. $ 595.1 $ 540.1 $ 505.1
Asia Pacific.................................... 355.1 329.3 286.9
Americas, other than the United States.......... 200.6 176.4 154.4
United States................................... 208.6 228.8 225.4
-------- -------- --------
Total net sales................................... $1,359.4 $1,274.6 $1,171.8
======== ======== ========
Segment profit:
Europe, Africa, and Middle East................. $ 156.8 $ 125.0 $ 110.3
Asia Pacific.................................... 59.4 46.3 40.3
Americas, other than the United States.......... 19.4 15.7 15.7
United States................................... 10.3 16.0 12.5
-------- -------- --------
Total segment profit.............................. 245.9 203.0 178.8
Unallocated expenses.............................. (22.9) (12.0) (17.8)
Interest income (expense), net.................... 1.9 0.2 (12.6)
-------- -------- --------
Income before income taxes........................ $ 224.9 $ 191.2 $ 148.4
======== ======== ========
Identifiable assets:
Europe, Africa, and Middle East................. $ 327.7 $ 284.5 $ 259.0
Asia Pacific.................................... 187.9 192.1 183.9
Americas, other than the United States.......... 115.6 90.8 76.5
United States................................... 159.1 161.6 135.9
Corporate....................................... 153.7 153.6 129.8
-------- -------- --------
Total identifiable assets......................... $ 944.0 $ 882.6 $ 785.1
======== ======== ========
</TABLE>
F-17
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Sales to a single customer did not exceed 10% of total sales. Export sales
were insignificant. Unallocated expenses are corporate expenses and other
items not directly related to the operations of any particular geographic
area. Corporate assets consist of cash and assets maintained for general
corporate purposes. As of December 30, 1995, the Company's net investment in
international operations was $266.5 million. The Company is subject to the
usual economic risks associated with international operations, however these
risks are partially mitigated by broad geographic dispersion of the Company's
operations.
NOTE 11: CONTINGENCIES
The Company and certain subsidiaries are involved in litigation and various
legal matters that are being defended and handled in the ordinary course of
business. Included among these matters are environmental issues. None of the
Company's contingencies are expected to have a material adverse effect on its
financial position, results of operations or any individual year's cash flow.
Kraft Foods, Inc., which was formerly affiliated with Premark and
Tupperware, has assumed any liabilities arising out of any legal proceedings
in connection with certain divested or discontinued businesses. The
liabilities assumed include matters alleging product liability, environmental
liability, and infringement of patents.
NOTE 12: QUARTERLY FINANCIAL SUMMARY (UNAUDITED)
Following is a summary of the unaudited interim results of operations for
each quarter in the years ended December 30, 1995 and December 31, 1994.
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
(IN MILLIONS) ------- ------- ------- -------
<S> <C> <C> <C> <C>
Year ended December 30, 1995
Net sales..................................... $330.2 $351.0 $291.9 $386.3
Cost of products sold......................... 113.4 122.6 112.1 133.4
Net income.................................... 30.6 47.9 18.3 74.6
Year ended December 31, 1994
Net sales..................................... $298.2 $319.5 $279.5 $377.4
Cost of products sold......................... 103.4 121.4 106.8 129.3
Net income.................................... 25.3 41.3 17.2 65.4
</TABLE>
NOTE 13: CREDIT FACILITY
On April 9, 1996, Tupperware received a commitment letter from its lead bank
relating to a $300,000,000 five year unsecured multi-currency bank facility
for Tupperware and certain of its subsidiaries. Tupperware's lead bank
committed, subject to certain conditions, to provide up to $75,000,000 of the
facility and to syndicate the remainder of the facility. The commitment letter
provides for a revolving credit at a floating rate and, at Tupperware's
option, fixed rate bid loans. The interest rate on the revolving credit is
based, at Tupperware's option, on the London Interbank Offered Rate plus a
spread, which will vary depending on Tupperware's long-term public debt rating
("Tupperware Debt Rating") or the prime rate. The interest rate on fixed rate
borrowings is to be set through an auction procedure. The commitment letter
provides that Tupperware is to pay an annual facility fee which will vary
based on the Tupperware Debt Rating. The commitment letter also provides that
the credit facility will contain financial covenants requiring a minimum
interest coverage and a maximum leverage ratio based on earnings before
interest, taxes, depreciation and amortization.
F-18
<PAGE>
TUPPERWARE CORPORATION
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 30, 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- ------------------------ ---------- ------------------- ---------- ---------
ADDITIONS
-------------------
BALANCE AT CHARGED CHARGED TO BALANCE
BEGINNING TO COSTS OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
----------- ---------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts, current and
long term:
Year ended December
30, 1995............. $48.0 $ 7.7 -- $ (4.7)(1) $50.9
(0.1)(2)
Year ended December
31, 1994............. $50.9 $ 6.1 -- $ (8.4)(1) $48.0
(0.6)(2)
Year ended December
25, 1993............. $54.1 $ 10.9 -- $(13.3)(1) $50.9
(0.8)(2)
Valuation allowance for
deferred tax assets:
Year ended December
30, 1995............. $28.7 $ (2.8) -- -- $25.9
Year ended December
31, 1994............. $52.5 $(23.8) -- -- $28.7
Year ended December
25, 1993............. $73.1 $(20.6) -- -- $52.5
</TABLE>
- --------
(1) Represents write-offs less recoveries
(2) Foreign currency translation adjustment
F-19
<PAGE>
PREMARK INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The unaudited Pro Forma Consolidated Balance Sheet and Pro Forma
Consolidated Statement of Income for Premark as of and for the year ended
December 30, 1995, present the consolidated financial position and results of
operations of Premark, assuming that the transactions contemplated by the
Distribution had been completed as of the end of and the beginning of the
year, respectively. In the opinion of management, they include all material
adjustments necessary to restate Premark's historical results. The adjustments
required to reflect such assumptions are described in Note 2 of the Notes to
the Pro Forma Consolidated Financial Information (Unaudited) and are set forth
in the "Pro Forma Adjustments" column.
The unaudited Pro Forma Consolidated Financial Information of Premark should
be read in conjunction with the historical financial statements of Premark
included in its 1995 annual report to shareholders, copies of which are
available from Premark. The pro forma information is presented for
informational purposes only and may not necessarily reflect future results of
operations or financial position or what the results of operations or
financial position would have been for Premark had the Distribution occurred
as assumed herein, or had Tupperware been operated as a separate, stand-alone
company during the period shown.
PREMARK INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 30, 1995
<TABLE>
<CAPTION>
PRO FORMA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) HISTORICAL ADJUSTMENTS PRO FORMA
- --------------------------------------- ---------- ----------- ---------
<S> <C> <C> <C>
Net sales................................. $2,213.4 $ -- $2,213.4
-------- ------ --------
Costs and expenses
Cost of products sold................... 1,420.9 -- 1,420.9
Delivery, sales, and administrative ex-
pense.................................. 648.0 -- 648.0
Interest expense........................ 26.6 (10.3)(2a) 16.3
Interest income......................... (2.0) -- (2.0)
Other expense, net...................... (0.4) -- (0.4)
-------- ------ --------
Total costs and expenses.............. 2,093.1 (10.3) 2,082.8
-------- ------ --------
Income before income taxes................ 120.3 10.3 130.6
Provision for income taxes................ 41.4 4.0 (2b) 45.4
-------- ------ --------
Income from continuing operations......... $ 78.9 $ 6.3 $ 85.2
======== ====== ========
Income from continuing operations per
common and common equivalent share....... $ 1.24 $ 1.34
======== ========
</TABLE>
See Notes to the Pro Forma Consolidated Financial Information (Unaudited).
F-20
<PAGE>
PREMARK INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF DECEMBER 30, 1995
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
(IN MILLIONS) ---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents................. $ 19.8 $ 51.9(2a) $ 71.7
Accounts and notes receivable, net........ 377.8 -- 377.8
Inventories............................... 347.6 -- 347.6
Recoverable income taxes.................. 12.3 -- 12.3
Deferred income tax benefits.............. 77.2 -- 77.2
Prepaid expenses.......................... 45.0 -- 45.0
-------- ------- --------
Total current assets.................. 879.7 51.9 931.6
-------- ------- --------
Property, plant, and equipment, net....... 424.7 -- 424.7
Intangibles, net.......................... 168.7 -- 168.7
Other assets.............................. 73.0 73.0
Net assets of discontinued operations..... 415.2 (184.9)(2a) --
(230.3)(2c)
-------- ------- --------
Total assets.......................... $1,961.3 $(363.3) $1,598.0
======== ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable.......................... $ 104.4 $ -- $ 104.4
Short-term borrowings and current portion
of long-term debt........................ 133.0 (133.0)(2a) --
Accrued liabilities....................... 365.7 -- 365.7
-------- ------- --------
Total current liabilities............. 603.1 (133.0) 470.1
-------- ------- --------
Long-term debt............................ 121.7 -- 121.7
Accrued postretirement benefit cost....... 120.1 -- 120.1
Other liabilities......................... 107.6 -- 107.6
Shareholders' equity:
Preferred stock......................... -- -- --
Common stock............................ 69.0 -- 69.0
Capital surplus......................... 590.3 (261.2)(2c) 329.1
Retained earnings....................... 735.7 (87.0)(2c) 648.7
Treasury stock.......................... (258.0) -- (258.0)
Restricted stock........................ (1.0) -- (1.0)
Cumulative foreign currency adjust-
ments.................................. (127.2) 117.9 (2c) (9.3)
-------- ------- --------
Total shareholders' equity............ 1,008.8 (230.3) 778.5
-------- ------- --------
Total liabilities and shareholders'
equity............................... $1,961.3 $(363.3) $1,598.0
======== ======= ========
</TABLE>
See Notes to the Pro Forma Consolidated Financial Information (Unaudited).
F-21
<PAGE>
PREMARK INTERNATIONAL, INC.
NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
Note 1.
The accompanying unaudited Pro Forma Consolidated Financial Information
reflects all adjustments which, in the opinion of management, are necessary to
present a fair statement of the financial position and results of operations.
This information does not include certain disclosures required under generally
accepted accounting principles and, therefore, should be read in conjunction
with Premark's historical financial statements and notes thereto.
Note 2.
The pro forma adjustments to the accompanying financial information as of
and for the year ended December 30, 1995 are described below:
(a) To record the receipt of a $184.9 million Special Dividend from Dart
Industries Inc. ("Dart"), a subsidiary of Tupperware, and the associated
decrease in debt and interest expense. Interest expense assumed to be
avoided is equal to the average amount of short-term borrowings actually
outstanding during the period, of $166.4 million, at their weighted average
interest rate of 6.2%.
(b) To record the estimated income tax expense on the income effect of
pro forma adjustment (a) above at the combined federal, state, and local
income tax rate of 39%.
(c) To record the Distribution of Premark's 100% equity interest in
Tupperware to Premark's shareholders.
Note 3.
Per share information is based upon the 63.8 million common and common
equivalent shares reflected in Premark's consolidated statement of income for
the year ended December 30, 1995. When the Distribution is completed, it is
expected that the outstanding options to purchase Premark Common Stock, which
are held by Premark officers and employees, will continue to be solely for the
purchase of Premark Common Stock, and that options held by Tupperware officers
and employees will be converted to options to purchase solely Tupperware
Common Stock. The number of Premark shares under option and their exercise
prices will be set in a manner that will maintain in the aggregate the excess
of market value over exercise price of the existing options immediately prior
to the Distribution. The number of common and common equivalent shares used to
compute earnings per share after the Distribution will depend on the market
price of Premark's Common Stock at that time, but is expected to be higher
than 63.8 million.
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Annex A
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF TUPPERWARE
CORPORATION
1. The name of the corporation (which is hereinafter referred to as the
Corporation) is "Tupperware Corporation".
2. The original Certificate of Incorporation was filed with the Secretary
of State of Delaware on February 8, 1996, under the name Tupperware
Corporation.
3. This Restated Certificate of Incorporation has been duly proposed by
resolutions adopted and declared advisable by the Board of Directors of the
Corporation (the "Board of Directors"), and duly executed and acknowledged by
the proper officers of the Corporation in accordance with the provisions of
Sections 103, 228, 242 and 245 of the General Corporation Law of the State of
Delaware and, upon filing with the Secretary of State in accordance with
Section 103 shall henceforth supercede the original Certificate of
Incorporation and shall, as it may thereafter be amended in accordance with
its terms and applicable law, be the Certificate of Incorporation of the
Corporation.
4. The text of the Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirety as follows:
ARTICLE I
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
Tupperware Corporation
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of the Corporation's registered
agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation shall be to engage in any lawful act or
activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.
ARTICLE IV
(A) Authorized Stock. The total number of shares of stock which the
Corporation shall have authority to issue is 800,000,000, consisting of
600,000,000 shares of common stock, par value $.01 per share ("Common Stock"),
and 200,000,000 shares of preferred stock, no par value ("Preferred Stock").
(B) Preferred Stock. The Preferred Stock may be issued from time to time
in one or more series. In addition to a series of Preferred Stock designated
as "Series A Junior Participating Preferred Stock", the terms of which are set
forth in the attached Preferred Stock Designation, the Board of Directors is
hereby authorized to create and provide for the issuance of shares of
Preferred Stock in series and, by filing a certificate pursuant to the
applicable law of the State of Delaware (hereinafter referred to as a
"Preferred Stock Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designation,
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power, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
(i) The designation of the series, which may be by distinguishing
number, letter or title.
(ii) The number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the Preferred
Stock Designation) increase or decrease (but not below the number of shares
thereof then outstanding).
(iii) Whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series.
(iv) The dates at which dividends, if any, shall be payable.
(v) The redemption rights and price or prices, if any, for shares of
the series.
(vi) The terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series.
(vii) The amounts payable on, and the preferences, if any, of shares of
the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation.
(viii) Whether the shares of the series shall be convertible into
shares of any other class or series, or any other security, of the
Corporation or any other corporation, and, if so, the specification of such
other class or series of such other security, the conversion price or
prices or rate or rates, any adjustments thereof, the date or dates at
which such shares shall be convertible and all other terms and conditions
upon which such conversion may be made.
(ix) Restrictions on the issuance of shares of the same series or of
any other class or series.
(x) The voting rights, if any, of the holders of shares of the series.
(xi) Such other powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions thereof as the Board of Directors shall determine.
(C) Common Stock. The Common Stock shall be subject to the express terms
of the Preferred Stock and any series thereof. Each share of Common Stock
shall be equal to each other share of Common Stock. The holders of shares of
Common Stock shall be entitled to one vote for each such share upon all
questions presented to the stockholders.
(D) Vote. Except as may be provided in this Certificate of Incorporation
or in a Preferred Stock Designation, or as may be required by applicable law,
the Common Stock shall have the exclusive right to vote for the election of
directors and for all other purposes, and holders of shares of Preferred Stock
shall not be entitled to receive notice of any meeting of stockholders at
which they are not entitled to vote.
(E) Record Holders. The Corporation shall be entitled to treat the person
in whose name any share of its stock is registered as the owner thereof for
all purposes and shall not be bound to recognize any equitable or other claim
to, or interest in, such share on the part of any other person, whether or not
the Corporation shall have notice thereof, except as expressly provided by
applicable law.
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ARTICLE V
The Board of Directors is hereby authorized to create and issue, whether
or not in connection with the issuance and sale of any of its stock or other
securities or property, rights entitling the holders thereof to purchase from
the Corporation shares of stock or other securities of the Corporation or any
other corporation. The times at which and the terms upon which such rights are
to be issued will be determined by the Board of Directors and set forth in the
contracts or instruments that evidence such rights. The authority of the Board
of Directors with respect to such rights shall include, but not be limited to,
determination of the following:
(A) The initial purchase price per share or other unit of the stock or
other securities or property to be purchased upon exercise of such rights.
(B) Provisions relating to the times at which and the circumstances under
which such rights may be exercised or sold or otherwise transferred, either
together with or separately from, any other stock or other securities of the
Corporation.
(C) Provisions which adjust the number or exercise price of such rights or
amount or nature of the stock or other securities or property receivable upon
exercise of such rights in the event of a combination, split or
recapitalization of any stock of the Corporation, a change in ownership of the
Corporation's stock or other securities or a reorganization, merger,
consolidation, sale of assets or other occurrence relating to the Corporation
or any stock of the Corporation, and provisions restricting the ability of the
Corporation to enter into any such transaction absent an assumption by the
other party or parties thereto of the obligations of the Corporation under
such rights.
(D) Provisions which deny the holder of a specified percentage of the
outstanding stock or other securities of the Corporation the right to exercise
such rights and/or cause the rights held by such holder to become void.
(E) Provisions which permit the Corporation to redeem or exchange such
rights.
(F) The appointment of a rights agent with respect to such rights.
Notwithstanding anything contained in this Certificate of Incorporation to
the contrary, the affirmative vote of at least 80 percent of the voting power
of the then outstanding Voting Stock (as defined below), voting together as a
single class, shall be required to amend or repeal, or adopt any provisions
inconsistent, with this Article V. For the purposes of this Certificate of
Incorporation, "Voting Stock" shall mean the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
Directors.
ARTICLE VI
(A) In furtherance and not in limitation of the powers conferred by law,
the Board of Directors is expressly authorized and empowered:
(i) to adopt, amend or repeal the By-laws of the Corporation, provided,
however, that the By-laws may also be altered, amended or repealed by the
affirmative vote of the holders of at least 80 percent of the voting power
of the then outstanding Voting Stock, voting together as a single class;
and
(ii) from time to time to determine whether and to what extent, and at
what times and places, and under what conditions and regulations, the
accounts and books of the Corporation, or any of them, shall be open to
inspection of stockholders; and, except as so determined, or as expressly
provided in this Certificate of Incorporation or in any Preferred Stock
Designation, no stockholder shall have any right to inspect any account,
book or document of the Corporation other than such rights as may be
conferred by applicable law.
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(B) The Corporation may in its By-laws confer powers upon the Board of
Directors in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board of Directors by law.
Notwithstanding anything contained in this Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least 80 percent of the
voting power of the then outstanding Voting Stock, voting together as a single
class, shall be required to amend, repeal or adopt any provision inconsistent
with subparagraph (i) of paragraph (A) of this Article VI.
ARTICLE VII
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances or to consent to
specific actions taken by the Corporation, any action required or permitted to
be taken by the stockholders of the Corporation must be effected at a duly
called annual or special meeting of stockholders of the Corporation and may
not be effected by any consent in writing in lieu of a meeting of such
stockholders. Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of at least 80 percent of
the voting power of the then outstanding Voting Stock, voting together as a
single class, shall be required to amend or repeal, any provision inconsistent
with, this Article VII.
ARTICLE VIII
(A) Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specific circumstances, the number of
directors of the Corporation shall be fixed by the By-laws of the Corporation
and may be increased or decreased from time to time in such a manner as may be
prescribed by the By-laws.
(B) Unless and except to the extent that the By-laws of the Corporation
shall so require, the election of directors of the Corporation need not be by
written ballot.
(C) The directors, other than those who may be elected by the holders of
any series of Preferred Stock, shall be divided into three classes, as nearly
equal in number as possible, and designated as Class I, Class II and Class
III. Class I directors shall be initially elected for a term expiring at the
1997 annual meeting of stockholders, Class II directors shall be initially
elected for a term expiring at the 1998 annual meeting of stockholders, and
Class III directors shall be initially elected for a term expiring at the 1999
annual meeting of stockholders. Members of each class shall hold office until
their successors are elected and qualified. At each succeeding annual meeting
of the stockholders of the Corporation, the successors of the class of
directors whose term expires at that meeting shall be elected by a plurality
vote of all votes cast at such meeting to hold office for a term expiring at
the annual meeting of stockholders held in the third year following the year
of their election, and until their successors are elected and qualified.
(D) Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specific circumstances, any director may
be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least 80 percent of the voting power of
the then outstanding Voting Stock, voting together as a single class.
(E) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
80 percent of the voting power of the then outstanding Voting Stock, voting
together as a single class, shall be required to amend or repeal, or adopt any
provision inconsistent with, this Article VIII.
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ARTICLE IX
Section 1. Vote Required for Certain Business Combinations
(A) Higher Vote for Certain Business Combinations. In addition to any
affirmative vote required, by law or this Certificate of Incorporation or by
any Preferred Stock Designation, and except as otherwise expressly provided in
Section 2 of this Article IX:
(i) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with (a) any Interested Stockholder (as
hereinafter defined) or (b) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested
Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder, including all Affiliates of the Interested
Stockholder, of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereinafter defined) of $10,000,000 or
more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder, including all
Affiliates of any Interested Stockholder, in exchange for cash, securities
or other property (or a combination thereof) having an aggregate Fair
Market Value of $10,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliates of an Interested Stockholder; or
(v) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not an Interested Stockholder is a party thereto)
which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is
Beneficially Owned (as hereinafter defined) by any Interested Stockholder
or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 80 percent of
the voting power of the then outstanding Voting Stock, voting together as a
single class, including the affirmative vote of the holders of at least 80
percent of the voting power of the then outstanding Voting Stock not owned
directly or indirectly by any Interested Stockholder or any Affiliate of any
Interested Stockholder. Such affirmative vote shall be required
notwithstanding any other provision of this Certificate of Incorporation, any
Preferred Stock Designation or any provision of law or of any agreement with
any national securities exchange or otherwise which might otherwise permit a
lesser vote or no vote.
(B) Definition of "Business Combination." The term "Business Combination"
as used in this Article IX shall mean any transaction described in any one or
more of clauses (i) through (v) of paragraph (A) of this Section 1.
Section 2. When Higher Vote Is Not Required
The provision of Section 1 of this Article IX shall not be applicable to
any particular Business Combination, and such Business Combination shall
require only such affirmative vote as is required by law or any other
provision of this Certificate of Incorporation and any Preferred Stock
Designation, if, in the case of a Business Combination that does not involve
any cash or other consideration being received by the stockholders of the
Corporation, the condition specified in the following paragraph (A) is met or,
in the case of any other Business Corporation, the conditions specified in
either of the following paragraph (A) or (B) are met:
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(A) Approval by Continuing Directors. The Business Combination shall have
been approved by a majority of the Continuing Directors (as hereinafter
defined); provided, however, that this condition shall not be capable of
satisfaction unless there are at least five Continuing Directors.
(B) Price and Procedure Requirements. All of the following conditions
shall have been met:
(i) The consideration to be received by holders of shares of a
particular class (or series) of outstanding capital stock (including Common
Stock and other than Excluded Preferred Stock (as hereinafter defined))
shall be in cash or in the same form as the Interested Stockholder or any
of its Affiliates has previously paid for shares of such class (or series)
of capital stock. If the Interested Stockholder or any of its Affiliates
have paid for shares of any class (or series) of capital stock with varying
forms of consideration, the form of consideration to be received per share
by holders of shares of such class (or series) of capital stock shall be
either cash or the form used to acquire the largest number of shares of
such class (or series) of capital stock previously acquired by the
Interested Stockholder.
(ii) The aggregate amount of (x) the cash and (y) the Fair Market
Value, as of the date (the "Consummation Date") of the consummation of the
Business Combination, of the consideration other than cash to be received
per share by holders of Common Stock in such Business Combination shall be
at least equal to the higher of the following (in each case appropriately
adjusted in the event of any stock dividend stock split, combination of
shares or similar event):
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid by the Interested Stockholder or any of its Affiliates for any
shares of Common Stock acquired by them within the two-year period
immediately prior to the date of the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or in
any transaction in which the Interested Shareholder became an
Interested Stockholder, whichever is higher, plus interest compounded
annually from the first date on which the Interested Stockholder became
an Interested Stockholder (the "Determination Date") through the
Consummation Date at the publicly announced base rate of interest of
Citibank N.A. (or such other major bank headquartered in the City of
New York as may be selected by the Continuing Directors) from time to
time in effect in the City of New York, less the aggregate amount of
any cash dividends paid, and the Fair Market Value of any dividends
paid in other than cash, on each share of Common Stock from the
Determination Date through the Consummation Date in an amount up to but
not exceeding the amount of interest so payable per share of Common
Stock; and
(b) the Fair Market Value per share of Common Stock on the Announcement
Date or the Determination Date, whichever is higher.
(iii) The aggregate amount of (x) the cash and (y) the Fair Market
Value, as of the Consummation Date, of the consideration other than cash to
be received per share by holders of shares of any class (or series), other
than Common Stock or Excluded Preferred Stock, of outstanding capital stock
be at least equal to the highest of the following (in each case
appropriately adjusted in the event of any stock dividend, stock split,
combination of shares or similar event), it being intended that the
requirements of this paragraph (B)(iii) shall be required to be met with
respect to every such class (or series) of outstanding capital stock
whether or not the Interested Stockholder or any of its Affiliates has
previously acquired any shares of a particular class (or series) of capital
stock:
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid by the Interested Stockholder or any of its Affiliates for any
shares of such class (or series) of capital stock acquired by them
within the two-year period immediately prior to the Announcement Date
or in any transactions in which it became an Interested Stockholder,
whichever is higher, plus interest compounded annually from the
Determination Date through the Consummation Date at the publicly
announced base rate of interest of Citibank N.A. (or such other
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major bank headquartered in the City of New York as may be selected by
the Continuing Directors) form time to time in effect in the City of
New York, less the aggregate amount of any cash dividends paid, and the
Fair Market Value of any dividends paid in other than cash, on each
share of such class (or series) of capital stock from the Determination
Date through the Consummation Date in an amount up to but not exceeding
the amount of interest so payable per share of such class (or series)
of capital stock;
(b) the Fair Market Value per share of such class (or series) of
capital stock on the Announcement Date or on the Determination Date,
whichever is higher, and
(c) the highest preferential amount per share, if any, to which the
holders of shares of such class (or series) of capital stock would be
entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
(iv) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (a)
except as approved by a majority of the Continuing Directors, there shall
have been no failure to declare and pay at the regular date therefor any
full quarterly dividends (whether or not cumulative) on any outstanding
Preferred Stock; (b) there shall have been (I) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary to reflect
any subdivision of the Common Stock), except as approved by a majority of
the Continuing Directors, and (II) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
shares of Common Stock, unless the failure so to increase such annual rate
is approved by a majority of the Continuing Directors; and (c) neither such
Interested Stockholder nor any of its Affiliates shall have become the
beneficial owner of any additional shares of Voting Stock except as part of
the transaction which results in such Interested Stockholder becoming an
Interested Stockholder; provided, however, that no approval by Continuing
Directors shall satisfy the requirements of this subparagraph (iv) unless
at the time of such approval there are at least five Continuing Directors.
(v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder and any of its Affiliates shall
not have received the benefit, directly or indirectly (except
proportionately, solely in such Interested Stockholder's or Affiliate's
capacity as a stockholder of the Corporation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or
other tax advantages provided by the Corporation, whether in anticipation
of or in connection with such Business Combination or otherwise.
(vi) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or regulations) shall be
mailed to all stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
(vii) Such Interested Stockholder shall have supplied the Corporation
with such information as shall have been requested pursuant to Section 4 of
this Article IX within the time period set forth therein.
Section 3. For the purposes of this Article IX:
(1) A "person" means any individual, limited partnership, general
partnership, corporation or other firm or entity.
(2) "Interested Stockholder" means any person (other than the Corporation
or any Subsidiary) who or which:
(i) is the beneficial owner (as hereinafter defined), directly or
indirectly, of ten percent or more of the voting power of the outstanding
Voting Stock; or
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(ii) is an Affiliate or an Associate of the Corporation and at any time
within the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of ten percent or more of the
voting power of the then-outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in the
course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended, or
any successor act thereto.
(3) A person shall be a "beneficial owner" of, or shall "Beneficially
Own", any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly within the
meaning of Rule 13d-3, or any successor rule thereto, under the Securities
Exchange Act of 1934, as amended, or any successor act thereto; or
(ii) which such person or any of its Affiliates or Associates has (a)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options or otherwise or (b) the right to vote pursuant to any
agreement, arrangement or understanding (but neither such person nor any
such Affiliate or Associate shall be deemed to be the beneficial owner of
any shares of Voting Stock solely by reason of a revocable proxy granted
for a particular meeting of stockholders, pursuant to a public solicitation
of proxies for such meeting, and with respect to which shares neither such
person nor any such Affiliate or Associate is otherwise deemed the
beneficial owner); or
(iii) which are beneficially owned, directly or indirectly, within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, or any successor rule thereto, by any other person with which such
person or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting
(other than solely by reason of a revocable proxy as described in
subparagraph (ii) of this paragraph (3)) or disposing of any shares of
Voting Stock;
provided, however, that in the case of any employee stock ownership or similar
plan of the Corporation or of any Subsidiary in which the beneficiaries
thereof possess the right to vote any shares of Voting Stock held by such
plan, no such plan nor any trustee with respect thereto (nor any Affiliate of
such trustee), solely by reason of such capacity of such trustee, shall be
deemed, for any purposes hereof, to beneficially own any shares of Voting
Stock held under any such plan.
(4) For the purposes of determining whether a person is an Interested
Stockholders pursuant to paragraph (2) of this Section 3, the number of shares
of Voting Stock deemed to be outstanding shall include shares deemed owned
through application of paragraph (3) of this Section 3 but shall not include
any other unissued shares of Voting Stock which may be issuable pursuant to
any agreement, arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, or any successor rule thereto.
(6) "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in paragraph (2) of this Section 3, the term
"Subsidiary" shall mean only a corporation of which a majority of each class
of equity security is owned, directly or indirectly, by the Corporation.
(7) "Continuing Director" means any member of the Board of Directors of
the Corporation who is unaffiliated with the Interested Stockholder and was a
member of a the Board prior to the time that the Interested
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Stockholder became an Interested Stockholder, and any director who is
thereafter chosen to fill any vacancy on the Board of Directors or who is
elected and who, in either event, is unaffiliated with the Interested
Stockholder and in connection with his or her initial assumption of office is
recommended for appointment or election by a majority of Continuing Directors
then on the Board.
(8) "Fair Market Value" means: (i) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange Listed Stocks, or, if such stock is not listed on such Exchange, on
the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the 30-day period preceding the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such
quotations are available, the fair market value on the date in question of a
share of such stock as determined by the Board in accordance with Section 4 of
this Article IX; and (ii) in the case of property other than cash or stock,
the fair market value of such property on the date in question as determined
by the Board of Directors in accordance with Section 4 of this Article IX.
(9) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as used in
paragraphs (2)(ii) of Section 2 of this Article IX shall include the shares of
Common Stock and/or the shares of any other class (or series) of outstanding
capital stock retained by the holders of such shares.
(10) "Whole Board" means the total number of directors which this
Corporation would have if there were no vacancies.
(11) "Excluded Preferred Stock" means any series of Preferred Stock with
respect to which the Preferred Stock Designation creating such series
expressly provides that the provisions of this Article IX shall not apply.
Section 4.
(a) A majority of the Whole Board, but only if a majority of the Whole
Board shall then consist of Continuing Directors or, if a majority of the
Whole Board shall not then consist of Continuing Directors, a majority of the
then Continuing Directors, shall have the power and duty to determine, on the
basis of information known to them after reasonable inquiry, all facts
necessary to determine compliance with this Article IX, including, without
limitation, (i) whether a person is an Interested Stockholder, (ii) the number
of shares of Voting Stock beneficially owned by any person, (iii) whether a
person is an Affiliate or Associate of another, (iv) whether the applicable
conditions set forth in paragraph (2) of Section 2 have been met with respect
to any Business Combination, (v) the Fair Market Value of stock or other
property in accordance with paragraph (8) of Section 3 of this Article IX, and
(vi) whether the assets which are the subject of any Business Combination
referred to in paragraph (1)(ii) of Section 1 have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination referred to in paragraph (1)(iii) of
Section 1 has, an aggregate Fair Market Value of $10,000,000 or more.
(b) A majority of the Whole Board shall have the right to demand, but only
if a majority of the Whole Board shall then consist of Continuing Directors,
or, if a majority of the Whole Board shall not then consist of Continuing
Directors, a majority of the then Continuing Directors shall have the right to
demand, that any person who it is reasonably believed is an Interested
Stockholder (or holds of record shares of Voting Stock Beneficially Owned by
any Interested Stockholder) supply this Corporation with complete information
as to (i) the record owner(s) of all shares Beneficially Owned by such person
who it is reasonably believed is an Interested Stockholder, (ii) the number
of, and class or series of, shares Beneficially Owned by such person who it is
reasonably believed is an Interested Stockholder and held of record by each
such record owner and the number(s) of the stock certificate(s) evidencing
such shares, and (iii) any other factual matter relating to the applicability
or
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effect of this Article IX, as may be reasonably requested of such person, and
such person shall furnish such information within 10 days after receipt of
such demand.
Section 5. No Effect on Fiduciary Obligations of Interested Stockholders.
Nothing contained in this Article IX shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
Section 6. Amendment, Repeal, etc.
Notwithstanding any other provisions of this Certificate of Incorporation
or the By-laws of the Corporation (and notwithstanding the fact that a lesser
percentage may be permitted by law, this Certificate of Incorporation, any
Preferred Stock Designation or the By-laws of the Corporation), but in
addition to any affirmative vote of the holders of any particular class of
Voting Stock required by law, this Certificate of Incorporation or any
Preferred Stock Designation, the affirmative vote of the holders of 80 percent
of the voting power of the shares of the then outstanding Voting Stock voting
together as a single class, including the affirmative vote of the holders of
80 percent of the voting power of the then outstanding Voting Stock not owned
directly or indirectly by any Interested Stockholder or any Affiliate of any
Interested Stockholder, shall be required to amend or repeal, or adopt any
provisions inconsistent with, this Article IX of this Certificate of
Incorporation.
ARTICLE X
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) for any transaction from which the
director derived an improper personal benefit. Any repeal or modification of
this Article X by the stockholders shall not adversely affect any right or
protection of a director or the Corporation existing hereunder in respect of
any act or omission occurring prior to such amendment or appeal.
ARTICLE XI
Each person who is or was or had agreed to become a director or officer of
the Corporation, or each such person who is or was serving or who had agreed
to serve at the request of the Board of Directors or an officer of the
Corporation as an employee or agent of the Corporation or as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise (including the heirs, executor, administrators or
estate of such person), shall be indemnified by the Corporation, in accordance
with the By-laws of the Corporation, to the fullest extent permitted from time
to time by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment) or any other applicable laws as presently or
hereafter in effect. Without limiting the generality or the effect of the
foregoing, the Corporation may enter into one or more agreements with any
person which provide for indemnification greater or different than that
provided in this Article XI. Any amendment or repeal of this Article XI shall
not adversely affect any right or protection existing hereunder in respect of
any act or omission occurring prior to such amendment or repeal.
ARTICLE XII
In furtherance and not in limitation of the powers conferred by law or in
this Certificate of Incorporation, the Board of Directors (and any committee
of the Board of Directors) is expressly authorized, to the extent permitted by
law, to take such action or actions as the Board of Directors or such
committee may determine to be reasonably necessary or desirable to (A)
encourage any person (as defined in Article IX of this
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Certificate of Incorporation) to enter into negotiations with the Board of
Directors and management of the Corporation with respect to any transaction
which may result in a change in control of the Corporation which is proposed
or initiated by such person or (B) contest or oppose any such transaction
which the Board of Directors or such committee determines to be unfair,
abusive or otherwise undesirable with respect to the Corporation and its
business, assets or properties or the stockholders of the Corporation,
including, without limitation, the adoption of such plans or the issuance of
such rights, options, capital stock, notes, debentures or other evidences of
indebtedness or other securities of the Corporation, which rights, options,
capital stock, notes, evidences of indebtedness and other securities (i) may
be exchangeable for or convertible into cash or other securities on such terms
and conditions as may be determined by the Board of Directors or such
committee and (ii) may provide for the treatment of any holder or class of
holders thereof designated by the Board of Directors or any such committee in
respect of the terms, conditions, provisions and rights of such securities
which is different from, and unequal to, the terms, conditions, provisions and
rights applicable to all other holders thereof.
ARTICLE XIII
The Corporation reserves the right at any time and from time to time to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, or any Preferred Stock Designation, and any other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter prescribed herein or by law;
and all rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to
this Certificate of Incorporation in its present form or as hereafter amended
are granted subject to the right reserved in this Article XIII; provided,
however, that any amendment or repeal of Article X or Article XI of this
Certificate of Incorporation shall not adversely affect any right or
protection existing hereunder in respect of any act or omission occurring
prior to such amendment or repeal; and provided further that no Preferred
Stock Designation shall be amended after the issuance of any shares of the
series of Preferred Stock created thereby, except in accordance with the terms
of such Preferred Stock Designation and the requirements of applicable law.
IN WITNESS WHEREOF, said Tupperware Corporation has caused this
Certificate of Incorporation to be signed by its President and attested by its
Secretary and has caused its corporate seal to be hereunto affixed, this
day of , 1996.
TUPPERWARE CORPORATION
By:
----------------------------------
Name:
Title:
Attest:
--------------------------------
Corporate Secretary
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Annex B
FORM OF AMENDED AND RESTATED BY-LAWS OF TUPPERWARE CORPORATION
Incorporated under the Laws of the State of Delaware
ARTICLE I
OFFICES AND RECORDS
Section 1.1 Delaware Office
The principal office of Tupperware Corporation (the "Corporation") in the
State of Delaware shall be located in the City of Wilmington, County of New
Castle, and the name and address of its registered agent is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware.
Section 1.2 Other Offices
The Corporation may have such other offices, either within or without the
State of Delaware, as the Board of Directors may from time to time designate
or as the business of the Corporation may from time to time require.
Section 1.3 Books and Records
The books and records of the Corporation may be kept outside the State of
Delaware at such place or places as may from time to time be designated by the
Board of Directors.
ARTICLE II
STOCKHOLDERS
Section 2.1 Annual Meeting
The annual meeting of stockholders of the Corporation shall be held at
such place, either within or without the State of Delaware, and at such time
and date as the Board of Directors, by resolution, shall determine for the
purpose of electing directors and for the transaction of such other business
as may be properly brought before the meeting. If the Board of Directors fails
so to determine the time, date and place of meeting, the annual meeting of
stockholders shall be held at the principal office of the Corporation on the
first Thursday in May. If the date of the annual meeting shall fall upon a
legal holiday, the meeting shall be held on the next succeeding business day.
Section 2.2 Special Meeting
Subject to the rights of the holders of any series of stock having a
preference over the Common Stock of the Corporation as to dividends or upon
liquidation (the "Preferred Stock") to elect additional directors under
specific circumstances, special meetings of the stockholders may be called
only by the Board of Directors pursuant to a resolution adopted by a majority
of the total number of directors which the Corporation would have if there
were no vacancies (the "Whole Board").
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Section 2.3 Place of Meeting
The Board of Directors may designate the place of meeting for any meeting
of the stockholders. If no designation is made by the Board of Directors, the
place of meeting shall be the principal office of the Corporation.
Section 2.4 Notice of Meeting
Written or printed notice, stating the place, day and hour of the meeting
and the purpose or purposes for which the meeting is called, shall be prepared
and delivered by the Corporation not less than ten days nor more than sixty
days before the date of the meeting, either personally or by mail, to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail with
postage thereon prepaid, addressed to the stockholder at such stockholder's
address as it appears on the stock transfer books of the Corporation. Such
further notice shall be given as may be required by law. Only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of meeting.
Meetings may be held without notice if all stockholders entitled to vote are
present, or if notice is waived by those not present in accordance with
Section 6.4 of these By-laws. Any previously scheduled meeting of the
stockholders may be postponed by resolution of the Board of Directors upon
public notice given prior to the time previously scheduled for such meeting of
stockholders.
Section 2.5 Quorum and Adjournment
Except as otherwise provided by law or by the Certificate of
Incorporation, the holders of a majority of the voting power of the
outstanding shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series voting as a class,
the holders of a majority of the voting power of the shares of such class or
series shall constitute a quorum for the transaction of such business. The
chairman of the meeting or a majority of the shares of Voting Stock so
represented may adjourn the meeting from time to time, whether or not there is
such a quorum (or, in the case of specified business to be voted on by a class
or series, the chairman or a majority of the shares of such class or series so
represented may adjourn the meeting with respect to such specified business).
No notice of the time and place of adjourned meetings need be given except as
required by law. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 2.6 Proxies
At all meetings of stockholders, a stockholder may vote by proxy executed
in writing by the stockholder or as may be permitted by law, or by such
stockholder's duly authorized attorney-in-fact. Such proxy must be filed with
the Secretary of the Corporation or such stockholder's representative at or
before the time of the meeting.
Section 2.7 Notice of Stockholder Business and Nominations
(A) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (a) pursuant to the Corporation's notice of meeting delivered
pursuant to Section 2.4 of these By-laws, (b) by or at the direction of the
Board of Directors or (c) by any stockholder of the Corporation who is
entitled to vote at the meeting, who complied with the notice procedures set
forth in clauses (2) and (3) of this paragraph (A) and this By-law and who was
a stockholder of record at the time such notice is delivered to the Secretary
of the Corporation.
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(2) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of
this By-law, the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation and such other business must otherwise be
a proper matter for stockholder action. To be timely, a stockholder's notice
shall be delivered to the Secretary at the principal office of the Corporation
not less than seventy days nor more than ninety days prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of an annual meeting is advanced by more than thirty
days, or delayed by more than seventy days, from the first anniversary date of
the previous year's annual meeting, notice by the stockholder to be timely
must be so delivered not earlier than the ninetieth day prior to such annual
meeting and not later than the close of business on the later of the
seventieth day prior to such annual meeting or the tenth day following the day
on which public announcement of the date of such meeting is first made by the
Corporation. For purposes of determining whether a stockholder's notice shall
have been delivered in a timely manner for the 1997 annual meeting, the first
anniversary of the previous year's meeting shall be deemed to be May 2, 1997.
Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the regulations promulgated
thereunder, including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected; (b) as
to any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial
owner and (ii) the class and number of shares of the Corporation which are
owned beneficially and of record by such stockholder and such beneficial
owner.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of
this By-law to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased and there is
no public announcement by the Corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors made by
the Corporation at least eighty days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice required by this By-
law shall also be considered timely, but only with respect to nominees for any
new positions created by such increase, if it shall be delivered to the
Secretary at the principal office of the Corporation not later than the close
of business on the tenth day following the day on which such public
announcement is first made by the Corporation. For purposes of determining
whether a stockholder's notice shall have been delivered in a timely manner
for the 1997 annual meeting, the first anniversary of the previous year's
meeting shall be deemed to be May 2, 1997.
(B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting pursuant to
Section 2.4 of these By-laws. Nominations of persons for election to the Board
of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting
(a) by or at the direction of the Board of Directors or (b) by any stockholder
of the Corporation who is entitled to vote at the meeting, who complies with
the notice procedures set forth in this By-law and who is a stockholder of
record at the time such notice is delivered to the Secretary of the
Corporation. Nominations by stockholders of persons for election to the Board
of Directors may be made at such a special meeting of stockholders if the
stockholder's notice as required by paragraph (A)(2) of this By-law shall be
delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the ninetieth day prior to such special meeting
and not later than the close of business on the later of the seventieth day
prior to such special meeting or the tenth day following the day on which
public announcement is first made of the date of the special meeting and of
the nominees proposed by the Board of Directors to be elected at such meeting.
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(C) General. (1) Only persons who are nominated in accordance with the
procedures set forth in this By-law shall be eligible to serve as directors
and only such business shall be conducted at a meeting of stockholders as
shall have been brought before the meeting in accordance with the procedures
set forth in this By-law. Except as otherwise provided by law, the Certificate
of Incorporation or these By-laws, the chairman of the meeting shall have the
power and duty to de- termine whether a nomination or any business proposed to
be brought before the meeting was made or proposed in accordance with the
procedures set forth in this By-law and, if any proposed nomination or
business is not in compliance with this By-law, to declare that such defective
proposal or nomination shall be disregarded.
