<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 4
TO
FORM 10/A4
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
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
P.O. BOX 2353
ORLANDO, FLORIDA 32802
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
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 "The Distribution--Listing and Trading
Management...................... 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 "The Distribution--Future Management
Officers........................ 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 "Summary of Certain Information";
Matters......................... "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 "Financial Statements" and "Index to
Exhibits........................ Financial Statements and Financial
Statement Schedule."
</TABLE>
<PAGE>
LETTERHEAD OF PREMARK
May 21, 1996
Dear Shareholder:
We are pleased to inform you that the Board of Directors of Premark
International, Inc. has 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 May 24,
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,
/s/ Warren L. Batts
Warren L. Batts
Chairman and Chief Executive Officer
/s/ James M. Ringler
James M. Ringler
President and Chief Operating Officer
<PAGE>
Tupperware Corporation 407 826 5050
14901 S. Orange Blossom Trail 407 847 3111
Orlando, FL 32837
Mailing Address:
Post Office Box 2363
Orlando, FL 32802-2353 LOGO TUPPERWARE
May 21, 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,
/s/ Warren L. Batts
Warren L. Batts
Chairman and Chief Executive Officer
/s/ Rick Goings
Rick Goings
President and Chief Operating Officer
<PAGE>
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.
The distribution will be made on May 31, 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.
The common stock of Tupperware Corporation is currently traded on a "when
issued" basis. Such stock has been approved for listing, subject to official
notice of issuance, 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 May 21, 1996.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information.................................................... iii
Summary of Certain Information........................................... 1
The Distribution....................................................... 1
Tupperware Corporation................................................. 2
Summary Selected Financial Information................................. 4
Risk Factors............................................................. 6
No Operating History as an Independent Company......................... 6
Foreign Operations..................................................... 6
No Prior Market for Tupperware Common Stock............................ 6
Certain Antitakeover Effects........................................... 7
Effects on Premark Common Stock........................................ 7
Certain Federal Income Tax Considerations.............................. 7
Introduction............................................................. 7
The Distribution......................................................... 8
Background and Reasons for the Distribution............................ 8
Manner of Effecting the Distribution................................... 8
Listing and Trading of Tupperware Common Stock......................... 9
Future Management of Tupperware........................................ 10
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
First Quarter 1996 vs. First Quarter 1995.............................. 22
1995 vs. 1994 and 1994 vs. 1993........................................ 22
Regional Results--Results of Operations................................ 23
First Quarter 1996 vs. First Quarter 1995.............................. 23
1995 vs. 1994.......................................................... 24
1994 vs. 1993.......................................................... 25
Financial Condition.................................................... 26
New Accounting Standard................................................ 27
Impact of Inflation and Foreign Operations............................. 27
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Management of Tupperware.................................................. 28
Directors of Tupperware................................................. 28
Committees of the Board of Directors.................................... 30
Compensation of Directors............................................... 31
Executive Officers of Tupperware........................................ 32
Ownership of Tupperware Common Stock by Management...................... 34
Compensation of Executive Officers...................................... 35
German Pension Plan..................................................... 39
Expected Compensation and Employee Benefit Plans Following the Distribu-
tion..................................................................... 39
Employment Agreements................................................... 39
Tupperware Corporation 1996 Incentive Plan.............................. 40
Tupperware Corporation Director Stock Plan.............................. 44
Employee Pension and Retirement Savings Plans........................... 46
Compensation Committee Interlocks Disclosure and Insider Participation.... 47
Ownership of Tupperware Common Stock by Certain Beneficial Owners......... 48
Certain Transactions...................................................... 48
Hart-Scott-Rodino Filing Requirement...................................... 48
Description of Tupperware Capital Stock................................... 49
Authorized Capital Stock................................................ 49
Tupperware Common Stock................................................. 49
Tupperware Preferred Stock.............................................. 49
Tupperware Rights Agreement............................................. 49
Certain Antitakeover Effects of Certain Provisions of the Certificate of
Incorporation, By-laws
and State Law............................................................ 52
Certificate of Incorporation and By-laws................................ 52
Antitakeover Legislation................................................ 56
Liability and Indemnification of Directors and Officers................... 57
Limitation of Liability of Directors.................................... 57
Indemnification of Directors and Officers............................... 57
Additional Information.................................................. 59
Index to Defined Terms.................................................... 60
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 62.0 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 May 17, 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
Consequences................. Premark has received a ruling (the "Tax Rul-
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................
The Tupperware Common Stock has been approved
for listing, subject to official notice of is-
suance, on the New York Stock Exchange, Inc.
("NYSE") (NYSE symbol: TUP). See "The Distribu-
tion -- Listing and Trading of Tupperware Com-
mon Stock."
Record Date...................
The record date for the Distribution is May 24,
1996 (the "Record Date").
Distribution Date.............
The Distribution will occur on May 31, 1996
(the "Distribution Date"). On the Distribution
Date, the Distribution Agent (as defined below)
will commence mailing share certificates for
Tupperware Common Stock to holders of Premark
Common Stock on the Record Date. Premark stock-
holders will not be required to make any pay-
ment or to take any other action to receive
their Tupperware Common Stock. See "The Distri-
bution -- Manner of Effecting the Distribu-
tion."
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...................... On May 24, 1996, Dart will pay a special cash
dividend (the "Dividend Payment") of approxi-
mately $284.9 million to Premark. The amount of
the Dividend Payment has been 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) would have been approximately $55.8 mil-
lion. The increase in the amount of the Divi-
dend Payment, compared with amounts calculated
as of prior reporting dates and reported in
prior filings, is a consequence of the higher
level of Tupperware's cash at the Cut-off Date
and the seasonal increase in Premark's consoli-
dated Net Debt. Dart will fund the Dividend
Payment with new bank borrowings (see
"Financings") and available cash 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 ad-
just 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 determined 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. See "Ar-
rangements Between Premark and Tupperware Re-
lating to the Distribution -- 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................
The Tupperware Common Stock has been approved
for listing, subject to official notice of is-
suance, 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 13-week
periods ended March 30, 1996 and April 1, 1995, and the unaudited pro forma
combined financial information for the year ended December 30, 1995 and the 13-
week period ended March 30, 1996. 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 and the 13-week period ended March 30, 1996, see "Tupperware
Corporation Selected Financial Data." For pro forma financial information of
Tupperware for the year ended December 30, 1995 and the 13-week period ended
March 30, 1996, see "Tupperware Corporation Pro Forma Combined Financial
Information." See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
<TABLE>
<CAPTION>
13 WEEKS ENDED YEAR ENDED
---------------- --------------------------
APRIL
MARCH 30, 1, DEC. 30, DEC. 31, DEC. 25,
(IN MILLIONS, EXCEPT PER SHARE 1996 1995 1995 1994 1993
AMOUNT) --------- ------ -------- -------- --------
<S> <C> <C> <C> <C> <C>
Geographic Information(l)
Net sales:
Europe, Africa, and Middle
East......................... $146.8 $173.4 $ 595.1 $ 540.1 $ 505.1
Americas...................... 106.0 84.8 409.2 405.2 379.8
Asia Pacific.................. 76.2 72.0 355.1 329.3 286.9
------ ------ -------- -------- --------
Total...................... $329.0 $330.2 $1,359.4 $1,274.6 $1,171.8
====== ====== ======== ======== ========
Segment profit (loss):
Europe, Africa, and Middle
East......................... $ 30.2 $ 44.0 $ 156.8 $ 125.0 $ 110.3
Americas...................... 7.3 (1.6) 29.7 31.7 28.2
Asia Pacific.................. 9.3 5.0 59.4 46.3 40.3
------ ------ -------- -------- --------
Total ...................... $ 46.8 $ 47.4 $ 245.9 $ 203.0 $ 178.8
====== ====== ======== ======== ========
Historical Combined Information(2)
Net sales....................... $329.0 $330.2 $1,359.4 $1,274.6 $1,171.8
Income before income taxes...... 43.3 41.0 224.9 191.2 148.4
Net income...................... 31.6 30.6 171.4 149.2 117.9
Total assets.................... 948.6 935.7 944.0 882.6 785.1
Total shareholder's equity...... 472.3 410.8 415.6 395.1 163.3
Pro Forma Combined Information(3)
Net sales....................... $329.0 $1,359.4
Income before income taxes...... 39.1 208.0
Net income...................... 29.4 161.1
Net income per share(4)......... 0.46 2.52
Total assets.................... 923.6
Long-term debt.................. 100.4
Total shareholders' equity...... 165.4
</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."
4
<PAGE>
(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."
(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 periods shown.
(4) Pro forma net income per share is based upon the 63.2 million and 63.8
million common and common equivalent shares reflected in Premark's
consolidated statement of income for the 13 weeks ended March 30, 1996, and
the year ended December 30, 1995, respectively. 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 "forward-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
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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 received 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 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 indicates, as used in this Information
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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 was declared by a committee of the Premark Board on May 17,
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
Tupperware Common Stock is currently traded on a "when issued" basis. Prices
at which Tupperware Common Stock may trade 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.
The Tupperware Common Stock has been approved for listing, subject to
official notice of issuance, 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 received 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, all but one of which have been satisfied as of the
date of this Information Statement. Even if all such conditions are satisfied,
the Premark Board, in its sole discretion, without approval of the Premark
stockholders, 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."
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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 have entered 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 have entered 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.
On May 24, 1996, Dart will pay the Dividend Payment of approximately $284.9
million to Premark. The amount of the Dividend Payment has been calculated so
that, after giving effect to such Payment, the Net Debt of Premark existing as
of the Cut-off Date would have been approximately $55.8 million. The increase
in the amount of the Dividend Payment, compared with amounts calculated as of
prior reporting dates and reported in prior filings, is a consequence of the
higher level of Tupperware's cash at the Cut-off Date and the seasonal
increase in Premark's consolidated Net Debt. Dart will fund the Dividend
Payment with new bank borrowings (see "Financings") and available cash 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 determined 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 through bank
borrowings 65% ($12.0 million) of the amount necessary to pay the quarterly
dividend declared ($.27 per share) on the Premark Common Stock on May 1, 1996.
The Dividend Payment and the funding of 65% of Premark's quarterly dividend
has been reflected on Tupperware's Pro Forma Combined Balance Sheet dated
March 30, 1996. 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 April 27, 1996 (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. As of the date of this
Information Statement, all of these conditions have been satisfied other than
the condition set forth in item (viii) which is anticipated to be satisfied by
the Distribution Date. Even if all the conditions have been 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 have entered 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 have entered 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 entered into a $300,000,000 five year unsecured multicurrency
facility for Tupperware and certain of its subsidiaries. It is expected that
the funds necessary for the payment by Dart of a portion of the Dividend
Payment to Premark and the funding of 65% of Premark's quarterly dividend, 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 facility 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 facility provides that Tupperware is to pay an annual facility
fee which will vary based on the Tupperware Debt Rating. The facility contains
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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<PAGE>
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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<PAGE>
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
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<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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TUPPERWARE CORPORATION
PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
The unaudited Pro Forma Combined Balance Sheet as of March 30, 1996 and the
Pro Forma Combined Statement of Income for the 13-week period ended March 30,
1996 and 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 March
30, 1996 and as of the beginning of 1995, 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" columns.
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 periods shown.
TUPPERWARE CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED MARCH 30, 1996 YEAR ENDED DECEMBER 30, 1995
----------------------------------- -----------------------------------
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) ---------- ----------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales................... $329.0 $ -- $329.0 $1,359.4 $ -- $1,359.4
------ ------ ------ -------- ------- --------
Costs and expenses:
Cost of products sold..... 120.4 -- 120.4 481.5 -- 481.5
Delivery, sales, and ad-
ministrative expense..... 166.2 -- 166.2 653.5 -- 653.5
Interest expense.......... 0.9 4.2 (2a) 5.1 3.1 16.9 (2a) 20.0
Interest income........... (1.3) -- (1.3) (5.0) -- (5.0)
Other (income) expense,
net...................... (0.5) -- (0.5) 1.4 -- 1.4
------ ------ ------ -------- ------- --------
Total costs and ex-
penses................. 285.7 4.2 289.9 1,134.5 16.9 1,151.4
------ ------ ------ -------- ------- --------
Income before income taxes.. 43.3 (4.2) 39.1 224.9 (16.9) 208.0
Provision for income taxes.. 11.7 (1.6)(2b) 10.1 53.5 (6.6)(2b) 46.9
------ ------ ------ -------- ------- --------
Net income.................. $ 31.6 $ (2.6) $ 29.0 $ 171.4 $ (10.3) $ 161.1
====== ====== ====== ======== ======= ========
Net income per common and
common equivalent share.... $ 0.46 $ 2.52
====== ========
</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 MARCH 30, 1996
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
(IN MILLIONS) ---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents................. $ 87.4 $ (25.0)(2a) $ 62.4
Accounts and notes receivable, net........ 170.8 -- 170.8
Inventories............................... 210.0 -- 210.0
Deferred income tax benefits.............. 50.8 -- 50.8
Prepaid expenses.......................... 20.2 -- 20.2
------- ------- -------
Total current assets.................. 539.2 (25.0) 514.2
------- ------- -------
Deferred income tax benefits.............. 21.1 -- 21.1
Property, plant, and equipment, net....... 313.0 -- 313.0
Long-term receivables, net, and other as-
sets..................................... 75.3 -- 75.3
------- ------- -------
Total assets.......................... $ 948.6 $ (25.0) $ 923.6
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable.......................... $ 79.4 $ -- $ 79.4
Short-term borrowings and current portion
of long-term debt........................ 65.8 159.9 (2a) 225.7
Accrued liabilities....................... 241.6 12.0 (2a) 263.6
10.0 (2c)
------- ------- -------
Total current liabilities............. 386.8 181.9 568.7
------- ------- -------
Long-term debt............................ 0.4 100.0 (2a) 100.4
Accrued postretirement benefit cost....... 36.2 -- 36.2
Other liabilities......................... 52.9 -- 52.9
Shareholders' equity:
Net investment by Premark............... 594.0 (296.9)(2a) --
(10.0)(2c)
(287.1)(2d)
Common shareholders' equity............. -- 287.1 (2d) 287.1
Cumulative foreign currency adjust-
ments.................................. (121.7) -- (121.7)
------- ------- -------
Total shareholders' equity............ 472.3 (306.9) 165.4
------- ------- -------
Total liabilities and shareholders'
equity............................... $ 948.6 $ (25.0) $ 923.6
======= ======= =======
</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 13 weeks ended March 30, 1996, and the year ended December 30, 1995,
are described below:
(a) To record the payment of a $284.9 million special dividend to Premark
and the funding of 65% ($12.0 million) of the amount necessary to pay
the dividend declared on Premark Common Stock on May 1, 1996, and the
associated decrease in cash and increase in debt and interest expense
from the borrowings incurred to fund the payments. 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 annual
interest expense and net income would be approximately $0.3 million and
$0.2 million, respectively.
(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 63.2 million and 63.8
million common and common equivalent shares reflected in Premark's consolidated
statement of income for the 13 weeks ended March 30, 1996 and the year ended
December 30, 1995, respectively. 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 63.2 million.
20
<PAGE>
TUPPERWARE CORPORATION
SELECTED FINANCIAL DATA
The following table summarizes certain selected historical financial
information of Tupperware that has been derived from the financial statements
of Tupperware for the five years ended December 30, 1995 and the 13-week
periods ended March 30, 1996 and April 1, 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 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>
13 WEEKS ENDED YEAR ENDED
---------------- -------------------------------------------------
APRIL
MARCH 30, 1, DEC. 30, DEC. 31, DEC. 25, DEC. 26, DEC. 28,
1996 1995 1995 1994 1993 1992 1991
(IN MILLIONS) --------- ------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $329.0 $330.2 $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..... 43.3 41.0 224.9 191.2 148.4 (41.8)** 97.8
Income (loss) before
cumulative effect of
accounting changes..... 31.6 30.6 171.4 149.2 117.9 (43.7)** 60.8
Capital expenditures.... 15.8 13.2 69.3 78.6 85.6 80.0 49.9
Depreciation............ 14.9 15.6 61.3 55.7 44.7 50.1 46.0
Working capital
(deficit).............. 152.4 86.3 88.1 72.9 (49.4)* (11.3) 85.2
Total assets............ 948.6 935.7 944.0 882.6 785.1 661.1 741.4
Long-term debt.......... 0.4 0.4 0.4 0.5 45.6 153.3 156.3
Net investment by
Premark................ 594.0 515.6 533.5 508.1 282.0 168.8 302.8
</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 following is a discussion of Tupperware's financial condition and
operating results for the first fiscal quarter of 1996 compared with the first
fiscal quarter of 1995, and for the years 1995 compared with 1994 and 1994
compared with 1993.
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
FIRST QUARTER 1996 VS. FIRST QUARTER 1995
Net Sales and Net Income. Net sales for the first quarter of 1996 were
$329.0 million, $1.2 million or 0.4 percent lower than 1995 sales of $330.2
million. Net income increased by $1.0 million to $31.6 million, which was a 3
percent improvement from 1995 net income of $30.6 million. The modest
variations from the prior year reflect lower performance by Europe, Africa and
the Middle East, which was offset by improvement in all other regions. The
only region where foreign exchange had a significant impact on the year-to-
year variation was Asia Pacific.
Costs and Expenses. The cost of products sold in relation to sales was 36.6
percent and 34.3 percent in the first quarter of 1996 and 1995, respectively.
The 1996 increase reflects a lower level of U.S. production to more closely
match sales demand, and higher product costs in Latin America due to increased
third party product sourcing. Delivery, sales and administrative expense as a
percentage of sales was 50.5 percent in 1996 compared with 53.4 percent in
1995. The improvement was due to lower promotional spending and operating
expenses in the Americas and Asia Pacific.
Tax Rate. The effective tax rates for the quarters ended March 30, 1996 and
April 1, 1995, and for the year ended December 30, 1995, were 26.7 percent,
25.2 percent and 25.4 percent, respectively. The increase in the rate in 1996
is due to the absence of the 1995 benefit from the resolution of certain tax
audit contingencies and a lower 1996 benefit from repatriating foreign
earnings. These factors were only partially offset by the 1996 benefit from
reducing the valuation allowance for U.S. federal deferred tax assets.
Net Interest. In the first quarters of 1996 and 1995, Tupperware had net
interest income of $0.4 million and $0.7 million, respectively. As a
subsidiary of Premark, Tupperware's income only reflects interest on legal
obligations owed or on amounts held by Tupperware. Dart, which will be a
subsidiary of Tupperware, will pay a special dividend to Premark of
approximately $284.9 million, on May 24, 1996, which will substantially
increase the debt of Tupperware.
1995 VS. 1994 AND 1994 VS. 1993
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
22
<PAGE>
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.
REGIONAL RESULTS -- RESULTS OF OPERATIONS
FIRST QUARTER 1996 VS. FIRST QUARTER 1995
Europe, Africa and the Middle East. Sales decreased by 15 percent in the
first quarter of 1996 to $146.8 million from $173.4 million in 1995. The
decrease resulted from reduced volume in Germany, reflecting weak economic
conditions. The region's sales represented 45 percent and 52 percent of
Tupperware's total sales in the first quarter of 1996 and 1995, respectively.
Segment profit in the region was $30.2 million in 1996, which represented a
$13.8 million, or 31 percent, decrease compared with 1995's segment profit of
$44.0 million. The decrease reflects the lower sales in Germany. For the first
quarter of 1996 and 1995, respectively, the region accounted for 65 percent
and 93 percent of Tupperware's segment profit.
The Americas. Sales in the Americas totaled $106.0 million in the first
quarter of 1996, which was a 25 percent improvement compared with 1995 sales
of $84.8 million. Segment profit in 1996 was $7.3 million compared with a loss
of $1.6 million in 1995. The region's sales accounted for 32 percent and 26
percent of Tupperware's total in 1996 and 1995, respectively, and the 1996
segment profit was 15 percent of its total.
U.S. sales were $43.8 million in 1996, $0.2 million higher than 1995 sales
of $43.6 million. However, the U.S. segment loss decreased sharply to $1.9
million in 1996 from $4.6 million in 1995, reflecting a more efficient use of
promotional expenditures and a lower administrative cost structure. During the
quarter, the U.S. business implemented several strategic initiatives to
simplify operations, increase sales force productivity and improve
profitability.
In the Americas, excluding the United States, sales increased by 51 percent
to $62.2 million in 1996 from $41.2 million in 1995. Mexico was the biggest
factor in the improvement, where sales increased sharply. Sales in Brazil
increased substantially with the improvements in both Mexico and Brazil
resulting from successful programs to boost the size of the sales force.
Segment profit in the Americas, excluding the United States, rose
23
<PAGE>
by $6.2 million to $9.2 million in 1996 from $3.0 million in 1995. Substantial
improvements in Mexico and Brazil, reflecting the higher sales, were the
largest factors in the increase. Also, Argentina had a profit in 1996 versus a
loss in 1995, reflecting higher volume from a much larger sales force and lower
selling and administrative costs.
Asia Pacific. Sales in Asia Pacific were $76.2 million in 1996, which was an
improvement of $4.2 million or 6 percent, from 1995 sales of $72.0 million.
Foreign exchange had a $4.2 million negative impact on the comparison.
Excluding foreign exchange, sales in Japan increased significantly due to the
impact in 1995 of the Kobe earthquake. However, the negative impact of foreign
exchange in Japan offset a large part of the increase. Sales in Korea increased
substantially, but Taiwan had a significant sales decrease. The sales
fluctuations were due to an increase in the size of the active sales force in
Korea and a decrease in Taiwan, reflecting the results of recruiting programs
in those countries. The region's sales represented 23 percent and 22 percent of
Tupperware's total sales in the first quarter of 1996 and 1995, respectively.
Segment profit in the region increased by 87 percent to $9.3 million in 1996
from $5.0 million in 1995. Foreign exchange had a minor impact on the
comparison. A substantial increase in Korea and a sharp improvement in Japan,
reflecting the higher sales along with the absence of costs related to the 1995
earthquake, were the main reasons for the increase. Taiwan's segment profit
fell substantially as a result of its lower sales. For the first quarter of
1996 and 1995, respectively, the region accounted for 20% and 11% of
Tupperware's segment profit.
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.
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
24
<PAGE>
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.
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
25
<PAGE>
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, Dart will pay the Dividend Payment of
approximately $284.9 million to Premark on May 24, 1996.
Prior to the Distribution, the Company's domestic cash requirements,
including working capital and capital expenditures, have been financed by
Premark through its centralized cash management system. On May 16, 1996,
Tupperware and certain of its subsidiaries entered into a 5-year $300 million
unsecured multicurrency credit facility. This facility will be used along with
available cash in funding the Dividend Payment to Premark, and along with cash
generated by operating activities and continuing foreign uncommitted lines of
credit, which totalled $199.9 million at March 30, 1996, is expected to be
adequate to finance any additional working capital needs and capital
expenditures.
Operating Activities. Net cash (used in) provided by operating activities
totaled $(4.9) million and $(1.7) million in the first quarter of 1996 and
1995, and $179.0 million, $142.7 million, and $105.3 million in 1995, 1994,
and 1993, respectively. Working capital was $152.4 million as of March 30,
1996 and $86.3 million as of April 1, 1995, and 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. The increase in working capital as of March 30,
1996 compared with April 1, 1995, reflects higher receivables due to a
refundable tax payment in Europe and higher sales in Latin America, along with
lower accruals, particularly in the United States. 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
26
<PAGE>
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 $15.8
million, $13.2 million, $69.3 million, $78.6 million, and $85.6 million in the
first quarter of 1996 and 1995, and for all of 1995, 1994, and 1993,
respectively. Capital expenditures declined during each of the periods as the
result of decreases in the necessity of expenditures in Europe. Capital
expenditures are expected to be approximately $85 million for all of 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."
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.
27
<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>
28
<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>
29
<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.
30
<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."
31
<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>
32
<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>
33
<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.
34
<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.
35
<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.
36
<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
37
<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.
38
<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 by Tupperware, 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.
39
<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 for the most recently
completed fiscal year of such three year period; 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, together with the options on Premark Common Stock
retained by Mr. Batts after the Distribution, will maintain the aggregate
excess of market value over exercise price of the stock options on Premark
Common Stock immediately prior to the Distribution.
TUPPERWARE CORPORATION 1996 INCENTIVE PLAN
The Tupperware Board and the Premark Board have adopted, and the Premark
stockholders have approved, 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").
40
<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, 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 number, kind and 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
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<PAGE>
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 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) any Option or SAR that is not then exercisable and
vested will become fully exercisable and vested (provided, in the case of any
holder of an Option or SAR who is subject to Section 16(b) of the Exchange
Act, such Option or SAR has been outstanding for at least six months as of the
date of such Change of Control), (ii) the restrictions on any Restricted Stock
will lapse and (iii) all Performance Awards will be deemed earned.
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 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, any such Option held by a Participant subject to Section 16 of
the Exchange Act will be cancelled and the holder thereof will receive six
months and
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one day after the grant of such Option, an amount equal to the Spread
multiplied times the number of shares of Tupperware Common Stock granted under
or comprising such Option.
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
The Tupperware Board has adopted, and Premark, as Tupperware's sole
stockholder, has approved, 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 or the designated committee 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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<PAGE>
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
The Tupperware Board has adopted and Premark, as Tupperware's sole
stockholder, has approved, 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 plans, and 3,680,076 shares of Tupperware Common
Stock with respect to Premark plans. In addition, 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 shares 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 May 17, 1996, up to approximately 62.0
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 with
respect to election of directors which requires a plurality of the votes cast,
a majority of the votes cast 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 $150 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 has acquired
beneficial ownership of 15% or more of the outstanding shares of Tupperware
Common Stock (an "Acquiring Person") 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 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, 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 May 1, 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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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 share 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 and 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, or newly created directorships, 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 designed 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 voting power,
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 stockholders. 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
56
<PAGE>
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 or agent of
Tupperware or as a director, officer or employee or agent 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, employee or agent of another corporation or of a partnership, joint
venture, trust or other
57
<PAGE>
enterprise, including service with respect to employee benefit plans, whether
the basis of such Proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as
a director, officer, employee or agent, 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, employee or agent 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.
58
<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 pursuant to
the indemnity provisions in the By-laws.
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.
59
<PAGE>
INDEX TO DEFINED TERMS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
1996 Incentive Plan........... 40
Acquiring Person.............. 50
Annual Retainer............... 44
Awards........................ 40
Bank.......................... 48
Base Plan..................... 38
Benefits Agreement............ 13
By-laws....................... 3
cause......................... 45
Certificate of Incorporation.. 3
Change of Control Agreements.. 40
Change of Control Price....... 42
Code.......................... 1
Commission.................... iii
Committee..................... 40
Continuing Director........... 54
Cut-off Date.................. 12
Dart.......................... 2
Dart & Kraft, Inc............. 8
Delaware Law.................. 7
Director Stock Plan........... 44
Distribution.................. 7
Distribution Agent............ 7
Distribution Agreement........ 11
Distribution Date............. 1
Dividend Payment.............. 2
DKI Distribution.............. 8
DKI Distribution Agreement.... 8
DKI Indemnity................. 11
Eligible Director............. 44
employment taxes.............. 43
ERISA......................... 41
Exchange Act.................. iii
Final Expiration Date......... 50
Freestanding SARs............. 41
German pension plan........... 38
HSR Act....................... 48
Interested Stockholder........ 54
interested stockholder........ 57
Interim Services Agreement.... 13
IRS........................... 1
ISOs.......................... 43
Loomis........................ 48
mix fund...................... 47
named executive officers...... 35
Net Debt...................... 2
</TABLE>
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
normal retirement............. 46
NQOs.......................... 43
NYSE.......................... 1
Options....................... 40
Participants.................. 40
Pension Plan.................. 46
Performance Awards............ 40
Preferred Shares.............. 49
Premark....................... 1
Premark Board................. 7
Premark Common Stock.......... 1
Premark Remaining Businesses.. 8
Proceeding.................... 57
Purchase Price................ 50
Record Date................... 1
Redemption Price.............. 51
Registration Statement........ iii
Restricted Period............. 42
Restricted Stock.............. 40
Right......................... 49
Rights Agent.................. 49
Rights Agreement.............. 49
Rights Certificates........... 50
Rights Distribution Date...... 50
SARs.......................... 36
Savings Plan.................. 47
Securities Act................ 9
Services...................... 13
Spread........................ 42
Stockholder Notice Procedure.. 53
Supplemental Plan............. 47
Tandem SARs................... 41
Tax Ruling.................... 1
Tax Sharing Agreement......... 12
TEAM pension plan............. 38
Tupperware.................... 1
Tupperware Board.............. 3
Tupperware Business........... 7
Tupperware Common Stock....... 1
Tupperware Debt Rating........ 14
Tupperware Participants....... 13
Tupperware Plans.............. 13
Tupperware Preferred Stock.... 49
U.S. named executive officers. 38
Voting Stock.................. 53
Whole Board................... 52
</TABLE>
60
<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
Condensed Combined Statement of Income (Unaudited)....................... F-19
Condensed Combined Statement of Cash Flows (Unaudited)................... F-20
Condensed Combined Balance Sheet (Unaudited)............................. F-21
Notes to Condensed Consolidated Financial Statements (Unaudited)......... F-22
Schedule II--Valuation and Qualifying Accounts........................... F-23
Premark International, Inc.
Pro Forma Consolidated Financial Information (Unaudited)................. F-24
Notes to the Pro Forma Consolidated Financial Information (Unaudited).... F-26
</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-23 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, EXCEPT PER SHARE DATA) 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)............................ $ 2.52
=========
</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) DEC. 30, DEC. 31,
1995 1994
-------- --------
<S> <C> <C>
ASSETS
Cash and cash equivalents.................................. $ 97.3 $ 102.3
Accounts and notes receivable, less allowances of $26.1 in
1995 and
$25.8 in 1994............................................. 147.5 111.5
Inventories................................................ 206.6 184.6
Deferred income tax benefits............................... 58.1 60.9
Prepaid expenses........................................... 16.9 14.0
------- -------
Total current assets................................... 526.4 473.3
------- -------
Deferred income tax benefits............................... 21.7 25.3
Property, plant, and equipment, net........................ 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 73.8
------- -------
Total assets........................................... $ 944.0 $ 882.6
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable........................................... $ 88.0 $ 99.5
Short-term borrowings and current portion of long-term
debt...................................................... 83.8 58.3
Accrued liabilities........................................ 266.5 242.6
------- -------
Total current liabilities.............................. 438.3 400.4
------- -------
Long-term debt............................................. 0.4 0.5
Accrued postretirement benefit cost........................ 36.1 35.7
Other liabilities.......................................... 53.6 50.9
Shareholder's equity:
Net investment by Premark................................ 533.5 508.1
Cumulative foreign currency adjustments.................. (117.9) (113.0)
------- -------
Total shareholder's equity............................. 415.6 395.1
------- -------
Total liabilities and shareholder's equity............. $ 944.0 $ 882.6
======= =======
</TABLE>
See "Notes to the Combined Financial Statements."
F-5
<PAGE>
TUPPERWARE CORPORATION
COMBINED STATEMENT OF SHAREHOLDER'S 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 NET INCOME PER SHARE (UNAUDITED)
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 assumes
that Tupperware will use $25.0 million of available cash and $271.9 million of
additional borrowings to fund both the Dividend Payment and Tupperware's share
of the Premark Dividend, which are described in Note 2, in the amounts of
$284.9 million and $12.0 million, respectively. The pro forma amount is based
upon: a) the Company's historical 1995 net income, adjusted for $16.9 million
of additional interest expense, net of $6.6 million of tax benefits, related
to the increase in borrowings at an assumed weighted average interest rate of
6.2%; 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. Dart will fund the Dividend
Payment with new bank borrowings and available cash 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 is to be
determined 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
the quarterly dividend on Premark's common stock to be declared in May 1996
(the "Premark Dividend").
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. 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 on total debt 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
CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
------------------
MARCH 30, APRIL 1,
1996 1995
(IN MILLIONS, EXCEPT PER SHARE DATA) --------- --------
<S> <C> <C>
Net sales................................................... $329.0 $330.2
------ ------
Cost and expenses:
Cost of products sold...................................... 120.4 113.4
Delivery, sales and administrative expense................. 166.2 176.4
Interest expense........................................... 0.9 0.5
Interest income............................................ (1.3) (1.2)
Other (income) expense, net................................ (0.5) 0.1
------ ------
Total costs and expenses................................. 285.7 289.2
------ ------
Income before income taxes.................................. 43.3 41.0
Provision for income taxes.................................. 11.7 10.4
------ ------
Net income.................................................. 31.6 30.6
Shareholders' equity, beginning of period................... 415.6 395.1
Net transactions with Premark............................... 28.9 (23.0)
Translation adjustments..................................... (3.8) 8.1
------ ------
Shareholders' equity, end of period......................... $472.3 $410.8
====== ======
Pro forma income per common and common equivalent share..... $ 0.46
======
</TABLE>
See "Notes to Condensed Combined Financial Statements (Unaudited)."
F-19
<PAGE>
TUPPERWARE CORPORATION
CONDENSED COMBINED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
------------------
MARCH 30, APRIL 1,
1996 1995
(IN MILLIONS) --------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income................................................. $31.6 $30.6
Adjustment to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation.............................................. 14.9 15.6
Changes in assets and liabilities:
Increase in accounts and notes receivable................. (25.0) (22.4)
Increase in inventory..................................... (5.7) (12.2)
Decrease in accounts payable and accrued liabilities...... (19.9) (8.6)
Decrease in income taxes payable.......................... (6.4) (3.3)
Decrease (increase) in net deferred income taxes.......... 7.0 (1.2)
Increase in prepaid expenses.............................. (3.4) (2.6)
Other, net................................................. 2.0 2.4
----- -----
Net cash used in operating activities..................... (4.9) (1.7)
----- -----
Cash flows from investing activities:
Capital expenditures....................................... (15.8) (13.2)
----- -----
Net cash used in investing activities..................... (15.8) (13.2)
----- -----
Cash flows from financing activities:
Net transactions with Premark.............................. 28.9 (23.0)
Net (decrease) increase in short-term debt................. (15.8) 22.4
Repayment of long-term debt................................ -- --
----- -----
Net cash provided by (used in) financing activities....... 13.1 (0.6)
----- -----
Effects of exchange rate changes on cash and cash equiva-
lents...................................................... (2.3) 9.4
----- -----
Net decrease in cash and cash equivalents $(9.9) $(6.1)
===== =====
</TABLE>
See "Notes to Condensed Combined Financial Statements (Unaudited)."
F-20
<PAGE>
TUPPERWARE CORPORATION
CONDENSED COMBINED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
MARCH 30, MARCH 30, DECEMBER 30,
1996 1996 1995
(IN MILLIONS) --------- --------- ------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents..................... $ 62.4 $ 87.4 $97.3
Accounts and notes receivable................. 197.4 197.4 173.6
Less allowances for doubtful accounts........ (26.6) (26.6) (26.1)
------ ------ ------
170.8 170.8 147.5
Inventories................................... 210.0 210.0 206.6
Deferred income tax benefits.................. 50.8 50.8 58.1
Prepaid expenses.............................. 20.2 20.2 16.9
------ ------ ------
Total current assets........................ 514.2 539.2 526.4
------ ------ ------
Deferred income tax benefits.................. 21.1 21.1 21.7
Property, plant, and equipment................ 939.1 939.1 938.0
Less accumulated depreciation................ (626.1) (626.1) (620.3)
------ ------ ------
313.0 313.0 317.7
Long-term receivables, net of allowances of
$26.5 million at
March 30, 1996, and $24.8 million at December
30, 1995,
and other assets............................. 75.3 75.3 78.2
------ ------ ------
Total assets................................ $923.6 $948.6 $944.0
====== ====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable.............................. $ 79.4 $ 79.4 $88.0
Short-term borrowings and current portion of
long-term debt............................... 225.7 65.8 83.8
Accrued liabilities........................... 263.6 241.6 266.5
------ ------ ------
Total current liabilities................... 568.7 386.8 438.3
------ ------ ------
Long-term debt................................ 100.4 0.4 0.4
Accrued postretirement benefit cost........... 36.2 36.2 36.1
Other liabilities............................. 52.9 52.9 53.6
Shareholders' equity:
Net investment by Premark.................... -- 594.0 533.5
Common shareholders' equity.................. 287.1 -- --
Cumulative foreign currency adjustments...... (121.7) (121.7) (117.9)
------ ------ ------
Total shareholders' equity.................. 165.4 472.3 415.6
------ ------ ------
Total liabilities and shareholders' equity.. $923.6 $948.6 $944.0
====== ====== ======
</TABLE>
See "Notes to Condensed Combined Financial Statements (Unaudited)."
F-21
<PAGE>
TUPPERWARE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim condensed
combined financial statements include all adjustments, consisting only of
normal recurring items, necessary for a fair presentation of the financial
position and results of operations. However, these statements do not include
all information and footnotes necessary for a fair presentation of financial
position, results of operations, and changes in financial position in
conformity with generally accepted accounting principles, and therefore should
be read in conjunction with the combined financial statements and notes
thereto for the three-year period ended December 30, 1995. The results of
operations of any interim period are not necessarily indicative of the results
that may be expected for a full fiscal year.
NOTE 2: INVENTORIES
Inventories, by component, are summarized as follows (in millions):
<TABLE>
<CAPTION>
MARCH 30, DECEMBER 30,
1996 1995
--------- ------------
<S> <C> <C>
Finished goods........................................... $ 99.6 $100.3
Work in process.......................................... 42.1 40.1
Raw materials and supplies............................... 68.3 66.2
------ ------
Total inventories $210.0 $206.6
====== ======
</TABLE>
NOTE 3: PRO FORMA INFORMATION
The pro forma condensed combined balance sheet reflects the following
transactions as if the Distribution had occurred on March 30, 1996: a) payment
of the $284.9 million special dividend to Premark ("the Dividend Payment"); b)
an increase in borrowings and a decrease in cash to fund the Dividend Payment;
c) an accrual of $10.0 million for non-recurring costs expected to be incurred
by Tupperware in 1996 that are directly related to the Distribution; and d) an
accrual of $12.0 million for the amount that Tupperware will pay related to
the quarterly dividend declared on Premark's common stock on May 1, 1996 (the
"Premark Dividend").
Pro forma net income per common and common equivalent share is calculated as
if the Distribution had occurred at the beginning of fiscal 1996 and assumes
that Tupperware will use $25.0 million of available cash and $271.9 million of
additional borrowings to fund both the Dividend Payment of $284.9 million and
the $12.0 million payment related to the Premark Dividend. The pro forma net
income per common and common equivalent share is based on: a) the Company's
historical net income for the 13 weeks ended March 30, 1996, adjusted for $4.2
million of additional interest expense, net of $1.6 million of tax benefits,
related to the increase in borrowings at an assumed weighted average interest
rate of 6.2%; and b) an assumed 63.2 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
63.2 million.
F-22
<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-23
<PAGE>
PREMARK INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The unaudited Pro Forma Consolidated Balance Sheet as of March 30, 1996 and
the Pro Forma Consolidated Statement of Income for the 13 weeks ended March
30, 1996 and 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 March
30, 1996 and as of the beginning of 1995, 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" columns.
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 periods shown.
PREMARK INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED MARCH 30, 1996 YEARS ENDED DECEMBER 30, 1995
---------------------------------- -----------------------------------
(IN MILLIONS, EXCEPT PER PRO FORMA PRO FORMA
SHARE AMOUNTS) HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
- ------------------------ ---------- ----------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $528.7 $ -- $528.7 $2,213.4 $ -- $2,213.4
------ ----- ------ -------- ------ --------
Costs and expenses
Cost of products
sold................. 340.7 -- 340.7 1,420.9 -- 1,420.9
Delivery, sales, and
administrative ex-
pense................ 163.6 -- 163.6 648.0 -- 648.0
Interest expense...... 5.7 (3.3)(2a) 2.4 26.6 (10.3)(2a) 16.3
Interest income....... (0.2) -- (0.2) (2.0) -- (2.0)
Other expense, net.... (0.1) -- (0.1) (0.4) -- (0.4)
------ ----- ------ -------- ------ --------
Total costs and ex-
penses............. 509.7 (3.3) 506.4 2,093.1 (10.3) 2,082.8
------ ----- ------ -------- ------ --------
Income before income
taxes.................. 19.0 3.3 22.3 120.3 10.3 130.6
Provision for income
taxes.................. 7.2 1.2 (2b) 8.4 41.4 4.0 (2b) 45.4
------ ----- ------ -------- ------ --------
Income from continuing
operations............. $ 11.8 $ 2.1 $ 13.9 $ 78.9 $ 6.3 $ 85.2
====== ===== ====== ======== ====== ========
Income from continuing
operations per common
and common equivalent
share.................. $ 0.19 $ 0.22 $ 1.24 $ 1.34
====== ====== ======== ========
</TABLE>
See "Notes to the Pro Forma Consolidated Financial Information (Unaudited)."
F-24
<PAGE>
PREMARK INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF MARCH 30, 1996
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
(IN MILLIONS) ---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents................. $ 18.1 $ 131.9 (2a) $ 150.0
Accounts and notes receivable, net........ 340.5 -- 340.5
Inventories............................... 353.8 -- 353.8
Recoverable income taxes.................. 12.7 -- 12.7
Deferred income tax benefits.............. 74.9 -- 74.9
Prepaid expenses.......................... 47.0 -- 47.0
-------- ------- --------
Total current assets.................. 847.0 131.9 978.9
-------- ------- --------
Property, plant, and equipment, net....... 422.8 -- 422.8
Intangibles, net.......................... 167.2 -- 167.2
Other assets.............................. 75.0 75.0
Net assets of discontinued operations..... 471.8 (296.9)(2a) --
(174.9)(2c)
-------- ------- --------
Total assets.......................... $1,983.8 $(339.9) $1,643.9
======== ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable.......................... $ 96.2 $ -- $ 96.2
Short-term borrowings and current portion
of long-term debt........................ 165.0 (165.0)(2a) --
Accrued liabilities....................... 350.5 -- 350.5
-------- ------- --------
Total current liabilities............. 611.7 (165.0) 446.7
-------- ------- --------
Long-term debt............................ 121.6 -- 121.6
Accrued postretirement benefit cost....... 121.8 -- 121.8
Other liabilities......................... 91.4 -- 91.4
Shareholders' equity:
Preferred stock......................... -- -- --
Common stock............................ 69.0 -- 69.0
Capital surplus......................... 590.3 (222.4)(2c) 367.9
Retained earnings....................... 751.7 (74.2)(2c) 677.5
Treasury stock.......................... (240.4) -- (240.4)
Restricted stock........................ (1.5) -- (1.5)
Cumulative foreign currency adjust-
ments.................................. (131.8) 121.7 (2c) (10.1)
-------- ------- --------
Total shareholders' equity............ 1,037.3 (174.9) 862.4
-------- ------- --------
Total liabilities and shareholders'
equity............................... $1,983.8 $(339.9) $1,643.9
======== ======= ========
</TABLE>
See "Notes to the Pro Forma Consolidated Financial Information (Unaudited)."
F-25
<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 13 weeks ended March 30, 1996, and for the year ended December 30,
1995 are described below:
(a) To record the receipt of a $284.9 million Special Dividend from Dart
Industries Inc. ("Dart"), a subsidiary of Tupperware, and the funding by
Tupperware of 65% ($12.0 million) of the amount necessary to pay the
dividend declared on Premark Common Stock on May 1, 1996 and the associated
increase in cash and 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 periods at their weighted
average interest rates.
(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 63.2 million and 63.8 million common
and common equivalent shares reflected in Premark's consolidated statement of
income for the 13 weeks ended March 30, 1996, and the year ended December 30,
1995, respectively. 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 63.2 million.
F-26
<PAGE>
Annex A
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF TUPPERWARE
CORPORATION
1. The name of the corporation (which is hereinafter referred to as the
Corporation) is "Tupperware Corporation".
2. The original Certificate of Incorporation was filed with the Secretary
of State of Delaware on February 8, 1996, under the name Tupperware
Corporation.
3. This Restated Certificate of Incorporation has been duly proposed by
resolutions adopted and declared advisable by the Board of Directors of the
Corporation (the "Board of Directors"), and duly executed and acknowledged by
the proper officers of the Corporation in accordance with the provisions of
Sections 103, 228, 242 and 245 of the General Corporation Law of the State of
Delaware and, upon filing with the Secretary of State in accordance with
Section 103 shall henceforth supersede the original Certificate of
Incorporation and shall, as it may thereafter be amended in accordance with
its terms and applicable law, be the Certificate of Incorporation of the
Corporation.
4. The text of the Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirety as follows:
ARTICLE I
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
Tupperware Corporation
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of the Corporation's registered
agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation shall be to engage in any lawful act or
activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.
ARTICLE IV
(A) Authorized Stock. The total number of shares of stock which the
Corporation shall have authority to issue is 800,000,000, consisting of
600,000,000 shares of common stock, par value $.01 per share ("Common Stock"),
and 200,000,000 shares of preferred stock, no par value ("Preferred Stock").
