<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM 10/A2
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 26, 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
----
<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
Distributing Company.......... Premark International, Inc., a Delaware corpo-
ration ("Premark").
Shares to be Distributed...... Approximately 61.6 million shares of common
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."
Distribution Ratio............ One share of Tupperware Common Stock for one
share of Premark Common Stock. See "The Distri-
bution -- Manner of Effecting the Distribu-
tion."
Federal Income Tax Premark has requested a ruling (the "Tax Rul-
Consequences................. ing") from the Internal Revenue Service ("IRS")
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."
Record Date................... Expected to be in [ ], 1996.
Distribution Date............. Expected to be in [ ], 1996. On the Distribu-
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 a
special cash dividend (the "Dividend Payment")
of approximately $[ ] to Premark. The amount
of the Dividend Payment will be calculated so
that, after giving effect to such Payment, the
total debt less cash ("Net Debt") of Premark
existing as of the Cut-off Date (as defined be-
low) will equal approximately $50,000,000. Dart
will fund the Dividend Payment with new bank
borrowings (see "Financings") and Premark will
use the funds received primarily to repay its
short-term indebtedness, with the remainder to
be utilized for working capital purposes. The
effect of these transactions will be to adjust
the post-Distribution capital structure of each
company by decreasing the consolidated debt of
Premark and increasing the consolidated debt of
Tupperware. The amount of the Dividend Payment
was based on the ability of each of the compa-
nies to generate cash flow and with the inten-
tion of establishing a strong capital structure
for each company. See "Arrangements Between
Premark and Tupperware Relating to the Distri-
bution -- Distribution Agreement."
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."
2
<PAGE>
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 trans-
action not approved by the Board of Directors
of Tupperware (the "Tupperware Board"). See
"Certain Antitakeover Effects of Certain Provi-
sions of the Certificate of Incorporation, By-
laws and State Law." The Certificate of Incor-
poration 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 It is anticipated that, following the Distribu-
Policy....................... 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.
Prior to the Distribution Date, Dart will pay the Dividend Payment of
approximately $[ ] to Premark. The amount of the Dividend Payment will be
calculated so that, after giving effect to such Payment, the Net Debt of
Premark existing as of the Cut-off Date will equal approximately $50,000,000.
Dart will fund the Dividend Payment with new bank borrowings (see
"Financings") and Premark will use the funds received primarily to repay its
short-term indebtedness, with the remainder to be utilized for working capital
purposes. The effect of these transactions will be to adjust the post-
Distribution capital structure of each company by decreasing the consolidated
debt of Premark and increasing the consolidated debt of Tupperware. The amount
of the Dividend Payment was based on the ability of each of the companies to
generate cash flow and with the intention of establishing a strong capital
structure for each company. 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
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."
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, 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.
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<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.
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<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 $8.2 million overall, but, excluding the
effect of foreign exchange, decreased by $4.9 million 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 $7.1 million and $6.0 million,
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. Dart will fund the Dividend Payment with
new bank borrowings (see "Financings"). 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.
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 the aggregate 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.
Retirement 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 also 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 the aggregate excess of market value
over exercise price of such stock options on Premark Common Stock 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").
39
<PAGE>
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 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....................... 3
cause......................... 44
Certificate of Incorporation.. 3
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
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 cash management system for all of its domestic
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.
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. Prior to the Distribution Date, Dart will pay a special
dividend (the "Dividend Payment") to Premark. The amount of the Dividend
Payment will be calculated so that, after giving effect to such Payment, the
total debt less cash of Premark existing as of the Cut-off Date will equal
approximately $50,000,000. Dart will fund the Dividend Payment with new bank
borrowings and Premark will use the funds received primarily to repay its
short-term indebtedness, with the remainder to be utilized for working capital
purposes. The effect of these transactions will be to adjust the post-
Distribution capital structure of each company by decreasing the consolidated
debt of Premark and increasing the consolidated debt of Tupperware. The amount
of the Dividend Payment was based on the ability of each of the companies to
generate cash flow and with the intention of establishing a strong capital
structure for each company. 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 in
the amounts of $14.5 million in 1995, $13.8 million in 1994, and $11.9 million
in 1993. 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.
There are no material intercompany purchase or sale transactions between
Premark and Tupperware. Under Premark's centralized cash management system,
short-term advances from Premark and excess cash sent to Premark are reflected
as "Net transactions with Premark." No interest is charged or otherwise
allocated by Premark to Tupperware.
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>
F-10
<PAGE>
TUPPERWARE CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
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>
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 contracts 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 tax audit 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 accumulated benefit obligations were $47.1 million and $42.7 million and
the projected benefit obligations were $57.2 million and $58.3 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)
Total identifiable assets shown above include certain corporate assets of
Tupperware, primarily cash, that were classified as corporate assets rather
than identifiable assets of the Tupperware segment in prior year Premark
financial statements.
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.
F-22
<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
** Previously filed
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
/s/ Warren L. Batts
By:
----------------------------------
Name: Warren L. Batts
Title: Chairman and Chief
Executive Officer
Date: April 26, 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
** Previously filed
II-3