(2) For purposes of this By-law, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this By-law, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth in this
By-law. Nothing in this By-law shall be deemed to affect any rights of
stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
Section 2.8 Procedure for Election of Directors
Election of directors at all meetings of the stockholders at which
directors are to be elected shall be by written ballot, and, subject to the
rights of the holders of any series of Preferred Stock to elect additional
directors under specific circumstances, a plurality of the votes cast thereat
shall elect. Except as otherwise provided by law, the Certificate of
Incorporation or these By-laws, all matters other than the election of
directors submitted to the stockholders at any meeting shall be decided by a
majority of the votes cast with respect thereto.
Section 2.9 Inspectors of Elections; Opening and Closing the Polls
(A) The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve
the Corporation in other capacities, including, without limitation, as
officers, employees, agents or representatives of the Corporation, to act at a
meeting of stockholders and make a written report thereof. One or more persons
may be designated as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate has been appointed to act, or if all
inspectors or alternates who have been appointed are unable to act at a
meeting of stockholders, the chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging his or
her duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspectors shall have the duties prescribed by the General
Corporation Law of the State of Delaware.
(B) The secretary of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at a meeting.
Section 2.10 No Stockholder Action by Written Consent
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances, any action required
or permitted to be taken by the stockholders of the Corporation must be
effected at an annual or special meeting of stockholders of the Corporation
and may not be affected by any consent in writing by such stockholders.
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ARTICLE III
BOARD OF DIRECTORS
Section 3.1 General Powers
The business and affairs of the Corporation shall be managed by or under
the direction of its Board of Directors. In addition to the powers and
authorities by these By-laws expressly conferred upon them, the Board of
Directors may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law or by the Certificate of
Incorporation or by these By-laws required to be exercised or done by the
stockholders.
Section 3.2 Number, Tenure and Qualifications
Subject to the rights of the holders of any series of Preferred Stock to
elect directors under specific circumstances, the number of directors shall be
fixed from time to time exclusively pursuant to a resolution adopted by a
majority of the Whole Board but shall consist of not less than three
directors. The directors, other than those who may be elected by the holders
of any series of Preferred Stock, or any other series or class of stock, shall
be divided, with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as possible, with the term of
office of the first class to expire at the 1997 annual meeting of
stockholders, the term of office of the second class to expire at the 1998
annual meeting of stockholders and the term of office of the third class to
expire at the 1999 annual meeting of stockholders. Each director shall hold
office until his or her successor shall have been duly elected and qualified.
At each annual meeting of stockholders, commencing with the 1997 annual
meeting, (i) directors elected to succeed those directors whose terms then
expire shall be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election, with each director to
hold office until his or her successor shall have been duly elected and
qualified, and (ii) if authorized by a resolution of the Board of Directors,
directors may be elected to fill any vacancy on the Board of Directors,
regardless of how such vacancy shall have been created.
Section 3.3 Regular Meetings
A regular meeting of the Board of Directors may be held without other
notice than this By-law immediately after, and at the same place as, each
annual meeting of stockholders. The Board of Directors may, by resolution,
provide the time and place for the holding of additional regular meetings
without other notice than such resolution.
Section 3.4 Special Meetings
Special meetings of the Board of Directors shall be called at the request
of the Chairman of the Board, the Chief Executive Officer or a majority of the
Board of Directors. The person or persons authorized to call special meetings
of the Board of Directors may fix the place and time of the meetings.
Section 3.5 Notice
Notice of any special meeting shall be given to each director at such
director's business or residence in writing or by telegram or by telephone
communication. If mailed, such notice shall be deemed adequately delivered
when deposited in the United States mails so addressed, with postage thereon
prepaid, at least five days before such meeting. If by telegram, such notice
shall be deemed adequately delivered when the telegram is delivered to the
telegraph company at least twenty-four hours before such meeting. If by
facsimile transmission, such notice shall be transmitted at least twenty-four
hours before such meeting. If by telephone, the notice shall be given at least
twelve hours prior to the time set for the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice of such meeting, except for
amendments to these By-laws as provided under Section 7.1 of Article VII
hereof. A meeting may be held at any time without notice if all the directors
are present or if those not present waive notice of the meeting in writing,
either before or after such meeting.
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Section 3.6 Quorum
A whole number of directors equal to at least one third of the Whole Board
shall constitute a quorum for the transaction of business, but if at any
meeting of the Board of Directors there shall be less than a quorum present, a
majority of the directors present may adjourn the meeting from time to time
without further notice. The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of
Directors. The directors present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
directors to leave less than a quorum.
Section 3.7 Vacancies
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances, and unless the Board
of Directors otherwise determines, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or other cause,
and newly created directorships resulting from any increase in the authorized
number of directors, may be filled only by the affirmative vote of a majority
of the remaining directors, though less than a quorum of the Board of
Directors, and directors so chosen shall hold office for a term expiring at
the annual meeting of stockholders at which the term of office of the class to
which they have been elected expires and until such director's successor shall
have been duly elected and qualified. No decrease in the number of authorized
directors constituting the Whole Board shall shorten the term of any incumbent
director.
Section 3.8 Executive and Other Committees
The Board of Directors may, by resolution adopted by a majority of the
Whole Board, designate an Executive Committee to exercise, subject to
applicable provisions of law, all the powers of the Board in the management of
the business and affairs of the Corporation when the Board of Directors is not
in session, including without limitation the power to declare dividends, to
authorize the issuance of the Corporation's capital stock and to adopt a
certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of the State of Delaware, and may, by resolution similarly
adopted, designate one or more other committees. The Executive Committee and
each such other committee shall consist of two or more directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Any such committee may to the extent
permitted by law exercise such powers and shall have such responsibilities as
shall be specified in the designating resolution. In the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously appoint another member
of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Each committee shall keep written minutes of
its proceedings and shall report such proceedings to the Board of Directors
when required.
A majority of any committee may determine its action and fix the time and
place of its meetings, unless the Board of Directors shall otherwise provide.
Notice of such meetings shall be given to each member of the committee in the
manner provided for in Section 3.5 of these By-laws. The Board of Directors
shall have power at any time to fill vacancies in, to change the membership
of, or to dissolve any such committee. Nothing herein shall be deemed to
prevent the Board of Directors from appointing one or more committees
consisting in whole or in part of persons who are not directors of the
Corporation; provided, however, that no such committee shall have or may
exercise any authority of the Board of Directors.
Section 3.9 Removal
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances, any director, or the
entire Board of Directors, may be removed from office at any time, but only
for cause and only by the affirmative vote of the holders of at least 80
percent of the voting power of the then outstanding Voting Stock, voting
together as a single class.
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ARTICLE IV
OFFICERS
Section 4.1 Elected Officers
The elected officers of the Corporation shall be a Chairman of the Board,
a Chief Executive Officer, one or more Vice Presidents, a Secretary, and such
other officers (including, without limitation, a President) as the Board of
Directors from time to time may deem proper. The Chairman of the Board may
also serve as the Chief Executive Officer. The Chairman of the Board shall be
chosen from the directors. All officers chosen by the Board of Directors shall
each have such powers and duties as generally pertain to their respective
offices, subject to the specific provisions of this Article IV. Such officers
shall also have powers and duties as from time to time may be conferred by the
Board of Directors or by any committee thereof.
Section 4.2 Election and Term of Office
The elected officers of the Corporation shall be elected annually by the
Board of Directors at the regular meeting of the Board of Directors held at
the time of each annual meeting of the stockholders. If the election of
officers shall not be held at such meeting, such election shall be held as
soon thereafter as convenient. Subject to Section 4.7 of these By-laws, each
officer shall hold office until such officer's successor shall have been duly
elected and shall have qualified or until such officer's death or until such
officer shall resign.
Section 4.3 Chairman of the Board
The Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman shall make reports to
the Board of Directors and the stockholders, and shall perform all such other
duties as are properly required of him by the Board of Directors.
Section 4.4 Chief Executive Officer
The Chief Executive Officer shall be responsible for the general
management of the affairs of the Corporation and shall perform all duties
incidental to the Chief Executive Officer's office which may be required by
law and all such other duties as are properly required of him by the Board of
Directors. The Chief Executive Officer shall see that all orders and
resolutions of the Board of Directors and of any committee thereof are carried
into effect.
Section 4.5 President
The President (if one shall have been chosen by the Board of Directors)
shall act in a general executive capacity and shall assist the Chairman of the
Board in the administration and operation of the Corporation's business and
general supervision of its policies and affairs. The President shall, in the
absence of or because of the inability to act of the Chairman of the Board,
perform all duties of the Chairman of the Board and preside at all meetings of
stockholders and of the Board of Directors. The President may sign, alone or
with the Secretary, or an Assistant Secretary, or any other proper officer of
the Corporation authorized by the Board of Directors, certificates, contracts,
and other instruments of the Corporation as authorized by the Board of
Directors.
Section 4.6 Vice Presidents
Each Vice President shall have such powers and perform such duties as from
time to time may be assigned to him or her by the Board of Directors or be
delegated to him or her by the President. The Board of Directors may assign to
any Vice President general supervision and charge over any territorial or
functional division of the business and affairs of the Corporation.
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Section 4.7 Secretary
The Secretary shall give, or cause to be given, notice of all meetings of
stockholders and directors and all other notices required by law or by these
By-laws, and in case of the Secretary's absence or refusal or neglect so to
do, any such notice may be given by any person thereunto directed by the
Chairman of the Board, the Chief Executive Officer, or by the Board of
Directors, upon whose request the meeting is called as provided in these By-
laws. The Secretary shall record all the proceedings of the meetings of the
Board of Directors, any committees thereof and the stockholders of the
Corporation in a book to be kept for that purpose, and shall perform such
other duties as may be assigned to him by the Board of Directors, the Chairman
of the Board or the Chief Executive Officer. The Secretary shall have the
custody of the seal of the Corporation and shall affix the same to all
instruments requiring it, when authorized by the Board of Directors, the
Chairman of the Board or the Chief Executive Officer, and attest to the same.
Section 4.8 Removal
Any officer elected by the Board of Directors may be removed by a majority
of the members of the Whole Board whenever, in their judgment, the best
interests of the Corporation would be served thereby. No elected officer shall
have any contractual rights against the Corporation for compensation by virtue
of such election beyond the date of the election of such officer's successor
or such officer's death, resignation or removal, whichever event shall first
occur, except as otherwise provided in an employment contract or an employee
plan.
Section 4.9 Vacancies
A newly created office and a vacancy in any office because of death,
resignation, or removal may be filled by the Board of Directors for the
unexpired portion of the term at any meeting of the Board of Directors.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
Section 5.1 Stock Certificates and Transfers
(A) The interest of each stockholder of the Corporation shall be evidenced
by certificates for shares of stock in such form as the appropriate officers
of the Corporation may from time to time prescribe, unless it shall be
determined by, or pursuant to, a resolution adopted by the Board of Directors
that the shares representing such interest be uncertificated. The shares of
the stock of the Corporation shall be transferred on the books of the
Corporation by the holder thereof in person or by such person's attorney, upon
surrender for cancellation of certificates for the same number of shares, with
an assignment and power of transfer endorsed thereon or attached thereto, duly
executed, with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require.
(B) The certificates of stock shall be signed, countersigned and
registered in such manner as the Board of Directors may by resolution
prescribe, which resolution may permit all or any of the signatures on such
certificates to be in facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer, transfer agent or registrar at the date of
issue.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Fiscal Year
The fiscal year of the Corporation shall be determined by resolution of
the Board of Directors.
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Section 6.2 Dividends
The Board of Directors may from time to time declare, and the Corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Certificate of Incorporation.
Section 6.3 Seal
The corporate seal may bear in the center the emblem of some object, and
shall have inscribed thereunder the words "Corporate Seal" and around the
margin thereof the words "Tupperware Corporation--Delaware."
Section 6.4 Waiver of Notice
Whenever any notice is required to be given to any stockholder or director
of the Corporation under the provisions of the General Corporation Law of the
State of Delaware, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Neither the
business to be transacted at, nor the purpose of, any annual or special
meeting of the stockholders or of the Board of Directors need be specified in
any waiver of notice of such meeting.
Section 6.5 Audits
The accounts, books and records of the Corporation shall be audited upon
the conclusion of each fiscal year by an independent certified public
accountant selected by the Board of Directors, and it shall be the duty of the
Board of Directors to cause such audit to be made annually.
Section 6.6 Resignations
Any director or any officer, whether elected or appointed, may resign at
any time by serving written notice of such resignation on the Chairman of the
Board, the Chief Executive Officer, the President, if any, or the Secretary,
and such resignation shall be deemed to be effective as of the close of
business on the date said notice is received by the Chairman of the Board, the
Chief Executive Officer, the President, if any, or the Secretary or at such
later date as is stated therein. No formal action shall be required of the
Board of Directors or the stockholders to make any such resignation effective.
Section 6.7 Indemnification and Insurance
(A) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she or a person of whom he or she is the legal
representative is or was a director, officer or employee of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of any other corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by the
General Corporation Law of the State of Delaware as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss (including,
without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred by
such person in connection therewith and such indemnification shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that except as provided in paragraph (B) of Section 6.7 of
these By-laws with
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respect to proceedings seeking to enforce rights to indemnification, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) initiated by such person was authorized
by the Board of Directors of the Corporation.
(B) If a claim under paragraph (A) of this By-law is not paid in full by
the Corporation within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim and, if successful
in whole or in part, the claimant also shall be entitled to be paid the
expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law of the State of Delaware for
the Corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent
legal counsel or stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel or stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
(C) Following any "change of control" of the Corporation of the type
required to be reported under Item 1 of Form 8-K promulgated under the
Exchange Act, any determination as to entitlement to indemnification shall be
made by independent legal counsel selected by the claimant which independent
legal counsel shall be retained by the Board of Directors on behalf of the
Corporation.
(D) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
By-law shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, By-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
(E) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or
loss under the General Corporation Law of the State of Delaware.
(F) The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification, and rights to be paid by
the Corporation the expenses incurred in defending any proceeding in advance
of its final disposition, to any agent of the Corporation to the fullest
extent of the provisions of this By-law with respect to the indemnification
and advancement of expenses of directors, officers and employees of the
Corporation.
(G) The right to indemnification conferred in this By-law shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the General Corporation Law of the
State of Delaware requires, the payment of such expenses in curred by a
director or officer in his or her capacity as a director or officer (and not
in any other capacity in which service was or is rendered by such person while
a director or officer, including, with limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be
made only upon delivery to the Corporation of an undertaking by or on behalf
of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this By-law or otherwise.
(H) Any amendment or repeal of this Article VI shall not adversely affect
any right or protection existing hereunder in respect of any act or omission
occurring prior to such amendment or repeal.
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ARTICLE VII
AMENDMENTS
Section 7.1 Amendments
These By-laws may be amended, added to, rescinded or repealed at any
meeting of the Board of Directors or of the stockholders, provided notice of
the proposed change was given in the notice of the meeting and, in the case of
a meeting of the Board of Directors, in a notice given no less than twenty-
four hours prior to the meeting; provided, however, that, in the case of
amendments by stockholders, notwithstanding any other provisions of these By-
laws or any provision of law which might otherwise permit a lesser vote or no
vote, but in addition to any affirmative vote of the holders of any particular
class or series of the stock required by law, the Certificate of Incorporation
or these By-laws, the affirmative vote of the holders of at least 80 percent
of the voting power of the then outstanding Voting Stock, voting together as a
single class, shall be required to alter, amend or repeal any provision of
these By-laws.
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ANNEX C
FORM OF TUPPERWARE CORPORATION 1996 INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. Tupperware Corporation, a Delaware corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as the "Tupperware Corporation 1996 Incentive
Plan" (hereinafter referred to as the "Plan"), as set forth in this document.
The Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, and Performance Awards.
The Plan shall become effective as of the Effective Date, and shall remain in
effect as provided in Section 1.3 herein.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the success and
enhance the value of the Company by linking the personal interests of
Participants to those of the Company's stockholders, and by providing
Participants with an incentive for outstanding performance. The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special efforts the successful conduct of its
operations largely is dependent.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date and
shall remain in effect, subject to the right of the Board of Directors to
terminate, amend or modify the Plan at any time pursuant to Article 14 herein,
until all Shares subject to it shall have been purchased or acquired according
to the Plan's provisions. However, in no event may an Award be granted under
the Plan on or after , 2006.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word
is capitalized:
(a) "Award" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, or Performance Awards.
(b) "Award Agreement" means an agreement entered into by each
Participant and the Company, setting forth the terms and provisions
applicable to Awards granted to Participants under this Plan.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(d) "Beneficiary" means a person who may be designated by a Participant
pursuant to Article 10 and to whom any benefit under the Plan is to be
paid in case of the Participant's death or physical or mental
incapacity, as determined by the Committee, before he or she receives
any or all of such benefit.
(e) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(f) "Cause" means (i) conviction of a Participant for committing a
felony under federal law or the law of the state in which such action
occurred, (ii) dishonesty in the course of fulfilling a Participant's
employment duties or (iii) willful and deliberate failure on the part
of a Participant to perform his employment duties in any material
respect, or such other events as shall be determined by the Committee.
The Committee shall have the sole discretion to determine whether
"Cause" exists, and its determination shall be final.
(g) "Change of Control" of the Company means:
i. An acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (1) the then outstanding Shares (the "Outstanding
Company Common Stock") or (2) the combined voting power of the then
outstanding Shares entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding,
however, the following: (1) any acquisition directly from the
Company, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was
itself acquired from the Company, (2) any acquisition
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by the Company, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any
Person pursuant to a transaction which complies with clauses (1),
(2) and (3) of subsection (iii) of this definition; or
ii. A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute
the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this
definition, that any individual who becomes a member of the Board
subsequent to such effective date, whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at
least a majority of those individuals who are members of the Board
and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided
further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person or
legal entity other than the Board shall not be so considered as a
member of the Incumbent Board; or
iii. The approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company or the
acquisition of assets of another corporation ("Corporate
Transaction") or, if consummation of such Corporate Transaction is
subject, at the time of such approval by stockholders, to the
consent of any government or governmental agency, the obtaining of
such consent (either explicitly or implicitly by consummation);
excluding, however, such a Corporate Transaction pursuant to which
(1) all or substantially all of the individuals and entities who are
the Beneficial Owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly
or indirectly, more than 60% of, respectively, the outstanding
Shares, and the combined voting power of the then outstanding Shares
entitled to vote generally in the election of directors, as the case
may be, of the Company resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person (other than the
Company, any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20% or
more of, respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors
except to the extent that such ownership existed with respect to the
Company prior to the Corporate Transaction and (3) individuals who
were members of the Incumbent Board will constitute at least a
majority of the board of directors of the corporation resulting from
such Corporate Transaction; or
iv. The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(h) "Change of Control Price" means the higher of (i) the highest
reported sales price, regular way, of a share of Common Stock in any
transaction reported on the New York Stock Exchange Composite Tape or
other national exchange on which such shares are listed or on NASDAQ
during the 60-day period prior to and including the date of a Change of
Control or (ii) if the Change of Control is the result of a tender or
exchange offer or a Corporate Transaction, the highest price per share
of Common
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Stock paid in such tender or exchange offer or Corporate Transaction;
provided, however, that (x) in the case of a Stock Option which (A) is
held by an optionee who is an officer or director of the Corporation
and is subject to Section 16(b) of the Exchange Act and (B) was granted
within 240 days of the Change of Control, then the Change of Control
Price for such Stock Option shall be the Fair Market Value of the
Common Stock on the date such Stock Option is exercised or deemed
exercised and (y) in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, the Change of
Control Price shall be in all cases the Fair Market Value of the Common
Stock on the date such Incentive Stock Option or Stock Appreciation
Right is exercised. To the extent that the consideration paid in any
such transaction described above consists all or in part of securities
or other noncash consideration, the value of such securities or other
noncash consideration shall be determined in the sole discretion of the
Board.
(i) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(j) "Commission" means the Securities and Exchange Commission or any
successor agency.
(k) "Committee" means the committee described in Article 3 or (unless
otherwise stated) its designee pursuant to a delegation by the
Committee as contemplated by Section 3.3.
(l) "Company" means Tupperware Corporation, a Delaware corporation, or
any successor thereto as provided in Article 16 herein.
(m) "Covered Employee" has the meaning ascribed thereto in Section
162(m) of the Code and the regulations thereunder.
(n) "Director" means any individual who is a member of the Board of
Directors of the Company.
(o) "Disinterested Person" means a member of the Board who qualifies as
a disinterested person as defined in Rule 16b-3(c)(2), as promulgated
by the Commission under the Exchange Act, or any successor definition
adopted by the Commission.
(p) "Effective Date" means the date determined by the Board of
Directors of Premark International, Inc., a Delaware corporation
("Premark"), on which shall be effected the distribution of Shares on a
pro rata basis to the holders of the outstanding shares of common stock
of Premark.
(q) "Employee" means any nonunion employee of the Company or of the
Company's Subsidiaries. Directors who are not otherwise employed by the
Company shall not be considered Employees under this Plan.
(r) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(s) "Fair Market Value" means, except as expressly provided otherwise,
as of any given date, the mean between the highest and lowest reported
sales prices of the Common Stock on the New York Stock Exchange
Composite Tape or, if not listed on such exchange, on any other
national securities exchange on which the Common Stock is listed or on
NASDAQ. If there is no regular public trading market for such Common
Stock, the Fair Market Value of the Common Stock shall be determined by
the Committee in good faith.
(t) "Freestanding SAR" means a SAR that is granted independently of any
Options pursuant to Section 7.1 herein.
(u) "Incentive Stock Option" or "ISO" means an option to purchase
Shares, granted under Article 6 herein, which is designated as an
Incentive Stock Option and is intended to meet the requirements of
Section 422 of the Code.
(v) "Insider" shall mean an Employee who is, on the relevant date, an
officer, director, or ten percent (10%) beneficial owner of the
Company, as defined under Section 16 of the Exchange Act.
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(w) "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares, granted under Article 6 herein, which is not intented to be an
Incentive Stock Option.
(x) "Option" means an Incentive Stock Option or a Non-qualified Stock
Option.
(y) "Option Price" means the price at which a Share may be purchased by
a Participant pursuant to an Option, as determined by the Committee.
(z) "Participant" means an Employee of the Company who has been granted
an Award under the Plan.
(aa) "Performance Award" means an Award granted to an Employee, as
described in Article 9 herein, including Performance Units and
Performance Shares.
(ab) "Performance Goals" means the performance goals established by the
Committee prior to the grant of Performance Awards that are based on
the attainment of one or any combination of the following: specified
levels of earnings per share from continuing operations, operating
income, revenues, return on operating assets, return on equity,
stockholder return (measured in terms of stock price appreciation)
and/or total stockholder return (measured in terms of stock price
appreciation and/or dividend growth), achievement of cost control,
working capital turns, cash flow, net income, economic value added,
segment profit, sales force growth, or stock price of the Company or
such subsidiary, division or department of the Company for or within
which the Participant is primarily employed and that are intended to
qualify under Section 162(m) (4) (c) of the Code. Such Performance
Goals also may be based upon the attaining of specified levels of
Company performance under one or more of the measures described above
relative to the performance of other corporations. Such Performance
Goals shall be set by the Committee within the time period prescribed
by Section 162(m) of the Code and related regulations.
(ac) "Performance Period" means a time period during which Performance
Goals established in connection with Performance Awards must be met.
(ad) "Performance Unit" means an Award granted to an Employee, as
described in Article 9 herein.
(ae) "Performance Share" means an Award granted to an Employee, as
described in Article 9 herein.
(af) "Restriction Period" or "Period" means the period or periods
during which the transfer of Shares of Restricted Stock is limited
based on the passage of time and the continuation of service with the
Company, and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 8 herein.
(ag) "Person" shall have the meaning ascribed to such term in Section
3(a) (9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d).
(ah) "Restricted Stock" means an Award granted to a Participant
pursuant to Article 8 herein.
(ai) "Share" means a share of common stock of the Company.
(aj) "Subsidiary" or "Subsidiaries" means any corporation or
corporations in which the Company owns directly, or indirectly through
subsidiaries, at least fifty percent (50%) of the total combined voting
power of all classes of stock, or any other entity (including, but not
limited to, partnerships and joint ventures) in which the Company owns
at least fifty percent (50%) of the combined equity thereof.
(ak) "Stock Appreciation Right" or "SAR" means an Award, granted alone
(Freestanding SAR) or in connection with a related Option (Tandem SAR),
designated as a SAR, pursuant to the terms of Article 7 herein.
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(al) "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Section 7.1 herein, the exercise of which
shall require forfeiture of the right to purchase a Share under the
related Option (and when a Share is purchased under the Option, the
Tandem SAR shall similarly be cancelled).
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation and
Directors Committee or such other committee of the Board as the Board may from
time to time designate (the "Committee"), which shall be composed of not less
than two Disinterested Persons each of whom shall be an "outside director" for
purposes of Section 162(m)(4) of the Code, and shall be appointed by and serve
at the pleasure of the Board.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have plenary authority to
grant Awards pursuant to the terms of the Plan to officers and employees of
the Company and its subsidiaries and Affiliates.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) To select the officers and employees to whom Awards may from time
to time be granted;
(b) To determine whether and to what extent Incentive Stock Options,
NonQualified Stock Options, SARs, Restricted Stock and Performance
Awards or any combination thereof are to be granted hereunder;
(c) To determine the number of Shares to be covered by each Award
granted hereunder;
(d) To determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the option price (subject to
Section 6.4 (a)), any vesting condition, restriction or limitation
(which may be related to the performance of the Participant, the
Company or any subsidiary or Affiliate) and any vesting acceleration or
forfeiture waiver regarding any Award and the Shares relating thereto,
based on such factors as the Committee shall determine;
(e) To modify, amend or adjust the terms and conditions of any Award,
at any time or from time to time, including but not limited to
Performance Goals, unless at the time of establishment of goals the
Committee shall have precluded its authority to make such adjustments;
and
(f) To determine to what extent and under what circumstances Shares and
other amounts payable with respect to an Award shall be deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
3.3 ACTION OF THE COMMITTEE. The Committee may act only by a majority of its
members then in office, except that the members thereof may (i) delegate to an
officer of the Company the authority to make decisions pursuant to Section
6.4, provided that no such delegation may be made that would cause Awards or
other transactions under the Plan to cease either to be exempt from Section
16(b) of the Exchange Act or to qualify as "qualified performance-based
compensation" as such term is defined in the regulations promulgated under
Section 162(m) of the Code, and (ii) authorize any one or more of their number
or any officer of the Company to execute and deliver documents on behalf of
the Committee.
3.4 DECISIONS BINDING. Any determination made by the Committee or pursuant to
delegated authority pursuant to the provisions of the Plan with respect to any
Award shall be made in the sole discretion of the Committee or such delegate
at the time of the grant of the Award or, unless in contravention of any
express term of the Plan, at any time thereafter. All decisions made by the
Committee or any appropriately delegated officer pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
Plan Participants.
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ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3 herein,
the total number of Shares available for grant under the Plan shall be six
million one hundred thousand (6,100,000); provided, however, that if during
the term of the Plan the Company repurchases Shares, additional Options may be
granted equal to the number of Shares so repurchased, except that no more than
one million five hundred thousand (1,500,000) additional Shares shall be
authorized for Options under this proviso; and provided further that the total
number of available Shares that may be used for Restricted Stock Awards under
the Plan shall be limited to three hundred thousand (300,000). No Participant
may be granted Awards covering in excess of 10% of the Shares available for
issuance over the life of the Plan. Shares subject to an Award under the Plan
may be authorized and unissued shares or may be treasury shares.
The following rules will apply for purposes of the determination of the number
of Shares available for grant under the Plan:
(a) While an Award is outstanding, it shall be counted against the
authorized pool of Shares, regardless of its vested status.
(b) The grant of an Option or Restricted Stock shall reduce the Shares
available for grant under the Plan by the number of Shares subject to
such Award.
(c) The grant of a Tandem SAR shall not reduce the number of Shares
available for grant by the number of Shares subject to the related
Option (i.e., there is no double counting of Options and their related
Tandem SARs).
(d) The grant of a Freestanding SAR shall reduce the number of Shares
available for grant by the number of Freestanding SARs granted.
(e) The Committee shall reduce the appropriate number of Shares from
the authorized pool where a Performance Award is payable in Shares.
4.2 LAPSED AWARDS. If any Award granted under this Plan is cancelled,
forfeited, terminates, expires, or lapses for any reason (with the exception
of the termination of a Tandem SAR upon exercise of the related Option or the
termination of a related Option upon exercise of the corresponding Tandem
SAR), any Shares subject to such Award again shall be available for the grant
of an Award under the Plan. However, in the event that prior to the Award's
cancellation, forfeiture, termination, expiration, or lapse, the holder of the
Award at any time received one or more "benefits of ownership" pursuant to
such Award (as defined by the Commission, pursuant to any rule or
interpretation promulgated under Section 16 or any successor rule of the
Exchange Act), the Shares subject to such Award shall not be made available
for regrant under the Plan to Insiders, but shall be available for regrants
under the Plan to Participants who are not Insiders.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES AND PRICES. In the event of any change in
corporate capitalization, such as a stock split or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such term in Section
368 of the Code) or any partial or complete liquidation of the Company, the
Committee or Board may make such substitution or adjustments in the aggregate
number and class of shares reserved for issuance under the Plan, in the
number, kind and option price of shares subject to outstanding Stock Options
or SARs, in the number and kind of shares subject to other outstanding Awards
granted under the Plan and/or such other equitable substitution or adjustments
as it may determine to be appropriate in its sole discretion; provided,
however, that the number of shares subject to any Award shall always be a
whole number. Such adjusted option price shall also be used to determine the
amount payable by the Company upon the exercise of any Tandem SAR.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to be granted Awards under this Plan include
all Employees of the Company and its Subsidiaries, as determined by the
Committee, including Employees who are members of the Board, but excluding
Directors who are not Employees.
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5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee
may, from time to time, select from all eligible Employees, those to whom
Awards shall be granted and shall determine the nature and amount of each
Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Stock Options may be granted alone or in addition to
other Awards granted under the Plan and may be of two types: Incentive Stock
Options and Nonqualified Stock Options. Any Stock Option granted under the
Plan shall be in such form as the Committee may from time to time approve. The
Committee shall have the authority to grant any optionee Incentive Stock
Options, Nonqualified Stock Options or both types of Stock Options (in each
case with or without Stock Appreciation Rights); provided, however, that
grants hereunder are subject to the aggregate limit on grants to individual
Participants set forth in Article 4. Incentive Stock Options may be granted
only to employees of the Company and any "subsidiary corporation" (as such
term is defined in Section 424(f) of the Code). To the extent that any Stock
Option is not designated as an Incentive Stock Option or even if so designated
does not qualify as an Incentive Stock Option, it shall constitute a
Nonqualified Stock Option.
6.2 AWARD AGREEMENT. Stock Options shall be evidenced by option agreements,
the terms and provisions of which may differ. An option agreement shall
indicate on its face whether it is intended to be an agreement for an
Incentive Stock Option or a Nonqualified Stock Option. The grant of a Stock
Option shall occur on the date the Committee by resolution selects an
individual to be a Participant in any grant of a Stock Option, determines the
number of Shares to be subject to such Stock Option to be granted to such
individual and specifies the terms and provisions of the Stock Option, or such
later date as the Committee designates. The Company shall notify a Participant
of any grant of a Stock Option, and a written option agreement or agreements
shall be duly executed and delivered by the Company to the Participant. Such
agreement or agreements shall become effective upon execution by the Company
and the Participant.
6.3 INCENTIVE STOCK OPTIONS. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options shall
be interpreted, amended or altered nor shall any discretion or authority
granted under the Plan be exercised so as to disqualify the Plan under Section
422 of the Code or, without the consent of the optionee affected, to
disqualify any Incentive Stock Option under such Section 422.
6.4 TERMS AND CONDITIONS. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions as the Committee shall deem desirable:
(a) OPTION PRICE. The option price per Share purchasable under a Stock Option
shall be determined by the Committee and set forth in the option agreement,
and shall not be less than the Fair Market Value of the Common Stock subject
to the Stock Option on the date of grant. Options may not be repriced without
shareholder approval.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than 10
years after the date the Stock Option is granted.
(c) EXERCISABILITY. Except as otherwise provided herein, Stock Options shall
be exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee. If the Committee provides that any
Stock Option is exercisable only in installments, the Committee may at any
time waive such installment exercise provisions, in whole or in part, based on
such factors as the Committee may determine. In addition, the Committee may at
any time accelerate the exercisability of any Stock Option.
(d) METHOD OF EXERCISE. Subject to the provisions of this Article 6, Stock
Options may be exercised, in whole or in part, at any time during the option
term by giving written notice of exercise to the Company specifying the number
of Shares subject to the Stock Option to be purchased.
Such notice shall be accompanied by payment in full of the purchase price by
certified or bank check or such other instrument as the Company may accept. If
approved by the Committee, payment, in full or in part, may
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also be made in the form of delivery of unrestricted Shares already owned by
the optionee of the same class as the Shares subject to the Stock Option
(based on the Fair Market Value of the shares on the date the Stock Option is
exercised), or by certifying ownership of such Shares by the Participant to
the satisfaction of the Company for later delivery to the Company as specified
by the Committee; provided, however, that, in the case of an Incentive Stock
Option the right to make a payment in the form of already owned Shares of the
same class as the Shares subject to the Stock Option may be authorized only at
the time the Stock Option is granted.
In the discretion of the Committee, payment for any Shares subject to a Stock
Option may also be made pursuant to a "cashless exercise" by delivering a
properly executed exercise notice to the Company, together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds to pay the purchase price, and, if requested,
the amount of any federal, state, local or foreign withholding taxes. To
facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
No shares shall be issued until full payment therefor has been made. An
optionee shall have all of the rights of a stockholder of the Company holding
the class or series of Shares that is subject to such Stock Option (including,
if applicable, the right to vote the shares and the right to receive
dividends), when the optionee has given written notice of exercise and has
paid in full for such Shares.
(e) RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities laws, under the requirements
of any stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.
(f) NONTRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall be transferable
by the optionee other than (i) by will or by application of the laws of
descent and distribution; or (ii) in the case of a Nonqualified Stock Option,
pursuant to (a) a domestic relations order issued by a tribunal of competent
jurisdiction or (b) a gift to members of such optionee's immediate family,
whether directly or indirectly or by means of a trust or partnership or
otherwise, if expressly permitted under the applicable option agreement. All
Stock Options shall be exercisable, subject to the terms of this Plan, during
the optionee's lifetime, only by the optionee or by the guardian or legal
representative of the optionee or, in the case of a Nonqualified Stock Option,
its alternative payee pursuant to such domestic relations order, it being
understood that the term "holder" and "optionee" include the guardian and
legal representative of the optionee named in the option agreement and any
person to whom an option is transferred by will or the laws of descent and
distribution or, in the case of a Nonqualified Stock Option, pursuant to a
domestic relations order or a gift permitted under the applicable option
agreement.
(g) TERMINATION BY DEATH. Unless otherwise determined by the Committee, if an
optionee's employment terminates by reason of death, any Stock Option held by
such optionee shall become immediately and fully exercisable and may
thereafter be exercised for a period of one year (or such other period as the
Committee may specify in the option agreement) from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter. Notwithstanding any provision herein to the contrary, unless
otherwise determined by the Committee, if an optionee dies after termination
of the optionee's employment, any Stock Option held by such optionee may
thereafter be exercised, to the extent such Stock Option was exercisable as of
the date of such death, for a period that expires on the earliest of (i) the
first anniversary of the date of such death, (ii) the last date on which the
optionee would have been entitled to exercise such Stock Option had the
optionee not died or (iii) the date on which the stated term of such Stock
Option expires.
(h) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by the
Committee, if an optionee's employment terminates by reason of Disability, any
Stock Option held by such optionee, if not fully vested and exercisable as of
the date of such termination, shall continue to vest according to such Stock
Option's stated vesting schedule and may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of
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termination or thereafter becomes exercisable, or on such accelerated basis as
the Committee may determine, for a period of three years (or such shorter
period as the Committee may specify in the option agreement) from the date of
such termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is the shorter; provided, however, that if
the optionee dies within such period, any unexercised Stock Option held by
such optionee shall continue to be exercisable to the extent to which it was
exercisable at the time of death for the remainder of such period, or for a
period of 12 months from the date of such death, or until the expiration of
the stated term of such Stock Option, whichever period is the shortest. In the
event of termination of employment by reason of Disability, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Nonqualified Stock Option.
(i) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by the
Committee, if an optionee's employment terminates by reason of retirement, the
following vesting and exercisability terms will apply. For purposes of this
Plan, an optionee shall be deemed to have terminated employment by reason of
retirement if such optionee is age 55 years or older with 10 or more years of
service with the Company, has given due notice (as determined by the
Committee), and has entered into an agreement, the form and content of which
shall be specified by the Committee, not to compete with the Company and its
Affiliates for a period of one year following such retirement.
<TABLE>
<CAPTION>
YEARS OF CONTINUED YEARS OF CONTINUED
AGE AT VESTING FOLLOWING EXERCISABILITY
RETIREMENT RETIREMENT FOLLOWING RETIREMENT
---------- ------------------ --------------------
<S> <C> <C>
55-59 1 2
60-64 2 3
65 or more 3 3
</TABLE>
Notwithstanding the foregoing, if the optionee dies within such period of
continued exercisability, any unexercised Stock Option held by such optionee
shall continue to be exercisable to the extent to which it was exercisable at
the time of death for the remainder of such period, or for a period of 12
months from the date of such death, or until the expiration of the stated term
of such Stock Option, whichever period is the shortest. In the event of
termination of employment by reason of retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply
for purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(j) OTHER TERMINATION. Unless otherwise determined by the Committee: (A) if an
optionee incurs a voluntary termination of Employment, any Stock Option held
by such optionee, to the extent then exercisable, or on such accelerated basis
as the Committee may determine, may be exercised for the lesser of thirty days
from the date of such termination of Employment or the balance of such Stock
Option's term; and (B) if an optionee incurs a termination of Employment
because such optionee's Employment is terminated by the Company or an
Affiliate, other than by reason of retirement or Disability or for Cause, any
Stock Option held by such optionee, to the extent then exercisable, or becomes
exercisable during the one-year period following termination of employment by
the Company or an Affiliate, or on such accelerated basis as the Committee may
determine, may be exercised for the lesser of one year from the date of such
termination of Employment or the balance of such Stock Option's term;
provided, however, that if the optionee dies within such thirty-day or one-
year period, as the case may be, any unexercised Stock Option held by such
optionee shall continue to be exercisable to the extent to which it was
exercisable at the time of death for the remainder of such period, or for a
period of 12 months from the date of such death, or until the expiration of
the stated term of such Stock Option, whichever period is the shortest.
Notwithstanding the foregoing, if an optionee incurs a Termination of
Employment at or after a Change of Control, other than by reason of death,
Disability or Retirement, any Stock Option held by such optionee shall be
exercisable for the lesser of (1) six months and one day from the date of such
termination of Employment, and (2) the balance of such Stock Option's term. In
the event of termination of Employment, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes
of Section 422 of the Code, such Stock Option will thereafter be treated as a
Nonqualified Stock Option.
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(k) TERMINATION FOR CAUSE. Unless otherwise determined by the Committee, if an
optionee incurs a Termination of Employment for Cause, all Stock Options held
by such optionee shall thereupon terminate.
(l) CHANGE OF CONTROL CASH-OUT. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change of Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the time
of grant, an optionee shall have the right, whether or not the Stock Option is
fully exercisable and in lieu of the payment of the exercise price for the
Shares being purchased under the Stock Option and by giving notice to the
Company, to elect (within the Exercise Period) to surrender all or part of the
Stock Option to the Company and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change of Control Price
per Share shall exceed the exercise price per Share under the Stock Option
(the "Spread") multiplied by the number of Shares granted under the Stock
Option as to which the right granted under this Section 6.4(l) shall have been
exercised; provided, however, that if the Change of Control is within six
months of the date of grant of a particular Stock Option held by an optionee
who is an officer or director of the Company and is subject to Section 16(b)
of the Exchange Act no such election shall be made by such optionee with
respect to such Stock Option prior to six months from the date of grant.
However, if the end of such 60-day period from and after a Change of Control
is within six months of the date of grant of a Stock Option held by an
optionee who is an officer or director of the Company and is subject to
Section 16(b) of the Exchange Act, such Stock Option shall be cancelled in
exchange for a cash payment to the optionee, effected on the day which is six
months and one day after the date of grant of such Option, equal to the Spread
multiplied by the number of Shares granted under the Stock Option.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan, a SAR may
be granted to an Employee at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SAR. In the case of a Nonqualified
Stock Option, Tandem SARs may be granted either at or after the time of grant
of such Stock Option. In the case of an Incentive Stock Option, Tandem SARs
may be granted only at the time of grant of such Stock Option.
The Committee shall have complete discretion in determining the number of SARs
granted to each Participant (subject to Article 4 herein) and, consistent with
the provisions of the Plan, in determining the terms and conditions pertaining
to such SARs. However, the grant price of a Freestanding SAR shall be at least
equal to the Fair Market Value of a Share on the date of grant of the SAR. The
grant price of Tandem SARs shall equal the Option Price of the related Option.
In no event shall any SAR granted hereunder become exercisable within the
first six (6) months of its grant. SARs may not be repriced without
stockholder approval.
7.2 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR shall
terminate and no longer be exercisable upon the termination or exercise of the
related Stock Option. A Tandem SAR may be exercised only with respect to the
Shares for which its related Option is then exercisable.
Notwithstanding any other provision of this Plan to the contrary, with respect
to a Tandem SAR granted in connection with an ISO; (i) the Tandem SAR will
expire no later than the expiration of the underlying ISO; (ii) the value of
the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying
ISO and the Fair Market Value of the Shares subject to the underlying ISO at
the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be
exercised only when the Fair Market Value of the Shares subject to the ISO
exceeds the Option Price of the ISO.
7.3 EXERCISE OF FREESTANDING SARS. Subject to the other provisions of this
Article 7, Freestanding SARs may be exercised upon whatever terms and
conditions the Committee, at its sole discretion, imposes upon them.
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7.4 SAR AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.
7.5 TERM OF SARS. The term of a SAR granted under the Plan shall be determined
by the Committee, at its sole discretion; provided, however, that such term
shall not exceed ten (10) years.
7.6 PAYMENT OF SAR AMOUNT. Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The excess of the Fair Market Value of a Share on the date of
exercise over the grant price of the SAR; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.
7.7 RULE 16b-3 REQUIREMENTS. Notwithstanding any other provision of the Plan,
the Committee may impose such conditions on exercise of a SAR (including,
without limitation, the right of the Committee to limit the time of exercise
to specified periods) as may be required to satisfy the requirements of any
rule or interpretation promulgated under Section 16 (or any successor rule) of
the Act.
7.8 NONTRANSFERABILITY OF SARS. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by application of the laws of descent and distribution.
Further, all SARs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant. Notwithstanding the
foregoing, at the discretion of the Committee, an Award Agreement may permit
the transferability of a SAR by a Participant solely to members of the
Participant's immediate family or trusts for the benefit of such persons.
ARTICLE 8. RESTRICTED STOCK
8.1 ADMINISTRATION. Shares of Restricted Stock may be awarded either alone or
in addition to other Awards granted under the Plan. The Committee shall
determine the officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of shares to be awarded
to any Participant (subject to the aggregate limit on grants to individual
Participants set forth in Article 4), the conditions for vesting, the time or
times within which such Awards may be subject to forfeiture and any other
terms and conditions of the Awards, in addition to those contained in Section
8.3.
The Committee may, prior to grant, condition the vesting of Restricted Stock
upon continued service of the Participant. The provisions of Restricted Stock
Awards need not be the same with respect to each recipient.