(B) Preferred Stock. The Preferred Stock may be issued from time to time
in one or more series. In addition to a series of Preferred Stock designated
as "Series A Junior Participating Preferred Stock", the terms of which are set
forth in the attached Preferred Stock Designation, the Board of Directors is
hereby authorized to create and provide for the issuance of shares of
Preferred Stock in series and, by filing a certificate pursuant to the
applicable law of the State of Delaware (hereinafter referred to as a
"Preferred Stock Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designation,
A-1
<PAGE>
power, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
(i) The designation of the series, which may be by distinguishing
number, letter or title.
(ii) The number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the Preferred
Stock Designation) increase or decrease (but not below the number of shares
thereof then outstanding).
(iii) Whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series.
(iv) The dates at which dividends, if any, shall be payable.
(v) The redemption rights and price or prices, if any, for shares of
the series.
(vi) The terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series.
(vii) The amounts payable on, and the preferences, if any, of shares of
the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation.
(viii) Whether the shares of the series shall be convertible into
shares of any other class or series, or any other security, of the
Corporation or any other corporation, and, if so, the specification of such
other class or series of such other security, the conversion price or
prices or rate or rates, any adjustments thereof, the date or dates at
which such shares shall be convertible and all other terms and conditions
upon which such conversion may be made.
(ix) Restrictions on the issuance of shares of the same series or of
any other class or series.
(x) The voting rights, if any, of the holders of shares of the series.
(xi) Such other powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions thereof as the Board of Directors shall determine.
(C) Common Stock. The Common Stock shall be subject to the express terms
of the Preferred Stock and any series thereof. Each share of Common Stock
shall be equal to each other share of Common Stock. The holders of shares of
Common Stock shall be entitled to one vote for each such share upon all
questions presented to the stockholders.
(D) Vote. Except as may be provided in this Certificate of Incorporation
or in a Preferred Stock Designation, or as may be required by applicable law,
the Common Stock shall have the exclusive right to vote for the election of
directors and for all other purposes, and holders of shares of Preferred Stock
shall not be entitled to receive notice of any meeting of stockholders at
which they are not entitled to vote.
(E) Record Holders. The Corporation shall be entitled to treat the person
in whose name any share of its stock is registered as the owner thereof for
all purposes and shall not be bound to recognize any equitable or other claim
to, or interest in, such share on the part of any other person, whether or not
the Corporation shall have notice thereof, except as expressly provided by
applicable law.
A-2
<PAGE>
ARTICLE V
The Board of Directors is hereby authorized to create and issue, whether
or not in connection with the issuance and sale of any of its stock or other
securities or property, rights entitling the holders thereof to purchase from
the Corporation shares of stock or other securities of the Corporation or any
other corporation. The times at which and the terms upon which such rights are
to be issued will be determined by the Board of Directors and set forth in the
contracts or instruments that evidence such rights. The authority of the Board
of Directors with respect to such rights shall include, but not be limited to,
determination of the following:
(A) The initial purchase price per share or other unit of the stock or
other securities or property to be purchased upon exercise of such rights.
(B) Provisions relating to the times at which and the circumstances under
which such rights may be exercised or sold or otherwise transferred, either
together with or separately from, any other stock or other securities of the
Corporation.
(C) Provisions which adjust the number or exercise price of such rights or
amount or nature of the stock or other securities or property receivable upon
exercise of such rights in the event of a combination, split or
recapitalization of any stock of the Corporation, a change in ownership of the
Corporation's stock or other securities or a reorganization, merger,
consolidation, sale of assets or other occurrence relating to the Corporation
or any stock of the Corporation, and provisions restricting the ability of the
Corporation to enter into any such transaction absent an assumption by the
other party or parties thereto of the obligations of the Corporation under
such rights.
(D) Provisions which deny the holder of a specified percentage of the
outstanding stock or other securities of the Corporation the right to exercise
such rights and/or cause the rights held by such holder to become void.
(E) Provisions which permit the Corporation to redeem or exchange such
rights.
(F) The appointment of a rights agent with respect to such rights.
Notwithstanding anything contained in this Certificate of Incorporation to
the contrary, the affirmative vote of at least 80 percent of the voting power
of the then outstanding Voting Stock (as defined below), voting together as a
single class, shall be required to amend or repeal, or adopt any provisions
inconsistent with, this Article V. For the purposes of this Certificate of
Incorporation, "Voting Stock" shall mean the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
Directors.
ARTICLE VI
(A) In furtherance and not in limitation of the powers conferred by law,
the Board of Directors is expressly authorized and empowered:
(i) to adopt, amend or repeal the By-laws of the Corporation, provided,
however, that the By-laws may also be altered, amended or repealed by the
affirmative vote of the holders of at least 80 percent of the voting power
of the then outstanding Voting Stock, voting together as a single class;
and
(ii) from time to time to determine whether and to what extent, and at
what times and places, and under what conditions and regulations, the
accounts and books of the Corporation, or any of them, shall be open to
inspection of stockholders; and, except as so determined, or as expressly
provided in this Certificate of Incorporation or in any Preferred Stock
Designation, no stockholder shall have any right to inspect any account,
book or document of the Corporation other than such rights as may be
conferred by applicable law.
A-3
<PAGE>
(B) The Corporation may in its By-laws confer powers upon the Board of
Directors in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board of Directors by law.
Notwithstanding anything contained in this Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least 80 percent of the
voting power of the then outstanding Voting Stock, voting together as a single
class, shall be required to amend, repeal or adopt any provision inconsistent
with subparagraph (i) of paragraph (A) of this Article VI.
ARTICLE VII
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances or to consent to
specific actions taken by the Corporation, any action required or permitted to
be taken by the stockholders of the Corporation must be effected at a duly
called annual or special meeting of stockholders of the Corporation and may
not be effected by any consent in writing in lieu of a meeting of such
stockholders. Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of at least 80 percent of
the voting power of the then outstanding Voting Stock, voting together as a
single class, shall be required to amend or repeal or adopt any provision
inconsistent with, this Article VII.
ARTICLE VIII
(A) Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specific circumstances, the number of
directors of the Corporation shall be fixed by the By-laws of the Corporation
and may be increased or decreased from time to time in such a manner as may be
prescribed by the By-laws.
(B) Unless and except to the extent that the By-laws of the Corporation
shall so require, the election of directors of the Corporation need not be by
written ballot.
(C) The directors, other than those who may be elected by the holders of
any series of Preferred Stock, shall be divided into three classes, as nearly
equal in number as possible, and designated as Class I, Class II and Class
III. Class I directors shall be initially elected for a term expiring at the
1997 annual meeting of stockholders, Class II directors shall be initially
elected for a term expiring at the 1998 annual meeting of stockholders, and
Class III directors shall be initially elected for a term expiring at the 1999
annual meeting of stockholders. Members of each class shall hold office until
their successors are elected and qualified. At each succeeding annual meeting
of the stockholders of the Corporation, the successors of the class of
directors whose term expires at that meeting shall be elected by a plurality
vote of all votes cast at such meeting to hold office for a term expiring at
the annual meeting of stockholders held in the third year following the year
of their election, and until their successors are elected and qualified.
(D) Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specific circumstances, any director may
be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least 80 percent of the voting power of
the then outstanding Voting Stock, voting together as a single class.
(E) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
80 percent of the voting power of the then outstanding Voting Stock, voting
together as a single class, shall be required to amend or repeal, or adopt any
provision inconsistent with, this Article VIII.
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ARTICLE IX
Section 1. Vote Required for Certain Business Combinations
(A) Higher Vote for Certain Business Combinations. In addition to any
affirmative vote required, by law or this Certificate of Incorporation or by
any Preferred Stock Designation, and except as otherwise expressly provided in
Section 2 of this Article IX:
(i) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with (a) any Interested Stockholder (as
hereinafter defined) or (b) any other person (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested
Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder, including all Affiliates of the Interested
Stockholder, of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereinafter defined) of $10,000,000 or
more; or
(iii) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder, including all
Affiliates of any Interested Stockholder, in exchange for cash, securities
or other property (or a combination thereof) having an aggregate Fair
Market Value of $10,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliates of an Interested Stockholder; or
(v) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not an Interested Stockholder is a party thereto)
which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is
Beneficially Owned (as hereinafter defined) by any Interested Stockholder
or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 80 percent of
the voting power of the then outstanding Voting Stock, voting together as a
single class, including the affirmative vote of the holders of at least 80
percent of the voting power of the then outstanding Voting Stock not owned
directly or indirectly by any Interested Stockholder or any Affiliate of any
Interested Stockholder. Such affirmative vote shall be required
notwithstanding any other provision of this Certificate of Incorporation, any
Preferred Stock Designation or any provision of law or of any agreement with
any national securities exchange or otherwise which might otherwise permit a
lesser vote or no vote.
(B) Definition of "Business Combination." The term "Business Combination"
as used in this Article IX shall mean any transaction described in any one or
more of clauses (i) through (v) of paragraph (A) of this Section 1.
Section 2. When Higher Vote Is Not Required
The provisions of Section 1 of this Article IX shall not be applicable to
any particular Business Combination, and such Business Combination shall
require only such affirmative vote as is required by law or any other
provision of this Certificate of Incorporation and any Preferred Stock
Designation, if, in the case of a Business Combination that does not involve
any cash or other consideration being received by the stockholders of the
Corporation, the condition specified in the following paragraph (A) is met or,
in the case of any other Business Corporation, the conditions specified in
either of the following paragraph (A) or (B) are met:
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(A) Approval by Continuing Directors. The Business Combination shall have
been approved by a majority of the Continuing Directors (as hereinafter
defined); provided, however, that this condition shall not be capable of
satisfaction unless there are at least five Continuing Directors.
(B) Price and Procedure Requirements. All of the following conditions
shall have been met:
(i) The consideration to be received by holders of shares of a
particular class (or series) of outstanding capital stock (including Common
Stock and other than Excluded Preferred Stock (as hereinafter defined))
shall be in cash or in the same form as the Interested Stockholder or any
of its Affiliates has previously paid for shares of such class (or series)
of capital stock. If the Interested Stockholder or any of its Affiliates
have paid for shares of any class (or series) of capital stock with varying
forms of consideration, the form of consideration to be received per share
by holders of shares of such class (or series) of capital stock shall be
either cash or the form used to acquire the largest number of shares of
such class (or series) of capital stock previously acquired by the
Interested Stockholder.
(ii) The aggregate amount of (x) the cash and (y) the Fair Market
Value, as of the date (the "Consummation Date") of the consummation of the
Business Combination, of the consideration other than cash to be received
per share by holders of Common Stock in such Business Combination shall be
at least equal to the higher of the following (in each case appropriately
adjusted in the event of any stock dividend, stock split, combination of
shares or similar event):
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid by the Interested Stockholder or any of its Affiliates for any
shares of Common Stock acquired by them within the two-year period
immediately prior to the date of the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or in
any transaction in which the Interested Stockholder became an
Interested Stockholder, whichever is higher, plus interest compounded
annually from the first date on which the Interested Stockholder became
an Interested Stockholder (the "Determination Date") through the
Consummation Date at the publicly announced base rate of interest of
Citibank N.A. (or such other major bank headquartered in the City of
New York as may be selected by the Continuing Directors) from time to
time in effect in the City of New York, less the aggregate amount of
any cash dividends paid, and the Fair Market Value of any dividends
paid in other than cash, on each share of Common Stock from the
Determination Date through the Consummation Date in an amount up to but
not exceeding the amount of interest so payable per share of Common
Stock; and
(b) the Fair Market Value per share of Common Stock on the Announcement
Date or the Determination Date, whichever is higher.
(iii) The aggregate amount of (x) the cash and (y) the Fair Market
Value, as of the Consummation Date, of the consideration other than cash to
be received per share by holders of shares of any class (or series), other
than Common Stock or Excluded Preferred Stock, of outstanding capital stock
shall be at least equal to the highest of the following (in each case
appropriately adjusted in the event of any stock dividend, stock split,
combination of shares or similar event), it being intended that the
requirements of this paragraph (B)(iii) shall be required to be met with
respect to every such class (or series) of outstanding capital stock
whether or not the Interested Stockholder or any of its Affiliates has
previously acquired any shares of a particular class (or series) of capital
stock:
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid by the Interested Stockholder or any of its Affiliates for any
shares of such class (or series) of capital stock acquired by them
within the two-year period immediately prior to the Announcement Date
or in any transactions in which it became an Interested Stockholder,
whichever is higher, plus interest compounded annually from the
Determination Date through the Consummation Date at the publicly
announced base rate of interest of Citibank N.A. (or such other
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major bank headquartered in the City of New York as may be selected by
the Continuing Directors) from time to time in effect in the City of
New York, less the aggregate amount of any cash dividends paid, and the
Fair Market Value of any dividends paid in other than cash, on each
share of such class (or series) of capital stock from the Determination
Date through the Consummation Date in an amount up to but not exceeding
the amount of interest so payable per share of such class (or series)
of capital stock;
(b) the Fair Market Value per share of such class (or series) of
capital stock on the Announcement Date or on the Determination Date,
whichever is higher, and
(c) the highest preferential amount per share, if any, to which the
holders of shares of such class (or series) of capital stock would be
entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
(iv) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (a)
except as approved by a majority of the Continuing Directors, there shall
have been no failure to declare and pay at the regular date therefor any
full quarterly dividends (whether or not cumulative) on any outstanding
Preferred Stock; (b) there shall have been (I) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary to reflect
any subdivision of the Common Stock), except as approved by a majority of
the Continuing Directors, and (II) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of outstanding
shares of Common Stock, unless the failure so to increase such annual rate
is approved by a majority of the Continuing Directors; and (c) neither such
Interested Stockholder nor any of its Affiliates shall have become the
beneficial owner of any additional shares of Voting Stock except as part of
the transaction which results in such Interested Stockholder becoming an
Interested Stockholder; provided, however, that no approval by Continuing
Directors shall satisfy the requirements of this subparagraph (iv) unless
at the time of such approval there are at least five Continuing Directors.
(v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder and any of its Affiliates shall
not have received the benefit, directly or indirectly (except
proportionately, solely in such Interested Stockholder's or Affiliate's
capacity as a stockholder of the Corporation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or
other tax advantages provided by the Corporation, whether in anticipation
of or in connection with such Business Combination or otherwise.
(vi) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or regulations) shall be
mailed to all stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
(vii) Such Interested Stockholder shall have supplied the Corporation
with such information as shall have been requested pursuant to Section 4 of
this Article IX within the time period set forth therein.
Section 3. For the purposes of this Article IX:
(1) A "person" means any individual, limited partnership, general
partnership, corporation or other firm or entity.
(2) "Interested Stockholder" means any person (other than the Corporation
or any Subsidiary) who or which:
(i) is the beneficial owner (as hereinafter defined), directly or
indirectly, of ten percent or more of the voting power of the outstanding
Voting Stock; or
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(ii) is an Affiliate or an Associate of the Corporation and at any time
within the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of ten percent or more of the
voting power of the then-outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in the
course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended, or
any successor act thereto.
(3) A person shall be a "beneficial owner" of, or shall "Beneficially
Own", any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly within the
meaning of Rule 13d-3, or any successor rule thereto, under the Securities
Exchange Act of 1934, as amended, or any successor act thereto; or
(ii) which such person or any of its Affiliates or Associates has (a)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options or otherwise or (b) the right to vote pursuant to any
agreement, arrangement or understanding (but neither such person nor any
such Affiliate or Associate shall be deemed to be the beneficial owner of
any shares of Voting Stock solely by reason of a revocable proxy granted
for a particular meeting of stockholders, pursuant to a public solicitation
of proxies for such meeting, and with respect to which shares neither such
person nor any such Affiliate or Associate is otherwise deemed the
beneficial owner); or
(iii) which are beneficially owned, directly or indirectly, within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, or any successor rule thereto, by any other person with which such
person or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting
(other than solely by reason of a revocable proxy as described in
subparagraph (ii) of this paragraph (3)) or disposing of any shares of
Voting Stock;
provided, however, that in the case of any employee stock ownership or similar
plan of the Corporation or of any Subsidiary in which the beneficiaries
thereof possess the right to vote any shares of Voting Stock held by such
plan, no such plan nor any trustee with respect thereto (nor any Affiliate of
such trustee), solely by reason of such capacity of such trustee, shall be
deemed, for any purposes hereof, to beneficially own any shares of Voting
Stock held under any such plan.
(4) For the purposes of determining whether a person is an Interested
Stockholder pursuant to paragraph (2) of this Section 3, the number of shares
of Voting Stock deemed to be outstanding shall include shares deemed owned
through application of paragraph (3) of this Section 3 but shall not include
any other unissued shares of Voting Stock which may be issuable pursuant to
any agreement, arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, or any successor rule thereto.
(6) "Subsidiary" means any person of which a majority of any class of
equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in paragraph (2) of this Section 3, the term
"Subsidiary" shall mean only a person of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
(7) "Continuing Director" means any member of the Board of Directors of
the Corporation who is unaffiliated with the Interested Stockholder and was a
member of the Board prior to the time that the Interested
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Stockholder became an Interested Stockholder, and any director who is
thereafter chosen to fill any vacancy on the Board of Directors or who is
elected and who, in either event, is unaffiliated with the Interested
Stockholder and in connection with his or her initial assumption of office is
recommended for appointment or election by a majority of Continuing Directors
then on the Board.
(8) "Fair Market Value" means: (i) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange Listed Stocks, or, if such stock is not listed on such Exchange, on
the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the 30-day period preceding the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such
quotations are available, the fair market value on the date in question of a
share of such stock as determined by the Board in accordance with Section 4 of
this Article IX; and (ii) in the case of property other than cash or stock,
the fair market value of such property on the date in question as determined
by the Board of Directors in accordance with Section 4 of this Article IX.
(9) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as used in
paragraph (B)(ii) of Section 2 of this Article IX shall include the shares of
Common Stock and/or the shares of any other class (or series) of outstanding
capital stock retained by the holders of such shares.
(10) "Whole Board" means the total number of directors which this
Corporation would have if there were no vacancies.
(11) "Excluded Preferred Stock" means any series of Preferred Stock with
respect to which the Preferred Stock Designation creating such series
expressly provides that the provisions of this Article IX shall not apply.
Section 4.
(a) A majority of the Whole Board, but only if a majority of the Whole
Board shall then consist of Continuing Directors or, if a majority of the
Whole Board shall not then consist of Continuing Directors, a majority of the
then Continuing Directors, shall have the power and duty to determine, on the
basis of information known to them after reasonable inquiry, all facts
necessary to determine compliance with this Article IX, including, without
limitation, (i) whether a person is an Interested Stockholder, (ii) the number
of shares of Voting Stock beneficially owned by any person, (iii) whether a
person is an Affiliate or Associate of another, (iv) whether the applicable
conditions set forth in paragraph (B) of Section 2 have been met with respect
to any Business Combination, (v) the Fair Market Value of stock or other
property in accordance with paragraph (8) of Section 3 of this Article IX, and
(vi) whether the assets which are the subject of any Business Combination
referred to in paragraph (1)(A)(ii) of Section 1 have, or the consideration to
be received for the issuance or transfer of securities by the Corporation or
any Subsidiary in any Business Combination referred to in paragraph
(1)(A)(iii) of Section 1 has, an aggregate Fair Market Value of $10,000,000 or
more.
(b) A majority of the Whole Board shall have the right to demand, but only
if a majority of the Whole Board shall then consist of Continuing Directors,
or, if a majority of the Whole Board shall not then consist of Continuing
Directors, a majority of the then Continuing Directors shall have the right to
demand, that any person who it is reasonably believed is an Interested
Stockholder (or holds of record shares of Voting Stock Beneficially Owned by
any Interested Stockholder) supply this Corporation with complete information
as to (i) the record owner(s) of all shares Beneficially Owned by such person
who it is reasonably believed is an Interested Stockholder, (ii) the number
of, and class or series of, shares Beneficially Owned by such person who it is
reasonably believed is an Interested Stockholder and held of record by each
such record owner and the number(s) of the stock certificate(s) evidencing
such shares, and (iii) any other factual matter relating to the applicability
or
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effect of this Article IX, as may be reasonably requested of such person, and
such person shall furnish such information within 10 days after receipt of
such demand.
Section 5. No Effect on Fiduciary Obligations of Interested Stockholders.
Nothing contained in this Article IX shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
Section 6. Amendment, Repeal, etc.
Notwithstanding any other provisions of this Certificate of Incorporation
or the By-laws of the Corporation (and notwithstanding the fact that a lesser
percentage may be permitted by law, this Certificate of Incorporation, any
Preferred Stock Designation or the By-laws of the Corporation), but in
addition to any affirmative vote of the holders of any particular class of
Voting Stock required by law, this Certificate of Incorporation or any
Preferred Stock Designation, the affirmative vote of the holders of 80 percent
of the voting power of the shares of the then outstanding Voting Stock voting
together as a single class, including the affirmative vote of the holders of
80 percent of the voting power of the then outstanding Voting Stock not owned
directly or indirectly by any Interested Stockholder or any Affiliate of any
Interested Stockholder, shall be required to amend or repeal, or adopt any
provisions inconsistent with, this Article IX of this Certificate of
Incorporation.
ARTICLE X
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) for any transaction from which the
director derived an improper personal benefit. Any repeal or modification of
this Article X by the stockholders shall not adversely affect any right or
protection of a director of the Corporation existing hereunder in respect of
any act or omission occurring prior to such amendment or appeal.
ARTICLE XI
Each person who is or was or had agreed to become a director or officer of
the Corporation, or each such person who is or was serving or who had agreed
to serve at the request of the Board of Directors or an officer of the
Corporation as an employee or agent of the Corporation or as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise (including the heirs, executor, administrators or
estate of such person), shall be indemnified by the Corporation, in accordance
with the By-laws of the Corporation, to the fullest extent permitted from time
to time by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment) or any other applicable laws as presently or
hereafter in effect. Without limiting the generality or the effect of the
foregoing, the Corporation may enter into one or more agreements with any
person which provide for indemnification greater or different than that
provided in this Article XI. Any amendment or repeal of this Article XI shall
not adversely affect any right or protection existing hereunder in respect of
any act or omission occurring prior to such amendment or repeal.
ARTICLE XII
In furtherance and not in limitation of the powers conferred by law or in
this Certificate of Incorporation, the Board of Directors (and any committee
of the Board of Directors) is expressly authorized, to the extent permitted by
law, to take such action or actions as the Board of Directors or such
committee may determine to be reasonably necessary or desirable to (A)
encourage any person (as defined in Article IX of this
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Certificate of Incorporation) to enter into negotiations with the Board of
Directors and management of the Corporation with respect to any transaction
which may result in a change in control of the Corporation which is proposed
or initiated by such person or (B) contest or oppose any such transaction
which the Board of Directors or such committee determines to be unfair,
abusive or otherwise undesirable with respect to the Corporation and its
business, assets or properties or the stockholders of the Corporation,
including, without limitation, the adoption of such plans or the issuance of
such rights, options, capital stock, notes, debentures or other evidences of
indebtedness or other securities of the Corporation, which rights, options,
capital stock, notes, evidences of indebtedness and other securities (i) may
be exchangeable for or convertible into cash or other securities on such terms
and conditions as may be determined by the Board of Directors or such
committee and (ii) may provide for the treatment of any holder or class of
holders thereof designated by the Board of Directors or any such committee in
respect of the terms, conditions, provisions and rights of such securities
which is different from, and unequal to, the terms, conditions, provisions and
rights applicable to all other holders thereof.
ARTICLE XIII
The Corporation reserves the right at any time and from time to time to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, or any Preferred Stock Designation, and any other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter prescribed herein or by law;
and all rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant to
this Certificate of Incorporation in its present form or as hereafter amended
are granted subject to the right reserved in this Article XIII; provided,
however, that any amendment or repeal of Article X or Article XI of this
Certificate of Incorporation shall not adversely affect any right or
protection existing hereunder in respect of any act or omission occurring
prior to such amendment or repeal; and provided further that no Preferred
Stock Designation shall be amended after the issuance of any shares of the
series of Preferred Stock created thereby, except in accordance with the terms
of such Preferred Stock Designation and the requirements of applicable law.
IN WITNESS WHEREOF, said Tupperware Corporation has caused this
Certificate of Incorporation to be signed by its President and attested by its
Secretary and has caused its corporate seal to be hereunto affixed, this
day of , 1996.
TUPPERWARE CORPORATION
By:
----------------------------------
Name:
Title:
Attest:
--------------------------------
Corporate Secretary
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Annex B
FORM OF AMENDED AND RESTATED BY-LAWS OF TUPPERWARE CORPORATION
Incorporated under the Laws of the State of Delaware
ARTICLE I
OFFICES AND RECORDS
Section 1.1 Delaware Office
The principal office of Tupperware Corporation (the "Corporation") in the
State of Delaware shall be located in the City of Wilmington, County of New
Castle, and the name and address of its registered agent is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware.
Section 1.2 Other Offices
The Corporation may have such other offices, either within or without the
State of Delaware, as the Board of Directors may from time to time designate
or as the business of the Corporation may from time to time require.
Section 1.3 Books and Records
The books and records of the Corporation may be kept outside the State of
Delaware at such place or places as may from time to time be designated by the
Board of Directors.
ARTICLE II
STOCKHOLDERS
Section 2.1 Annual Meeting
The annual meeting of stockholders of the Corporation shall be held at
such place, either within or without the State of Delaware, and at such time
and date as the Board of Directors, by resolution, shall determine for the
purpose of electing directors and for the transaction of such other business
as may be properly brought before the meeting. If the Board of Directors fails
so to determine the time, date and place of meeting, the annual meeting of
stockholders shall be held at the principal office of the Corporation on the
first Thursday in May. If the date of the annual meeting shall fall upon a
legal holiday, the meeting shall be held on the next succeeding business day.
Section 2.2 Special Meeting
Subject to the rights of the holders of any series of stock having a
preference over the Common Stock of the Corporation as to dividends or upon
liquidation (the "Preferred Stock") to elect additional directors under
specific circumstances, special meetings of the stockholders may be called
only by the Board of Directors pursuant to a resolution adopted by a majority
of the total number of directors which the Corporation would have if there
were no vacancies (the "Whole Board").
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Section 2.3 Place of Meeting
The Board of Directors may designate the place of meeting for any meeting
of the stockholders. If no designation is made by the Board of Directors, the
place of meeting shall be the principal office of the Corporation.
Section 2.4 Notice of Meeting
Written or printed notice, stating the place, day and hour of the meeting
and the purpose or purposes for which the meeting is called, shall be prepared
and delivered by the Corporation not less than ten days nor more than sixty
days before the date of the meeting, either personally or by mail, to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail with
postage thereon prepaid, addressed to the stockholder at such stockholder's
address as it appears on the stock transfer books of the Corporation. Such
further notice shall be given as may be required by law. Only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of meeting.
Meetings may be held without notice if all stockholders entitled to vote are
present, or if notice is waived by those not present in accordance with
Section 6.4 of these By-laws. Any previously scheduled meeting of the
stockholders may be postponed by resolution of the Board of Directors upon
public notice given prior to the time previously scheduled for such meeting of
stockholders.
Section 2.5 Quorum and Adjournment
Except as otherwise provided by law or by the Certificate of
Incorporation, the holders of a majority of the voting power of the
outstanding shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series voting as a class,
the holders of a majority of the voting power of the shares of such class or
series shall constitute a quorum for the transaction of such business. The
chairman of the meeting or a majority of the shares of Voting Stock so
represented may adjourn the meeting from time to time, whether or not there is
such a quorum (or, in the case of specified business to be voted on by a class
or series, the chairman or a majority of the shares of such class or series so
represented may adjourn the meeting with respect to such specified business).
No notice of the time and place of adjourned meetings need be given except as
required by law. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 2.6 Proxies
At all meetings of stockholders, a stockholder may vote by proxy executed
in writing by the stockholder or as may be permitted by law, or by such
stockholder's duly authorized attorney-in-fact. Such proxy must be filed with
the Secretary of the Corporation or such stockholder's representative at or
before the time of the meeting.
Section 2.7 Notice of Stockholder Business and Nominations
(A) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (a) pursuant to the Corporation's notice of meeting delivered
pursuant to Section 2.4 of these By-laws, (b) by or at the direction of the
Board of Directors or (c) by any stockholder of the Corporation who is
entitled to vote at the meeting, who complied with the notice procedures set
forth in clauses (2) and (3) of this paragraph (A) of this By-law and who was
a stockholder of record at the time such notice is delivered to the Secretary
of the Corporation.
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(2) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of
this By-law, the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation and such other business must otherwise be
a proper matter for stockholder action. To be timely, a stockholder's notice
shall be delivered to the Secretary at the principal office of the Corporation
not less than seventy days nor more than ninety days prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of an annual meeting is advanced by more than thirty
days, or delayed by more than seventy days, from the first anniversary date of
the previous year's annual meeting, notice by the stockholder to be timely
must be so delivered not earlier than the ninetieth day prior to such annual
meeting and not later than the close of business on the later of the
seventieth day prior to such annual meeting or the tenth day following the day
on which public announcement of the date of such meeting is first made by the
Corporation. For purposes of determining whether a stockholder's notice shall
have been delivered in a timely manner for the 1997 annual meeting, the first
anniversary of the previous year's meeting shall be deemed to be May 2, 1997.
Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the regulations promulgated
thereunder, including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected; (b) as
to any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial
owner and (ii) the class and number of shares of the Corporation which are
owned beneficially and of record by such stockholder and such beneficial
owner.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of
this By-law to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased and there is
no public announcement by the Corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors made by
the Corporation at least eighty days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice required by this By-
law shall also be considered timely, but only with respect to nominees for any
new positions created by such increase, if it shall be delivered to the
Secretary at the principal office of the Corporation not later than the close
of business on the tenth day following the day on which such public
announcement is first made by the Corporation. For purposes of determining
whether a stockholder's notice shall have been delivered in a timely manner
for the 1997 annual meeting, the first anniversary of the previous year's
meeting shall be deemed to be May 2, 1997.
(B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting pursuant to
Section 2.4 of these By-laws. Nominations of persons for election to the Board
of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting
(a) by or at the direction of the Board of Directors or (b) by any stockholder
of the Corporation who is entitled to vote at the meeting, who complies with
the notice procedures set forth in this By-law and who is a stockholder of
record at the time such notice is delivered to the Secretary of the
Corporation. Nominations by stockholders of persons for election to the Board
of Directors may be made at such a special meeting of stockholders if the
stockholder's notice as required by paragraph (A)(2) of this By-law shall be
delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the ninetieth day prior to such special meeting
and not later than the close of business on the later of the seventieth day
prior to such special meeting or the tenth day following the day on which
public announcement is first made of the date of the special meeting and of
the nominees proposed by the Board of Directors to be elected at such meeting.
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(C) General. (1) Only persons who are nominated in accordance with the
procedures set forth in this By-law shall be eligible to serve as directors
and only such business shall be conducted at a meeting of stockholders as
shall have been brought before the meeting in accordance with the procedures
set forth in this By-law. Except as otherwise provided by law, the Certificate
of Incorporation or these By-laws, the chairman of the meeting shall have the
power and duty to determine whether a nomination or any business proposed to
be brought before the meeting was made or proposed in accordance with the
procedures set forth in this By-law and, if any proposed nomination or
business is not in compliance with this By-law, to declare that such defective
proposal or nomination shall be disregarded.
(2) For purposes of this By-law, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this By-law, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth in this
By-law. Nothing in this By-law shall be deemed to affect any rights of
stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
Section 2.8 Procedure for Election of Directors
Election of directors at all meetings of the stockholders at which
directors are to be elected shall be by written ballot, and, subject to the
rights of the holders of any series of Preferred Stock to elect additional
directors under specific circumstances, a plurality of the votes cast thereat
shall elect. Except as otherwise provided by law, the Certificate of
Incorporation or these By-laws, all matters other than the election of
directors submitted to the stockholders at any meeting shall be decided by a
majority of the votes cast with respect thereto.
Section 2.9 Inspectors of Elections; Opening and Closing the Polls
(A) The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve
the Corporation in other capacities, including, without limitation, as
officers, employees, agents or representatives of the Corporation, to act at a
meeting of stockholders and make a written report thereof. One or more persons
may be designated as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate has been appointed to act, or if all
inspectors or alternates who have been appointed are unable to act at a
meeting of stockholders, the chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging his or
her duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspectors shall have the duties prescribed by the General
Corporation Law of the State of Delaware.
(B) The secretary of the meeting shall fix and announce at the meeting the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at a meeting.
Section 2.10 No Stockholder Action by Written Consent
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances, any action required
or permitted to be taken by the stockholders of the Corporation must be
effected at an annual or special meeting of stockholders of the Corporation
and may not be effected by any consent in writing by such stockholders.
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ARTICLE III
BOARD OF DIRECTORS
Section 3.1 General Powers
The business and affairs of the Corporation shall be managed by or under
the direction of its Board of Directors. In addition to the powers and
authorities by these By-laws expressly conferred upon them, the Board of
Directors may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law or by the Certificate of
Incorporation or by these By-laws required to be exercised or done by the
stockholders.
Section 3.2 Number, Tenure and Qualifications
Subject to the rights of the holders of any series of Preferred Stock to
elect directors under specific circumstances, the number of directors shall be
fixed from time to time exclusively pursuant to a resolution adopted by a
majority of the Whole Board but shall consist of not less than three
directors. The directors, other than those who may be elected by the holders
of any series of Preferred Stock, or any other series or class of stock, shall
be divided, with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as possible, with the term of
office of the first class to expire at the 1997 annual meeting of
stockholders, the term of office of the second class to expire at the 1998
annual meeting of stockholders and the term of office of the third class to
expire at the 1999 annual meeting of stockholders. Each director shall hold
office until his or her successor shall have been duly elected and qualified.
At each annual meeting of stockholders, commencing with the 1997 annual
meeting, (i) directors elected to succeed those directors whose terms then
expire shall be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election, with each director to
hold office until his or her successor shall have been duly elected and
qualified, and (ii) if authorized by a resolution of the Board of Directors,
directors may be elected to fill any vacancy on the Board of Directors,
regardless of how such vacancy shall have been created.
Section 3.3 Regular Meetings
A regular meeting of the Board of Directors may be held without other
notice than this By-law immediately after, and at the same place as, each
annual meeting of stockholders. The Board of Directors may, by resolution,
provide the time and place for the holding of additional regular meetings
without other notice than such resolution.
Section 3.4 Special Meetings
Special meetings of the Board of Directors shall be called at the request
of the Chairman of the Board, the Chief Executive Officer or a majority of the
Board of Directors. The person or persons authorized to call special meetings
of the Board of Directors may fix the place and time of the meetings.
Section 3.5 Notice
Notice of any special meeting shall be given to each director at such
director's business or residence in writing or by telegram or by telephone
communication. If mailed, such notice shall be deemed adequately delivered
when deposited in the United States mails so addressed, with postage thereon
prepaid, at least five days before such meeting. If by telegram, such notice
shall be deemed adequately delivered when the telegram is delivered to the
telegraph company at least twenty-four hours before such meeting. If by
facsimile transmission, such notice shall be transmitted at least twenty-four
hours before such meeting. If by telephone, the notice shall be given at least
twelve hours prior to the time set for the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice of such meeting, except for
amendments to these By-laws as provided under Section 7.1 of Article VII
hereof. A meeting may be held at any time without notice if all the directors
are present or if those not present waive notice of the meeting in writing,
either before or after such meeting.
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Section 3.6 Quorum
A whole number of directors equal to at least one third of the Whole Board
shall constitute a quorum for the transaction of business, but if at any
meeting of the Board of Directors there shall be less than a quorum present, a
majority of the directors present may adjourn the meeting from time to time
without further notice. The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of
Directors. The directors present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
directors to leave less than a quorum.
Section 3.7 Vacancies
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances, and unless the Board
of Directors otherwise determines, vacancies resulting from death,
resignation, retirement, disqualification, removal from office or other cause,
and newly created directorships resulting from any increase in the authorized
number of directors, may be filled only by the affirmative vote of a majority
of the remaining directors, though less than a quorum of the Board of
Directors, and directors so chosen shall hold office for a term expiring at
the annual meeting of stockholders at which the term of office of the class to
which they have been elected expires and until such director's successor shall
have been duly elected and qualified. No decrease in the number of authorized
directors constituting the Whole Board shall shorten the term of any incumbent
director.
Section 3.8 Executive and Other Committees
The Board of Directors may, by resolution adopted by a majority of the
Whole Board, designate an Executive Committee to exercise, subject to
applicable provisions of law, all the powers of the Board in the management of
the business and affairs of the Corporation when the Board of Directors is not
in session, including without limitation the power to declare dividends, to
authorize the issuance of the Corporation's capital stock and to adopt a
certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of the State of Delaware, and may, by resolution similarly
adopted, designate one or more other committees. The Executive Committee and
each such other committee shall consist of two or more directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Any such committee may to the extent
permitted by law exercise such powers and shall have such responsibilities as
shall be specified in the designating resolution. In the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously appoint another member
of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Each committee shall keep written minutes of
its proceedings and shall report such proceedings to the Board of Directors
when required.
A majority of any committee may determine its action and fix the time and
place of its meetings, unless the Board of Directors shall otherwise provide.
Notice of such meetings shall be given to each member of the committee in the
manner provided for in Section 3.5 of these By-laws. The Board of Directors
shall have power at any time to fill vacancies in, to change the membership
of, or to dissolve any such committee. Nothing herein shall be deemed to
prevent the Board of Directors from appointing one or more committees
consisting in whole or in part of persons who are not directors of the
Corporation; provided, however, that no such committee shall have or may
exercise any authority of the Board of Directors.
Section 3.9 Removal
Subject to the rights of the holders of any series of Preferred Stock to
elect additional directors under specific circumstances, any director, or the
entire Board of Directors, may be removed from office at any time, but only
for cause and only by the affirmative vote of the holders of at least 80
percent of the voting power of the then outstanding Voting Stock, voting
together as a single class.
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ARTICLE IV
OFFICERS
Section 4.1 Elected Officers
The elected officers of the Corporation shall be a Chairman of the Board,
a Chief Executive Officer, one or more Vice Presidents, a Secretary, and such
other officers (including, without limitation, a President) as the Board of
Directors from time to time may deem proper. The Chairman of the Board may
also serve as the Chief Executive Officer. The Chairman of the Board shall be
chosen from the directors. All officers chosen by the Board of Directors shall
each have such powers and duties as generally pertain to their respective
offices, subject to the specific provisions of this Article IV. Such officers
shall also have powers and duties as from time to time may be conferred by the
Board of Directors or by any committee thereof.
Section 4.2 Election and Term of Office
The elected officers of the Corporation shall be elected annually by the
Board of Directors at the regular meeting of the Board of Directors held at
the time of each annual meeting of the stockholders. If the election of
officers shall not be held at such meeting, such election shall be held as
soon thereafter as convenient. Subject to Section 4.8 of these By-laws, each
officer shall hold office until such officer's successor shall have been duly
elected and shall have qualified or until such officer's death or until such
officer shall resign.
Section 4.3 Chairman of the Board
The Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman shall make reports to
the Board of Directors and the stockholders, and shall perform all such other
duties as are properly required of him by the Board of Directors.
Section 4.4 Chief Executive Officer
The Chief Executive Officer shall be responsible for the general
management of the affairs of the Corporation and shall perform all duties
incidental to the Chief Executive Officer's office which may be required by
law and all such other duties as are properly required of him by the Board of
Directors. The Chief Executive Officer shall see that all orders and
resolutions of the Board of Directors and of any committee thereof are carried
into effect.
Section 4.5 President
The President (if one shall have been chosen by the Board of Directors)
shall act in a general executive capacity and shall assist the Chairman of the
Board in the administration and operation of the Corporation's business and
general supervision of its policies and affairs. The President shall, in the
absence of or because of the inability to act of the Chairman of the Board,
perform all duties of the Chairman of the Board and preside at all meetings of
stockholders and of the Board of Directors. The President may sign, alone or
with the Secretary, or an Assistant Secretary, or any other proper officer of
the Corporation authorized by the Board of Directors, certificates, contracts,
and other instruments of the Corporation as authorized by the Board of
Directors.
Section 4.6 Vice Presidents
Each Vice President shall have such powers and perform such duties as from
time to time may be assigned to him or her by the Board of Directors or be
delegated to him or her by the President. The Board of Directors may assign to
any Vice President general supervision and charge over any territorial or
functional division of the business and affairs of the Corporation.
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Section 4.7 Secretary
The Secretary shall give, or cause to be given, notice of all meetings of
stockholders and directors and all other notices required by law or by these
By-laws, and in case of the Secretary's absence or refusal or neglect so to
do, any such notice may be given by any person thereunto directed by the
Chairman of the Board, the Chief Executive Officer, or by the Board of
Directors, upon whose request the meeting is called as provided in these By-
laws. The Secretary shall record all the proceedings of the meetings of the
Board of Directors, any committees thereof and the stockholders of the
Corporation in a book to be kept for that purpose, and shall perform such
other duties as may be assigned to him by the Board of Directors, the Chairman
of the Board or the Chief Executive Officer. The Secretary shall have the
custody of the seal of the Corporation and shall affix the same to all
instruments requiring it, when authorized by the Board of Directors, the
Chairman of the Board or the Chief Executive Officer, and attest to the same.
Section 4.8 Removal
Any officer elected by the Board of Directors may be removed by a majority
of the members of the Whole Board whenever, in their judgment, the best
interests of the Corporation would be served thereby. No elected officer shall
have any contractual rights against the Corporation for compensation by virtue
of such election beyond the date of the election of such officer's successor
or such officer's death, resignation or removal, whichever event shall first
occur, except as otherwise provided in an employment contract or an employee
plan.
Section 4.9 Vacancies
A newly created office and a vacancy in any office because of death,
resignation, or removal may be filled by the Board of Directors for the
unexpired portion of the term at any meeting of the Board of Directors.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
Section 5.1 Stock Certificates and Transfers
(A) The interest of each stockholder of the Corporation shall be evidenced
by certificates for shares of stock in such form as the appropriate officers
of the Corporation may from time to time prescribe, unless it shall be
determined by, or pursuant to, a resolution adopted by the Board of Directors
that the shares representing such interest be uncertificated. The shares of
the stock of the Corporation shall be transferred on the books of the
Corporation by the holder thereof in person or by such person's attorney, upon
surrender for cancellation of certificates for the same number of shares, with
an assignment and power of transfer endorsed thereon or attached thereto, duly
executed, with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require.
(B) The certificates of stock shall be signed, countersigned and
registered in such manner as the Board of Directors may by resolution
prescribe, which resolution may permit all or any of the signatures on such
certificates to be in facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer, transfer agent or registrar at the date of
issue.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Fiscal Year
The fiscal year of the Corporation shall be determined by resolution of
the Board of Directors.
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Section 6.2 Dividends
The Board of Directors may from time to time declare, and the Corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Certificate of Incorporation.
Section 6.3 Seal
The corporate seal may bear in the center the emblem of some object, and
shall have inscribed thereunder the words "Corporate Seal" and around the
margin thereof the words "Tupperware Corporation--Delaware."
Section 6.4 Waiver of Notice
Whenever any notice is required to be given to any stockholder or director
of the Corporation under the provisions of the General Corporation Law of the
State of Delaware, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Neither the
business to be transacted at, nor the purpose of, any annual or special
meeting of the stockholders or of the Board of Directors need be specified in
any waiver of notice of such meeting.
Section 6.5 Audits
The accounts, books and records of the Corporation shall be audited upon
the conclusion of each fiscal year by an independent certified public
accountant selected by the Board of Directors, and it shall be the duty of the
Board of Directors to cause such audit to be made annually.
Section 6.6 Resignations
Any director or any officer, whether elected or appointed, may resign at
any time by serving written notice of such resignation on the Chairman of the
Board, the Chief Executive Officer, the President, if any, or the Secretary,
and such resignation shall be deemed to be effective as of the close of
business on the date said notice is received by the Chairman of the Board, the
Chief Executive Officer, the President, if any, or the Secretary or at such
later date as is stated therein. No formal action shall be required of the
Board of Directors or the stockholders to make any such resignation effective.
Section 6.7 Indemnification and Insurance
(A) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she or a person of whom he or she is the legal
representative is or was a director, officer or employee of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of any other corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by the
General Corporation Law of the State of Delaware as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide
prior to such amendment), against all expense, liability and loss (including,
without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred by
such person in connection therewith and such indemnification shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that except as provided in paragraph (B) of Section 6.7 of
these By-laws with
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respect to proceedings seeking to enforce rights to indemnification, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) initiated by such person was authorized
by the Board of Directors of the Corporation.
(B) If a claim under paragraph (A) of this By-law is not paid in full by
the Corporation within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim and, if successful
in whole or in part, the claimant also shall be entitled to be paid the
expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law of the State of Delaware for
the Corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent
legal counsel or stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the General Corporation Law of the State of Delaware, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel or stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
(C) Following any "change of control" of the Corporation of the type
required to be reported under Item 1 of Form 8-K promulgated under the
Exchange Act, any determination as to entitlement to indemnification shall be
made by independent legal counsel selected by the claimant which independent
legal counsel shall be retained by the Board of Directors on behalf of the
Corporation.
(D) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
By-law shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, By-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
(E) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or
loss under the General Corporation Law of the State of Delaware.
(F) The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification, and rights to be paid by
the Corporation the expenses incurred in defending any proceeding in advance
of its final disposition, to any agent of the Corporation to the fullest
extent of the provisions of this By-law with respect to the indemnification
and advancement of expenses of directors, officers and employees of the
Corporation.
(G) The right to indemnification conferred in this By-law shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the General Corporation Law of the
State of Delaware requires, the payment of such expenses 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, shall be
made only upon delivery to the Corporation of an undertaking by or on behalf
of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this By-law or otherwise.
(H) Any amendment or repeal of this Article VI shall not adversely affect
any right or protection existing hereunder in respect of any act or omission
occurring prior to such amendment or repeal.
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ARTICLE VII
AMENDMENTS
Section 7.1 Amendments
These By-laws may be amended, added to, rescinded or repealed at any
meeting of the Board of Directors or of the stockholders, provided notice of
the proposed change was given in the notice of the meeting and, in the case of
a meeting of the Board of Directors, in a notice given no less than twenty-
four hours prior to the meeting; provided, however, that, in the case of
amendments by stockholders, notwithstanding any other provisions of these By-
laws or any provision of law which might otherwise permit a lesser vote or no
vote, but in addition to any affirmative vote of the holders of any particular
class or series of the stock required by law, the Certificate of Incorporation
or these By-laws, the affirmative vote of the holders of at least 80 percent
of the voting power of the then outstanding Voting Stock, voting together as a
single class, shall be required to alter, amend or repeal any provision of
these By-laws.
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ANNEX C
FORM OF
TUPPERWARE CORPORATION 1996 INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. Tupperware Corporation, a Delaware corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as the "Tupperware Corporation 1996 Incentive
Plan" (hereinafter referred to as the "Plan"), as set forth in this document.
The Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, and Performance Awards.
The Plan shall become effective as of the Effective Date, and shall remain in
effect as provided in Section 1.3 herein.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the success and
enhance the value of the Company by linking the personal interests of
Participants to those of the Company's stockholders, and by providing
Participants with an incentive for outstanding performance. The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special efforts the successful conduct of its
operations largely is dependent.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date and
shall remain in effect, subject to the right of the Board of Directors to
terminate, amend or modify the Plan at any time pursuant to Article 14 herein,
until all Shares subject to it shall have been purchased or acquired according
to the Plan's provisions. However, in no event may an Award be granted under
the Plan on or after , 2006.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word
is capitalized:
(a) "Award" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, or Performance Awards.
(b) "Award Agreement" means an agreement entered into by each
Participant and the Company, setting forth the terms and provisions
applicable to Awards granted to Participants under this Plan.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(d) "Beneficiary" means a person who may be designated by a Participant
pursuant to Article 10 and to whom any benefit under the Plan is to be
paid in case of the Participant's death or physical or mental
incapacity, as determined by the Committee, before he or she receives
any or all of such benefit.
(e) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(f) "Cause" means (i) conviction of a Participant for committing a
felony under federal law or the law of the state in which such action
occurred, (ii) dishonesty in the course of fulfilling a Participant's
employment duties or (iii) willful and deliberate failure on the part
of a Participant to perform his employment duties in any material
respect, or such other events as shall be determined by the Committee.
The Committee shall have the sole discretion to determine whether
"Cause" exists, and its determination shall be final.
(g) "Change of Control" of the Company means:
i. An acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (1) the then outstanding Shares (the "Outstanding
Company Common Stock") or (2) the combined voting power of the then
outstanding Shares entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding,
however, the following: (1) any acquisition directly from the
Company, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was
itself acquired from the Company, (2) any acquisition
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by the Company, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any
Person pursuant to a transaction which complies with clauses (1),
(2) and (3) of subsection (iii) of this definition; or
ii. A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute
the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this
definition, that any individual who becomes a member of the Board
subsequent to such effective date, whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at
least a majority of those individuals who are members of the Board
and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided
further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person or
legal entity other than the Board shall not be so considered as a
member of the Incumbent Board; or
iii. The approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company or the
acquisition of assets of another corporation ("Corporate
Transaction") or, if consummation of such Corporate Transaction is
subject, at the time of such approval by stockholders, to the
consent of any government or governmental agency, the obtaining of
such consent (either explicitly or implicitly by consummation);
excluding, however, such a Corporate Transaction pursuant to which
(1) all or substantially all of the individuals and entities who are
the Beneficial Owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly
or indirectly, more than 60% of, respectively, the outstanding
Shares, and the combined voting power of the then outstanding Shares
entitled to vote generally in the election of directors, as the case
may be, of the Company resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person (other than the
Company, any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20% or
more of, respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors
except to the extent that such ownership existed with respect to the
Company prior to the Corporate Transaction and (3) individuals who
were members of the Incumbent Board will constitute at least a
majority of the board of directors of the corporation resulting from
such Corporate Transaction; or
iv. The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(h) "Change of Control Price" means the higher of (i) the highest
reported sales price, regular way, of a share of Common Stock in any
transaction reported on the New York Stock Exchange Composite Tape or
other national exchange on which such shares are listed or on NASDAQ
during the 60-day period prior to and including the date of a Change of
Control or (ii) if the Change of Control is the result of a tender or
exchange offer or a Corporate Transaction, the highest price per share
of Common
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Stock paid in such tender or exchange offer or Corporate Transaction;
provided, however, that (x) in the case of a Stock Option which (A) is
held by an optionee who is an officer or director of the Corporation
and is subject to Section 16(b) of the Exchange Act and (B) was granted
within 240 days of the Change of Control, then the Change of Control
Price for such Stock Option shall be the Fair Market Value of the
Common Stock on the date such Stock Option is exercised or deemed
exercised and (y) in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, the Change of
Control Price shall be in all cases the Fair Market Value of the Common
Stock on the date such Incentive Stock Option or Stock Appreciation
Right is exercised. To the extent that the consideration paid in any
such transaction described above consists all or in part of securities
or other noncash consideration, the value of such securities or other
noncash consideration shall be determined in the sole discretion of the
Board.
(i) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(j) "Commission" means the Securities and Exchange Commission or any
successor agency.
(k) "Committee" means the committee described in Article 3 or (unless
otherwise stated) its designee pursuant to a delegation by the
Committee as contemplated by Section 3.3.
(l) "Company" means Tupperware Corporation, a Delaware corporation, or
any successor thereto as provided in Article 16 herein.
(m) "Covered Employee" has the meaning ascribed thereto in Section
162(m) of the Code and the regulations thereunder.
(n) "Director" means any individual who is a member of the Board of
Directors of the Company.
(o) "Disinterested Person" means a member of the Board who qualifies as
a disinterested person as defined in Rule 16b-3(c)(2), as promulgated
by the Commission under the Exchange Act, or any successor definition
adopted by the Commission.
(p) "Effective Date" means May 20, 1996.
(q) "Employee" means any nonunion employee of the Company or of the
Company's Subsidiaries. Directors who are not otherwise employed by the
Company shall not be considered Employees under this Plan.
(r) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(s) "Fair Market Value" means, except as expressly provided otherwise,
as of any given date, the mean between the highest and lowest reported
sales prices of the Common Stock on the New York Stock Exchange
Composite Tape or, if not listed on such exchange, on any other
national securities exchange on which the Common Stock is listed or on
NASDAQ. If there is no regular public trading market for such Common
Stock, the Fair Market Value of the Common Stock shall be determined by
the Committee in good faith.
(t) "Freestanding SAR" means a SAR that is granted independently of any
Options pursuant to Section 7.1 herein.
(u) "Incentive Stock Option" or "ISO" means an option to purchase
Shares, granted under Article 6 herein, which is designated as an
Incentive Stock Option and is intended to meet the requirements of
Section 422 of the Code.
(v) "Insider" shall mean an Employee who is, on the relevant date, an
officer, director, or ten percent (10%) beneficial owner of the
Company, as defined under Section 16 of the Exchange Act.
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(w) "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares, granted under Article 6 herein, which is not intented to be an
Incentive Stock Option.
(x) "Option" means an Incentive Stock Option or a Non-qualified Stock
Option.
(y) "Option Price" means the price at which a Share may be purchased by
a Participant pursuant to an Option, as determined by the Committee.
(z) "Participant" means an Employee of the Company who has been granted
an Award under the Plan.
(aa) "Performance Award" means an Award granted to an Employee, as
described in Article 9 herein, including Performance Units and
Performance Shares.
(ab) "Performance Goals" means the performance goals established by the
Committee prior to the grant of Performance Awards that are based on
the attainment of one or any combination of the following: specified
levels of earnings per share from continuing operations, operating
income, revenues, return on operating assets, return on equity,
stockholder return (measured in terms of stock price appreciation)
and/or total stockholder return (measured in terms of stock price
appreciation and/or dividend growth), achievement of cost control,
working capital turns, cash flow, net income, economic value added,
segment profit, sales force growth, or stock price of the Company or
such subsidiary, division or department of the Company for or within
which the Participant is primarily employed and that are intended to
qualify under Section 162(m) (4) (c) of the Code. Such Performance
Goals also may be based upon the attaining of specified levels of
Company performance under one or more of the measures described above
relative to the performance of other corporations. Such Performance
Goals shall be set by the Committee within the time period prescribed
by Section 162(m) of the Code and related regulations.
(ac) "Performance Period" means a time period during which Performance
Goals established in connection with Performance Awards must be met.
(ad) "Performance Unit" means an Award granted to an Employee, as
described in Article 9 herein.
(ae) "Performance Share" means an Award granted to an Employee, as
described in Article 9 herein.
(af) "Restriction Period" or "Period" means the period or periods
during which the transfer of Shares of Restricted Stock is limited
based on the passage of time and the continuation of service with the
Company, and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 8 herein.
(ag) "Person" shall have the meaning ascribed to such term in Section
3(a) (9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d).
(ah) "Restricted Stock" means an Award granted to a Participant
pursuant to Article 8 herein.
(ai) "Share" means a share of common stock of the Company.
(aj) "Subsidiary" or "Subsidiaries" means any corporation or
corporations in which the Company owns directly, or indirectly through
subsidiaries, at least fifty percent (50%) of the total combined voting
power of all classes of stock, or any other entity (including, but not
limited to, partnerships and joint ventures) in which the Company owns
at least fifty percent (50%) of the combined equity thereof.
(ak) "Stock Appreciation Right" or "SAR" means an Award, granted alone
(Freestanding SAR) or in connection with a related Option (Tandem SAR),
designated as a SAR, pursuant to the terms of Article 7 herein.
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(al) "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Section 7.1 herein, the exercise of which
shall require forfeiture of the right to purchase a Share under the
related Option (and when a Share is purchased under the Option, the
Tandem SAR shall similarly be cancelled).
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation and
Directors Committee or such other committee of the Board as the Board may from
time to time designate (the "Committee"), which shall be composed of not less
than two Disinterested Persons each of whom shall be an "outside director" for
purposes of Section 162(m)(4) of the Code, and shall be appointed by and serve
at the pleasure of the Board.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have plenary authority to
grant Awards pursuant to the terms of the Plan to officers and employees of
the Company and its subsidiaries and Affiliates.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) To select the officers and employees to whom Awards may from time
to time be granted;
(b) To determine whether and to what extent Incentive Stock Options,
NonQualified Stock Options, SARs, Restricted Stock and Performance
Awards or any combination thereof are to be granted hereunder;
(c) To determine the number of Shares to be covered by each Award
granted hereunder;
(d) To determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the option price (subject to
Section 6.4 (a)), any vesting condition, restriction or limitation
(which may be related to the performance of the Participant, the
Company or any subsidiary or Affiliate) and any vesting acceleration or
forfeiture waiver regarding any Award and the Shares relating thereto,
based on such factors as the Committee shall determine;
(e) To modify, amend or adjust the terms and conditions of any Award,
at any time or from time to time, including but not limited to
Performance Goals, unless at the time of establishment of goals the
Committee shall have precluded its authority to make such adjustments;
and
(f) To determine to what extent and under what circumstances Shares and
other amounts payable with respect to an Award shall be deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
3.3 ACTION OF THE COMMITTEE. The Committee may act only by a majority of its
members then in office, except that the members thereof may (i) delegate to an
officer of the Company the authority to make decisions pursuant to Section
6.4, provided that no such delegation may be made that would cause Awards or
other transactions under the Plan to cease either to be exempt from Section
16(b) of the Exchange Act or to qualify as "qualified performance-based
compensation" as such term is defined in the regulations promulgated under
Section 162(m) of the Code, and (ii) authorize any one or more of their number
or any officer of the Company to execute and deliver documents on behalf of
the Committee.
3.4 DECISIONS BINDING. Any determination made by the Committee or pursuant to
delegated authority pursuant to the provisions of the Plan with respect to any
Award shall be made in the sole discretion of the Committee or such delegate
at the time of the grant of the Award or, unless in contravention of any
express term of the Plan, at any time thereafter. All decisions made by the
Committee or any appropriately delegated officer pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
Plan Participants.
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ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3 herein,
the total number of Shares available for grant under the Plan shall be six
million one hundred thousand (6,100,000); provided, however, that if during
the term of the Plan the Company repurchases Shares, additional Options may be
granted equal to the number of Shares so repurchased, except that no more than
one million five hundred thousand (1,500,000) additional Shares shall be
authorized for Options under this proviso; and provided further that the total
number of available Shares that may be used for Restricted Stock Awards under
the Plan shall be limited to three hundred thousand (300,000). No Participant
may be granted Awards covering in excess of 10% of the Shares available for
issuance over the life of the Plan. Shares subject to an Award under the Plan
may be authorized and unissued shares or may be treasury shares.
The following rules will apply for purposes of the determination of the number
of Shares available for grant under the Plan:
(a) While an Award is outstanding, it shall be counted against the
authorized pool of Shares, regardless of its vested status.
(b) The grant of an Option or Restricted Stock shall reduce the Shares
available for grant under the Plan by the number of Shares subject to
such Award.
(c) The grant of a Tandem SAR shall not reduce the number of Shares
available for grant by the number of Shares subject to the related
Option (i.e., there is no double counting of Options and their related
Tandem SARs).
(d) The grant of a Freestanding SAR shall reduce the number of Shares
available for grant by the number of Freestanding SARs granted.
(e) The Committee shall reduce the appropriate number of Shares from
the authorized pool where a Performance Award is payable in Shares.
4.2 LAPSED AWARDS. If any Award granted under this Plan is cancelled,
forfeited, terminates, expires, or lapses for any reason (with the exception
of the termination of a Tandem SAR upon exercise of the related Option or the
termination of a related Option upon exercise of the corresponding Tandem
SAR), any Shares subject to such Award again shall be available for the grant
of an Award under the Plan. However, in the event that prior to the Award's
cancellation, forfeiture, termination, expiration, or lapse, the holder of the
Award at any time received one or more "benefits of ownership" pursuant to
such Award (as defined by the Commission, pursuant to any rule or
interpretation promulgated under Section 16 or any successor rule of the
Exchange Act), the Shares subject to such Award shall not be made available
for regrant under the Plan to Insiders, but shall be available for regrants
under the Plan to Participants who are not Insiders.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES AND PRICES. In the event of any change in
corporate capitalization, such as a stock split or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such term in Section
368 of the Code) or any partial or complete liquidation of the Company, the
Committee or Board may make such substitution or adjustments in the aggregate
number and class of shares reserved for issuance under the Plan, in the
number, kind and option price of shares subject to outstanding Stock Options
or SARs, in the number and kind of shares subject to other outstanding Awards
granted under the Plan and/or such other equitable substitution or adjustments
as it may determine to be appropriate in its sole discretion; provided,
however, that the number of shares subject to any Award shall always be a
whole number. Such adjusted option price shall also be used to determine the
amount payable by the Company upon the exercise of any Tandem SAR.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to be granted Awards under this Plan include
all Employees of the Company and its Subsidiaries, as determined by the
Committee, including Employees who are members of the Board, but excluding
Directors who are not Employees.
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5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee
may, from time to time, select from all eligible Employees, those to whom
Awards shall be granted and shall determine the nature and amount of each
Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Stock Options may be granted alone or in addition to
other Awards granted under the Plan and may be of two types: Incentive Stock
Options and Nonqualified Stock Options. Any Stock Option granted under the
Plan shall be in such form as the Committee may from time to time approve. The
Committee shall have the authority to grant any optionee Incentive Stock
Options, Nonqualified Stock Options or both types of Stock Options (in each
case with or without Stock Appreciation Rights); provided, however, that
grants hereunder are subject to the aggregate limit on grants to individual
Participants set forth in Article 4. Incentive Stock Options may be granted
only to employees of the Company and any "subsidiary corporation" (as such
term is defined in Section 424(f) of the Code). To the extent that any Stock
Option is not designated as an Incentive Stock Option or even if so designated
does not qualify as an Incentive Stock Option, it shall constitute a
Nonqualified Stock Option.
6.2 AWARD AGREEMENT. Stock Options shall be evidenced by option agreements,
the terms and provisions of which may differ. An option agreement shall
indicate on its face whether it is intended to be an agreement for an
Incentive Stock Option or a Nonqualified Stock Option. The grant of a Stock
Option shall occur on the date the Committee by resolution selects an
individual to be a Participant in any grant of a Stock Option, determines the
number of Shares to be subject to such Stock Option to be granted to such
individual and specifies the terms and provisions of the Stock Option, or such
later date as the Committee designates. The Company shall notify a Participant
of any grant of a Stock Option, and a written option agreement or agreements
shall be duly executed and delivered by the Company to the Participant. Such
agreement or agreements shall become effective upon execution by the Company
and the Participant.
6.3 INCENTIVE STOCK OPTIONS. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options shall
be interpreted, amended or altered nor shall any discretion or authority
granted under the Plan be exercised so as to disqualify the Plan under Section
422 of the Code or, without the consent of the optionee affected, to
disqualify any Incentive Stock Option under such Section 422.
6.4 TERMS AND CONDITIONS. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such
additional terms and conditions as the Committee shall deem desirable:
(A) OPTION PRICE. The option price per Share purchasable under a Stock Option
shall be determined by the Committee and set forth in the option agreement,
and shall not be less than the Fair Market Value of the Common Stock subject
to the Stock Option on the date of grant. Options may not be repriced without
shareholder approval.
(B) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than 10
years after the date the Stock Option is granted.
(C) EXERCISABILITY. Except as otherwise provided herein, Stock Options shall
be exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee. If the Committee provides that any
Stock Option is exercisable only in installments, the Committee may at any
time waive such installment exercise provisions, in whole or in part, based on
such factors as the Committee may determine. In addition, the Committee may at
any time accelerate the exercisability of any Stock Option.
(D) METHOD OF EXERCISE. Subject to the provisions of this Article 6, Stock
Options may be exercised, in whole or in part, at any time during the option
term by giving written notice of exercise to the Company specifying the number
of Shares subject to the Stock Option to be purchased.
Such notice shall be accompanied by payment in full of the purchase price by
certified or bank check or such other instrument as the Company may accept. If
approved by the Committee, payment, in full or in part, may
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also be made in the form of delivery of unrestricted Shares already owned by
the optionee of the same class as the Shares subject to the Stock Option
(based on the Fair Market Value of the shares on the date the Stock Option is
exercised), or by certifying ownership of such Shares by the Participant to
the satisfaction of the Company for later delivery to the Company as specified
by the Committee; provided, however, that, in the case of an Incentive Stock
Option the right to make a payment in the form of already owned Shares of the
same class as the Shares subject to the Stock Option may be authorized only at
the time the Stock Option is granted.
In the discretion of the Committee, payment for any Shares subject to a Stock
Option may also be made pursuant to a "cashless exercise" by delivering a
properly executed exercise notice to the Company, together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds to pay the purchase price, and, if requested,
the amount of any federal, state, local or foreign withholding taxes. To
facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
No shares shall be issued until full payment therefor has been made. An
optionee shall have all of the rights of a stockholder of the Company holding
the class or series of Shares that is subject to such Stock Option (including,
if applicable, the right to vote the shares and the right to receive
dividends), when the optionee has given written notice of exercise and has
paid in full for such Shares.
(E) RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities laws, under the requirements
of any stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.
(F) NONTRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall be transferable
by the optionee other than (i) by will or by application of the laws of
descent and distribution; or (ii) in the case of a Nonqualified Stock Option,
pursuant to (a) a domestic relations order issued by a tribunal of competent
jurisdiction or (b) a gift to members of such optionee's immediate family,
whether directly or indirectly or by means of a trust or partnership or
otherwise, if expressly permitted under the applicable option agreement. All
Stock Options shall be exercisable, subject to the terms of this Plan, during
the optionee's lifetime, only by the optionee or by the guardian or legal
representative of the optionee or, in the case of a Nonqualified Stock Option,
its alternative payee pursuant to such domestic relations order, it being
understood that the term "holder" and "optionee" include the guardian and
legal representative of the optionee named in the option agreement and any
person to whom an option is transferred by will or the laws of descent and
distribution or, in the case of a Nonqualified Stock Option, pursuant to a
domestic relations order or a gift permitted under the applicable option
agreement.
(G) TERMINATION BY DEATH. Unless otherwise determined by the Committee, if an
optionee's employment terminates by reason of death, any Stock Option held by
such optionee shall become immediately and fully exercisable and may
thereafter be exercised for a period of one year (or such other period as the
Committee may specify in the option agreement) from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter. Notwithstanding any provision herein to the contrary, unless
otherwise determined by the Committee, if an optionee dies after termination
of the optionee's employment, any Stock Option held by such optionee may
thereafter be exercised, to the extent such Stock Option was exercisable as of
the date of such death, for a period that expires on the earliest of (i) the
first anniversary of the date of such death, (ii) the last date on which the
optionee would have been entitled to exercise such Stock Option had the
optionee not died or (iii) the date on which the stated term of such Stock
Option expires.
(H) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by the
Committee, if an optionee's employment terminates by reason of Disability, any
Stock Option held by such optionee, if not fully vested and exercisable as of
the date of such termination, shall continue to vest according to such Stock
Option's stated vesting schedule and may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of
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termination or thereafter becomes exercisable, or on such accelerated basis as
the Committee may determine, for a period of three years (or such shorter
period as the Committee may specify in the option agreement) from the date of
such termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is the shorter; provided, however, that if
the optionee dies within such period, any unexercised Stock Option held by
such optionee shall continue to be exercisable to the extent to which it was
exercisable at the time of death for the remainder of such period, or for a
period of 12 months from the date of such death, or until the expiration of
the stated term of such Stock Option, whichever period is the shortest. In the
event of termination of employment by reason of Disability, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Nonqualified Stock Option.
(I) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by the
Committee, if an optionee's employment terminates by reason of retirement, the
following vesting and exercisability terms will apply. For purposes of this
Plan, an optionee shall be deemed to have terminated employment by reason of
retirement if such optionee is age 55 years or older with 10 or more years of
service with the Company, has given due notice (as determined by the
Committee), and has entered into an agreement, the form and content of which
shall be specified by the Committee, not to compete with the Company and its
Affiliates for a period of one year following such retirement.
<TABLE>
<CAPTION>
YEARS OF CONTINUED YEARS OF CONTINUED
AGE AT VESTING FOLLOWING EXERCISABILITY
RETIREMENT RETIREMENT FOLLOWING RETIREMENT
---------- ------------------ --------------------
<S> <C> <C>
55-59 1 2
60-64 2 3
65 or more 3 3
</TABLE>
Notwithstanding the foregoing, if the optionee dies within such period of
continued exercisability, any unexercised Stock Option held by such optionee
shall continue to be exercisable to the extent to which it was exercisable at
the time of death for the remainder of such period, or for a period of 12
months from the date of such death, or until the expiration of the stated term
of such Stock Option, whichever period is the shortest. In the event of
termination of employment by reason of retirement, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply
for purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(J) OTHER TERMINATION. Unless otherwise determined by the Committee: (A) if an
optionee incurs a voluntary termination of Employment, any Stock Option held
by such optionee, to the extent then exercisable, or on such accelerated basis
as the Committee may determine, may be exercised for the lesser of thirty days
from the date of such termination of Employment or the balance of such Stock
Option's term; and (B) if an optionee incurs a termination of Employment
because such optionee's Employment is terminated by the Company or an
Affiliate, other than by reason of retirement or Disability or for Cause, any
Stock Option held by such optionee, to the extent then exercisable, or becomes
exercisable during the one-year period following termination of employment by
the Company or an Affiliate, or on such accelerated basis as the Committee may
determine, may be exercised for the lesser of one year from the date of such
termination of Employment or the balance of such Stock Option's term;
provided, however, that if the optionee dies within such thirty-day or one-
year period, as the case may be, any unexercised Stock Option held by such
optionee shall continue to be exercisable to the extent to which it was
exercisable at the time of death for the remainder of such period, or for a
period of 12 months from the date of such death, or until the expiration of
the stated term of such Stock Option, whichever period is the shortest.
Notwithstanding the foregoing, if an optionee incurs a Termination of
Employment at or after a Change of Control, other than by reason of death,
Disability or Retirement, any Stock Option held by such optionee shall be
exercisable for the lesser of (1) six months and one day from the date of such
termination of Employment, and (2) the balance of such Stock Option's term. In
the event of termination of Employment, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes
of Section 422 of the Code, such Stock Option will thereafter be treated as a
Nonqualified Stock Option.
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(K) TERMINATION FOR CAUSE. Unless otherwise determined by the Committee, if an
optionee incurs a Termination of Employment for Cause, all Stock Options held
by such optionee shall thereupon terminate.
(L) CHANGE OF CONTROL CASH-OUT. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change of Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the time
of grant, an optionee shall have the right, whether or not the Stock Option is
fully exercisable and in lieu of the payment of the exercise price for the
Shares being purchased under the Stock Option and by giving notice to the
Company, to elect (within the Exercise Period) to surrender all or part of the
Stock Option to the Company and to receive cash, within 30 days of such
notice, in an amount equal to the amount by which the Change of Control Price
per Share shall exceed the exercise price per Share under the Stock Option
(the "Spread") multiplied by the number of Shares granted under the Stock
Option as to which the right granted under this Section 6.4(l) shall have been
exercised; provided, however, that if the Change of Control is within six
months of the date of grant of a particular Stock Option held by an optionee
who is an officer or director of the Company and is subject to Section 16(b)
of the Exchange Act no such election shall be made by such optionee with
respect to such Stock Option prior to six months from the date of grant.
However, if the end of such 60-day period from and after a Change of Control
is within six months of the date of grant of a Stock Option held by an
optionee who is an officer or director of the Company and is subject to
Section 16(b) of the Exchange Act, such Stock Option shall be cancelled in
exchange for a cash payment to the optionee, effected on the day which is six
months and one day after the date of grant of such Option, equal to the Spread
multiplied by the number of Shares granted under the Stock Option.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan, a SAR may
be granted to an Employee at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SAR. In the case of a Nonqualified
Stock Option, Tandem SARs may be granted either at or after the time of grant
of such Stock Option. In the case of an Incentive Stock Option, Tandem SARs
may be granted only at the time of grant of such Stock Option.
The Committee shall have complete discretion in determining the number of SARs
granted to each Participant (subject to Article 4 herein) and, consistent with
the provisions of the Plan, in determining the terms and conditions pertaining
to such SARs. However, the grant price of a Freestanding SAR shall be at least
equal to the Fair Market Value of a Share on the date of grant of the SAR. The
grant price of Tandem SARs shall equal the Option Price of the related Option.
In no event shall any SAR granted hereunder become exercisable within the
first six (6) months of its grant. SARs may not be repriced without
stockholder approval.
7.2 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR shall
terminate and no longer be exercisable upon the termination or exercise of the
related Stock Option. A Tandem SAR may be exercised only with respect to the
Shares for which its related Option is then exercisable.
Notwithstanding any other provision of this Plan to the contrary, with respect
to a Tandem SAR granted in connection with an ISO; (i) the Tandem SAR will
expire no later than the expiration of the underlying ISO; (ii) the value of
the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying
ISO and the Fair Market Value of the Shares subject to the underlying ISO at
the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be
exercised only when the Fair Market Value of the Shares subject to the ISO
exceeds the Option Price of the ISO.
7.3 EXERCISE OF FREESTANDING SARS. Subject to the other provisions of this
Article 7, Freestanding SARs may be exercised upon whatever terms and
conditions the Committee, at its sole discretion, imposes upon them.
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7.4 SAR AGREEMENT. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.
7.5 TERM OF SARS. The term of a SAR granted under the Plan shall be determined
by the Committee, at its sole discretion; provided, however, that such term
shall not exceed ten (10) years.
7.6 PAYMENT OF SAR AMOUNT. Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The excess of the Fair Market Value of a Share on the date of
exercise over the grant price of the SAR; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.
7.7 RULE 16B-3 REQUIREMENTS. Notwithstanding any other provision of the Plan,
the Committee may impose such conditions on exercise of a SAR (including,
without limitation, the right of the Committee to limit the time of exercise
to specified periods) as may be required to satisfy the requirements of any
rule or interpretation promulgated under Section 16 (or any successor rule) of
the Act.
7.8 NONTRANSFERABILITY OF SARS. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by application of the laws of descent and distribution.
Further, all SARs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant. Notwithstanding the
foregoing, at the discretion of the Committee, an Award Agreement may permit
the transferability of a SAR by a Participant solely to members of the
Participant's immediate family or trusts for the benefit of such persons.
ARTICLE 8. RESTRICTED STOCK
8.1 ADMINISTRATION. Shares of Restricted Stock may be awarded either alone or
in addition to other Awards granted under the Plan. The Committee shall
determine the officers and employees to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of shares to be awarded
to any Participant (subject to the aggregate limit on grants to individual
Participants set forth in Article 4), the conditions for vesting, the time or
times within which such Awards may be subject to forfeiture and any other
terms and conditions of the Awards, in addition to those contained in Section
8.3.
The Committee may, prior to grant, condition the vesting of Restricted Stock
upon continued service of the Participant. The provisions of Restricted Stock
Awards need not be the same with respect to each recipient.
8.2 AWARDS AND CERTIFICATES. Shares of Restricted Stock shall be evidenced in
such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates. Any certificate
issued in respect of shares of Restricted Stock shall be registered in the
name of such Participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award, substantially in
the following form:
"The sale or other transfer of the Shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the
Tupperware Corporation 1996 Incentive Plan, and in a Restricted Stock
Agreement. A copy of the Plan and such Restricted Stock Agreement may
be obtained from Tupperware Corporation."
The Committee may require that the certificates evidencing such Shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the Participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
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8.3 TERMS AND CONDITIONS. Shares of Restricted Stock shall be subject to the
following terms and conditions:
(a) Subject to the provisions of the Plan and the Restricted Stock
Agreement referred to in Section 8.3(f), during the Restricted Period,
the Participant shall not be permitted to sell, assign, transfer,
pledge or otherwise encumber shares of Restricted Stock, except that,
if expressly provided in the Restricted Stock Agreement, a Participant
may, during the Restriction Period, transfer shares of Restricted Stock
to members of the Participant's immediate family or trusts or
partnerships for the benefit of such persons. Within these limits, the
Committee may provide for the lapse of restrictions based upon period
of service in installments or otherwise and may accelerate or waive, in
whole or in part, restrictions based upon period of service.
Notwithstanding the foregoing, any Restricted Stock Award granted
hereunder shall have a Restriction Period of not less than three years,
except that an aggregate amount of Restricted Stock Awards not
exceeding one-third of the Shares available for use as Restricted Stock
Awards pursuant to Section 4.1 of the Plan may be issued without a
minimum Restriction Period.
(b) Except as provided in this paragraph (b) and paragraph (a), above,
and the Restricted Stock Agreement, the Participant shall have, with
respect to the shares of Restricted Stock, all of the rights of a
stockholder of the Company holding the class or series of Shares that
is the subject of the Restricted Stock, including, if applicable, the
right to vote the shares and the right to receive any cash dividends.
Unless otherwise determined by the Committee in the applicable
Restricted Stock Agreement, dividends payable in Shares shall be paid
in the form of Restricted Stock of the same class as the Shares with
which such dividend was paid, held subject to the vesting of the
underlying Restricted Stock. In the event that any dividend constitutes
a "derivative security" or an "equity security" pursuant to Rule 16(a)
under the Act, such dividend shall be subject to a vesting period equal
to the longer of: (i) the remaining vesting period of the Shares of
Restricted Stock with respect to which the dividend is paid; or (ii)
six months. The Committee shall establish procedures for the
application of this provision.
(c) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement and paragraphs (a) and (d) of this Section
8.3 and Section 13.1(b), upon a Participant's Termination of Employment
for any reason during the Restriction Period, all Shares still subject
to restriction shall be forfeited by the Participant.
(d) Except to the extent otherwise provided in Section 13.1(b), in the
event that a Participant retires or such Participant's employment is
involuntarily terminated (other than for Cause), the Committee shall
have the discretion to waive, in whole or in part, any or all remaining
restrictions with respect to any or all of such Participant's shares of
Restricted Stock.
(e) If and when any applicable Restriction Period expires without a
prior forfeiture of the Restricted Stock, unlegended certificates for
such shares shall be delivered to the Participant upon surrender of the
legended certificates.
(f) Each Award shall be confirmed by, and be subject to, the terms of a
Restricted Stock Agreement.
ARTICLE 9. PERFORMANCE AWARDS
9.1 GRANT OF PERFORMANCE AWARDS. Subject to the terms of the Plan, Performance
Awards may be granted to eligible Employees at any time and from time to time,
as shall be determined by the Committee, and may be granted either alone or in
addition to other Awards granted under the Plan. The Committee shall have
complete discretion in determining the number, amount and timing of Awards
granted to each Participant. Such Performance Awards may take the form
determined by the Committee, including without limitation, cash, Shares,
Performance Units and Performance Shares, or any combination thereof.
Performance Awards may be awarded as short-term or long-term incentives.
9.2 PERFORMANCE GOALS. (a) The Committee shall set Performance Goals at its
discretion which, depending on the extent to which they are met, will
determine the number and/or value of Performance Awards that will be paid out
to the Participants, and may attach to such Performance Awards one or more
restrictions, including, without limitation, a requirement that Participants
pay a stipulated purchase price for each Performance
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Share, or restrictions which are necessary or desirable as a result of
applicable laws or regulations. Each Performance Award may be confirmed by,
and be subject to, a Performance Award Agreement.
(b) The Committee shall have the authority at any time to make
adjustments to Performance Goals for any outstanding Performance Awards
which the Committee deems necessary or desirable unless at the time of
establishment of goals the Committee shall have precluded its authority
to make such adjustments.
(c) Performance Periods shall, in all cases, exceed six (6) months in
length.
9.3 VALUE OF PERFORMANCE UNITS/SHARES. (a) Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant.
(b) Each Performance Share shall have an initial value equal to the
Fair Market Value of a Share on the date of grant.
9.4 EARNING OF PERFORMANCE AWARDS. After the applicable Performance Period has
ended, the holder of Performance Awards shall be entitled to receive the
payout earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding Performance Goals have
been achieved, except as adjusted pursuant to Section 9.2(b) or as deferred
pursuant to Article 11.
9.5 TIMING OF PAYMENT OF PERFORMANCE AWARDS. Payment of earned Performance
Awards shall be made in accordance with terms and conditions prescribed or
authorized by the Committee. The Committee may permit the Participants to
elect to defer or the Committee may require the deferral of, the receipt of
Performance Awards upon such terms as the Committee deems appropriate.
9.6 NONTRANSFERABILITY. Performance Awards may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by application of the laws of descent and distribution. Further, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's
Beneficiary. Notwithstanding the foregoing, at the discretion of the
Committee, an Award Agreement may permit the transferability of a Performance
Award by a Participant solely to members of the Participant's immediate family
or trusts or partnerships for the benefit of such persons.
9.7 TERMINATION. Performance Awards shall be subject to the following terms
and conditions:
(a) Except to the extent otherwise provided in the applicable
Performance Award Agreement, if any, and Sections 9.7(b) and 13.1(c),
upon a Participant's Termination of Employment for any reason during
the Performance Period or before any applicable Performance Goals are
satisfied, the rights to the shares still covered by the Performance
Award shall be forfeited by the Participant.
(b) Except to the extent otherwise provided in Section 13.1(c), in the
event that a Participant's employment is terminated (other than for
Cause), or in the event a Participant retires, the Committee shall have
the discretion to waive, in whole or in part, any or all remaining
payment limitations (other than, in the case of Performance Awards with
respect to which a Participant is a Covered Employee, satisfaction of
any applicable Performance Goals unless the Participant's employment is
terminated by reason of death or disability) with respect to any or all
of such Participant's Performance Awards.
ARTICLE 10. BENEFICIARY
10.1 DESIGNATION. Each Participant under the Plan may, from time to time, name
any Beneficiary or Beneficiaries (who may be named contingently or
successively). Each such designation shall revoke all prior designations by
the same Participant, shall be in a form prescribed by the Company, and shall
be effective only when filed by the Participant in writing with the Company
during the Participant's lifetime. Any such designation shall control over any
inconsistent testamentary or inter vivos transfer by a Participant, and any
benefit of a Participant under the Plan shall pass automatically to a
Participant's Beneficiary pursuant to a proper designation pursuant to this
Section 10.1 without administration under any statute or rule of law governing
the transfer of property by will, trust, gift or intestacy.
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10.2 ABSENCE OF DESIGNATION. In the absence of any such designation
contemplated by Section 10.1, benefits remaining unpaid at the Participant's
death shall be paid pursuant to the Participant's will or pursuant to the laws
of descent and distribution.
ARTICLE 11. DEFERRALS
The Committee may permit a Participant to elect, or the Committee may require
at its sole discretion subject to the proviso set forth below, any one or more
of the following: (i) the deferral of the Participant's receipt of cash, (ii)
a delay in the exercise of an Option or SAR, (iii) a delay in the lapse or
waiver of restrictions with respect to Restricted Stock, or (iv) a delay of
the satisfaction of any requirements or goals with respect to Performance
Awards; provided, however, the Committee's authority to take such actions
hereunder shall exist only to the extent necessary to reduce or eliminate a
limitation on the deductibility of compensation paid to the Participant
pursuant to (and so long as such action in and of itself does not constitute
the exercise of impermissible discretion under) Section 162(m) of the Code, or
any successor provision thereunder. If any such deferral is required or
permitted, the Committee shall establish rules and procedures for such
deferrals, including provisions relating to periods of deferral, the terms of
payment following the expiration of the deferral periods, and the rate of
earnings, if any, to be credited to any amounts deferred thereunder.
ARTICLE 12. RIGHTS OF EMPLOYEES
12.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of
the Company. For purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Subsidiaries (or between Subsidiaries)
shall not be deemed a termination of employment.
12.2 PARTICIPATION. No Employee shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 13. CHANGE OF CONTROL
13.1 IMPACT OF EVENT. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change of Control:
(a) Any Stock Options or SARs outstanding as of the date such Change of
Control is determined to have occurred, and which are not then
exercisable and vested, shall become fully exercisable and vested to
the full extent of the original grant; provided, however, that in the
case of the holder of Stock Options or SARs who is actually subject to
Section 16(b) of the Exchange Act, such Stock Options or SARs shall
have been outstanding for at least six months at the date such Change
of Control is determined to have occurred.
(b) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become
free of all restrictions and become fully vested and transferable to
the full extent of the original grant.
(c) All Performance Awards shall be considered to be earned and payable
in full, and any deferral or other restriction shall lapse and such
Performance Units shall be settled in cash as promptly as is
practicable.
ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1 AMENDMENT, MODIFICATION, AND TERMINATION. At any time and from time to
time, the Board may terminate, amend, or modify the Plan. However, no
amendment, alteration or discontinuation shall be made which would disqualify
the Plan from the exemption provided by Rule 16b-3, and no such amendment
shall be made without the approval of the Company's stockholders to the extent
such approval is required by law or agreement.
14.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification of
the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award except such an amendment made to cause the Plan or Award to qualify
for the exemption provided by Rule 16b-3. The Committee shall have the right
to replace any previously-granted Award under the Plan with an Award equal to
the value of the replaced Award at the time of replacement, without obtaining
the consent of the Participant holding such Award.
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Subject to the above provisions, the Board shall have authority to amend the
Plan to take into account changes in law and tax and accounting rules as well
as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
ARTICLE 15. WITHHOLDING
15.1 TAX WITHHOLDING. The Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising under or as a result of this Plan.
15.2 SHARE WITHHOLDING. With respect to withholding required and/or permitted
upon the exercise of Options or SARs, upon the lapse of restrictions on
Restricted Stock, or upon any other taxable event hereunder, Participants may
elect, subject to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares (or by
surrendering Shares previously owned which have been held for longer than six
months) having a Fair Market Value on the date the tax is to be determined
equal to the minimum statutory total tax which could be imposed on the
transaction. All elections shall be irrevocable, made in writing, signed by
the Participant, and elections by Insiders shall additionally comply with the
requirements established by the Committee.
ARTICLE 16. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, spin-off, or otherwise, of all or substantially all of
the business and/or assets of the Company.
ARTICLE 17. LEGAL CONSTRUCTION
17.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
17.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
17.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the plan or action by the Committee fails to comply
with Section 17.3, it shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee.
Notwithstanding any other provision set forth in the Plan, if required by any
rule or interpretation promulgated under Section 16 of the Exchange Act, any
"derivative security" or "equity security" offered pursuant to the Plan to any
Insider may not be sold or transferred for at least six (6) months after the
date of grant of such Award. The terms "equity security" and "derivative
security" shall have the meanings ascribed to them in the then-current Rule
16(a) under the Exchange Act.
Notwithstanding any other provision of the Plan or agreements made pursuant
thereto, the Company shall not be required to issue or deliver any certificate
or certificates for Shares under the Plan prior to fulfillment of all of the
following conditions:
i. Listing or approval for listing upon notice of issuance, of such
shares on the New York Stock Exchange, Inc., or such other securities
exchange as may at the time be the principal market for the Shares;
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ii. Any registration or other qualification of such Shares under any
state or federal law or regulation, or the maintaining in effect of any
such registration or other qualification which the Committee shall, in
its absolute discretion upon the advice of counsel, deem necessary or
advisable; and
iii. Obtaining any other consent, approval, or permit from any state or
federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be
necessary or advisable.
17.4 POOLING. Notwithstanding anything in the Plan to the contrary, if any
right granted pursuant to this Plan would make a Change of Control transaction
ineligible for pooling-of-interests accounting under APB No.16 that but for
the nature of such grant would otherwise be eligible for such accounting
treatment, the Committee shall have the ability to substitute for the cash
payable pursuant to such grant Common Stock with a Fair Market Value equal to
the cash that would otherwise be payable hereunder.
17.5 GOVERNING LAW. To the extent not preempted by Federal law, the Plan, and
all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Delaware.
C-16
<PAGE>
Annex D
FORM OF
TUPPERWARE CORPORATION
DIRECTOR STOCK PLAN
Section 1. Purpose
The purposes of the Plan are to assist the Company in (1) promoting a
greater identity of interests between the Company's non-employee directors and
its shareholders, and (2) attracting and retaining directors by affording them
an opportunity to share in the future successes of the Company.
Section 2. Definitions
"Act" shall mean the Securities Exchange Act of 1934, as amended.
"Award" shall mean an award of Common Stock as contemplated by Section
7 of this Plan.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean the happening of any of the following
events:
(i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Act) of 20% or more of either (1) the then outstanding shares of Common
Stock (the "Outstanding Company Common Stock") or (2) the combined voting
power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the following: (1) any acquisition
directly from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted
was itself acquired from the Company, (2) any acquisition by the Company,
(3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (4) any acquisition by any Person pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (iii) of this
definition; or
(ii) A change in the composition of the Board such that the individuals
who, as of the Distribution Date of the Plan, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board; provided,
however, for purposes of this definition, that any individual who becomes a
member of the Board subsequent to such Distribution Date, whose election,
or nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided further,
that any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Act) or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a
member of the Incumbent Board; or
(iii) The approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company or the acquisition of
assets of another corporation ("Corporate Transaction") or, if consummation
of such Corporate Transaction is subject, at the time of such approval by
stockholders, to the consent of any
D-1
<PAGE>
government or governmental agency, the obtaining of such consent (either
explicitly or implicitly by consummation); excluding, however, such a
Corporate Transaction pursuant to which (1) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock, and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the company resulting from
such Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (2) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company or such corporation resulting
from such Corporate Transaction) will beneficially own, directly or
indirectly, 20% or more of, respectively, the outstanding shares of common
stock of the corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors except
to the extent that such ownership existed with respect to the Company prior
to the Corporate Transaction and (3) individuals who were members of the
Incumbent Board will constitute at least a majority of the board of
directors of the corporation resulting from such Corporate Transaction; or
(iv) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
1. "Change of Control Price" means the higher of (i) the highest reported
sales price, regular way, of a share of Common Stock in any transaction
reported on the New York Stock Exchange Composite Tape or other national
exchange on which such shares are listed or on NASDAQ during the 60-day
period prior to and including the date of a Change of Control or (ii) if
the Change of Control is the result of a tender or exchange offer or a
Corporate Transaction, the highest price per share of Common Stock paid
in such tender or exchange offer or Corporate Transaction; provided,
however, that in the case of a Stock Option which was granted within 240
days of the Change of Control, then the Change of Control Price for such
Stock Option shall be the Fair Market Value of the Common Stock on the
date such Stock Option is exercised or deemed exercised. To the extent
that the consideration paid in any such transaction described above
consists all or in part of securities or other noncash consideration,
the value of such securities or other noncash consideration shall be
determined in the sole discretion of the Committee.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"Common Stock" shall mean the common stock, $.01 par value, of the
Company.