8.2 AWARDS AND CERTIFICATES. Shares of Restricted Stock shall be evidenced in
such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates. Any certificate
issued in respect of shares of Restricted Stock shall be registered in the
name of such Participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award, substantially in
the following form:
"The sale or other transfer of the Shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the
Tupperware Corporation 1996 Incentive Plan, and in a Restricted Stock
Agreement. A copy of the Plan and such Restricted Stock Agreement may
be obtained from Tupperware Corporation."
The Committee may require that the certificates evidencing such Shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the Participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
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8.3 TERMS AND CONDITIONS. Shares of Restricted Stock shall be subject to the
following terms and conditions:
(a) Subject to the provisions of the Plan and the Restricted Stock
Agreement referred to in Section 8.3(f), during the Restricted Period,
the Participant shall not be permitted to sell, assign, transfer,
pledge or otherwise encumber shares of Restricted Stock, except that,
if expressly provided in the Restricted Stock Agreement, a Participant
may, during the Restriction Period, transfer shares of Restricted Stock
to members of the Participant's immediate family or trusts or
partnerships for the benefit of such persons. Within these limits, the
Committee may provide for the lapse of restrictions based upon period
of service in installments or otherwise and may accelerate or waive, in
whole or in part, restrictions based upon period of service.
Notwithstanding the foregoing, any Restricted Stock Award granted
hereunder shall have a Restriction Period of not less than three years,
except that an aggregate amount of Restricted Stock Awards not
exceeding one-third of the Shares available for use as Restricted Stock
Awards pursuant to Section 4.1 of the Plan may be issued without a
minimum Restriction Period.
(b) Except as provided in this paragraph (b) and paragraph (a), above,
and the Restricted Stock Agreement, the Participant shall have, with
respect to the shares of Restricted Stock, all of the rights of a
stockholder of the Company holding the class or series of Shares that
is the subject of the Restricted Stock, including, if applicable, the
right to vote the shares and the right to receive any cash dividends.
Unless otherwise determined by the Committee in the applicable
Restricted Stock Agreement, dividends payable in Shares shall be paid
in the form of Restricted Stock of the same class as the Shares with
which such dividend was paid, held subject to the vesting of the
underlying Restricted Stock. In the event that any dividend constitutes
a "derivative security" or an "equity security" pursuant to Rule 16(a)
under the Act, such dividend shall be subject to a vesting period equal
to the longer of: (i) the remaining vesting period of the Shares of
Restricted Stock with respect to which the dividend is paid; or (ii)
six months. The Committee shall establish procedures for the
application of this provision.
(c) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement and paragraphs (a) and (d) of this Section
8.3 and Section 13.1(b), upon a Participant's Termination of Employment
for any reason during the Restriction Period, all Shares still subject
to restriction shall be forfeited by the Participant.
(d) Except to the extent otherwise provided in Section 13.1(b), in the
event that a Participant retires or such Participant's employment is
involuntarily terminated (other than for Cause), the Committee shall
have the discretion to waive, in whole or in part, any or all remaining
restrictions with respect to any or all of such Participant's shares of
Restricted Stock.
(e) If and when any applicable Restriction Period expires without a
prior forfeiture of the Restricted Stock, unlegended certificates for
such shares shall be delivered to the Participant upon surrender of the
legended certificates.
(f) Each Award shall be confirmed by, and be subject to, the terms of a
Restricted Stock Agreement.
ARTICLE 9. PERFORMANCE AWARDS
9.1 GRANT OF PERFORMANCE AWARDS. Subject to the terms of the Plan, Performance
Awards may be granted to eligible Employees at any time and from time to time,
as shall be determined by the Committee, and may be granted either alone or in
addition to other Awards granted under the Plan. The Committee shall have
complete discretion in determining the number, amount and timing of Awards
granted to each Participant. Such Performance Awards may take the form
determined by the Committee, including without limitation, cash, Shares,
Performance Units and Performance Shares, or any combination thereof.
Performance Awards may be awarded as short-term or long-term incentives.
9.2 PERFORMANCE GOALS. (a) The Committee shall set Performance Goals at its
discretion which, depending on the extent to which they are met, will
determine the number and/or value of Performance Awards that will be paid out
to the Participants, and may attach to such Performance Awards one or more
restrictions, including, without limitation, a requirement that Participants
pay a stipulated purchase price for each Performance
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Share, or restrictions which are necessary or desirable as a result of
applicable laws or regulations. Each Performance Award may be confirmed by,
and be subject to, a Performance Award Agreement.
(b) The Committee shall have the authority at any time to make
adjustments to Performance Goals for any outstanding Performance Awards
which the Committee deems necessary or desirable unless at the time of
establishment of goals the Committee shall have precluded its authority
to make such adjustments.
(c) Performance Periods shall, in all cases, exceed six (6) months in
length.
9.3 VALUE OF PERFORMANCE UNITS/SHARES. (a) Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant.
(b) Each Performance Share shall have an initial value equal to the
Fair Market Value of a Share on the date of grant.
9.4 EARNING OF PERFORMANCE AWARDS. After the applicable Performance Period has
ended, the holder of Performance Awards shall be entitled to receive the
payout earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding Performance Goals have
been achieved, except as adjusted pursuant to Section 9.2(b) or as deferred
pursuant to Article 11.
9.5 TIMING OF PAYMENT OF PERFORMANCE AWARDS. Payment of earned Performance
Awards shall be made in accordance with terms and conditions prescribed or
authorized by the Committee. The Committee may permit the Participants to
elect to defer or the Committee may require the deferral of, the receipt of
Performance Awards upon such terms as the Committee deems appropriate.
9.6 NONTRANSFERABILITY. Performance Awards may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by application of the laws of descent and distribution. Further, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's
Beneficiary. Notwithstanding the foregoing, at the discretion of the
Committee, an Award Agreement may permit the transferability of a Performance
Award by a Participant solely to members of the Participant's immediate family
or trusts or partnerships for the benefit of such persons.
9.7 TERMINATION. Performance Awards shall be subject to the following terms
and conditions:
(a) Except to the extent otherwise provided in the applicable
Performance Award Agreement, if any, and Sections 9.7(b) and 13.1(c),
upon a Participant's Termination of Employment for any reason during
the Performance Period or before any applicable Performance Goals are
satisfied, the rights to the shares still covered by the Performance
Award shall be forfeited by the Participant.
(b) Except to the extent otherwise provided in Section 13.1(c), in the
event that a Participant's employment is terminated (other than for
Cause), or in the event a Participant retires, the Committee shall have
the discretion to waive, in whole or in part, any or all remaining
payment limitations (other than, in the case of Performance Awards with
respect to which a Participant is a Covered Employee, satisfaction of
any applicable Performance Goals unless the Participant's employment is
terminated by reason of death or disability) with respect to any or all
of such Participant's Performance Awards.
ARTICLE 10. BENEFICIARY
10.1 DESIGNATION. Each Participant under the Plan may, from time to time, name
any Beneficiary or Beneficiaries (who may be named contingently or
successively). Each such designation shall revoke all prior designations by
the same Participant, shall be in a form prescribed by the Company, and shall
be effective only when filed by the Participant in writing with the Company
during the Participant's lifetime. Any such designation shall control over any
inconsistent testamentary or inter vivos transfer by a Participant, and any
benefit of a Participant under the Plan shall pass automatically to a
Participant's Beneficiary pursuant to a proper designation pursuant to this
Section 10.1 without administration under any statute or rule of law governing
the transfer of property by will, trust, gift or intestacy.
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<PAGE>
10.2 ABSENCE OF DESIGNATION. In the absence of any such designation
contemplated by Section 10.1, benefits remaining unpaid at the Participant's
death shall be paid pursuant to the Participant's will or pursuant to the laws
of descent and distribution.
ARTICLE 11. DEFERRALS
The Committee may permit a Participant to elect, or the Committee may require
at its sole discretion subject to the proviso set forth below, any one or more
of the following: (i) the deferral of the Participant's receipt of cash, (ii)
a delay in the exercise of an Option or SAR, (iii) a delay in the lapse or
waiver of restrictions with respect to Restricted Stock, or (iv) a delay of
the satisfaction of any requirements or goals with respect to Performance
Awards; provided, however, the Committee's authority to take such actions
hereunder shall exist only to the extent necessary to reduce or eliminate a
limitation on the deductibility of compensation paid to the Participant
pursuant to (and so long as such action in and of itself does not constitute
the exercise of impermissible discretion under) Section 162(m) of the Code, or
any successor provision thereunder. If any such deferral is required or
permitted, the Committee shall establish rules and procedures for such
deferrals, including provisions relating to periods of deferral, the terms of
payment following the expiration of the deferral periods, and the rate of
earnings, if any, to be credited to any amounts deferred thereunder.
ARTICLE 12. RIGHTS OF EMPLOYEES
12.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of
the Company. For purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Subsidiaries (or between Subsidiaries)
shall not be deemed a termination of employment.
12.2 PARTICIPATION. No Employee shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 13. CHANGE OF CONTROL
13.1 IMPACT OF EVENT. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change of Control:
(a) Any Stock Options or SARs outstanding as of the date such Change of
Control is determined to have occurred, and which are not then
exercisable and vested, shall become fully exercisable and vested to
the full extent of the original grant; provided, however, that in the
case of the holder of Stock Options or SARs who is actually subject to
Section 16(b) of the Exchange Act, such Stock Options or SARs shall
have been outstanding for at least six months at the date such Change
of Control is determined to have occurred.
(b) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become
free of all restrictions and become fully vested and transferable to
the full extent of the original grant.
(c) All Performance Awards shall be considered to be earned and payable
in full, and any deferral or other restriction shall lapse and such
Performance Units shall be settled in cash as promptly as is
practicable.
ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1 AMENDMENT, MODIFICATION, AND TERMINATION. At any time and from time to
time, the Board may terminate, amend, or modify the Plan. However, no
amendment, alteration or discontinuation shall be made which would disqualify
the Plan from the exemption provided by Rule 16b-3, and no such amendment
shall be made without the approval of the Company's stockholders to the extent
such approval is required by law or agreement.
14.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification of
the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award except such an amendment made to cause the Plan or Award to qualify
for the exemption provided by Rule 16b-3. The Committee shall have the right
to replace any previously-granted Award under the Plan with an Award equal to
the value of the replaced Award at the time of replacement, without obtaining
the consent of the Participant holding such Award.
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<PAGE>
Subject to the above provisions, the Board shall have authority to amend the
Plan to take into account changes in law and tax and accounting rules as well
as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
ARTICLE 15. WITHHOLDING
15.1 TAX WITHHOLDING. The Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising under or as a result of this Plan.
15.2 SHARE WITHHOLDING. With respect to withholding required and/or permitted
upon the exercise of Options or SARs, upon the lapse of restrictions on
Restricted Stock, or upon any other taxable event hereunder, Participants may
elect, subject to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares (or by
surrendering Shares previously owned which have been held for longer than six
months) having a Fair Market Value on the date the tax is to be determined
equal to the minimum statutory total tax which could be imposed on the
transaction. All elections shall be irrevocable, made in writing, signed by
the Participant, and elections by Insiders shall additionally comply with the
requirements established by the Committee.
ARTICLE 16. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, spin-off, or otherwise, of all or substantially all of
the business and/or assets of the Company.
ARTICLE 17. LEGAL CONSTRUCTION
17.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
17.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
17.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the plan or action by the Committee fails to comply
with Section 17.3, it shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee.
Notwithstanding any other provision set forth in the Plan, if required by any
rule or interpretation promulgated under Section 16 of the Exchange Act, any
"derivative security" or "equity security" offered pursuant to the Plan to any
Insider may not be sold or transferred for at least six (6) months after the
date of grant of such Award. The terms "equity security" and "derivative
security" shall have the meanings ascribed to them in the then-current Rule
16(a) under the Exchange Act.
Notwithstanding any other provision of the Plan or agreements made pursuant
thereto, the Company shall not be required to issue or deliver any certificate
or certificates for Shares under the Plan prior to fulfillment of all of the
following conditions:
i. Listing or approval for listing upon notice of issuance, of such
shares on the New York Stock Exchange, Inc., or such other securities
exchange as may at the time be the principal market for the Shares;
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<PAGE>
ii. Any registration or other qualification of such Shares under any
state or federal law or regulation, or the maintaining in effect of any
such registration or other qualification which the Committee shall, in
its absolute discretion upon the advice of counsel, deem necessary or
advisable; and
iii. Obtaining any other consent, approval, or permit from any state or
federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be
necessary or advisable.
17.4 POOLING. Notwithstanding anything in the Plan to the contrary, if any
right granted pursuant to this Plan would make a Change of Control transaction
ineligible for pooling-of-interests accounting under APB No.16 that but for
the nature of such grant would otherwise be eligible for such accounting
treatment, the Committee shall have the ability to substitute for the cash
payable pursuant to such grant Common Stock with a Fair Market Value equal to
the cash that would otherwise be payable hereunder.
17.5 GOVERNING LAW. To the extent not preempted by Federal law, the Plan, and
all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Delaware.
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<PAGE>
Annex D
FORM
OF
TUPPERWARE CORPORATION
DIRECTOR STOCK PLAN
Section 1. Purpose
-------
The purposes of the Plan are to assist the Company in (1) promoting a
greater identity of interests between the Company's non-employee directors and
its shareholders, and (2) attracting and retaining directors by affording them
an opportunity to share in the future successes of the Company.
Section 2. Definitions
-----------
"Act" shall mean the Securities Exchange Act of 1934, as amended.
"Award" shall mean an award of Common Stock as contemplated by Section
7 of this Plan.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean the happening of any of the following
events:
(i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Act) of 20% or more of either (1) the then outstanding shares of Common
Stock (the "Outstanding Company Common Stock") or (2) the combined voting
power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the following: (1) any acquisition
directly from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted
was itself acquired from the Company, (2) any acquisition by the Company,
(3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (4) any acquisition by any Person pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (iii) of this
definition; or
(ii) A change in the composition of the Board such that the individuals
who, as of the Distribution Date of the Plan, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board; provided,
however, for purposes of this definition, that any individual who becomes a
member of the Board subsequent to such Distribution Date, whose election,
or nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided further,
that any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Act) or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a
member of the Incumbent Board; or
(iii) The approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company or the acquisition of
assets of another corporation ("Corporate Transaction") or, if consummation
of such Corporate Transaction is subject, at the time of such approval by
stockholders, to the consent of any
D-1
<PAGE>
government or governmental agency, the obtaining of such consent (either
explicitly or implicitly by consummation); excluding, however, such a
Corporate Transaction pursuant to which (1) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock, and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the company resulting from
such Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (2) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company or such corporation resulting
from such Corporate Transaction) will beneficially own, directly or
indirectly, 20% or more of, respectively, the outstanding shares of common
stock of the corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors except
to the extent that such ownership existed with respect to the Company prior
to the Corporate Transaction and (3) individuals who were members of the
Incumbent Board will constitute at least a majority of the board of
directors of the corporation resulting from such Corporate Transaction; or
(iv) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
1. "Change of Control Price" means the higher of (i) the highest reported
sales price, regular way, of a share of Common Stock in any transaction
reported on the New York Stock Exchange Composite Tape or other national
exchange on which such shares are listed or on NASDAQ during the 60-day
period prior to and including the date of a Change of Control or (ii) if
the Change of Control is the result of a tender or exchange offer or a
Corporate Transaction, the highest price per share of Common Stock paid
in such tender or exchange offer or Corporate Transaction; provided,
however, that in the case of a Stock Option which was granted within 240
days of the Change of Control, then the Change of Control Price for such
Stock Option shall be the Fair Market Value of the Common Stock on the
date such Stock Option is exercised or deemed exercised. To the extent
that the consideration paid in any such transaction described above
consists all or in part of securities or other noncash consideration,
the value of such securities or other noncash consideration shall be
determined in the sole discretion of the Committee.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"Common Stock" shall mean the common stock, $.01 par value, of the
Company.
"Company" shall mean Tupperware Corporation, a Delaware corporation.
"Distribution Date" shall mean the date determined by the Board of
Directors of Premark International, Inc., a Delaware corporation ("Premark"),
on which shall be effected the distribution on a pro rata basis to the holders
of the outstanding shares of common stock of Premark the shares of Common
Stock held by Premark on such date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations thereunder.
"Fair Market Value" shall mean, as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on the New York
Stock Exchange Composite Tape or, if not listed
D-2
<PAGE>
on such exchange, on any other national securities exchange on which the
Common Stock is listed or on NASDAQ, adjusted to the next higher five cents if
such mean is not divisible by five cents. If there is no regular public
trading market for such Common Stock, the Fair Market Value of the Common
Stock shall be determined by the Committee in good faith.
"Fees" shall mean the annual retainer fee for a Participant in connection
with his or her service on the Board for any fiscal year of the Company.
"Participant" shall mean each member of the Board who is not an employee
of the Company or any subsidiary of the Company.
"Plan" shall mean the Tupperware Corporation Director Stock Plan.
"Retirement" shall mean the retirement by a Participant from the Board in
accordance with the Company's stated policy on Director retirement.
"Rules" shall mean the rules promulgated under the Act from time to time
and the interpretations issued by Securities and Exchange Commission in
respect thereof.
"Stock Option" shall mean a non-qualified stock option, which is further
defined as any right to Common Stock which does not qualify as an "incentive
stock option" as defined under the Code.
Section 3. Eligibility
-----------
Each member of the Board who is not an employee of the Company or any
subsidiary of the Company shall be eligible to participate in the Plan.
Section 4. Shares Subject to the Plan
--------------------------
The maximum number of shares of Common Stock which shall be available for
use under the Plan shall be 300,000, subject to adjustment pursuant to Section
17 hereunder. The shares issued under the Plan may be authorized and unissued
shares or issued shares heretofore or hereafter acquired and held as treasury
shares or shares purchased on the open market.
Section 5. Duration of Plan
----------------
Unless earlier terminated pursuant to Section 11 hereof, this Plan shall
automatically terminate on, and no grants, awards or elections may be made
after, the date of the tenth anniversary of the approval by stockholders of
the Plan pursuant to Section 19 hereof.
Section 6. Administration
--------------
(a) The Plan shall be administered by the Board or any committee thereof
so designated by the Board (the "Committee"), which shall have full authority
to construe and interpret the Plan, to establish, amend and rescind rules and
regulations relating to the Plan, and to take all such actions and make all
such determinations in connection with the Plan as it may deem necessary or
desirable.
(b) Notwithstanding any other provision of the Plan, neither the Board nor
the Committee shall be authorized to exercise any discretion with respect to
the selection of Participants to receive Awards or Stock Options under the
Plan or concerning the amount, timing or vesting of such Awards or Stock
Options under the Plan, and no amendment or termination of the Plan shall
adversely affect the interest of any Director in Awards or Stock Options
previously granted to the Director without that Director's express written
consent.
Section 7. Initial Awards
--------------
Each Participant shall receive a one-time grant of one thousand (1,000)
shares of Common Stock, upon serving his or her initial three months as a
member of the Board.
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<PAGE>
Section 8. Stock in Lieu of Retainer
-------------------------
Each Participant who, in any year of the Plan, delivers to the Company
written notice of an irrevocable election concerning the Fees to be earned in
the next fiscal year of the Company, may receive in lieu of cash an amount of
shares of Common Stock equal in value to all or any portion of the Fees (but
only increments of 25% or a multiple thereof, and in no event to exceed 100%
of the Fees) as so designated by the Participant in such written notice, which
amount shall be determined by dividing the Fees payable in each fiscal quarter
of the Company by the Fair Market Value of a share of Common Stock on the last
business day of such fiscal quarter (but if such date is not a day on which
the New York Stock Exchange is open, then on the next preceding day on which
the New York Stock Exchange is open), except that only whole numbers of shares
shall be obtainable pursuant to this Section, and any remainder Fees which
otherwise would have purchased a fractional share shall be paid in cash. Any
such written notice pursuant to this Section 8 shall remain in effect for
subsequent Plan years unless such Participant delivers a written notice
setting forth a different election with respect to Fees which shall be applied
to future Plan years until further written notice is received by the Company
pursuant to this Section 8.
Section 9. Stock Options
-------------
(a) Each Participant who, in any year of the Plan, delivers to the Company
an irrevocable election concerning the Fees to be earned in the next fiscal
year of the Company, may receive in lieu of all or any portion of the cash
Fees (but only increments of 25% or a multiple thereof) as so designated by
the Participant, a Stock Option for an amount of shares of Common Stock in
each fiscal year of the Company as follows:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent of Annual Number of Shares
Retainer Forgone Subject to Option
- -------------------------------------------
<S> <C>
100% 2,000
75% 1,500
50% 1,000
25% 500
</TABLE>
- -------------------------------------------------------------------------------
The exercise price of such shares shall be determined as follows:
<TABLE>
<S> <C> <C>
Fair Market Value 100% of Fee Exercise Price
of a Share - ----------- =
of Common Stock 2,000 Per Share
Fair Market Value 75% of Fee Exercise Price
of a Share - ---------- =
of Common Stock 1,500 Per Share
Fair Market Value 50% of Fee Exercise Price
of a Share - ---------- =
of Common Stock 1,000 Per Share
Fair Market Value 25% of Fee Exercise Price
of a Share - ---------- =
of Common Stock 500 Per Share
</TABLE>
In no event, however, shall the exercise price be less than 50% of the
Fair Market Value of a share of Common Stock on the date of the grant.
(b) The date of grant of a Stock Option pursuant to this Section 9 shall
be the date of the annual meeting of stockholders of the Company, provided
that such meeting occurs at least six (6) months and one day after the
Participant's election to receive a Stock Option in lieu of cash Fees;
otherwise, the date of grant shall
D-4
<PAGE>
be six (6) months and one day after the Participant's election to receive a
Stock Option in lieu of cash Fees. If such day would not be a day on which the
New York Stock Exchange is open, then on the next succeeding day on which the
New York Stock Exchange is open.
(c) A Stock Option granted pursuant to this Section 9 shall vest and be
exercisable on the last day of the fiscal year in which the Stock Option is
granted. In the event that a Participant is not a member of the Board on the
last day of the fiscal year in which the Stock Option is granted, except in
the case of a Participant's Retirement or termination for cause, such
Participant's Stock Option which has not become vested and exercisable as of
such time shall (i) be reduced to an amount of shares of Common Stock which
reflects the amount of Fees earned as of the date of termination from service
on the Board which amount shall be determined by multiplying the number of
shares of Common Stock subject to the Stock Option as determined pursuant to
Section 9(a), above, by a fraction, the numerator of which shall be the number
of days of the fiscal year of the Company in which the Stock Option is granted
that the Participant was a member of the Board and the denominator of which
shall be 365, provided, that any Stock Option for a fractional share of Common
Stock shall be rounded up to the nearest whole number of shares, and (ii)
shall continue to vest. The term of exercisability for a Stock Option granted
under this Section 9 shall be ten (10) years.
(d) The remaining terms and conditions of each such Stock Option shall be
as set forth in this Plan and in the form of Stock Option Agreement used in
connection with this Plan.
Section 10. Transferability
---------------
Rights, grants and Awards under the Plan may not be assigned, transferred,
pledged or hypothecated, and shall not be subject to execution, attachment or
similar process. Notwithstanding the foregoing, any such right, grant or award
constituting a "derivative security" under the Rules shall not be transferable
by a Participant other than by will or by operation of applicable laws of
descent and distribution or pursuant to a domestic relations order or
qualified domestic relations order as such terms are defined by the Code or
ERISA.
Section 11. Amendment
---------
(c) The Board may from time to time make such amendments to the Plan as it
may deem proper and in the best interest of the Company without further
approval of the Company's stockholders, provided that to the extent required
to qualify transactions under the Plan for exemption under Rule 16b-3
promulgated under the Act ("Rule 16b-3") no amendment to the Plan shall be
adopted without further approval by the holders of at least a majority of the
shares of Common Stock present, or represented, and entitled to vote at a
meeting held for such purpose, and provided further, that if and to the extent
required for the Plan to comply with Rule 16b-3, no amendment to the Plan
shall be made more than once in any six-month period that would change the
amount, price or timing of the grants of Awards or Stock Options hereunder
other than to comport with changes in the Code, ERISA, or the regulations
thereunder.
Section 12. Termination
-----------
The Plan may be terminated at any time by the Board or by the approval by
the holders of at least a majority of the shares of Common Stock present, or
represented, and entitled to vote at a meeting held for such purpose.
Section 13. Withholding Taxes
-----------------
No later than the date as of which an amount first becomes includible in
the gross income of the Participant for Federal income tax purposes with
respect to any Award under the Plan or with respect to any exercise of any
Stock Option granted under the Plan, the Participant shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to be
withheld. Such withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award or that is received upon the
exercise of the Stock Option that gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditional
D-5
<PAGE>
upon such payment or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Participant. The Company may establish such procedures as
it deems appropriate, including the making of irrevocable elections or the
timing of the use of Common Stock, for the settlement of its withholding
obligations.
Section 14. Effect of Change of Control
---------------------------
Notwithstanding any other provision of the Plan to the contrary, in the
event of a Change of Control, any Stock Options outstanding and not then
exercisable and vested as of the date such Change of Control is determined to
have occurred, shall become fully exercisable and vested to the full extent of
the original grant. During the 60-day period from and after a Change of
Control (the "Exercise Period"), a Participant who holds an Award or a Stock
Option shall have the right, in lieu (in the case of a Stock Option) of the
payment of the exercise price for the shares of Common Stock being purchased
under the Stock Option, by giving notice to the Company, to elect (within the
Exercise Period) to surrender all or part of an Award or a Stock Option to the
Company and to receive cash, within 30 days of such notice, in an amount equal
to (a) in the case of a Stock Option, the amount by which the Change of
Control Price per share of Common Stock on the date of such election shall
exceed the exercise price per share of Common Stock under the Stock Option
(the "Spread") multiplied by the number of shares of Common Stock granted
under the Stock Option as to which the right granted under this Section shall
have been exercised, or (b) in the case of an Award, an amount equal to the
Change of Control Price multiplied by the number of shares of Common Stock
granted pursuant to such Award as to which the right granted under this
Section shall have been exercised; provided, however, that if the Change of
Control is within six (6) months of the date of grant of a particular Award or
Stock Option held by a Participant no such election shall be made by such
Participant with respect to such Award or Stock Option prior to six (6) months
from the date of grant. If the end of such 60-day period from and after a
Change of Control is within six (6) months from the date of grant of a Stock
Option or the date of an Award, such Stock Option or Award shall be cancelled
in exchange for a cash payment to the Participant, effected on the day which
is six (6) months and one day after the date of grant of such Stock Option or
Award, as the case may be, equal to (a) in the case of a Stock Option, the
Spread multiplied by the number of shares of Common Stock granted under the
Stock Option, or (b) in the case of an Award, the Change of Control Price
multiplied by the number of shares of Common Stock comprising an outstanding
Award.
Section 15. Death, Disability, Termination or Retirement of Participant
-----------------------------------------------------------
(a) Death While A Director. Notwithstanding any other provision of the
---------------------
Plan to the contrary, in the event of the death of a Participant while a
member of the Board, any Stock Options outstanding as of the date of death and
not then exercisable shall become immediately exercisable, and all outstanding
Stock Options held by such Participant shall remain exercisable by the person
to whom the Stock Option is transferred by will or by the laws of descent and
distribution for a period of the lesser of (i) the remaining term of the Stock
Option, or (ii) three (3) years after the date of death.
(b) Disability, Retirement or Other Termination. Except as otherwise
-------------------------------------------
provided by the Plan, in the event of a Participant's termination of
membership on the Board as a result of the Participant's disability or
Retirement or for another reason other than cause, any Stock Options
outstanding as of the date of such termination and not then exercisable shall
(i) be adjusted in amount to reflect the proportion of Fees earned in the
final year of such Participant's service in such year (in accordance with the
operation of Sections 8 and 9 of this Plan and in consideration of such
Participant's elections for such year), and (ii) become exercisable on the
last day of the Company's then-current fiscal year. All outstanding Stock
Options held by such Participant shall remain exercisable for the full period
contemplated by the terms of such Stock Options. In the event of the death of
a Participant subsequent to termination of membership from the Board as a
result of circumstances described in this Section 15(b), any Stock Options
outstanding as of the date of death and not then exercisable shall become
immediately exercisable, and all outstanding Stock Options held by such
Participant shall remain exercisable by the person to whom the Stock Option is
transferred by will or by the laws of descent and distribution for a period of
the lesser of (i) the remaining term of the Stock Option, or (ii) three (3)
years after the date of death.
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<PAGE>
Section 16. Effect of Termination for Cause
-------------------------------
If a Participant incurs a termination of membership on the Board for
cause, such Participant's Stock Options which are not then exercisable shall
be automatically cancelled immediately. Unless otherwise determined by the
Board, for purposes of the Plan "cause" shall mean (i) the conviction of the
Participant for commission of a felony under Federal law or the law in the
state in which such action occurred, or (ii) dishonesty in the course of
fulfilling the Participant's duties as a director.
Section 17. Adjustments Upon Changes in Capitalization
------------------------------------------
In the event of any change in corporate capitalization, such as a stock
split or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property
of the Company, any reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code) or any partial
or complete liquidation of the Company, the Committee or Board may make such
substitution or adjustments in the aggregate number and class of shares
reserved for issuance under the Plan, in the number, kind and option price of
shares subject to outstanding Stock Options, in the number and kind of shares
subject to other outstanding Awards granted under the Plan and/or such other
equitable substitution or adjustments as it may determine to be appropriate in
its sole discretion; provided, however, that the number of shares subject to
any Award shall always be a whole number.
Section 18. Regulatory Matters
------------------
The Plan is intended to be construed so that participation in the Plan
will be exempt from Section 16(b) of the Act, pursuant to Rule 16b-3 as
promulgated thereunder, as may be further amended or interpreted by the
Securities and Exchange Commission. In the event that any provision of the
Plan shall be deemed not to be in compliance with the Rules in order to enjoy
the exemption from the Act, such provision shall be deemed of no force or
effect and the remaining provisions of the Plan shall remain in effect.
Section 19. Effectiveness of Plan
---------------------
The Plan shall become effective as of the Distribution Date.
Section 20. Governing Law
-------------
To the extent not preempted by Federal law, the Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the laws of
the State of Delaware.
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<PAGE>
ANNEX E
-------------------------------------
FORM
OF
TUPPERWARE CORPORATION
AND
-------------------------------------
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF , 1996
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<PAGE>
Agreement, dated as of , 1996, between Tupperware Corporation, a
Delaware corporation (the "Company"), and (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a dividend
of one preferred share purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company to be issued in the distribution of Common
Shares (the "Spin-off") by Premark International, Inc. to its stockholders,
each Right representing the right to purchase one one-hundredth of a Preferred
Share (as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become outstanding between
the record date of the Spin-off (the "Record Date") and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
-------------------
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or any entity holding Common
Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
-------- -------
Owner of 15% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Common Shares of
the Company, then such Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be
an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
-------- -------
Beneficial Owner of, or to beneficially own, securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right
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<PAGE>
to vote pursuant to any agreement, arrangement or understanding; provided,
--------
however, that a Person shall not be deemed the Beneficial Owner of, or to
-------
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in [State of Rights Agent] are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., [City of
Rights Agent] time, on such date; provided, however, that, if such date is not
-------- -------
a Business Day, it shall mean 5:00 P.M., [City of Rights Agent] time, on the
next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean the
shares of common stock, par value $.01 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3.
(h) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b).
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Exchange Ratio" shall have the meaning set forth in Section 24(a).
(k) "Final Expiration Date" shall have the meaning set forth in Section 7.
(l) "NASDAQ" shall mean the National Association of Securities Dealers, Inc.
Automated Quotation System.
(m) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
(n) "Preferred Shares" shall mean shares of Series A Junior Participating
Preferred Stock, no par, of the Company having the rights and preferences set
forth in the Form of Certificate of Designations attached to this Agreement as
Exhibit A.
(o) "Purchase Price" shall have the meaning set forth in Section 4.
(p) "Record Date" shall have the meaning set forth in the second paragraph
hereof.
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<PAGE>
(q) "Redemption Date" shall have the meaning set forth in Section 7.
(r) "Redemption Price" shall have the meaning set forth in Section 23(a).
(s) "Right" shall have the meaning set forth in the second paragraph hereof.
(t) "Right Certificate" shall have the meaning set forth in Section 3(a).
(u) "Rights Agent" shall have the meaning set forth in the preamble hereof.
(v) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(w) "Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
(x) "Summary of Rights" shall have the meaning set forth in Section 3(b).
(y) "Trading Day" shall have the meaning set forth in Section 11(d)(i).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
---------------------------
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
---------------------------
tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors of
the Company prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of Common
Shares aggregating 15% or more of the then outstanding Common Shares
(including any such date which is after the date of this Agreement and prior
to the issuance of the Rights; the earlier of such dates being herein referred
to as the "Distribution Date"), (x) the Rights will be evidenced (subject to
the provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-
prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each Common
Share so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by
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<PAGE>
such certificates registered in the names of the holders thereof together with
a copy of the Summary of Rights attached thereto. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence
of this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between Tupperware Corporation
and dated as of , 1996 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Tupperware Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be evidenced
by this certificate. Tupperware Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the forms
--------------------------
of election to purchase Preferred Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one one-
hundredth of a Preferred Share set forth therein (the "Purchase Price"), but
the number of such one one-hundredths of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates shall
---------------------------------
be executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution
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<PAGE>
of such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
-----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
- ---------------------------------------------------------------------
to the provisions of Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-
hundredths of a Preferred Share as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
------------------------------------------------------
Rights. (a) The registered holder of any Right Certificate may exercise the
- ------
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights
Agent, together with payment of the Purchase Price for each one one-hundredth
of a Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on , 2006 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $ , and
shall be subject to adjustment from time to time as provided in Section 11 or
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the depositary agent
depositary receipts
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<PAGE>
representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
SECTION 8. Cancellation and Destruction of Right Certificates. All Right
--------------------------------------------------
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. Availability of Preferred Shares. The Company covenants and
--------------------------------
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a Person other than, or
the issuance or delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person in whose name any
----------------------------
certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
-------- -------
payment is a date upon which the Preferred Shares transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder
of Preferred Shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or
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<PAGE>
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
-----------------------------------------------------------
Rights. The Purchase Price, the number of Preferred Shares covered by each
- ------
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of the
Company were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
-------- -------
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right.
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares
of the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event. In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.
From and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or any Associate
or Affiliate thereof; no Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be
cancelled.
(iii) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize additional Common
Shares for issuance upon exercise of the Rights. In the event the Company
shall, after good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be issuable upon
exercise of a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share market price of one
Common Share as of the date of issuance of such Preferred Shares or fraction
thereof.
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<PAGE>
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same rights, privileges
and preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares at
a price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share market price
of the Preferred Shares on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to
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be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to one Preferred Share
and the denominator of which shall be such current per share market price of
the Preferred Shares; provided, however, that in no event shall the
-------- -------
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the "current per share
market price" of any security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date; provided,
--------
however, that in the event that the current per share market price of the
- -------
Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing
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<PAGE>
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then in use, or, if
on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of
Directors of the Company. The term "Trading Day: shall mean a day on which the
principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preferred Shares are not
publicly traded, the "current per share market price" of the Preferred Shares
shall be conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
-------- -------
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one one-
millionth of a Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the right
to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one one-hundredths of a Preferred
Share purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one one-
hundredths of a Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the number of one one-
hundredths of a share covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to
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<PAGE>
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Right Certificates
held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of
a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one- hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in
the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
-------- -------
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition
to those adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred Shares, issuance wholly
for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Agreement and prior
to the Distribution Date, the Company shall (i) declare or pay any dividend on
the Common Shares payable in Common Shares or (ii) effect
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<PAGE>
a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A)
the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
---------------------------------------------------
Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
- ------
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
--------------------------------------------------------------
Power. In the event, directly or indirectly, at any time after a Person has
- -----
become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or more
of its wholly-owned Subsidiaries, then, and in each such case, proper
provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the surviving
corporation) as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (B)
50% of the then current per share market price of the Common Shares of such
other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise
of the Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
so providing. The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements
or arrangements which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits intended to be afforded
by the Rights. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
---------------------------------------
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
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<PAGE>
Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided that such agreement shall provide that the
-------
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-hundredth of a
Preferred Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
--------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;
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<PAGE>
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Shares certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as
-------------------------------------------------
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
---------------------------
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
---------------------------------------------------------
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, that such corporation would be eligible for
--------
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
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<PAGE>
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
----------------------
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall
it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether
any Preferred Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the
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<PAGE>
President, any Vice President, the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or suffered by it
in good faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
----------------------
Agent may resign and be discharged from its duties under this Agreement upon
30 days' notice in writing mailed to the Company and to each transfer agent of
the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the State of [State of Rights Agent] (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the State of [State of Rights Agent]), in
good standing, having an office in the State of [State of Rights Agent], which
is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
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<PAGE>
Section 23. Redemption. (a) The Board of Directors of the Company may, at
----------
its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors of the Company
may be made effective at such time, on such basis and with such conditions as
the Board of Directors of the Company in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; provided, however, that
-------- -------
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors of the Company ordering the redemption of the Rights, the Company
shall mail a notice of redemption to all the holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the Company may, at its
--------
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section
24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; provided,
--------
however, that the failure to give, or any defect in, such notice shall not
- -------
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient Common Shares issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for
each
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<PAGE>
Common Share that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share as of the date
of issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common Shares or
to distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall propose
------------------------
(i) to pay any dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or
to effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at least 10 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
-------
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Tupperware Corporation
14901 South Orange Blossom Trail
Orlando, Florida 32837
Attention: General Counsel
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<PAGE>
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
_____________________________________
_____________________________________
Attention:
Corporate Secretary
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. The Company may from time to time
--------------------------
supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes
-------- -------
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) to not less than 10%.
Section 28. Successors. All the covenants and provisions of this Agreement
----------
by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
--------------------------
construed to give to any Person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate issued
-------------
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested, all as of the day and year first above written.
TUPPERWARE CORPORATION
Attest:
By __________________________________ By __________________________________
Name: Name:
Title: Title:
Attest: [Rights Agent]
By __________________________________ By __________________________________
Name: Name:
Title: Title:
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<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
TUPPERWARE CORPORATION
(Pursuant to Section 151 of the Delaware General Corporation Law)
Tupperware Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on , 1996:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, no par, of the Corporation (the "Preferred Stock"), and hereby states
the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be . Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no
--------
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
par value $.01 per share of the Corporation (the "Common Stock"), and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A
E-21
<PAGE>
Preferred Stock. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin
to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid
on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
-------------
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders
of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
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<PAGE>
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided
that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock;
or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other
Certificate of Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Corporation, no distribution shall be made
(1) to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A Preferred
Stock shall have received $100 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such
E-23
<PAGE>
case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in
clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
--------------------------
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall not
-------------
be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
----
the payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the Corporation
---------
shall not be amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series A Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of
at least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Chairman of the Board and attested by its Secretary
this day of , 1996.
_____________________________________
Chairman of the Board
Attest:
___________________________________
Secretary
E-24
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- _______Rights
NOT EXERCISABLE AFTER ___, 2006 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
TUPPERWARE CORPORATION
This certifies that ___, or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of ___, 1996 (the "Rights Agreement"), between Tupperware
Corporation, a Delaware corporation (the "Company"), and ___ (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
[City of Rights Agent] time, on ___, 2006 at the principal office of the
Rights Agent, or at the office of its successor as Rights Agent, one one-
hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, no par, of the Company (the "Preferred
Shares"), at a purchase price of $ ___ per one one-hundredth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-
hundredths of a Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of ___, 1996, based on the Preferred Shares as constituted
at such date. As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a Preferred Share which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any Right
or Rights evidenced hereby (other than fractions which are integral multiples
of one one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
E-25
<PAGE>
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ___, 1996.
ATTEST: Tupperware Corporation
_______________________________ By ________________________________________
Countersigned:
[Rights Agent]
By______________________________
Authorized Signature
E-26
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto _____________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated:_____________ ,______
______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
______________________________________
Signature
E-27
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To:Tupperware Corporation
The undersigned hereby irrevocably elects to exercise Rights represented
by this Right Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such Preferred
Shares be issued in the name of:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:_________ ,_____
______________________________________
Signature
E-28
<PAGE>
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
E-29
<PAGE>
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
____________________________________
Signature
- -- -- -- -- -- ---- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
NOTICE
The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
E-30
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On , 1996, the Board of Directors of Tupperware Corporation (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each share of common stock, par value $.01 per share of the
Company (the "Common Shares") to be issued in the distribution of Common
Shares (the "Spin-off") by Premark International, Inc. to its stockholders.
The dividend is payable on , 1996 to the stockholders of record of the
Spin-off. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, no par (the "Preferred Shares"), of the Company at a price of
$ per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") between the Company and , as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") have acquired beneficial ownership of 15% or more of the outstanding
Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any
person or group of affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to make, a tender offer
or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate with a copy of this
Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with
and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer ornew issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on , 2006 (the "Final Expiration Date"), unless the Final Expiration
Date is extended or unless the Rights are earlier redeemed or exchanged by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion
price, less than the then-current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
E-31
<PAGE>
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividendof 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to
a minimum preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one Common Share, or one one-
hundredth of a Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
The redemption of the Rights may be made effective at such time on such basis
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less 10%, except
that from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
E-32
<PAGE>
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 10 dated
, 1996. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
E-33
<PAGE>
PART II
INFORMATION NOT INCLUDED IN INFORMATION STATEMENT
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
2 Form of Distribution Agreement
3.1 Form of Amended and Restated Certificate of Incorporation of
Tupperware Corporation (Attached to Information Statement as Annex A
and incorporated herein by reference)
3.2 Form of Amended and Restated By-laws of Tupperware Corporation
(Attached to Information Statement as Annex B and incorporated herein
by reference)
4 Form of Rights Agreement, by and between Tupperware Corporation and
the rights agent named therein (Attached to Information Statement as
Annex E and incorporated herein by reference)
10.1 Form of Tupperware Corporation 1996 Incentive Plan (Attached to
Information Statement as Annex C and incorporated herein by reference)
10.2 Form of Tupperware Corporation Directors Stock Plan (Attached to
Information Statement as Annex D and incorporated herein by reference)
10.3 Form of Tax Sharing Agreement
10.4 Form of Employee Benefits and Compensation Allocation Agreement
10.5 Form of Change of Control Agreement
10.6 Employment Agreement for Mr. Goings
10.7 Employment Agreement for Mr. Campos
*10.8 Form of Credit Agreement
22 Subsidiaries of Tupperware Corporation
27 Financial Data Schedule
</TABLE>
- --------
* To be filed by amendment
II-1
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized.
TUPPERWARE CORPORATION
By: /s/ Warren L. Batts
----------------------------------
Name: Warren L. Batts
Title: Chairman and Chief
Executive Officer
Date: April 16, 1996
II-2
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
2 Form of Distribution Agreement
3.1 Form of Amended and Restated Certificate of Incorporation of
Tupperware Corporation (Attached to Information Statement as
Annex A and incorporated herein by reference)
3.2 Form of Amended and Restated By-laws of Tupperware Corporation
(Attached to Information Statement as Annex B and incorporated
herein by reference)
4 Form of Rights Agreement, by and between Tupperware Corporation
and the rights agent named therein (Attached to Information
Statement as Annex E and incorporated herein by reference)
10.1 Form of Tupperware Corporation 1996 Incentive Plan (Attached to
Information Statement as Annex C and incorporated herein by
reference)
10.2 Form of Tupperware Corporation Directors Stock Plan (Attached
to Information Statement as Annex D and incorporated herein by
reference)
10.3 Form of Tax Sharing Agreement
10.4 Form of Employee Benefits and Compensation Allocation Agreement
10.5 Form of Change of Control Agreement
10.6 Employment Agreement for Mr. Goings
10.7 Employment Agreement for Mr. Campos
*10.8 Form of Credit Agreement
22 Subsidiaries of Tupperware Corporation
27 Financial Data Schedule
</TABLE>
- --------
* To be filed by amendment
II-3
<PAGE>
EXHIBIT 2
FORM
OF
DISTRIBUTION
AGREEMENT
BY AND AMONG
PREMARK INTERNATIONAL, INC.
and
TUPPERWARE CORPORATION
and
DART INDUSTRIES INC.