"Company" shall mean Tupperware Corporation, a Delaware corporation.
"Distribution Date" shall mean the date determined by the Board of
Directors of Premark International, Inc., a Delaware corporation ("Premark"),
on which shall be effected the distribution on a pro rata basis to the holders
of the outstanding shares of common stock of Premark the shares of Common
Stock held by Premark on such date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations thereunder.
"Fair Market Value" shall mean, as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on the New York
Stock Exchange Composite Tape or, if not listed
D-2
<PAGE>
on such exchange, on any other national securities exchange on which the
Common Stock is listed or on NASDAQ, adjusted to the next higher five cents if
such mean is not divisible by five cents. If there is no regular public
trading market for such Common Stock, the Fair Market Value of the Common
Stock shall be determined by the Committee in good faith.
"Fees" shall mean the annual retainer fee for a Participant in connection
with his or her service on the Board for any fiscal year of the Company.
"Participant" shall mean each member of the Board who is not an employee
of the Company or any subsidiary of the Company.
"Plan" shall mean the Tupperware Corporation Director Stock Plan.
"Retirement" shall mean the retirement by a Participant from the Board in
accordance with the Company's stated policy on Director retirement.
"Rules" shall mean the rules promulgated under the Act from time to time
and the interpretations issued by Securities and Exchange Commission in
respect thereof.
"Stock Option" shall mean a non-qualified stock option, which is further
defined as any right to Common Stock which does not qualify as an "incentive
stock option" as defined under the Code.
Section 3. Eligibility
Each member of the Board who is not an employee of the Company or any
subsidiary of the Company shall be eligible to participate in the Plan.
Section 4. Shares Subject to the Plan
The maximum number of shares of Common Stock which shall be available for
use under the Plan shall be 300,000, subject to adjustment pursuant to Section
17 hereunder. The shares issued under the Plan may be authorized and unissued
shares or issued shares heretofore or hereafter acquired and held as treasury
shares or shares purchased on the open market.
Section 5. Duration of Plan
Unless earlier terminated pursuant to Section 11 hereof, this Plan shall
automatically terminate on, and no grants, awards or elections may be made
after, the date of the tenth anniversary of the approval by stockholders of
the Plan pursuant to Section 19 hereof.
Section 6. Administration
(a) The Plan shall be administered by the Board or any committee thereof
so designated by the Board (the "Committee"), which shall have full authority
to construe and interpret the Plan, to establish, amend and rescind rules and
regulations relating to the Plan, and to take all such actions and make all
such determinations in connection with the Plan as it may deem necessary or
desirable.
(b) Notwithstanding any other provision of the Plan, neither the Board nor
the Committee shall be authorized to exercise any discretion with respect to
the selection of Participants to receive Awards or Stock Options under the
Plan or concerning the amount, timing or vesting of such Awards or Stock
Options under the Plan, and no amendment or termination of the Plan shall
adversely affect the interest of any Director in Awards or Stock Options
previously granted to the Director without that Director's express written
consent.
Section 7. Initial Awards
Each Participant shall receive a one-time grant of one thousand (1,000)
shares of Common Stock, upon serving his or her initial three months as a
member of the Board.
D-3
<PAGE>
Section 8. Stock in Lieu of Retainer
Each Participant who, in any year of the Plan, delivers to the Company
written notice of an irrevocable election concerning the Fees to be earned in
the next fiscal year of the Company, may receive in lieu of cash an amount of
shares of Common Stock equal in value to all or any portion of the Fees (but
only increments of 25% or a multiple thereof, and in no event to exceed 100%
of the Fees) as so designated by the Participant in such written notice, which
amount shall be determined by dividing the Fees payable in each fiscal quarter
of the Company by the Fair Market Value of a share of Common Stock on the last
business day of such fiscal quarter (but if such date is not a day on which
the New York Stock Exchange is open, then on the next preceding day on which
the New York Stock Exchange is open), except that only whole numbers of shares
shall be obtainable pursuant to this Section, and any remainder Fees which
otherwise would have purchased a fractional share shall be paid in cash. Any
such written notice pursuant to this Section 8 shall remain in effect for
subsequent Plan years unless such Participant delivers a written notice
setting forth a different election with respect to Fees which shall be applied
to future Plan years until further written notice is received by the Company
pursuant to this Section 8.
Section 9. Stock Options
(a) Each Participant who, in any year of the Plan, delivers to the Company
an irrevocable election concerning the Fees to be earned in the next fiscal
year of the Company, may receive in lieu of all or any portion of the cash
Fees (but only increments of 25% or a multiple thereof) as so designated by
the Participant, a Stock Option for an amount of shares of Common Stock in
each fiscal year of the Company as follows:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent of Annual Number of Shares
Retainer Forgone Subject to Option
- -------------------------------------------
<S> <C>
100% 2,000
75% 1,500
50% 1,000
25% 500
</TABLE>
- -------------------------------------------------------------------------------
The exercise price of such shares shall be determined as follows:
<TABLE>
<S> <C> <C>
Fair Market Value
of a Share - 100% of Fee = Exercise Price
of Common Stock ----------- Per Share
2,000
Fair Market Value
of a Share - 75% of Fee = Exercise Price
of Common Stock ----------- Per Share
1,500
Fair Market Value
of a Share - 50% of Fee = Exercise Price
of Common Stock ----------- Per Share
1,000
Fair Market Value
of a Share - 25% of Fee = Exercise Price
of Common Stock ----------- Per Share
500
</TABLE>
In no event, however, shall the exercise price be less than 50% of the
Fair Market Value of a share of Common Stock on the date of the grant.
(b) The date of grant of a Stock Option pursuant to this Section 9 shall
be the date of the annual meeting of stockholders of the Company, provided
that such meeting occurs at least six (6) months and one day after the
Participant's election to receive a Stock Option in lieu of cash Fees;
otherwise, the date of grant shall
D-4
<PAGE>
be six (6) months and one day after the Participant's election to receive a
Stock Option in lieu of cash Fees. If such day would not be a day on which the
New York Stock Exchange is open, then on the next succeeding day on which the
New York Stock Exchange is open.
(c) A Stock Option granted pursuant to this Section 9 shall vest and be
exercisable on the last day of the fiscal year in which the Stock Option is
granted. In the event that a Participant is not a member of the Board on the
last day of the fiscal year in which the Stock Option is granted, except in
the case of a Participant's Retirement or termination for cause, such
Participant's Stock Option which has not become vested and exercisable as of
such time shall (i) be reduced to an amount of shares of Common Stock which
reflects the amount of Fees earned as of the date of termination from service
on the Board which amount shall be determined by multiplying the number of
shares of Common Stock subject to the Stock Option as determined pursuant to
Section 9(a), above, by a fraction, the numerator of which shall be the number
of days of the fiscal year of the Company in which the Stock Option is granted
that the Participant was a member of the Board and the denominator of which
shall be 365, provided, that any Stock Option for a fractional share of Common
Stock shall be rounded up to the nearest whole number of shares, and (ii)
shall continue to vest. The term of exercisability for a Stock Option granted
under this Section 9 shall be ten (10) years.
(d) The remaining terms and conditions of each such Stock Option shall be
as set forth in this Plan and in the form of Stock Option Agreement used in
connection with this Plan.
Section 10. Transferability
Rights, grants and Awards under the Plan may not be assigned, transferred,
pledged or hypothecated, and shall not be subject to execution, attachment or
similar process. Notwithstanding the foregoing, any such right, grant or award
constituting a "derivative security" under the Rules shall not be transferable
by a Participant other than by will or by operation of applicable laws of
descent and distribution or pursuant to a domestic relations order or
qualified domestic relations order as such terms are defined by the Code or
ERISA.
Section 11. Amendment
(c) The Board may from time to time make such amendments to the Plan as it
may deem proper and in the best interest of the Company without further
approval of the Company's stockholders, provided that to the extent required
to qualify transactions under the Plan for exemption under Rule 16b-3
promulgated under the Act ("Rule 16b-3") no amendment to the Plan shall be
adopted without further approval by the holders of at least a majority of the
shares of Common Stock present, or represented, and entitled to vote at a
meeting held for such purpose, and provided further, that if and to the extent
required for the Plan to comply with Rule 16b-3, no amendment to the Plan
shall be made more than once in any six-month period that would change the
amount, price or timing of the grants of Awards or Stock Options hereunder
other than to comport with changes in the Code, ERISA, or the regulations
thereunder.
Section 12. Termination
The Plan may be terminated at any time by the Board or by the approval by
the holders of at least a majority of the shares of Common Stock present, or
represented, and entitled to vote at a meeting held for such purpose.
Section 13. Withholding Taxes
No later than the date as of which an amount first becomes includible in
the gross income of the Participant for Federal income tax purposes with
respect to any Award under the Plan or with respect to any exercise of any
Stock Option granted under the Plan, the Participant shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to be
withheld. Such withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award or that is received upon the
exercise of the Stock Option that gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditional
D-5
<PAGE>
upon such payment or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Participant. The Company may establish such procedures as
it deems appropriate, including the making of irrevocable elections or the
timing of the use of Common Stock, for the settlement of its withholding
obligations.
Section 14. Effect of Change of Control
Notwithstanding any other provision of the Plan to the contrary, in the
event of a Change of Control, any Stock Options outstanding and not then
exercisable and vested as of the date such Change of Control is determined to
have occurred, shall become fully exercisable and vested to the full extent of
the original grant. During the 60-day period from and after a Change of
Control (the "Exercise Period"), a Participant who holds an Award or a Stock
Option shall have the right, in lieu (in the case of a Stock Option) of the
payment of the exercise price for the shares of Common Stock being purchased
under the Stock Option, by giving notice to the Company, to elect (within the
Exercise Period) to surrender all or part of an Award or a Stock Option to the
Company and to receive cash, within 30 days of such notice, in an amount equal
to (a) in the case of a Stock Option, the amount by which the Change of
Control Price per share of Common Stock on the date of such election shall
exceed the exercise price per share of Common Stock under the Stock Option
(the "Spread") multiplied by the number of shares of Common Stock granted
under the Stock Option as to which the right granted under this Section shall
have been exercised, or (b) in the case of an Award, an amount equal to the
Change of Control Price multiplied by the number of shares of Common Stock
granted pursuant to such Award as to which the right granted under this
Section shall have been exercised; provided, however, that if the Change of
Control is within six (6) months of the date of grant of a particular Award or
Stock Option held by a Participant no such election shall be made by such
Participant with respect to such Award or Stock Option prior to six (6) months
from the date of grant. If the end of such 60-day period from and after a
Change of Control is within six (6) months from the date of grant of a Stock
Option or the date of an Award, such Stock Option or Award shall be cancelled
in exchange for a cash payment to the Participant, effected on the day which
is six (6) months and one day after the date of grant of such Stock Option or
Award, as the case may be, equal to (a) in the case of a Stock Option, the
Spread multiplied by the number of shares of Common Stock granted under the
Stock Option, or (b) in the case of an Award, the Change of Control Price
multiplied by the number of shares of Common Stock comprising an outstanding
Award.
Section 15. Death, Disability, Termination or Retirement of Participant
(a) Death While A Director. Notwithstanding any other provision of the
Plan to the contrary, in the event of the death of a Participant while a
member of the Board, any Stock Options outstanding as of the date of death and
not then exercisable shall become immediately exercisable, and all outstanding
Stock Options held by such Participant shall remain exercisable by the person
to whom the Stock Option is transferred by will or by the laws of descent and
distribution for a period of the lesser of (i) the remaining term of the Stock
Option, or (ii) three (3) years after the date of death.
(b) Disability, Retirement or Other Termination. Except as otherwise
provided by the Plan, in the event of a Participant's termination of
membership on the Board as a result of the Participant's disability or
Retirement or for another reason other than cause, any Stock Options
outstanding as of the date of such termination and not then exercisable shall
(i) be adjusted in amount to reflect the proportion of Fees earned in the
final year of such Participant's service in such year (in accordance with the
operation of Sections 8 and 9 of this Plan and in consideration of such
Participant's elections for such year), and (ii) become exercisable on the
last day of the Company's then-current fiscal year. All outstanding Stock
Options held by such Participant shall remain exercisable for the full period
contemplated by the terms of such Stock Options. In the event of the death of
a Participant subsequent to termination of membership from the Board as a
result of circumstances described in this Section 15(b), any Stock Options
outstanding as of the date of death and not then exercisable shall become
immediately exercisable, and all outstanding Stock Options held by such
Participant shall remain exercisable by the person to whom the Stock Option is
transferred by will or by the laws of descent and distribution for a period of
the lesser of (i) the remaining term of the Stock Option, or (ii) three (3)
years after the date of death.
D-6
<PAGE>
Section 16. Effect of Termination for Cause
If a Participant incurs a termination of membership on the Board for
cause, such Participant's Stock Options which are not then exercisable shall
be automatically cancelled immediately. Unless otherwise determined by the
Board, for purposes of the Plan "cause" shall mean (i) the conviction of the
Participant for commission of a felony under Federal law or the law in the
state in which such action occurred, or (ii) dishonesty in the course of
fulfilling the Participant's duties as a director.
Section 17. Adjustments Upon Changes in Capitalization
In the event of any change in corporate capitalization, such as a stock
split or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property
of the Company, any reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code) or any partial
or complete liquidation of the Company, the Committee or Board may make such
substitution or adjustments in the aggregate number and class of shares
reserved for issuance under the Plan, in the number, kind and option price of
shares subject to outstanding Stock Options, in the number and kind of shares
subject to other outstanding Awards granted under the Plan and/or such other
equitable substitution or adjustments as it may determine to be appropriate in
its sole discretion; provided, however, that the number of shares subject to
any Award shall always be a whole number.
Section 18. Regulatory Matters
The Plan is intended to be construed so that participation in the Plan
will be exempt from Section 16(b) of the Act, pursuant to Rule 16b-3 as
promulgated thereunder, as may be further amended or interpreted by the
Securities and Exchange Commission. In the event that any provision of the
Plan shall be deemed not to be in compliance with the Rules in order to enjoy
the exemption from the Act, such provision shall be deemed of no force or
effect and the remaining provisions of the Plan shall remain in effect.
Section 19. Effectiveness of Plan
The Plan shall become effective as of the Distribution Date.
Section 20. Governing Law
To the extent not preempted by Federal law, the Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the laws of
the State of Delaware.
D-7
<PAGE>
ANNEX E
-------------------------------------
FORM
OF
TUPPERWARE CORPORATION
AND
-------------------------------------
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF , 1996
E-1
<PAGE>
Agreement, dated as of , 1996, between Tupperware Corporation, a
Delaware corporation (the "Company"), and (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a dividend
of one preferred share purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company to be issued in the distribution of Common
Shares (the "Spin-off") by Premark International, Inc. to its stockholders,
each Right representing the right to purchase one one-hundredth of a Preferred
Share (as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become outstanding between
the record date of the Spin-off (the "Record Date") and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or any entity holding Common
Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Common Shares of
the Company, then such Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be
an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right
E-2
<PAGE>
to vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in [State of Rights Agent] are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., [City of
Rights Agent] time, on such date; provided, however, that, if such date is not
a Business Day, it shall mean 5:00 P.M., [City of Rights Agent] time, on the
next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean the
shares of common stock, par value $.01 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3.
(h) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b).
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Exchange Ratio" shall have the meaning set forth in Section 24(a).
(k) "Final Expiration Date" shall have the meaning set forth in Section 7.
(l) "NASDAQ" shall mean the National Association of Securities Dealers, Inc.
Automated Quotation System.
(m) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
(n) "Preferred Shares" shall mean shares of Series A Junior Participating
Preferred Stock, no par, of the Company having the rights and preferences set
forth in the Form of Certificate of Designations attached to this Agreement as
Exhibit A.
(o) "Purchase Price" shall have the meaning set forth in Section 4.
(p) "Record Date" shall have the meaning set forth in the second paragraph
hereof.
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(q) "Redemption Date" shall have the meaning set forth in Section 7.
(r) "Redemption Price" shall have the meaning set forth in Section 23(a).
(s) "Right" shall have the meaning set forth in the second paragraph hereof.
(t) "Right Certificate" shall have the meaning set forth in Section 3(a).
(u) "Rights Agent" shall have the meaning set forth in the preamble hereof.
(v) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(w) "Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
(x) "Summary of Rights" shall have the meaning set forth in Section 3(b).
(y) "Trading Day" shall have the meaning set forth in Section 11(d)(i).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors of
the Company prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of Common
Shares aggregating 15% or more of the then outstanding Common Shares
(including any such date which is after the date of this Agreement and prior
to the issuance of the Rights; the earlier of such dates being herein referred
to as the "Distribution Date"), (x) the Rights will be evidenced (subject to
the provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-
prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each Common
Share so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by
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such certificates registered in the names of the holders thereof together with
a copy of the Summary of Rights attached thereto. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence
of this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between Tupperware Corporation
and dated as of , 1996 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Tupperware Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be evidenced
by this certificate. Tupperware Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the forms
of election to purchase Preferred Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one one-
hundredth of a Preferred Share set forth therein (the "Purchase Price"), but
the number of such one one-hundredths of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution
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of such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-
hundredths of a Preferred Share as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights
Agent, together with payment of the Purchase Price for each one one-hundredth
of a Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on , 2006 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $ , and
shall be subject to adjustment from time to time as provided in Section 11 or
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the depositary agent
depositary receipts
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representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
SECTION 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. Availability of Preferred Shares. The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a Person other than, or
the issuance or delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder
of Preferred Shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or
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other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of the
Company were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right.
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares
of the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event. In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.
From and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or any Associate
or Affiliate thereof; no Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be
cancelled.
(iii) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize additional Common
Shares for issuance upon exercise of the Rights. In the event the Company
shall, after good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be issuable upon
exercise of a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share market price of one
Common Share as of the date of issuance of such Preferred Shares or fraction
thereof.
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(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same rights, privileges
and preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares at
a price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share market price
of the Preferred Shares on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to one Preferred Share
and the denominator of which shall be such current per share market price of
the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the "current per share
market price" of any security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing
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price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then in use, or, if
on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of
Directors of the Company. The term "Trading Day: shall mean a day on which the
principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preferred Shares are not
publicly traded, the "current per share market price" of the Preferred Shares
shall be conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one one-
millionth of a Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the right
to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one one-hundredths of a Preferred
Share purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one one-
hundredths of a Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the number of one one-
hundredths of a share covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to
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such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Right Certificates
held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of
a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one- hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in
the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition
to those adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred Shares, issuance wholly
for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Agreement and prior
to the Distribution Date, the Company shall (i) declare or pay any dividend on
the Common Shares payable in Common Shares or (ii) effect
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a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A)
the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly, at any time after a Person has
become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or more
of its wholly-owned Subsidiaries, then, and in each such case, proper
provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the surviving
corporation) as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (B)
50% of the then current per share market price of the Common Shares of such
other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise
of the Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
so providing. The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements
or arrangements which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits intended to be afforded
by the Rights. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
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Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-hundredth of a
Preferred Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;
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(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Shares certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
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In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall
it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether
any Preferred Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the
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President, any Vice President, the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or suffered by it
in good faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
30 days' notice in writing mailed to the Company and to each transfer agent of
the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the State of [State of Rights Agent] (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the State of [State of Rights Agent]), in
good standing, having an office in the State of [State of Rights Agent], which
is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
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Section 23. Redemption. (a) The Board of Directors of the Company may, at
its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors of the Company
may be made effective at such time, on such basis and with such conditions as
the Board of Directors of the Company in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; provided, however, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors of the Company ordering the redemption of the Rights, the Company
shall mail a notice of redemption to all the holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section
24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient Common Shares issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for
each
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Common Share that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share as of the date
of issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common Shares or
to distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall propose
(i) to pay any dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or
to effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at least 10 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Tupperware Corporation
14901 South Orange Blossom Trail
Orlando, Florida 32837
Attention: General Counsel
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<PAGE>
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
-------------------------------------
-------------------------------------
Attention:
Corporate Secretary
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) to not less than 10%.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
E-19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and attested, all as of the day and year first above written.
TUPPERWARE CORPORATION
Attest:
By __________________________________ By __________________________________
Name: Name:
Title: Title:
Attest: [Rights Agent]
By __________________________________ By __________________________________
Name: Name:
Title: Title:
E-20
<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
TUPPERWARE CORPORATION
(Pursuant to Section 151 of the Delaware General Corporation Law)
Tupperware Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on , 1996:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, no par, of the Corporation (the "Preferred Stock"), and hereby states
the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be . Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
par value $.01 per share of the Corporation (the "Common Stock"), and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A
E-21
<PAGE>
Preferred Stock. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin
to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid
on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders
of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
E-22
<PAGE>
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided
that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock;
or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other
Certificate of Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made
(1) to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A Preferred
Stock shall have received $100 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such
E-23
<PAGE>
case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in
clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series A Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of
at least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Chairman of the Board and attested by its Secretary
this day of , 1996.
_____________________________________
Chairman of the Board
Attest:
- -----------------------------------
Secretary
E-24
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER , 2006 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
TUPPERWARE CORPORATION
This certifies that , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of , 1996 (the "Rights Agreement"), between Tupperware
Corporation, a Delaware corporation (the "Company"), and (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
[City of Rights Agent] time, on , 2006 at the principal office of the
Rights Agent, or at the office of its successor as Rights Agent, one one-
hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, no par, of the Company (the "Preferred
Shares"), at a purchase price of $ per one one-hundredth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-
hundredths of a Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of , 1996, based on the Preferred Shares as constituted
at such date. As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a Preferred Share which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any Right
or Rights evidenced hereby (other than fractions which are integral multiples
of one one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
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<PAGE>
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of , 1996.
ATTEST: Tupperware Corporation
________________________________ By _________________________
Countersigned:
[Rights Agent]
By
Authorized Signature
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<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto _____________
- -------------------------------------------------------------------------------
(Please print name and address of transferee)
- -------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ,
-------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
-------------------------------------
Signature
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<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To:Tupperware Corporation
The undersigned hereby irrevocably elects to exercise Rights represented
by this Right Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such Preferred
Shares be issued in the name of:
Please insert social security or other identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Dated: ,
-------------------------------------
Signature
E-28
<PAGE>
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
E-29
<PAGE>
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
-------------------------------------
Signature
- -- -- -- -- -- ---- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
NOTICE
The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
E-30
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On , 1996, the Board of Directors of Tupperware Corporation (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each share of common stock, par value $.01 per share of the
Company (the "Common Shares") to be issued in the distribution of Common
Shares (the "Spin-off") by Premark International, Inc. to its stockholders.
The dividend is payable on , 1996 to the stockholders of record of the
Spin-off. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, no par (the "Preferred Shares"), of the Company at a price of
$ per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") between the Company and , as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") have acquired beneficial ownership of 15% or more of the outstanding
Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any
person or group of affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to make, a tender offer
or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate with a copy of this
Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with
and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer ornew issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on , 2006 (the "Final Expiration Date"), unless the Final Expiration
Date is extended or unless the Rights are earlier redeemed or exchanged by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion
price, less than the then-current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
E-31
<PAGE>
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividendof 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to
a minimum preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper provision
shall be made so that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one Common Share, or one one-
hundredth of a Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
The redemption of the Rights may be made effective at such time on such basis
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less 10%, except
that from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
E-32
<PAGE>
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 10 dated
, 1996. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
E-33
<PAGE>
PART II
INFORMATION NOT INCLUDED IN INFORMATION STATEMENT
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
**2 Form of Distribution Agreement
**3.1 Form of Amended and Restated Certificate of Incorporation of
Tupperware Corporation (Attached to Information Statement as Annex A
and incorporated herein by reference)
**3.2 Form of Amended and Restated By-laws of Tupperware Corporation
(Attached to Information Statement as Annex B and incorporated herein
by reference)
**4 Form of Rights Agreement, by and between Tupperware Corporation and
the rights agent named therein (Attached to Information Statement as
Annex E and incorporated herein by reference)
**10.1 Form of Tupperware Corporation 1996 Incentive Plan (Attached to
Information Statement as Annex C and incorporated herein by reference)
**10.2 Form of Tupperware Corporation Directors Stock Plan (Attached to
Information Statement as Annex D and incorporated herein by reference)
10.3 Form of Tax Sharing Agreement
**10.4 Form of Employee Benefits and Compensation Allocation Agreement
**10.5 Form of Change of Control Agreement
**10.6 Employment Agreement for Mr. Goings
**10.7 Employment Agreement for Mr. Campos
10.8 Form of Credit Agreement
**22 Subsidiaries of Tupperware Corporation
27 Financial Data Schedule
</TABLE>
- --------
** 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: May 21, 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>
- --------
** Previously filed
II-3
<PAGE>
EXHIBIT 10.3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM
OF
TAX SHARING AGREEMENT
BY AND BETWEEN
PREMARK INTERNATIONAL, INC.
and
TUPPERWARE CORPORATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I................................................................... 1
DEFINITIONS................................................................. 1
"1995 Fiscal Year"....................................................... 1
"1995 Tupperware Estimated Tax Benefit".................................. 1
"1996 Fiscal Year........................................................ 1
"AAA".................................................................... 1
"Affiliate".............................................................. 1
"Carryover" and "Carryback".............................................. 2
"Chairman"............................................................... 2
"Code"................................................................... 2
"Compromising Party"..................................................... 2
"Cutoff Date"............................................................ 2
"Dispute Resolution Committee"........................................... 2
"Distribution"........................................................... 2
"Distribution Agreement"................................................. 2
"Distribution Date"...................................................... 2
"DKI".................................................................... 2
"DKI Liability".......................................................... 2
"DKI Refund"............................................................. 2
"Foreign Taxes".......................................................... 2
"Granting Party"......................................................... 2
"Group".................................................................. 2
"Indemnification Party".................................................. 2
"Indemnified Party"...................................................... 2
"Indemnifying Party"..................................................... 2
"Joint Contest".......................................................... 2
"Kraft Agreement"........................................................ 2
"Law".................................................................... 2
"Liable Party"........................................................... 2
"Non-Compromising Party"................................................. 2
"Non-Proposing Party".................................................... 2
"Participating Party".................................................... 2
"Person"................................................................. 2
"Pre-Distribution Period"................................................ 2
"Preparing Party"........................................................ 2
"Prime Rate"............................................................. 2
"Post-Distribution Period"............................................... 3
"Premark"................................................................ 3
"Premark Group".......................................................... 3
"Premark Tax Reduction".................................................. 3
"Proposing Party"........................................................ 3
"Restructuring Taxes".................................................... 3
"Return"................................................................. 3
"Ruling"................................................................. 3
"Ruling Request"......................................................... 3
"Separate Contest"....................................................... 3
"Service"................................................................ 3
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
"State Taxes"........................................................... 3
"Stereo Business"....................................................... 3
"Straddle Period"....................................................... 3
"Taxes"................................................................. 3
"Tax Adjustment"........................................................ 4
"Tax Authority"......................................................... 4
"Tax Benefit"........................................................... 4
"Tax Contest"........................................................... 4
"Tax Period"............................................................ 4
"Tax Records"........................................................... 4
"Transaction Steps"..................................................... 4
"Tupperware"............................................................ 4
"Tupperware 1995 Estimated Tax"......................................... 4
"Tupperware 1995 Final Tax"............................................. 4
"Tupperware 1995 Final Tax Benefit"..................................... 4
"Tupperware Carryback".................................................. 4
"Tupperware Group"...................................................... 4
"United States Federal Taxes"........................................... 4
ARTICLE II................................................................. 4
ALLOCATION OF TAX LIABILITIES.............................................. 4
2.01 United States Federal Tax Liabilities.............................. 4
2.02 State Tax Liabilities.............................................. 6
2.03 Foreign Tax Liabilities............................................ 7
2.04 Restructuring Taxes................................................ 8
2.05 Liability Arising from Prior Tax Sharing Agreement................. 8
ARTICLE III................................................................ 9
PREPARATION AND FILING OF TAX RETURNS...................................... 9
3.01 General............................................................ 9
3.02 Joint Returns...................................................... 9
3.03 Method of Pro Ration For Straddle Periods.......................... 10
3.04 Tax Accounting Practices........................................... 11
3.05 Right to Review Returns............................................ 11
ARTICLE IV................................................................. 11
TAX REFUNDS, CARRYOVERS AND CARRYBACKS..................................... 11
4.01 Refunds............................................................ 11
4.02 Carryovers and Carrybacks.......................................... 12
ARTICLE V.................................................................. 12
TAX PAYMENTS............................................................... 12
5.01 Payment of Consolidated Federal Income Tax for Pre-Distribution Pe-
riods........................................................... 12
5.02 Payment of State and Foreign Taxes for Which Premark
has Filing Responsibility....................................... 13
5.03 Payment of State and Foreign Taxes for Which Tupperware
has Filing Responsibility....................................... 13
5.04 State Tax Returns for 1986 through 1990............................ 13
5.05 Indemnification Payments........................................... 13
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI.................................................................. 14
TAX RECORDS: COOPERATION.................................................... 14
6.01 Tax Records........................................................ 14
6.02 Cooperation........................................................ 14
ARTICLE VII................................................................. 14
TAX AUDITS AND APPEALS...................................................... 14
7.01 Notice............................................................. 14
7.02 Control of Audits and Appeals...................................... 15
7.03 Consent to Settlements in Joint Contests........................... 15
7.04 Expenses........................................................... 16
ARTICLE VIII................................................................ 16
DISPUTE RESOLUTION.......................................................... 16
8.01 Good-Faith Negotiation............................................. 16
8.02 Binding Arbitration................................................ 16
ARTICLE IX.................................................................. 17
MISCELLANEOUS MATTERS....................................................... 17
9.01 No Inconsistent Actions............................................ 17
9.02 Amendment and Waiver............................................... 18
9.03 Tax Allocation Agreements.......................................... 18
9.04 Entire Agreement; Inconsistent Provisions.......................... 18
9.05 Affiliate Obligations.............................................. 19
9.06 Further Action..................................................... 19
9.07 Time for Notice.................................................... 19
9.08 Notices............................................................ 19
9.09 Remedies........................................................... 19
9.10 Successors and Assigns............................................. 19
9.11 Severability....................................................... 19
9.12 Counterparts....................................................... 20
9.13 Descriptive Headings............................................... 20
9.14 No Third-Party Beneficiaries....................................... 20
9.15 Construction....................................................... 20
9.16 Form of Payments and Late Payments................................. 20
9.17 Treatment of Payments.............................................. 20
9.18 Governing Law...................................................... 20
9.19 Confidentiality.................................................... 20
</TABLE>
iii
<PAGE>
TAX SHARING AGREEMENT
THIS TAX SHARING AGREEMENT ("Agreement") is made and entered into as of May
15, 1996, by and between Premark International Inc., a Delaware corporation
("Premark") and Tupperware Corporation, a Delaware corporation ("Tupperware"),
on behalf of themselves and their respective Affiliates (as defined below).
RECITALS
WHEREAS, the Premark Board has determined that it is appropriate and
desirable to distribute all outstanding shares of Tupperware common stock on a
pro rata basis to the holders of the Premark common stock (the "Distribution")
in a transaction that will qualify as a tax-free distribution for federal
income tax purposes under Section 355 of the Code (as defined below); and
WHEREAS, Tupperware and its Affiliates will accordingly cease to be members
of the affiliated group (within the meaning of Section 1504(a) of the Code) of
which Premark is the common parent, effective as of the Distribution Date; and
WHEREAS, Premark and Tupperware have set forth the principal corporate
transactions required to effect such Distribution in the Distribution
Agreement between Premark and Tupperware dated as of the date hereof, and to
which this Agreement is attached as an exhibit (the "Distribution Agreement");
and
WHEREAS, Premark and Tupperware desire to provide for and agree upon the
allocation of liabilities for Taxes with respect to the parties prior to,
arising out of, and subsequent to the Distribution; and
WHEREAS, the parties hereto also desire to provide for: (1) the preparation
and filing of Tax Returns along with the payment of Taxes shown due and
payable thereon, (2) the retention and maintenance of relevant records
necessary to prepare and file appropriate Tax Returns, as well as the
provision for appropriate access to those records by the parties to this
Agreement, (3) the conduct of audits, examinations and proceedings by
appropriate governmental entities which could result in a redetermination of
Taxes of the parties to this Agreement, (4) the treatment of refunds of Taxes
and Carryovers and Carrybacks of the parties, (5) the cooperation of all
parties with one another in order to fulfill their duties and responsibilities
under this Agreement and under the Code and other applicable Law, and (6) any
other matters related to Taxes.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and conditions hereinafter contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, (including the recitals hereof), the following
terms shall have the following meanings:
"1995 Fiscal Year" has the meaning set forth in Section 5.01 below.
"1995 Tupperware Estimated Tax Benefit" has the meaning set forth in
Section 5.01(a) below.
"1996 Fiscal Year" has the meaning set forth in Section 5.01 below.
"AAA" has the meaning set forth in Section 8.02(b) below.
"Affiliate" means any Person that directly or indirectly controls, is
under the control of, or is under common control with, the Person in
question. "Control" of a Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through ownership or voting
securities, by contract or otherwise. Except as otherwise provided herein,
the term "Affiliate" shall refer to Affiliates of a Person determined
immediately after the Distribution Date.
-1-
<PAGE>
"Carryover" and "Carryback" mean any net operating loss, net capital
loss, excess tax credit, or other similar Tax item which may or must be
carried forward or back, respectively, from one Tax Period to another under
the Code or other applicable Laws.
"Chairman" has the meaning set forth in Section 8.02(b) below.
"Code" means the U. S. Internal Revenue Code of 1986, as amended, or any
successor law.
"Compromising Party" has the meaning set forth in Section 7.03(b) below.
"Cutoff Date" has the meaning set forth in Section 3.03 below.
"Dispute Resolution Committee" has the meaning set forth in Section 8.01
below.
"Distribution" has the meaning set forth in the Recitals above.
"Distribution Agreement" has the meaning set forth in the Recitals above.
"Distribution Date" means the effective date of the Distribution as set
forth in the Distribution Agreement.
"DKI" has the meaning set forth in Section 2.05(a) below.
"DKI Liability" has the meaning set forth in Section 2.05(c) below.
"DKI Refund" has the meaning set forth in Section 2.05(c) below.
"Foreign Taxes" means any Taxes imposed or collected by any foreign
government, and the term "Foreign Tax" means any one of the foregoing
Foreign Taxes.
"Granting Party" has the meaning set forth in Section 7.02(b)(1) below.
"Group" means each of the Premark Group and the Tupperware Group whenever
no distinction is otherwise required between them.
"Indemnification Payment" means a payment subject to Section 5.05 below.
"Indemnified Party" has the meaning set forth in Section 5.05 below.
"Indemnifying Party" has the meaning set forth in Section 5.05 below.
"Joint Contest" means any Tax Contest seeking a redetermination of Taxes
which involves or could involve one or more members of both the Premark
Group and the Tupperware Group.
"Kraft Agreement" has the meaning set forth in Section 2.05(a) below.
"Law" means the law of any governmental entity or political subdivision
thereof, other than the Code, relating to any Tax.
"Liable Party" has the meaning set forth in Section 2.01(c)(3) below.
"Non-Compromising Party" has the meaning set forth in Section 7.03(b)
below.
"Non-Proposing Party" has the meaning set forth in Section 9.01 below.
"Participating Party" has the meaning set forth in Section 7.02(b)(1)
below.
"Person" means any individual and any partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization
or other business entity formed or operating under United States or foreign
law.
"Pre-Distribution Period" means any Tax Period ending on or before the
Distribution Date, and, in the case of any Tax Period that begins before
and ends after the Distribution Date, the portion of such Tax Period ending
on the Distribution Date.
"Preparing Party" has the meaning set forth in Section 3.04 below.
"Prime Rate" means the prime interest rate published in the Wall Street
Journal from time to time.
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<PAGE>
"Post-Distribution Period" means any Tax Period beginning after the
Distribution Date, and in the case of any Tax Period that begins before and
ends after the Distribution Date, the portion of such Tax Period ending
after the Distribution Date.
"Premark" has the meaning set forth in the Recitals above.
"Premark Group" means Premark and its Affiliates.
"Premark Tax Reduction" has the meaning set forth in Section 4.02(b)
below.
"Proposing Party" has the meaning set forth in Section 9.01 below.
"Restructuring Taxes" means any Taxes incurred by or imposed on (or
deemed to be incurred or imposed on) either Premark or Tupperware (or their
respective Affiliates) resulting from any of the Transaction Steps
(including, without limitation, any United States federal income Taxes
attributable to the recognition of intercompany gains or any other deferred
Taxes that must be taken into account as a result of any of the Transaction
Steps). For purposes of the preceding sentence, with respect to any
intercompany gain or other item of income realized or taken into account as
the result of any of the Transaction Steps, such item of gain or income
shall be deemed to result in Restructuring Taxes equal to the product
obtained by multiplying (i) the amount of such item of gain or income by
(ii) the highest applicable marginal Tax rate under the Code or other
applicable Law.
"Return" means any report of Taxes due, any information return with
respect to Taxes, or any other similar report, statement, declaration, or
document required to be filed under the Code or other Laws, any claims for
refund of Taxes paid, and any amendments or supplements to any of the
foregoing.
"Ruling" means the private letter ruling issued by the Service in reply
to the Ruling Request (and, in the event Premark and Tupperware join in
requesting an amendment or supplement thereto, such amendment or
supplemental ruling).
"Ruling Request" means the private letter ruling request filed by the
parties with the Service on December 15, 1995 (as modified or supplemented
by any materials submitted to the Service), seeking rulings that, inter
alia, the Distribution will qualify for federal income tax purposes as a
tax-free distribution under Section 355 of the Code.
"Separate Contest" means a Tax Contest which involves (i) only Premark
and members of the Premark Group, or (ii) only Tupperware and members of
the Tupperware Group.
"Service" means the United States Internal Revenue Service and any
successor department, agency or organization of the United States.
"State Taxes" means all Taxes imposed or collected by any state or local
government in the United States (including possessions and territories of
the United States), and the term "State Tax" means any one of the foregoing
State Taxes.
"Stero Business" has the meaning set forth in Section 9.01(b) below.
"Straddle Period" means (i) any Tax Period that begins before and ends
after the Distribution Date, (ii) any Short Period that ends on the
Distribution Date and (iii) any Short Period that begins on the first day
following the Distribution Date. The term "Short Period" means any Tax
Period which is based on an accounting period which is shorter than the
normal accounting period used for determining such Tax (e.g., in the case
of the United States federal income Tax, any Tax Period of less than one
year).
"Taxes" means all federal, state, territorial, local, foreign and other
net income, gross income, gross receipts, sales, use, value added, ad
valorem, transfer, franchise, profits, license, lease, service, service
use, withholding, payroll, employment, unemployment insurance, workers
compensation, social security, excise, severance, stamp, business license,
occupation, premium, property, environmental, windfall profits, customs,
duties, alternative minimum, estimated or other taxes, fees, premiums,
assessments or charges or any kind whatever imposed or collected by any
governmental entity or political subdivision thereof, which any member of
the Premark Group or the Tupperware Group is required to pay, collect or
withhold, together with any interest and any penalties, additions to Tax or
additional amounts with respect thereto, and the term "Tax" means any one
of the foregoing Taxes.
-3-
<PAGE>
"Tax Adjustment" has the meaning provided in Section 2.01(c) below.
"Tax Authority" means, with respect to any Tax, the governmental entity
or political subdivision thereof that imposes such Tax and the agency (if
any) charged with the determination or collection of such Taxes for such
entity or subdivision.
"Tax Benefit" means any refund, credit Carryover, Carryback or other
reduction in otherwise required Tax payments. Such term does not include a
decrease in any Tax in one Tax Period that results from a Tax Adjustment in
another Tax Period, such as an increase in a deduction for depreciation
that results from a determination that, in a previous Tax Period, an
expenditure is capitalized and not deducted, or an item of gain is
recognized.
"Tax Contest" means an audit, review, examination, or any other
administrative or judicial proceeding (including without limitation any
determination with respect to a claim for refund) with the purpose or
effect of redetermining Taxes of any member of either the Premark Group or
the Tupperware Group for
(1) any Pre-Distribution Period,
(2) any Straddle Period, or
(3) any Post-Distribution Period, if such proceeding could result in
any Tax Adjustment or Tax Benefit for any Pre-Distribution Period
or Straddle Period (without regard to whether such matter was
initiated by an appropriate Tax Authority or in response to a
claim for a refund of Taxes).
"Tax Period" means, with respect to any Tax, the period for which the Tax
is reported as provided under the Code or other applicable Laws,
"Tax Records" has the meaning set forth in Section 6.01(a) below.
"Transaction Steps" means the transaction steps as set forth in Articles
II and III of the Distribution Agreement.
"Tupperware" has the meaning set forth in the Recitals above.
"Tupperware 1995 Estimated Tax" has the meaning set forth in Section
5.01(a) below.
"Tupperware 1995 Final Tax" has the meaning set forth in Section 5.01(a)
below.
"Tupperware 1995 Final Tax Benefit" has the meaning set forth in Section
5.01(a) below.
"Tupperware Carryback" has the meaning set forth in Section 4.02(a)
below.
"Tupperware Group" means Tupperware and its Affiliates; provided however
that for any Pre-Distribution Period, Dart Italia SpA and Dart Industries
Canada Limited shall be treated as included in the Tupperware Group.
"United States Federal Taxes" means all Taxes imposed or collected by the
United States Federal Government, and the term "United States Federal Tax"
means any one of the foregoing United States Federal Taxes.
Any capitalized term not otherwise defined in this Agreement shall have
the meaning ascribed to it in the Distribution Agreement.
ARTICLE II
ALLOCATION OF TAX LIABILITIES
2.01 United States Federal Tax Liabilities.
(a) Subject to Sections 2.04 and 2.05, Premark and its Affiliates shall
be liable for, and shall indemnify and hold Tupperware and the Tupperware
Group harmless from:
(1) any United States Federal Taxes for any Pre-Distribution Period
imposed on Premark, Tupperware or their respective Affiliates, but only to
the extent such Taxes arise from the income, profits, or transactions of,
or are otherwise attributable to, Premark or any member of the Premark
Group; and
-4-
<PAGE>
(2) all United States Federal Taxes imposed on, or with respect to,
Premark and its Affiliates for any Post-Distribution Period.
(b) Subject to Sections 2.04 and 2.05, Tupperware and its Affiliates
shall be liable for, and shall indemnify and hold Premark and the Premark
Group harmless from:
(1) any United States Federal Taxes for any Pre-Distribution Period
imposed on Premark, Tupperware or their respective Affiliates, but only to
the extent such Taxes arise from the income, profits, or transactions of,
or are otherwise attributable to, Tupperware or any member of the
Tupperware Group; and
(2) all United States Federal Taxes imposed on, or with respect to,
Tupperware and its Affiliates for any Post-Distribution Period.
Without limiting the foregoing, Tupperware and its Affiliates shall be
liable for, and shall indemnify and hold Premark and the Premark Group
harmless from, all Taxes arising from any adjustment to United States
foreign Tax credits relating to the transactions and dividends of December
1995, involving Dart Industries Belgium N.V.; provided, however, with
respect to any Tax liability arising from such adjustment to the United
States foreign Tax credits described in the preceding clause (excluding
interest) up to, but not in excess of $5,000,000 Premark and its Affiliates
shall be liable for, and shall indemnify and hold Tupperware and the
Tupperware Group harmless from, forty-five percent (45%) of such Tax (plus
forty five percent (45%) of any interest owing on such Tax.)
(c) For purposes of this Section 2.01, if, as a result of any Joint
Contest, there is any redetermination of United States Federal Taxes on a
consolidated basis for any Pre-Distribution Period, the determination of
whether additional United States Federal Taxes imposed on (or refunds
payable to) Premark or Tupperware (or their respective Affiliates) for any
Pre-Distribution Period shall be deemed to arise from the income, profits
or transactions of, or are otherwise attributable to, Premark or Tupperware
(or their respective Affiliates), shall be made pursuant to the following
principles:
(1) Each party shall compute the difference between (A) the recomputed
consolidated federal tax liability for each Pre-Distribution Period
affected, taking into account solely those adjustments which relate to or
arise out of the income, profits or activities of such party and its
Affiliates, and (B) the consolidated federal tax liability of the
consolidated group for such Tax Period based on the Tax Return as
originally filed (the difference between (A) and (B) shall be referred to
herein as a party's "Tax Adjustment").
(2) If each party's Tax Adjustment for the Tax Period is greater than
or equal to zero, each party shall then be liable for that portion of
additional Taxes equal to the amount obtained by multiplying the additional
Taxes by a percentage equal to such party's Tax Adjustment divided by the
aggregate Tax Adjustment of the parties.
(3) If one party's Tax Adjustment for the Tax Period is greater than
zero (the "Liable Party") and the other party's Tax Adjustment for the Tax
Period is less than zero (the "Other Party"), the Liable Party shall be
responsible for all of the additional Taxes owed for such Tax Period. In
addition, the Liable Party shall make an Indemnification Payment to the
Other Party equal to the Other Party's Tax Adjustment for such Tax Period
(for this purpose, the Tax Adjustment of the Other Party shall be deemed to
be positive); provided however, that such Indemnification Payment shall not
exceed the amount by which the Liable Party's Tax Adjustment exceeds the
additional Taxes for the Tax Period. Further, the Other Party shall be
entitled to any refund received in respect of such Tax Period.
(4) If each party's Tax Adjustment for the Tax Period is less than or
equal to zero, each party shall be entitled to that portion of any refund
received in respect of such Tax Period equal to the amount obtained by
multiplying the amount of the refund by a percentage equal to such party's
Tax Adjustment divided by the aggregate Tax Adjustment of the parties.
Without in any manner limiting the foregoing, to the extent a party's Tax
Adjustment for a Pre-Distribution Period results in a reduction of a
Carryover or Carryback, the party whose adjustment resulted in the
reduction of the Carryover or Carryback shall be liable to the other party
for any increase in Tax resulting from said reduction of such Carryover or
Carryback in the year in which such Tax increase occurs.
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2.02 State Tax Liabilities. Subject to sections 2.04 and 2.05, each party's
liability for State Taxes shall be determined under this Section 2.02.
(a) Premark and its Affiliates shall be liable for, and shall indemnify
and hold Tupperware and the Tupperware Group harmless from, the following
State Taxes:
(1) in the case of any Pre-Distribution Period: (A) any State Taxes
imposed with respect to a separate Tax Return filed by Premark or any member
of the Premark Group for such Tax Period, and (B) with respect to any joint,
combined, consolidated or unitary Tax Return filed for such Tax Period, any
State Taxes for such Tax Period, whether imposed on Premark or Tupperware (or
their respective Affiliates), but only to the extent such Taxes arise from the
income, profits, or transactions of, or are otherwise attributable to, Premark
or any member of the Premark Group; and
(2) any State Taxes imposed on, or with respect to, Premark or any
member of the Premark Group for any Post-Distribution Period.
(b) Tupperware and its Affiliates shall be liable for, and shall indemnify
and hold Premark and the Premark Group harmless from, the following State
Taxes:
(l) in the case of any Pre-Distribution Period: (A) any State Taxes
imposed with respect to a separate Tax Return filed by Tupperware or any
member of the Tupperware Group for such Tax Period, and (B) with respect any
joint, combined, consolidated or unitary Tax Return filed for such Tax Period,
any State Taxes for such Tax Period, whether imposed on Premark or Tupperware
(or their respective Affiliates), but only to the extent such Taxes arise from
the income, profits, or transactions of, or are otherwise attributable to,
Tupperware or any member of the Tupperware Group; and
(2) any State Taxes imposed on, or with respect to, Tupperware or
any member of the Tupperware Group for any Post-Distribution Period.
(c) For purposes of Section 2.02(a)(1)(B) and 2.02(b)(1)(B) hereof, the
determination of whether additional State Taxes (or refunds) arising from a
Joint Contest for any Pre-Distribution Period shall be deemed to arise from
the income, profits or transactions of, or to otherwise be attributable to, a
party, shall be made pursuant to the following principles:
(1) Each party shall compute the sum of the reportable changes to
federal and state income and deductions before apportionment for each Pre-
Distribution Period affected, taking into account solely those changes which
relate to or arise out of income, profits or activities of such party or its
Affiliates (the sum of a party's reportable changes shall be referred to
herein as a party's "State Tax Adjustment"). Notwithstanding the foregoing, if
a Joint Contest results in a change to a credit against a State Tax, the
additional State Taxes (or refund) shall be allocated to the Group which the
credit is attributable. For purposes of making the calculations in Sections
2.02(c)(2) through 2.02(c)(4) below, the amount of the additional State Taxes
(or refund) shall be reduced by the amount of any additional State Taxes
resulting from a change to a credit and shall be increased by the amount of
any reduction or refund in State Taxes from a change to a credit.
(2) If each party's State Tax Adjustment for the Tax Period is
greater than or equal to zero, each party shall then be liable for that
portion of additional Taxes equal to the amount obtained by multiplying the
additional State Taxes by a percentage equal to such party's State Tax
Adjustment divided by the aggregate State Tax Adjustment of the parties.
(3) If one party's State Tax Adjustment for the Tax Period is
greater than zero and the other party's State Tax Adjustment for the Tax
Period is less than zero, the liable party shall be responsible for all of the
additional Taxes owed for such Tax Period (provided, however, that such party
shall not be liable for making any payment to the other party in respect of
such other party's negative State Tax Adjustment). In addition, the other
party shall be entitled to any refund received in respect of such Tax Period.
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(4) If each party's State Tax Adjustment for the Tax Period is less than
or equal to zero, each party shall be entitled to that portion of any refund
received in respect of such Tax Period equal to the amount obtained by
multiplying the amount of the refund by a percentage equal to such party's
State Tax Adjustment divided by the aggregate State Tax Adjustment of the
parties.
(d) For purposes of determining liability for United States Federal and
State Taxes under Sections 2.01 and 2.02, for any Pre-Distribution Period
during which the assets and business of Wilsonart International, Inc. or the
West Bend Company constituted a division of Dart Industries Inc., Wilsonart
International, Inc. and The West Bend Company shall be treated as separate
entities included within the Premark Group.
(e) Notwithstanding anything to the contrary above, with respect to any
State franchise Tax that is due and payable after the Cut off Date, the party
legally responsible for filing the Return on which such Tax is reported shall
be liable for, and shall indemnify and hold the other party harmless from,
such Tax.
(f) Notwithstanding anything to the contrary above, with respect to any
joint, combined, consolidated or unitary State Tax Return for any Pre-
Distribution Period, if Premark or Tupperware (or any of their respective
Affiliates) is required to file an amended Return (or Returns) on a separate
company basis, each Person filing such a separate Return shall be liable for,
and shall hold the other parties to this Agreement harmless from, any Taxes
owed with respect to such separate Return (or Returns).
2.03 Foreign Tax Liabilities.
(a) Subject to Sections 2.04 and 2.05, each party's liability for Foreign
Taxes shall be determined under this Section 2.03(a).
(1) Premark and its Affiliates shall be liable for, and shall indemnify
and hold Tupperware and the Tupperware Group harmless from, the following
Foreign Taxes:
(A) in the case of any Pre-Distribution Period: (i) any Foreign Taxes
imposed with respect to a separate Tax Return filed by Premark or any member
of the Premark Group for such Tax Period, and (ii) with respect to any joint,
combined, consolidated or unitary Tax Return filed for such Tax Period, any
Foreign Taxes for such Tax Period imposed on Premark or Tupperware (or their
respective Affiliates) but only to the extent such Taxes arise from the
income, profits, or transactions of, or are otherwise attributable to, Premark
or any member of the Premark Group; and
(B) any Foreign Taxes imposed on, or with respect to, Premark or any
member of the Premark Group for any Post-Distribution Period.
(2) Tupperware and its Affiliates shall be liable for, and shall
indemnify and hold Premark and the Premark Group harmless from, the following
Foreign Taxes:
(A) in the case of any Pre-Distribution Period: (i) any Foreign Taxes
imposed with respect to a separate Tax Return filed by Tupperware or any
member of the Tupperware Group for such Tax Period, and (ii) with respect to
any joint, combined, consolidated or unitary Tax Return filed for such Tax
Period, any Foreign Taxes for such Tax Period imposed on Premark or Tupperware
(or their respective Affiliates) but only to the extent such Taxes arise from
the income, profits, or transactions of, or are otherwise attributable to,
Tupperware or any member of the Tupperware Group; and
(B) any Foreign Taxes imposed on, or with respect to Tupperware or any
member of the Tupperware Group for any Post-Distribution Period.
(3) For purposes of Section 2.03(a)(1)(A)(ii) and 2.03(a)(2)(A)(ii)
hereof, the determination of whether additional Foreign Taxes (or refunds)
arising from a Joint Contest for any Pre-Distribution Period shall be deemed
to arise from the income, profits or transactions of, or to otherwise be
attributable to, a party, shall be made in the same manner as provided in
Section 2.01(c) hereof.
(b) The parties hereby agree that (i) the distribution by Wavebest
Limited, a U.K. corporation, of the stock of DILHC (as such corporation is
defined in the Distribution Agreement) to Dart Industries Inc., and (ii)
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the distribution by Dart Industries Inc. of Wavebest Limited to Premark,
pursuant to the Transaction Steps, shall be reported for United States federal
income Tax purposes in accordance with the principles of Temp. Reg.
(S) 7.367(b)-10(d). For this purpose, the fair market value of Wavebest
Limited, DILHC, Dart Industries Inc. and their subsidiaries shall be
determined based on the historic earnings of each such company.
2.04 Restructuring Taxes.
(a) Except as otherwise provided below in Sections 2.04(b) and 2.04(c), in
the case of any Restructuring Taxes, Premark and its Affiliates shall be
liable for, and shall indemnify and hold Tupperware and the Tupperware Group
harmless from, 45% of such Tax and Tupperware and its Affiliates shall be
liable for, and shall indemnify and hold Premark and the Premark Group
harmless from, 55% of such Tax (provided, however, that in the case of any
deemed Restructuring Tax computed in accordance with the last sentence of the
definition of Restructuring Tax in Article I hereof, the party responsible for
filing the Tax Return to which such Restructuring Tax relates shall notify the
other party in writing of the amount of such Restructuring Tax, and the other
party shall pay to the party filing such Return such other party's share of
the deemed Restructuring Tax within 30 days of the due date of the Return to
which such Restructuring Tax relates (without regard to any extension
thereof)).
(b) Notwithstanding anything to the contrary in Section 2.04, Premark and
its Affiliates shall be liable for, and shall indemnify and hold Tupperware
and the Tupperware Group harmless from, any Tax resulting from recognition of
the DLC Deferred Gain by reason of one or more of the transactions described
in the Transaction Steps; provided, however, that if the amount of the DLC
Deferred Gain is increased as the result of any Tax Contest, any additional
Tax resulting from such increase shall be treated as a Restructuring Tax and
shall be governed by Section 2.04(a) hereof. For purposes of this Section
2.04(b), the term "DLC Deferred Gain" shall refer to the intercompany gain
realized (and deferred for federal income tax purposes) in connection with the
transfer by Dart Industries Inc. of certain real property located in Osceola
and Orange County Florida to Premark in 1988.
(c) Notwithstanding anything to the contrary in this Section 2.04,
Tupperware and its Affiliates shall be liable for, and shall indemnify and
hold Premark and the Premark Group harmless from, any Tax resulting from the
sale or transfer by Premark Financial Corporation of certain operating assets
of Florida Tile Industries, Inc. and The West Bend Company to such entities in
connection with the separation of the Tupperware Group from the Premark Group.
(d) Notwithstanding anything to the contrary in this Section 2.04, in the
event that Premark does not receive a ruling from the Service that the
separation of the Premark division of Premark Italia S.p.A. ("Tasselli") from
Premark Italia S.p.A. is tax-free, the parties will use their best efforts to
accomplish a taxable sale by Premark Italia S.p.A. of Tasselli to a newly
formed Affiliate of Premark, and Premark shall be liable for, and shall
indemnify and hold Tupperware and the Tupperware Group harmless from, any Tax
resulting from such separation, and in the event the taxable sale takes place,
the Tax resulting from such sale.
(e) Notwithstanding anything else in this Section 2.04, in the event that
either party (or any Affiliate or employee, officer or director of such party)
takes any action inconsistent with, or fails to take any action required by,
the Ruling Request or the Ruling (or in accordance with the Transaction
Steps), then such party shall be liable for, and shall indemnify and hold the
other party and its Group harmless from, 100% of the Restructuring Taxes
resulting from such action or failure to act.
2.05 Liability Arising from Prior Tax Sharing Agreement.
(a) With respect to any liability imposed on or incurred by Premark under
the Tax Sharing Agreement by and between Dart & Kraft, Inc., a Delaware
corporation ("DKI") and Premark, dated September 4, 1986 (the "Kraft
Agreement"), Tupperware and its Affiliates shall indemnify and hold Premark
and the Premark Group harmless from any liability arising from the income,
profits, or transactions of, or otherwise attributable to, Tupperware or any
member of the Tupperware Group. Notwithstanding the above, Premark shall be
liable to Kraft for all interest owing under the Kraft Agreement, in
accordance with the terms thereof, and Tupperware
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shall not be liable to indemnify Premark for any such interest. For purposes
of this Section 2.05, the determination of whether any liability imposed on or
incurred by Premark arose from the income, profits or transactions of, or was
otherwise attributable to, Tupperware or any member of the Tupperware Group
shall be made in the same manner as provided in Section 2.01(c) hereof. In
addition, for purposes of determining Tupperware's liability under this
Section 2.05, Wilsonart International, Inc., and The West Bend Company shall
be treated as included within the Premark Group, and any liability otherwise
attributable to Dart Industries Inc. shall be apportioned between Tupperware
and Premark in the same manner as provided in Section 2.02(d).
(b) Premark and Tupperware hereby agree that it is their mutual intention
that Premark, as a signatory to the Kraft Agreement, shall have primarily
responsibility, subject to any limitations contained in this Section 2.05, for
any dealings or negotiations with DKI with respect to the Kraft Agreement;
including, without limitation, the payment to DKI of any amounts owing under
the Kraft Agreement (including any interest thereon) as well as the receipt of
any amounts payable by DKI (including any interest thereon) under the Kraft
Agreement. Notwithstanding the foregoing, the parties hereby agree that
Tupperware shall have the right to participate fully in any negotiations or
other dealings which could affect Tupperware's liability (or entitlement to
payment) under the Kraft Agreement. Premark hereby agrees that, with respect
to any issue which involves or could involve Tupperware's liability to Premark
under this Section 2.05, Premark shall not have the right to settle such issue
without the prior consent of Tupperware (which consent shall not be
unreasonably withheld); provided, however, that if Premark desires to settle
such issue on specified terms and Tupperware refuses to consent to settlement
on such terms, Tupperware shall indemnify Premark from and against any outcome
less favorable than the settlement which Premark was willing to accept. With
respect to any matter arising under the Kraft Agreement, each of Tupperware
and Premark hereby agrees that it shall not participate in the negotiation,
settlement or other resolution of such matter in a manner discriminating
against the other party's interests under the Kraft Agreement.
(c) Premark and Tupperware hereby agree that any payment owed by DKI to
Premark under the Kraft Agreement resulting from the carryback of net
operating losses from Tax Period(s) ending December 27, 1986, including any
interest owed thereon (the "DKI Refund") shall be applied against the
aggregate amount, if any, owed by Premark and Tupperware to DKI under the
Kraft Agreement, excluding any interest owed thereon (the "DKI Liability") as
follows:
(i) The DKI Liability shall first be reduced (without regard to the
extent to which such liability is attributable to items relating to Premark or
Tupperware) by the amount of the DKI Refund; and
(ii) Any remaining DKI Liability (or excess DKI Refund) shall then be
allocated to each of Premark and Tupperware in proportion to each party's
respective share of the DKI Liability (applying the principles of Section
2.05(a) hereof).
ARTICLE III
PREPARATION AND FILING OF TAX RETURNS
3.01 General. Except as otherwise provided in this Article III, Tax Returns
shall be prepared and filed by the Person liable for the Tax reported on such
Tax Return, or otherwise obligated to file such Return, under the Code or
other applicable Laws. Without limiting the foregoing, the party responsible
for filing such a Return shall also be responsible for filing and/or
responding to any revenue agent request or any other formal or informal
request for information or otherwise relating to such Return by the Service or
any other applicable Tax Authority. The parties shall render assistance and
cooperate with one another in accordance with Section 6.02 hereof with respect
to the preparation and filing of Tax Returns.
3.02 Joint Returns.
(a) Any Tax Returns for United States Federal Taxes imposed for any Pre-
Distribution Period which reflect Taxes for which one or more members of both
the Premark Group and the Tupperware Group have liability under Article II
hereof (including, without limitation, Premark's consolidated federal income
Tax Return for the Tax Period in which the Distribution occurs) shall be
prepared by and filed by Premark. In furtherance
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of, and not by limitation of, the cooperation and assistance required by
Section 6.02, Tupperware shall, in connection with any Tax Return for United
States federal income Taxes for any Pre-Distribution Period filed after the
Distribution Date for which Premark has filing responsibility under this
Agreement and which reflects income or transactions attributable to the
Tupperware Group and for which the Tupperware Group has liability under
Article II hereof, provide Premark with (i) a true and correct consolidated
federal income Tax Return for Tupperware and its Affiliates for the Tax
Period, together with all accompanying workpapers and other computations of
the consolidated federal income Tax liability of Tupperware and its
Affiliates, (ii) true and correct separate federal income Tax Returns for
Tupperware and each of its Affiliates, together with all accompanying
workpapers and other computations of separate federal income Tax liability for
Tupperware and each of its Affiliates; and (iii) a true and correct
reconciliation of book income to federal taxable income for Tupperware and
each of its Affiliates. Tupperware and each of its Affiliates shall certify,
under penalties of perjury, that any and all information provided pursuant to
this Section 3.02(a) is true, accurate and complete. With respect to the Tax
Period ending on December 30, 1995, Tupperware hereby agrees to provide
Premark with all such Returns, workpapers and computations on or before July
15, 1996. With respect to the Tax Period ending on December 28, 1996,
Tupperware hereby agrees to provide Premark with all such Returns, workpapers
and computations on or before, June 30, 1997. If Tupperware fails to provide
any information required by this Section 3.02 within the time frame specified
herein, Premark may file the applicable Returns based on the information
available at the time such Returns are due and Tupperware shall be liable for,
and shall indemnify Premark and its Affiliates from, all Taxes or other costs
imposed on or with respect to Premark or Tupperware (and their respective
Affiliates) as a result of Tupperware's failure to provide such information.
In addition, with respect to any information required to be provided by
Tupperware or its Affiliates pursuant to this Section 3.02, (1) Premark shall
utilize such information in the preparation of the appropriate Returns, as
provided by Tupperware or its Affiliates, except to the extent (a) Tupperware
provides its prior written consent to any change in such information, or (b)
Premark determines in good faith that such information is inaccurate or
incomplete in a material respect, and (2) Tupperware and its Affiliates agree
to indemnify and hold Premark and its Affiliates harmless from and against any
cost, fine, penalty or other expense of any kind attributable to the
misconduct or negligence of Tupperware or its Affiliates in supplying Premark
with inaccurate or incomplete information.
(b) Any Tax Returns for State Taxes for any Pre-Distribution Period which
reflect Taxes for which one or more members of the Premark Group and the
Tupperware Group have liability under Article II hereof, shall be prepared and
filed by Premark (except as otherwise provided on Schedule I attached hereto).
The final five sentences of Section 3.02(a) hereof shall apply mutatis
mutandis to all State Tax Returns for any Pre-Distribution Period that Premark
must prepare and/or file under this Agreement that is measured by income and
that includes any income or transactions attributable to Tupperware or any
member of the Tupperware Group.
(c) Any Tax Returns for Foreign Taxes for any Pre-Distribution Period
which reflect Taxes for which one or more members of both the Premark Group
and the Tupperware Group have liability under Article II hereof, shall be
prepared and filed by Premark (except as otherwise provided on Schedule I
attached hereto). The final five sentences of Section 3.02(a) hereof shall
apply mutatis mutandis to all Foreign Tax Returns measured by income filed for
any Pre-Distribution Period that includes any income or transactions
attributable to Tupperware or any member of the Tupperware Group for which
Premark has filing responsibility.
3.03 Method of Pro Ration For Straddle Periods. In the case of any Straddle
Period relating to Premark, Tupperware or their respective Affiliates, unless
the books of such Person are closed on the Distribution Date, Taxes shall be
apportioned for purposes of Article II, between Pre-Distribution and Post-
Distribution Periods, as follows: First, Taxes for Tax Periods or portions
thereof ending on May 25, 1996 (such date is hereinafter referred to as the
"Cutoff Date") shall be based on actual events and activities through the
Cutoff Date and in accordance with past accounting practices. Second, Taxes
for the Tax Period from the Cutoff Date through the Distribution Date shall be
computed by prorating the activities of the calendar month which includes the
Distribution Date on a daily pro rata basis. Notwithstanding the foregoing
provisions of this Section 3.03, (i) depreciation, amortization and depletion
for any Straddle Period shall be apportioned on a daily pro rata basis and
(ii) extraordinary items not arising in the ordinary course of business shall
be apportioned to the Tax Period in which the event giving rise to such item
occurs.
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3.04 Tax Accounting Practices. Any Straddle Period Returns prepared by one
or more members of the Premark Group, or one or more members of the Tupperware
Group, as the case may be (the "Preparing Party"), shall be prepared in
accordance with past Tax accounting practices used with respect to the Returns
in question (unless such past practices are no longer permissible under the
Code or other applicable Laws), and to the extent any items are not covered by
past practices (or in the event such past practices are no longer permissible
under the Code or other applicable Laws), in accordance with reasonable Tax
accounting practices selected by the Preparing Party (except that accounting
elections and determinations shall be made, where reasonably possible, in a
manner that minimizes the net Tax incurred by the other party and its
Affiliates). In the event the Preparing Party files Tax Returns for Straddle
Periods inconsistently with such past Tax accounting practices, then,
notwithstanding any provision of this Agreement to the contrary, in addition
to any other remedies available, the other party and its Affiliates shall only
be responsible for the amount of Taxes they would owe if such Tax Returns had
been filed consistently with such past Tax accounting practices.
3.05 Right to Review Returns. Upon the request of either party, the other
party shall make available for inspection and copying all Tax Returns (and
related workpapers) with respect to Taxes to the extent that (i) such Return
relates to Taxes for which the requesting party may be liable under this
Agreement, (ii) such Return relates to Taxes for which the requesting party
may have a claim for Tax Benefits hereunder, or (iii) the requesting party
reasonably determines that it must inspect such Return to confirm compliance
with the terms of this Agreement. Premark and Tupperware shall attempt in good
faith to resolve any issues arising out of the review of such Returns.
ARTICLE IV
TAX REFUNDS, CARRYOVERS AND CARRYBACKS
4.01 Refunds.
(a) In the case of any separate Tax Return filed by Premark, Tupperware
or their respective Affiliates for a Pre-Distribution Period, the Person
that filed such Tax Return shall be entitled to any refund of Taxes with
respect to such Return.
(b) Subject to Section 4.02, any refund of Taxes with respect to a
joint, combined, consolidated or unitary Tax Return for any Pre-
Distribution Period shall be allocated between the Premark Group and the
Tupperware Group in accordance with the principles in Sections 2.01(c) or
2.02(c) as applicable; provided, however:
(1) Premark and its Affiliates shall be entitled to any Tax Benefit
attributable to the United States foreign Tax credits arising out of the
1995 sale and related transactions between Dart Industries Belgium N.V. and
Premark Gmbh entered into on December 29, 1995 (the "Belgium Transaction");
(for purposes of determining such Tax Benefit, the United States Foreign
Tax credits arising out of the Belgium Transaction shall be deemed to be
utilized after all other credits available in 1995 have been utilized); and
(2) Tupperware shall be entitled to any refund of Belgium and France
value added Taxes paid to Premark Gmbh in connection with the Belgium
Transaction; and
(3) Premark shall be entitled to the return, refund or applications
of any amounts deposited with (including any cash bond delivered to) the
United States Government (or any agency thereof) in connection with the
payment of United States federal Taxes, together with any interest payable
thereon; and
(c) Notwithstanding anything to the contrary above, with respect to any
refund or credit for overpayment of any estimated taxes for any Tax Period
ending in 1995 or 1996, the Person that filed the Tax Return to which the
refund or credit for overpayment relates shall be entitled to the refund or
credit for overpayment.
(d) If any amounts become payable under this Section 4.01, the Person
obligated to make such payment shall notify the Person entitled to receive
such payment within 30 days after receipt of the refund or credit for
overpayment and shall remit the amount of the refund to such Person within
30 days after such receipt.
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4.02 Carryovers and Carrybacks.
(a) In the event Tupperware or any other member of the Tupperware Group
desires to carry back a loss or other Tax attribute arising after the
Distribution Date (excluding, however, any Carryback described in Section
4.01(b)(1)) (the "Tupperware Carryback") to a Pre-Distribution Period,
Tupperware shall notify Premark in writing of its intent to carry back such
item (and to forego any election to waive such Carryback). Such notification
shall include a certification by an appropriate officer of Tupperware setting
forth Tupperware's belief, based on a thorough examination of the facts and
law relating to the tax treatment of such item, that the tax treatment of such
item is supported by "substantial authority" within the meaning of Section
6662 of the Code (and the Treasury Regulations promulgated thereunder).
Premark shall cooperate with Tupperware in connection with the filing and
processing of any Tupperware Carryback and shall provide Tupperware with
copies of all correspondence in connection therewith.
(b) Subject to Section 4.02(c), if, pursuant to the terms of Section
4.02(a) hereof, Tupperware elects to carry back a loss or other Tax attribute
to a Pre-Distribution Period, Premark shall be obligated to make a payment to
Tupperware equal to the amount by which the actual Taxes imposed on the
affiliated group (as that term is defined in Section 1504 of the Code) of
which Premark is the common parent for such Pre-Distribution Period have been
reduced as a result of utilization of the Tupperware Carryback (the "Premark
Tax Reduction").
(c) For purposes of determining the amount of the Premark Tax Reduction,
in the event that each of Premark and Tupperware have Carrybacks available for
use in a Pre-Distribution Period, the order of use of such Carrybacks shall be
determined under the Code and applicable Regulations; provided, however, that
where Premark and Tupperware each have Carrybacks available and such
Carrybacks are of equal priority under the Code or applicable Regulations and
cannot be utilized in full in such Pre-Distribution Period, Premark or
Tupperware, as the case may be, shall each be entitled to utilize its
Carryback against its taxable income before the other party shall have the
right to utilize its Carryback against such income.
(d) If Premark is required to make a payment to Tupperware with respect to
any Tupperware Carryback under this Section 4.02(b), Premark shall have the
option, in its sole and absolute discretion, of (i) making such payment within
30 days of receiving the Tax refund attributable to such Tupperware Carryback,
or (ii) making such payment not later than 30 days of the date on which the
statutory period (under the Code of other applicable law) for examining the
Return on which such Tupperware Carryback was claimed has expired (provided,
such payment shall bear interest at the Prime Rate for the period commencing
30 days from the date of receipt of such refund and ending on the date of such
payment).
ARTICLE V
TAX PAYMENTS
5.01 Payment of Consolidated Federal Income Tax for Pre-Distribution
Periods. Premark shall pay all Taxes due (or shall receive all refunds) in
connection with the filing of Premark's consolidated federal income Tax Return
for (i) the Tax Period ending on December 30, 1995 (the "1995 Fiscal Year"),
and (ii) the Tax Period ending on December 28, 1996 (the "1996 Fiscal Year").
Premark and Tupperware shall make payments to one another in respect of the
consolidated federal income Tax liability shown on such Tax Returns as
determined and at the times set forth in paragraphs (a) and (b) below as
applicable:
(a) If the consolidated federal income Tax Return for the 1995 Fiscal Year
has not been filed on the Distribution Date, immediately before the
Distribution, the parties shall compute the amount of Tupperware's share of
the consolidated federal income Tax liability for such Tax Period (the
"Tupperware 1995 Estimated Tax") (or the amount of the net tax benefit
realized by Premark as a result of utilization of Tupperware's losses or
credits for such Tax Period) (the "1995 Tupperware Estimated Tax Benefit"),
determined as if the Tupperware Group were a separate group of companies
filing a consolidated federal income Tax Return (but taking into account
Premark's ability to utilize any net losses or credits of Tupperware for such
Tax Period, but not taking into account Premark's ability to utilize its own
net losses or credits, which for this purpose shall include any Tax Benefit
relating to the Belgium Transaction).
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In addition, immediately prior to the due date for filing Premark's
consolidated federal income Tax Return for the 1995 Fiscal Year (taking into
account any extension of time for filing that Premark requests and is
granted), the parties shall compute, applying the principles set forth in the
first sentence of this paragraph (a) of this Section 5.01 and based on the
information contained in the federal consolidated income Tax Return for the
1995 Fiscal Year, Tupperware's share of the consolidated federal income Tax
liability for the 1995 Fiscal Year (the "Tupperware 1995 Final Tax") (or the
amount of the net tax benefit realized by Premark as a result of Tupperware's
losses or credits for such Tax Period) (the "Tupperware 1995 Final Tax
Benefit"). If either (1) the Tupperware 1995 Final Tax exceeds the Tupperware
1995 Estimated Tax, and/or (2) the Tupperware 1995 Estimated Tax Benefit
exceeds the Tupperware 1995 Final Tax Benefit, Tupperware shall pay such
excess to Premark immediately prior to the due date for filing Premark's
consolidated federal income Tax Return for the 1995 Fiscal Year. Conversely,
if either (1) the Tupperware 1995 Estimated Tax exceeds the Tupperware 1995
Final Tax and/or (2) the Tupperware 1995 Final Tax Benefit exceeds the
Tupperware 1995 Estimated Tax Benefit, Premark shall pay such excess to
Tupperware immediately prior to the due date for filing Premark's consolidated
federal income Tax Return for the 1995 Fiscal Year. For purposes of
determining the amounts owed under this section 5.01, the principles in the
last sentence of Section 2.01(c) of this Agreement shall apply.
(b) With respect to the consolidated federal income Tax Return for the
1996 Fiscal Year, immediately before the Distribution, and immediately before
Premark's consolidated federal income Tax Return for the 1996 Fiscal Year is
due (taking into account any extension of time for filing that Premark
requests and is granted), Tupperware shall make payments to Premark (or
Premark shall make payments to Tupperware) of amounts which shall, in each
case, be determined with the principles applied mutatis mutandis, set forth in
Section 5.01(a) of the Agreement.
5.02 Payment of State and Foreign Taxes for Which Premark has Filing
Responsibility. Premark shall pay to the appropriate Tax Authority all State
and Foreign Taxes for Tax Returns with respect to which Premark (or another
member of the Premark Group) has filing responsibility pursuant to Article III
of this Agreement. Immediately prior to the Distribution and immediately
before such Return is due (taking into account any extension of time for
filing that Premark requests and is granted), or immediately after receipt of
any refund, Tupperware shall make payments to Premark (or Premark shall make
payments to Tupperware) of amounts which shall, in each case, be determined in
accordance with the principles, applied mutatis mutandis, set forth in Section
5.01 of the Agreement.
5.03 Payment of State and Foreign Taxes for Which Tupperware has Filing
Responsibility. Tupperware shall pay to the appropriate Tax Authority all
State and Foreign Taxes for Tax Returns with respect to which Tupperware (or
another member of the Tupperware Group) has filing responsibility pursuant to
Article III of this Agreement. Immediately prior to the Distribution and
immediately before the time such Return is due (taking into account any
extension of time for filing that Tupperware requests and is granted), or
immediately after receipt of any refund, Premark shall make payments to
Tupperware (or Tupperware shall make payments to Premark) of amounts which
shall, in each case, be determined in accordance with the principles, applied
mutatis mutandis, set forth in Section 5.01 of the Agreement.
5.04 State Tax Returns for 1986 through 1990. Without in any manner limiting
Sections 5.02 and 5.03 hereof, the parties hereby agree that, with respect to
any amended State Tax Return filed to reflect final audit adjustments to the
consolidated federal income Tax Return of the Premark Group for the Periods
ending December 1986, 1987, 1988, 1989 and 1990, Premark and Tupperware shall
each be liable for, and shall pay, the portion of any additional Tax liability
reflected on such amended return attributable to such party (applying the
principles of Section 2.02(c) hereof).
5.05 Indemnification Payments.
(a) Upon payment of any Taxes with respect to which a party is entitled to
receive indemnification hereunder, such party (the "Indemnified Party") shall
send the other party (the "Indemnifying Party") an invoice accompanied by
evidence of payment and a statement detailing the Taxes paid and describing in
reasonable detail the particulars relating thereto. The Indemnifying Party (or
such one or more members of the
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Indemnifying Party's Group as it shall nominate) shall remit payment for Taxes
for which the Indemnifying Party is liable for indemnification hereunder to
the Indemnified Party (or such one or more members of the Indemnified Party's
Group as it shall nominate) within 30 days of receipt of such invoice,
evidence of payment and statement, or at any earlier time identified by the
Indemnifying Party.
(b) If any Indemnified Party realizes a Tax Benefit or a Tax detriment in
one or more Tax Periods by reason of having incurred any Tax for which such
Indemnified Party receives indemnification hereunder, then such Indemnified
Party shall pay to such Indemnifying Party an amount equal to the Tax Benefit
or such Indemnifying Party shall pay to such Indemnified Party an additional
amount equal to the Tax detriment (taking into account any Tax detriment
resulting from the receipt of such additional amounts), as the case may be.
The amount of any Tax Benefit or any Tax detriment for a Tax Period realized
by an Indemnified Party by reason of having incurred a Tax for which such
Indemnified Party received indemnification hereunder shall be deemed to equal
the product obtained by multiplying (i) the amount of any deduction or
inclusion in income for such period resulting from such Tax or the payment
thereof, as the case may be, by (ii) the highest applicable marginal Tax rate
for such Period. Any payment due under this Section 5.05(b) with respect to a
Tax benefit or Tax detriment realized by an Indemnified Party in a Tax Period
shall be due and payable within 30 days from the time the Return for such Tax
Period is due, without taking into account any extension of time granted to
the party filing such Return.
ARTICLE VI
TAX RECORDS: COOPERATION
6.01 Tax Records.
(a) Premark and Tupperware (and their respective Affiliates) shall keep in
their possession all Tax Records relating to Taxes for which the other party
may have liability under this Agreement, until the expiration of any
applicable statute of limitations and as otherwise required by law.
Notwithstanding the foregoing, Tupperware shall retain all Tax Records
relating to Pre-Distribution Periods until such time as Premark shall consent
to the disposition of such Tax Records, which consent shall not be
unreasonably withheld. For purposes of this Article VI, "Tax Records" shall
include, inter alia, journal vouchers, cash vouchers, general ledgers,
material contracts and authorizations for expenditures (AFEs).
(b) Premark and Tupperware (and their respective Affiliates) shall make
available to each other for inspection and copying during normal business
hours all Tax Records in their possession, to the extent such Tax Records are
reasonably required by the other party in connection with the preparation of
Tax Returns, audits, litigation or the resolution of items under this
Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, if either
party fails to comply with the requirements of this Section 6.01, the party
failing so to comply shall be liable for, and shall hold the other party
harmless from, any Taxes (including without limitation, penalties for failure
to comply with the record retention requirements of the Code) and other costs
resulting from such party's failure to comply.
6.02 Cooperation. Premark and Tupperware shall each provide the other with
such assistance as may reasonably be requested in connection with the
preparation of any Tax Return, audit or other examination by any Tax Authority
or judicial or administrative proceedings relating to liability for any Taxes.
ARTICLE VII
TAX AUDITS AND APPEALS
7.01 Notice. Premark and Tupperware shall provide prompt notice to the other
party of any pending or threatened Tax Contest that it becomes aware of
relating to Taxes for Tax Periods for which it is indemnified by, or is to
indemnify, the other party hereunder. Such notice shall contain factual
information (to the extent known) describing any asserted Tax liability in
reasonable detail and shall be accompanied by copies of any notice or other
document received from any Tax Authority in respect of any such matter. If any
party has knowledge of
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an asserted Tax liability with respect to a matter for which it is to be
indemnified hereunder and such party fails to give the indemnifying party
notice of such asserted Tax liability within 30 days after it has received
written notice thereof, then, unless such failure has no material adverse
effect upon the indemnifying party's ability to participate in the Tax
Contest, the indemnifying party shall have no obligation to indemnify the
indemnified party for any Taxes arising out of such asserted Tax liability.
7.02 Control of Audits and Appeals.
(a) Separate Contests. Any Separate Contest shall be controlled solely by
the party involved in the Tax Contest.
(b) Joint Contests.
(1) With respect to any Joint Contest, the party that filed the Return
shall control the proceeding. The personnel and outside advisers (including
counsel) of the party not controlling the proceeding may participate, at the
expense of such party, in the proceeding to the extent such proceeding relates
to items or adjustments for which such party may incur indemnity liability
under this Agreement. Such participation shall include: (i) participation in
all conferences, meetings or proceedings with any Tax Authority, the subject
matter of which includes an item for which such party has indemnity liability
hereunder; (ii) participation in all appearances before any court, the subject
matter of which includes an item for which such party has indemnity liability
hereunder; (iii) with respect to matters described in the preceding clauses
(i) and (ii), participation in the submission and determination of content of
documentation, protests, memoranda of fact and law and briefs, the conduct of
oral arguments or presentations, the selection of witnesses and the
negotiation of stipulations of fact in such matters. Such participation may be
reflected by the grant of appropriate powers of attorney. The party granting
such power of attorney (the "Granting Party") shall have the right to revoke
the power of attorney if the Granting Party reasonably determines that the
other party's (the "Participating Party") actions or failure to act, in the
proceeding has resulted, or can be reasonably expected to result, in the
hindrance or delay of any resolution or settlement of the proceeding. In the
event the Participating Party fails to timely and fully participate in any
proceeding to the extent to which such proceeding relates to items or
adjustments for which the Participating Party has indemnity liability under
this Agreement, the Participating Party shall be liable for, in addition to
all Taxes for which the Participating Party shall be liable under this
Agreement, any and all costs imposed on, or incurred by, the Granting Party as
a result of the Participating Party's failure to participate. The revocation
of any power of attorney under this Section 7.02 shall in no way limit the
Participating Party's indemnity liability under this Agreement.
(2) Each of the parties hereto agrees to cooperate in seeking an
agreement with the Service or any other Tax authority under which such
authority would conduct separate audits of Premark and Tupperware with respect
to returns including both parties. To the extent permitted by such an
Agreement, each party would control its separate audits in accordance with the
terms thereof, and the procedures provided in the remainder of this Section
7.02(b) and in Section 7.03 hereof shall not apply.
7.03 Consent to Settlements in Joint Contests.
(a) With respect to any Joint Contest, neither party shall have the right
to accept or enter into the settlement of any Tax liability, or compromise any
Tax claim to the extent such liability or claim relates to an item for which
the other party has indemnity liability hereunder, without the prior written
consent of the other party (which consent shall not be unreasonably withheld).
(b) In the case of any Joint Contest, either party (the "Compromising
Party"), without the consent or permission of the other party (the "Non-
Compromising Party"), may, if permitted by the appropriate agency or tribunal,
accept or enter into the settlement of any Tax liability to the extent such
liability relates solely to items for which such party has indemnity liability
hereunder. In the event the Non-Compromising Party's refusal to settle its
portion of the contest prevents the Compromising Party from reaching a
settlement as to its portion of the contest, the Non-Compromising Party shall
indemnify the Compromising Party from and against any outcome less favorable
than the settlement which the Compromising Party was willing to accept. With
respect to
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any Joint Contest, each of Tupperware and Premark hereby agrees that it shall
not participate in the negotiation, settlement or other resolution of any item
at issue in such Joint Contest in a manner discriminating against the other
party's interests in such contest.
(c) Notwithstanding anything to the contrary in the foregoing, in the
event the judgment of the United States Tax Court or other court of competent
jurisdiction results in an adverse determination with respect to the liability
of either party hereunder, such party shall have the right (at its own
expense) to appeal such adverse determination; provided, however, that the
second sentence of Section 7.03(b) shall apply for purposes of determining the
liability of any non-appealing party hereunder.
7.04 Expenses.
(a) With respect to any Separate Contest, the party involved in such
contest shall bear all expenses related thereto.
(b) With respect to any Joint Contest, except as otherwise provided
herein, the parties shall share any and all costs and expenses incurred in
connection with such contest (including without limitation attorneys' fees)
based on each party's potential liability with respect to such contest as
agreed to by the parties at the outset of such contest.
ARTICLE VIII
DISPUTE RESOLUTION
8.01 Good-Faith Negotiation.
In the event of any dispute or disagreement relating to this Agreement or
the transactions contemplated by this Agreement, Premark and Tupperware shall
each appoint two members from their respective management staffs to serve on a
joint committee (the "Dispute Resolution Committee"). The Dispute Resolution
Committee shall meet at either Premark or Tupperware's offices, whichever is
more appropriate in view of the issues under consideration, at such reasonable
time as either party may notify the other in writing, for the purpose of
resolving any dispute arising under this Agreement. No dispute arising under
this Agreement shall be the subject of arbitration or other formal proceedings
between the parties hereto unless and until such dispute has been considered
by the Dispute Resolution Committee. If the Dispute Resolution Committee is
unable to resolve any dispute submitted to it by any party hereto within
thirty (30) days of such submission, the Dispute Resolution Committee shall
refer the issue to the Chief Executive Officers of Premark and Tupperware for
their resolution. If such officers are unable to resolve such dispute within
fifteen (15) days after referral, any member of the Dispute Resolution
Committee may refer such dispute to binding arbitration as provided in Section
8.02 hereof. No such dispute shall be subject to arbitration or other formal
proceedings between the parties hereto before being considered by the Dispute
Resolution Committee and the Chief Executive Officers of Premark and
Tupperware.
8.02 Binding Arbitration.
(a) Any controversy, dispute or claim (whether in contract or tort)
between the parties arising out of or related to this Agreement or the
transactions contemplated hereby, shall, after the dispute resolution process
set forth in Section 8.02 has been completed, at the request of any party, be
submitted to arbitration in accordance with this Section 8.02 by notifying the
other party to the dispute of its decision to arbitrate such controversy,
dispute or claim.
(b) Each controversy, dispute or claim submitted by a party to arbitration
shall be heard by an arbitration panel composed of three arbitrators, in
accordance with the following provisions. Premark and Tupperware shall each
appoint one arbitrator (who shall not be an employee, officer or director,
professional consultant (including without limitation outside attorney or
accountant) or otherwise related to the appointing party) within fifteen (15)
days after the matter has been submitted to arbitration. If any party fails to
appoint its arbitrator within such fifteen (15) day period, any party may
apply to the American Arbitration Association (the "AAA") to appoint an
arbitrator on behalf of the party that has failed to appoint its arbitrator.
The two arbitrators appointed by, or on behalf of, the parties shall jointly
appoint a third arbitrator who shall chair the
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arbitration panel (the "Chairman"). If the arbitrators appointed by, or on
behalf of, the parties do not succeed in appointing a Chairman within fifteen
(15) days of the latter of the two arbitrators appointed by, or on behalf of,
the parties has been appointed, the Chairman shall, at the request of either
party, be appointed by the AAA. If for any reason an arbitrator is unable to
perform his or her function, he or she shall be replaced and a substitute
shall be appointed in the same manner as the arbitrator replaced.
(c) Except as otherwise provided herein, arbitration proceedings shall be
conducted in accordance with the Commercial Arbitration Rules of the AAA. In
any arbitration proceeding hereunder: (i) proceedings shall, unless otherwise
agreed by the parties, be held in Orlando, Florida; (ii) the arbitration panel
shall have no power to award punitive damages and shall be bound by all
statutes of limitation which would otherwise be applicable in a judicial
action brought by a party; and (iii) the decision of a majority of the
arbitrators (or the Chairman if there is no such majority) shall be final and
binding on the parties to this Agreement and shall be enforceable in any court
of competent jurisdiction. The parties hereby waive any rights to appeal or to
review of such decision by any court or tribunal and also waive any objections
to such enforcement. THE PARTIES HEREBY AGREE TO WAIVE ALL RIGHTS TO TRIAL BY
JURY WITH RESPECT TO ANY CONTROVERSY, DISPUTE OR CLAIM SUBMITTED TO
ARBITRATION UNDER THIS AGREEMENT.
(d) Notice preliminary to, in conjunction with, or incident to any
arbitration proceeding may be sent to the parties by registered or certified
mail (return receipt requested) at the address set forth in Section 9.08
hereof and personal service is hereby waived. The arbitrators shall award
recovery of all costs and fees incurred in connection with the arbitration and
the proceeding, and obtaining any judgment related thereto, of each disputed
matter (including reasonable attorney's fees and expenses and arbitrator's
fees and expenses and court costs) in each case, with respect to such disputed
matter, to the party that substantially prevails in the arbitration proceeding
with respect to such disputed matter.
(e) No provision of this Section 8.02 shall limit the right of any party
to this Agreement to exercise self-help remedies such as set-off, or obtaining
provisional, equitable or ancillary remedies from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party
to resort to arbitration.