<PAGE>
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (this "Agreement"), dated as of , 1996, by and
among (i) PREMARK INTERNATIONAL, INC., a Delaware corporation ("Premark"),
(ii) TUPPERWARE CORPORATION, a Delaware corporation and, as of the date
hereof, a wholly-owned subsidiary of Premark ("Tupperware") and (iii) DART
INDUSTRIES INC., a Delaware corporation and, as of the date hereof, a wholly-
owned subsidiary, directly or indirectly, of Premark ("Dart").
WHEREAS, the Premark Board (as defined herein) has determined that it is
appropriate and desirable to distribute all outstanding shares of Tupperware
Common Stock (as defined herein) on a pro rata basis to the holders of Premark
Common Stock (as defined herein); and
WHEREAS, Premark, Tupperware and Dart have determined that it is appropriate
and desirable to set forth the principal corporate transactions required to
effect such distribution and certain other agreements that will govern certain
matters relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
Definitions
-----------
Section 1.01 General. As used in this Agreement, the following terms shall
-------
have the following meanings (such meanings to be equally applicable to both
the singular and plural forms of the terms defined):
AAA: as defined in Section 6.07(b).
---
Action: any action, suit, arbitration, inquiry, proceeding or investigation
------
by or before any court, any governmental or other regulatory or administrative
agency or commission or any arbitration tribunal.
Affiliate: with respect to any Person, a Person that directly, or indirectly
---------
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person; provided, however, that for purposes of this
Agreement, no member of either Group shall be deemed to be an Affiliate of any
member of the other Group.
Agent: the distribution agent for the stockholders of Premark, as selected
-----
by Premark, to distribute the Tupperware Common Stock in connection with the
Distribution.
Ancillary Agreements: collectively, all of the agreements, instruments,
--------------------
understandings, assignments or other arrangements entered into in connection
with the transactions contemplated hereby, including, without limitation, the
Conveyance and Assumption Instruments, the Employee Benefits and Compensation
Allocation Agreement, the Interim Services Agreement, if any, and the Tax
Sharing Agreement.
By-Laws: Tupperware's by-laws substantially in the form attached hereto as
-------
Annex D.
Cash Dividend: as defined in Section 3.02(a).
-------------
Certificate of Incorporation: Tupperware's certificate of incorporation
----------------------------
substantially in the form attached hereto as Annex E.
Chairman: as defined in Section 6.07(b).
--------
<PAGE>
Claims Administration: (i) the processing of claims made under the Policies,
---------------------
including the reporting of claims to the insurance carrier, management and
defense of claims, and providing for appropriate releases upon settlement of
claims, (ii) in the case of the Tupperware Businesses, the reporting to
Premark of any losses or claims which may cause the per-occurrence deductible
or self-insured retention or limits of any Policy to be exceeded, (iii) the
collection of the proceeds of Policies, and (iv) the reporting to excess
insurance carriers of any losses or claims which may cause the per-occurrence
deductible or self-insured retention or limits of any Policy to be exceeded.
Code: the Internal Revenue Code of 1986, as amended.
----
Commission: the Securities and Exchange Commission.
----------
Convention Center: the convention center building and the underlying and
-----------------
related land located near Orlando, Florida currently owned and operated by
Dart.
Convention Center Business: the personal property assets and contracts
--------------------------
related to the business currently conducted by Dart through the use of the
Convention Center.
Conveyance and Assumption Instruments: collectively, the various agreements,
-------------------------------------
instruments and other documents to be entered into to effect the transfer of
assets and the assumption of Liabilities contemplated by the transactions set
forth in Section 3.01 of this Agreement.
Cook: Cook Insurance Company, Ltd., a Bermuda corporation.
----
Cut-off Date: the last fiscal day of the calendar month immediately
------------
preceding the Distribution Date.
Dart-Brazil: Dart do Brasil Industria e Comercio Limitada, a Brazilian
-----------
corporation.
Dart Guarantees: collectively, the guarantees by Dart pursuant to the
---------------
Facilities and Guarantee Agreement of the debt of Kraft set forth on Schedule
1.1.
Daypar: Daypar Participacoes Limitada, a Brazilian corporation.
------
Deerfield: Deerfield Land Corporation, a Delaware corporation.
---------
DIL: Dart Industries Limited, a United Kingdom corporation.
---
DILHC: a new domestic corporation to be organized by Wavebest.
-----
Dispute Resolution Committee: as defined in Section 6.06.
----------------------------
Distribution: the distribution on a pro rata basis to holders of Premark
------------
Common Stock of the shares of Tupperware Common Stock owned by Premark on the
Distribution Date.
Distribution Date: the date determined by the Premark Board on which the
-----------------
Distribution shall be effected.
DKI: Dart & Kraft, Inc., a Delaware corporation (now known as Kraft Foods,
---
Inc.).
DKI Indemnifiable Losses: collectively, any DKI Liability, Newco Liability,
------------------------
Retained Dart Subsidiary Liability or any Indemnifiable Losses described in
Section 5.01 of the DKI Reorganization and Distribution Agreement.
DKI Indemnification: the obligations of DKI and its Affiliates to indemnify,
-------------------
defend and hold harmless, pursuant to Section 5.01 of the DKI Reorganization
and Distribution Agreement and the rights to such indemnification, defense and
holding harmless.
2
<PAGE>
DKI Reorganization and Distribution Agreement: the Reorganization and
---------------------------------------------
Distribution Agreement, dated as of September 4, 1986, by and among DKI,
Premark, Dart, HIH, Vulcan-Hart Corporation, DKI Commercial Equipment
Holdings, Inc. and Duracell Inc.
Employee Benefits and Compensation Allocation Agreement: an employee
-------------------------------------------------------
benefits and compensation allocation agreement between Premark and Tupperware
substantially in the form attached hereto as Annex A.
Exchange Act: the Securities Exchange Act of 1934, as amended.
------------
Facilities and Guarantee Agreement: the Facilities and Guarantee Agreement,
----------------------------------
dated as of July 24, 1981, by and among DKI, Dart, and Kraft, Inc., as amended
on April 22, 1982, which was terminated as of September 4, 1986 pursuant to
Section 4.01 thereof.
Foreign Exchange Rate: with respect to any currency other than United States
---------------------
dollars as of any date of determination, the average of the opening bid and
asked rates on such date at which such currency may be exchanged for United
States dollars as quoted by Citibank, N.A.
Form 10: the registration statement on Form 10 filed by Tupperware with the
-------
Commission to effect the registration of the Tupperware Common Stock pursuant
to the Exchange Act.
Former Dart Businesses: has the meaning assigned to such term in the DKI
----------------------
Reorganization and Distribution Agreement. (For informational purposes, the
businesses specified on Schedule I to such agreement are set forth on Schedule
1.2 hereto.)
Former Dart Business Liabilities: has the meaning assigned to such term in
--------------------------------
the DKI Reorganization and Distribution Agreement.
Former Premark Businesses: the businesses set forth on Schedule 1.3 and all
-------------------------
businesses, assets or operations managed or operated by, or operationally
related to, Premark or any of such businesses, which heretofore have been sold
or otherwise disposed of or discontinued, which are not Former Dart
Businesses.
Former Premark Business Liabilities: collectively, all of the Liabilities
-----------------------------------
related to the Former Premark Businesses.
Former Tupperware Businesses: the businesses set forth on Schedule 1.4 and
----------------------------
all businesses, assets or operations managed or operated by, or operationally
related to, Dart or any of such businesses, which heretofore have been sold or
otherwise disposed of or discontinued, which are not Former Dart Businesses.
Former Tupperware Business Liabilities: collectively, all of the Liabilities
--------------------------------------
related to the Former Tupperware Businesses.
Group: the Premark Group or the Tupperware Group.
-----
HIH: Hobart International Holdings, Inc., a Delaware corporation.
---
Hobart Brazil: Hobart do Brasil Limitada, a Brazilian corporation.
-------------
Indemnifiable Loss: has the meaning assigned to such term in the DKI
------------------
Reorganization and Distribution Agreement.
Indemnifying Party: as defined in Section 4.03(a).
------------------
Indemnitee: as defined in Section 4.03(a)
----------
Indemnity Payment: as defined in Section 4.03(a).
-----------------
3
<PAGE>
Information: as defined in Section 5.01.
-----------
Information Statement: the information statement to be sent to the holders
---------------------
of Premark Common Stock in connection with the Distribution.
Interim Services Agreement: an interim services agreement between Premark
--------------------------
and Tupperware which, if determined to be required, will be entered into prior
to the Distribution Date pursuant to which Premark and Tupperware will provide
for various service and other relationships following the Distribution Date.
Insurance Amount: as defined in Section 3.06(f).
----------------
IRS: the Internal Revenue Service.
---
Kraft: Kraft Foods, Inc., a Delaware corporation and successor to DKI and
-----
Kraft, Inc., a Delaware corporation and former subsidiary of DKI.
Liabilities: with respect to any Person, any and all debts, liabilities and
-----------
obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising (unless
otherwise specified in this Agreement), including, without limitation, all
costs and expenses relating thereto, and including, without limitation, those
debts, liabilities and obligations arising under any law, rule, regulation,
Action, threatened Action, order or consent decree of any governmental entity
or any award of any arbitrator of any kind, and those arising under any
contract, commitment or undertaking.
Losses: any and all losses, Liabilities, claims, damages, obligations,
------
payments, costs and expenses, matured or unmatured, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, known or unknown, whenever
arising (including, without limitation, the costs and expenses of any and all
Actions, threatened Actions, demands, assessments, judgments, settlements and
compromises relating thereto, and attorneys' fees and any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending
against any such Actions or threatened Actions).
NewCan: a new Canadian corporation to be organized by Dart.
------
No-action Letter: a letter from the staff of the Commission indicating,
----------------
among other things, that the Division of Corporation Finance will not
recommend enforcement action to the Commission if the Tupperware Common Stock
is distributed pursuant to the Distribution without registration under the
Securities Act of 1933, as amended.
Norwest Bank: Norwest Bank Minnesota, N.A., a nationally chartered bank.
------------
NYSE: the New York Stock Exchange, Inc.
----
Person: an individual, a partnership, a joint venture, a corporation, a
------
limited liability company, a trust, an unincorporated organization or a
government or any department or agency thereof.
PFEG: Premark FEG Corporation, a Delaware corporation.
----
PFEG-Brasil: Premark FEG do Brasil Limitada, a Brazilian corporation.
-----------
PFEG LLC: a limited liability company to be formed by Premark and a Premark
--------
Affiliate.
Policies: as defined in Section 3.06(a).
--------
PreCan: Premark Canada Inc., a Canadian corporation.
------
Premark Assets: collectively, all the assets of Premark and the Premark
--------------
Subsidiaries, including, without limitation, the Premark Patents and
Trademarks, other than the Tupperware Assets.
4
<PAGE>
Premark Assumed Liabilities: collectively, all Liabilities relating to or
---------------------------
arising in connection with the Premark Assets or the Premark Businesses,
whether arising before, on or after the Distribution Date, which are to be
assumed by Premark or a Premark Subsidiary, as appropriate, pursuant to the
transactions contemplated by Section 3.01, including, without limitation, the
Liabilities set forth on Schedule 1.5.
Premark Board: the Board of Directors of Premark.
-------------
Premark Businesses: the businesses currently conducted by Premark and its
------------------
Subsidiaries other than the Tupperware Businesses.
Premark Common Stock: the Common Stock, par value $1.00 per share, of
--------------------
Premark.
Premark Financial: Premark Financial Corporation, a Delaware corporation.
-----------------
Premark Group: Premark and its Affiliates, whether now or hereafter
-------------
existing, other than members of the Tupperware Group.
Premark Guarantees: collectively, (i) the guarantees by Premark set forth on
------------------
Schedule 1.6(a) which were entered into by Premark with respect to the duties
and obligations of Tupperware U.S., as franchisor, under certain franchise
agreements and (ii) the other guarantees set forth on Schedule 1.6(b).
Premark Indemnitees: as defined in Section 4.02.
-------------------
Premark Liabilities: collectively, all of (i) the Liabilities of any member
-------------------
of the Premark Group under this Agreement or any Ancillary Agreement to which
it is or becomes a party, (ii) the Liabilities arising out of or in connection
with the businesses, assets or operations of the Premark Group (other than
such businesses, assets or operations which, pursuant to this Agreement,
shall, after the Distribution Date, be part of the Tupperware Group), as
heretofore, currently, or hereafter conducted, (iii) the Premark Assumed
Liabilities, (iv) the Former Premark Business Liabilities and (v) the
Liabilities retained or assumed by Premark or any Premark Subsidiary pursuant
to the Employee Benefits and Compensation Allocation Agreement.
Premark Patents and Trademarks: collectively, the patents and trademarks set
------------------------------
forth on Schedule 1.7.
Premark Subsidiary: any subsidiary of Premark other than Tupperware or any
------------------
Tupperware Subsidiary.
Premium Administration: with respect to each Policy, the accounting for
----------------------
premiums, retrospectively-rated premiums, defense costs, indemnity payments,
deductibles and retentions as appropriate under the terms and conditions of
each of the Policies.
Record Date: the close of business on the date to be determined by the
-----------
Premark Board, or a committee thereof, as the record date for the
Distribution.
Representative: with respect to any Person, any of such Person's directors,
--------------
officers, employees, agents, consultants, advisors, accountants, attorneys and
representatives.
Rights Plan: the rights agreement, to be entered into on or prior to the
-----------
Distribution Date, between Tupperware and Norwest Bank, as rights agent,
substantially in the form filed as an exhibit to the Form 10.
Stero: The Stero Company, a Delaware corporation.
-----
Subsidiary: with respect to any Person, any corporation or other legal
----------
entity of which such Person or any Subsidiaries controls or owns, directly or
indirectly, more than 50% of the stock or other equity interest, or more than
50% of the voting power entitled to vote on the election of members to the
board of directors or similar governing body; provided, however, that for
-------- -------
purposes of this Agreement, (i) Dart and the Subsidiaries of Dart shall be
deemed to be Tupperware Subsidiaries and (ii) neither Dart, Tupperware nor any
Tupperware Subsidiary shall be deemed to be Premark Subsidiaries.
5
<PAGE>
Tax: as defined in the Tax Sharing Agreement.
---
Tax Ruling: a private letter ruling issued by the IRS indicating that the
----------
Distribution will qualify as a tax-free distribution for federal income tax
purposes under Section 355 of the Code.
Tax Sharing Agreement: the Tax Sharing Agreement between Premark and
---------------------
Tupperware, substantially in the form attached hereto as Annex C.
Third Party Claim: as defined in Section 4.04(a)(i).
-----------------
Tupperware Assets: collectively, (i) all assets currently owned by Dart and
-----------------
the Subsidiaries of Dart (other than any such assets which pursuant to, or as
a consequence of, this Agreement are to be transferred to, or retitled in the
name of, Premark or a Premark Subsidiary, including, without limitation, the
Premark Patents and Trademarks) and which, as of and after the Distribution
Date are to be owned by the Tupperware Group, and (ii) all assets which are
currently owned by Premark or a Premark Subsidiary and which pursuant to, or
as a consequence of, this Agreement are to be transferred to Tupperware or a
Tupperware Subsidiary, including, without limitation, any assets set forth on
Schedule 1.8 and which, as of and after the Distribution Date are to be owned
by the Tupperware Group.
Tupperware Assumed Liabilities: collectively, all Liabilities relating to or
------------------------------
arising in connection with the Tupperware Assets or the Tupperware Businesses,
whether arising before, on or after the Distribution Date, which are to be
assumed by Tupperware or a Tupperware Subsidiary, as appropriate, pursuant to
the transactions contemplated by Section 3.01, including, without limitation,
the Liabilities set forth on Schedule 1.9.
Tupperware Board: the Board of Directors of Tupperware.
----------------
Tupperware Businesses: the direct selling business (other than the direct
---------------------
selling business conducted by West Bend or any West Bend Subsidiary) and
related manufacturing business conducted, as of the date hereof, by Dart and
its Subsidiaries and by certain divisions of various Premark Subsidiaries
through the use of the Tupperware Assets, and after the Distribution Date to
be conducted by Tupperware and the Tupperware Subsidiaries.
Tupperware Common Stock: collectively, the Common Stock, par value $.01 per
-----------------------
share, of Tupperware and the rights issued pursuant to the Rights Plan.
Tupperware Group: Tupperware and that portion of any corporation or other
----------------
entity, whether now or hereafter existing, which conduct the Tupperware
Businesses.
Tupperware Indemnitees: as defined in Section 4.01.
----------------------
Tupperware Liabilities: collectively, all of (i) the Liabilities of any
----------------------
member of the Tupperware Group under this Agreement or any Ancillary Agreement
to which it is or becomes a party, (ii) the Liabilities arising out of or in
connection with the businesses, assets or operations of the Tupperware Group
(other than such businesses, assets or operations which, pursuant to this
Agreement shall, after the Distribution Date, be part of the Premark Group),
as heretofore, currently, or hereafter conducted, (iii) the Tupperware Assumed
Liabilities, (iv) the Former Tupperware Business Liabilities and (v) the
Liabilities retained or assumed by Tupperware or any Tupperware Subsidiary
pursuant to the Employee Benefits and Compensation Allocation Agreement.
Tupperware Subsidiary: any subsidiary of Tupperware that, as of the
---------------------
Distribution Date, will be a subsidiary of Tupperware, and any other
subsidiary of Tupperware which thereafter may be organized or acquired.
Tupperware U.S.: Tupperware U.S., Inc., a Delaware corporation.
---------------
6
<PAGE>
Wavebest: Wavebest Limited, a United Kingdom corporation.
--------
West Bend: The West Bend Company, a Delaware corporation and wholly-owned
---------
Premark Subsidiary.
Wolf: The Wolf Range Company, a Delaware corporation.
----
Wolf LLC: a limited liability company to be formed by PFEG and a Premark
--------
Affiliate.
Section 1.02 Exhibits, etc. References to an "Exhibit" or "Schedule" are,
-------------
unless otherwise specified, to one of the Exhibits or Schedules attached to
this Agreement, and references to "Section" or "Article" are, unless otherwise
specified, to one of the Sections or Articles of this Agreement.
Section 1.03 References to Time. All references in this Agreement to times
------------------
of day shall be to Central time.
ARTICLE II
The Distribution
----------------
Section 2.01 The Distribution. Subject to Section 2.03 hereof and prior to
----------------
the Distribution Date, Premark will deliver to the Agent for the benefit of
holders of record of Premark Common Stock on the Record Date, a single stock
certificate, endorsed by Premark in blank, representing all of the then
outstanding shares of Tupperware Common Stock owned by Premark, and shall
instruct the Agent to distribute on, or as soon as practicable following, the
Distribution Date the appropriate number of such shares of Tupperware Common
Stock to each such holder or designated transferee or transferees of such
holder. The Distribution shall be effective as of 5:00 p.m. Central time, on
the Distribution Date. Tupperware will provide to the Agent all share
certificates and any information required in order to complete the
Distribution on the basis of one share of Tupperware Common Stock for each
share of Premark Common Stock outstanding on the Record Date.
Section 2.02 Cooperation Prior to the Distribution.
-------------------------------------
(a) Premark and Tupperware shall prepare, and Premark shall mail to the
holders of Premark Common Stock on the Record Date, the Information Statement,
which shall set forth appropriate disclosure concerning Tupperware, the
Distribution and other matters. Premark and Tupperware shall prepare, and
Tupperware shall file with the Commission, the Form 10, which includes or
incorporates by reference the Information Statement. Premark and Tupperware
shall use reasonable efforts to cause the Form 10 to become effective under
the Exchange Act as promptly as reasonably practicable.
(b) Premark and Tupperware shall cooperate in preparing, filing with the
Commission and causing to become effective any registration statements or
amendments thereof which are required to reflect the establishment of, or
amendments to, any employee benefit and other plans contemplated by the
Distribution and the Employee Benefits and Compensation Allocation Agreement.
(c) Premark and Tupperware shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of the states or other
political subdivisions of the United States and the securities laws of any
applicable foreign countries or other political subdivision thereof, in
connection with the transactions contemplated by this Agreement.
(d) Premark and Tupperware shall have prepared, and Tupperware shall file
and pursue, an application to permit listing of the Tupperware Common Stock on
the NYSE and any other national securities exchanges selected by Tupperware.
(e) Premark and Tupperware shall each take all such action as may be
necessary or appropriate to cause the conditions set forth in Section 2.03 to
be satisfied and to effect the Distribution on the Distribution Date.
7
<PAGE>
Section 2.03 Conditions to the Distribution. The Premark Board shall in its
------------------------------
discretion establish the Record Date and the Distribution Date and all
appropriate procedures in connection with the Distribution, but in no event
shall the Distribution Date occur prior to such time as each of the following
have occurred or have been waived by the Premark Board in its sole discretion:
(i) Premark shall have received the Tax Ruling or an acceptable opinion of tax
counsel indicating that the Distribution will qualify as a tax-free
distribution for federal income tax purposes under Section 355 of the Code and
such Tax Ruling or such acceptable opinion of tax counsel shall be in full
force and effect and shall not have been modified or amended in any respect
adversely affecting the tax consequences set forth therein; (ii) the Premark
Board shall have given final approval of the Distribution; (iii) all material
consents which are required to effect the Distribution shall have been
received; (iv) the Form 10 shall have been declared effective by the
Commission; (v) the Tupperware Board, composed as contemplated by Section
3.03, shall have been duly elected; (vi) the Certificate of Incorporation, the
By-Laws and the Rights Plan shall each have been adopted and be in effect;
(vii) the Tupperware Common Stock shall have been approved for listing upon
notice of issuance on the NYSE and any other exchange selected by Tupperware
pursuant to Section 2.02(d); (viii) the transactions contemplated by Section
3.01 and Section 3.02 shall have been consummated in all material respects;
(ix) Premark and Tupperware shall have entered into each of the Ancillary
Agreements and each such agreement shall be in full force and effect; (x) the
No-action Letter shall have been issued and shall be in full force and effect;
and (xi) no order, injunction or decree issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing consummation
of the Distribution shall be in effect; provided that the satisfaction of such
--------
conditions shall not create any obligation on the part of Premark or any other
party hereto to effect the Distribution or in any way limit Premark's power of
termination set forth in Section 6.10 or alter the consequences of any such
termination from those specified in such Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
-----------------------------------------
Section 3.01 Intercorporate Reorganization.
-----------------------------
(a) Subject to Section 3.08, prior to or on the Distribution Date, Premark
and Tupperware shall undertake to complete all actions necessary, including,
without limitation, the actions specified in Section 3.01(b), to (i) transfer,
or cause to be transferred, to Tupperware or a Tupperware Subsidiary, as
appropriate, effective as of the Cut-off Date, all of the right, title and
interest of Premark or any Premark Subsidiary, as appropriate, in any
Tupperware Assets and have Tupperware or a Tupperware Subsidiary, as
appropriate, assume and agree to pay, perform and discharge in due course each
of the Tupperware Assumed Liabilities, and (ii) transfer, or cause to be
transferred, to Premark or a Premark Subsidiary, as appropriate, effective as
of the Cut-off Date, all the right, title and interest of Tupperware or any
Tupperware Subsidiary, as appropriate, in any Premark Assets and have Premark
or a Premark Subsidiary, as appropriate, assume and agree to pay, perform and
discharge in due course each of the Premark Assumed Liabilities.
(b) Subject to Section 3.08, prior to the Distribution, Premark and
Tupperware each agree to take, or cause to be taken, the following actions in
connection with the Distribution:
(i) domestic transactions:
(A) a plan of complete liquidation of HIH shall be adopted and HIH
shall be merged with and into PFEG;
(B) Wolf LLC shall be formed, a plan of complete liquidation of Wolf
shall be adopted and Wolf shall be merged with and into Wolf LLC;
(C) PFEG LLC shall be formed, PFEG shall transfer to PFEG LLC, (x)
Premark FEG GmbH & Co. KG, a German partnership, and (y) all PFEG's
right, title and interest in the intellectual property owned by PFEG,
and thereafter, a plan of complete liquidation of PFEG shall be adopted
and PFEG shall be merged with and into Premark;
8
<PAGE>
(D) a plan of complete liquidation of Stero shall be adopted and
Stero shall be merged with and into Premark;
(E) Premark shall transfer all of its right, title and interest in
the outstanding shares of capital stock of Dart to Tupperware;
(F) as determined to be appropriate, Premark shall either (x)
transfer all of its right, title, and interest in the outstanding
shares of capital stock of Cook to Tupperware, or (y) merge Cook with
and into Tupperware or (z) retain Cook;
(G) as determined to be appropriate, Premark shall either (x)
transfer all of its right, title and interest in the outstanding shares
of capital stock of Deerfield to Tupperware or (y) merge Deerfield with
and into Tupperware;
(H) as determined to be appropriate, (x) Premark Financial shall
transfer to Premark all Premark Assets owned by Premark Financial, the
Premark Financial preferred stock owned by Florida Tile Industries,
Inc. (a Florida corporation and Premark Subsidiary) shall be redeemed
by Premark Financial and Premark shall thereafter transfer to
Tupperware all of its right, title, and interest in the outstanding
shares of capital stock of Premark Financial or (y) Premark Financial
shall transfer or assign, as appropriate, to the Tupperware Group all
Tupperware Assets owned or leased by Premark Financial, the Premark
Financial preferred stock owned by Dart shall be redeemed by Premark
Financial, and the $7,925,000 Promissory Note dated December 18, 1992
from Premark Financial to Deerfield shall be repaid in full;
(I) Dart shall transfer the Convention Center Business to Tupperware;
(J) Dart and Tupperware shall enter into a lease pursuant to which
Tupperware shall lease from Dart the Convention Center;
(K) Dart shall cooperate in the retitling of the Premark Patents and
Trademarks into the name of Premark or a Premark Subsidiary, as
appropriate;
(L) Premark GmbH shall transfer to the appropriate foreign entity in
the Premark Group all of its right, title and interest in the
outstanding shares of capital stock of Premark HII Holdings, Inc., a
Delaware corporation; and
(M) Dart will make or cause to be made appropriate capital
contributions to Tupperware U.S., Tupperware Distributors, Inc., and
Dartco Manufacturing, Inc. or take any other appropriate action in
order to eliminate any excess loss accounts as defined in Treasury
Regulation 1.1502-19;
(ii) Canadian Transactions;
(A) NewCan shall be formed, Dart shall transfer to NewCan all Dart's
right, title and interest in the capital stock of PreCan in exchange
for all of the issued and outstanding shares of common stock of NewCan;
(B) PreCan shall transfer to NewCan all the Tupperware Assets and
Tupperware Businesses owned by PreCan in exchange for (x) all of the
issued and outstanding shares of preferred stock of NewCan and (y) the
assumption by NewCan of certain Liabilities of PreCan;
(C) NewCan shall redeem all shares of its preferred stock owned by
PreCan in exchange for a non-interest-bearing demand promissory note
payable to PreCan;
(D) PreCan shall redeem all shares of its common stock owned by
NewCan in exchange for a non-interest-bearing demand promissory note
payable to NewCan; and
(E) the promissory notes described in subsections 3.01(b)(ii)(C) and
3.01(b)(ii)(D) shall be set-off and cancelled;
9
<PAGE>
(iii) Italian transactions:
(A) the parties hereto undertake to reorganize the Italian operations
of Premark and Dart so that, as of the Distribution Date, the Premark
Group shall not have any interest in any Tupperware Businesses or
Tupperware Assets of such operations, and the Tupperware Group shall
not have any interest in the Premark Businesses or Premark Assets of
such operations;
(iv) United Kingdom transactions:
(A) DILHC shall be formed by Wavebest and Wavebest shall transfer to
DILHC all Wavebest's right, title and interest in the capital stock of
DIL;
(B) Wavebest shall distribute to Dart all of the shares of capital
stock of DILHC; and
(C) as determined to be appropriate, Dart shall distribute either to
Premark and HIH, or to Premark alone, all its right, title and interest
in the outstanding shares of capital stock of Wavebest; and
(v) Brazilian Transactions:
(A) Dart-Brazil shall sell to PFEG-Brasil for cash all its right,
title and interest in the capital stock of Daypar;
(B) Hobart Brazil shall be merged into Daypar; and
(C) Daypar shall be merged into PFEG-Brazil.
(c) In connection with the transfers of assets other than capital stock and
the assumptions of Liabilities contemplated by subsection (a) and subsection
(b) of this Section, Premark and Tupperware shall execute or cause to be
executed by the appropriate entities the Conveyance and Assumption Instruments
in such forms as Premark and Tupperware shall reasonably agree, including the
transfer of real property by deed. The transfer of capital stock shall be
effected by means of delivery of stock certificates duly endorsed or
accompanied by duly executed stock powers and notation on the stock records
books of the corporation or other legal entities involved and, to the extent
required by applicable law, by notation on appropriate registries.
(d) Each of the parties hereto understands and agrees that no party hereto
is, in this Agreement or in any other agreement or document contemplated by
this Agreement or otherwise, representing and warranting in any way as to the
value or freedom from encumbrance of, or any other matter concerning, any
assets of such party, it being agreed and understood that all assets are being
transferred "as is, where is."
(e) Prior to the Distribution Date, Premark and Tupperware shall take all
steps necessary to increase the outstanding shares of Tupperware Common Stock
so that immediately prior to the Distribution, Premark will hold a number of
shares of Tupperware Common Stock equal to the total number of shares of
Premark Common Stock outstanding on the Record Date.
Section 3.02 Repayment of Intercompany Indebtedness and Cash Dividend.
--------------------------------------------------------
(a) Dividend Payments. Prior to the Distribution, Dart shall pay a cash
-----------------
dividend (the "Cash Dividend") to Premark in accordance with the terms set
forth on Schedule 3.02(a).
(b) Elimination of Intercompany Accounts as of the Cut-off Date. All
-----------------------------------------------------------
intercompany receivables, payables and loans between Tupperware and the
Tupperware Subsidiaries, on the one hand, and Premark and the Premark
Subsidiaries, on the other hand, shall be accorded the treatment set forth on
Schedule 3.02(b).
(c) Cash Management After the Cut-off Date. Premark and Tupperware shall
--------------------------------------
establish and maintain a separate cash management system with respect to the
Tupperware Businesses in accordance with the terms set forth on Schedule
3.02(c).
10
<PAGE>
Section 3.03 The Tupperware Board. At the Distribution Date, the Tupperware
--------------------
Board shall consist of, and Tupperware and Premark shall take all actions
which may be required to elect or otherwise appoint as directors of Tupperware
on or prior to the Distribution Date, the persons named on Schedule 3.03.
Section 3.04 Resignations; Transfer of Stock held as Nominee. (a) Premark
-----------------------------------------------
shall cause all of its, and all Premark Group entities', employees and
directors to resign, not later than the Distribution Date, from all boards of
directors or similar governing bodies of Tupperware or any member of the
Tupperware Group on which they serve, and from all positions as officers of
Tupperware or any member of the Tupperware Group in which they serve, except
as otherwise specified on Schedule 3.04. Tupperware shall cause all of its,
and all Tupperware Group entities', employees and directors to resign, not
later than the Distribution Date, from all boards of directors or similar
governing bodies of Premark or any member of the Premark Group on which they
serve, and from all positions as officers of Premark or any member of the
Premark Group in which they serve, except as otherwise specified on Schedule
3.04.
(b) Premark shall cause each of its employees who holds stock, or similar
evidence of ownership, of any Tupperware Group entity as nominee for such
entity pursuant to the laws of the country in which such entity is located to
transfer such stock, or similar evidence of ownership, to the Person so
designated by Tupperware to be such nominee as of and after the Distribution
Date. Tupperware shall cause each of its employees who holds stock, or similar
evidence of ownership, of any Premark Group entity as nominee for such entity
pursuant to the laws of the country in which such entity is located to
transfer such stock, or similar evidence of ownership, to the Person so
designated by Premark to be such nominee as of and after the Distribution
Date.
Section 3.05 Tupperware Certificate of Incorporation and By-Laws; Rights
---------------------------------------------------
Plan. Prior to the Distribution Date, (a) the Tupperware Board shall (i)
approve the Certificate of Incorporation and shall file the same with the
Secretary of State of the State of Delaware and (ii) adopt the By-Laws, and
(b) Premark, as sole stockholder of Tupperware, shall approve such Certificate
of Incorporation. Prior to the Distribution Date, Tupperware shall adopt the
Rights Plan.
Section 3.06 Insurance.
---------
(a) Coverage. Premark and its predecessors have historically provided
--------
various forms of insurance coverage ("Policies") which include Tupperware and
the Tupperware Subsidiaries within the definition of the named insured. Except
for those Policies issued in the name of any Tupperware Subsidiary, coverage
of Tupperware and the Tupperware Subsidiaries shall cease under the Policies
as of the Distribution Date. From and after the Distribution Date, Tupperware
and Tupperware Subsidiaries will be responsible for obtaining and maintaining
insurance coverages in their own right. Premark shall retain the Policies,
together with the rights, benefits and privileges thereunder. It is agreed
that Tupperware and the Tupperware Subsidiaries shall have the right to
present claims under such Policies for insured incidents occurring from the
date said coverage first commenced until the Distribution Date to the extent
that the terms and conditions of any such Policies so allow. It is understood
that any such Policies written on a "claims made" basis rather than
"occurrence" basis may not provide coverage to Tupperware and the Tupperware
Subsidiaries for incidents occurring prior to the Distribution Date but which
are first reported after the Distribution Date.
(b) Administration and Reserves. From and after the Cut-off Date:
---------------------------
(i) Premark shall be responsible for the (A) Premium Administration of
all Policies except the European auto policy, and (B) Claims Administration
with respect to the Premark Liabilities; provided, that the retention of
the Policies by Premark is in no way intended to limit, inhibit or preclude
any right to insurance coverage for any insured claim of a named insured
under the Policies, including but not limited to Tupperware and the
Tupperware Subsidiaries;
(ii) Tupperware or a Tupperware Subsidiary, as appropriate, shall be
responsible for the (A) Premium Administration of the European auto policy
and (B) Claims Administration with respect to the Tupperware Liabilities;
11
<PAGE>
(iii) Premark or a Premark Subsidiary, as appropriate, shall be entitled
to reserves or the benefit of reserves held by any insurance carrier, with
respect to Premark Liabilities; and
(iv) Tupperware or a Tupperware Subsidiary, as appropriate, shall be
entitled to reserves, or the benefit of reserves held by any insurance
carrier, with respect to Tupperware Liabilities.
(c) Insurance Premiums. Premark shall pay the premiums, to the extent that
------------------
Tupperware or a Tupperware Subsidiary does not pay premiums with respect to
Tupperware Liabilities (retrospectively-rated or otherwise), as required under
the terms and conditions of the respective Policies, whereupon Tupperware or a
Tupperware Subsidiary, as appropriate, shall upon receipt of a copy of the
retrospective-rating adjustment forthwith reimburse Premark or a Premark
Subsidiary, as appropriate, for that portion of such premiums paid by Premark
as are attributable to the Tupperware Liabilities.
(d) Insurance Proceeds. Proceeds received with respect to claims made under
------------------
the Policies shall be paid to Premark with respect to the Premark Liabilities
and to Tupperware with respect to the Tupperware Liabilities.
(e) Agreement for Waiver of Conflict and Shared Defense. In the event that a
---------------------------------------------------
Policy or Policies provide coverage for both Premark and Tupperware relating
to the same occurrence, Premark and Tupperware agree to jointly defend and to
waive any conflict of interest necessary to the conduct of that joint defense.
Nothing in this subsection (e) shall be construed to limit or otherwise alter
in any way the indemnity obligations of the parties to this Agreement,
including those created by this Agreement, by operation of law or otherwise.
(f) Directors' and Officers' Insurance. Premark shall use its reasonable
----------------------------------
efforts to cause the persons currently serving as officers and/or directors of
Premark who will become effective as of the Distribution Date officers and/or
directors of Tupperware to be covered for a period of three years from the
Distribution Date by the directors' and officers' liability insurance policy
maintained by Premark (provided that Premark may substitute therefor policies
of at least the same coverage and amounts containing terms and conditions
which are not less advantageous than such policy) with respect to matters
covered under the existing policy occurring prior to the Distribution Date
which were committed by such officers and/or directors in their capacity as
such; provided, however, that in no event shall Premark be required to expend
-------- -------
with respect to any year more than 120% of the current annual premium expended
by Premark (the "Insurance Amount") to maintain or procure insurance coverage
pursuant hereto and further provided that if Premark is unable to maintain or
obtain the insurance called for by this subsection 3.06(f), Premark shall use
its reasonable efforts to obtain as much comparable insurance as available for
the Insurance Amount. In the event Premark or any of its successors or assigns
(i) consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Premark
assume the obligations set forth in this subsection. The provisions of this
subsection 3.06(f) are intended to be for the benefit of, and shall be
enforceable by, each such officer and director and his or her heirs and
representatives.
Section 3.07 Use of Names.
------------
(a) Use of Tupperware Name. Any existing printed material showing any
----------------------
affiliation or connection of Premark or any of its Subsidiaries with
Tupperware or any Tupperware Subsidiary may be used by Premark and its
Subsidiaries only for a period ending eight months after the Distribution
Date. On and after the Distribution Date, Premark and its Subsidiaries shall
not otherwise represent to third parties that any of them is affiliated with
Tupperware or any Tupperware Subsidiary.
(b) Use of Premark Name. Any existing printed material showing any
-------------------
affiliation or connection of Tupperware or any of its Subsidiaries with
Premark or any Premark Subsidiary may be used by Tupperware and its
Subsidiaries only for a period ending eight months after the Distribution
Date. On and after the Distribution Date, Tupperware and its Subsidiaries
shall not otherwise represent to third parties that any of them is affiliated
with Premark or any Premark Subsidiary.
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Section 3.08 Transfers Not Effected Prior to the Distribution; Transfers
-----------------------------------------------------------
Deemed Effective as of the Cut-off Date. To the extent that any transfers and
- ---------------------------------------
assumptions contemplated by this Article III shall not have been consummated
prior to the Distribution Date, the parties shall cooperate to effect such
transfers as promptly following the Distribution Date as shall be practicable,
it nonetheless being agreed and understood by all the parties that no party
shall be liable in any manner to any other party for any failure of any of the
transfers contemplated by this Article III to be consummated prior to the
Distribution Date. Subject to the provisions of Section 2.03, nothing herein
shall be deemed to require the transfer of any assets or the assumption of any
Liabilities which by their terms or operation of law cannot be transferred or
assumed; provided, however, that Premark and Tupperware shall, and shall cause
-------- -------
their respective Subsidiaries to, cooperate to seek to obtain any necessary
consents or approvals for the transfer of all assets and Liabilities
contemplated to be transferred pursuant to this Article III. In the event that
any such transfer of assets (other than capital stock of corporations to be
transferred hereunder) or Liabilities has not been consummated, effective as
of and after the Cut-off Date, the party retaining such asset or Liability
shall thereafter hold such asset for the party entitled thereto (at the
expense of the party entitled thereto) and retain such Liability for the
account of the party by whom such Liability is to be assumed, and take such
other action as may be reasonably requested by the party to whom such asset is
to be transferred, or by whom such Liability is to be assumed, as the case may
be, in order to place such party, insofar as reasonably possible, in the same
position as would have existed had such asset or Liability been transferred as
of the Cut-off Date. As and when any such asset or Liability becomes
transferable, such transfer shall be effected forthwith. The parties agree
that, as of the Cut-off Date, each party hereto shall be deemed to have
assumed in accordance with the terms of this Agreement and the Ancillary
Agreements all of the Liabilities, and all duties, obligations and
responsibilities incident thereto, which such party is required to assume
pursuant to the terms hereof and thereof.
Section 3.09 DKI Indemnification. (a) Premark and Tupperware hereby agree
-------------------
that, notwithstanding the provisions of Section 4.01(c), it is their mutual
intention that each Tupperware Indemnitee shall continue after the
Distribution to be a Newco Indemnitee (as defined in the DKI Reorganization
and Distribution Agreement) and to be entitled to the benefit of the DKI
Indemnification. Prior to the Distribution Date, Premark shall use its
reasonable efforts to cause the Tupperware Indemnitees to be entitled to the
benefit of the DKI Indemnification, including efforts to secure the written
agreement of DKI or its successors that Tupperware and its Subsidiaries will
after the Distribution continue to be "Affiliates" for purposes of Section
5.01 of the DKI Reorganization and Distribution Agreement and entitled to
indemnification under such Section 5.01 in accordance with its terms.
(b) After the Distribution Date, Premark and its Affiliates shall use their
respective reasonable efforts to assist the Tupperware Indemnitees in
enforcing the DKI Indemnification with respect to DKI Indemnifiable Losses to
which the Tupperware Indemnitees are or may become subject, including, without
limitation, instituting a lawsuit, action or other proceeding to enforce such
DKI Indemnification (whether to seek to enforce such DKI Indemnification on
behalf of such Tupperware Indemnitee, to seek indemnification with respect to
the Indemnifiable Loss incurred by Premark pursuant to Section 4.01 of this
Agreement or otherwise); provided that such Tupperware Indemnitee shall
reimburse Premark for its reasonable fees and expenses (including, without
limitation, reasonable fees and expenses of Premark's counsel) in connection
with such lawsuit, action or other proceeding (it being understood that if
such lawsuit, action or other proceeding involves matters other than
enforcement of the DKI Indemnification with respect to DKI Indemnifiable
Losses of Tupperware Indemnitees, such reimbursement obligation shall be
limited to such incremental fees and expenses incurred in connection with such
enforcement).
(c) Without limiting the generality of the foregoing, any DKI Indemnifiable
Losses as to which Premark has an enforceable DKI Indemnification shall be
deemed not to have been assumed by any Tupperware Indemnitee in connection
with the Distribution, if and to the extent that such Tupperware Indemnitee
does not have an enforceable DKI Indemnification.
Section 3.10 Premark Guarantees. Tupperware shall use its reasonable efforts
------------------
to cause itself or one of its Affiliates to be substituted in all respects for
Premark in respect of all obligations of Premark under (i) any
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guarantee related to the franchises set forth on Schedule 1.6(a), effective as
of the date that Tupperware next effects a resigning of any franchise
agreement related to any such franchise, and (ii) each of the guarantees and
comfort letters set forth on Schedule 1.6(b), effective as of the next
maturity date after the date hereof of each of the related agreements with
respect to which such guaranty or comfort letter was issued.
ARTICLE IV
INDEMNIFICATION
Section 4.01 Indemnification by Premark. Except with respect to claims for
--------------------------
proceeds of Policies or other amounts received, which shall be governed by
Section 3.06 and Section 4.03, Premark shall indemnify, defend and hold
harmless Tupperware, each Affiliate of Tupperware and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "Tupperware Indemnitees") from and
against each of the following:
(a) The Premark Liabilities and any and all Losses of the Tupperware
Indemnitees arising out of, or due to the failure or alleged failure of
Premark or any of its Affiliates to pay, perform or otherwise discharge in
due course any of the Premark Liabilities.
(b) All Losses of any Tupperware Indemnitee arising (whether before, on
or after the Distribution Date) in connection with the Premark Assets or
the Premark Businesses, whether any such Losses relate to events,
occurrences or circumstances occurring or existing, or whether any such
Losses are asserted, before, on or after the Distribution Date.
(c) In the event that, notwithstanding the provisions of Section 3.09,
any Tupperware Indemnitee cannot enforce the DKI Indemnification with
respect to any DKI Indemnifiable Losses to which such Tupperware Indemnitee
is or may become subject, such DKI Indemnifiable Losses, to the extent and
only to the extent that Premark is able to enforce the DKI Indemnification
with respect to such DKI Indemnifiable Losses.
(d) Fifty percent of any Losses of any Tupperware Indemnitee arising
(whether before, on or after the Distribution Date) in connection with the
Dart Guarantees, whether any such Losses relate to events, occurrences or
circumstances occurring or existing, or whether any such Losses are
asserted, before, on or after the Distribution Date.
(e) All Losses of any Tupperware Indemnitee arising out of or based upon
any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, with
respect to the information set forth in the following parts of any
preliminary or final Form 10 or any amendment thereto: Premark's letter to
its stockholders or under the headings "Certain Special Considerations--
Effects on Premark Common Stock," "Introduction," "The Distribution,"
"Management of Tupperware--Compensation of Executive Officers," and
"Tupperware Corporation Pro Forma Consolidated Financial Information (other
than with respect to information provided by the Tupperware Group)," and
any information under "Summary of Certain Information" derived from
information contained under such headings.
Notwithstanding anything in this Section 4.01 to the contrary, neither Premark
nor any Premark Subsidiary shall have any liability whatsoever to either
Tupperware or any Tupperware Subsidiary in respect of any Tax, except as
otherwise provided in the Tax Sharing Agreement.
Section 4.02 Indemnification by Tupperware. Except with respect to claims
-----------------------------
for proceeds of Policies or other amounts received, which shall be governed by
Section 3.06 and Section 4.03, Tupperware shall indemnify, defend and hold
harmless Premark, each Affiliate of Premark and each of their respective
directors, officers and employees and each of the heirs, executors, successors
and assigns of any of the foregoing (the "Premark Indemnitees") from and
against each of the following:
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(a) The Tupperware Liabilities and any and all Losses of the Premark
Indemnitees arising out of, or due to the failure or alleged failure of
Tupperware or any of its Affiliates to pay, perform or otherwise discharge
in due course any of the Tupperware Liabilities.
(b) All Losses of any Premark Indemnitee arising (whether before, on or
after the Distribution Date) in connection with the Tupperware Assets or
the Tupperware Businesses, whether any such Losses relate to events,
occurrences or circumstances occurring or existing, or whether any such
Losses are asserted, before, on or after the Distribution Date.
(c) All Losses of any Premark Indemnitee arising out of or based upon any
untrue statement or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, with respect to
all information set forth in any preliminary or final Form 10 or any
amendment thereto, except for information set forth under the headings
specified in Section 4.01(e), with respect to which Premark will indemnify
Tupperware, and except for information set forth under the headings
"Arrangements Between Premark and Tupperware Relating to the Distribution,"
and "Certain Transactions."
Notwithstanding anything in this Section 4.02 to the contrary, neither
Tupperware nor any Tupperware Subsidiary shall have any liability whatsoever
to either Premark or any Premark Subsidiary in respect of any Tax, except as
otherwise provided in the Tax Sharing Agreement.
Section 4.03 Limitations on Indemnification Obligations.
------------------------------------------
(a) The amount which any party (an "Indemnifying Party") is or may be
required to pay to any other party (an "Indemnitee") pursuant to Section 4.01
or Section 4.02 shall be reduced (including, without limitation,
retroactively) by any proceeds of Policies and amounts recovered under the DKI
Indemnification or other amounts actually recovered by or on behalf of such
Indemnitee, in reduction of the related Loss. If an Indemnitee shall have
received the payment (an "Indemnity Payment") required by this Agreement from
an Indemnifying Party in respect of any Loss and shall subsequently actually
receive proceeds of Policies or amounts recovered under the DKI
Indemnification or other amounts in respect of such Loss, then such Indemnitee
shall pay to such Indemnifying Party a sum equal to the amount actually
received (up to but not in excess of the amount of any Indemnity Payment made
hereunder). An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by
virtue of the indemnification provisions hereof, have any subrogation rights
with respect thereto, it being expressly understood and agreed that no insurer
or any other third party shall be entitled to a "windfall" (i.e., a benefit
they would not be entitled to receive in the absence of the indemnification
provisions) by virtue of the indemnification provisions hereof.
(b) If any Indemnitee realizes a Tax benefit or detriment in one or more Tax
periods by reason of having incurred an Indemnifiable Loss for which such
Indemnitee receives an Indemnity Payment from an Indemnifying Party, then such
Indemnitee shall pay to such Indemnifying Party an amount equal to the Tax
benefit or such Indemnifying Party shall pay to such Indemnitee an additional
amount equal to the Tax detriment (taking into account any Tax detriment
resulting from the receipt of such additional amounts), as the case may be.
The amount of any Tax benefit or any Tax detriment for a Tax period realized
by an Indemnitee by reason of having incurred an Indemnifiable Loss shall be
deemed to equal the product obtained by multiplying (i) the amount of any
deduction or inclusion in income for such period resulting from such
Indemnifiable Loss or the payment thereof, as the case may be, by (ii) the
highest applicable marginal Tax rate for such period (provided, however, that
--------
the amount of any Tax benefit attributable to an amount that is creditable
shall be deemed to equal the amount of such creditable item). Any payment due
under this Section 4.03(b) with respect to a Tax benefit or Tax detriment
realized by an Indemnitee in a Tax period shall be due and payable within 30
days from the time the return for such Tax period is due, without taking into
account any extension of time granted to the party filing such return.
(c) In the event that an Indemnity Payment shall be denominated in a
currency other than United States dollars, the amount of such payment shall be
translated into United States dollars using the Foreign Exchange Rate for such
currency determined in accordance with the following rules:
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(i) with respect to a Loss arising from payment by a financial
institution under a guarantee, comfort letter, letter of credit,
foreign exchange contract or similar instrument, the Foreign Exchange
Rate for such currency shall be determined as of the date on which such
financial institution shall have been reimbursed;
(ii) with respect to a Loss covered by insurance, the Foreign
Exchange Rate for such currency shall be the Foreign Exchange Rate
employed by the insurance company providing such insurance in settling
such Loss with the Indemnifying Party; and
(iii) with respect to a Loss not covered by clause (i) or (ii) above,
the Foreign Exchange Rate for such currency shall be determined as of
the date that notice of the claim with respect to such Loss shall be
given to the Indemnitee.
Section 4.04 Procedures for Indemnification.
------------------------------
(a) Procedures for Indemnification of Third Party Claims shall be as
follows:
(i) If an Indemnitee shall receive notice or otherwise learn of the
assertion by a Person (including, without limitation, any governmental
entity) who is not a party to this Agreement (or an Affiliate thereof)
or to any Ancillary Agreement of any claim or of the commencement by
any such Person of any Action (a "Third Party Claim") with respect to
which an Indemnifying Party may be obligated to provide indemnification
pursuant to Section 4.01, Section 4.02, or any other Section of this
Agreement, such Indemnitee shall give such Indemnifying Party written
notice thereof promptly after becoming aware of such Third Party Claim;
provided that the failure of any Indemnitee to give notice as provided
--------
in this Section 4.04(a)(i) shall not relieve the related Indemnifying
Party of its obligations under this Article IV, except to the extent
that such Indemnifying Party is prejudiced by such failure to give
notice. Such notice shall describe the Third Party Claim in reasonable
detail and, if ascertainable, shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by such
Indemnitee.
(ii) An Indemnifying Party may elect to defend or to seek to settle
or compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days
of the receipt of notice from an Indemnitee in accordance with Section
4.04(a)(i) (or sooner, if the nature of such Third Party Claim so
requires), the Indemnifying Party shall notify the Indemnitee of its
election whether the Indemnifying Party will assume responsibility for
defending such Third Party Claim, which election shall specify any
reservations or exceptions. After notice from an Indemnifying Party to
an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnifying Party shall not be liable to such Indemnitee
under this Article IV for any legal or other expenses (except expenses
approved in advance by the Indemnifying Party) subsequently incurred by
such Indemnitee in connection with the defense thereof; provided that,
--------
if the defendants in any such claim include both the Indemnifying Party
and one or more Indemnitees and in any Indemnitee's reasonable judgment
a conflict of interest between one or more of such Indemnitees and such
Indemnifying Party exists in respect of such claim or if the
Indemnifying Party shall have assumed responsibility for such claim
with any reservations or exceptions, such Indemnitees shall have the
right to employ separate counsel to represent such Indemnitees and in
that event the reasonable fees and expenses of such separate counsel
(but not more than one separate counsel reasonably satisfactory to the
Indemnifying Party) shall be paid by such Indemnifying Party. If an
Indemnifying Party elects not to assume responsibility for defending a
Third Party Claim, or fails to notify an Indemnitee of its election as
provided in this Section 4.04(a)(ii), such Indemnitee may defend or
(subject to the remainder of this Section 4.04(a)(ii)) seek to
compromise or settle such Third Party Claim. Notwithstanding the
foregoing, neither an Indemnifying Party nor an Indemnitee may settle
or compromise any claim over the objection of the other; provided,
however, that consent to settlement or compromise shall not be
unreasonably withheld. Neither an Indemnifying Party nor an Indemnitee
shall consent to entry of any judgment or enter into any settlement of
any Third Party Claim which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnitee, in
the case of a consent or settlement by an Indemnifying Party, or the
Indemnifying Party, in the case of a consent or settlement by the
Indemnitee, of a written release from all liability in respect to such
Third Party Claim.
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(iii) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the related Indemnitee
shall make available to such Indemnifying Party any personnel or any
books, records or other documents within its control or which it
otherwise has the ability to make available that are necessary or
appropriate for such defense, settlement or compromise, and shall
otherwise cooperate in the defense, settlement or compromise of such
Third Party Claims, subject to the establishment of appropriate
confidentiality arrangements which are reasonably satisfactory to
Premark and Tupperware.
(iv) Notwithstanding anything else in this Section 4.04 to the
contrary, if an Indemnifying Party notifies the related Indemnitee in
writing of such Indemnifying Party's desire to settle or compromise a
Third Party Claim on the basis set forth in such notice (provided that
such settlement or compromise includes as an unconditional term thereof
the giving by the claimant or plaintiff of a written release of the
Indemnitee from all liability in respect thereof) and the Indemnitee
shall notify the Indemnifying Party in writing that such Indemnitee
declines to accept any such settlement or compromise, such Indemnitee
may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole
expense. In such event, the obligation of such Indemnifying Party to
such Indemnitee with respect to such Third Party Claim shall be equal
to (i) the costs and expenses of such Indemnitee prior to the date such
Indemnifying Party notifies such Indemnitee of the offer to settle or
compromise (to the extent such costs and expenses are otherwise
indemnifiable hereunder) plus (ii) the lesser of (A) the amount of any
offer of settlement or compromise which such Indemnitee declined to
accept and (B) the actual out-of-pocket amount such Indemnitee is
obligated to pay subsequent to such date as a result of such
Indemnitee's continuing to pursue such Third Party Claim.
(b) Any claim on account of a Loss which does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the
related Indemnifying Party. Such Indemnifying Party shall have a period of 30
days after the receipt of such notice within which to respond thereto. If such
Indemnifying Party does not respond within such 30-day period, such
Indemnifying Party shall be deemed to have refused to accept responsibility to
make payment. If such Indemnifying Party does not respond within such 30-day
period or rejects such claim in whole or in part, such Indemnitee shall be
free to pursue such remedies as may be available to such party under this
Agreement or under applicable law.
(c) In addition to any adjustments required pursuant to Section 4.03, if the
amount of any Loss shall, at any time subsequent to the payment required by
this Agreement, be reduced by recovery, settlement or otherwise, the amount of
such reduction, less any expenses incurred in connection therewith, shall
promptly be repaid by the Indemnitee to the Indemnifying Party.
(d) In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or
claim relating to such Third Party Claim against any claimant or plaintiff
asserting such Third Party Claim or against any other Person. Such Indemnitee
shall cooperate with such Indemnifying Party in a reasonable manner, and at
the cost and expense of such Indemnifying Party, in prosecuting any subrogated
right or claim.
Section 4.05 Remedies Cumulative. The remedies provided in this Article IV
-------------------
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 4.06 Survival of Indemnities. The obligations of each of Premark and
-----------------------
Tupperware under this Article IV shall survive the sale or other transfer by
it of any assets or businesses or the assignment by it of any Liabilities,
with respect to any Loss of the other related to such assets, businesses or
Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01 Access to Information. From and after the Distribution Date,
---------------------
Premark shall afford to Tupperware and its Representatives reasonable access
(including using reasonable efforts to give access to
17
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Persons or firms possessing information) and duplicating rights during normal
business hours to all records, books, contracts, instruments, computer data
and other data and information (collectively, "Information") within Premark's
possession or in the possession of a Premark Subsidiary relating to
Tupperware, any Tupperware Subsidiary, any Tupperware Assets or the Tupperware
Businesses, insofar as such access is reasonably required by Tupperware or any
Tupperware Subsidiary. Similarly, Tupperware shall afford to Premark and its
Representatives reasonable access (including using reasonable efforts to give
access to Persons or firms possessing Information) and duplicating rights
during normal business hours to Information within Tupperware's possession
relating to Premark or any Premark Subsidiary and insofar as such access is
reasonably required by Premark or any Premark Subsidiary. Information may be
requested under this Article V for, without limitation, audit, accounting,
claims, litigation and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement and the
transactions contemplated hereby.
Section 5.02 Production of Witnesses. After the Distribution Date, each of
-----------------------
Premark and Tupperware shall, and shall cause their respective Subsidiaries
to, use reasonable efforts to make available to the other party and its
Subsidiaries, upon written request, its directors, officers, employees and
agents as witnesses to the extent that any such Person may reasonably be
required (giving consideration to business demands of such Representatives) in
connection with any legal, administrative or other proceedings in which the
requesting party may from time to time be involved.
Section 5.03 Retention of Records. Except as otherwise required by law or
--------------------
agreed to in writing, each of Premark and Tupperware shall, and shall cause
each of their respective Subsidiaries to, retain for a period of at least
seven years following the Distribution Date, all significant Information
relating to the business of the other and the other's Subsidiaries. In
addition, after the expiration of such seven-year period, such Information
shall not be destroyed or otherwise disposed of at any time, unless, prior to
such destruction or disposal, (a) the party proposing to destroy or otherwise
dispose of such Information shall provide no less than 30 days' prior written
notice to the other, specifying in reasonable detail the Information proposed
to be destroyed or disposed of and (b) if a recipient of such notice shall
request in writing prior to the scheduled date for such destruction or
disposal that any of the Information proposed to be destroyed or disposed of
be delivered to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such of the Information as
was requested at the expense of the party requesting such Information.
Section 5.04 Confidentiality. Each of Premark and Tupperware shall, and
---------------
shall cause each of their respective Subsidiaries and Representatives to,
hold, in strict confidence, all material Information concerning the other in
its possession or furnished by the other or the other's Representatives
pursuant to either this Agreement or any Ancillary Agreement (except to the
extent that such Information has been (a) in the public domain through no
fault of such party or (b) later lawfully acquired from other sources by such
party), and each party shall not release or disclose such Information to any
other Person, except its Representatives, unless compelled to disclose by
judicial or administrative process or, as advised by its counsel, by other
requirements of law.
ARTICLE VI
MISCELLANEOUS
-------------
Section 6.01 Complete Agreement; Construction. This Agreement and the
--------------------------------
Ancillary Agreements, including any schedules and exhibits hereto or thereto,
and other agreements and documents referred to herein, shall constitute the
entire agreement between the parties with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter. Notwithstanding any other provisions in this
Agreement to the contrary, in the event and to the extent that there shall be
a conflict between the provisions of this Agreement and the provisions of the
Employee Benefits and Compensation Allocation Agreement or the Tax Sharing
Agreement, the provisions of the Employee Benefits and Compensation Allocation
Agreement or the Tax Sharing Agreement, as appropriate, shall control.
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Section 6.02 Survival of Agreements. Except as otherwise contemplated by
----------------------
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
Section 6.03 Expenses. All costs and expenses related to the Distribution
--------
shall be allocated between Premark and Tupperware as set forth on Schedule
6.03.
Section 6.04 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 6.05 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail),
to the parties at the following addresses (or at such other addresses for a
party as shall be specified by like notice) and shall be deemed given on the
date on which such notice is received:
if to Premark:
Premark International, Inc.
1717 Deerfield Road
Deerfield, Illinois 60015
Attention: General Counsel
if to Tupperware:
Tupperware Corporation
P.O. Box 2353
Orlando, Florida 32802
Attention: General Counsel
Section 6.06 Dispute Resolution. Premark and Tupperware shall each appoint
------------------
two members from their managerial staffs to serve on a joint committee (the
"Dispute Resolution Committee"). The Dispute Resolution Committee shall meet
at either Premark's or Tupperware's offices, whichever is more appropriate in
light of the issue to be discussed, at such time as either party may demand in
writing, for the purpose of resolving any dispute arising under this Agreement
(other than a dispute arising under this Agreement in connection with Section
3.02 which shall be resolved as provided for on Schedules 3.02(a), 3.02(b) or
3.02(c), as appropriate) or the Ancillary Agreements. If the Dispute
Resolution Committee is unable to resolve any dispute submitted to it by any
party hereto within 30 days after such submission, the Dispute Resolution
Committee shall refer the issue to the Chief Executive Officers of Premark and
Tupperware for resolution. If such officers are unable to resolve such dispute
within fifteen days after referral, such dispute shall be referred to binding
arbitration as provided for in Section 6.07. No such dispute shall be the
subject of arbitration or other formal proceeding between the parties hereto
before being considered by the Dispute Resolution Committee and the Chief
Executive Officers of Premark and Tupperware.
Section 6.07 Binding Arbitration. (a) Any controversy, dispute or claim
-------------------
(whether lying in contract or tort) between or among the parties arising out
of or related to this Agreement (other than a dispute arising under this
Agreement in connection with Section 3.02 which shall be resolved as provided
for on Schedules 3.02(a), 3.02(b) or 3.02(c), as appropriate) or the Ancillary
Agreements shall, after the dispute resolution process set forth in Section
6.06 has been completed, be submitted to arbitration in accordance with this
Section 6.07.
(b) Each such controversy, dispute or claim submitted by a party to
arbitration shall be heard by an arbitration panel composed of three
arbitrators, in accordance with the following provisions. Premark and
Tupperware shall each appoint one arbitrator within fifteen days after the
matter has been submitted to arbitration. If any party fails to appoint its
arbitrator within such fifteen day period, any party may apply to the American
Arbitration Association (the "AAA") to appoint an arbitrator on behalf of the
party that has failed to
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appoint its arbitrator. The two arbitrators appointed by, or on behalf of, the
parties shall jointly appoint a third arbitrator, who shall chair the
arbitration panel (the "Chairman"). If the arbitrators appointed by, or on
behalf of, the parties do not succeed in appointing a Chairman within fifteen
days after the latter of the two arbitrators appointed by, or on behalf of,
the parties has been appointed, the Chairman shall, at the request of either
party, be appointed by the AAA. If for any reason an arbitrator is unable to
perform his or her function, he or she shall be replaced and a substitute
shall be appointed in the same manner as the arbitrator replaced.
(c) Except as otherwise stated herein, arbitration proceedings shall be
conducted in accordance with the Commercial Arbitration Rules of the AAA. In
any arbitration proceeding hereunder: (i) proceedings shall, unless otherwise
agreed by the parties, be held in Orlando, Florida; (ii) the arbitration panel
shall have no power to award punitive damages and shall be bound by all
statutes of limitation which would otherwise be applicable in a judicial
action brought by a party; and (iii) the decision of a majority of the
arbitrators (or the Chairman if there is no such majority) shall be final and
binding on the parties to this Agreement and shall be enforceable in any court
of competent jurisdiction. The parties hereby waive any rights to appeal or to
review of such decision by any court or tribunal and also waive any objections
to such enforcement. THE PARTIES HEREBY AGREE TO WAIVE ALL RIGHTS TO TRIAL BY
JURY WITH RESPECT TO ANY CONTROVERSY, DISPUTE OR CLAIM SUBMITTED TO
ARBITRATION UNDER THIS AGREEMENT.
(d) Notice preliminary to, in conjunction with, or incident to any
arbitration proceeding may be sent to the parties by registered or certified
mail (return receipt requested) at the address set forth in Section 6.05 and
personal service is hereby waived. The arbitrators shall award recovery of all
costs and fees incurred in connection with the arbitration and the proceeding,
and obtaining any judgment related thereto, of each disputed matter (including
reasonable attorney's fees and expenses and arbitrator's fees and expenses and
court costs, in each case, with respect to such disputed matter) to the party
that substantially prevails in the arbitration proceeding with respect to such
disputed matter.
(e) No provision of this Section 6.07 shall limit the right of any party to
this Agreement to exercise self-help remedies such as set-off, or to obtain
provisional, equitable or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party
to resort to arbitration.
Section 6.08 Amendments. This Agreement may not be modified or amended
----------
except by an agreement in writing signed by the parties.
Section 6.09 Successors and Assigns. The rights under this Agreement may not
----------------------
be assigned and duties may not be delegated by any party without the written
consent of the other parties, which consent shall not be unreasonably
withheld. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties and their respective successors
and permitted assigns.
Section 6.10 Termination. This Agreement may be terminated and the
-----------
Distribution abandoned at any time prior to the Distribution Date by and in
the sole discretion of the Premark Board without the approval of Tupperware or
of Premark's stockholders. In the event of such termination, no party shall
have any liability of any kind to any other party on account of such
termination.
Section 6.11 No Third Party Beneficiaries. Except for the provisions of
----------------------------
Article IV relating to Indemnitees and subsection 3.06(f) relating to
directors and officers, this Agreement is solely for the benefit of the
parties hereto and their respective Affiliates and should not be deemed to
confer upon third parties (including any employee of Premark or Tupperware or
of any Premark or Tupperware Subsidiary) any remedy, claim, reimbursement,
claim of action or other right in excess of those existing without reference
to this Agreement.
Section 6.12 Titles and Headings. Titles and headings to sections herein are
-------------------
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
20
<PAGE>
Section 6.13 Legal Enforceability. Any provision of this Agreement which is
--------------------
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. Without
prejudice to any rights or remedies otherwise available to any party hereto,
each party hereto acknowledges that damages would be an inadequate remedy for
any breach of the provisions of this Agreement and agrees that the obligations
of the parties hereunder shall be specifically enforceable.
Section 6.14 No Waivers. No failure by any party hereto to take any action
----------
or assert any right hereunder shall be deemed to be a waiver of such right in
the event of the continuation or repetition of the circumstances giving rise
to such right, unless expressly waived in writing by the party against whom
the existence of such waiver is asserted.
Section 6.15 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 6.16 Performance. Each party hereto shall cause to be performed, and
-----------
hereby guarantees the performance of, all actions, agreements and obligations
set forth herein to be performed by any Subsidiary or Affiliate of such party.
21
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
PREMARK INTERNATIONAL, INC.
By: _________________________________
Name:
Title:
TUPPERWARE CORPORATION
By: _________________________________
Name:
Title:
DART INDUSTRIES INC.
By: _________________________________
Name:
Title:
22
<PAGE>
SCHEDULE 3.02(a) DIVIDEND PAYMENT
(a) Within 15 business days after the Cut-off Date, Premark shall prepare
and cause Price Waterhouse LLP ("PW") to perform agreed-upon procedures (at
Premark's sole expense) on the Statement of Management Net Assets (the
"Statement") of the Premark Businesses as of the Cut-off Date which shall be
prepared in accordance with generally accepted accounting principles, as set
forth in the Premark Corporate Accounting Manual, and on a basis consistent
with the methods and practices employed in the preparation and presentation of
the Premark historical consolidated financial statements.
(b) Within said 15 days, Premark shall deliver to Tupperware and Dart a copy
of the Statement together with PW's signed report thereon. Not later than the
fifth business day after Tupperware's and Dart's receipt of the Statement,
Dart shall pay a cash dividend to Premark based upon the Statement, in an
amount such that the Net Debt (as defined below) of the Premark Businesses as
of the Cut-off Date is $50 million; provided, however, that such dividend
payment shall be reduced by the amount, if any, by which Premark's Management
Net Assets (as defined below) exceeds $895 million. It is expressly understood
that the dividend shall be paid notwithstanding the fact that Tupperware may
dispute the Statement pursuant to subparagraph (c) below.
(c) Not later than five business days after receipt of the Statement,
Tupperware may notify Premark that it disputes any item or amount reflected in
the Statement, based solely upon the application of the accounting principles,
methods and practices described in paragraph (a) of this Schedule 3.02(a),
specifying in reasonable detail, the points of disagreement and the amount
thereof. Premark and Tupperware shall use their best efforts to resolve any
disputes as promptly as possible, but in no event later than 60 days after the
Cut-off Date. If this effort fails, Arthur Andersen & Co. shall forthwith be
engaged as an arbitrator (the "Arbitrator") to resolve (based solely on
presentations by Premark, PW, and Tupperware and not by independent review or
audit) all points of disagreement with respect to the Statement. All
determinations made by the Arbitrator shall be final, conclusive and binding
with respect to the Statement. The fees and expenses of the Arbitrator shall
be allocated to Tupperware and Premark by the Arbitrator based on Arbitrator's
judgment of the relative merits of the issues.
(d) For purposes of this Schedule 3.02(a), "Net Debt" means consolidated
short-term borrowings, current portions of long-term debt, and long-term debt,
less total cash and cash equivalents of Premark (including Tupperware).
Management Net Assets consists of management assets less management
liabilities (as described in Section 401 of the Premark Corporate Accounting
Manual) of the Premark Businesses.
(e) Any reduction in the dividend determined by the Arbitrator shall be paid
by Premark to Dart not later than five business days after the receipt of such
determination from the Arbitrator together with a copy of the Statement as
determined by the Arbitrator, together with interest, at a per annum rate of
interest equal to the prime rate than in effect at Citibank, N.A., computed
from the date of payment of the dividend through the date immediately
preceding the date of repayment.
(f) In the event that either party to this Agreement believes that any
extraordinary or unusual event has adversely affected Net Debt as of the Cut-
off Date, such party may notify the other parties to this Agreement and the
Chairman of Premark of such event, together with appropriate detail, not later
than 15 days after the Cut-off Date. Within 5 business days of receipt of such
notice, the Chairman of Premark shall evaluate the impact of such event(s) on
the Net Debt as of the Cut-off Date, determine the adjustment to be made to
the cash dividend, if any, and notify the parties. In the event that such
determination affects the amount of the cash dividend in paragraph (b) above,
either Premark shall repay Dart any amount determined to be an overpayment of
the cash dividend or Dart shall pay Premark any amount determined to be an
underpayment of the cash dividend, as the case may be, as a consequence of the
impact of the extraordinary or unusual event. Any such payment shall include
interest at a per annum rate of interest equal to the prime rate then in
effect at Citibank, N.A., computed from the date of payment of the dividend
through the date immediately preceding the date of payment of any amount
contemplated by this paragraph (f).
(g) Tupperware shall fund 65% of the amount necessary to pay the dividend
declared upon the common stock of Premark on May 1, 1996.
<PAGE>
Exhibit 10.3
FORM OF
TAX SHARING AGREEMENT
BY AND BETWEEN
PREMARK INTERNATIONAL, INC.
AND
TUPPERWARE CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I................................................................... -3-
DEFINITIONS................................................................. -3-
"1995 Fiscal Year"........................................................ -3-
"1995 Tupperware Estimated Tax Benefit"................................... -3-
"1996 Fiscal Year"........................................................ -3-
"AAA"..................................................................... -3-
"Affiliate"............................................................... -3-
"Carryover" and "Carryback"............................................... -3-
"Chairman"................................................................ -3-
"Code".................................................................... -4-
"Compromising Party"...................................................... -4-
"Cutoff Date"............................................................. -4-
"Deemed Tax Reduction".................................................... -4-
"Dispute Resolution Committee"............................................ -4-
"Distribution"............................................................ -4-
"Distribution Agreement".................................................. -4-
"Distribution Date"....................................................... -4-
"DKI"..................................................................... -4-
"DKI Liability"........................................................... -4-
"DKI Refund".............................................................. -4-
"Foreign Taxes"........................................................... -4-
"Granting Party".......................................................... -4-
"Group"................................................................... -5-
"Indemnification Payment"................................................. -5-
"Indemnified Party"....................................................... -5-
"Indemnifying Party"...................................................... -5-
"Joint Contest"........................................................... -5-
"Kraft Agreement"......................................................... -5-
"Law"..................................................................... -5-
"Liable Party"............................................................ -5-
"Non-Compromising Party".................................................. -5-
"Non-Proposing Party"..................................................... -5-
"Participating Party"..................................................... -5-
"Person".................................................................. -5-
"Pre-Distribution Period"................................................. -6-
"Preparing Party"......................................................... -6-
"Prime Rate".............................................................. -6-
"Post-Distribution Period"................................................ -6-
"Premark"................................................................. -6-
"Premark Group"........................................................... -6-
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
"Premark Tax Reduction".................................................. -6-
"Proposing Party"........................................................ -6-
"Restructuring Taxes".................................................... -6-
"Return"................................................................. -7-
"Ruling"................................................................. -7-
"Ruling Request"......................................................... -7-
"Separate Contest"....................................................... -7-
"Service"................................................................ -7-
"State Taxes"............................................................ -7-
"Stereo Business"........................................................ -7-
"Straddle Period"........................................................ -8-
"Taxes".................................................................. -8-
"Tax Adjustment"......................................................... -8-
"Tax Authority".......................................................... -8-
"Tax Benefit"............................................................ -8-
"Tax Contest"............................................................ -9-
"Tax Period"............................................................. -9-
"Tax Records"............................................................ -9-
"Transaction Steps"...................................................... -9-
"Tupperware"............................................................. -9-
"Tupperware 1995 Esimated Tax"........................................... -9-
"Tupperware 1995 Final Tax".............................................. -9-
"Tupperware 1995 Final Tax Benefit"...................................... -9-
"Tupperware Carryback"................................................... -10-
"Tupperware Group"....................................................... -10-
"United States Federal Taxes"............................................ -10-
ARTICLE II................................................................. -10-
ALLOCATION OF TAX LIABILITIES.............................................. -10-
2.01 United States Federal Tax Liabilities............................... -10-
2.02 State Tax Liabilities............................................... -12-
2.03 Foreign Tax Liabilities............................................. -15-
2.04 Restructuring Taxes................................................. -17-
2.05 Liability Arising from Prior Tax Sharing Agreement.................. -18-
ARTICLE III................................................................ -20-
PREPARATION AND FILING OF TAX RETURNS...................................... -20-
3.01 General............................................................. -20-
3.02 Joint Returns....................................................... -20-
3.03 Method of Pro Ration For Straddle Periods........................... -22-
3.04 Tax Accounting Practices............................................ -22-
3.05 Right to Review Returns............................................. -23-
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
ARTICLE IV................................................................ -23-
TAX REFUNDS, CARRYOVERS AND CARRYBACKS.................................... -23-
4.01 Refunds............................................................ -23-
4.02 Carryovers and Carrybacks.......................................... -25-
ARTICLE V................................................................. -26-
TAX PAYMENTS.............................................................. -26-
5.01 Payment of Consolidated Federal Income Tax for Pre-Distribution Pe-
riods.................................................................. -26-
5.02 Payment of State and Foreign Taxes for Which Premark has Filing Re-
sponsibility........................................................... -28-
5.03 Payment of State and Foreign Taxes for Which Tupperware has Filing
Responsibility......................................................... -28-
5.04 State Tax Returns for 1986 through 1990............................ -28-
5.05 Indemnification Payments........................................... -29-
ARTICLE VI................................................................ -30-
TAX RECORDS: COOPERATION.................................................. -30-
6.01 Tax Records........................................................ -30-
6.02 Cooperation........................................................ -31-
ARTICLE VII............................................................... -31-
TAX AUDITS AND APPEALS.................................................... -31-
7.01 Notice............................................................. -31-
7.02 Control of Audits and Appeals...................................... -32-
7.03 Consent to Settlements in Joint Contests........................... -33-
7.04 Expenses........................................................... -34-
ARTICLE VIII.............................................................. -34-
DISPUTE RESOLUTION........................................................ -34-
8.01 Good-Faith Negotiation............................................. -34-
8.02 Binding Arbitration................................................ -35-
ARTICLE IX................................................................ -37-
MISCELLANEOUS MATTERS..................................................... -37-
9.01 No Inconsistent Actions............................................ -37-
9.02 Amendment and Waiver............................................... -39-
9.03 Tax Allocation Agreements.......................................... -39-
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
9.04 Entire Agreement; Inconsistent Provisions........................... -40-
9.05 Affiliate Obligations............................................... -40-
9.06 Further Action...................................................... -40-
9.07 Time for Notice..................................................... -40-
9.08 Notices............................................................. -40-
9.09 Remedies............................................................ -41-
9.10 Successors and Assigns.............................................. -41-
9.11 Severability........................................................ -42-
9.12 Counterparts........................................................ -42-
9.13 Descriptive Headings................................................ -42-
9.14 No Third-Party Beneficiaries........................................ -42-
9.15 Construction........................................................ -42-
9.16 Form of Payments and Late Payments.................................. -42-
9.17 Treatment of Payments............................................... -43-
9.18 Governing Law....................................................... -43-
9.19 Confidentiality..................................................... -43-
</TABLE>
-iv-
<PAGE>
TAX SHARING AGREEMENT
---------------------
THIS TAX SHARING AGREEMENT ("Agreement") is made and entered into as of
__________, 1996, by and between Premark International Inc., a Delaware
corporation ("Premark") and Tupperware Corporation, a Delaware corporation
("Tupperware"), on behalf of themselves and their respective Affiliates (as
defined below).
RECITALS
--------
WHEREAS, the Premark Board has determined that it is appropriate and
desirable to distribute all outstanding shares of Tupperware common stock on a
pro rata basis to the holders of the Premark common stock (the "Distribution")
- --- ----
in a transaction that will qualify as a tax-free distribution for federal
income tax purposes under Section 355 of the Code (as defined below); and
WHEREAS, Tupperware and its Affiliates will accordingly cease to be members
of the affiliated group (within the meaning of Section 1504(a) of the Code) of
which Premark is the common parent, effective as of the Distribution Date; and
WHEREAS, Premark and Tupperware have set forth the principal corporate
transactions required to effect such Distribution in the Distribution
Agreement between Premark and Tupperware dated as of the date hereof, and to
which this Agreement is attached as an exhibit (the "Distribution Agreement");
and
WHEREAS, Premark and Tupperware desire to provide for and agree upon the
allocation of liabilities for Taxes with respect to the parties prior to,
arising out of, and subsequent to the Distribution; and
WHEREAS, the parties hereto also desire to provide for: (1) the preparation
and filing of Tax Returns along with the payment of Taxes shown due and
payable thereon, (2) the retention and maintenance of relevant records
necessary to prepare and file appropriate Tax Returns, as well as the
provision for appropriate access to those records by the parties to this
Agreement, (3) the conduct of audits, examinations and proceedings by
appropriate governmental entities which could result in a redetermination of
Taxes of the parties to this Agreement, (4) the treatment of refunds of Taxes
and Carryovers and Carrybacks of the parties, (5) the cooperation of all
parties with one another in order to fulfill their duties and responsibilities
under this Agreement and under the Code and other applicable Law, and (6) any
other matters related to Taxes.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and conditions hereinafter contained, the parties hereto
agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
As used in this Agreement, (including the recitals hereof), the following
terms shall have the following meanings:
"1995 Fiscal Year" has the meaning set forth in Section 5.01 below.
"1995 Tupperware Estimated Tax Benefit" has the meaning set forth in
Section 5.01(a) below.
"1996 Fiscal Year" has the meaning set forth in Section 5.01 below.
"AAA" has the meaning set forth in Section 8.02(b) below.
"Affiliate" means any Person that directly or indirectly controls, is
under the control of, or is under common control with, the Person in
question. "Control" of a Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through ownership or voting
securities, by contract or otherwise. Except as otherwise provided herein,
the term "Affiliate" shall refer to Affiliates of a Person determined
immediately after the Distribution Date.
-1-
<PAGE>
"Carryover" and "Carryback" mean any net operating loss, net capital
loss, excess tax credit, or other similar Tax item which may or must be
carried forward or back, respectively, from one Tax Period to another under
the Code or other applicable Laws.
"Chairman" has the meaning set forth in Section 8.02(b) below.
"Code" means the U. S. Internal Revenue Code of 1986, as amended, or any
successor law.
"Compromising Party" has the meaning set forth in Section 7.03(b) below.
"Cutoff Date" has the meaning set forth in Section 3.03 below.
"Deemed Tax Reduction" has the meaning set forth in Section 4.02(c)
below.
"Dispute Resolution Committee" has the meaning set forth in Section 8.01
below.
"Distribution" has the meaning set forth in the Recitals above.
"Distribution Agreement" has the meaning set forth in the Recitals above.
"Distribution Date" means the effective date of the Distribution as set
forth in the Distribution Agreement.
"DKI" has the meaning set forth in Section 2.05(a) below.
"DKI Liability" has the meaning set forth in Section 2.05(c) below.
"DKI Refund" has the meaning set forth in Section 2.05(c) below.
"Foreign Taxes" means any Taxes imposed or collected by any foreign
government, and the term "Foreign Tax" means any one of the foregoing
Foreign Taxes.
"Granting Party" has the meaning set forth in Section 7.02(b)(1) below.
"Group" means each of the Premark Group and the Tupperware Group whenever
no distinction is otherwise required between them.
"Indemnification Payment" means a payment subject to Section 5.05 below.
"Indemnified Party" has the meaning set forth in Section 5.05 below.
"Indemnifying Party" has the meaning set forth in Section 5.05 below.
"Joint Contest" means any Tax Contest seeking a redetermination of Taxes
which involves or could involve one or more members of both the Premark
Group and the Tupperware Group.
"Kraft Agreement" has the meaning set forth in Section 2.05(a) below.
"Law" means the law of any governmental entity or political subdivision
thereof, other than the Code, relating to any Tax.
"Liable Party" has the meaning set forth in Section 2.01(c)(3) below.
"Non-Compromising Party" has the meaning set forth in Section 7.03(b)
below.
"Non-Proposing Party" has the meaning set forth in Section 9.01 below.
"Participating Party" has the meaning set forth in Section 7.02(b)(1)
below.
"Person" means any individual and any partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization
or other business entity formed or operating under United States or foreign
law.
"Pre-Distribution Period" means any Tax Period ending on or before the
Distribution Date, and, in the case of any Tax Period that begins before
and ends after the Distribution Date, the portion of such Tax Period ending
on the Distribution Date.
"Preparing Party" has the meaning set forth in Section 3.04 below.
"Prime Rate" means the prime interest rate published in the Wall Street
Journal from time to time.
-2-
<PAGE>
"Post-Distribution Period" means any Tax Period beginning after the
Distribution Date, and in the case of any Tax Period that begins before and
ends after the Distribution Date, the portion of such Tax Period ending
after the Distribution Date.
"Premark" has the meaning set forth in the Recitals above.
"Premark Group" means Premark and its Affiliates.
"Premark Tax Reduction" has the meaning set forth in Section 4.02(b)
below.
"Proposing Party" has the meaning set forth in Section 9.01 below.
"Restructuring Taxes" means any Taxes incurred by or imposed on (or
deemed to be incurred or imposed on) either Premark or Tupperware (or their
respective Affiliates) resulting from any of the Transaction Steps
(including, without limitation, any United States federal income Taxes
attributable to the recognition of intercompany gains or any other deferred
Taxes that must be taken into account as a result of any of the Transaction
Steps). For purposes of the preceding sentence, with respect to any
intercompany gain or other item of income realized or taken into account as
the result of any of the Transaction Steps, such item of gain or income
shall be deemed to result in Restructuring Taxes equal to the product
obtained by multiplying (i) the amount of such item of gain or income by
(ii) the highest applicable marginal Tax rate under the Code or other
applicable Law.
"Return" means any report of Taxes due, any information return with
respect to Taxes, or any other similar report, statement, declaration, or
document required to be filed under the Code or other Laws, any claims for
refund of Taxes paid, and any amendments or supplements to any of the
foregoing.
"Ruling" means the private letter ruling issued by the Service in reply
to the Ruling Request (and, in the event Premark and Tupperware join in
requesting an amendment or supplement thereto, such amendment or
supplemental ruling).
"Ruling Request" means the private letter ruling request filed by the
parties with the Service on December 15, 1995 (as modified or supplemented
by any materials submitted to the Service), seeking rulings that, inter
alia, the Distribution will qualify for federal income tax purposes as a
tax-free distribution under Section 355 of the Code.
"Separate Contest" means a Tax Contest which involves (i) only Premark
and members of the Premark Group, or (ii) only Tupperware and members of
the Tupperware Group.
"Service" means the United States Internal Revenue Service and any
successor department, agency or organization of the United States.
"State Taxes" means all Taxes imposed or collected by any state or local
government in the United States (including possessions and territories of
the United States), and the term "State Tax" means any one of the foregoing
State Taxes.
"Stero Business" has the meaning set forth in Section 9.01(b) below.
"Straddle Period" means (i) any Tax Period that begins before and ends
after the Distribution Date, (ii) any Short Period that ends on the
Distribution Date and (iii) any Short Period that begins on the first day
following the Distribution Date. The term "Short Period" means any Tax
Period which is based on an accounting period which is shorter than the
normal accounting period used for determining such Tax (e.g., in the case
of the United States federal income Tax, any Tax Period of less than one
year).
"Taxes" means all federal, state, territorial, local, foreign and other
net income, gross income, gross receipts, sales, use, value added, ad
valorem, transfer, franchise, profits, license, lease, service, service
use, withholding, payroll, employment, unemployment insurance, workers
compensation, social security, excise, severance, stamp, business license,
occupation, premium, property, environmental, windfall profits, customs,
duties, alternative minimum, estimated or other taxes, fees, premiums,
assessments or charges or any kind whatever imposed or collected by any
governmental entity or political subdivision thereof, which any member of
the Premark Group or the Tupperware Group is required to pay, collect or
withhold, together with any interest and any penalties, additions to Tax or
additional amounts with respect thereto, and the term "Tax" means any one
of the foregoing Taxes.
-3-
<PAGE>
"Tax Adjustment" has the meaning provided in Section 2.01(c) below.
"Tax Authority" means, with respect to any Tax, the governmental entity
or political subdivision thereof that imposes such Tax and the agency (if
any) charged with the determination or collection of such Taxes for such
entity or subdivision.
"Tax Benefit" means any refund, credit Carryover, Carryback or other
reduction in otherwise required Tax payments. Such term does not include a
decrease in any Tax in one Tax Period that results from a Tax Adjustment in
another Tax Period, such as an increase in a deduction for depreciation
that results from a determination that, in a previous Tax Period, an
expenditure is capitalized and not deducted, or an item of gain is
recognized.
"Tax Contest" means an audit, review, examination, or any other
administrative or judicial proceeding (including without limitation any
determination with respect to a claim for refund) with the purpose or
effect of redetermining Taxes of any member of either the Premark Group or
the Tupperware Group for
(1) any Pre-Distribution Period,
(2) any Straddle Period, or
(3) any Post-Distribution Period, if such proceeding could result in
any Tax Adjustment or Tax Benefit for any Pre-Distribution Period
or Straddle Period (without regard to whether such matter was
initiated by an appropriate Tax Authority or in response to a
claim for a refund of Taxes).
"Tax Period" means, with respect to any Tax, the period for which the Tax
is reported as provided under the Code or other applicable Laws,
"Tax Records" has the meaning set forth in Section 6.01(a) below.
"Transaction Steps" means the transaction steps as set forth in Articles
II and III of the Distribution Agreement.
"Tupperware" has the meaning set forth in the Recitals above.
"Tupperware 1995 Estimated Tax" has the meaning set forth in Section
5.01(a) below.