ARTICLE IX
MISCELLANEOUS MATTERS
9.01 No Inconsistent Actions. Neither Premark nor Tupperware (nor their
respective Affiliates) shall take any action inconsistent with, nor fail to
take any action required by, either the Distribution Agreement, the Ruling
Request or the Ruling, unless such party acting has obtained the prior consent
of the other party. Except as otherwise provided in Section 9.01(b) hereof,
either party (the "Non-Proposing Party") will grant its consent to action
proposed by the other party (the "Proposing Party") if the Proposing Party
either (1) obtains a ruling with respect to the proposed action from the
Service or other applicable Tax Authority that is reasonably satisfactory, in
form and substance, to the Non-Proposing Party and its tax counsel (except
that the Proposing Party shall not submit any ruling request for the purpose
of complying with the Section 9.01, if the Non-Proposing Party reasonably
determines that filing such request might adversely affect the Non-Proposing
Party), or (2) obtains an opinion from tax counsel reasonably satisfactory to
the Non-Proposing Party (both as to choice of counsel and the opinion given).
Without limiting the generality of the foregoing:
(a) Conditions to Ruling. Each of the parties hereto represents that
neither it (nor any of its Affiliates) has any plan or intention to take any
action which is inconsistent with any factual statements, representations or
other similar conditions contained in the Ruling Request or in the Ruling.
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(b) Continuity of Business Enterprise. Tupperware hereby represents that
it has no plan or intent to reduce, eliminate or otherwise discontinue the
Convention Center Business (as such term is defined in the Ruling Request).
Tupperware will not take any action which might result in a contraction or
elimination of the Convention Center Business within the three year Tax Period
beginning on the Distribution Date without the prior written consent of
Premark. Premark hereby represents that is has no plan or intent to reduce,
eliminate or otherwise discontinue the manufacturing business of The Stero
Company, a Delaware corporation, as described in the Ruling Request (the
"Stero Business"). Premark will not take any action which might result in the
contraction or elimination of the Stero Business within the three year Tax
Period beginning on the Distribution Date without the prior written consent of
Tupperware. Notwithstanding the foregoing, Tupperware or Premark may take any
action described in this Section 9.01(b), provided that such party obtains a
ruling with respect to the proposed action from the Service that is reasonably
satisfactory in form and substance to the other party and its tax counsel.
(c) Supplement or Amendment to Ruling.
(1) Neither of the parties shall (A) file any request for a
supplement or amendment to the Ruling, or (B) arrange any "pre-submission" or
similar conference or file any memorandum or other material relating to any
such supplement or amendment, unless the party filing such materials (the
"Filing Party") shall have provided to the other party (the "Other Party"), no
later than 10 days in advance of such filing, or conference, (a) a complete
copy of all material to be filed or submitted, and (b) the opportunity to join
in such filing or conference, at its own expense.
(2) Regardless of whether the Other Party joins in any filing or
conference or other proceeding referred to in paragraph (1) to this Section
9.01(c), the Filing Party shall:
(A) inform the Other Party promptly regarding any telephone and
in-person conferences with Service personnel regarding such filing or
conference, and
(B) provide to the Other Party copies of (i) all filings or other
correspondence submitted to the Service in connection with such filing or
conference, and (ii) all correspondence from the Service (including without
limitation any supplemental or amendment to the Ruling), promptly upon
receipt.
9.02 Amendment and Waiver. This Agreement shall not be amended or modified
in any manner whatsoever without the written consent of each of the parties
hereto. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
9.03 Tax Allocation Agreements. Immediately prior to the Distribution,
Premark shall cause any and all tax allocation, tax sharing and similar
agreements or arrangements existing between Premark (including its Affiliates)
and Tupperware (including its Affiliates) to be terminated with respect to the
Tupperware Group, as of an effective date agreed to by the parties prior to
the Distribution Date, and shall cause any amounts due under such agreements
or arrangements to be settled in the manner agreed to by the parties prior to
the Distribution Date. Upon such termination and settlement, no further
payments made by one party to the other with respect to such agreements or
arrangements shall be made, and all other rights and obligations resulting
from such agreements or arrangements between the parties shall cease as of
such time.
9.04 Entire Agreement; Inconsistent Provisions. The parties agree that this
Agreement constitutes the entire Agreement between them in respect of the
subject matter of this Agreement, and that, in the event of a conflict or
other inconsistency between any provision or term of this Agreement and any
provision or term of the Distribution Agreement, then insofar as such matter
relates to Taxes, this Agreement shall prevail; provided, further, in the
event of any conflict or other inconsistency between any provision or term of
this Agreement and any provision or term of the Employee Benefits and
Compensation Allocation Agreement, the Employee Benefits and Compensation
Allocation Agreement shall prevail.
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9.05 Affiliate Obligations. To the extent that the provisions of this
Agreement pertain to an Affiliate of Premark or Tupperware, Premark and
Tupperware hereby respectively agree that they will cause such Affiliate to
carry out the terms of this Agreement.
9.06 Further Action. The parties shall execute and deliver all documents,
provide all information, and take or refrain from taking any action as may be
necessary or appropriate to achieve the purposes of this Agreement. Without
limiting the preceding sentence, and subject to Section 7.02(b) hereof, each
party and its Affiliates shall provide the other party and its Affiliates with
such powers of attorney or other authorizing documentation as is reasonably
necessary to empower then to execute and file Tax Returns, refunds and
equivalent claims for Taxes for which they are responsible hereunder, and
contest, settle and resolve any Tax Contests that they control under Article
VII hereof.
9.07 Time for Notice. Notice of any indemnification claim under this
Agreement must be received by the party against whom such claim is made no
later than six months from the date on which the Taxes to which such claim
relates have been paid.
9.08 Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally to the
recipient or when sent to the recipient by telecopy (receipt confirmed), one
business day after the date when sent to the recipient by reputable express
courier service (charges prepaid) or two business days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to the parties at their addresses indicated below:
If to Premark: Premark International, Inc. 1717 Deerfield Road
Deerfield, Illinois 60015 Attention: Vice President,
Taxes
If to Tupperware: Tupperware Corporation P. O. Box 2353 Orlando, Florida
32802 Attention: Vice President, Taxes
Or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
9.09 Remedies. Any party having any rights under any provision of this
Agreement will have all rights and remedies set forth in this Agreement and
all rights and remedies which such party may have been granted at any time
under any other agreement or contract and all of the rights which such party
may have under any law. Any such party will be entitled to enforce such rights
specifically, without posting a bond or other security, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
9.10 Successors and Assigns. No party hereto may assign or delegate any of
such party's rights or obligations under or in connection with this Agreement
without the written consent of the other parties hereto. All covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto will be binding upon and enforceable against the respective successors
and assigns of such party and will be enforceable by and will inure to the
benefit of the respective successors and permitted assigns of such party.
9.11 Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
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9.12 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
9.13 Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
9.14 No Third-Party Beneficiaries. This Agreement will not confer any rights
or remedies upon any Person other than the parties hereto and their respective
successors and permitted assigns.
9.15 Construction. The language used in this Agreement will be deemed to be
the language mutually chosen by the parties to express their mutual intent and
no rule of strict construction will be applied against any party. The use of
the word "including" in this Agreement means "including without limitation"
and is intended by the parties to be by way of example rather than limitation.
9.16 Form of Payments and Late Payments. Any payments owed by one party to
another under this Agreement shall be made in the currency in which the Tax to
which such payment relates is assessed by the Tax Authority, and shall be paid
in immediately available funds and in such other manner as the party to whom
such payment is owed may reasonably request. Any payments required by this
Agreement that are not made when due shall bear interest at the Prime Rate
plus six percent from the due date of the payment to the date paid.
9.17 Treatment of Payments. The parties agree that, in the absence of any
change in law or fact, any Indemnification Payments made under this agreement
shall be reported for tax purposes by the payor and the recipient as capital
contributions or dividends, as appropriate, relating back to the Tax Period
beginning before the Distribution Date.
9.18 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT
THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.
9.19 Confidentiality. If, pursuant to the terms of this Agreement, either
Premark or Tupperware (or any of their respective Affiliates) is required to
provide or disclose any information to the other party to this Agreement (or
any Affiliate of such other party), the Person receiving such information
shall hold and keep such information confidential, and shall not disclose such
information (except as otherwise required by Law) without the prior written
consent of the Person from whom such information was received.
IN WITNESS WHEREOF, the Agreement has been duly executed as of the day and
year first above written.
PREMARK INTERNATIONAL, INC.
By /s/ Raymond Barbosa
-----------------------------------
Name: RAYMOND BARBOSA
--------------------------------
Title: Vice President, Taxes
---------------------------------
TUPPERWARE CORPORATION
By /s/ James E. Rose Jr.
-----------------------------------
Name: JAMES E. ROSE JR.
--------------------------------
Title: Vice President
---------------------------------
-20-
<PAGE>
SCHEDULE 1
NONE
<PAGE>
EXHIBIT 10.8
FORM
OF
US$300,000,000
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT
dated as of
May 16, 1996
among
Tupperware Corporation
The Subsidiaries Named Herein
The Lenders Named Herein
and
Chemical Bank,
as Agent
<PAGE>
EXECUTION COPY
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT dated as
of May 16, 1996 among TUPPERWARE CORPORATION, the BORROWING SUBSIDIARIES (as
defined herein), the LENDERS (as defined herein) and CHEMICAL BANK, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
-----------
have the following meanings:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
-------------
"ABR Loan" shall mean any Standby Loan bearing interest at a rate
--------
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Standby Borrowing" shall mean a Standby Borrowing comprised of
---------------------
ABR Loans.
"Administrative Fees" shall have the meaning assigned to such term
-------------------
in Section 2.06(c).
"Administrative Questionnaire" shall mean, with respect to each
----------------------------
Lender, an administrative questionnaire in the form of Exhibit A, submitted to
the Agent (with a copy to the Company) duly completed by such Lender.
"Affiliate" shall mean with respect to any Person, the Parent of
---------
such Person, any Subsidiary of such Person, and any Person that has a Parent
in common with such first Person.
"Agent" shall mean Chemical Bank in its capacity as agent for the
-----
Lenders hereunder, and its successors in such capacity.
"Alternate Base Rate" shall mean, for any day, a rate per annum
-------------------
equal to the greater of (a) the Prime Rate in
<PAGE>
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Applicable Lending Office" shall mean, with respect to each Lender,
-------------------------
such Lender's Domestic Lending Office in the case of an ABR Loan or a Fixed
Rate Loan, such Lender's Eurocurrency Lending Office in the case of a
Eurocurrency Loan (other than a Eurocurrency Multicurrency Loan) or such
Lender's (or its Affiliate's) branch or agency, as specified by such Lender,
in the case of a Multicurrency Loan.
"Applicable Margin" shall mean on any date, with respect to
-----------------
Eurocurrency Standby Loans or, as the case may be, L/C Participation Fees, the
applicable percentage set forth below based upon the Ratings most recently
announced by the Rating Agencies as of such date:
Percentage
------------
Category 1
----------
A3 or higher by Moody's; .175%
A- or higher by S&P
Category 2
----------
Baa1 by Moody's; .185%
BBB+ by S&P
Category 3
----------
Baa2 by Moody's; .200%
BBB by S&P
Category 4
----------
Baa3 by Moody's; .300%
BBB- by S&P
Category 5
----------
Lower than Baa3 by Moody's; .500%
lower than BBB- by S&P
2
<PAGE>
For purposes of the foregoing, (i) if either Moody's or S&P shall not have
in effect a Rating (other than by reason of the circumstances referred to in
the last sentence of this definition), then such Rating Agency shall be deemed
to have established a rating in Category 5; (ii) if the Ratings established or
deemed to have been established shall fall within different Categories, then
(x) if such Ratings shall differ by only one Category or if one of such
Ratings shall be deemed to be in Category 5 because the applicable Rating
Agency shall not yet have established a Rating, the Applicable Margin shall be
based upon the higher of the two Ratings, (y) if such Ratings shall differ by
only two Categories, the Applicable Margin shall be determined by reference to
the Category that falls between the two Categories in which the Ratings shall
fall and (z) otherwise, the Applicable Margin shall be determined by reference
to the Category one level above that in which the lower of the two Ratings
shall fall (and for these purposes one Category is above another if the
Ratings it contains are superior to those in such other Category), and (iii)
if any Rating shall be changed (other than as a result of a change in the
rating system of the applicable Rating Agency), such change shall be effective
as of the date on which it is first announced by the Rating Agency making such
change. Each such change in the Applicable Margin shall apply to all
outstanding Eurocurrency Loans during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change. If the rating system of any Rating Agency shall
change, or if any Rating Agency shall cease to be in the business of rating
corporate debt obligations or shall have terminated its Rating for reasons
outside the control of the Company, the parties hereto shall negotiate in good
faith to amend this definition to reflect such changed rating system or the
absence of such Rating, and pending the effectiveness of any such amendment
the Applicable Margin shall be determined by reference to the Rating from the
other Rating Agency. Notwithstanding the foregoing provisions of this
definition, until the earlier of (i) the date on which at least one Rating
Agency has established a Rating and (ii) June 30, 1996, the Applicable Margin
shall be determined by reference to Category 3.
"Assignee" has the meaning set forth in Section 9.05(c).
--------
"Assignment and Acceptance" shall mean an agreement in the form of
-------------------------
Exhibit B hereto.
3
<PAGE>
"Available Commitment" shall mean, as to any Lender at any time, an
--------------------
amount equal to such Lender's Commitment at such time minus the sum of the L/C
Exposure of such Lender and the aggregate of all such Lender's Standby Loans
and Multicurrency Loans (Dollar Equivalent) outstanding at such time.
"Bank Default" has the meaning set forth in Section 2.20(b).
------------
"Bank Proceeding" has the meaning set forth in Section 2.20(b).
---------------
"Borrower" shall mean the Company or any Borrowing Subsidiary.
--------
"Borrowing" shall mean a group of Loans of a single Type made by the
---------
Lenders (or by the applicable Multicurrency Lenders or the Lender or Lenders
whose Competitive Bids have been accepted pursuant to Section 2.03, as the
case may be) on a single date and as to which a single Interest Period is in
effect.
"Borrowing Subsidiary" shall mean Dart and any Subsidiary of the
--------------------
Company designated as a Borrowing Subsidiary by the Company pursuant to
Section 2.21.
"Borrowing Subsidiary Counterpart" shall mean a Borrowing Subsidiary
--------------------------------
Counterpart substantially in the form of Exhibit C.
"Borrowing Subsidiary Termination" shall mean a Borrowing Subsidiary
--------------------------------
Termination substantially in the form of Exhibit D.
"Business Day" shall mean any day (other than a day which is a
------------
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
-------- -------
connection with a Eurocurrency Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in deposits in the
applicable currency in the London interbank market.
"Calculation Date" shall mean (i) the date one Business Day before
----------------
each Multicurrency Credit Event, (ii) each Interest Payment Date under any
Multicurrency Loan that
4
<PAGE>
is not the end of an Interest Period and (iii) the last business day of each
calendar month.
"Change in Control" shall be deemed to have occurred if (a) any
-----------------
person or group (within the meaning of Rule 13d-5 of the Securities Exchange
Act of 1934 as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing more than 30% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Company or any corporation directly or indirectly
Controlling the Company; (b) a majority of the seats (other than vacant seats)
on the board of directors of the Company or any person directly or indirectly
Controlling the Company shall at any time be occupied by persons who were
neither (i) nominated by the board of directors of the Company, nor (ii)
appointed by directors so nominated; (c) any change in control (or similar
event, however denominated) with respect to the Company, any person directly
or indirectly Controlling the Company or any Subsidiary shall occur under and
as defined in any indenture or agreement in respect of Indebtedness to which
the Company, any person directly or indirectly Controlling the Company or any
Subsidiary is a party or (d) any person or group (with the meaning of Rule
13d-5 of the Securities and Exchange Commission) shall Control the Company;
provided, however, that, notwithstanding the foregoing, none of the events
-------- -------
described in clauses (a), (b), (c) or (d) shall be deemed to be a "Change of
Control" if approved by the Board of Directors of the Company at a time when
any person acquiring Control (x) does not own shares representing more than
10% or such greater percentage as would require the issuance by the Company to
its shareholders of preferred share purchase rights pursuant to the provisions
of the stockholder rights agreement of the Company dated as of May 1, 1996, as
in effect on the Effective Date, of the aggregate ordinary voting power
represented by the issuing and outstanding capital stock of the Company or any
corporation directly or indirectly Controlling the Company and (y) has not
commenced any proxy contest, tender offer or similar proceeding.
"Change in Law" shall mean (a) the adoption of any law, rule or
-------------
regulation after the date of this Agreement, (b) any change in any law, rule
or regulation or in the interpretation or application thereof after the date
of this Agreement or (c) compliance by any Lender or Fronting Bank with any
request, guideline or directive (whether or not
5
<PAGE>
having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.
"Commitment" shall mean, with respect to each Lender, the commitment
----------
of such Lender hereunder as set forth in Schedule 2.01 under the heading "U.S.
Dollar Commitment" or in an Assignment and Acceptance delivered by such Lender
under Section 9.05, as such Lender's Commitment may be permanently terminated
or reduced from time to time pursuant to Section 2.11 or pursuant to one or
more assignments under Section 9.05. The Commitment of each Lender shall
automatically and permanently terminate on the Maturity Date if not terminated
earlier pursuant to the terms hereof.
"Company" shall mean Tupperware Corporation, a Delaware corporation,
-------
and its successors.
"Competitive Bid" shall mean an offer by a Lender to make a
---------------
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a notification
------------------------------------
made by the Company pursuant to Section 2.03(d) in the form of Exhibit E-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid, (i) in
--------------------
the case of a Eurocurrency Loan, the Margin, and (ii) in the case of a Fixed
Rate Loan, the fixed rate of interest offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to
-----------------------
Section 2.03 in the form of Exhibit E-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a
---------------------
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted under the bidding
procedure described in Section 2.03.
"Competitive Loan" shall mean a loan made pursuant to the bidding
----------------
procedure described in Section 2.03. Each Competitive Loan shall be a
Eurocurrency Competitive Loan or a Fixed Rate Loan.
"Competitive Loan Exposure" shall mean, with respect to any Lender
-------------------------
at any time, the sum of the aggregate principal amount of all outstanding
Competitive Loans made by such Lender.
6
<PAGE>
"Consolidated Debt" shall mean at any date the Debt of the Company
-----------------
and its Consolidated Subsidiaries on such date, determined on a consolidated
basis in accordance with GAAP consistently applied.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
-------------------
Income for such period, plus, to the extent deducted in computing such
----
Consolidated Net Income and without duplication, (a) depreciation and
amortization expense, (c) Consolidated Interest Expense, (c) income tax
expense and (d) other non-cash charges, all as determined in accordance with
GAAP consistently applied.
"Consolidated Interest Coverage Ratio" shall mean, at any date, the
------------------------------------
ratio of (a) Consolidated EBITDA for the period of four consecutive fiscal
quarters most recently ended as of such date to (b) Consolidated Interest
Expense for such period of four consecutive fiscal quarters.
"Consolidated Interest Expense" shall mean, for any period, the
-----------------------------
gross interest expense of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently
applied.
"Consolidated Leverage Ratio" shall mean, on any date, the ratio of
---------------------------
Consolidated Total Debt at such date to Consolidated EBITDA for the period of
the four consecutive fiscal quarters most recently ended as of such date.
"Consolidated Net Income" shall mean, for any period, the net income
-----------------------
(or loss) of the Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP consistently applied.
"Consolidated Subsidiary" shall mean at any date any Subsidiary or
-----------------------
other entity the accounts of which would be consolidated with those of the
Company in its consolidated financial statements if such statements were
prepared as of such date.
"Consolidated Total Debt" shall mean, as of any date, all Debt of
-----------------------
the Company and its Subsidiaries on such date, determined on a consolidated
basis in accordance with GAAP consistently applied.
"Control" shall mean the possession, directly or indirectly, of the
-------
power to direct or cause the direction of
7
<PAGE>
the management or policies of a person, whether through the ownership of
voting securities, by contract or otherwise, and "Controlling" and
-----------
"Controlled" shall have meanings correlative thereto.
----------
"Dart" shall mean Dart Industries Inc., a Delaware corporation, and
----
its successors.
"Dart Contribution Date" shall mean the date on and as of which Dart
----------------------
becomes a Wholly-Owned Consolidated Subsidiary of the Company and all other
Tupperware Assets (as defined in the Distribution Agreement) have been
transferred to the Company or a wholly owned subsidiary of the Company.
"Debt" of any Person shall mean at any date, without duplication,
----
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising in the
ordinary course of business, (iv) all obligations of such Person as lessee
which are capitalized in accordance with generally accepted accounting
principles, (v) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, (vi) all Debt of
others Guaranteed by such Person and (vii) obligations of such Person as an
account party in respect of letters of credit (other than (x) letters of
credit issued supporting payment obligations in respect of goods and services
in the ordinary course of business and (y) other letters of credit supporting
obligations of such person in an aggregate amount not in excess of
$25,000,000); provided that Debt shall not include "back-to-back" borrowings
--------
by Foreign Subsidiaries of the Company in foreign currencies for which there
are related deposits or receivables of equivalent amounts so long as (y) such
borrowings are not included in Consolidated Debt under GAAP and (z) the
borrowing arrangements include rights of offset allowing defaulted principal
and accrued interest to be offset against the related repayment obligation.
"Default" shall mean any condition or event which constitutes an
-------
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
8
<PAGE>
"Distribution Agreement" shall mean the Distribution Agreement dated
----------------------
as of May 15, 1996, by and among Premark, the Company and Dart, as distributed
to the Lenders prior to the date hereof.
"Dollar Borrowing" shall mean a Borrowing comprised of Dollar Loans.
----------------
"Dollar Equivalent" shall mean, on any date of determination, with
-----------------
respect to any amount in any Eligible Currency, the equivalent in Dollars of
such amount, determined by the Agent using the Exchange Rate with respect to
such Eligible Currency then in effect as determined pursuant to Section
2.23(a).
"Dollar Facility Excess" shall have the meaning assigned to such
----------------------
term in Section 2.23(d).
"Dollar Facility Overage" shall mean an amount equal to the excess
-----------------------
of (a) the Total Commitment over (b) the aggregate amount of all Multicurrency
Facility Maximum Borrowing Amounts (determined, if applicable, after giving
effect to any reduction therein made pursuant to Section 2.23(c)).
"Dollar Loan" shall mean any Loan denominated in Dollars.
-----------
"Dollar Standby Credit Excess" shall have the meaning assigned to
----------------------------
such term in Section 2.23(c).
"Dollar Standby Credit Overage" shall mean, with respect to any
-----------------------------
Lender, an amount equal to the excess, if any, of (a) such Lender's Commitment
over (b) the aggregate Multicurrency Lender Maximum Borrowing Amounts of such
Lender with respect to all Multicurrency Addenda to which such Lender or any
of its Affiliates is a party.
"Dollar Standby Extensions of Credit" shall mean, with respect to
-----------------------------------
any Lender at any time, the aggregate principal amount of all Standby Loans
made by such Lender then outstanding.
"Dollars" or "$" shall mean lawful money of the United States of
------- -
America.
"Domestic Borrowing Subsidiary" shall mean any Borrowing Subsidiary
-----------------------------
organized under the laws of the United
9
<PAGE>
States or any of its territories or possessions or any political subdivision
thereof.
"Domestic Lending Office" shall mean, with respect to any Lender,
-----------------------
the office of such Lender specified as its "Domestic Lending Office" on
Schedule 2.01 or, as to any person who becomes a Lender after the Closing
Date, on the Assignment and Acceptance executed by such person or such other
office of such Lender as such Lender may hereafter designate from time to time
as its "Domestic Lending Office" by notice to the Company and the Agent.
"Effective Date" shall mean the date this Agreement becomes
--------------
effective in accordance with Section 3.01.
"Eligible Currency" shall mean any currency other than Dollars as to
-----------------
which an Exchange Rate may be calculated.
"Environmental Laws" shall mean any and all federal, state, local
------------------
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or wastes or the clean-
up or other remediation thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended, or any successor statute.
"ERISA Group" shall mean the Borrower and all members of a
-----------
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414 of the Internal Revenue Code.
"Eurocurrency Borrowing" shall mean a Borrowing comprised of
----------------------
Eurocurrency Loans.
10
<PAGE>
"Eurocurrency Competitive Loan" shall mean any Competitive Loan
-----------------------------
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurocurrency Lending Office" shall mean, with respect to each
---------------------------
Lender, the branch or Affiliate of such Lender which such Lender has
designated as its "Eurocurrency Lending Office" on Schedule 2.01 or, as to any
person who becomes a Lender after the Closing Date, on the Assignment and
Acceptance executed by such person or such other office of such Lender as such
Lender may hereafter designate from time to time as its "Eurodollar Lending
Office" by notice to the Company and the Agent.
"Eurocurrency Loan" shall mean any Eurocurrency Competitive Loan,
-----------------
Eurocurrency Standby Loan or Eurocurrency Multicurrency Loan.
"Eurocurrency Multicurrency Loan" shall mean any Multicurrency Loan
-------------------------------
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurocurrency Standby Loan" shall mean any Standby Loan bearing
-------------------------
interest at a rate determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
"Event of Default" has the meaning set forth in Section 6.01.
----------------
"Exchange Rate" shall mean, with respect to any Eligible Currency on
-------------
a particular date, the rate at which such Eligible Currency may be exchanged
into Dollars, as set forth on such date on the Reuters currency page more
particularly described in the Multicurrency Addendum for Loans to be made in
such Eligible Currency. In the event that such rate does not appear on such
Reuters currency page, the Exchange Rate with respect to such Eligible
Currency shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed upon by the Agent and
the Company or, in the absence of such agreement, such Exchange Rate shall
instead be the Agent's spot rate of exchange in the London interbank market or
other market where the Agent's foreign currency exchange operations in respect
of such Eligible Currency are then being conducted, at or about 10:00 A.M.,
local time, at
11
<PAGE>
such date for the purchase of Dollars with such Eligible Currency for delivery
two Business Days later; provided, however, that if at the time of any such
-------- -------
determination, for any reason, no such spot rate is being quoted, the Agent
may use any reasonable method it deems appropriate to determine such rate, and
such determination shall be conclusive absent manifest error.
"Excluded Taxes" shall mean, with respect to the Agent, any Lender,
--------------
any Fronting Bank or any other recipient of any payment to be made by or on
account of any obligation of any Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the jurisdiction under the
laws of which it is organized, or the jurisdiction in which its principal
office is located or, in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits or similar tax imposed by
the Relevant Jurisdiction and (c) in the case of a Foreign Lender (other than
an assignee pursuant to a request by the Borrower under Section 2.20(b)), any
withholding tax imposed on amounts payable to such Foreign Lender under this
Agreement because of its failure or inability to comply with Section 2.19(e)
or otherwise, unless (and to the extent that) (i) such withholding tax
liability arises or is increased by reason of a Change in Law occurring after
such Foreign Lender becomes a Lender under this Agreement or (ii) such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding tax
liability pursuant to Section 2.19(a).
"Facility Fee" shall have the meaning assigned to such term in
------------
Section 2.06(a).
"Facility Fee Percentage" shall mean on any date the applicable
-----------------------
percentage set forth below based upon the Ratings most recently announced by
the Rating Agencies as of such date:
Percentage
------------
Category 1
----------
A3 or higher by Moody's; .075%
A- or higher by S&P
12
<PAGE>
Category 2
----------
Baa1 by Moody's; .090%
BBB+ by S&P
Category 3
----------
Baa2 by Moody's; .100%
BBB by S&P
Category 4
----------
Baa3 by Moody's; .150%
BBB- by S&P
Category 5
----------
Lower than Baa3 by Moody's; .250%
lower than BBB- by S&P
For purposes of the foregoing, (i) if either Moody's or S&P shall not have in
effect a Rating (other than by reason of the circumstances referred to in the
last sentence of this definition), then such Rating Agency shall be deemed to
have established a rating in Category 5; (ii) if the Ratings established or
deemed to have been established shall fall within different Categories, then
(x) if such Ratings shall differ by only one Category or if one of such
Ratings shall be deemed to be in Category 5 because the applicable Rating
Agency shall not yet have established a Rating, the Facility Fee Percentage
shall be based upon the higher of the two Ratings, (y) if such Ratings shall
differ by only two Categories, the Facility Fee Percentage shall be determined
by reference to the Category that falls between the two Categories in which
the Ratings shall fall and (z) otherwise, the Facility Fee Percentage shall be
determined by reference to the Category one level above that in which the
lower of the two Ratings shall fall (and for these purposes one Category is
above another if the Ratings it contains are superior to those in such other
Category), and (iii) if any Rating shall be changed (other than as a result of
a change in the rating system of the applicable Rating Agency), such change
shall be effective as of the date on which it is first announced by the Rating
Agency making such change. Each such change in the Facility Fee Percentage
shall apply at any time during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of
the
13
<PAGE>
next such change. If the rating system of any Rating Agency shall change, or
if any Rating Agency shall cease to be in the business of rating corporate
debt obligations or shall have terminated its Rating for reasons outside the
control of the Company, the parties hereto shall negotiate in good faith to
amend this definition to reflect such changed rating system or the absence of
such Rating, and pending the effectiveness of any such amendment the Facility
Fee Percentage shall be determined by reference to the Rating from the other
Rating Agency. Notwithstanding the foregoing provisions of this definition,
until the earlier of (i) the date on which at least one Rating Agency has
established a Rating and (ii) June 30, 1996, the Facility Fee Percentage shall
be determined by reference to Category 3.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the quotations for the day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fees" shall mean the Facility Fee, the L/C Participation Fees, the
----
Fronting Bank Fees and the Administrative Fees.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed
--------------------
Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing interest
---------------
at a fixed percentage rate per annum (expressed in the form of a decimal to no
more than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"Foreign Finance Subsidiary" shall mean any Foreign Subsidiary of
--------------------------
the Company designated as such by the Company that at all times (i) is not an
operating subsidiary, (ii) does not directly or indirectly own any operating
subsidiary and (iii) is engaged solely in financing activities.
14
<PAGE>
"Foreign Lender", with respect to any Loan, shall mean any Lender
--------------
making such Loan that is organized under the laws of a jurisdiction other than
the Relevant Jurisdiction.
"Foreign Subsidiary" shall mean (i) any Subsidiary organized under
------------------
the laws of a jurisdiction outside the United States of America or any of its
territories or possessions or any political subdivision thereof and (ii) any
branch or office located outside the United States of America or any of its
territories or possessions or any political subdivision thereof of any other
Subsidiary.
"Fronting Bank" shall mean Chemical Bank or any other Lender that
-------------
may become a Fronting Bank pursuant to Section 2.24, in each case with respect
to Letters of Credit issued by it.
"Fronting Bank Agreement" shall mean an agreement substantially in
-----------------------
the form of Exhibit H.
"Fronting Bank Fees" shall have the meaning assigned to such term in
------------------
Section 2.06(b).
"GAAP" shall mean generally accepted accounting principles, applied
-----
on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
----------------------
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" by any Person shall mean any obligation, contingent or
---------
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part), provided that the term Guarantee shall not include
--------
endorsements for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
15
<PAGE>
"Guarantor" shall mean (a) the Company, (b) Dart and (c) each other
---------
Domestic Borrowing Subsidiary (other than any Domestic Borrowing Subsidiary
(i) that has no significant assets or operations or (ii) that has not directly
or indirectly borrowed Loans or obtained Letters of Credit in an aggregate
principal and/or face amount of $1,000,000 or more).
"Identifiable Assets" shall mean identifiable assets within the
-------------------
meaning of Item 101(b) of Regulation S-K promulgated by the Securities and
Exchange Commission.
"Interest Payment Date" shall mean (a) with respect to any Loan, the
---------------------
last day of each Interest Period applicable thereto, (b) in the case of a
Eurocurrency Loan with an Interest Period of more than three months' duration
or a Fixed Rate Loan with an Interest Period of more than 90 days' duration,
each day that would have been an Interest Payment Date for such Loan had
successive Interest Periods of three months' duration or 90 days' duration, as
the case may be, been applicable to such Loan and, in addition, the date of
any prepayment of such Loan or conversion of such Loan to a Loan of a
different Type and (c) with respect to a Multicurrency Loan (other than a
Eurocurrency Loan), such days as shall be specified in the applicable
Multicurrency Addendum.
"Interest Period" shall mean (a) as to any Eurocurrency Borrowing,
---------------
the period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the
case may be, and ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the calendar month that
is 1, 2, 3 or 6 months thereafter, as the Borrower may elect, (b) as to any
ABR Borrowing, the period commencing on the date of such Borrowing or on the
last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the Maturity
Date and (iii) the date such Borrowing is converted to a Borrowing of a
different Type in accordance with Section 2.05 or repaid or prepaid in
accordance with Section 2.07 or Section 2.12, (c) as to any Fixed Rate
Borrowing, the period commencing on the date of such Borrowing and ending on
the date specified in the Competitive Bids in which the offer to make the
Fixed Rate Loans comprising such Borrowing were extended, which shall
16
<PAGE>
not be earlier than one day after the date of such Borrowing or later than 360
days after the date of such Borrowing and (d) as to any Multicurrency
Borrowing (other than a Eurocurrency Borrowing), such periods as shall be
specified in the applicable Multicurrency Addendum; provided, however, that if
-------- -------
any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless,
in the case of Eurocurrency Loans only, such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day. Interest shall accrue from and
including the first day of an Interest Period to but excluding the last day of
such Interest Period.
"Internal Revenue Code" shall mean the Internal Revenue Code of
---------------------
1986, as amended, or any successor statute.
"Kraft" shall mean Kraft Foods, Inc. a Delaware corporation, and its
-----
successors.
"L/C Commitment" shall mean the commitment of each Fronting Bank to
--------------
issue Letters of Credit pursuant to Section 2.24, as set forth in the
applicable Fronting Bank Agreement.
"L/C Disbursement" shall mean a payment or disbursement made by any
-----------------
Fronting Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum at such time of (a)
------------
the aggregate undrawn amount of all outstanding Letters of Credit plus (b) the
----
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed. The L/C Exposure of any Lender at any time shall mean its Pro
Rata Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term
---------------------
in Section 2.06(b).
"Lender" shall mean each bank listed on the signature pages hereof,
------
each Assignee which becomes a Lender pursuant to Section 9.06(c), and their
respective successors.
"Letter of Credit" shall mean any Letter of Credit issued pursuant
----------------
to Section 2.24.
17
<PAGE>
"LIBO Rate" shall mean, with respect to any Eurocurrency Borrowing
---------
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the arithmetic average of the
rates that appear on the Reuters Screen LIBO Page as of 11:00 a.m. (London
time) on such date with respect to which the rates would ordinarily be quoted
for deposits in Dollars or the applicable Eligible Currency and for a maturity
comparable to such Interest Period or, in the event no such rates appear on
the Reuters Screen LIBO Page, the rate at which deposits in Dollars or the
applicable Eligible Currency approximately equal in principal amount to such
Borrowing and for a maturity comparable to such Interest Period are offered to
the principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
----
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement, the Company or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"Loan" shall mean a Competitive Loan, a Standby Loan or a
----
Multicurrency Loan.
"Loan Documents" shall mean this Agreement, the Letters of Credit,
--------------
each Borrowing Subsidiary Counterpart and each Multicurrency Addendum.
"Margin" shall mean, as to any Eurocurrency Competitive Loan, the
------
margin (expressed as a percentage rate per annum in the form of a decimal to
no more than four decimal places) to be added to or subtracted from the LIBO
Rate in order to determine the interest rate applicable to such Loan, as
specified in the Competitive Bid relating to such Loan.
"Material Adverse Effect" shall mean a materially adverse effect on
-----------------------
the business, financial condition, results of operations or prospects of the
Company and its Consolidated Subsidiaries, considered as a whole.
18
<PAGE>
"Material Debt" shall mean (i) Debt (other than the Loans) of the
-------------
Company or one of its Consolidated Subsidiaries arising under a single
indenture, loan agreement or similar document in an aggregate principal amount
exceeding $10,000,000, or (ii) Debt (other than the Loans) of the Company
and/or one or more of its Consolidated Subsidiaries, arising in one or more
related or unrelated transactions, in an aggregate principal amount exceeding
$25,000,000.
"Material Plan" shall mean at any time a Plan or Plans having
-------------
aggregate Unfunded Liabilities in excess of $25,000,000.
"Material Subsidiary" shall mean at any time, any Subsidiary of the
-------------------
Company which as of such time meets the definition of a "significant
subsidiary" contained as of the date hereof in Regulation S-K of the
Securities and Exchange Commission.
"Maturity Date" shall mean May 16, 2001.
-------------
"Moody's" shall mean Moody's Investors Service, Inc.
-------
"Multicurrency Addendum" shall mean a multicurrency addendum among
----------------------
the Company, a Borrower and one or more Multicurrency Lenders, substantially
in the form of Exhibit I.
"Multicurrency Agent" shall mean one or more entities (which may be
-------------------
the Agent or its local affiliates), satisfactory to the Agent, as specified in
the applicable Multicurrency Addendum.
"Multicurrency Borrowing" shall mean a Borrowing comprised of
-----------------------
Multicurrency Loans.
"Multicurrency Credit Event" shall mean each Borrowing under a
--------------------------
Multicurrency Addendum.
"Multicurrency Equivalent" shall mean, on any date of determination,
------------------------
with respect to any amount in Dollars, the equivalent in the relevant Eligible
Currency of such amount, determined by the Agent using the Exchange Rate with
respect to such Eligible Currency then in effect as determined pursuant to
Section 2.23(a).
19
<PAGE>
"Multicurrency Facility Maximum Borrowing Amount" shall have the
-----------------------------------------------
meaning assigned to such term in Section 2.22(b).
"Multicurrency Lender" shall mean any Lender (or any Affiliate,
--------------------
branch or agency thereof) party to a Multicurrency Addendum. In the event any
agency or Affiliate of a Lender shall be party to a Multicurrency Addendum,
such agency or Affiliate shall, to the extent of any commitment extended and
any Loans made by it, have all the rights of such Lender hereunder; provided,
--------
however, that such Lender shall continue to the exclusion of such agency or
Affiliate to have all the voting and consensual rights vested in it by the
terms hereof.
"Multicurrency Lender Maximum Borrowing Amount" shall have the
---------------------------------------------
meaning assigned to such term in Section 2.22(b).
"Multicurrency Loan" shall mean any extension of credit, denominated
------------------
in a currency other than Dollars, made to a Borrower pursuant to Section
2.01(b) and a Multicurrency Addendum. Each Multicurrency Loan shall be a
Eurocurrency Loan or a Loan bearing interest at such other rate as shall be
specified in the applicable Multicurrency Addendum.
"Multicurrency Loans (Dollar Equivalent)" shall mean the Dollar
---------------------------------------
Equivalent of the relevant Multicurrency Loans.
"Multiemployer Plan" shall mean at any time an employee pension
------------------
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.
"Notice of Competitive Bid Request" shall mean a notification made
---------------------------------
pursuant to Section 2.03 in the form of Exhibit E-2.
"Obligations" shall mean the due and punctual payment of (i) the
-----------
principal of and interest on the Loans, when and as due, whether at maturity,
by acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each
20
<PAGE>
payment required to be made by a Borrower under the Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including fees,
costs, expenses and indemnities (including, without limitation, the
obligations described in Section 2.19 of the Borrowers to the Lenders under
the Agreement and the other Loan Documents).
"Other Taxes" shall mean any and all present or future stamp or
-----------
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution or
delivery of, or otherwise with respect to, this Agreement.
"Parent" shall mean, with respect to any Person, any other Person
------
controlling such Person.
"Participant" has the meaning set forth in Section 9.05(b).
-----------
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
----
entity succeeding to any or all of its functions under ERISA.
"Permitted Guarantees" shall mean Guarantees existing on the date
--------------------
hereof by Dart of certain existing Debt of Kraft.
"Person" shall mean an individual, a corporation, a partnership, an
------
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" shall mean at any time an employee pension benefit plan
----
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to,
by any Person which was at such time a member of the ERISA Group for employees
of any Person which was at such time a member of the ERISA Group.
21
<PAGE>
"Premark" shall mean Premark International, Inc., a Delaware
-------
corporation, and its successors.
"Premark Dividend" shall mean the special cash dividend to be paid
----------------
on the capital stock of Dart to Premark in accordance with the formula
described in the Registration Statement.
"Prime Rate" shall mean the rate of interest per annum publicly
----------
announced from time to time by Chemical Bank as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as
being effective.
"Pro Rata Percentage" shall mean, with respect to any Lender, the
-------------------
percentage of the Total Commitment represented by such Lender's Commitment.
If the Commitments have terminated or expired, the Pro Rata Percentages shall
be determined based upon the Commitments most recently in effect, giving
effect to any subsequent assignments pursuant to Section 9.05.
"Rating Agencies" shall mean Moody's and S&P.
---------------
"Ratings" shall mean the ratings (or indicative ratings) from time
-------
to time announced by the Rating Agencies for senior, unsecured, non-credit-
enhanced long-term debt of the Company.
"Registration Statement" shall mean the registration statement of
----------------------
the Company on Form 10 under the Securities Exchange Act of 1934 filed with
the Securities and Exchange Commission on March 4, 1996, as distributed to the
Lenders prior to the date hereof.
"Relevant Jurisdiction" shall mean (i) in the case of any Loan to
---------------------
the Company or any Domestic Borrowing Subsidiary, the United States of
America, and (ii) in the case of any Loan to any other Borrowing Subsidiary,
the jurisdiction imposing (or having the power to impose) withholding tax on
payments by such Borrowing Subsidiary under this Agreement.
"Regulation G" shall mean Regulation G of the Board of Governors of
------------
the Federal Reserve System of the United States of America, as in effect from
time to time.
22
<PAGE>
"Regulation U" shall mean Regulation U of the Board of Governors of
------------
the Federal Reserve System of the United States of America, as in effect from
time to time.
"Regulation X" shall mean Regulation X of the Board of Governors of
------------
the Federal Reserve System of the United States of America, as in effect from
time to time.
"Required Lenders" shall mean, at any time, (i) in the case of this
----------------
Agreement, Lenders having Commitments representing at least 51% of the Total
Commitment or, for purposes of acceleration pursuant to clause (ii) of Article
VI, Lenders holding Loans, L/C Exposures and unused Commitments representing
at least 51% of the aggregate Dollar Equivalent of the principal amount of all
Loans outstanding, L/C Exposures and unused Commitments or (ii) in the case of
any Multicurrency Addendum, Lenders having Multicurrency Lender Maximum
Borrowing Amounts under such Multicurrency Addendum representing at least 51%
of the Multicurrency Facility Maximum Borrowing Amount (in each case
determined without regard for any adjustments thereto pursuant to Sections
2.23(c) and 2.23(d))
"Reuters Screen LIBO Page" shall mean the display designated as page
------------------------
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks).
"S&P" shall mean Standard and Poor's Ratings Group.
---
"Spin-Off Transactions" shall mean (i) the Premark Dividend, (ii)
---------------------
the contribution by Premark of Dart to the Company with the result that Dart
becomes a Wholly-Owned Consolidated Subsidiary, (iii) the distribution by
Premark to its shareholders of all the issued and outstanding capital stock of
the Company, and (iii) all other related transactions described in the
Registration Statement.
"Standby Borrowing" shall mean a Borrowing consisting of
-----------------
simultaneous Standby Loans from each of the Lenders then having an Available
Commitment.
"Standby Borrowing Request" shall mean a request made pursuant to
-------------------------
Section 2.04 in the form of Exhibit E-5.
23
<PAGE>
"Standby Credit Exposure" shall mean, with respect to any Lender at
-----------------------
any time, the sum of the aggregate principal amount at such time of all
outstanding Standby Loans of such Lender and the aggregate Dollar Equivalent
of the principal amount of all outstanding Multicurrency Loans of such Lender
(and each agency or Affiliate of such Lender acting as a Multicurrency
Lender).
"Standby Loans" shall mean the revolving loans made pursuant to
-------------
Section 2.04(a). Each Standby Loan shall be in Dollars and shall be a
Eurocurrency Standby Loan or an ABR Loan.
"Subsidiary" shall mean any corporation or other entity of which
----------
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Company. During
the period from the date hereof to the Dart Contribution Date, Dart and each
of its subsidiaries shall be deemed to be a Subsidiary of the Company for
purposes of the provisions of Articles IV, V and VI and the definitions
associated therewith.
"Taxes" shall mean any and all present or future taxes, levies,
-----
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority, other than Excluded Taxes.
"Total Commitment" shall mean, at any time, the aggregate
----------------
Commitments of all the Lenders, as in effect at such time.
"Type", when used in respect of any Loan or Borrowing, shall refer
----
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
----
include the LIBO Rate, the Alternate Base Rate and the Fixed Rate.
"Unfunded Liabilities" shall mean, with respect to any Plan at any
--------------------
time, the amount (if any) by which (i) the present value of all accrued
benefits under such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for such Plan, but
only to the extent that such amount represents a potential liability of a
member of
24
<PAGE>
the ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Consolidated Subsidiary" shall mean any Consolidated
------------------------------------
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time owned by the
Company or one or more wholly-owned subsidiaries of the Company or by the
Company and one or more wholly-owned subsidiaries of the Company.