"Tupperware 1995 Final Tax" has the meaning set forth in Section 5.01(a)
below.
"Tupperware 1995 Final Tax Benefit" has the meaning set forth in Section
5.01(a) below.
"Tupperware Carryback" has the meaning set forth in Section 4.02(a)
below.
"Tupperware Group" means Tupperware and its Affiliates; provided,
however, that for any Pre-Distribution Period, Dart Italia SpA and Dart
Industries Canada Limited shall be treated as included in the Tupperware
Group.
"United States Federal Taxes" means all Taxes imposed or collected by the
United States Federal Government, and the term "United States Federal Tax"
means any one of the foregoing United States Federal Taxes.
Any capitalized term not otherwise defined in this Agreement shall have
the meaning ascribed to it in the Distribution Agreement.
ARTICLE II
----------
ALLOCATION OF TAX LIABILITIES
-----------------------------
2.01 United States Federal Tax Liabilities.
-------------------------------------
(a) Subject to Sections 2.04 and 2.05, Premark and its Affiliates shall
be liable for, and shall indemnify and hold Tupperware and the Tupperware
Group harmless from:
(1) any United States Federal Taxes for any Pre-Distribution Period
imposed on Premark, Tupperware or their respective Affiliates, but only to
the extent such Taxes arise from the income, profits, or transactions of,
or are otherwise attributable to, Premark or any member of the Premark
Group; and
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(2) all United States Federal Taxes imposed on, or with respect to,
Premark and its Affiliates for any Post-Distribution Period.
(b) Subject to Sections 2.04 and 2.05, Tupperware and its Affiliates
shall be liable for, and shall indemnify and hold Premark and the Premark
Group harmless from:
(1) any United States Federal Taxes for any Pre-Distribution Period
imposed on Premark, Tupperware or their respective Affiliates, but only to
the extent such Taxes arise from the income, profits, or transactions of,
or are otherwise attributable to, Tupperware or any member of the
Tupperware Group; and
(2) all United States Federal Taxes imposed on, or with respect to,
Tupperware and its Affiliates for any Post-Distribution Period.
(c) For purposes of this Section 2.01, if, as a result of any Tax
Contest, there is any redetermination of United States Federal Taxes on a
consolidated basis for any Pre-Distribution Period, the determination of
whether additional United States Federal Taxes imposed on Premark or
Tupperware (or their respective Affiliates) for any Pre-Distribution Period
shall be deemed to arise from the income, profits or transactions of, or
are otherwise attributable to, Premark or Tupperware (or their respective
Affiliates), shall be made pursuant to the following principles:
(1) Each party shall compute the difference between (A) the recomputed
consolidated federal tax liability for each Pre-Distribution Period
affected, taking into account solely those adjustments which relate to or
arise out of the income, profits or activities of such party or its
Affiliates, and (B) the consolidated federal tax liability of the
consolidated group for such Tax Period based on the Tax Return as
originally filed (the difference between (A) and (B) shall be referred to
herein as a party's "Tax Adjustment").
(2) If each party's Tax Adjustment for the Tax Period is greater than
or equal to zero, each party shall then be liable for that portion of
additional Taxes equal to the amount obtained by multiplying the additional
Taxes by a percentage equal to such party's Tax Adjustment divided by the
aggregate Tax Adjustment of the parties.
(3) If one party's Tax Adjustment for the Tax Period is greater than
zero (the "Liable Party") and the other party's Tax Adjustment for the Tax
Period is less than zero (the "Other Party"), the Liable Party shall be
responsible for all of the additional Taxes owed for such Tax Period. In
addition, the Liable Party shall make an Indemnification Payment to the
Other Party equal to the Other Party's Tax Adjustment for such Tax Period
(for this purpose, the Tax Adjustment of the Other Party shall be deemed to
be positive); provided, however, that such Indemnification Payment shall
not exceed the amount by which the Liable Party's Tax Adjustment exceeds
the additional Taxes for the Tax Period. Further, the Other Party shall be
entitled to any refund received in respect of such Tax Period.
(4) If each party's Tax Adjustment for the Tax Period is less than or
equal to zero, each party shall be entitled to that portion of any refund
received in respect of such Tax Period equal to the amount obtained by
multiplying the amount of the refund by a percentage equal to such party's
Tax Adjustment divided by the aggregate Tax Adjustment of the parties.
2.02 State Tax Liabilities. Subject to sections 2.04 and 2.05, each party's
---------------------
liability for State Taxes shall be determined under this Section 2.02.
(a) Premark and its Affiliates shall be liable for, and shall indemnify
and hold Tupperware and the Tupperware Group harmless from, the following
State Taxes:
(1) in the case of any Pre-Distribution Period: (A) any State Taxes
imposed with respect to a separate Tax Return filed by Premark or any member
of the Premark Group for such Tax Period, and (B) with respect to any joint,
combined, consolidated or unitary Tax Return filed for such Tax Period, any
State Taxes for
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<PAGE>
such Tax Period, whether imposed on Premark or Tupperware (or their respective
Affiliates), but only to the extent such Taxes arise from the income, profits,
or transactions of, or are otherwise attributable to, Premark or any member of
the Premark Group; and
(2) any State Taxes imposed on, or with respect to, Premark or any
member of the Premark Group for any Post-Distribution Period.
(b) Tupperware and its Affiliates shall be liable for, and shall indemnify
and hold Premark and the Premark Group harmless from, the following State
Taxes:
(l) in the case of any Pre-Distribution Period: (A) any State Taxes
imposed with respect to a separate Tax Return filed by Tupperware or any
member of the Tupperware Group for such Tax Period, and (B) with respect any
joint, combined, consolidated or unitary Tax Return filed for such Tax Period,
any State Taxes for such Tax Period, whether imposed on Premark or Tupperware
(or their respective Affiliates), but only to the extent such Taxes arise from
the income, profits, or transactions of, or are otherwise attributable to,
Tupperware or any member of the Tupperware Group; and
(2) any State Taxes imposed on, or with respect to, Tupperware or any
member of the Tupperware Group for any Post-Distribution Period.
(c) For purposes of Section 2.02(a)(1)(B) and 2.02(b)(1)(B) hereof, the
determination of whether additional State Taxes for any Pre-Distribution
Period shall be deemed to arise from the income, profits or transactions of,
or to otherwise be attributable to, a party, shall be made pursuant to the
following principles:
(1) Each party shall compute the difference between (A) the recomputed
net taxable income (computed in accordance with the rules applied by the state
in question) for each Pre-Distribution Period affected, and (B) the net
taxable income of its Group for such Tax Period based on the State Tax Return
as originally filed (the difference between (A) and (B) shall be referred to
herein as a party's "State Tax Adjustment").
(2) If each party's State Tax Adjustment for the Tax Period is greater
than or equal to zero, each party shall then be liable for that portion of
additional Taxes equal to the amount obtained by multiplying the additional
State Taxes by a percentage equal to such party's State Tax Adjustment divided
by the aggregate State Tax Adjustment of the parties.
(3) If one party's State Tax Adjustment for the Tax Period is greater
than zero and the other party's State Tax Adjustment for the Tax Period is
less than zero, the liable party shall be responsible for all of the
additional Taxes owed for such Tax Period (provided, however, that such party
shall not be liable for making any payment to the other party in respect of
such other party's negative State Tax Adjustment). In addition, the other
party shall be entitled to any refund received in respect of such Tax Period.
(4) If each party's State Tax Adjustment for the Tax Period is less than
or equal to zero, each party shall be entitled to that portion of any refund
received in respect of such Tax Period equal to the amount obtained by
multiplying the amount of the refund by a percentage equal to such party's
State Tax Adjustment divided by the aggregate State Tax Adjustment of the
parties.
(d) For purposes of determining liability for State Taxes under this
Section 2.02, for any Pre-Distribution Period during which the assets and
business of Wilsonart International, Inc. or the West Bend Company constituted
a division of Dart Industries Inc., Wilsonart International, Inc. and The West
Bend Company shall be treated as separate entities included within the Premark
Group.
(e) Notwithstanding anything to the contrary above, with respect to any
State franchise Tax that is due and payable after the Cutoff Date, the party
legally responsible for filing the Return on which such Tax is reported shall
be liable for, and shall indemnify and hold the other party harmless from,
such Tax.
(f) Notwithstanding anything to the contrary above, with respect to any
joint, combined, consolidated or unitary State Tax Return for any Pre-
Distribution Period, if Premark or Tupperware (or any of their respective
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<PAGE>
Affiliates) is required to file an amended Return (or Returns) on a separate
company basis, each Person filing such a separate Return shall be liable for,
and shall hold the other parties to this Agreement harmless from, any Taxes
owed with respect to such separate Return (or Returns).
2.03 Foreign Tax Liabilities.
-----------------------
(a) Subject to Sections 2.04 and 2.05, each party's liability for Foreign
Taxes shall be determined under this Section 2.03(a).
(1) Premark and its Affiliates shall be liable for, and shall indemnify
and hold Tupperware and the Tupperware Group harmless from, the following
Foreign Taxes:
(A) in the case of any Pre-Distribution Period: (i) any Foreign Taxes
imposed with respect to a separate Tax Return filed by Premark or any member
of the Premark Group for such Tax Period, and (ii) with respect to any joint,
combined, consolidated or unitary Tax Return filed for such Tax Period, any
Foreign Taxes for such Tax Period imposed on Premark or Tupperware (or their
respective Affiliates) but only to the extent such Taxes arise from the
income, profits, or transactions of, or are otherwise attributable to, Premark
or any member of the Premark Group; and
(B) any Foreign Taxes imposed on, or with respect to, Premark or any
member of the Premark Group for any Post-Distribution Period.
(2) Tupperware and its Affiliates shall be liable for, and shall
indemnify and hold Premark and the Premark Group harmless from, the following
Foreign Taxes:
(A) in the case of any Pre-Distribution Period: (i) any Foreign Taxes
imposed with respect to a separate Tax Return filed by Tupperware or any
member of the Tupperware Group for such Tax Period, and (ii) with respect to
any joint, combined, consolidated or unitary Tax Return filed for such Tax
Period, any Foreign Taxes for such Tax Period imposed on Premark or Tupperware
(or their respective Affiliates) but only to the extent such Taxes arise from
the income, profits, or transactions of, or are otherwise attributable to,
Tupperware or any member of the Tupperware Group; and
(B) any Foreign Taxes imposed on, or with respect to Tupperware or any
member of the Tupperware Group for any Post-Distribution Period.
(3) For purposes of Section 2.03(a)(1)(A)(ii) and 2.03(a)(2)(A)(ii)
hereof, the determination of whether additional Foreign Taxes for any Pre-
Distribution Period shall be deemed to arise from the income, profits or
transactions of, or to otherwise be attributable to, a party, shall be made in
the same manner as provided in Section 2.01(c) hereof.
(b) The parties hereby agree that (i) the distribution by Wavebest
Limited, a U.K. corporation, of the stock of DILHC (as such corporation is
defined in the Distribution Agreement) to Dart Industries Inc., and (ii) the
distribution by Dart Industries Inc. of Wavebest Limited to Premark, pursuant
to the Transaction Steps, shall be reported for United States federal income
Tax purposes in accordance with the principles of Temp. Reg. Section 7.367(b)-
10(d). For this purpose, the fair market value of Wavebest Limited, DILHC,
Dart Industries Inc. and their subsidiaries shall be determined based on the
historic earnings of each such company.
2.04 Restructuring Taxes.
-------------------
(a) Except as otherwise provided below in Sections 2.04(b) and 2.04(c), in
the case of any Restructuring Taxes, Premark and its Affiliates shall be
liable for, and shall indemnify and hold Tupperware and the Tupperware Group
harmless from, 45% of such Tax and Tupperware and its Affiliates shall be
liable for, and shall indemnify and hold Premark and the Premark Group
harmless from, 55% of such Tax (provided, however, that in the case of any
deemed Restructuring Tax computed in accordance with the last sentence of the
definition of Restructuring Tax in Article I hereof, the party responsible for
filing the Tax Return to which such Restructuring Tax relates shall notify the
other party in writing of the amount of such Restructuring Tax, and the other
party shall pay to the party filing such Return such other party's share of
the deemed Restructuring Tax within 30 days of the due date of the Return to
which such Restructuring Tax relates (without regard to any extension
thereof)).
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<PAGE>
(b) Notwithstanding anything to the contrary in Section 2.04, Premark and
its Affiliates shall be liable for, and shall indemnify and hold Tupperware
and the Tupperware Group harmless from, any Tax resulting from recognition of
the DLC Deferred Gain by reason of one or more of the transactions described
in the Transaction Steps; provided, however, that if the amount of the DLC
Deferred Gain is increased as the result of any Tax Contest, any additional
Tax resulting from such increase shall be treated as a Restructuring Tax and
shall be governed by Section 2.04(a) hereof. For purposes of this Section
2.04(b), the term "DLC Deferred Gain" shall refer to the intercompany gain
realized (and deferred for federal income tax purposes) in connection with the
transfer by Dart Industries Inc. of certain real property located in Osceola
and Orange County Florida to Premark in 1988.
(c) Notwithstanding the above, in the event that either party (or any
Affiliate or employee, officer or director of such party) takes any action
inconsistent with, or fails to take any action required by, the Ruling Request
or the Ruling (or in accordance with the Transaction Steps), then such party
shall be liable for, and shall indemnify and hold the other party and its
Group harmless from, 100% of the Restructuring Taxes resulting from such
action or failure to act.
2.05 Liability Arising from Prior Tax Sharing Agreement.
--------------------------------------------------
(a) With respect to any liability imposed on or incurred by Premark under
the Tax Sharing Agreement by and between Dart & Kraft, Inc., a Delaware
corporation ("DKI") and Premark, dated September 4, 1986 (the "Kraft
Agreement"), Tupperware and its Affiliates shall indemnify and hold Premark
and the Premark Group harmless from any liability arising from the income,
profits, or transactions of, or otherwise attributable to, Tupperware or any
member of the Tupperware Group. Notwithstanding the above, Premark shall be
liable to Kraft for all interest owing under the Kraft Agreement, in
accordance with the terms thereof, and Tupperware shall not be liable to
indemnify Premark for any such interest. For purposes of this Section 2.05,
the determination of whether any liability imposed on or incurred by Premark
arose from the income, profits or transactions of, or was otherwise
attributable to, Tupperware or any member of the Tupperware Group shall be
made in the same manner as provided in Section 2.01(c) hereof. In addition,
for purposes of determining Tupperware's liability under this Section 2.05,
Wilsonart International, Inc., and The West Bend Company shall be treated as
included within the Premark Group, and any liability otherwise attributable to
Dart Industries Inc. shall be apportioned between Tupperware and Premark in
the same manner as provided in Section 2.02(d).
(b) Premark and Tupperware hereby agree that it is their mutual intention
that Premark, as a signatory to the Kraft Agreement, shall have primarily
responsibility, subject to any limitations contained in this Section 2.05, for
any dealings or negotiations with DKI with respect to the Kraft Agreement;
including, without limitation, the payment to DKI of any amounts owing under
the Kraft Agreement (including any interest thereon) as well as the receipt of
any amounts payable by DKI (including any interest thereon) under the Kraft
Agreement. Notwithstanding the foregoing, the parties hereby agree that
Tupperware shall have the right to participate fully in any negotiations or
other dealings which could affect Tupperware's liability (or entitlement to
payment) under the Kraft Agreement. Premark hereby agrees that, with respect
to any issue which involves or could involve Tupperware's liability to Premark
under this Section 2.05, Premark shall not have the right to settle such issue
without the prior consent of Tupperware (which consent shall not be
unreasonably withheld); provided, however, that if Premark desires to settle
such issue on specified terms and Tupperware refuses to consent to settlement
on such terms, Tupperware shall indemnify Premark from and against any outcome
less favorable than the settlement which Premark was willing to accept. With
respect to any matter arising under the Kraft Agreement, each of Tupperware
and Premark hereby agrees that it shall not participate in the negotiation,
settlement or other resolution of such matter in a manner discriminating
against the other party's interests under the Kraft Agreement.
(c) Premark and Tupperware hereby agree that any payment owed by DKI to
Premark under the Kraft Agreement resulting from the carryback of net
operating losses from Tax Period(s) ending December 27, 1986,
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<PAGE>
including any interest owed thereon (the "DKI Refund") shall be applied
against the aggregate amount, if any, owed by Premark and Tupperware to DKI
under the Kraft Agreement, excluding any interest owed thereon (the "DKI
Liability") as follows:
(i) The DKI Liability shall first be reduced (without regard to the
extent to which such liability is attributable to items relating to Premark or
Tupperware) by the amount of the DKI Refund; and
(ii) Any remaining DKI Liability (or excess DKI Refund) shall then be
allocated to each of Premark and Tupperware in proportion to each party's
respective share of the DKI Liability (applying the principles of Section
2.05(a) hereof).
ARTICLE III
-----------
PREPARATION AND FILING OF TAX RETURNS
-------------------------------------
3.01 General. Except as otherwise provided in this Article III, Tax Returns
-------
shall be prepared and filed by the Person liable for the Tax reported on such
Tax Return, or otherwise obligated to file such Return, under the Code or
other applicable Laws. Without limiting the foregoing, the party responsible
for filing such a Return shall also be responsible for filing and/or
responding to any revenue agent request or any other formal or informal
request for information or otherwise relating to such Return by the Service or
any other applicable Tax Authority. The parties shall render assistance and
cooperate with one another in accordance with Section 6.02 hereof with respect
to the preparation and filing of Tax Returns.
3.02 Joint Returns.
-------------
(a) Any Tax Returns for United States Federal Taxes imposed for any Pre-
Distribution Period which reflect Taxes for which one or more members of both
the Premark Group and the Tupperware Group have liability under Article II
hereof (including, without limitation, Premark's consolidated federal income
Tax Return for the Tax Period in which the Distribution occurs) shall be
prepared by and filed by Premark. In furtherance of, and not by limitation of,
the cooperation and assistance required by Section 6.02, Tupperware shall, in
connection with any Tax Return for United States federal income Taxes for any
Pre-Distribution Period filed after the Distribution Date for which Premark
has filing responsibility under this Agreement and which reflects income or
transactions attributable to the Tupperware Group and for which the Tupperware
Group has liability under Article II hereof, provide Premark with (i) a true
and correct consolidated federal income Tax Return for Tupperware and its
Affiliates for the Tax Period, together with all accompanying workpapers and
other computations of the consolidated federal income Tax liability of
Tupperware and its Affiliates, (ii) true and correct separate federal income
Tax Returns for Tupperware and each of its Affiliates, together with all
accompanying workpapers and other computations of separate federal income Tax
liability for Tupperware and each of its Affiliates; and (iii) a true and
correct reconciliation of book income to federal taxable income for Tupperware
and each of its Affiliates. Tupperware and each of its Affiliates shall
certify, under penalties of perjury, that any and all information provided
pursuant to this Section 3.02(a) is true, accurate and complete. With respect
to the Tax Period ending on December 30, 1995, Tupperware hereby agrees to
provide Premark with all such Returns, workpapers and computations on or
before July 15, 1996. With respect to the Tax Period ending on December 28,
1996, Tupperware hereby agrees to provide Premark with all such Returns,
workpapers and computations on or before, June 30, 1997. If Tupperware fails
to provide any information required by this Section 3.02 within the time frame
specified herein, Premark may file the applicable Returns based on the
information available at the time such Returns are due and Tupperware shall be
liable for, and shall indemnify Premark and its Affiliates from, all Taxes or
other costs imposed on or with respect to Premark or Tupperware (and their
respective Affiliates) as a result of Tupperware's failure to provide such
information. In addition, with respect to any information required to be
provided by Tupperware or its Affiliates pursuant to this Section 3.02, (1)
Premark shall utilize such information in the preparation of the appropriate
Returns, as provided by Tupperware or its Affiliates, except to the extent (a)
Tupperware provides its prior written consent to any change in such
information, or (b) Premark determines in good faith that such information is
inaccurate or incomplete in
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a material respect, and (2) Tupperware and its Affiliates agree to indemnify
and hold Premark and its Affiliates harmless from and against any cost, fine,
penalty or other expense of any kind attributable to the misconduct or
negligence of Tupperware or its Affiliates in supplying Premark with
inaccurate or incomplete information.
(b) Any Tax Returns for State Taxes for any Pre-Distribution Period which
reflect Taxes for which one or more members of the Premark Group and the
Tupperware Group have liability under Article II hereof, shall be prepared and
filed by Premark (except as otherwise provided on Schedule I attached hereto).
The final five sentences of Section 3.02(a) hereof shall apply mutatis
-------
mutandis to all State Tax Returns for any Pre-Distribution Period that Premark
- --------
must prepare and/or file under this Agreement that is measured by income and
that includes any income or transactions attributable to Tupperware or any
member of the Tupperware Group.
(c) Any Tax Returns for Foreign Taxes for any Pre-Distribution Period
which reflect Taxes for which one or more members of both the Premark Group
and the Tupperware Group have liability under Article II hereof, shall be
prepared and filed by Premark (except as otherwise provided on Schedule I
attached hereto). The final five sentences of Section 3.02(a) hereof shall
apply mutatis mutandis to all Foreign Tax Returns measured by income filed for
------- --------
any Pre-Distribution Period that includes any income or transactions
attributable to Tupperware or any member of the Tupperware Group for which
Premark has filing responsibility.
3.03 Method of Pro Ration For Straddle Periods. In the case of any Straddle
-----------------------------------------
Period relating to Premark, Tupperware or their respective Affiliates, unless
the books of such Person are closed on the Distribution Date, Taxes shall be
apportioned for purposes of Article II, between Pre-Distribution and Post-
Distribution Periods, as follows: First, Taxes for Tax Periods or portions
thereof ending on the last day of the calendar month preceding the
Distribution Date (such date is hereinafter referred to as the "Cutoff Date")
shall be based on actual events and activities through the Cutoff Date and in
accordance with past accounting practices. Second, Taxes for the Tax Period
from the Cutoff Date through the Distribution Date shall be computed by
prorating the activities of the calendar month which includes the Distribution
Date on a daily pro rata basis. Notwithstanding the foregoing provisions of
--- ----
this Section 3.03, (i) depreciation, amortization and depletion for any
Straddle Period shall be apportioned on a daily pro rata basis and (ii)
--- ----
extraordinary items not arising in the ordinary course of business shall be
apportioned to the Tax Period in which the event giving rise to such item
occurs.
3.04 Tax Accounting Practices. Any Straddle Period Returns prepared by one
------------------------
or more members of the Premark Group, or one or more members of the Tupperware
Group, as the case may be (the "Preparing Party"), shall be prepared in
accordance with past Tax accounting practices used with respect to the Returns
in question (unless such past practices are no longer permissible under the
Code or other applicable Laws), and to the extent any items are not covered by
past practices (or in the event such past practices are no longer permissible
under the Code or other applicable Laws), in accordance with reasonable Tax
accounting practices selected by the Preparing Party (except that accounting
elections and determinations shall be made, where reasonably possible, in a
manner that minimizes the net Tax incurred by the other party and its
Affiliates). In the event the Preparing Party files Tax Returns for Straddle
Periods inconsistently with such past Tax accounting practices, then,
notwithstanding any provision of this Agreement to the contrary, in addition
to any other remedies available, the other party and its Affiliates shall only
be responsible for the amount of Taxes they would owe if such Tax Returns had
been filed consistently with such past Tax accounting practices.
3.05 Right to Review Returns. Upon the request of either party, the other
-----------------------
party shall make available for inspection and copying all Tax Returns (and
related workpapers) with respect to Taxes to the extent that (i) such Return
relates to Taxes for which the requesting party may be liable under this
Agreement, (ii) such Return relates to Taxes for which the requesting party
may have a claim for Tax Benefits hereunder, or (iii) the requesting party
reasonably determines that it must inspect such Return to confirm compliance
with the terms of this Agreement. Premark and Tupperware shall attempt in good
faith to resolve any issues arising out of the review of such Returns.
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ARTICLE IV
TAX REFUNDS, CARRYOVERS AND CARRYBACKS
4.01 Refunds.
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(a) In the case of any separate Tax Return filed by Premark, Tupperware
or their respective Affiliates for a Pre-Distribution Period, the Person
that filed such Tax Return shall be entitled to any refund of Taxes with
respect to such Return.
(b) Subject to Section 4.02, any refund of Taxes with respect to a
joint, combined, consolidated or unitary Tax Return for any Pre-
Distribution Period shall be allocated between the Premark Group and the
Tupperware Group in accordance with the principles in Sections 2.01(c) or
2.02(c) as applicable; provided, however:
(1) Premark and its Affiliates shall be entitled to any refund of
United States federal income Taxes attributable to the carryback of United
States foreign tax credits arising out of the 1995 sale/leaseback
transaction between Dart Industries Belgium N.V. and Premark Gmbh entered
into on ______, 1995 (the "Belgium Transaction"); and
(2) Tupperware shall be entitled to any refund of [statutory
reference to Belgium, France and German value added Taxes] paid in
connection with the Belgium Transaction; and
(3) Premark shall be entitled to the return or refund of any amounts
deposited with (including any cash bond delivered to) the United States
Government (or any agency thereof) in connection with the payment of United
States federal Taxes, together with any interest payable thereon; and
(c) Notwithstanding anything to the contrary above, with respect to any
refund or credit for overpayment of any estimated taxes for any Tax Period
ending in 1995 or 1996, the Person that filed the Tax Return to which the
refund or credit for overpayment relates shall be entitled to the refund or
credit for overpayment.
(d) If any amounts become payable under this Section 4.01, the Person
obligated to make such payment shall notify the Person entitled to receive
such payment within 30 days after receipt of the refund or credit for
overpayment and shall remit the amount of the refund to such Person within
30 days after such receipt.
4.02 Carryovers and Carrybacks.
-------------------------
(a) In the event Tupperware or any other member of the Tupperware Group
desires to carry back a loss or other Tax attribute arising after the
Distribution Date (excluding, however, any Carryback described in Section
4.01(b)(1)) (the "Tupperware Carryback") to a Pre-Distribution Period,
Tupperware shall notify Premark in writing of its intent to carry back such
item (and to forego any election to waive such Carryback). Such notification
shall include a certification by an appropriate officer of Tupperware setting
forth Tupperware's belief, based on a thorough examination of the facts and
law relating to the tax treatment of such item, that the tax treatment of such
item is supported by "substantial authority" within the meaning of Section
6662 of the Code (and the Treasury Regulations promulgated thereunder).
Promptly upon its receipt of such notification, Premark shall notify
Tupperware, in writing, as to whether Premark believes that the filing of the
Tupperware Carryback will result in any Deemed Tax Reduction under Section
4.02(c) and if so, Premark shall provide information to Tupperware pertaining
to the amount of such Deemed Tax Reduction and the computation thereof.
Premark shall cooperate with Tupperware in connection with the filing and
processing of any Tupperware Carryback and shall provide Tupperware with
copies of all correspondence in connection therewith.
(b) Subject to Section 4.02(c), if, pursuant to the terms of Section
4.02(a) hereof, Tupperware elects to carry back a loss or other Tax attribute
to a Pre-Distribution Period, Premark shall be obligated to make a payment to
Tupperware equal to the amount by which the Taxes imposed on the Premark Group
for such Pre-Distribution Period have been reduced as a result of utilization
of the Tupperware Carryback (the "Premark Tax Reduction").
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<PAGE>
(c) For purposes of computing the amount of the Premark Tax Reduction, if,
in the absence of the Tupperware Carryback, losses or other Tax attributes of
Premark or its Affiliates would have resulted in a reduction of Taxes of the
Premark Group for such Period (the "Deemed Tax Reduction"), the amount of the
Premark Tax Reduction shall be reduced by the amount of the Deemed Tax
Reduction. In the event any losses or other Tax attributes of Premark which
are taken into account in computing a Deemed Tax Reduction are subsequently
utilized by the Premark Group to reduce Taxes in a future Tax Period, Premark
shall be obligated to pay to Tupperware the amount of such subsequent Tax
reduction (provided that the aggregate amount of payments to Tupperware with
respect to any Tupperware Carryback shall not exceed the Premark Tax Reduction
computed without regard to the first sentence of this Section 4.02(c)).
(d) If Premark is required to make a payment to Tupperware with respect to
any Tupperware Carryback under this Section 4.02(b), Premark shall have the
option, in its sole and absolute discretion, of (i) making such payment within
30 days of receiving the Tax refund attributable to such Tupperware Carryback,
or (ii) making such payment not later than 30 days of the date on which the
statutory period (under the Code of other applicable law) for examining the
Return on which such Tupperware Carryback was claimed has expired (provided,
such payment shall bear interest at the Prime Rate for the period commencing
30 days from the date of receipt of such refund and ending on the date of such
payment).
ARTICLE V
---------
TAX PAYMENTS
------------
5.01 Payment of Consolidated Federal Income Tax for Pre-Distribution
---------------------------------------------------------------
Periods. Premark shall pay all Taxes due (or shall receive all refunds) in
- -------
connection with the filing of Premark's consolidated federal income Tax Return
for (i) the Tax Period ending on December 30, 1995 (the "1995 Fiscal Year"),
and (ii) the Tax Period ending on December 28, 1996 (the "1996 Fiscal Year").
Premark and Tupperware shall make payments to one another in respect of the
consolidated federal income Tax liability shown on such Tax Returns as
determined and at the times set forth in paragraphs (a) and (b) below as
applicable:
(a) If the consolidated federal income Tax Return for the 1995 Fiscal Year
has not been filed on the Distribution Date, immediately before the
Distribution, the parties shall compute the amount of Tupperware's share of
the consolidated federal income Tax liability for such Tax Period (the
"Tupperware 1995 Estimated Tax") (or the amount of the net tax benefit
realized by Premark as a result of utilization of Tupperware's losses or
credits for such Tax Period) (the "1995 Tupperware Estimated Tax Benefit"),
determined as if the Tupperware Group were a separate group of companies
filing a consolidated federal income Tax Return (but taking into account
Premark's ability to utilize any net losses or credits of Tupperware for such
Tax Period).
In addition, immediately prior to the due date for filing Premark's
consolidated federal income Tax Return for the 1995 Fiscal Year (taking into
account any extension of time for filing that Premark requests and is
granted), the parties shall compute, applying the principles set forth in the
first sentence of this paragraph (a) of this Section 5.01 and based on the
information contained in the federal consolidated income Tax Return for the
1995 Fiscal Year, Tupperware's share of the consolidated federal income Tax
liability for the 1995 Fiscal Year (the "Tupperware 1995 Final Tax") (or the
amount of the net tax benefit realized by Premark as a result of Tupperware's
losses or credits for such Tax Period) (the "Tupperware 1995 Final Tax
Benefit"). If either (1) the Tupperware 1995 Final Tax exceeds the Tupperware
1995 Estimated Tax, and/or (2) the Tupperware 1995 Estimated Tax Benefit
exceeds the Tupperware 1995 Final Tax Benefit, Tupperware shall pay such
excess to
- --------
1 Note, this provision assumes that the Tax Return for the fiscal year ended
in 1995 will not have been filed and Taxes will not have been paid prior to
the Distribution Date. If the return is filed and the Taxes are paid prior to
the Distribution Date, the reference to the 1995 Fiscal Year should be
removed.
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<PAGE>
Premark immediately prior to the due date for filing Premark's consolidated
federal income Tax Return for the 1995 Fiscal Year. Conversely, if either (1)
the Tupperware 1995 Estimated Tax exceeds the Tupperware 1995 Final Tax and/or
(2) the Tupperware 1995 Final Tax Benefit exceeds the Tupperware 1995
Estimated Tax Benefit, Premark shall pay such excess to Tupperware immediately
prior to the due date for filing Premark's consolidated federal income Tax
Return for the 1995 Fiscal Year.
(b) With respect to the consolidated federal income Tax Return for the
1996 Fiscal Year, immediately before the Distribution, and immediately before
Premark's consolidated federal income Tax Return for the 1996 Fiscal Year is
due (taking into account any extension of time for filing that Premark
requests and is granted), Tupperware shall make payments to Premark (or
Premark shall make payments to Tupperware) of amounts which shall, in each
case, be determined with the principles applied mutatis mutandis, set forth in
------- --------
Section 5.01(a) of the Agreement.
5.02 Payment of State and Foreign Taxes for Which Premark has Filing
---------------------------------------------------------------
Responsibility. Premark shall pay to the appropriate Tax Authority all State
- --------------
and Foreign Taxes for Tax Returns with respect to which Premark (or another
member of the Premark Group) has filing responsibility pursuant to Article III
of this Agreement. Immediately prior to the Distribution and immediately
before such Return is due (taking into account any extension of time for
filing that Premark requests and is granted), or immediately after receipt of
any refund, Tupperware shall make payments to Premark (or Premark shall make
payments to Tupperware) of amounts which shall, in each case, be determined in
accordance with the principles, applied mutatis mutandis, set forth in Section
5.01 of the Agreement.
5.03 Payment of State and Foreign Taxes for Which Tupperware has Filing
------------------------------------------------------------------
Responsibility. Tupperware shall pay to the appropriate Tax Authority all
- --------------
State and Foreign Taxes for Tax Returns with respect to which Tupperware (or
another member of the Tupperware Group) has filing responsibility pursuant to
Article III of this Agreement. Immediately prior to the Distribution and
immediately before the time such Return is due (taking into account any
extension of time for filing that Tupperware requests and is granted), or
immediately after receipt of any refund, Premark shall make payments to
Tupperware (or Tupperware shall make payments to Premark) of amounts which
shall, in each case, be determined in accordance with the principles, applied
mutatis mutandis, set forth in Section 5.01 of the Agreement.
5.04 State Tax Returns for 1986 through 1990. Without in any manner limiting
---------------------------------------
Sections 5.02 and 5.03 hereof, the parties hereby agree that, with respect to
any amended State Tax Return filed to reflect final audit adjustments to the
consolidated federal income Tax Return of the Premark Group for the Periods
ending December 1986, 1987, 1988, 1989 and 1990, Premark and Tupperware shall
each be liable for, and shall pay, the portion of any additional Tax liability
reflected on such amended return attributable to such party (applying the
principles of Section 2.02(c) hereof).
5.05 Indemnification Payments.
------------------------
(a) Upon payment of any Taxes with respect to which a party is entitled to
receive indemnification hereunder, such party (the "Indemnified Party") shall
send the other party (the "Indemnifying Party") an invoice accompanied by
evidence of payment and a statement detailing the Taxes paid and describing in
reasonable detail the particulars relating thereto. The Indemnifying Party (or
such one or more members of the Indemnifying Party's Group as it shall
nominate) shall remit payment for Taxes for which the Indemnifying Party is
liable for indemnification hereunder to the Indemnified Party (or such one or
more members of the Indemnified Party's Group as it shall nominate) within 30
days of receipt of such invoice, evidence of payment and statement, or at any
earlier time identified by the Indemnifying Party.
(b) If any Indemnified Party realizes a Tax Benefit or a Tax detriment in
one or more Tax Periods by reason of having incurred any Tax for which such
Indemnified Party receives indemnification hereunder, then such Indemnified
Party shall pay to such Indemnifying Party an amount equal to the Tax Benefit
or such Indemnifying Party shall pay to such Indemnified Party an additional
amount equal to the Tax detriment (taking
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<PAGE>
into account any Tax detriment resulting from the receipt of such additional
amounts), as the case may be. The amount of any Tax Benefit or any Tax
detriment for a Tax Period realized by an Indemnified Party by reason of
having incurred a Tax for which such Indemnified Party received
indemnification hereunder shall be deemed to equal the product obtained by
multiplying (i) the amount of any deduction or inclusion in income for such
period resulting from such Tax or the payment thereof, as the case may be, by
(ii) the highest applicable marginal Tax rate for such Period. Any payment due
under this Section 5.05(b) with respect to a Tax benefit or Tax detriment
realized by an Indemnified Party in a Tax Period shall be due and payable
within 30 days from the time the Return for such Tax Period is due, without
taking into account any extension of time granted to the party filing such
Return.
ARTICLE VI
TAX RECORDS: COOPERATION
6.01 Tax Records.
-----------
(a) Premark and Tupperware (and their respective Affiliates) shall keep in
their possession all Tax Records relating to Taxes for which the other party
may have liability under this Agreement, until the expiration of any
applicable statute of limitations and as otherwise required by law.
Notwithstanding the foregoing, Tupperware shall retain all Tax Records
relating to Pre-Distribution Periods until such time as Premark shall consent
to the disposition of such Tax Records, which consent shall not be
unreasonably withheld. For purposes of this Article VI, "Tax Records" shall
include, inter alia, journal vouchers, cash vouchers, general ledgers,
----------
material contracts and authorizations for expenditures (AFEs).
(b) Premark and Tupperware (and their respective Affiliates) shall make
available to each other for inspection and copying during normal business
hours all Tax Records in their possession, to the extent such Tax Records are
reasonably required by the other party in connection with the preparation of
Tax Returns, audits, litigation or the resolution of items under this
Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, if either
party fails to comply with the requirements of this Section 6.01, the party
failing so to comply shall be liable for, and shall hold the other party
harmless from, any Taxes (including without limitation, penalties for failure
to comply with the record retention requirements of the Code) and other costs
resulting from such party's failure to comply.
6.02 Cooperation. Premark and Tupperware shall each provide the other with
-----------
such assistance as may reasonably be requested in connection with the
preparation of any Tax Return, audit or other examination by any Tax Authority
or judicial or administrative proceedings relating to liability for any Taxes.
ARTICLE VII
-----------
TAX AUDITS AND APPEALS
----------------------
7.01 Notice. Premark and Tupperware shall provide prompt notice to the other
------
party of any pending or threatened Tax Contest that it becomes aware of
relating to Taxes for Tax Periods for which it is indemnified by, or is to
indemnify, the other party hereunder. Such notice shall contain factual
information (to the extent known) describing any asserted Tax liability in
reasonable detail and shall be accompanied by copies of any notice or other
document received from any Tax Authority in respect of any such matter. If any
party has knowledge of an asserted Tax liability with respect to a matter for
which it is to be indemnified hereunder and such party fails to give the
indemnifying party notice of such asserted Tax liability within 30 days after
it has received written notice thereof, then, unless such failure has no
material adverse effect upon the indemnifying party's ability to participate
in the Tax Contest, the indemnifying party shall have no obligation to
indemnify the indemnified party for any Taxes arising out of such asserted Tax
liability.
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<PAGE>
7.02 Control of Audits and Appeals.
-----------------------------
(a) Separate Contests. Any Separate Contest shall be controlled solely by
-----------------
the party involved in the Tax Contest.
(b) Joint Contests.
--------------
(1) With respect to any Joint Contest, the party that filed the Return
shall control the proceeding. The personnel and outside advisers (including
counsel) of the party not controlling the proceeding may shall participate,
at the expense of such party, in the proceeding to the extent such
proceeding relates to items or adjustments for which such party may incur
indemnity liability under this Agreement. Such participation shall include:
(i) participation in all conferences, meetings or proceedings with any Tax
Authority, the subject matter of which includes an item for which such
party has indemnity liability hereunder; (ii) participation in all
appearances before any court, the subject matter of which includes an item
for which such party has indemnity liability hereunder; (iii) with respect
to matters described in the preceding clauses (i) and (ii), participation
in the submission and determination of content of documentation, protests,
memoranda of fact and law and briefs, the conduct of oral arguments or
presentations, the selection of witnesses and the negotiation of
stipulations of fact in such matters. Such participation may be reflected
by the grant of appropriate powers of attorney. The party granting such
power of attorney (the "Granting Party") shall have the right to revoke the
power of attorney if the Granting Party reasonably determines that the
other party's (the "Participating Party") actions or failure to act, in the
proceeding has resulted, or can be reasonably expected to result, in the
hindrance or delay of any resolution or settlement of the proceeding. In
the event the Participating Party fails to timely and fully participate in
any proceeding to the extent to which such proceeding relates to items or
adjustments for which the Participating Party has indemnity liability under
this Agreement, the Participating Party shall be liable for, in addition to
all Taxes for which the Participating Party shall be liable under this
Agreement, any and all costs imposed on, or incurred by, the Granting Party
as a result of the Participating Party's failure to participate. The
revocation of any power of attorney under this Section 7.02 shall in no way
limit the Participating Party's indemnity liability under this Agreement.
(2) Each of the parties hereto agrees to cooperate in seeking an
agreement with the Service or any other Tax authority under which such
authority would conduct separate audits of Premark and Tupperware with
respect to returns including both parties. To the extent permitted by such
an Agreement, each party would control its separate audits in accordance
with the terms thereof, and the procedures provided in the remainder of
this Section 7.02(b) and in Section 7.03 hereof shall not apply.
7.03 Consent to Settlements in Joint Contests.
----------------------------------------
(a) With respect to any Joint Contest, neither party shall have the right
to accept or enter into the settlement of any Tax liability, or compromise any
Tax claim to the extent such liability or claim relates to an item for which
the other party has indemnity liability hereunder, without the prior written
consent of the other party (which consent shall not be unreasonably withheld).
(b) In the case of any Joint Contest, either party (the "Compromising
Party"), without the consent or permission of the other party (the "Non-
Compromising Party"), may, if permitted by the appropriate agency or tribunal,
accept or enter into the settlement of any Tax liability to the extent such
liability relates solely to items for which such party has indemnity liability
hereunder. In the event the Non-Compromising Party's refusal to settle its
portion of the contest prevents the Compromising Party from reaching a
settlement as to its portion of the contest, the Non-Compromising Party shall
indemnify the Compromising Party from and against any outcome less favorable
than the settlement which the Compromising Party was willing to accept. With
respect to any Joint Contest, each of Tupperware and Premark hereby agrees
that it shall not participate in the negotiation, settlement or other
resolution of any item at issue in such Joint Contest in a manner
discriminating against the other party's interests in such contest.
-15-
<PAGE>
(c) Notwithstanding anything to the contrary in the foregoing, in the
event the judgment of the United States Tax Court or other court of competent
jurisdiction results in an adverse determination with respect to the liability
of either party hereunder, such party shall have the right (at its own
expense) to appeal such adverse determination; provided, however, that the
second sentence of Section 7.03(b) shall apply for purposes of determining the
liability of any non-appealing party hereunder.
7.04 Expenses.
--------
(a) With respect to any Separate Contest, the party involved in such
contest shall bear all expenses related thereto.
(b) With respect to any Joint Contest, except as otherwise provided
herein, the parties shall share any and all costs and expenses incurred in
connection with such contest (including without limitation attorneys' fees)
based on each party's potential liability with respect to such contest as
agreed to by the parties at the outset of such contest.
ARTICLE VIII
------------
DISPUTE RESOLUTION
------------------
8.01 Good-Faith Negotiation.
----------------------
In the event of any dispute or disagreement relating to this Agreement or
the transactions contemplated by this Agreement, Premark and Tupperware shall
each appoint two members from their respective management staffs to serve on a
joint committee (the "Dispute Resolution Committee"). The Dispute Resolution
Committee shall meet at either Premark or Tupperware's offices, whichever is
more appropriate in view of the issues under consideration, at such reasonable
time as either party may notify the other in writing, for the purpose of
resolving any dispute arising under this Agreement. No dispute arising under
this Agreement shall be the subject of arbitration or other formal proceedings
between the parties hereto unless and until such dispute has been considered
by the Dispute Resolution Committee. If the Dispute Resolution Committee is
unable to resolve any dispute submitted to it by any party hereto within
thirty (30) days of such submission, the Dispute Resolution Committee shall
refer the issue to the Chief Executive Officers of Premark and Tupperware for
their resolution. If such officers are unable to resolve such dispute within
fifteen (15) days after referral, any member of the Dispute Resolution
Committee may refer such dispute to binding arbitration as provided in Section
8.02 hereof. No such dispute shall be subject to arbitration or other formal
proceedings between the parties hereto before being considered by the Dispute
Resolution Committee and the Chief Executive Officers of Premark and
Tupperware.