SECTION 1.02. Accounting Terms and Determinations. Unless
-----------------------------------
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time; provided that, if the Company notifies the Agent that the
--------
Company wishes to amend any covenant in Article V to eliminate the effect of
any change in generally accepted accounting principles on the operation of
such covenant (or if the Agent notifies the Company that the Required Lenders
wish to amend Article V for such purpose), then the Company's compliance with
such covenant shall be determined on the basis of generally accepted
accounting principles in effect immediately before the relevant change in
generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Lenders.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. (a) Subject to the terms and
-----------
conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, to make Standby Loans to
the Borrowers, at any time and from time to time on and after the Effective
Date and until the earlier of the Maturity Date and the termination of the
Commitment of such Lender.
(b) Subject to the terms and conditions and relying upon the
representations and warranties set forth herein and in the applicable
Multicurrency Addendum, each Multicurrency Lender that is party to a
Multicurrency
25
<PAGE>
Addendum agrees, severally and not jointly, to make Multicurrency Loans under
such Multicurrency Addendum to the Borrowers, at any time and from time to
time on and after the later of the Effective Date and the execution of such
Multicurrency Addendum and until the earlier of the Maturity Date and the
termination of the Commitment (or the commitment under such Multicurrency
Addendum) of such Multicurrency Lender.
(c) Notwithstanding anything to the contrary contained in this
Agreement, in no event may any Borrowing be made under this Article II if,
after giving effect thereto (and to any concurrent repayment or prepayment of
Loans), (i) the sum of the aggregate Standby Credit Exposures, the aggregate
Competitive Loan Exposures and the L/C Exposure would exceed the Total
Commitment then in effect or (ii) the sum of the Standby Credit Exposure and
the L/C Exposure of any Lender would exceed such Lender's Commitment.
(d) Within the foregoing limits, the Borrowers may borrow, pay or
prepay and reborrow Standby Loans and Multicurrency Loans hereunder, on and
after the Effective Date and prior to the Maturity Date, subject to the terms,
conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as part
-----
of a Borrowing consisting of Standby Loans made by the Lenders ratably in
accordance with their Available Commitments; provided, however, that the
-------- -------
failure of any Lender to make any Standby Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other
Lender to make any Loan required to be made by such other Lender). Each
Multicurrency Loan shall be made as part of a Borrowing consisting of
Multicurrency Loans denominated in the same Eligible Currency and made by the
applicable Multicurrency Lenders ratably in accordance with the applicable
Multicurrency Lender Maximum Borrowing Amounts; provided, however, that the
-------- -------
failure of any Multicurrency Lender to make any Multicurrency Loan shall not
in itself relieve any other Multicurrency Lender of its obligation to lend
hereunder (it being understood, however, that no Multicurrency Lender shall be
responsible for the failure of any other Multicurrency Lender to make any
Multicurrency Loan required to be made by such other Multicurrency Lender).
Each Competitive Loan shall be made in accordance
26
<PAGE>
with the procedures set forth in Section 2.03. The Loans comprising any
Borrowing shall be (i) in the case of Competitive Loans, in an aggregate
principal amount which is an integral multiple of $1,000,000 and not less than
$5,000,000, (ii) in the case of Standby Loans, in an aggregate principal
amount which is an integral multiple of $1,000,000 and not less than
$5,000,000 (or an aggregate principal amount equal to the remaining balance of
the available Commitments) and (iii) in the case of Multicurrency Loans, in an
aggregate principal amount which complies with the requirements set forth in
the applicable Multicurrency Addendum. All Standby Loans and Competitive
Loans shall be made in Dollars.
(b) Each Competitive Borrowing shall be comprised entirely of
Eurocurrency Competitive Loans or Fixed Rate Loans, and each Standby Borrowing
shall be comprised entirely of Eurocurrency Standby Loans or ABR Loans, as the
applicable Borrower may request pursuant to Section 2.03 or 2.04, as
applicable. Each Lender may at its option make any Eurocurrency Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided, however, that any exercise of such option shall not
-------- -------
affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time; provided, however, that no Borrower shall
-------- -------
be entitled to request any Borrowing which, if made, would result in an
aggregate of more than 10 separate Eurocurrency Standby Loans of any Lender
being outstanding at any one time. For purposes of the foregoing, Loans
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Loans.
(c) Subject to Section 2.05 and, in the case of any Multicurrency
Loan, to any alternative procedures set forth in the applicable Multicurrency
Addendum, each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to the
Agent in New York, New York, not later than 12:00 noon, New York City time,
and the Agent shall by 2:00 p.m., New York City time, credit the amounts so
received to the account or accounts specified from time to time in one or more
notices delivered by the Company to the Agent or, if a Borrowing shall not
occur on such date because any condition precedent herein specified shall not
have been met, return the amounts so received to the
27
<PAGE>
respective Lenders. Competitive Loans shall be made by the Lender or Lenders
whose Competitive Bids therefor are accepted pursuant to Section 2.03 in the
amounts so accepted. Standby Loans and Multicurrency Loans shall be made by
the Lenders pro rata in accordance with Section 2.02. Unless the Agent shall
have received notice from a Lender prior to the date of any Borrowing that
such Lender will not make available to the Agent such Lender's portion of such
Borrowing, the Agent may assume that such Lender has made such portion
available to the Agent on the date of such Borrowing in accordance with this
paragraph (c) and the Agent may, in reliance upon such assumption, make
available to the applicable Borrower on such date a corresponding amount. If
and to the extent that such Lender shall not have made such portion available
to the Agent, such Lender and the applicable Borrower severally agree to repay
to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent at (i) in the
case of the Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Lender, the Federal
Funds Effective Rate; provided that no repayment by a Borrower pursuant to
--------
this sentence shall be deemed to be a prepayment for purposes of Section 2.15.
If such Lender shall repay to the Agent such corresponding amount, such amount
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement.
(d) Each Competitive Loan shall be a Eurocurrency Competitive Loan
or a Fixed Rate Loan. Each Standby Loan shall be a Eurocurrency Standby Loan
or an ABR Loan. Each Multicurrency Loan shall be a Eurocurrency Multicurrency
Loan or shall bear interest at a rate specified in the applicable
Multicurrency Addendum.
SECTION 2.03. Competitive Bid Procedure. (a) In order to request
-------------------------
Competitive Bids, a Borrower shall hand deliver or telecopy to the Agent a
duly completed Competitive Bid Request in the form of Exhibit E-1 hereto, to
be received by the Agent (i) in the case of a Eurocurrency Competitive
Borrowing, not later than 10:00 a.m., New York City time, four Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 a.m., New York City time, one Business Day
before a proposed Competitive Borrowing. No ABR Loan shall be requested in,
or made pursuant to, a Competitive Bid Request. A Competitive Bid
28
<PAGE>
Request that does not conform substantially to the format of Exhibit E-1 may
be rejected in the Agent's sole discretion, and the Agent shall promptly
notify the Borrower of such rejection by telecopy. Each Competitive Bid
Request shall refer to this Agreement and specify (w) the Borrower submitting
such Competitive Bid Request, (x) whether the Borrowing then being requested
is to be a Eurocurrency Borrowing or a Fixed Rate Borrowing, (y) the date of
such Borrowing (which shall be a Business Day) and the aggregate principal
amount thereof, which shall be in a minimum principal amount of $5,000,000 and
in an integral multiple of $1,000,000, and (z) the Interest Period with
respect thereto (which may not end after the Maturity Date). Promptly after
its receipt of a Competitive Bid Request that is not rejected as aforesaid,
the Agent shall telecopy to each Lender a Notice of Competitive Bid Request
inviting the Lender to bid, on the terms and conditions of this Agreement, to
make Competitive Loans.
(b) Each Lender invited to bid may, in its sole discretion, make
one or more Competitive Bids responsive to the Borrower's Competitive Bid
Request. Each Competitive Bid by a Lender must be received by the Agent by
telecopy, in the form of Exhibit E-3 hereto, (i) in the case of a Eurocurrency
Competitive Borrowing, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case of
a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the
day of a proposed Competitive Borrowing. Multiple bids will be accepted by
the Agent. Competitive Bids that do not conform substantially to the format
of Exhibit E-3 may be rejected by the Agent, and the Agent shall notify the
Lender making such nonconforming bid of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and specify (x) the
principal amount (which shall be in a minimum principal amount of $5,000,000
and in an integral multiple of $1,000,000 and which may equal the entire
principal amount of the Competitive Borrowing requested) of the Competitive
Loan or Loans that the Lender is willing to make, (y) the Competitive Bid Rate
or Rates at which the Lender is prepared to make the Competitive Loan or Loans
and (z) the Interest Period and the last day thereof. If any Lender invited
to bid shall elect not to make a Competitive Bid, such Lender shall so notify
the Agent by telecopy (I) in the case of Eurocurrency Competitive Loans, not
later than 9:30 a.m., New York City time, three Business Days before a
proposed Competitive Borrowing, and (II) in the case of Fixed Rate Loans, not
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<PAGE>
later than 9:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing; provided, however, that failure by any Lender to give such notice
-------- -------
shall not cause such Lender to be obligated to make any Competitive Loan as
part of such Competitive Borrowing. A Competitive Bid submitted by a Lender
pursuant to this paragraph (b) shall be irrevocable.
(c) The Agent shall promptly notify the Borrower, by telecopy, of
all the Competitive Bids made, the Competitive Bid Rate and the principal
amount of each Competitive Loan in respect of which a Competitive Bid was made
and the identity of the Lender that made each bid. The Agent shall send a
copy of all Competitive Bids to the Borrower for its records as soon as
practicable after completion of the bidding process set forth in this Section
2.03.
(d) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any Competitive
Bid referred to in paragraph (c) above. The Borrower shall notify the Agent
by telephone, confirmed by telecopy in the form of a Competitive Bid
Accept/Reject Letter, whether and to what extent it has decided to accept or
reject any of or all the bids referred to in paragraph (c) above not more than
one hour after it shall have been notified of such bids by the Agent pursuant
to such paragraph (c); provided, however, that (i) the failure of the Borrower
-------- -------
to give such notice shall be deemed to be a rejection of all the bids referred
to in paragraph (c) above, (ii) the Borrower shall not accept a bid made at a
particular Competitive Bid Rate if it has decided to reject a bid made at a
lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids
accepted by the Borrower shall not exceed the principal amount specified in
the Competitive Bid Request, (iv) if the Borrower shall accept a bid or bids
made at a particular Competitive Bid Rate but the amount of such bid or bids
shall cause the total amount of bids to be accepted to exceed the amount
specified in the Competitive Bid Request, then the Borrower shall accept a
portion of such bid or bids in an amount equal to the amount specified in the
Competitive Bid Request less the amount of all other Competitive Bids accepted
with respect to such Competitive Bid Request, which acceptance, in the case of
multiple bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such bid at such Competitive Bid Rate, and
(v) except pursuant to clause (iv)
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<PAGE>
above, no bid shall be accepted for a Competitive Loan unless such Competitive
Loan is in a minimum principal amount of $5,000,000 and an integral multiple
of $1,000,000; provided further, however, that if a Competitive Loan must be
---------------- -------
in an amount less than $5,000,000 because of the provisions of clause (iv)
above, such Competitive Loan may be for an integral multiple of $1,000,000,
and in calculating the pro rata allocation of acceptances of portions of
multiple bids at a particular Competitive Bid Rate pursuant to clause (iv) the
amounts shall be rounded to integral multiples of $1,000,000 in a manner which
shall be in the discretion of the Borrower. A notice given pursuant to this
paragraph (d) shall be irrevocable.
(e) The Agent shall promptly notify each bidding Lender whether or
not its Competitive Bid has been accepted (and if so, in what amount and at
what Competitive Bid Rate) by telecopy, and each successful bidder will
thereupon become bound, subject to the other applicable conditions hereof, to
make the Competitive Loan in respect of which its bid has been accepted.
(f) No Competitive Borrowing shall be requested or made hereunder
if after giving effect thereto any of the conditions set forth in paragraph
(c) of Section 2.01 would not be met.
(g) If the Agent shall elect to submit a Competitive Bid in its
capacity as a Lender, it shall submit such bid directly to the Borrower one
quarter of an hour earlier than the latest time at which the other Lenders are
required to submit their bids to the Agent pursuant to paragraph (b) above.
SECTION 2.04. Standby and Multicurrency Borrowing Procedure. (a)
---------------------------------------------
In order to request a Standby Borrowing, a Borrower shall hand deliver or
telecopy to the Agent a duly completed Standby Borrowing Request in the form
of Exhibit E-5 (i) in the case of a Eurocurrency Standby Borrowing, not later
than 10:30 a.m., New York City time, three Business Days before such
Borrowing, and (ii) in the case of an ABR Standby Borrowing, not later than
10:30 a.m., New York City time, on the day of such Borrowing. No Fixed Rate
Loan shall be requested or made pursuant to a Standby Borrowing Request. Such
notice shall be irrevocable and shall in each case specify (A) the Borrower
requesting such Standby Borrowing, (B) whether the Borrowing then being
requested is to be a Eurocurrency Standby Borrowing or an
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<PAGE>
ABR Standby Borrowing; (C) the date of such Standby Borrowing (which shall be
a Business Day) and the amount thereof; and (D) if such Borrowing is to be a
Eurocurrency Standby Borrowing, the Interest Period with respect thereto,
which shall not end after the Maturity Date. If no election as to the Type of
Standby Borrowing is specified in any such notice, then the requested Standby
Borrowing shall be an ABR Standby Borrowing. If no Interest Period with
respect to any Eurocurrency Standby Borrowing is specified in any such notice,
then the Borrower shall be deemed to have selected an Interest Period of one
month's duration. Notwithstanding any other provision of this Agreement to
the contrary, no Standby Borrowing shall be requested if the Interest Period
with respect thereto would end after the Maturity Date. The Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.04
and of each Lender's portion of the requested Borrowing.
(b) In order to establish a multicurrency facility, the Company
shall advise each Lender of its desire to establish such facility, either
directly or through the Agent, and shall discuss with any Lender expressing an
interest in becoming a Multicurrency Lender under the proposed multicurrency
facility the proposed terms thereof and the potential participation of such
Lender therein. The participation of any Lender desiring to participate in a
multicurrency facility is at the sole discretion of the Company.
(c) In order to request a Multicurrency Borrowing under a
multicurrency facility, a Borrower shall give the notice required under the
applicable Multicurrency Addendum and shall simultaneously deliver a copy of
such notice to the Agent.
SECTION 2.05. Conversion and Continuation of Standby Loans. A
--------------------------------------------
Borrower shall have the right at any time upon prior irrevocable notice to the
Agent (i) not later than 10:30 a.m., New York City time, on the day of the
conversion, to convert all or any part of any Eurocurrency Standby Borrowing
into an ABR Standby Borrowing, and (ii) not later than 10:30 a.m., New York
City time, three Business Days prior to conversion or continuation, to convert
any ABR Standby Borrowing into a Eurocurrency Standby Borrowing or to continue
any Eurocurrency Standby Borrowing as a Eurocurrency Standby Borrowing for an
additional Interest Period, subject in each case to the following:
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<PAGE>
(a) if less than all the outstanding principal amount of any Standby
Borrowing shall be converted or continued, the aggregate principal amount
of the Standby Borrowing converted or continued shall be an integral
multiple of $1,000,000 and not less than $5,000,000;
(b) accrued interest on a Standby Borrowing (or portion thereof)
being converted shall be paid by the Borrower at the time of conversion;
(c) if any Eurocurrency Standby Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, the
Borrower shall pay, upon demand, any amounts due to the Lenders pursuant
to Section 2.15;
(d) any portion of a Standby Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as a
Eurocurrency Standby Borrowing;
(e) any portion of a Eurocurrency Standby Borrowing which cannot be
continued as a Eurocurrency Standby Borrowing by reason of clause (d)
above shall be automatically converted at the end of the Interest Period
in effect for such Eurocurrency Standby Borrowing into an ABR Standby
Borrowing; and
(f) no Interest Period may be selected for any Eurocurrency Standby
Borrowing that would end later than the Maturity Date.
Each notice pursuant to this Section 2.05 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Standby Borrowing to be converted or continued, (ii) whether such Standby
Borrowing is to be converted to or continued as a Eurocurrency Standby
Borrowing or an ABR Standby Borrowing, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(iv) if such Standby Borrowing is to be converted to or continued as a
Eurocurrency Standby Borrowing, the Interest Period with respect thereto. If
no Interest Period is specified in any such notice with respect to any
conversion to or continuation as a Eurocurrency Standby Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. If no notice shall have been given in accordance with this
33
<PAGE>
Section 2.05 to convert or continue any Standby Borrowing, such Standby
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into a new
Interest Period as an ABR Standby Borrowing.
SECTION 2.06. Fees. (a) The Company agrees to pay to each Lender,
----
through the Agent, on each March 31, June 30, September 30 and December 31
(with the first payment being due on June 30, 1996) and on each date on which
the Commitment of such Lender shall be terminated as provided herein, a
facility fee (a "Facility Fee"), at a rate per annum equal to the Facility Fee
Percentage from time to time in effect on the amount of the Commitment of such
Lender, whether used or unused, during the preceding quarter (or other period
commencing on the Effective Date, or ending with the Maturity Date or any date
on which the Commitment of such Lender shall be terminated). All Facility
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days. The Facility Fee due to each Lender shall be payable in
arrears and shall commence to accrue on the Effective Date, and shall cease to
accrue on the earlier of the Maturity Date and the termination of the
Commitment of such Lender as provided herein.
(b) Each of the Borrowers agrees to pay (i) to the Fronting Banks
with respect to each Letter of Credit, the standard fronting, issuance and
drawing fees specified from time to time by the relevant Fronting Bank (the
"Fronting Bank Fees") and (ii) the fees with respect to each Letter of Credit
------------------
(the "L/C Participation Fees") described below. The Company shall pay to each
----------------------
Lender, through the Agent, a fee calculated on such Lender's Pro Rata
Percentage of the average daily aggregate undrawn amount of all outstanding
Letters of Credit during the preceding quarter (or shorter period commencing
with the Effective Date or ending with the Maturity Date or the date on which
all Letters of Credit have been cancelled or have expired and the Commitments
shall have been terminated) at a rate equal to the Applicable Margin from time
to time in effect.
(c) The Company agrees to pay the Agent, for its own account, the
administrative, auction and other fees separately agreed to by the Company and
the Agent (collectively, the "Administrative Fees").
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution,
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<PAGE>
if and as appropriate, among the Lenders. Once paid, none of the Fees shall
be refundable under any circumstances other than to correct errors in payment.
SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) Each of
------------------------------------
the Borrowers hereby agrees that the outstanding principal balance of each
Standby Loan or Multicurrency Loan shall be payable on the Maturity Date
(unless, in the case of a Multicurrency Loan, an earlier date is specified in
the Multicurrency Addendum relating to such Multicurrency Loan) and that the
outstanding principal balance of each Competitive Loan shall be payable on the
last day of the Interest Period applicable thereto.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to
time under this Agreement.
(c) The Agent shall maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the currency of each Loan, the
Borrower of each Loan, the Type of each Loan made and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from each Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder from
each Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) and (c) of this Section 2.07 shall be prima facie evidence of
the existence and amounts of the obligations therein recorded; provided,
--------
however, that the failure of any Lender or the Agent to maintain such accounts
-------
or any error therein shall not in any manner affect the obligations of the
Borrowers to repay the Loans in accordance with their terms.
SECTION 2.08. Interest on Loans. (a) Subject to the provisions of
-----------------
Section 2.09, the Loans comprising each Eurocurrency Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to (i) in the case of each
Eurocurrency Standby Loan, the LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin from time to time in effect, (ii) in
the
35
<PAGE>
case of each Eurocurrency Competitive Loan, the LIBO Rate for the Interest
Period in effect for such Borrowing plus (or minus) the Margin offered by the
Lender making such Loan and accepted by the Company pursuant to Section 2.03
and (iii) in the case of each Eurocurrency Multicurrency Loan, the LIBO Rate
for the Interest Period in effect for such Loan plus any spread specified in
the applicable Multicurrency Addendum.
(b) Subject to the provisions of Section 2.09, the Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, for
periods during which the Alternate Base Rate is determined by reference to the
Prime Rate and 360 days for other periods) at a rate per annum equal to the
Alternate Base Rate.
(c) Subject to the provisions of Section 2.09, each Fixed Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Lender making such Loan and accepted by the applicable
Borrower pursuant to Section 2.03.
(d) Subject to the provisions of Section 2.09, the Loans comprising
each Multicurrency Borrowing (other than a Eurocurrency Borrowing) shall bear
interest at the rate or rates per annum and calculated in the manner specified
in the applicable Multicurrency Addendum.
(e) Interest on each Loan shall be payable on each Interest Payment
Date applicable to such Loan except as otherwise provided in this Agreement or
in an applicable Multicurrency Addendum. The applicable LIBO Rate or
Alternate Base Rate for each Interest Period or day within an Interest Period,
as the case may be, shall be determined by the Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.09. Default Interest. If any Borrower shall default in
----------------
the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall on demand from time to time
from the Agent pay interest, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (after as well as
36
<PAGE>
before judgment) at a rate per annum (computed as provided in Section 2.08(b))
equal to the Alternate Base Rate plus 1% (or, in the case of Multicurrency
Loans, such other rate as may be specified in the applicable Multicurrency
Addendum).
SECTION 2.10. Alternate Rate of Interest. In the event, and on
--------------------------
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurocurrency Borrowing or other Multicurrency
Borrowing the Agent shall have determined (i) that deposits in the applicable
currency in the principal amounts of the Loans comprising such Borrowing are
not generally available in the London interbank market or any other market in
which the Lenders shall be funding Multicurrency Loans, (ii) that the rates at
which such deposits in the applicable currency are being offered will not
adequately and fairly reflect the cost to Lenders having at such time
Commitments representing at least 50% of the Total Commitment at such time
(or, in the case of Multicurrency Loans, Multicurrency Lenders having at such
time Multicurrency Lender Maximum Borrowing Amounts representing at least 50%
of the Multicurrency Facility Maximum Borrowing Amount at such time under the
applicable Multicurrency Addendum (in each case determined without regard for
any adjustments thereto pursuant to Sections 2.23(c) and 2.23(d)) of making or
maintaining their Eurocurrency Loans or other Multicurrency Loans during such
Interest Period or (iii) that reasonable means do not exist for ascertaining
the LIBO Rate or any other rate to be used in determining the interest rate
applicable to any Multicurrency Loans, the Agent shall, as soon as practicable
thereafter, give telecopy notice of such determination to the Borrowers and
the Lenders or the applicable Multicurrency Lenders. In the event of any such
determination under clauses (i), (ii) or (iii) above, until the Agent shall
have advised the Borrowers and the Lenders or the applicable Multicurrency
Lenders that the circumstances giving rise to such notice no longer exist, (x)
if such notice relates to Dollar Loans, any request by a Borrower for a
Eurocurrency Competitive Borrowing pursuant to Section 2.03 shall be of no
force and effect and shall be denied by the Agent and any request by a
Borrower for a Eurocurrency Standby Borrowing pursuant to Section 2.04 shall
be deemed to be a request for an ABR Standby Borrowing or (y) if such notice
relates to Loans in any Eligible Currency any request by a Borrower for a
Multicurrency Loan pursuant to Section 2.04 and the applicable Multicurrency
Addendum denominated in such Eligible Currency shall be deemed to be a request
for a Multicurrency Loan bearing
37
<PAGE>
interest by reference to any alternate rate specified in the applicable
Multicurrency Addendum (provided that if no alternate rate is specified in the
--------
applicable Multicurrency Addendum, such request shall be of no force and
effect and shall be denied by the Agent). Each determination by the Agent
hereunder shall be conclusive absent manifest error.
SECTION 2.11. Termination and Reduction of Commitments. (a) The
----------------------------------------
Commitments shall be automatically terminated on the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable telecopy
notice to the Agent, the Company may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Total
Commitment; provided, however, that (i) each partial reduction of the Total
-------- -------
Commitment shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $5,000,000 and (ii) no such termination or reduction shall
be made (A) which would reduce the Total Commitment to an amount less than the
sum of the aggregate Standby Credit Exposures, the aggregate Competitive Loan
Exposures and the L/C Exposure, (B) which would reduce any Lender's Commitment
to an amount that is less than the sum of such Lender's Standby Credit
Exposure and L/C Exposure or (C) which would reduce any Lender's Commitment to
an amount that is less than the aggregate of all the Multicurrency Lender
Maximum Borrowing Amounts of such Lender.
(c) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments.
The Company shall pay to the Agent for the account of the Lenders, on the date
of each termination or reduction of the Total Commitment, the Facility Fees on
the amount of the Commitments so terminated accrued through the date of such
termination or reduction.
SECTION 2.12. Prepayment. (a) The Borrowers shall have the right
----------
at any time and from time to time to prepay any Standby Borrowing or, unless
otherwise specified in the applicable Multicurrency Addendum, any
Multicurrency Borrowing, as the case may be, in whole or in part, upon giving
telecopy notice (or telephone notice promptly confirmed by telecopy) to the
Agent: (i) before 10:00 a.m., New York City time, three Business Days prior
to prepayment, in the case of Eurocurrency Standby Loans, (ii) before 10:00
a.m., New York City time, one Business Day prior to
38
<PAGE>
prepayment, in the case of ABR Loans and (iii) in the case of Multicurrency
Loans, by such time as shall be specified in the applicable Multicurrency
Addendum; provided, however, that each partial prepayment shall be in an
-------- -------
amount which is an integral multiple of $1,000,000 and not less than
$5,000,000. No prepayment may be made in respect of any Competitive
Borrowing.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.11, the Borrowers shall pay or prepay so much of the
Standby Borrowings as shall be necessary in order that the sum of the
aggregate Standby Credit Exposures, the aggregate Competitive Loan Exposures
and the L/C Exposure will not exceed the Total Commitment, after giving effect
to such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid,
shall be irrevocable and shall commit the applicable Borrower to prepay such
Borrowing (or portion thereof) in the amount stated therein on the date stated
therein. All prepayments under this Section 2.12 shall be subject to Section
2.15 but otherwise without premium or penalty. All prepayments under this
Section 2.12 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances. (a)
---------------------------------------------
Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall result in the imposition, modification or applicability of any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by any Lender, or shall result
in the imposition on any Lender or the London interbank market of any other
condition affecting this Agreement, such Lender's Commitment or any
Eurocurrency Loan or Fixed Rate Loan made by such Lender, and the result of
any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurocurrency Loan or Fixed Rate Loan or to reduce the amount
of any sum received or receivable by such Lender hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender to be
material, then the Borrowers
39
<PAGE>
agree jointly and severally to pay such additional amount or amounts as will
compensate such Lender for such additional costs or reduction.
Notwithstanding the foregoing, no Lender shall be entitled to request
compensation under this paragraph with respect to any Competitive Loan if the
change giving rise to such request was known by such Lender to be applicable
to it at the time of submission of the Competitive Bid pursuant to which such
Competitive Loan was made.
(b) If any Lender shall have determined that the adoption after the
date hereof of any law, rule, regulation or guideline regarding capital
adequacy, or any change after the date hereof in any of the foregoing or in
the interpretation or administration of any of the foregoing by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
any Lender's holding company with any request or directive issued after the
date hereof regarding capital adequacy (whether or not having the force of
law) of any Governmental Authority, has or would have the effect of reducing
the rate of return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of this Agreement, such Lender's
Commitment or the Loans made by such Lender pursuant hereto to a level below
that which such Lender or such Lender's holding company could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then the Borrowers agree jointly and severally to pay to such Lender
from time to time such additional amount or amounts as will compensate such
Lender for such reduction.
(c) A certificate of each Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (a) or (b) above, as the case may be, and setting
forth in reasonable detail the manner in which such amount or amounts shall
have been determined, shall be delivered to the Company with a copy to the
Agent and shall be conclusive absent manifest error. The Company shall pay
each Lender the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender to demand
compensation for any increased costs or reduction in
40
<PAGE>
amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender's right to demand such compensation with
respect to such period or any other period, except that no Lender shall be
entitled to any compensation under this Section 2.13 for any costs incurred or
reduction suffered with respect to any date unless such Lender shall have
notified the Company that it will demand compensation for such costs or
reductions under paragraph (c) above not more than 60 days after the later of
(i) such date and (ii) the date on which such Lender shall have become aware
of such costs or reductions. The protection of this Section shall be
available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding any other
------------------
provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
or its Applicable Lending Office to make or maintain any Eurocurrency Loan or
Multicurrency Loan or to give effect to its obligations as contemplated hereby
with respect to any Eurocurrency Loan or Multicurrency Loan or shall limit the
convertibility into Dollars of any Eligible Currency (or make such conversion
commercially impracticable), then, by written notice to the Company and to the
Agent, such Lender may:
(i) declare that Eurocurrency Loans or Multicurrency Loans in any
affected Eligible Currency, as applicable, will not thereafter be made by
such Lender hereunder, whereupon (A) such Lender shall not submit a
Competitive Bid in response to a request for Eurocurrency Competitive
Loans, and (B) any request by any Borrower for Eurocurrency Loans or
Multicurrency Loans in such Eligible Currency, as applicable, (I) shall,
as to such Lender only, be deemed a request for an ABR Loan in Dollars
or, at the option of such Borrower (II) shall be withdrawn by such
Borrower prior to the due time for making such loans; unless, in the case
of clauses (A) and (B), such declaration shall be subsequently withdrawn;
and
(ii) promptly enter into negotiations with the applicable Borrower
and negotiate in good faith to
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<PAGE>
agree to a solution to such illegality, limitation or impracticability;
provided, however, that if such an agreement has not been reached by the
-------- -------
date at which such change in law is given effect with respect to the
outstanding Eurocurrency Loans or Multicurrency Loans of such Lender,
such Borrower shall immediately prepay the affected Loans.
In the event any Multicurrency Lender shall exercise its rights under (i) or
(ii) above with respect to Multicurrency Loans, all payments and prepayments
in respect of such Multicurrency Loans shall thereafter be made in Dollars,
converted at the then prevailing Exchange Rate.
(b) For purposes of this Section 2.14, a notice by any Lender shall
be effective as to each Eurocurrency Loan, if lawful, on the last day of the
Interest Period currently applicable to such Eurocurrency Loan; in all other
cases such notice shall be effective on the date of receipt.
SECTION 2.15. Indemnity. Each Borrower shall indemnify each Lender
---------
against any out-of-pocket loss or expense which such Lender may sustain or
incur as a consequence of (a) any failure by such Borrower to borrow or to
refinance, convert or continue any Loan hereunder after irrevocable notice of
such borrowing, refinancing, conversion or continuation has been given
pursuant to Section 2.03, 2.04 or 2.05, (b) any payment, prepayment or
conversion of a Multicurrency Loan to such Borrower required by any other
provision of this Agreement or otherwise made or deemed made, or any purchase
required pursuant to the provisions of Section 2.20(b), on a date other than
the last day of the Interest Period, if any, applicable thereto or (c) any
default by such Borrower in payment or prepayment of the principal amount of
any Loan or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether by scheduled maturity, acceleration,
irrevocable notice of prepayment or otherwise), including, in each such case,
any loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a Multicurrency Loan.
Such loss or reasonable expense shall include an amount equal to the present
value of the excess, if any, as reasonably determined by such Lender, of (i)
its cost of obtaining the funds for the Loan being paid, prepaid, refinanced
or not borrowed (which in the case of a Eurocurrency Loan will be assumed to
be the
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LIBO Rate applicable thereto) for the period from the date of such payment,
prepayment, refinancing or failure to borrow or refinance to the last day of
the Interest Period for such Loan (or, in the case of a failure to borrow or
refinance the Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such Lender in
reemploying the funds so paid, prepaid or not borrowed or refinanced for such
period or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section and setting forth in reasonable detail the manner in
which such amount or amounts shall have been determined shall be delivered to
such Borrower with a copy to the Agent and shall be conclusive absent manifest
error.
SECTION 2.16. Pro Rata Treatment. Each payment of the Facility
------------------
Fees and each reduction of the Commitments shall be allocated pro rata among
the Lenders in accordance with their respective Commitments. Except as
required under Section 2.14, each payment or prepayment of principal of any
Standby Borrowing and each refinancing or conversion of any Standby Borrowing
shall be allocated pro rata among the Lenders participating in such Borrowing
in accordance with the respective principal amounts of their outstanding
Standby Loans comprising such Borrowing. Each payment of interest on any
Standby Borrowing shall be allocated pro rata among the Lenders participating
in such Borrowing in accordance with the respective amounts of accrued and
unpaid interest on their outstanding Standby Loans comprising such Borrowing.
Except as required under Section 2.14 or 2.23(g), each payment or prepayment
of principal of any Multicurrency Borrowing and each refinancing or conversion
of any Multicurrency Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective principal
amounts of their outstanding Multicurrency Loans comprising such Borrowing.
Each payment of interest on any Multicurrency Borrowing shall be allocated pro
rata among the Lenders participating in such Borrowing in accordance with the
respective amounts of accrued and unpaid interest on their outstanding
Multicurrency Loans comprising such Borrowing. Each payment of principal of
any Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective principal
amounts of their outstanding Competitive Loans comprising such Borrowing.
Each payment of interest on any Competitive Borrowing shall
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be allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made hereunder,
the Agent may, in its discretion, round each Lender's percentage of such
Borrowing to the next higher or lower whole Dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it
------------------
shall, through the exercise of a right of banker's lien, setoff or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other
means, obtain payment (voluntary or involuntary) in respect of any Standby
Loan or Standby Loans or L/C Disbursement as a result of which the unpaid
principal portion of its Standby Loans and participations in L/C Disbursements
shall be proportionately less than the unpaid principal portion of the Standby
Loans and participations in L/C Disbursements of any other Lender, it shall be
deemed simultaneously to have purchased from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the Standby Loans and L/C Exposure of such other Lender, so
that the aggregate unpaid principal amount of the Standby Loans and L/C
Exposure and participations in the Standby Loans and L/C Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Standby Loans and L/C Exposure then outstanding as the principal
amount of its Standby Loans and L/C Exposure prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal
amount of all Standby Loans and L/C Exposure outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
--------
however, that, if any such purchase or purchases or adjustments shall be made
-------
pursuant to this Section 2.17 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. Any Lender holding a participation in a
Standby Loan or L/C Disbursement deemed to have been so purchased may exercise
any and all rights of banker's lien, setoff or counterclaim with respect to
any and all moneys owing to such Lender by
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reason thereof as fully as if such Lender had made a Standby Loan in the
amount of such participation.
SECTION 2.18. Payments. (a) The relevant Borrower shall make each
--------
payment (including principal of or interest on any Borrowing or any L/C
Disbursement or any Fees or other amounts) hereunder not later than 12:00
noon, New York City time, on the date when due in Dollars or the applicable
currency, as the case may be, to the Agent (other than Fronting Bank Fees,
which shall be paid directly to the applicable Fronting Bank) at its offices
at 270 Park Avenue, New York, New York, in immediately available funds (or, in
the case of Multicurrency Loans, such other time and place as shall be
specified in the applicable Multicurrency Addendum).
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of interest or Fees, if
applicable.
SECTION 2.19. Taxes. (a) Any and all payments by or on account of
-----
any obligation of any Borrower hereunder shall be made free and clear of and
without deduction for any Taxes or Other Taxes; provided that if any Borrower
--------
shall be required to deduct any Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section) the Agent, Lender or Fronting Bank (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrowers agree jointly and severally to pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) Each Borrower shall indemnify the Agent, each Lender and each
Fronting Bank, within 10 days after written demand therefor, for the full
amount of any Taxes or Other Taxes (including Taxes or Other Taxes imposed or
asserted on amounts payable under this Section) paid by the Agent, such
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Lender or such Fronting Bank, as the case may be, with respect to payments by
or on account of any obligation of any Borrower hereunder and any liability
(including penalties, interest and reasonable expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to a Borrower by a Lender
or Fronting Bank, or by the Agent on its own behalf or on behalf of a Lender
or Fronting Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Taxes or Other
Taxes by any Borrower to a Governmental Authority, the Borrower shall deliver
to the Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the tax return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax on payments under this Agreement pursuant to the
law of the Relevant Jurisdiction or any treaty to which it is a party shall
deliver to the Borrower (with a copy to the Agent), at the required time or
times, properly completed and executed forms and other documentation (if any)
prescribed by applicable law that will permit such payments to be made without
withholding or at a reduced rate.
SECTION 2.20. Duty to Mitigate; Assignment of Commitments Under
-------------------------------------------------
Certain Circumstances. (a) Any Lender or Fronting Bank claiming any
----------------------
additional amounts payable pursuant to Section 2.13, 2.15 or 2.19, or
exercising its rights under Section 2.14, shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Company or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may
thereafter accrue or avoid the circumstances giving rise to such exercise and
would not, in the sole determination of such Lender or Fronting Bank, be
otherwise disadvantageous to such Lender or Fronting Bank.
(b) In the event that (i) any Lender or Fronting Bank shall have
delivered a notice or certificate pursuant to Section 2.13 or 2.14, (ii) any
Borrower shall be required
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to make additional payments to any Lender under Section 2.19, (iii) any
Lender or Fronting Bank shall become, or a substantial part of the property of
any Lender or Fronting Bank shall become, the subject of any receivership or
similar proceeding (a "Bank Proceeding") or (iv) any Lender or Fronting Bank
shall default on its commitment to lend hereunder or under any applicable
Multicurrency Addendum (a "Bank Default"), the Company shall have the right,
at its own expense, upon notice to such Lender or Fronting Bank and the Agent,
(x) to terminate the Commitment of such Lender or Fronting Bank or (y) to
require such Lender or Fronting Bank to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in Section 9.05)
all interests, rights and obligations contained hereunder to another financial
institution approved by the Agent (which approval shall not be unreasonably
withheld) or to another Lender which shall assume such obligations; provided
that (A) no such termination or assignment shall conflict with any law, rule
or regulation or order of any Governmental Authority and (B) the assignee or
the Company, as the case may be, shall pay to the affected Lender in
immediately available funds on the date of such termination or assignment the
principal of and the interest accrued to the date of payment on the Loans made
by it hereunder and all other amounts accrued for its account or owed to it
hereunder.
SECTION 2.21. Borrowing Subsidiaries. The Company may designate
----------------------
any Subsidiary as a Borrowing Subsidiary. Upon the receipt by the Agent of a
Borrowing Subsidiary Counterpart of this Agreement in the form of Exhibit C
executed by such Subsidiary and the Company, and unless and until the Company
shall have executed a Borrowing Subsidiary Termination in the form of Exhibit
D, such Subsidiary shall be a Borrowing Subsidiary and a party to this
Agreement.
SECTION 2.22. Terms of Multicurrency Facilities. (a) Each of the
----------------------------------
Company and one or more Multicurrency Lenders may in its discretion from time
to time agree that one or more Borrowing Subsidiaries may borrow Multicurrency
Loans on a revolving basis from any one or more Multicurrency Lenders by
delivering a Multicurrency Addendum to the Agent, executed by the Company,
each such Borrowing Subsidiary and each such Multicurrency Lender; provided,
--------
however, that on the effective date of such election (i) an Exchange Rate with
-------
respect to each Eligible Currency covered by such Multicurrency Addendum shall
be determinable by
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reference to the Reuters currency pages (or comparable publicly available
screen) and (ii) no Default or Event of Default shall have occurred and be
continuing. Each Borrowing Subsidiary and, by agreeing to any Multicurrency
Addendum, each relevant Multicurrency Lender, acknowledges and agrees that
each reference in this Agreement to any Lender shall, to the extent
applicable, be deemed to be a reference to such Multicurrency Lender, subject
to the second sentence of the definition of such term.
(b) Each Multicurrency Addendum shall set forth (i) the maximum
amount (expressed in Dollars and without duplication) available to be borrowed
from all Multicurrency Lenders under such Multicurrency Addendum (as the same
may be reduced from time to time pursuant to Section 2.23(c) or 2.23(d), a
"Multicurrency Facility Maximum Borrowing Amount") and (ii) with respect to
each Multicurrency Lender party to such Multicurrency Addendum, the maximum
amount (expressed in Dollars and without duplication) available to be borrowed
from such Multicurrency Lender thereunder (as the same may be reduced from
time to time pursuant to Section 2.23(c) or 2.23(d), a "Multicurrency Lender
Maximum Borrowing Amount"). In no event shall the aggregate of all the
Multicurrency Facility Maximum Borrowing Amounts exceed $150,000,000. In no
event shall the aggregate of all Multicurrency Lender Maximum Borrowing
Amounts in respect of any Multicurrency Lender at any time exceed such
Lender's Commitment. Except as provided herein, the making of Multicurrency
Loans by a Multicurrency Lender under a Multicurrency Addendum shall under no
circumstances reduce the amount available to be borrowed from such Lender
under any other Multicurrency Addendum to which such Lender is a party.
(c) Except as otherwise required by applicable law, in no event
shall the Multicurrency Lenders have the right to accelerate the Multicurrency
Loans outstanding under any Multicurrency Addendum or to terminate their
commitments (if any) thereunder to make Multicurrency Loans prior to the
stated termination date in respect thereof, except that such Multicurrency
Lenders shall, in each case, have such rights upon an acceleration of the
Loans and a termination of the Commitments pursuant to Article VI,
respectively. No Multicurrency Loan may be made if (i) an Exchange Rate with
respect to such Eligible Currency cannot be determined, (ii) after giving
effect thereto, (A) the sum of the Standby Credit Exposure and the L/C
Exposure of any Lender would exceed such Lender's Commitment, (B) the Dollar
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Equivalent of the aggregate principal amount of outstanding Multicurrency
Loans denominated in a specified Eligible Currency would exceed the applicable
Multicurrency Facility Maximum Borrowing Amount or (C) the sum of the
aggregate Standby Credit Exposure, the aggregate Competitive Loan Exposure and
the L/C Exposure would exceed the Total Commitment.
(d) The applicable Borrower and the applicable Multicurrency
Lenders, or, if so specified in the relevant Multicurrency Addendum, an agent
acting on their behalf, shall furnish to the Agent, promptly following the
making, payment or prepayment of each Multicurrency Loan, and at any other
time at the reasonable request of the Agent, a statement setting forth the
outstanding Multicurrency Loans made under such Multicurrency Addendum.
(e) The relevant Borrowing Subsidiary or the Company shall furnish
to the Agent copies of any amendment, supplement or other modification to the
terms of any Multicurrency Addendum promptly after the effectiveness thereof.
(f) The Company may terminate any Multicurrency Addendum in its
sole discretion if there are not any Loans outstanding thereunder (or, if
there are Loans outstanding thereunder, with the consent of each Multicurrency
Lender party thereto), by written notice to the Agent, which notice shall be
executed by the Company, each relevant Borrowing Subsidiary and, if their
consent is required, each such Multicurrency Lender. Once notice of such
termination is received by the Agent, such Multicurrency Addendum and the
loans and other obligations outstanding thereunder shall immediately cease to
be subject to the terms of this Agreement.
SECTION 2.23. Currency Fluctuations, etc. (a) Not later than 1:00
---------------------------
p.m., New York City time, on each Calculation Date, the Multicurrency Agents
and the Agent shall (i) determine the Exchange Rate as of such Calculation
Date with respect to each Eligible Currency covered by a Multicurrency
Addendum and (ii) give notice thereof to the Lenders, the Company and the
relevant Borrowing Subsidiaries. The Exchange Rates so determined shall
become effective on the first Business Day immediately following the relevant
Calculation Date (a "Reset Date") and shall remain effective until the next
succeeding Reset Date.
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(b) Not later than 5:00 p.m., New York City time, on each Reset
Date and the date of each Borrowing, the Agent shall (i) determine the Dollar
Equivalent of the Multicurrency Loans then outstanding (after giving effect to
any Multicurrency Loans to be made or repaid on such date) and (ii) notify the
Lenders, the Company and the relevant Borrowing Subsidiaries of the results of
such determination.
(c) If, on any Reset Date or the date of any Borrowing (after
giving effect to (i) any Loans to be made or repaid on such date and (ii) any
amendment, supplement or other modification to any Multicurrency Addendum
effective on such date of which the Agent has received notice), the sum of (A)
the aggregate outstanding Dollar Standby Extensions of Credit of any Lender
and (B) the L/C Exposure of such Lender exceeds the Dollar Standby Credit
Overage of such Lender (the amount of such excess being called the "Dollar
Standby Credit Excess"), then such Lender's Multicurrency Lender Maximum
Borrowing Amount under each Multicurrency Addendum to which such Lender is a
party shall be reduced on such date by an amount equal to the product of such
Dollar Standby Credit Excess times a fraction the numerator of which shall
equal the Multicurrency Lender Maximum Borrowing Amount under such
Multicurrency Addendum and the denominator of which shall equal the aggregate
of all the Multicurrency Lender Maximum Borrowing Amounts of such Lender.