8.02 Binding Arbitration.
-------------------
(a) Any controversy, dispute or claim (whether in contract or tort)
between the parties arising out of or related to this Agreement or the
transactions contemplated hereby, shall, after the dispute resolution process
set forth in Section 8.02 has been completed, at the request of any party, be
submitted to arbitration in accordance with this Section 8.02 by notifying the
other party to the dispute of its decision to arbitrate such controversy,
dispute or claim.
(b) Each controversy, dispute or claim submitted by a party to arbitration
shall be heard by an arbitration panel composed of three arbitrators, in
accordance with the following provisions. Premark and Tupperware shall each
appoint one arbitrator (who shall not be an employee, officer or director,
professional consultant (including without limitation outside attorney or
accountant) or otherwise related to the appointing party) within fifteen (15)
days after the matter has been submitted to arbitration. If any party fails to
appoint its arbitrator within such fifteen (15) day period, any party may
apply to the American Arbitration Association (the "AAA") to appoint an
arbitrator on behalf of the party that has failed to appoint its arbitrator.
The two arbitrators appointed by, or on behalf of, the parties shall jointly
appoint a third arbitrator who shall chair the
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<PAGE>
arbitration panel (the "Chairman"). If the arbitrators appointed by, or on
behalf of, the parties do not succeed in appointing a Chairman within fifteen
(15) days of the latter of the two arbitrators appointed by, or on behalf of,
the parties has been appointed, the Chairman shall, at the request of either
party, be appointed by the AAA. If for any reason an arbitrator is unable to
perform his or her function, he or she shall be replaced and a substitute
shall be appointed in the same manner as the arbitrator replaced.
(c) Except as otherwise provided herein, arbitration proceedings shall be
conducted in accordance with the Commercial Arbitration Rules of the AAA. In
any arbitration proceeding hereunder: (i) proceedings shall, unless otherwise
agreed by the parties, be held in Orlando, Florida; (ii) the arbitration panel
shall have no power to award punitive damages and shall be bound by all
statutes of limitation which would otherwise be applicable in a judicial
action brought by a party; and (iii) the decision of a majority of the
arbitrators (or the Chairman if there is no such majority) shall be final and
binding on the parties to this Agreement and shall be enforceable in any court
of competent jurisdiction. The parties hereby waive any rights to appeal or to
review of such decision by any court or tribunal and also waive any objections
to such enforcement. THE PARTIES HEREBY AGREE TO WAIVE ALL RIGHTS TO TRIAL BY
JURY WITH RESPECT TO ANY CONTROVERSY, DISPUTE OR CLAIM SUBMITTED TO
ARBITRATION UNDER THIS AGREEMENT.
(d) Notice preliminary to, in conjunction with, or incident to any
arbitration proceeding may be sent to the parties by registered or certified
mail (return receipt requested) at the address set forth in Section 9.08
hereof and personal service is hereby waived. The arbitrators shall award
recovery of all costs and fees incurred in connection with the arbitration and
the proceeding, and obtaining any judgment related thereto, of each disputed
matter (including reasonable attorney's fees and expenses and arbitrator's
fees and expenses and court costs) in each case, with respect to such disputed
matter, to the party that substantially prevails in the arbitration proceeding
with respect to such disputed matter.
(e) No provision of this Section 8.02 shall limit the right of any party
to this Agreement to exercise self-help remedies such as set-off, or obtaining
provisional, equitable or ancillary remedies from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party
to resort to arbitration.
ARTICLE IX
----------
MISCELLANEOUS MATTERS
---------------------
9.01 No Inconsistent Actions. Neither Premark nor Tupperware (nor their
-----------------------
respective Affiliates) shall take any action inconsistent with, nor fail to
take any action required by, either the Distribution Agreement, the Ruling
Request or the Ruling, unless such party acting has obtained the prior consent
of the other party. Except as otherwise provided in Section 9.01(b) hereof,
either party (the "Non-Proposing Party") will grant its consent to action
proposed by the other party (the "Proposing Party") if the Proposing Party
either (1) obtains a ruling with respect to the proposed action from the
Service or other applicable Tax Authority that is reasonably satisfactory, in
form and substance, to the Non-Proposing Party and its tax counsel (except
that the Proposing Party shall not submit any ruling request for the purpose
of complying with the Section 9.01, if the Non-Proposing Party reasonably
determines that filing such request might adversely affect the Non-Proposing
Party), or (2) obtains an opinion from tax counsel reasonably satisfactory to
the Non-Proposing Party (both as to choice of counsel and the opinion given).
Without limiting the generality of the foregoing:
(a) Conditions to Ruling. Each of the parties hereto represents that
--------------------
neither it (nor any of its Affiliates) has any plan or intention to take any
action which is inconsistent with any factual statements, representations or
other similar conditions contained in the Ruling Request or in the Ruling.
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<PAGE>
(b) Continuity of Business Enterprise. Tupperware hereby represents that
---------------------------------
it has no plan or intent to reduce, eliminate or otherwise discontinue the
Convention Center Business (as such term is defined in the Ruling Request).
Tupperware will not take any action which might result in a contraction or
elimination of the Convention Center Business within the three year Tax Period
beginning on the Distribution Date without the prior written consent of
Premark. Premark hereby represents that is has no plan or intent to reduce,
eliminate or otherwise discontinue the manufacturing business of The Stero
Company, a Delaware corporation, as described in the Ruling Request (the
"Stero Business"). Premark will not take any action which might result in the
contraction or elimination of the Stero Business within the three year Tax
Period beginning on the Distribution Date without the prior written consent of
Tupperware. Notwithstanding the foregoing, Tupperware or Premark may take any
action described in this Section 9.01(b), provided that such party obtains a
ruling with respect to the proposed action from the Service that is reasonably
satisfactory in form and substance to the other party and its tax counsel.
(c) Supplement or Amendment to Ruling.
---------------------------------
(1) Neither of the parties shall (A) file any request for a
supplement or amendment to the Ruling, or (B) arrange any "pre-
submission" or similar conference of file any memorandum or other
material relating to any such supplement or amendment, unless the party
filing such materials (the "Filing Party") shall have provided to the
other party (the "Other Party"), no later than 10 days in advance of
such filing, or conference, (a) a complete copy of all material to be
filed or submitted, and (b) the opportunity to join in such filing or
conference, at its own expense.
(2) Regardless of whether the Other Party joins in any filing or
conference or other proceeding referred to in paragraph (1) to this
Section 9.01(c), the Filing Party shall:
(A) inform the Other Party promptly regarding any telephone and
in-person conferences with Service personnel regarding such filing
or conference, and
(B) provide to the Other Party copies of (i) all filings or other
correspondence submitted to the Service in connection with such
filing or conference, and (ii) all correspondence from the Service
(including without limitation any supplemental or amendment to the
Ruling), promptly upon receipt.
9.02 Amendment and Waiver. This Agreement shall not be amended or modified
--------------------
in any manner whatsoever without the written consent of each of the parties
hereto. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
9.03 Tax Allocation Agreements. Immediately prior to the Distribution,
-------------------------
Premark shall cause any and all tax allocation, tax sharing and similar
agreements or arrangements existing between Premark (including its Affiliates)
and Tupperware (including its Affiliates) to be terminated with respect to the
Tupperware Group, as of an effective date agreed to by the parties prior to
the Distribution Date, and shall cause any amounts due under such agreements
or arrangements to be settled in the manner agreed to by the parties prior to
the Distribution Date. Upon such termination and settlement, no further
payments made by one party to the other with respect to such agreements or
arrangements shall be made, and all other rights and obligations resulting
from such agreements or arrangements between the parties shall cease as of
such time.
9.04 Entire Agreement; Inconsistent Provisions. The parties agree that this
-----------------------------------------
Agreement constitutes the entire Agreement between them in respect of the
subject matter of this Agreement, and that, in the event of a conflict or
other inconsistency between any provision or term of this Agreement and any
provision or term of the Distribution Agreement, then insofar as such matter
relates to Taxes, this Agreement shall prevail; provided, further, in the
event of any conflict or other inconsistency between any provision or term of
this Agreement and any provision or term of the Employee Benefits and
Compensation Allocation Agreement, the Employee Benefits and Compensation
Allocation Agreement shall prevail.
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<PAGE>
9.05 Affiliate Obligations. To the extent that the provisions of this
---------------------
Agreement pertain to an Affiliate of Premark or Tupperware, Premark and
Tupperware hereby respectively agree that they will cause such Affiliate to
carry out the terms of this Agreement.
9.06 Further Action. The parties shall execute and deliver all documents,
--------------
provide all information, and take or refrain from taking any action as may be
necessary or appropriate to achieve the purposes of this Agreement. Without
limiting the preceding sentence, and subject to Section 7.02(b) hereof, each
party and its Affiliates shall provide the other party and its Affiliates with
such powers of attorney or other authorizing documentation as is reasonably
necessary to empower then to execute and file Tax Returns, refunds and
equivalent claims for Taxes for which they are responsible hereunder, and
contest, settle and resolve any Tax Contests that they control under Article
VII hereof.
9.07 Time for Notice. Notice of any indemnification claim under this
---------------
Agreement must be received by the party against whom such claim is made no
later than six months from the date on which the Taxes to which such claim
relates have been paid.
9.08 Notices. All notices, demands or other communications to be given or
-------
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally to the
recipient or when sent to the recipient by telecopy (receipt confirmed), one
business day after the date when sent to the recipient by reputable express
courier service (charges prepaid) or two business days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to the parties at their addresses indicated below:
If to Premark: Premark International, Inc. 1717 Deerfield Road
Deerfield, Illinois 60015 Attention: Vice President,
Taxes
If to Tupperware: Tupperware Corporation P. O. Box 2353 Orlando, Florida
32802 Attention: Vice President, Taxes
Or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
9.09 Remedies. Any party having any rights under any provision of this
--------
Agreement will have all rights and remedies set forth in this Agreement and
all rights and remedies which such party may have been granted at any time
under any other agreement or contract and all of the rights which such party
may have under any law. Any such party will be entitled to enforce such rights
specifically, without posting a bond or other security, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
9.10 Successors and Assigns. No party hereto may assign or delegate any of
----------------------
such party's rights or obligations under or in connection with this Agreement
without the written consent of the other parties hereto. All covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto will be binding upon and enforceable against the respective successors
and assigns of such party and will be enforceable by and will inure to the
benefit of the respective successors and permitted assigns of such party.
9.11 Severability. Whenever possible, each provision of this Agreement will
------------
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
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<PAGE>
9.12 Counterparts. This Agreement may be executed simultaneously in two or
------------
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
9.13 Descriptive Headings. The descriptive headings of this Agreement are
--------------------
inserted for convenience only and do not constitute a part of this Agreement.
9.14 No Third-Party Beneficiaries. This Agreement will not confer any rights
----------------------------
or remedies upon any Person other than the parties hereto and their respective
successors and permitted assigns.
9.15 Construction. The language used in this Agreement will be deemed to be
------------
the language mutually chosen by the parties to express their mutual intent and
no rule of strict construction will be applied against any party. The use of
the word "including" in this Agreement means "including without limitation"
and is intended by the parties to be by way of example rather than limitation.
9.16 Form of Payments and Late Payments. Any payments owed by one party to
----------------------------------
another under this Agreement shall be made in the currency in which the Tax to
which such payment relates is assessed by the Tax Authority, and shall be paid
in immediately available funds and in such other manner as the party to whom
such payment is owed may reasonably request. Any payments required by this
Agreement that are not made when due shall bear interest at the Prime Rate
plus six percent from the due date of the payment to the date paid.
9.17 Treatment of Payments. The parties agree that, in the absence of any
---------------------
change in law or fact, any Indemnification Payments made under this agreement
shall be reported for tax purposes by the payor and the recipient as capital
contributions or dividends, as appropriate, relating back to the Tax Period
beginning before the Distribution Date.
9.18 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
-------------
INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT
THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.
9.19 Confidentiality. If, pursuant to the terms of this Agreement, either
---------------
Premark or Tupperware (or any of their respective Affiliates) is required to
provide or disclose any information to the other party to this Agreement (or
any Affiliate of such other party), the Person receiving such information
shall hold and keep such information confidential, and shall not disclose such
information (except as otherwise required by Law) without the prior written
consent of the Person from whom such information was received.
IN WITNESS WHEREOF, the Agreement has been duly executed as of the day and
year first above written.
PREMARK INTERNATIONAL, INC.
By
-----------------------------------
Name:
--------------------------------
Title:
---------------------------------
TUPPERWARE CORPORATION
By
-----------------------------------
Name:
Title:
---------------------------------
-20-
<PAGE>
SCHEDULE 1
----------
PREPARATION AND FILING OF TAX RETURNS
This schedule lists the Tax Returns that Premark will file which includes
members of both the Premark Group and the Tupperware Group. The returns will
include members of the Tupperware Group for a full year in 1995, and through
the distribution date for 1996.
1995
- ----
<TABLE>
<CAPTION>
TAX DUE
PERIOD DESCRIPTION DATE
------ ----------- --------
<C> <S> <C>
1995 U.S. Corporation Income Tax Return 09/16/96
1995 Alaska Corporation Net Income Tax Return 10/15/96
1995 Arkansas Corporation Income Tax Return 09/16/96
1995 California Corporation Income Tax Return 10/15/96
1995 Colorado Corporation Income Tax Return 10/15/96
1995 Connecticut Corporation Business Tax Return 09/30/96
1995 Florida Corporation Income Tax Return 09/30/96
1995 Idaho Corporation Income Tax Return 10/15/96
1995 Illinois Corporation Income And Replacement Tax Return 10/15/96
1995 Kansas Corporation Income Tax Return 10/15/96
1995 Maine Corporation Income Tax Return 09/16/96
1995 Minnesota Corporation Franchise Tax Return 10/15/96
1995 Montana Corporation Income Tax Return 11/15/96
1995 Nebraska Corporation lncome Tax Return 10/15/96
1995 New Hampshire Business Tax Return For Corporations 10/15/96
1995 Ohio Corporation Franchise Tax Return 10/15/96
1995 Oregon Corporation Income Tax Return 10/15/96
1995 Multnomah Corporation Income Tax Return 10/15/96
1995 North Dakota Corporation Income Tax Return 09/16/96
1995 South Carolina Corporation Income Tax Return 09/16/96
1995 Utah Corporation Income Tax Return 10/15/96
1995 Virginia Corporation Income Tax Return 10/15/96
1996
----
1996 U.S. Corporation Income Tax Return 09/16/97
1996 Alaska Corporation Net Income Tax Return 10/15/97
1996 Arkansas Corporation Income Tax Return 09/15/97
1996 California Corporation Income Tax Return 10/15/97
1996 Colorado Corporation Income Tax Return 10/15/97
1996 Connecticut Corporation Business Tax Return 09/30/97
1996 Florida Corporation Income Tax Return 09/30/97
1996 Idaho Corporation Income Tax Return 10/15/97
1996 Illinois Corporation Income And Replacement Tax Return 10/15/97
1996 Kansas Corporation Income Tax Return 10/15/97
1996 Maine Corporation Income Tax Return 09/15/97
1996 Minnesota Corporation Franchise Tax Return 10/15/97
1996 Montana Corporation Income Tax Return 11/15/97
1996 Nebraska Corporation Income Tax Return 10/15/97
1996 New Hampshire Business Tax Return For Corporations 10/15/97
1996 Ohio Corporation Franchise Tax Return 10/15/97
1996 Oregon Corporation Income Tax Return 10/15/97
1996 Multnomah Corporation Income Tax Return 10/15/97
1996 North Dakota Corporation Income Tax Return 09/15/97
1996 South Carolina Corporation Income Tax Return 09/15/97
1996 Utah Corporation Income Tax Return 10/15/97
1996 Virginia Corporation Income Tax Return 10/15/97
</TABLE>
<PAGE>
Exhibit 10.4
FORM
OF
EMPLOYEE BENEFITS AND COMPENSATION
ALLOCATION AGREEMENT
Employee Benefits and Compensation Allocation Agreement, dated as of
_________, 1996, by and between Premark International, Inc., a Delaware
corporation ("Premark"), and Tupperware Corporation, a Delaware corporation
and, as of the date hereof, a wholly-owned subsidiary of Premark
("Tupperware").
Whereas, the Premark Board has determined that it is appropriate and
desirable to distribute all outstanding shares of Tupperware Common Stock (as
defined herein) on a pro rata basis to the holders of Premark Common Stock
(the "Distribution"); and
Whereas, Premark and Tupperware are entering into a Distribution Agreement
of even date herewith (the "Distribution Agreement"), which, among other
things, sets forth the principal corporate transactions required to effect the
Distribution and sets forth other agreements that will govern certain other
matters following the Distribution; and
Whereas, in connection with the Distribution, Premark and Tupperware desire
to provide for the allocation of assets and liabilities and other matters
relating to employee benefit plans and compensation arrangements.
Now, Therefore, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
Definitions
-----------
Section 1.01 General. Any capitalized terms that are used in this Agreement
-------
but not defined herein (other than the names of Premark employee benefit
plans) shall have the meanings set forth in the Distribution Agreement, and as
used herein, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
Audit Liability: defined in Section 2.12(a).
---------------
Base Retirement Plan Assumption Date: defined in Section 2.01(a).
------------------------------------
Canadian Assumption Date: defined in Section 2.07(a).
------------------------
Cash Incentive Plans: defined in Section 2.05(a).
--------------------
Common Non-Employee Director: defined in Section 2.04(c)(i).
----------------------------
Enrolled Actuary: an enrolled actuary or other party making actuarial or
----------------
similar determinations pursuant to this Agreement with respect to assets or
liabilities relating to a particular employee benefit plan selected by Premark
with the approval of Tupperware, which approval shall not be unreasonably
withheld.
Former Dart Business Employee: any employee or former employee of a Former
-----------------------------
Dart Business who is a retired participant or deferred vested participant in
the Premark Base Retirement Plan, the Premark Retirement Savings Plan, the
Premark Retiree Medical Program and/or the Premark Retiree Life Program, and
who is not a Premark Employee, a Premark Former Employee, a Tupperware
Employee or Tupperware Former Employee.
PreCan: Premark Canada Inc., a Canadian corporation.
------
<PAGE>
Pre-Distribution Group: Premark and its present and former subsidiaries, and
----------------------
their respective present and former affiliates (including without limitation
Tupperware and its subsidiaries).
Premark Base Retirement Plan: the Premark International, Inc. Base
----------------------------
Retirement Plan.
Premark Director Option: an option to purchase from Premark shares of
-----------------------
Premark Common Stock granted to a non-employee director of Premark pursuant to
the Premark International, Inc. Director Stock Plan.
Premark Employee: any individual who is employed by Premark or any of its
----------------
subsidiaries immediately before the Cut-off Date and who is not a Tupperware
Employee.
Premark Former Employee: any individual who was, at any time before the Cut-
-----------------------
off Date, employed by any member of the Pre-Distribution Group, who is not a
Premark Employee or a Tupperware Employee, and whose most recent active
employment with any such member was with a Premark Business or a Former
Premark Business.
Premark Option: an option to purchase shares of Premark Common Stock granted
--------------
pursuant to the Premark Stock Plan.
Premark Phantom SAR: a right granted under the Premark Stock Plan to receive
-------------------
from Premark a payment in cash in an amount based upon the excess of the fair
market value per share of Premark Common Stock on the date of the exercise
over a specified exercise price per share.
Premark Ratio: the amount obtained by dividing the average of the daily high
-------------
and low trading prices on the New York Stock Exchange for the Premark Common
Stock on each of the five trading days prior to the ex-dividend date for the
Distribution by the average of the daily high and low trading prices on the
New York Stock Exchange for the Premark Common Stock on each of the five
trading days beginning with the ex-dividend date for the Distribution.
Premark Restricted Stock: restricted shares of Premark Common Stock granted
------------------------
pursuant to the Premark Stock Plan.
Premark Retiree Life Program: the Premark International, Inc. Group Benefits
----------------------------
Plan Retiree Life Program.
Premark Retiree Medical Program: the Premark International, Inc. Group
-------------------------------
Benefits Plan Retiree Medical Program.
Premark Retirement Savings Plan: the Premark International, Inc. Retirement
-------------------------------
Savings Plan.
Premark Stock Plan: the Premark International, Inc. 1994 Incentive Plan and
------------------
its predecessors.
Premark Supplemental Plan: the Premark International, Inc. Supplemental
-------------------------
Plan.
Premark Welfare Plan: a Welfare Plan sponsored by Premark or a Premark
--------------------
Subsidiary.
Qualified Plan: an "employee pension benefit plan" as defined in Section
--------------
3(2) of ERISA which constitutes or is intended in good faith to constitute a
qualified plan under Section 401(a) of the Code.
Ratio: the amount obtained by dividing the average of the daily high and low
-----
trading prices on the New York Stock Exchange for the Premark Common Stock on
each of the five trading days prior to the ex-dividend date for the
Distribution by the average of the daily high and low trading prices on the
New York Stock Exchange for the Tupperware Common Stock on each of the five
trading days beginning with the ex-dividend date for the Distribution.
Retirement Savings Plan Assumption Plan: defined in Section 2.02(a).
---------------------------------------
2
<PAGE>
Transition Period: defined in Section 2.02(a).
-----------------
Tupperware Base Retirement Plan: a Qualified Plan of Tupperware established
pursuant to Section 2.01.
Tupperware Canadian Retirement Plan: a Registered Pension Plan of Tupperware
-----------------------------------
established pursuant to Section 2.07.
Tupperware Director Option: an option to purchase from Tupperware shares of
--------------------------
Tupperware Common Stock provided to a Common Non-Employee Director or a
Tupperware Non-Employee Director pursuant to Section 2.04(c).
Tupperware Employee: any individual who, immediately before the Cut-off
-------------------
Date, was employed by Premark or any of its subsidiaries (including Tupperware
and the Tupperware Subsidiaries) and who, on or immediately after the Cut-off
Date, or otherwise in connection with the Distribution, is employed by
Tupperware or a Tupperware Subsidiary.
Tupperware Former Employee: any individual who was, at any time before the
--------------------------
Cut-off Date, employed by any member of the Pre-Distribution Group, who is not
a Premark Employee or a Tupperware Employee, and whose most recent active
employment with any such member was with a Tupperware Business or a Former
Tupperware Business.
Tupperware Non-Employee Director: defined in Section 2.04(c)(i).
--------------------------------
Tupperware Option: an option to purchase from Tupperware shares of
-----------------
Tupperware Common Stock provided to a Tupperware Participant pursuant to
Section 2.04(a).
Tupperware Participants: Tupperware Employees, Tupperware Former Employees,
-----------------------
and their respective beneficiaries and dependents.
Tupperware Phantom SAR: a right to receive from Tupperware payment in cash
----------------------
in an amount based upon the excess of the fair market value per share of
Tupperware Common Stock on the date of exercise over a specified exercise
price per share, provided to a Tupperware Participant pursuant to Section
2.04(a).
Tupperware Qualified Plan: a Qualified Plan sponsored by Tupperware or a
-------------------------
Tupperware Subsidiary.
Tupperware Restricted Stock: restricted shares of Tupperware Common Stock
---------------------------
provided to Tupperware Participants pursuant to Section 2.04(b).
Tupperware Retirement Savings Plan: a Qualified Plan of Tupperware
----------------------------------
established pursuant to Section 2.02.
Tupperware Supplemental Plan: defined in Section 2.05(b).
----------------------------
Tupperware Welfare Plan: a Welfare Plan sponsored by Tupperware or a
-----------------------
Tupperware Subsidiary.
Unified Plan: the Premark Canada Inc. Unified Pension Plan.
------------
Welfare Plan: an "employee welfare benefit plan" as defined in Section 3(1)
------------
of ERISA (whether or not such plan is subject to ERISA).
Section 1.02 Schedules, Etc. Reference to a "Schedule" are, unless otherwise
---------------
specified, to one of the Schedules attached to this Agreement, and references
to a "Section" are, unless otherwise specified, to one of the Sections of this
Agreement.
3
<PAGE>
ARTICLE II
Employee Benefits
-----------------
Section 2.01 Base Retirement Plans. (a) As soon as practicable after the
---------------------
date hereof and effective as of a date (the "Base Retirement Plan Assumption
Date") on or before the Cut-off Date, Tupperware shall establish the
Tupperware Base Retirement Plan and a related trust to assume liabilities of
and receive the transfer of assets from the Premark Base Retirement Plan
provided for in this Section 2.01. As of the Base Retirement Plan Assumption
Date, the Tupperware Participants shall cease to be participants in the
Premark Base Retirement Plan and shall become participants (to the extent they
are eligible) in the Tupperware Base Retirement Plan.
(b) Premark shall direct the trustee of the trust funding the Premark Base
Retirement Plan to transfer to the trustee of the trust funding the Tupperware
Base Retirement Plan, in cash, securities, other property or a combination
thereof, as agreed by Premark and Tupperware, an amount equal to (X) less (Y),
----
as adjusted by (Z); where (X) equals that portion of such assets of the
Premark Base Retirement Plan which represents the minimum amount of assets
necessary to satisfy the requirements of Section 414(l) of the Code and
Section 4044 of ERISA; where (Y) equals the aggregate payments made from the
trust relating to the Premark Base Retirement Plan in respect of such
participants who are Tupperware Participants from the Base Retirement Plan
Assumption Date through the date the transfer occurs; and where (Z) equals the
amount of the net earnings or losses, as the case may be, from the Base
Retirement Plan Assumption Date through the date the transfer occurs, on the
average of the daily balances of the foregoing and based upon the actual rate
of return earned by the Premark Base Retirement Plan during such period. All
of the foregoing calculations shall be determined by the Enrolled Actuary.
(c) Tupperware and Premark shall, in connection with the transfer described
in this Section 2.01, cooperate in making any and all appropriate filings
required under the Code or ERISA, and the regulations thereunder and any
applicable securities laws, implementing all appropriate communications with
participants, transferring appropriate records, and taking all such other
actions as may be necessary and appropriate to implement the provisions of
this Section 2.01 and to cause such transfer to take place as soon as
practicable after the Base Retirement Plan Assumption Date; provided, however,
that such transfer shall not take place until as soon as practicable after the
receipt of an opinion of Tupperware's counsel satisfactory to Premark's
counsel to the effect that the Tupperware Base Retirement Plan is in form
qualified under Section 401(a) of the Code and the related trust is in form
exempt under Section 501(a) of the Code. Premark agrees to provide to
Tupperware's counsel such information in the possession of Premark or any
Premark Subsidiary as may be reasonably requested by Tupperware's counsel in
connection with the issuance of such opinion. Premark agrees, during the
period ending with the date of the transfer of assets to the Tupperware Base
Retirement Plan, to cause distributions in respect of participants who are
Tupperware Participants to be made in the ordinary course from the trust
funding the Premark Base Retirement Plan in accordance with applicable law and
pursuant to plan provisions.
(d) Except as specifically set forth in this Section 2.01 and Section 2.12,
upon the completion of the transfer of assets provided for herein, effective
as of the Base Retirement Plan Assumption Date, Tupperware, the Tupperware
Subsidiaries and the Tupperware Base Retirement Plan shall assume, and shall
be solely responsible for, all Liabilities of the Pre-Distribution Group to or
with respect to Tupperware Participants under the Premark Base Retirement
Plan. Tupperware, the Tupperware Subsidiaries and the Tupperware Base
Retirement Plan shall be solely responsible for all Liabilities arising out of
or relating to the Tupperware Base Retirement Plan.
Section 2.02 The Retirement Savings Plans. (a) As soon as practicable after
----------------------------
the date hereof and effective as of a date (the "Retirement Savings Plan
Assumption Date") on or before the Cut-off Date, Tupperware shall establish
the Tupperware Retirement Savings Plan and a related trust to assume
liabilities of and receive the transfer of assets from the Premark Retirement
Savings Plan provided for in this Section 2.02. During the period (if any)
from the Retirement Savings Plan Assumption Date until such transfer of assets
takes place (the "Transition Period"), Tupperware shall cause contributions by
or in respect of Tupperware Participants to the Tupperware Retirement Savings
Plan to be held by the trustee of the Tupperware Retirement
4
<PAGE>
Savings Plan in a short term investment fund. During the Transition Period (if
any), distributions in respect of Tupperware Participants shall be made from
the Premark Retirement Savings Plan in accordance with applicable law and
pursuant to plan provisions and Tupperware Participants shall otherwise be
treated as terminated participants under such plan, except that they shall not
be treated as having terminated employment for purposes of entitlement to
distributions or the repayment of outstanding loans solely as a result of
becoming Tupperware Participants. As of the end of the Transition Period or,
if there is no Transition Period, as of the Retirement Savings Plan Assumption
Date, Tupperware Participants shall cease to be participants in the Premark
Retirement Savings Plan and shall, to the extent they are eligible, become
participants in the Tupperware Retirement Savings Plan.
(b) As soon as practicable after the Retirement Savings Plan Assumption
Date, Premark and Tupperware shall take all actions as may be necessary or
appropriate in order to effect the transfer to the Tupperware Retirement
Savings Plan and the related trust of the respective account balances as of
the date of transfer of the participants in the Premark Retirement Savings
Plan who are Tupperware Participants. Such transfer shall be made in cash,
securities, other property or a combination thereof, as agreed by Premark and
Tupperware, but shall be effected, where practicable, in kind, so as to
preserve each such participant's investment election as in effect on the date
of such transfer.
(c) Tupperware and Premark shall cooperate in making all appropriate filings
required under the Code or ERISA, and the regulations thereunder and any
applicable securities laws, implementing all appropriate communications with
participants, transferring appropriate records, and taking all such other
actions as may be necessary and appropriate to implement the provisions of
this Section 2.02 and to cause the transfer of assets pursuant to Section
2.02(b) to take place as soon as practicable after the Retirement Savings Plan
Assumption Date; provided, however, that such transfer shall not take place
until as soon as practicable after the receipt of an opinion of Tupperware's
counsel satisfactory to Premark's counsel to the effect that the Tupperware
Retirement Savings Plan is in form qualified under Section 401(a) of the Code
and the related trust is in form exempt under Section 501(a) of the Code.
(d) Except as specifically set forth in this Section 2.02 and Section 2.12,
upon the completion of the transfer provided for herein, effective as of the
Retirement Savings Plan Assumption Date, Tupperware, the Tupperware
Subsidiaries and the Tupperware Retirement Savings Plan shall assume or
retain, as the case may be, and shall be solely responsible for, all
Liabilities of the Pre-Distribution Group to or with respect to Tupperware
Participants under the Premark Retirement Savings Plan. Tupperware, the
Tupperware Subsidiaries and the Tupperware Retirement Savings Plan shall be
solely responsible for all Liabilities arising out of or relating to the
Tupperware Retirement Savings Plan.
Section 2.03 Welfare Plans. Tupperware shall take, and shall cause the
-------------
Tupperware Subsidiaries to take, all actions necessary or appropriate to
establish, on or before the Cut-off Date, Tupperware Welfare Plans to provide
each Tupperware Participant with benefits substantially similar to the
benefits provided to him or her under the Premark Welfare Plans. From and
after the Cut-off Date, except as specifically set forth in Section 2.12,
Tupperware and the Tupperware Subsidiaries shall assume or retain, as the case
may be, and shall be solely responsible for, all Liabilities of the Pre-
Distribution Group in connection with claims by or in respect of Tupperware
Participants for benefits under the Premark Welfare Plans and the Tupperware
Welfare Plans, whether incurred before, on or after the Cut-off Date. Premark
agrees to provide Tupperware or its designated representative with such
information (in the possession of Premark or a Premark Subsidiary and not
already in the possession of Tupperware or a Tupperware Subsidiary) as may be
reasonably requested by Tupperware in order to carry out the requirements of
this Section 2.03.
Section 2.04 Stock Plans. (a) Premark and Tupperware shall take all action
-----------
necessary or appropriate (including obtaining the consent of the holders of
Premark Options and Premark Phantom SARs, if required) so that each Premark
Option and Premark Phantom SAR held by a Tupperware Participant that is
outstanding as of the Distribution Date shall be replaced with a Tupperware
Option or a Tupperware Phantom SAR, as the case
5
<PAGE>
may be, with respect to a number of shares of Tupperware Common Stock equal to
the number of shares subject to such Premark Option or Premark Phantom SAR, as
the case may be, immediately before such replacement, times the Ratio, and
then, if any resultant fractional share of Tupperware Common Stock exists,
rounded [up] [down] to the nearest whole share, and with a per-share exercise
price equal to the per-share exercise price of such Premark Option or Premark
Phantom SAR, as the case may be, immediately before such replacement, divided
by the Ratio. Such Tupperware Option or Tupperware Phantom SAR, as the case
may be, shall otherwise have the same terms and conditions as the
corresponding Premark Option or Premark Phantom SAR, as the case may be,
except that references to Premark shall be changed to refer to Tupperware.
(b) Premark and Tupperware shall take all action necessary (including
obtaining the consent of the holders of Premark Restricted Stock, if
necessary) so that each award of Premark Restricted Stock held by a Tupperware
Participant (including any Tupperware Common Stock issued in the Distribution
with respect thereto) that is outstanding as of the Distribution Date is
converted into an award of a number of shares of Tupperware Restricted Stock
such that the sum of such number and the number of shares of Tupperware Common
Stock issued in the Distribution with respect to such Premark Restricted Stock
equals the number of shares of Premark Restricted Stock comprising such award
immediately before the Distribution Date, times the Ratio, and then, if any
resultant fractional share of Tupperware Common Stock exists, rounded [up]
[down] to the nearest whole share. Such converted award shall be subject to
the same schedule with respect to the lapse of restrictions and the same risks
of forfeiture as the corresponding Premark Restricted Stock immediately before
such conversion, and shall otherwise have the same terms and conditions as the
corresponding Premark Restricted Stock, except that references to Premark
shall be changed to references to Tupperware.
(c) (i) Premark and Tupperware shall take all action necessary or
appropriate (including obtaining the consent of the holders of Premark
Director Options, if required) so that each Premark Director Option held by an
individual who is a non-employee member of the Board of Directors of both
Tupperware and Premark (a "Common Non-Employee Director") and each Premark
Director Option held by an individual who is a non-employee member of the
Board of Directors of Tupperware but is not a member of the Board of Directors
of Premark (a "Tupperware Non-Employee Director") that is outstanding as of
the Distribution Date shall be replaced as set forth below.
(ii) Each such Premark Director Option held by a Common Non-Employee
Director shall be replaced with (i) a Tupperware Director Option and (ii) a
new Premark Director Option, in each case as more fully described below. Such
Tupperware Director Option shall constitute an option to purchase a number of
shares of Tupperware Common Stock equal to one-half the number of shares
subject to such Premark Director Option immediately before such replacement,
times the Ratio, and then, if any resultant fractional share of Tupperware
Common Stock exists, rounded [up] [down] to the nearest whole share, and with
a per-share exercise price equal to the per-share exercise price of such
Premark Director Option immediately before such replacement, divided by the
Ratio. Such Tupperware Director Option shall otherwise have the same terms and
conditions as the Premark Director Option it replaces in part, except that
references to Premark shall be changed to refer to Tupperware. Such new
Premark Director Option shall constitute an option to purchase a number of
shares of Premark Common Stock equal to one-half the number of shares subject
to such Premark Director Option immediately before such replacement, times the
Premark Ratio, and then, if any resultant fractional share of Premark Common
Stock exists, rounded [up] [down] to the nearest whole share, and with a per-
share exercise price equal to the per-share exercise price of such Premark
Director Option immediately before such replacement, divided by the Premark
Ratio.
(iii) Each such Premark Director Option held by a Tupperware Non-Employee
Director shall be replaced with a Tupperware Director Option to purchase a
number of shares of Tupperware Common Stock equal to the number of shares
subject to such Premark Director Option immediately before such replacement,
times the Ratio, and then, if any resultant fractional share of Tupperware
Common Stock exists, rounded [up] [down] to the nearest whole share, and with
a per-share exercise price of such Premark Director Option immediately before
such replacement, divided by the Ratio. Such Tupperware Director Option shall
otherwise have the same terms and conditions as the Premark Director Option it
replaces, except that references to Premark shall be changed to refer to
Tupperware.
6
<PAGE>
(d) Effective as of the Distribution Date, except as specifically set forth
in Section 2.12, Tupperware and the Tupperware Subsidiaries shall assume and
be solely responsible for (i) all Liabilities of the Pre-Distribution Group to
or with respect to Tupperware Participants arising out of or relating to
Premark Options, Premark Phantom SARs and Premark Restricted Stock that are
outstanding as of the Distribution Date, and (ii) all Liabilities of the Pre-
Distribution Group to or with respect to Common Non-Employee Directors and
Tupperware Non-Employee Directors arising out of or relating to Premark
Director Options to the extent they are to be replaced by Tupperware Director
Options pursuant to Section 2.04(c). Tupperware and the Tupperware
Subsidiaries shall be solely responsible for all Liabilities arising out of or
relating to Tupperware Options, Tupperware Stock Units, Tupperware Restricted
Stock and Tupperware Director Options.
Section 2.05 Nonqualified Plans and Programs. (a) Effective as of the Cut-
-------------------------------
off Date, Tupperware and the Tupperware Subsidiaries shall assume and be
solely responsible for all Liabilities of the Pre-Distribution Group to or
relating to Tupperware Participants under all annual and long-term cash
incentive compensation plans of Premark, the Premark Subsidiaries, Tupperware
and the Tupperware Subsidiaries (the "Cash Incentive Plans"). Tupperware and
Premark shall cooperate in taking all actions necessary or appropriate to
adjust the performance goals and other terms and conditions of awards under
the Cash Incentive Plans for performance periods that begin before and end
after the Cut-Off Date as appropriate to reflect the Distribution, including,
but not limited to, amending any Cash Incentive Plan or grant thereunder and
obtaining any necessary consents of affected participants.
(b) Effective as of the Cut-off Date: (i) Tupperware and the Tupperware
Subsidiaries shall establish a plan (the "Tupperware Supplemental Plan")
substantially similar to the Premark Supplemental Plan to provide supplemental
retirement benefits to certain management and highly compensated employees;
(ii) Premark shall amend the Premark Supplemental Plan, if necessary, so that
no Tupperware Employee who is a participant therein shall be deemed to have
terminated employment as a result of the Distribution or as a result of
becoming a Tupperware Employee in connection with the Distribution; and (iii)
Tupperware and the Tupperware Subsidiaries shall assume and be solely
responsible for all Liabilities of the Pre-Distribution Group to or relating
to Tupperware Participants under the Premark Supplemental Plan. All deferral
elections and beneficiary designations made by Tupperware Participants under
the Premark Supplemental Plan shall remain in effect with respect to the
Tupperware Supplemental Plan from and after the Cut-off Date, until changed in
accordance with the Tupperware Supplemental Plan. Tupperware and Premark shall
cooperate in taking all actions necessary or appropriate to accomplish the
foregoing and to ensure that as of the Cut-off Date, Premark and the Premark
Subsidiaries cease to have any Liabilities to or relating to the Tupperware
Participants under the Premark Supplemental Plan, including, but not limited
to, amending the Premark Supplemental Plan or any grant thereunder and
obtaining any necessary consents of affected participants.
Section 2.06 Severance Pay. (a) Tupperware and Premark agree that
-------------
individuals who, in connection with the Distribution, cease to be Premark
Employees and become Tupperware Employees shall not be deemed to have
experienced a termination or severance of employment from Premark and its
subsidiaries for purposes of any policy, plan, program or agreement of Premark
or any of its subsidiaries that provides for the payment of severance, salary
continuation or similar benefits.
(b) Tupperware and the Tupperware Subsidiaries shall assume and be solely
responsible for all Liabilities of the Pre-Distribution Group in connection
with claims made by or on behalf of Tupperware Employees in respect of
severance pay, salary continuation and similar obligations relating to the
termination or alleged termination of any such person's employment on or after
the Cut-off Date.
Section 2.07 Canadian Unified Pension Plan. (a) As soon as practicable after
-----------------------------
the date hereof and effective as of January 1, 1996 (the "Canadian Assumption
Date"), Premark shall cause PreCan to establish the Tupperware Canadian
Retirement Plan and a related trust to assume liabilities of and receive the
transfer of assets from the Unified Plan provided for in this Section 2.07. As
of the Canadian Assumption Date, the Tupperware Employees shall cease to be
participants in the Unified Plan and shall become participants (to the extent
they are
7
<PAGE>
eligible) in the Tupperware Canadian Retirement Plan. As soon as practicable
after Tupperware has established a Tupperware Subsidiary that is a Canadian
corporation, Premark shall cause PreCan to transfer sponsorship of the
Tupperware Canadian Retirement Plan to such Tupperware Subsidiary, and
Tupperware shall cause such Tupperware Subsidiary to accept such sponsorship.
(b) Premark shall direct, or shall cause PreCan to direct, the trustee of
the trust funding the Unified Plan to transfer to the trustee of the trust
funding the Tupperware Canadian Retirement Plan, all of the assets
attributable to accounts of Tupperware Participants under the Unified Plan
[treatment of surplus to be determined].
(c) Tupperware and Premark shall cooperate, and Premark shall cause PreCan
to cooperate, in connection with the transfers described in this Section 2.07,
in making any and all appropriate filings required under the Pension Benefits
Act (Ontario) and the Income Tax Act (Canada), the regulations thereunder and
any other applicable legislation, implementing all appropriate communications
with participants, transferring appropriate records, and taking all such other
actions as may be necessary and appropriate to implement the provisions of
this Section 2.07 and to cause such transfers to take place as soon as
practicable after the Canadian Assumption Date; provided, however, that such
transfers shall not take place until receipt of approval from the appropriate
government pension supervisory authorities. PreCan agrees, during the period
ending with the date of the transfer of assets to the Tupperware Canadian
Retirement Plan, to cause distributions in respect of participants who are
Tupperware Participants to be made in the ordinary course from the Tupperware
accounts within the trust funding the Unified Plan in accordance with
applicable law and pursuant to plan provisions.
(d) Except as specifically set forth in this Section 2.07 and in Section
2.12, upon the completion of the transfer of assets provided for herein,
effective as of the Canadian Assumption Date, Tupperware, the Tupperware
Subsidiaries and the Tupperware Canadian Retirement Plan shall assume, and
shall be solely responsible for, all Liabilities of the Pre-Distribution Group
to or with respect to Tupperware Participants under the Unified Plan.
Tupperware, the Tupperware Subsidiaries and the Tupperware Canadian Retirement
Plan shall be solely responsible for all Liabilities arising out of or
relating to the Tupperware Canadian Retirement Plan.
Section 2.08 Employment Agreements. (a) As of the Cut-off Date, Tupperware
---------------------
and the Tupperware Subsidiaries shall assume and be solely responsible for all
Liabilities of Premark and its Subsidiaries pursuant to the employment
agreement(s) listed on Schedule A hereto.
(b) Effective as of the Distribution Date, Tupperware shall enter into
change-of-control employment agreements substantially in the form attached
hereto as Exhibit A with each of the individuals listed on Schedule B hereto.
Section 2.09 Other Liabilities and Obligations. As of the Cut-off Date,
---------------------------------
except as otherwise agreed by the parties hereto, Tupperware and the
Tupperware Subsidiaries shall assume and be solely responsible for all
Liabilities of the Pre-Distribution Group not otherwise provided for in this
Agreement to or relating to Tupperware Participants arising out of or relating
to employment by any of Premark, the Premark Subsidiaries, Tupperware or the
Tupperware Subsidiaries, or any predecessors thereof, including without
limitation the Former Tupperware Businesses.
Section 2.10 Recognition of Premark Employment Service, etc. The Tupperware
----------------------------------------------
Qualified Plans, the Tupperware Welfare Plans, and all other employee benefit
plans, programs and policies of Tupperware shall recognize service before the
Distribution with the Pre-Distribution Group as service with Tupperware and
the Tupperware Subsidiaries. Each Tupperware Welfare Plan shall provide
benefits to Tupperware Participants without interruption or change solely as a
result of the transition from the corresponding Premark Welfare Plans, and
without limiting the generality of the foregoing: (i) shall, to the extent
applicable, recognize all amounts applied to deductibles, out-of-pocket
maximums and lifetime maximum benefits with respect to Tupperware Participants
under the corresponding Premark Welfare Plan for the plan year that includes
the Cut-off Date and for prior periods (if applicable); (ii) shall, to the
extent applicable, not impose any limitations on coverage of pre-existing
conditions of Tupperware Participants except to the extent such limitations
applied to such
8
<PAGE>
Tupperware Participants under the corresponding Premark Welfare Plan
immediately before such Tupperware Welfare Plan became effective; and (iii)
shall not impose any other conditions (such as proof of good health, evidence
of insurability or a requirement of a physical examination) upon the
participation by Tupperware Participants who were participating in the
corresponding Premark Welfare Plan immediately before such Tupperware Welfare
Plan became effective.
Section 2.11 Special Provisions. (a) Notwithstanding any other provision of
------------------
this Agreement, the Chairman of Premark shall not be treated as a Premark
Employee or a Tupperware Employee for purposes of this Agreement, no provision
of this Agreement shall apply to him, and all Liabilities relating to or
arising out of his employment with Premark or Tupperware shall be dealt with
as specifically determined by the Board of Directors of Premark before the
Cut-off Date.
(b) Premark and the Premark Subsidiaries shall retain all Liabilities of the
Pre-Distribution Group to or relating to the Former Dart Business Employees
and their beneficiaries and dependents under the Premark Base Retirement Plan,
the Premark Retirement Savings Plan, the Premark Retiree Medical Program and
the Premark Retiree Life Program.
Section 2.12 (a) Plan Audits. If any audit, examination or similar
-----------
proceeding with respect to any Premark Qualified Plan or Premark Welfare Plan
or the Unified Plan by the Internal Revenue Service, the U.S. Department of
Labor, any government pension supervisory authority of Canada or Ontario, or
any other governmental authority, or any litigation arising out of such an
audit, examination or similar proceeding, that pertains (in whole or in part)
to a period before the Cut-off Date results in the imposition of any
Liability, then the portion of such Liability that pertains to a period before
the Cut-off Date (an "Audit Liability") shall be allocated between Tupperware
and Premark as set forth in this Section 2.12; provided, that the term "Audit
--------
Liability" shall not include any portion of such a Liability that results from
the loss of any compensation deduction or any related interest or penalties
(which shall be governed by the Tax Sharing Agreement).
(b) To the extent that an Audit Liability takes the form of a payment to any
Tupperware Participant or of a benefit under a plan or a contribution to a
trust or other funding vehicle relating to a plan, or interest on such a
payment or contribution, there shall be allocated to Tupperware the portion of
such Audit Liability that is attributable to Tupperware Participants.
(c) Any Audit Liability that takes the form of a penalty, fine or other
liability imposed as a result of the manner in which a plan was administered
(including without limitation as a result of the failure to make a required
filing or participant communication) and that is not described in Section
2.12(b) above shall be allocated to Tupperware if Tupperware or a Tupperware
Subsidiary was responsible for such administration; to Premark if Premark or a
Premark Subsidiary, other than Tupperware or a Tupperware Subsidiary, was
responsible for such administration; and equally between Tupperware and
Premark if the responsibility for such administration was shared or cannot be
clearly determined.
(d) If an Audit Liability arises, the allocation of which is not addressed
in Section 2.12(b) or (c), or if there arises any other dispute concerning the
allocation of Audit Liabilities, such allocation or dispute shall be subject
to the dispute resolution and arbitration provisions of the Distribution
Agreement.
Section 2.13 Indemnification. All Liabilities retained or assumed by or
---------------
allocated to Tupperware or any Tupperware Subsidiary pursuant to this
Agreement shall be deemed to be Tupperware Liabilities, as defined in the
Distribution Agreement, and all Liabilities retained or assumed by or
allocated to Premark or any Premark Subsidiary pursuant to this Agreement
shall be deemed to be Premark Liabilities, as defined in the Distribution
Agreement and, in each case, shall be subject to the indemnification
provisions set forth in Article IV thereof.
9
<PAGE>
ARTICLE III
Miscellaneous
-------------
Section 3.01 Guarantee of Subsidiaries' Obligations. Each of the parties
--------------------------------------
hereto shall cause to be performed, and hereby guarantees the performance and
payment of, all actions, agreements, obligations and liabilities set forth
herein to be performed or paid by any subsidiary of such party which is
contemplated by the Distribution Agreement to be a subsidiary of such party on
or after the Distribution Date.
Section 3.02 Failure of Premark and Tupperware To Agree on Certain
-----------------------------------------------------
Determinations. (a) In any case in which Tupperware or Premark shall disagree
- --------------
with the determination of an amount which this Agreement requires to be made
by the Enrolled Actuary, each such disagreeing party shall have the right
within 30 days after receipt of notice of such determination to engage at its
own expense, an enrolled actuary to make the determination of such amount. If
the amount determined by such actuaries should differ, such amount shall be
determined by another enrolled actuary selected by agreement between or among
the Enrolled Actuary and the enrolled actuary or enrolled actuaries.
(b) Any other dispute concerning the matters addressed by this Agreement
shall, except as specifically provided in Section 2.12, be subject to the
dispute resolution and arbitration provisions of the Distribution Agreement.
Section 3.03 Sharing of Information. Each of Premark and Tupperware shall,
----------------------
and shall cause each of their respective Subsidiaries to, provide to the other
all such information in its possession as the other may reasonably request to
enable it to administer its employee benefit plans and programs, and to
determine the scope of, and fulfill, its obligations under this Agreement.
Such information shall, to the extent reasonably practicable, be provided in
the format and at the times and places requested, but in no event shall the
party providing such information be obligated to incur any direct expense not
reimbursed by the party making such request, nor to make such information
available outside its normal business hours and premises. The right of the
parties to receive information hereunder shall, without limiting the
generality of the foregoing, extend to any and all reports, and the data
underlying such reports, prepared by the Enrolled Actuary in making any
determination under this Agreement or by any third party engaged pursuant to
Section 2.12.
Section 3.04 Governing Law. Subject to applicable federal law, this
-------------
Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to the principles of conflicts of laws
thereof.
Section 3.05 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telex or telecopy (confirmed by regular, first-class mail),
to the parties at the following addresses (or at such other addresses for a
party as shall be specified by like notice) and shall be deemed given on the
date on which such notice is received:
if to Premark:
Premark International, Inc.
1717 Deerfield Road
Deerfield, Illinois 60015
Attention: General Counsel
if to Tupperware:
Tupperware Corporation
14901 South Orange Blossom Trail
P.O. Box 2353
Orlando, Florida 32802
Attention: General Counsel
10
<PAGE>
Section 3.06 Amendments. This Agreement may not be modified or amended
----------
except by an agreement in writing signed by the parties.
Section 3.07 Successors and Assigns. This Agreement and all of the
----------------------
provisions hereof shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.
Section 3.08 Termination. This Agreement shall be terminated in the event
-----------
that the Distribution Agreement is terminated and the Distribution abandoned
prior to the Distribution Date. In the event of such termination, neither
party shall have any liability of any kind to the other party.
Section 3.09 Rights to Amend or Terminate Plans; No Third Party
--------------------------------------------------
Beneficiaries. No provision of this Agreement shall be construed (a) to limit
- -------------
the right of Premark, any Premark Subsidiary, Tupperware or any Tupperware
Subsidiary to amend any plan or terminate any plan, or (b) to create any right
or entitlement whatsoever in any employee or beneficiary including, without
limitation, a right to continued employment or to any benefit under a plan or
any other benefit or compensation. This Agreement is solely for the benefit of
the parties hereto and their respective subsidiaries and should not be deemed
to confer upon third parties any remedy, claim, liability, reimbursement,
claim of action or other right in excess of those existing without reference
to this Agreement.
Section 3.10 Titles and Headings. Titles and headings to sections herein are
-------------------
inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
Section 3.11 Legal Enforceability. Any provision of this Agreement which is
--------------------
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
In Witness Whereof, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
Premark International, Inc.
By: _________________________________
Name:
Title:
Tupperware Corporation
By: _________________________________
Name:
Title:
11
<PAGE>
SCHEDULE A
EMPLOYMENT AGREEMENTS
TO BE ASSUMED BY
TUPPERWARE
Letter Agreement dated November 9, 1992 between Everett V. Goings and Premark
International, Inc. (signed by James M. Ringler)
<PAGE>
SCHEDULE B
INDIVIDUALS TO HAVE
CHANGE OF CONTROL
EMPLOYMENT AGREEMENTS
WITH TUPPERWARE
Warren L. Batts
E. V. Goings
Luis G. Campos
Christian E. Skroeder
Paul B. Van Sickle
Robert W. Williams
Carol A. Kiryluk
Thomas M. Roehlk
David T. Halversen
James E. Rose, Jr.
Mark H. Bobek
Brian R. Biggin
Christine J. Hanneman
Gaylin Olson
Hans Joachim Schwenzer
Jose R. Timmerman
<PAGE>
EXHIBIT A
FORM OF CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
<PAGE>
Exhibit 10.5
FORM
OF
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
--------------------------------------
AGREEMENT by and between TUPPERWARE CORPORATION, a Delaware corporation (the
"Company") and [___] (the "Executive"), dated as of the __ day of ______, 1996.
The Board of Directors of the Company (the "Board"), has determined that it
is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control
and to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of
other corporations. Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date" shall be the first date
-------------------
during the Protection Period (as defined in Section 1(b)) on which a Change of
Control occurs. Anything in this Agreement to the contrary notwithstanding, if
a Change of Control occurs and if the Executive's employment with the Company
is terminated prior to the date on which the Change of Control occurs, and if
it is reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of a third party who has taken steps
reasonably calculated to effect the Change of Control or (ii) otherwise arose
in connection with or anticipation of the Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) The "Protection Period" shall be the period commencing on the date
hereof and ending on the third anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof shall
be hereinafter referred to as the "Renewal Date"), the Protection Period shall
be automatically extended so as to terminate three years from such Renewal
Date, unless at least 60 days prior to the Renewal Date the Company shall give
notice to the Executive that the Protection Period shall not be so extended.
2. Change of Control. For the purpose of this Agreement, a "Change of
-----------------
Control" shall mean:
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board, provided that any individual becoming a director
<PAGE>
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office is in
connection with an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
(c) Consummation by the Company of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation (a "Corporate
Transaction"), in each case, unless, following such Corporate Transaction, (i)
all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Corporate Transaction)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Corporate Transaction and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
Corporate Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or at the time of the action of the Board,
providing for such Corporate Transaction; or
(d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
3. Employment Period. The Company hereby agrees to continue the Executive in
-----------------
its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the third anniversary of such
date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the Employment
------------------- -------------------
Period, (A) the Executive's position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held, exercised and assigned at any time during the 90-day period immediately
preceding the Effective Date and (B) the Executive's services shall be
performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 35 miles from
the Executive's primary residence immediately prior to such relocation.
For purposes of Section 4(a)(i)(A) such position, authority, duties and
responsibilities shall be regarded as not commensurate if, as a result of a
Change of Control, (I), the Company becomes a direct or indirect subsidiary of
another corporation or becomes controlled, directly or indirectly, by an
unincorporated entity (such ultimate parent corporation or unincorporated
entity is hereinafter referred to as a "parent company"), or (II) all or
substantially all of the assets of the Company are acquired by another
corporation or corporations or unincorporated entity or entities owned or
controlled, directly or indirectly, by another corporation or unincorporated
entity (such ultimate parent corporation or unincorporated entity is also
hereinafter referred to as a "parent company"), unless, in each case, (x)
Section 12 (b) of this Agreement shall have been complied with
2
<PAGE>
by any such parent company and (y) the Executive shall have assumed a position
with such parent company and the Executive's position, authority, duties and
responsibilities with such parent company are at least commensurate in all
material respects with the most significant of those held, exercised and
assigned with the Company at any time during the 90-day period immediately
preceding the Effective Date, or (III) the Company becomes owned or
controlled, directly or indirectly, by more than one other corporation and/or
unincorporated entity, as the case may be, which are not owned or controlled,
directly or indirectly, by a single parent company or more than one unrelated
corporation or unincorporated entity acquires a significant portion of the
assets of the Corporation and such unrelated corporations or unincorporated
entities, as the case may be, are not owned or controlled, directly or
indirectly, by a single parent company.
(ii) During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with
the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to interfere
with the performance of the Executive's responsibilities to the Company.
(b) Compensation. (i) Base Salary. During the Employment Period, the
------------ -----------
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the
month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed at least annually and shall be increased
at any time and from time to time as shall be substantially consistent with
increases in base salary generally awarded in the ordinary course of business
to other peer executives of the Company and its affiliated companies. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased. As used
in this Agreement, the term "affiliated companies" shall include any company
controlled by, controlling or under common control with the Company.
(ii) Incentive Awards. In addition to Annual Base Salary, the Executive
----------------
shall be awarded, for each fiscal year ending during the Employment Period, an
annual incentive award (the "Annual Incentive Award") and a long-term
incentive award (the "Long-Term Cash Incentive Award" and together with the
Annual Incentive Award, the "Incentive Awards") in cash at least equal to the
average annualized (for any fiscal year consisting of less than twelve full
months or with respect to which the Executive has been employed by the Company
for less than twelve full months) incentive award and long-term cash incentive
award, respectively (together, the "Recent Incentive Awards"), paid or
payable, including by reason of any deferral, to the Executive by the Company
and its affiliated companies in respect of the three fiscal years immediately
preceding the fiscal year in which the Effective Date occurs. Each such Annual
Incentive Award and Long-Term Cash Incentive Award shall be paid no later than
the end of the third month of the fiscal year next following the fiscal year
for which the Annual Incentive Award or the Long-Term Cash Incentive Award, as
the case may be, is awarded, unless the Executive shall elect to defer the
receipt of such Annual Incentive Award or Long-Term Cash Incentive Award.
(iii) Profit Sharing, Thrift, Savings and Pension Plans. In addition to
-------------------------------------------------
Annual Base Salary and Incentive Awards payable as hereinabove provided, the
Executive shall be entitled to participate during the Employment
3
<PAGE>
Period in all profit sharing, thrift, savings and pension plans, practices,
policies and programs generally applicable to other peer executives of the
Company and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with profit sharing
opportunities (measured with respect to both regular and special profit
sharing opportunities), thrift opportunities, savings opportunities and
pension benefits opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its
affiliated companies for the Executive under such plans, practices, policies
and programs as in effect at any time during the 90-day period immediately
preceding the Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive
---------------------
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death
and travel accident insurance plans and programs) to the extent generally
applicable to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 90-day period immediately preceding the
Effective Date or if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company
and its affiliated companies.
(v) Expenses. During the Employment Period, the Executive shall be entitled
--------
to receive prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies.
(vi) Perquisites. During the Employment Period, the Executive shall be
-----------
entitled to perquisites in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies
in effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect at any time thereafter generally with respect to other peer executives
of the Company and its affiliated companies.
(vii) Office and Support Staff. During the Employment Period, the Executive
------------------------
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
the Executive by the Company and its affiliated companies at any time during
the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided at any time thereafter generally with
respect to other peer executives of the Company and its affiliated companies.
(viii) Vacation. During the Employment Period, the Executive shall be
--------
entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies
as in effect for the Executive at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect at any time thereafter generally with respect to other
peer executives of the Company and its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The Executive's
------------------------- -------------------
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of "Disability" set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the
4
<PAGE>
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means the absence of the Executive from the Executive's duties
with the Company on a substantially full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be withheld
unreasonably).
(b) Cause. The Company may terminate the Executive's employment during the
-----
Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the manner
in which the Board or Chief Executive Officer believes that the Executive
has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than three-
quarters of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.
(c) Good Reason; Window Period. The Executive's employment may be terminated
--------------------------
(i) during the Employment Period by the Executive for Good Reason or (ii)
during the Window Period by the Executive for any reason or for no reason. For
purposes of this Agreement, the "Window Period" shall mean that 30-day period
immediately following the first anniversary of the Effective Date. For
purposes of this Agreement, "Good Reason" shall mean
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties
or responsibilities, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions of
Section 4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any office or
location other than that described in Section 4(a)(i)(B) hereof;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
5
<PAGE>
(v) any failure by the Company or any successor to comply with and
satisfy Section 11(c) of this Agreement, provided that such successor has
received at least ten days prior written notice from the Company or the
Executive of the requirements of Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for Cause, or by
---------------------
the Executive during the Window Period or for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 12(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
fifteen days after the giving of such notice). The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause, as the case may be,
shall not waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(e) Date of Termination. "Date of Termination" shall mean (i) if the
-------------------
Executive's employment is terminated by the Company for Cause, or by the
Executive during the Window Period or for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause, Disability or death, the Date of Termination shall be the date on
which the Company notifies the Executive of such termination, and (iii) if the
Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a) Good Reason or during
------------------------------------------- ---------------------
the Window Period; Other than for Cause or Disability. If, during the
- ----------------- ----------------------------------
Employment Period, the Company shall terminate the Executive's employment
other than for Cause or Disability or the Executive shall terminate employment
either for Good Reason or during the Window Period, the Company shall have the
following obligations.
(i) The Company shall pay to the Executive in a lump sum in cash within
30 days after the Date of Termination the aggregate of the following
amounts:
(A) the amount equal to the product of (x) three and (y) the sum of
the Executive's Annual Base Salary and the Executive's Highest
Incentive Award; provided, however, that such amount shall be paid in
lieu of, and the Executive hereby waives the right to receive, any
other amount of severance relating to salary or bonus continuation to
be received by the Executive upon such termination of employment under
any severance plan, policy or arrangement of the Company; and
(B) the amount equal to the product of (x) the sum of the the maximum
Annual Incentive Award and the maximum Long-Term Incentive Award that
would have been available to the Executive under the applicable
incentive plans of the Company and the policies and procedures
thereunder for the fiscal year of the Company in which the Change of
Control occurs or, if greater, the fiscal year in which the Date of
Termination occurs and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365; and
(C) the amount of the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid and the amount of any
compensation previously deferred by the Executive (together with any
accrued interest thereon) and not yet paid by the Company and any
accrued vacation pay of the Executive not yet paid by the Company.
6
<PAGE>
For purposes of this Agreement, the aggregate of the amounts described in
clauses (A), (B) and (C) of this Section 6(a) shall hereafter be referred to
as the "Special Termination Amount" and the term "Highest Incentive Award"
shall mean the greater of (1) the sum of the Annual Incentive Award and the
Long-Term Incentive Award paid or payable, including by reason of any
deferral, to the Executive (and annualized for any fiscal year consisting of
less than twelve full months or for which the Executive has been employed for
less than twelve full months) for the most recently completed fiscal year
during the Employment Period, if any, and (2) the Recent Incentive Awards. The
sum of the amounts described in clauses (B) and (C) of this Section 6(a) shall
be hereinafter referred to as the "Accrued Obligations".
(ii) For the remainder of the Employment Period, or such longer period as
any plan, program, practice or policy may provide, the Company shall
continue benefits to the Executive and, where applicable, the Executive's
family at least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies described in
Section 4(b)(iv) of this Agreement if the Executive's employment had not
been terminated in accordance with the most favorable plans, practices,
programs or policies of the Company and its affiliated companies generally
applicable to other peer executives and their families during the 90-day
period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect at any time thereafter generally with respect
to other peer executives of the Company and its affiliated companies and
their families (for purposes of determining eligibility of the Executive
for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed until
the end of the Employment Period and to have retired on the last day of
such period); provided, however, that with respect to medical benefits, the
Company shall continue, for the lifetime of the Executive, medical benefits
for the Executive and the Executive's family no less favorable than the
medical benefits provided to the Executive under the [Tupperware
Corporation Health Care Plan] (or any successor plan thereto) during the
90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect at any time thereafter generally
with respect to any other peer executives of the Company and its affiliated
companies and their families; and, provided, further, that, in the event
the Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under any employer provided plan,
the medical and other welfare benefits described herein shall not be
provided by the Company during such applicable period of eligibility, but
shall resume if such period of eligibility shall terminate.
(iii) To the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies (such other amounts
and benefits shall be hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of the
-----
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under
this Agreement, other than the payment by the Company of the Special
Termination Amount, provided however, that the amount of such payment
determined under Section 6(a)(i)(A) shall be adjusted as follows. The amount
set forth in clause (A) shall be offset in all cases by the basic life
insurance benefit paid or payable in respect of the Executive's death and, in
addition, if the death occurs after the one year anniversary following the
Change of Control, it shall be offset by the amount of any salary payments
made to the Executive for any periods of employment following the Change of
Control. The Special Termination Amount shall be paid to the Executive's
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, the Executive's family shall be entitled to receive benefits
at least equal to the most favorable benefits provided generally by the
Company and any of its affiliated companies to surviving families of peer
executives of the Company and such affiliated companies under such plans,
programs, practices and policies relating to family death benefits, if any, as
in effect generally with respect to other peer executives and their families
at any time during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Executive and/or the Executive's family, as in
effect on the date of the Executive's death generally with respect to other
peer executives of the Company and its affiliated companies and their
families.
7
<PAGE>
(c) Disability. If the Executive's employment is terminated by reason of the
----------
Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than the payment
by the Company of the Special Termination Amount. The Special Termination
Amount shall be paid to the Executive in a lump sum in cash within 30 days of
the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, the Executive shall be entitled after the Disability
Effective Date to receive disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at
any time during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive's family, as in effect
at any time thereafter through the Date of Termination generally with respect
to other peer executives of the Company and its affiliated companies and their
families.
(d) Cause; Other than for Good Reason or during the Window Period. If the
-------------------------------------------------------------
Executive's employment shall be terminated for Cause during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive Annual Base Salary
through the Date of Termination plus the amount of any compensation previously
deferred by the Executive, in each case to the extent theretofore unpaid. If
the Executive terminates employment during the Employment Period, excluding a
termination either for Good Reason or without any reason during the Window
Period, this Agreement shall terminate without further obligations to the
Executive, other than for the Accrued Obligations, all of which such Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30
days of the Date of Termination.
7. Non-exclusivity of Rights. Except as explicitly modified or otherwise
-------------------------
explicitly provided by this Agreement, (i) nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or practices
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor shall anything herein limit or otherwise affect
such rights as the Executive may have under any other agreements with the
Company or any of its affiliated companies and (ii) amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any
plan, policy, practice or program of the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program except as explicitly
modified by this Agreement.
8. Full Settlement. The Company's obligation to make the payments provided
---------------
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and, except as
provided in Section 6(d)(ii) of this Agreement, such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company
agrees to pay, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of
any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended (the "Code").
9. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding, in the event
it shall be determined that as a result, directly or indirectly, of any
payment or distribution by the Company to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise (a "Payment"), the Executive would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with
8
<PAGE>
any such interest and penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to promptly receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, but excluding any income taxes on the
Payment, the Executive is in the same after-tax position as if no Excise Tax
had been imposed upon the Executive.
(b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether or when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determinations, shall be made by the accounting
firm of Price Waterhouse LLP (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within
15 business days of receipt of notice from the Executive that there has been a
Payment or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant
to this Section 9, shall be paid to the Executive within five days of the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish
the Executive with a written opinion that failure to report the Excise Tax on
the Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 9(c) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment shall
be promptly paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive knows of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company
relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and,
(iv) permit the Company to participate in any proceedings relating to such
claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the
9
<PAGE>
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.
10. Confidential Information. The Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the
Executive's employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data
to anyone other than the Company and those designated by it. In no event shall
an asserted violation of the provisions of this Section 10 constitute a basis
for deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and without
----------
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or by application of the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
10
<PAGE>
12. Miscellaneous. (a) This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
-------------------
If to the Company:
Tupperware Corporation
14901 South Orange Blossom Trail
P.O. Box 2353
Orlando, Florida 32802
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of
such provision or any other provision of this Agreement.
(f) The Executive and the Company acknowledge that, except as may otherwise
be provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is "at will" and,
subject to Section 1(a) hereof, prior to the Effective Date, may be terminated
by either the Executive or the Company at any time. Moreover, if prior to the
Effective Date, the Executive's employment with the Company terminates, then
the Executive shall have no further rights under this Agreement. From and
after the Effective Date this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
_____________________________________
(Executive)
TUPPERWARE CORPORATION
By___________________________________
11
<PAGE>
EXHIBIT 10.6
November 9, 1992
Mr. Everett V. Goings
18 Tomac Avenue
Old Greenwich, Connecticut 06870
Dear Rick:
I am pleased to offer you the position of Executive Vice President of
Premark International, Inc. and President of Tupperware, Worldwide. We hope
that you will be able to commence employment with Premark as soon as possible.
As you are aware, the Board of Directors met on November 4, and elected you to
this position and approved the terms and conditions of your employment as
outlined below, effective on your first day of employment.
1. Your initial annual base salary will be $325,000, paid on Tupperware's
regular payroll cycle.
2. You will participate in the Premark International, Inc. Annual Incentive
Plan. You will be awarded $150,000 as your 1992 award to be paid on or before
November 30, 1992. This amount approximates the bonus you will forfeit when
you leave your current employer. For 1993, your individual incentive target
will be 50% of your base salary. The maximum award is 100% of your base
salary. The financial component of your 1993 award will be based on Worldwide
Tupperware financial performance. For 1993, we will guarantee you a minimum
incentive award of $162,500, which is your target award. For 1994 through
1996, the financial component of your award would be based on non-North
American Tupperware financial performance. Annual incentive awards are paid in
March, following the year of the award. You must be employed through
December 31, to be entitled to an award for any given year.
3. You will participate in the Premark International, Inc. Performance Unit
Plan (the long-term incentive program).
Starting on January 1, 1993, your award will be based on Worldwide
Tupperware financial performance. This program provides the opportunity to
earn an award ranging from the target award at 25% of your base salary up to a
maximum of 75% of your base salary. For the two-year long-term incentive
program performance cycle of 1993-1994, we will guarantee you a minimum award
of $81,500, your award at target. The award is based on 1993 financial
performance and 1993 and 1994 employment service. Therefore, payment of any
award under the long-term incentive program is contingent on your continued
employment through December 31, 1994. Beginning in 1994, we expect there to be
a new long-term incentive program, which would likely base your award on non-
North American financial performance.
4. The Compensation and Employee Benefits Committee of the Board of
Directors ("Committee") has granted you a stock option award of 50,000 shares,
effective on your first day of employment. The number of option shares was
determined in part on the stock
<PAGE>
compensation you will forfeit when you leave your current employer. This
option would vest three years after the effective date. You would be
considered for additional stock options annually on each subsequent November,
when the Committee normally grants stock options to the key management
employees and executives.
5. The Committee has awarded you 20,000 shares of restricted stock,
effective on your first day of employment. The number of restricted shares was
determined in part on the stock compensation you will forfeit when you leave
your current employer. The restrictions would be lifted on one-third of these
shares on the first anniversary of your employment. And one-third of the
restrictions on the remainder would be lifted on the second and third
anniversaries of your employment, so that all restrictions will have been
lifted in three years. Dividends will be paid during the period of
restriction.
6. You will participate in an annual gainsharing program for the years 1994,
1995 and 1996 to be based on pre-tax segment income of Tupperware North
America, as determined by the Company. For each year, the gainsharing award
will be equal to 10 percent of the pre-tax segment income if such pre-tax
segment income is $10,000,000 or less. If pre-tax segment income is over
$10,000,000, the gainsharing award will be equal to 10 percent of pre-tax
segment income for the first $10,000,000 and 15 percent of the pre-tax segment
income for any amount in excess of $10,000,000. Notwithstanding the above, the
maximum gainsharing award for any year may not exceed $3,000,000, and the
maximum cumulative gainsharing award during the three-year period may not
exceed $6,000,000. The gainsharing award shall be payable 50 percent in cash
and 50 percent in Premark restricted stock. The restrictions on the stock
shall lapse in two years. Dividends will be paid during the period of
restriction. Further, the payment of gainsharing awards is conditioned upon
maintaining non-North American pre-tax segment income of at least the actual
1992 amount, measuring such segment income using foreign exchange rates in
effect on December 31, 1992, in order to eliminate the effect of changing
currency values. Any payments and restricted stock awards will be made in
March, following the year of the gainsharing award. You must be employed
through the date the award is paid, to be entitled to an award for any given
year. After 1996, the Company intends to structure a program that would
provide an award based on increases in Worldwide Tupperware segment income,
with potential awards at levels which would not be comparable to the 1994-1996
program, but would be competitive with market compensation for similar
positions.
As we discussed, the purpose of the gainsharing program is to restore the
long-term profitability of Tupperware North America, while maintaining and
increasing the long-term profitability of non-North American Tupperware. It is
understood that the Committee will consider how the financial results were
achieved and has the right to adjust your award, as equitable, if the
financial results are achieved by short-term decisions which adversely affect
the long-term profitability of Tupperware. In addition, the Committee may
adjust such award, as equitable, in recognition of extraordinary or non-
recurring events or changes in accounting standards or practices. These
principles reflect the plan provisions and administrative rules that are
applied throughout the Company when determining awards under all annual and
long-term incentive plans and, therefore, will be applied to all of the
incentive plans and programs described above. Similarly, accruals for the
gainsharing program will be charged to the operating earnings of the North
American Tupperware business, and accruals for the annual and long-term
incentive
<PAGE>
plans described above will be charged to the appropriate business segment on
which the award is based.
7. In the event your employment is terminated by the Company, other than for
cause (such as gross misconduct, conviction of a felony, or willful conduct
that enriches you at the expense of the Company), you would be entitled to
receive severance payments equal to two year's salary. Such severance payments
would be paid out in accordance with the Tupperware payroll cycle. These
payments would be offset by any amount you would be entitled to receive under
the Premark International, Inc. Severance Pay Plan.
There would be no award paid out of the Annual Incentive Plan or the
Performance Unit Plan (long-term program). Nor would any annual gainsharing
payment be made, because you must be employed on the date the award is paid.
Your stock options would continue to become exercisable for a period of one
year, and would be exercisable during that one year period, at which point all
unexercised stock options would be forfeited. You would forfeit all restricted
shares which are still under restriction. The Company would continue to
provide you with medical and dental benefits, as well as life insurance during
this two-year period. With respect to the medical benefits, the Company would
pay the total cost of COBRA coverage continuation for the first eighteen
months, and then the Company would pay the cost of conversion to an individual
policy and the premium cost of six months. With respect to the life insurance,
the Company would pay the cost of conversion to an individual policy and would
pay the premium cost for two years. Any payments or benefits that are not
required by law to be paid will be conditioned upon your execution of and
compliance with a confidentiality and non-competition agreement.
8. Should you voluntarily terminate your employment, you would not become
entitled to any payments or benefits other than those that the Company is
obligated by law or by plan to provide. Any stock options that are
exercisable on your last date of employment would continue to be exercisable
for thirty days, and if not exercised during such period, would be forfeited.
9. As an officer of Premark International, Inc., the Company will enter into
a Change of Control Employment Agreement (golden parachute) with you. This
agreement provides significant benefits to you in the event you are terminated
due to a change in control.
10. You will be eligible for relocation benefits in accordance with our
standard relocation policy, less any relocation expenses Avon will cover under
your agreement with it. A copy of our relocation policy, still in draft form,
is enclosed for your information.
11. You will be entitled to participate in the standard benefits package
offered to Tupperware employees, which includes the following programs:
Base Retirement Plan (pension plan)
Retirement Savings Plan (401(k) plan)
Medical Plan (includes standard medical benefits, and effective January
1, 1993, mental health and chemical dependency benefits and prescription
drugs)
Dental Plan
Flexible Spending Account Plan
<PAGE>
Disability Plan
Group Life Insurance Plan
Business Travel Accident Insurance Plan
12. As an officer of Premark International, Inc., you will be eligible for
our standard executive perquisites, which are as follows:
Three weeks of vacation per year
Supplemental Benefits Plan
Tax Preparation (up to $2,500 per year)
First Class Travel (Domestic); Business Class
Travel (International)
Annual Physical
Country Club Membership
13. Based on your representation to Premark that you have not breached, nor
will you breach, your agreement with Avon, dated February 12, 1992, the
Company agrees to indemnify you in the event Avon determines that you have
violated the non-competition and non-disclosure provisions of the Avon
agreement. Such indemnification is limited to the payment of the last two
installments of severance pay under such agreement, to a maximum of $500,000
in February of 1993 and $500,000 in February of 1994, and reasonable legal
fees associated with your defense if Avon were to seek monetary damages or
equitable relief. In the event Premark were required to make the severance
payments described above, you agree that Premark would subrogate to your
rights to seek payment from Avon and would cooperate with Premark in such
action.
14. Following two years of your employment with the Company, and based on
performance, we will recommend to our Board of Directors' Committee on
Directors that you be nominated for election to the Board of Directors.
If you have any specific questions regarding these items, don't hesitate to
contact Jim Coleman, Senior Vice President, Human Resources, directly for
clarification or further explanation. If there is any major item which has
been overlooked, please feel free to contact me directly. Warren Batts and I
are very enthusiastic about your joining Premark International, and believe
you will make a significant contribution to the future success of the Company.
Rick, I hope this letter meets your expectations. If it does, I would
appreciate your signing below on both copies of this letter. Please return one
signed copy to me by Monday, November 16, 1992. You may retain the other for
your records.
Sincerely,
/s/ James M. Ringler
James M. Ringler
Enclosure
cc: Warren L. Batts
James C. Coleman
<PAGE>
Accepted:
12/10/92
/s/ E. V. Goings
Everett V. Goings
Date
<PAGE>
Exhibit 10.7
[Tupperware Worldwide Letterhead]
E.V. Goings, President
March 21, 1994
Mr. Luis G. Campos
Cerrado Hidalgo No. 26
Rancho San Francisco
San Bartolo Ameyalco
Delegacion Alvaro Obregon
CP 01800
Mexico, DF
Dear Luis:
I am pleased to offer you the position of President, Tupperware Latin America.
Outlined below are the terms and conditions of this offer which will be
effective on your first day of employment.
1.Your initial base will be $215,000 per annum, paid on Tupperware's regular
US payroll cycle.
2. You will be provided with a company automobile in accordance with the
Tupperware Latin America car policy.
3. You will participate in the Premark International, Inc. Annual Incentive
Plan. For 1994 your individual incentive target will be 50% of your base
salary and payout can range from 0% to 100% of your base salary. Ten
percent (10%) of your award will be based on Tupperware Worldwide
performance (reflecting your role on the Tupperware Policy Committee); the
remaining 90% will be based on Tupperware Latin America financial
performance. All final payments are subject to the approval of the
Compensation and Employee Benefits Committee of the Board of Directors.
Your 1994 award, if any, will be prorated by the number of weeks you are
employed by Tupperware in 1994. Annual incentive awards are paid in March
following the close of the plan year. You must be employed by Tupperware or
another Premark company through December 31st to be entitled to an award
for any given year.
3175 N. Orange Blossom Trail, Kissimmee, FL 34744-1197 U.S.A. Telephone:
407-826-8050 Fax: 407-826-8849
<PAGE>
Luis G. Campos
Page 2
4. You will participate in the Premark International, Inc. Performance Unit
Plan (Long Term Incentive Program). Your award will be based on Tupperware
Latin America financial performance for the years 1994, 1995 and 1996. This
program provides the opportunity to earn an award ranging from 0% to 75% of
your base annual salary rate on the last day of the financial performance
cycle. 1994 is the first year of a three year program 1994-96. Therefore,
payment of any award is contingent on your continued employment by
Tupperware or another Premark company through the payout date March 1997.
Your award, if any, would be prorated by the number of months worked during
the plan measurement period.
In future years we expect there to be overlapping three year plans
resulting in annual potential awards.
5. You will be eligible to participate in the Premark International, Inc.
Stock Option Plan. Subject to Premark International Board Compensation
Committee approval, you will be awarded 5,000 stock options effective on
your first day of employment. These options will vest three years after the
effective date. Stock options are normally granted to key management
employees and executives each November.
6. You will participate in an annual gainsharing program for the years 1995,
1996, and 1997 to be based on the pre-tax segment profit of Tupperware
Latin America, as determined by the company. For 1995, the gainsharing
award will be equal to 3 percent of the pre-tax segment profit over
$22,000,000. For 1996, the gainsharing award will be equal to 3 percent of
the pre-tax segment profit over $25,000,000. And, for 1997, the gainsharing
award will be equal to 3 percent of the pre-tax segment profit over
$30,000,000.
Notwithstanding the above, the maximum gainsharing award for any year may
not exceed $100,000, and the maximum cumulative gainsharing award during
the three-year period may not exceed $300,000. The gainsharing awards shall
be payable 100 percent in Premark restricted stock in March following the
year of the Gainsharing award. The restrictions shall lapse on one-third of
the restricted stock each year following the award. Dividends shall be paid
during the period of the restriction. (E.g., assume 1995 performance year
award approved by the Compensation Committee of the Board an March 6 1996.
Restrictions on one-third of the restricted shares lapse on March 6, 1997,
one-third on March 6, 1998, and on the final third on March 6, 1999.) You
must be employed by Tupperware or another Premark company through the date
the restrictions lapse in order to receive the stock.
<PAGE>
Luis G. Campos
Page 3
The purpose of the gainsharing program is to enhance the long-term
profitability of Tupperware Latin America. It is understood that the
Committee will consider how the financial results were achieved and has the
right to adjust your award, as equitable, if the financial results are
achieved by short-term decisions which adversely affect the long-term
profitability of Tupperware. In addition, the committee may adjust such
award, as equitable, in recognition of extraordinary or non-recurring
events or changes in accounting standards or practices. These principles
reflect the plan provisions and administrative rules that are applied
throughout the Company when determining awards under all annual and long-
term incentive plans, and therefore, will be applied to all of the
incentive plans and programs described above. Similarly, accruals for the
gainsharing program and the annual and long-term plans described above will
be charged to the operating earnings of the Tupperware Latin American
business in calculating segment profit.
7. You will be entitled to participate in the standard Tupperware US benefits
package which include: Pension (one (1) year service requirement),
Retirement Savings Plan Flexible Spending Account, Disability Plan, Life
Insurance, and Business Travel Accident Insurance.
8. In recognition of the Annual Incentive Plan payments you will forfeit from
the July 1, 1993--June 30, 1994 Sara Lee plan, we will give you a one-time
taxable payment of $170,000 payable your first day of employment.
9. Further, you will receive a one-time taxable payment of $17,917 to
compensate for the loss of your statutory 13th month salary payable your
first day of employment.
10. You will be eligible for our standard executive perquisities, which are as
follows: three weeks of vacation per year, Supplemental Benefits Plan,
Price Waterhouse Tax Preparation, and an annual physical.
11. You and your family will be relocated to Orlando under the Tupperware
relocation policy. This includes transportation of household and person
effects, transportation for you and your family, temporary accommodations
in Orlando, home sale and purchase assistance, and a relocation allowance
of one month's salary ($17,917) paid net of taxes payable your first day
of employment.
<PAGE>
Luis G. Campos
Page 4
12. Tupperware will coordinate and pay for the application and the processing
of this visa. You may not work or be paid in the United States without the
necessary legal documents. It is expected that you will expeditiously
supply all necessary documents and information and that ultimately you
will apply for permanent residency in the United States. Alternative
arrangements will be made to pay you in Mexico if the visa is not ready on
your start date.
13. By accepting the offer, you agree to sign a confidentiality agreement if
requested.
If you have any specific questions regarding these items, don't hesitate to
contact Carol Kiryluk, Vice President, Tupperware Human Resources, directly
for clarification or further explanation. If there is any major item which has
been overlooked, please feel free to contact me directly.
We are very enthusiastic about your joining Tupperware and Premark
International, and believe you will make a significant contribution to the
future success of the Company. Luis, I hope this letter meets your
expectations. If it does, I would appreciate your signing below on both copies
of this letter. Please return one signed copy to me by Monday, March 21, 1994.
You may retain the other for your records.
Sincerely,
/s/ E. V. Goings
E. V. Goings
President
Tupperware Worldwide
cc: Warren L. Batts
James C. Coleman
Carol Kiryluk
Jim Ringler
Accepted: /s/ Luis G. Campos 3.21.94
___________________________________ ___________________________________
Luis G. Campos Date
<PAGE>
Exhibit 22
Tupperware Corporation
Active Subsidiaries
The following active subsidiaries will be wholly-owned by the Registrant or
another subsidiary of the Registrant (degree of remoteness from the Registrant
is shown by indentations), except in the case of certain subsidiaries as to
which the percentage ownership of voting is stated in parenthesis.
Dart Industries Inc.
Premark Far East, Inc.
Tupperware Polska Sp.zo.o
Dart Far East Sdn. Bhd.
Dart Argentina S.A.
Dart de Venezuela, C.A.
Dart Brasil Industria e Comercio Ltda.
Adota Artigos Domesticos Ltda.
Dart Europe S.A.
Dart Hellas S.A.I.
Dart Iberica S.A.
Dart Industries Belgium N.V.
Premark GmbH
Tupperware Del Ecuador Tupperware Cia. Ltda.
Dart Industries G.m.b.H.
Dart Industries Hong Kong Limited
Tupperware China, Inc.
Dart Nederland Properties B.V.
Dart Industries Nederland B.V.
Dart Industries (New Zealand) Limited
Dart Industries (Proprietary) Limited
Premark Italia SpA
Dart (Philippines), Inc.
Premark Realty Corporation
Dart, S.A. de C.V.
Servicious Especializados de Arrendamiento en Latinoamerica S.A. de C.V.
Tupperware--Dart (Suisse) SA
Dartco Manufacturing Inc.
Dartluso-Industria Lusitana de Artigos Domesticos, Lda.
Premiere Products, Inc.
Exportadora Lerma, S.A. de C.V.
Premark Resources N.V.
Premiere Manufacturing, Inc.
Premiere Korea Ltd.
Tupperware U.S., Inc.
Tupperware Distributors, Inc.
<PAGE>
Japan Tupperware Co., Inc.
Tupperware Australia Pty. Ltd.
Dart Staff Superannuation Fund Pty Ltd.
Tupperware Commercial Ltd.
Prlando Sociedad Comercializadora Limitada
Importadora Y Distribuidora Importupp Limitada
Tupperware Iberica S. A.
Tupperware (Portugal) Artigos Domesticos, Lda.
Tupperware Singapore Pte. Ltd.
Tupperware (Thailand) Limited
Tupperware Turkey, Inc.
Tupperware Uruguay S.A.
Dart Executive Pension Fund Limited
Dart Penison Fund Limited
Tupperware Home Parties Corporation
DILHC
Dart Industries Limited
The Tupperware Company Limited
Premark Scandinavia A/S
The Premark International Foundation
Cook Insurance Co., Ltd.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TUPPERWARE
CORPORATION'S 1995 COMBINED FINANCIAL STATEMENTS AS INCLUDED IN ITS REGISTRATION
STATEMENT ON FORM 10. IT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
COMBINED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-30-1995
<CASH> 97,300
<SECURITIES> 0
<RECEIVABLES> 173,600
<ALLOWANCES> 26,100
<INVENTORY> 206,600
<CURRENT-ASSETS> 526,400
<PP&E> 938,000
<DEPRECIATION> 620,300
<TOTAL-ASSETS> 944,000
<CURRENT-LIABILITIES> 438,300
<BONDS> 400
0
0
<COMMON> 0
<OTHER-SE> 415,600
<TOTAL-LIABILITY-AND-EQUITY> 944,000
<SALES> 1,359,400
<TOTAL-REVENUES> 1,359,400
<CGS> 481,500
<TOTAL-COSTS> 481,500
<OTHER-EXPENSES> 1,400
<LOSS-PROVISION> 7,700
<INTEREST-EXPENSE> 3,100
<INCOME-PRETAX> 224,900
<INCOME-TAX> 53,500
<INCOME-CONTINUING> 171,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 171,400
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