After giving effect to any such reduction in Multicurrency Lender Maximum
Borrowing Amounts, the Multicurrency Facility Maximum Borrowing Amount with
respect to each Multicurrency Addendum shall in turn be reduced to an amount
equal to the aggregate of the Multicurrency Lender Maximum Borrowing Amounts
of all Lenders party to such Multicurrency Addendum. Reductions in
Multicurrency Facility Maximum Borrowing Amounts and Multicurrency Lender
Maximum Borrowing Amounts pursuant to this Section 2.23(c) shall be effective
until the amount thereof shall be recalculated by the Agent on the next
succeeding Reset Date or date of a Borrowing, and shall not be deemed to
reduce the stated amount of any commitment of any Multicurrency Lender in
respect of any Multicurrency Addendum.
(d) If, on any Reset Date or date of a Borrowing (after giving
effect to (i) any Loans to be made or repaid on such date, (ii) any amendment,
supplement or other modification to any Multicurrency Addendum effective on
such date of which the Agent has received notice and (iii) any reduction in
the Multicurrency Facility Maximum Borrowing Amounts pursuant to Section
2.23(c) effective on such date),
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the sum of (A) the aggregate outstanding Dollar Standby Extensions of Credit
of all the Lenders, (B) the aggregate Competitive Loan Exposure and (C) the
L/C Exposure exceeds the Dollar Facility Overage (the amount of such excess
being called the "Dollar Facility Excess"), then the Multicurrency Facility
Maximum Borrowing Amount under each Multicurrency Addendum shall be reduced on
such date by an amount equal to the product of such Dollar Facility Excess
times a fraction the numerator of which shall equal the Multicurrency Facility
Maximum Borrowing Amount under such Multicurrency Addendum and the denominator
of which shall equal the aggregate of the Multicurrency Facility Maximum
Borrowing Amounts with respect to all Multicurrency Addenda. Each such
reduction in the Multicurrency Facility Maximum Borrowing Amount under a
Multicurrency Addendum shall in turn reduce the respective Multicurrency
Lender Maximum Borrowing Amounts of each Multicurrency Lender party to such
Multicurrency Addendum, pro rata on the basis of the respective Multicurrency
Lender Maximum Borrowing Amounts of such Multicurrency Lenders immediately
prior to such reduction. Reductions in Multicurrency Facility Maximum
Borrowing Amounts and Multicurrency Lender Maximum Borrowing Amounts pursuant
to this Section 2.23(d) shall be effective until the amount thereof shall be
recalculated by the Agent on the next succeeding Reset Date or date of a
Borrowing, and shall not be deemed to reduce the stated amount of any
commitment of any Multicurrency Lender in respect of any Multicurrency
Addendum.
(e) If on the last day of any Interest Period with respect to
Multicurrency Loans outstanding under any Multicurrency Addendum the Dollar
Equivalent of all Multicurrency Loans outstanding under such Multicurrency
Addendum exceeds 105% of the Multicurrency Facility Maximum Borrowing Amount
with respect thereto (after giving effect to any reductions therein effected
pursuant to Section 2.23(c) or 2.23(d) on such date) the relevant Borrowing
Subsidiary shall on such day (i) increase the Multicurrency Facility Maximum
Borrowing Amount with respect to such multicurrency facility in accordance
with Section 9.04(a) and/or (ii) prepay Multicurrency Loans, in either case in
an aggregate amount such that, after giving effect thereto, (x) the Dollar
Equivalent of all such Multicurrency Loans shall be equal to or less than such
Multicurrency Facility Maximum Borrowing Amount and (y) the Dollar Equivalent
of the Multicurrency Loans of each relevant Multicurrency Lender shall be
equal to or less than such Multicurrency Lender's Multicurrency Lender Maximum
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Borrowing Amount with respect to such Multicurrency Addendum.
(f) If, on any Reset Date, the sum of the aggregate Standby Credit
Exposures, the aggregate Competitive Loan Exposures and the L/C Exposure
exceeds the Total Commitment, the Borrowers shall, within two Business Days
thereafter, repay or prepay Loans in an aggregate amount at least equal to the
amount of such excess.
(g) If, on any Reset Date, the sum of the Standby Credit Exposure
and the L/C Exposure of any Lender exceeds such Lender's Commitment, then,
within two Business Days thereafter, the Borrowers shall prepay Loans in
accordance with this Agreement, in an aggregate amount such that, after giving
effect thereto and to each repayment or prepayment of Loans pursuant to
paragraph (f) above, the sum of the Standby Credit Exposure and the L/C
Exposure of such Lender shall be equal to or less than such Lender's
Commitment.
(h) The Agent shall promptly notify the relevant Lenders of the
amount of any reductions in Multicurrency Facility Maximum Borrowing Amounts
or Multicurrency Lender Maximum Borrowing Amounts required pursuant to this
Section 2.23.
SECTION 2.24. Letters of Credit. (a) General. Any Borrower may
------------------ --------
request the issuance of a Letter of Credit, denominated in Dollars, in a form
reasonably acceptable to the Agent and the applicable Fronting Bank,
appropriately completed, for its account, at any time and from time to time
while the Commitments remain in effect. Each Fronting Bank agrees, subject to
the terms and conditions set forth herein and in its Fronting Bank Agreement,
to issue Letters of Credit requested by the Borrowers in an aggregate amount
at any time outstanding not to exceed the amount of its L/C Commitment. This
Section shall not be construed to impose an obligation upon any Fronting Bank
to issue any Letter of Credit that is inconsistent with the terms and
conditions of this Agreement or its Fronting Bank Agreement.
(b) Notice of Issuance; Certain Conditions. In order to request
---------------------------------------
the issuance of a Letter of Credit, the relevant Borrower shall hand deliver
or telecopy to the Fronting Bank and the Agent (reasonably in advance of the
requested date of issuance) a notice requesting the issuance of a Letter of
Credit, the date of issuance, the date on which such Letter of Credit is to
expire (which shall comply
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with paragraph (c) below), the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. Following receipt of such notice
and prior to the issuance of the requested Letter of Credit, the Agent shall
notify the Borrowers and the applicable Fronting Bank of the amount of the
Standby Credit Exposure, the Competitive Loan Exposure and the L/C Exposure
after giving effect to (i) the issuance, amendment, renewal or extension of
such Letter of Credit, (ii) the issuance or expiration of any other Letter of
Credit that is to be issued or will expire prior to the requested date of
issuance of such Letter of Credit and (iii) the borrowing or repayment of any
Loans that (based upon notices delivered to the Agent by the Borrowers) are to
be borrowed or repaid prior to the requested date of issuance of such Letter
of Credit. A Letter of Credit shall be issued only if, and upon issuance of
each Letter of Credit the relevant Borrower shall be deemed to represent and
warrant that, after giving effect to such issuance (A) the L/C Exposure shall
not exceed $50,000,000, and (B) the sum of (x) the Standby Credit Exposure,
(y) the Competitive Loan Exposure and (z) the L/C Exposure shall not exceed
the Total Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the
----------------
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days
prior to the Maturity Date, unless such Letter of Credit expires by its terms
on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and
---------------
without any further action on the part of the Fronting Bank or the Lenders,
the Fronting Bank hereby grants to each Lender, and each such Lender hereby
acquires from the Fronting Bank, a participation in such Letter of Credit
equal to such Lender's Pro Rata Percentage from time to time of the aggregate
amount available to be drawn under such Letter of Credit, effective upon the
issuance of such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Agent, for the account of the Fronting Bank, such Lender's Pro Rata
Percentage as of the due date provided in paragraph (e) below (or any earlier
date on which the Commitments shall be terminated pursuant to Article VI) of
each L/C Disbursement made by the Fronting Bank and not reimbursed by the
relevant Borrower (or, if applicable, another party pursuant to its
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obligations under any other Loan Document) forthwith on the date due as
provided in paragraph (e) below. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default (or any termination of the Commitments pursuant
to Article VI), and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Fronting Bank shall make any L/C
--------------
Disbursement in respect of a Letter of Credit, the applicable Borrower shall
reimburse the Agent for the full amount thereof not later than 10:00 a.m., New
York City time, on the second Business Day following the date of such L/C
Disbursement. If the applicable Borrower shall fail to pay any amount
required to be paid under this paragraph on or prior to the time specified in
the preceding sentence, then (i) such unpaid amount shall bear interest, for
each day from and including the date specified for payment of such L/C
Disbursement in the preceding sentence, to but excluding the date of payment,
at a rate per annum equal to the interest rate applicable to overdue ABR Loans
pursuant to Section 2.09, (ii) the Agent shall notify the Fronting Bank and
the Lenders thereof, (iii) each Lender shall comply with its obligation under
paragraph (d) above by wire transfer of immediately available funds, in the
same manner as provided in Section 2.02(a) with respect to Loans made by such
Lender (and Section 2.02(a) shall apply, mutatis mutandis, to the payment
------- --------
obligations of the Lenders) and (iv) the Agent shall promptly pay to the
Fronting Bank amounts so received by it from the Lenders. The Agent shall
promptly pay to the Fronting Bank any amounts received by it from the
applicable Borrower pursuant to this paragraph prior to the time that any
Lender makes any payment pursuant to paragraph (d) above; any such amounts
received by the Agent thereafter shall be promptly remitted by the Agent to
the Lenders that shall have made such payments and to the Fronting Bank, as
their interests may appear.
(f) Obligations Absolute. Each Borrower's obligations to reimburse
---------------------
L/C Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
54
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with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
any Borrower, any other party guaranteeing, or otherwise obligated with
respect to, any Borrower, any Subsidiary or other Affiliate thereof or
any other person may at any time have against the beneficiary under any
Letter of Credit, the Fronting Bank, the Agent or any Lender or any other
person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Fronting Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Fronting Bank, the Lenders, the Agent or any other person or any other
event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of any Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrowers hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Fronting Bank. However, the
foregoing shall not be construed to excuse the Fronting Bank from liability to
any Borrower to the extent of any direct damages (as opposed to consequential
damages,
55
<PAGE>
claims in respect of which are hereby waived by the Borrowers to the extent
permitted by applicable law) suffered by any Borrower that are caused by such
Fronting Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Fronting Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Fronting Bank's
exclusive reliance on the documents presented to it under such Letter of
Credit as to any and all matters set forth therein, including reliance on the
amount of any draft presented under such Letter of Credit, whether or not the
amount due to the beneficiary thereunder equals the amount of such draft and
whether or not any document presented pursuant to such Letter of Credit proves
to be insufficient in any respect, if such document on its face appears to be
in order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or invalid or
any statement therein proves to be inaccurate or untrue in any respect
whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall,
in each case, be deemed not to constitute wilful misconduct or gross
negligence of the Fronting Bank.
(g) Disbursement Procedures. A Fronting Bank shall, promptly
------------------------
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit to determine whether such
documents appear on their face to conform to the terms and conditions of such
Letter of Credit. Such Fronting Bank shall also as promptly as possible give
telephonic notification, confirmed by telecopy, to the Agent and the relevant
Borrower of such demand for payment and whether such Fronting Bank has made or
will make an L/C Disbursement thereunder; provided that any failure to give or
--------
delay in giving such notice shall not relieve the relevant Borrower of its
obligation to reimburse such Fronting Bank and the Lenders with respect to any
such L/C Disbursement. The Agent shall promptly give each Lender notice
thereof.
(h) Interim Interest. If a Fronting Bank shall make any L/C
-----------------
Disbursement in respect of a Letter of Credit, then, unless the relevant
Borrower shall reimburse such L/C
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<PAGE>
Disbursement in full on the date of such L/C Disbursement, the unpaid amount
thereof shall bear interest for the account of such Fronting Bank, for each
day from and including the date of such L/C Disbursement, to but excluding the
earlier of the date of payment or the date on which interest shall commence to
accrue thereon as provided in paragraph (e) above, at the rate per annum that
would apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of Fronting Bank. A Fronting Bank may
----------------------------------------
resign at any time by giving 180 days' prior written notice to the Agent, the
Lenders and the Borrowers, and may be removed at any time by the Borrowers by
notice to such Fronting Bank, the Agent and the Lenders. Subject to the next
succeeding paragraph, upon the acceptance of any appointment as a Fronting
Bank hereunder by a successor Fronting Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the
retiring Fronting Bank and the retiring Fronting Bank shall be discharged from
its obligations to issue additional Letters of Credit hereunder. At the time
such removal or resignation shall become effective, the Borrowers shall pay
all accrued and unpaid fees owed to such Fronting Bank pursuant to Section
2.06(b). The acceptance of any appointment as an Fronting Bank hereunder by a
successor Lender shall be evidenced by a Fronting Bank Agreement entered into
by such successor, and, from and after the effective date of such agreement,
(i) such successor Fronting Bank shall have all the rights and obligations of
the previous Fronting Bank under this Agreement and the other Loan Documents
and (ii) references herein and in the other Loan Documents to the term
"Fronting Bank" shall be deemed to refer to such successor or to any previous
Fronting Bank, or to such successor and all previous Fronting Banks, as the
context shall require. After the resignation or removal of a Fronting Bank
hereunder, the retiring Fronting Bank shall remain a party hereto and shall
continue to have all the rights and obligations of a Fronting Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit
issued by it prior to such resignation or removal, but shall not be required
to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
-----------------------
and be continuing, the Borrowers shall, on the Business Day the Company
receives notice from the Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Lenders holding participations
57
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in outstanding Letters of Credit representing greater than 50% of the
aggregate undrawn amount of all outstanding Letters of Credit) thereof and the
amount to be deposited, deposit in an account with the Agent, for the benefit
of the Lenders, an amount in cash equal to the undrawn portion of the L/C
Exposure as of such date. Such deposit shall be held by the Agent as
collateral for the payment and performance of the Obligations. The Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the
investment of such deposits in cash or cash equivalents, which investments
shall be made at the option and sole discretion of the Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments
shall accumulate in such account. Moneys in such account shall (i)
automatically be applied by the Agent to reimburse the Fronting Banks for L/C
Disbursements from time to time for which they shall not have been reimbursed
in accordance with paragraph (e) above, (ii) be held for the satisfaction of
the portion of the reimbursement obligations of the Borrowers for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), be applied to satisfy
the Obligations. If the Company and the other Borrowers are required to
provide an amount of cash collateral hereunder as a result of the occurrence
and continuance of an Event of Default, such amount (to the extent not applied
as aforesaid) shall be returned to the persons depositing the same within
three Business Days after all Events of Default have been cured or waived.
(k) Termination or Reduction of L/C Commitment. The Company may
-------------------------------------------
permanently terminate, or from time to time in part permanently reduce, the
L/C Commitment, in each case upon at least one Business Day's prior written or
facsimile notice to the Agent and each Fronting Bank; provided that, after
--------
giving effect to such termination or reduction, the aggregate L/C Commitment
shall not be less than the L/C Exposure at such time.
58
<PAGE>
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. (a) This Agreement shall become
-------------
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.04):
(i) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation
from such party of execution of a counterpart hereof by such party);
(ii) receipt by the Agent, on behalf of itself, the Lenders and the
Fronting Banks, of (i) an opinion of Thomas M. Roehlk, Senior Vice
President, General Counsel and Secretary for the Company, substantially
in the form of Exhibit F-1 hereto, and (ii) an opinion of Wachtell,
Lipton, Rosen & Katz, counsel to the Company, substantially in the form
of Exhibit F-2 hereto, each dated the Effective Date and covering such
additional matters relating to the transactions contemplated hereby as
the Required Lenders may reasonably request;
(iii) receipt by the Agent of an opinion of Cravath, Swaine & Moore,
counsel for the Agent, substantially in the form of Exhibit G hereto;
(iv) receipt by the Agent of a certificate, dated the Effective
Date, signed by the chief financial officer, the chief accounting
officer, or the treasurer of the Company to the effect set forth in
clauses (b) and (c) of Section 3.02;
(v) receipt by the Agent of a certificate of each of the Company and
Dart stating that none of the Company, Dart or any subsidiary of either
such corporation is or will at any time be liable as a borrower,
guarantor or otherwise in respect of any indebtedness outstanding or to
be outstanding under the Credit Agreement dated as of June 15, 1994 among
Premark, the banks named therein and Morgan Guaranty Trust Company of New
York, as agent, or under any agreement replacing such Credit Agreement.
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(vi) receipt by the Agent of all documents it may reasonably request
prior to the date hereof relating to the existence of the Company or any
other Borrower, the corporate authority of the Company and any such other
Borrower to enter into and the validity of this Agreement and the other
Loan Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Agent;
(vii) receipt by the Agent of all governmental and third party
approvals necessary or advisable in connection with the transactions
contemplated by this Agreement;
(viii) receipt by the Agent of (A) the Registration Statement, as
amended, and (B) the Report on 10-Q of Premark for the fiscal quarter
ended March 30, 1996, if publicly available on or prior to the Effective
Date.
SECTION 3.02. Borrowings. The obligation of any Lender to make a
----------
Loan on the occasion of any Borrowing (including a Multicurrency Borrowing)
and of any Fronting Bank to issue Letters of Credit hereunder is subject to
the satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.03 or 2.04, as the case may be, or, in the case of the issuance
of a Letter of Credit, the applicable Fronting Bank and the Agent shall
have received a notice requesting the issuance of such Letter of Credit
as required by Section 2.24(b);
(b) the fact that, immediately prior to and after such Borrowing, no
Default shall have occurred and be continuing; and
(c) the fact that the representations and warranties of the Company
contained in this Agreement shall be true on and as of the date of such
Borrowing (except the representations and warranties set forth in
Sections 4.04(b), 4.05(i), 4.07 and 4.12, which need be true only on and
as of the Effective Date).
Each Borrowing hereunder shall be deemed to be a representation and warranty
by the Borrowers on the date of such Borrowing as to the facts specified in
clauses (b) and (c) of this Section. An election by a Borrower to convert
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or continue a Standby Loan pursuant to Section 2.05 is not a Borrowing subject
to the requirements of this Section.
SECTION 3.03. Initial Borrowing by Each Borrowing Subsidiary. The
-----------------------------------------------
obligation of any Lender or Fronting Bank to make a Loan or issue a Letter of
Credit on the occasion of the first Borrowing by or issuance of a Letter of
Credit for the account of each Borrowing Subsidiary is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of (i) a Borrowing Subsidiary Counterpart
executed by such Borrowing Subsidiary and acknowledged by the Company,
(ii) certified resolutions of the board of directors of such Borrowing
Subsidiary authorizing the execution, delivery and performance of this
Agreement (including, without limitation, the provisions of Article VIII)
and the other Loan Documents and (iii) evidence of the incumbency and
specimen signature of the officer or officers executing the documents
referenced in clause (i) or (ii) of this paragraph (a);
(b) receipt by the Agent, on behalf of itself, the Lenders and the
Fronting Banks, of an opinion of counsel for the Company dated the date
of such Borrowing or issuance of a Letter of Credit and covering such
matters as the Agent may reasonably request;
(c) receipt by the Agent of all documents it may reasonably
request relating to the existence of the applicable Borrowing Subsidiary,
the corporate authority of such Borrowing Subsidiary to enter into and
the validity of this Agreement and the other Loan Documents, and any
other matters relevant hereto, all in form and substance satisfactory to
the Agent; and
(d) receipt by the Agent of all governmental and third party
approvals necessary or advisable in connection with the execution,
delivery and performance by such Borrowing Subsidiary of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent, each of the
Lenders and each of the Fronting Banks as follows:
SECTION 4.01. Corporate Existence and Power. (a) Each Borrower is
-----------------------------
a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation.
(b) The Company has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
--------------------------------------------
Contravention. The execution, delivery and performance by each Borrower of
-------------
this Agreement and each other Loan Document are within its corporate powers,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of its certificate of incorporation or by-laws
of or of any agreement, judgment, injunction, order, decree or other
instrument binding upon such Borrower or result in the creation or imposition
of any Lien on any asset of such Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement and each other Loan
--------------
Document to which each Borrower is a party constitutes a valid and binding
agreement of such Borrower, enforceable in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
SECTION 4.04. Financial Information. (a) The combined balance
---------------------
sheet of the Company and its subsidiaries as of December 30, 1995 and the
related combined statements of income and cash flows for the fiscal year then
ended, reported on by Price Waterhouse LLP and set forth in the Registration
Statement, fairly present, in conformity with GAAP, the combined financial
position of the Company and its
62
<PAGE>
subsidiaries as of such date and their combined results of operations and cash
flows for the fiscal year then ended.
(b) Except as disclosed in the Registration Statement, since
December 30, 1995, there has been no material adverse change in the business,
financial position, results of operations or prospects of the Company and its
Consolidated Subsidiaries, considered as a whole.
(c) On and as of the date of the initial Borrowing or issuance of a
Letter of Credit under this Agreement, the Borrowers will own all of the
Tupperware Assets (as defined in the Distribution Agreement), as reflected in
the pro forma financial statements of the Company set forth in the
Registration Statement (other than assets since disposed of prior to the date
of such Borrowing in the ordinary course of business and assets described on
Schedule 4.04).
SECTION 4.05. Litigation. Except as disclosed in the Registration
----------
Statement, there is no action, suit or proceeding pending against, or to its
knowledge threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency
or official in which there is a reasonable possibility of an adverse decision
(i) which could result in a Material Adverse Effect, or (ii) which in any
manner draws into question the validity of this Agreement or any other Loan
Document.
SECTION 4.06. Compliance with Employee Benefit Plans. Each member
--------------------------------------
of the ERISA Group has fulfilled its obligations under the minimum funding
standards of ERISA and the Internal Revenue Code with respect to each Plan and
is in compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each Plan.
No member of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code in respect of any
Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or made any amendment to any Plan which has resulted or
could result in the imposition of a Lien or the posting of a bond or other
security under ERISA or the Internal Revenue Code or (iii) incurred any
liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA; any of which alone or in the aggregate
could reasonably be expected to result in a material liability to the ERISA
Group.
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<PAGE>
SECTION 4.07. Environmental Matters. Except as disclosed in the
---------------------
Registration Statement, there are no matters or activities involving the
Company or its Consolidated Subsidiaries in respect of Environmental Laws
which such Borrower reasonably believes will have a Material Adverse Effect.
SECTION 4.08. Taxes. The Company and its Subsidiaries have filed
-----
all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
or any Subsidiary. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of taxes or payments in lieu of taxes
are, in the opinion of the Company, adequate.
SECTION 4.09. Subsidiaries. Each of the Material Subsidiaries is a
------------
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Company is not an
-------------------------
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. Full Disclosure. All written information heretofore
---------------
furnished by or on behalf of the Company to the Agent or any Lender for
purposes of or in connection with this Agreement is, and all such information
hereafter furnished by or on behalf of the Company to the Agent or any Lender
will be, true and accurate in all material respects on the date as of which
such information is stated or certified. The Borrowers have disclosed to the
Lenders in writing any and all facts which, in the reasonable judgment of the
Borrowers, materially and adversely affect or may affect (to the extent the
Borrowers can now reasonably foresee), the business, operations or financial
condition of the Company and its Consolidated Subsidiaries, taken as a whole,
or the ability of any Borrower to perform its obligations under this
Agreement.
SECTION 4.12. Solvency. On and as of the date of the consummation
--------
of the Spin-off Transactions and after giving effect thereto and to the
application of the proceeds
64
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of all prior or simultaneous extensions of credit hereunder, (A) the fair
value of the assets of the Company and its subsidiaries on a consolidated
basis will exceed the debts and liabilities, direct, subordinated, contingent
or otherwise, of the Company and its subsidiaries on a consolidated basis; (B)
the present fair saleable value of the property of the Company and its
subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Company and its subsidiaries
on a consolidated basis on their debts and other liabilities, direct,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (C) the Company and its subsidiaries on a
consolidated basis will be able to pay their debts and liabilities, direct,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (D) the Company and its subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted following the Effective Date.
SECTION 4.13. Federal Reserve Regulations. (a) None of the
----------------------------
Borrowers or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying margin stock (as defined in Regulation U).
(b) No part of the proceeds of any Loan or any Letter of Credit
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of, or
that is inconsistent with, the provisions of the Regulations of the Board of
Governors of the Federal Reserve System of the United States of America,
including Regulation G, U or X.
65
<PAGE>
ARTICLE V
COVENANTS
The Company agrees that, so long as any Lender has any Commitment
hereunder or the principal of or interest on any Loan, any Fees, any L/C
Disbursements or any other expenses or amounts payable in connection herewith
shall be unpaid:
SECTION 5.01. Information. The Company will deliver to each of the
-----------
Lenders and the Fronting Banks:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Company, a consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income and cash
flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all certified as to
fairness of presentation and conformity with generally accepted
accounting principles by Price Waterhouse LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the
Company (or, in the case of the quarter ending March 30, 1996, within the
later of 60 days after the end of such quarter and the required filing
date for such financial statements under the rules and regulations of the
Securities and Exchange Commission), a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such quarter
and the related consolidated statements of income and the related
consolidated statement of cash flows for such quarter and for the portion
of the Company's fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the Company's previous fiscal
year, all certified (subject to normal year-end adjustments) as to
fairness of presentation and conformity with generally accepted
accounting principles by the chief financial officer, the chief
accounting officer or the treasurer of the Company;
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(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer, the chief accounting officer or the treasurer of
the Company (i) setting forth in reasonable detail the calculations
required to establish whether the Company was in compliance with the
requirements of Sections 5.03(b), 5.03(c), 5.03(i), 5.03(k), 5.06, 5.07
and 5.08 on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action
which the Company is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a report of the firm of
independent public accountants which reported on such statements stating
that nothing came to their attention that caused them to believe the
Company was not in compliance with Sections 5.03(b), 5.03(c), 5.03(i),
5.03(k), 5.06, 5.07 and 5.08, insofar as such Sections relate to
accounting matters;
(e) within five days after the chief financial officer, the chief
accounting officer or the treasurer of the Company obtains knowledge of
any Default, if such Default is then continuing, a certificate of any of
them setting forth the details thereof and the action which the Company
is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) within the respective time frames specified in clauses (a) and
(b) above, reports on Forms 10-K and 10-Q (or their equivalents), and
promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form
S-8 or its equivalent) and reports on Form 8-K (or its equivalent) which
the Company shall have filed with the Securities and Exchange commission;
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(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, which alone or together with any
other reportable event could reasonably be expected to result in
liability to the ERISA Group in an aggregate amount exceeding $5,000,000,
a copy of the notice of such reportable event given or required to be
given to the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any Multiemployer Plan
is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to administer
any Plan, a copy of such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code, a copy
of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan or Multiemployer
Plan or makes any amendment to any Plan or, in either case, which has
resulted or could reasonably be expected to result in the imposition of a
Lien or the posting of a bond or other security, a certificate of the
chief financial officer, the chief accounting officer or the treasurer of
the Company setting forth details as to such occurrence and action, if
any, which the Company or applicable member of the ERISA Group is
required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Company and its Consolidated
Subsidiaries as the Agent, at the request of any Lender, may reasonably
request.
SECTION 5.02. Maintenance of Property; Insurance. (a) The Company
----------------------------------
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in
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good working order and condition, ordinary wear and tear excepted.
(b) The Company will maintain, and will cause each Subsidiary to
maintain (either in the name of the Company or in such Subsidiary's own name),
with financially sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts and against at least such
risks (and with such risk retention) as are usually insured against in the
same general area by companies of established repute engaged in the same or
similar business; and will furnish to the Lenders, upon request from the
Agent, information presented in reasonable detail as to the insurance so
carried.
SECTION 5.03. Negative Pledge. Neither the Company nor any
---------------
Consolidated Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date hereof securing Debt outstanding on
the date hereof in an aggregate principal amount not exceeding
$25,000,000;
(b) Liens hereafter created or assumed securing obligations in
respect of tax exempt revenue bonds not exceeding $25,000,000 in
aggregate principal amount at any one time outstanding;
(c) any Lien on any asset securing Debt hereafter incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such asset; provided that (i) such Lien attaches to such asset
--------
concurrently with or within 90 days after the acquisition thereof and
(ii) the aggregate principal amount of Debt secured by all such Liens at
any one time outstanding shall not exceed $50,000,000;
(d) any Lien existing on any asset of any corporation at the time
such corporation becomes a Consolidated Subsidiary and not created in
contemplation of such event;
(e) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into a Consolidated
Subsidiary and not created in contemplation of such event;
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(f) any Lien existing on any asset prior to the acquisition thereof
by the Company or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(g) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section; provided that such Debt is not
--------
increased and is not secured by any additional assets other than fixed
improvements constructed on real estate previously subject to a Lien
securing such Debt;
(h) Liens incidental to conduct of its business or the ownership of
its assets which (i) do not secure Debt and (ii) do not in the aggregate
materially detract from the value of its assets or materially impair the
use thereof in the operation of its business;
(i) Liens arising from capital leases entered into by the Company or
a Subsidiary of the Company as part of a sale and leaseback transaction;
provided that the aggregate principal amount of Debt secured by such
--------
Liens at any time outstanding shall not exceed $70,000,000;
(j) Liens securing Debt payable to the Company or a Wholly-Owned
Consolidated Subsidiary; and
(k) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal amount at any time
outstanding not to exceed $25,000,000.
SECTION 5.04. Consolidation, Mergers and Sales of Assets. The
------------------------------------------
Company will not, and will not permit any Borrowing Subsidiary or any
Subsidiary directly or indirectly owning any Borrowing Subsidiary to, (i)
consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer all or substantially all of its assets to any other Person.
Notwithstanding the foregoing, the Company or any Borrowing Subsidiary or
Subsidiary directly or indirectly owning any Borrowing Subsidiary may merge or
consolidate with the Company or a Subsidiary; provided that the surviving
--------
entity in any such transaction shall assume, by operation of law or in a
writing reasonably satisfactory to the Lenders, the
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obligations hereunder of all parties to such transaction (it being understood
that the surviving entity in any such transaction involving the Company or a
Borrowing Subsidiary shall be treated as the Company or such Borrowing
Subsidiary for all purposes of this Agreement).
SECTION 5.05. Use of Proceeds. The proceeds of the Loans will be
---------------
used (i) to pay the Premark Dividend and (ii) for general corporate purposes,
including working capital and commercial paper backup. The Letters of Credit
will be used in the ordinary course of the Borrowers' businesses. None of
such proceeds or Letters of Credit will be used in violation of any applicable
law.
SECTION 5.06. Subsidiary Debt. The Subsidiaries will not issue any
----------------
preferred stock or create, incur, assume or permit to exist any Debt except
(i) preferred stock of Subsidiaries (other than Dart or any Borrowing
Subsidiary) in an aggregate stated value not in excess of $25,000,000, (ii)
Debt created hereunder and under the Multicurrency Addenda, (iii) Debt of
Foreign Finance Subsidiaries in an aggregate amount for all such Foreign
Finance Subsidiaries not in excess of $300,000,000 and (iv) other Debt in an
aggregate amount for all Subsidiaries not in excess of $200,000,000.
SECTION 5.07. Consolidated Leverage Ratio. The Consolidated
----------------------------
Leverage Ratio shall not at any time on or after June 30, 1996, exceed 3.5 to
1.0 (unless the Company consummates transactions otherwise permitted hereunder
that are sufficient to cause its Consolidated Leverage Ratio to be less than
or equal to 3.5 to 1.0, which transactions shall be consummated within 30 days
after the chief financial officer, the chief accounting officer or the
treasurer of the Company obtains knowledge that the Consolidated Leverage
Ratio is above such level).
SECTION 5.08. Consolidated Interest Coverage Ratio. The
-------------------------------------
Consolidated Interest Coverage Ratio shall not at any time on or after June
30, 1996, be less than 2.5 to 1.0.
SECTION 5.09. Spin-Off Transactions. (a) The Borrowers will not
----------------------
permit the Spin-Off Transactions to differ materially from the description
thereof in the Registration Statement and the Distribution Agreement in any
manner that would adversely affect the rights or interests of the Lenders or
the creditworthiness of the Borrowers.
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(b) The Company and Dart shall cause the Dart Contribution Date to
occur promptly after the date the Premark Dividend is paid. The Premark
Dividend shall be paid within five days after the date of the initial
Borrowing or issuance of a Letter of Credit under this Agreement.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
-----------------
events ("Events of Default") shall have occurred and be continuing:
(a) default shall be made in the payment of any principal of any
Loan or the reimbursement with respect to any L/C Disbursement when and
as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;
(b) default shall be made in the payment of any interest on any
Loan, Fee or L/C Disbursement or any other amount (other than an amount
referred to in clause (a) above) due hereunder or under any Multicurrency
Addendum, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of five Business Days;
(c) default shall be made in the due observance or performance of
any covenant, condition or agreement contained in Section 5.04, 5.05,
5.06, 5.07, 5.08 or 5.09;
(d) default shall be made in the due observance or performance of
the covenant contained in Section 5.03 and, if such failure is
susceptible of cure, such failure shall not have been cured within 30
days after the chief financial officer, the chief accounting officer or
the treasurer of the Company obtains knowledge thereof;
(e) default shall be made in the due observance or performance of
any covenant, condition or agreement contained in this Agreement, any
Multicurrency Addendum or any other Loan Document (other than those
covered by
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clause (a), (b), (c) or (d) above) for 30 days after notice thereof has
been given to the Company by the Agent or any Lender;
(f) any representation, warranty, certification or statement made in
any Loan Document or in any certificate, financial statement or other
document delivered pursuant to any thereof shall prove to have been
incorrect in any material respect when made or deemed made;
(g) the Company or any Subsidiary shall fail to make any payment in
respect of any Material Debt when due or within any applicable grace
period;
(h) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt (other than the
Permitted Guarantees);
(i) the Company, Dart, any Material Subsidiary or any other Borrower
(unless, in the case of any such other Borrower, within five days, the
Company shall have either assumed the obligations of such other Borrower
under this Agreement or shall have prepaid the outstanding Loans and
other amounts due hereunder of such Borrower) shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due,
or shall take any corporate action to authorize any of the foregoing;
(j) an involuntary case or other proceeding shall be commenced
against the Company, Dart, any Material Subsidiary or any other Borrower
(unless, in the case of any such other Borrower, within five days, the
Company shall have either assumed the obligations of such other Borrower
under this Agreement or shall have prepaid the outstanding Loans and
other amounts due
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hereunder of such Borrower) seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Company, Dart, any Material Subsidiary or any other Borrower
(unless, within five days, the Company shall have either assumed the
obligations of such other Borrower under this Agreement or shall have
prepaid the outstanding Loans and other amounts due hereunder of such
Borrower) under the federal bankruptcy laws as now or hereafter in
effect;
(k) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could reasonably be expected to cause one or
more members of the ERISA Group to incur a current payment obligation in
excess of $25,000,000;
(l) a single judgment or order for the payment of money in excess of
$25,000,000 or judgments or orders for the payment of money in excess of
$40,000,000 in the aggregate shall be rendered against the Company or any
Material Subsidiary and such judgment(s) or order(s) shall continue
unsatisfied and unstayed for a period of 60 days;
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(m) At any time after the Dart Contribution Date, Dart shall not be
a Wholly-Owned Consolidated Subsidiary;
(n) at any time, the guarantee in Article VIII shall cease to be, or
shall be asserted by any Guarantor not to be, a valid and binding
obligation on the part of such Guarantor; or
(o) there shall have occurred a Change in Control;
then, and in every such event, and at any time thereafter during the
continuance of such event the Agent, at the request of the Required Lenders,
shall, by notice to the Company, take either or both of the following actions,
at the same or different times: (i) terminate forthwith the Commitments and
(ii) declare the Loans then outstanding to be forthwith due and payable in
whole or in part, whereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Company or any Borrowing Subsidiary
accrued hereunder, shall become forthwith due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; provided that in the case of any of the Events
--------
of Default specified in clause (i) or (j) above with respect to the Company,
without any notice or any other act by the Agent or the Lenders, the
Commitments shall thereupon terminate and the Loans (together with accrued
interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Lender and
-----------------------------
Fronting Bank irrevocably appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. The Agent in its individual
--------------------
capacity and not as Agent shall have the same rights and powers under this
Agreement as any other Lender
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and may exercise or refrain from exercising the same as though it were not the
Agent, and the Agent and its Affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Company or any
Subsidiary or Affiliate of the Company as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
---------------
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article
VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
-------------------------
with legal counsel (who may be counsel for the Company), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
------------------
Affiliates nor any of their respective directors, officers, agents, or
employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its Affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Company; (iii) the satisfaction of any
condition specified in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement or any other instrument or writing furnished in connection
herewith. The Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex, facsimile transmission or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Lender and Fronting Bank shall,
---------------
ratably in accordance with its
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Commitment, indemnify the Agent, its Affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Company) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with this Agreement or any action taken or
omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Lender and Fronting Bank
---------------
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and Fronting Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
---------------
giving notice thereof to the Lenders and the Company. Upon any such
resignation, (a) the Company, with the consent of the Required Lenders, shall
have the right to appoint a successor Agent, if no Default shall have occurred
and be continuing or (b) the Required Lenders, if a Default shall have
occurred and be continuing, shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed, and shall have accepted
such appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
its appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
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ARTICLE VIII
GUARANTEE
SECTION 8.01. Guarantee. In order to induce the Lenders and the
---------
Fronting Banks to extend credit hereunder, each Guarantor hereby
unconditionally guarantees, as a primary obligor and not merely as a surety,
jointly with the other Guarantors and severally, the Obligations. Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it
will remain bound upon its Guarantee hereunder notwithstanding any such
extension or renewal of any Obligation.
Each Guarantor waives presentment to, demand of payment from and
protest to any Borrower of any of the Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of the Guarantors hereunder shall not be affected by (a) the
failure of any Lender or Fronting Bank or the Agent to assert any claim or
demand or to enforce any right or remedy against any Borrower under the
provisions of this Agreement or any of the other Loan Documents or otherwise;
(b) any rescission, waiver, amendment or modification of any of the terms or
provisions of this Agreement, any of the other Loan Documents or any other
agreement; or (c) the failure of any Lender to exercise any right or remedy
against any Borrower.
Each Guarantor further agrees that its agreement hereunder
constitutes a promise of payment when due and not merely of collection, and
waives any right to require that any resort be had by any Lender or Fronting
Bank to any balance of any deposit account or credit on the books of any
Lender or Fronting Bank in favor of any Borrower or any other person.
The obligations of the Guarantors hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, and shall
not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Obligations, any impossibility in the performance of
the Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of the Guarantors hereunder shall not be discharged
or impaired or otherwise affected by the failure of the Agent or any
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Lender or Fronting Bank to assert any claim or demand or to enforce any remedy
under this Agreement or under any other Loan Document or any other agreement,
by any waiver or modification in respect of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Obligations,
or by any other act or omission which may or might in any manner or to any
extent vary the risk of any Guarantor or otherwise operate as a discharge of
any Guarantor as a matter of law or equity.
Each Guarantor further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation is
rescinded or must otherwise be restored by the Agent or any Lender or Fronting
Bank upon the bankruptcy or reorganization of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which the Agent or any Lender or Fronting Bank may have at law or in
equity against the Guarantors by virtue hereof, upon the failure of any
Borrower to pay any Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will, upon receipt of written demand by the
Agent, forthwith pay, or cause to be paid, in cash the amount of such unpaid
Obligation. In the event that, by reason of the bankruptcy of any Borrower
(other than the Company, Dart or any Material Subsidiary), (i) acceleration of
Loans made to such Borrower is prevented and (ii) the Company, within the time
period specified in clause (i) or, as applicable, (j) of Section 6.01, shall
neither have assumed the obligations of such Borrower under this Agreement nor
prepaid the outstanding Loans and other amounts due hereunder owed by such
Borrower, the Company will forthwith purchase such Loans at a price equal to
the principal amount thereof plus accrued interest thereon and any other
amounts due hereunder with respect thereto. The Guarantors further agree,
jointly and severally, that if payment in respect of any Obligation shall be
due in a currency other than Dollars and/or at a place of payment other than
New York and if, by reason of any Change in Law, disruption of currency or
foreign exchange markets, war or civil disturbance or similar event, payment
of such Obligation in such currency or such place of payment shall be
impossible or, in the judgment of any applicable Lender or Fronting Bank, not
consistent with the protection of its
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rights or interests, then, at the election of any applicable Lender or
Fronting Bank, the Guarantors shall make payment of such Obligation in Dollars
(based upon the applicable Exchange Rate in effect on the date of payment)
and/or in New York, and shall indemnify such Lender or Fronting Bank against
any losses or expenses that it shall sustain as a result of such alternative
payment.
Upon payment by the Guarantors of any Obligations, each Lender or
Fronting Bank shall, in a reasonable manner, assign the amount of the
Obligations owed to it and so paid to the applicable Guarantors, such
assignment to be pro tanto to the extent to which the Obligations in question
--- -----
were discharged by the Guarantors, or make such disposition thereof as the
applicable Guarantors shall direct (all without recourse to any Lender and
without any representation or warranty by any Lender or Fronting Bank.
Upon payment by any Guarantors of any sums as provided above, all
rights of such Guarantor against any Borrower arising as a result thereof by
way of right of subrogation or otherwise shall in all respects be subordinated
and junior in right of payment to the prior indefeasible payment in full of
all the Obligations to the Lenders or Fronting Banks.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
-------
communications to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and shall be given to
such party: (w) in the case of the Company or the Agent, at its address,
facsimile number or telex number set forth on the signature pages hereof, (x)
in the case of any Borrowing Subsidiary, to it at the address (or telex
number) for the Company as described in the immediately preceding clause, (y)
in the case of any Lender, at its address, facsimile number or telex number
set forth in its Administrative Questionnaire or (z) in the case of any party,
such other address, facsimile number or telex number as such party may
hereafter specify for the purpose by notice to the Agent and the Company.
Each Borrowing Subsidiary hereby irrevocably appoints the Company as its agent
for the purpose of giving on its behalf any notice and taking any other action
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provided for in this Agreement and hereby agrees that it shall be bound by any
such notice or action given or taken by the Company hereunder irrespective of
whether or not any such notice shall have in fact been authorized by such
Borrowing Subsidiary and irrespective of whether or not the agency provided
for herein shall have theretofore been terminated. Each such notice, request
or other communication shall be effective (i) if given by telex, when such
telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent
--------
under Article II shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
----------
Lender in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a)
--------------------------------------------
The Company shall pay (i) all out-of-pocket expenses of the Agent and the
Fronting Banks, including reasonable fees and disbursements of Cravath, Swaine
& Moore or such other firm as shall be acting as counsel for the Agent, in
connection with the preparation of this Agreement or any other Loan Document,
any waiver or consent hereunder or thereunder or any amendment hereof or
thereof or any Default or alleged Default hereunder or thereunder and (ii) all
out-of-pocket expenses incurred by the Agent, each Fronting Bank and each
Lender, including reasonable fees and disbursements of counsel, in connection
with collection, bankruptcy, insolvency and other enforcement proceedings
resulting from an Event of Default. The Company shall indemnify each Lender
and each Fronting Bank against any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of this Agreement.
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(b) The Company agrees to indemnify the Agent, each Fronting Bank
and each Lender, their respective Affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee") and
hold each Lender and each Fronting Bank harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including,
without limitation, the reasonable fees and disbursements of counsel, which
may be incurred by or asserted against such Indemnitee in connection with any
claim, litigation, investigation or administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) relating
to or arising out of this Agreement or any other Loan Document or any actual
or proposed use of proceeds of Loans hereunder; provided that no Indemnitee
--------
shall have the right to be indemnified hereunder for such Indemnitee's own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Amendments and Waivers. (a) Any provision of this
----------------------
Agreement or any other Loan Document may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by or on behalf of the
Company and the Required Lenders (and, if the rights or duties of the Agent
are affected thereby, by the Agent); provided that no such amendment or waiver
--------
shall, unless signed by each Lender affected thereby (or, in the case of
clause (v) below, each Lender), (i) increase or decrease the Commitment or any
Multicurrency Lender Maximum Borrowing Amount of any Lender (except for a
ratable decrease in the Commitments or the applicable Multicurrency Lender
Maximum Borrowing Amounts of all the Lenders or all the applicable
Multicurrency Lenders), or subject any Lender to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or reimbursement
obligation or any Fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or reimbursement obligation or
any fees hereunder or for any reduction or termination of any Commitment or
waive or excuse any such payment or any part thereof, (iv) amend or modify
Article VIII, or (v) amend or modify the provisions of Section 2.16 or Section
9.05(a), the provisions of this Section or the definition of the "Required
Lenders"; provided further, that the provisions of Section 2.22 and 2.23 shall
----------------
not be amended or modified without the prior approval of Lenders that would
constitute "Required Lenders" with respect to each Multicurrency Addendum then
in effect. Each Lender shall be bound by any waiver, amendment or
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modification authorized by this Section and any consent by any Lender pursuant
to this Section shall bind any assignee of its rights and interests hereunder
or under any other Loan Document.
(b) Notwithstanding the foregoing, any Fronting Bank Agreement may
be waived, amended or modified by the parties thereto with the written
approval of the Agent if and to the extent that such waiver, amendment or
modification would be permitted in connection with the execution and delivery
of a replacement of such agreement.
SECTION 9.05. Successors and Assigns. (a) The provisions of this
----------------------
Agreement and each other Loan Document shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Company may not assign or otherwise transfer any of its rights
under this Agreement (other than as permitted by Section 5.04) without the
prior written consent of all Lenders and the Fronting Banks.
(b) Any Lender may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Company and the Agent, such Lender shall remain responsible for the
performance of its obligations hereunder and under any applicable
Multicurrency Addendum, and the Company, the Fronting Banks and the Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and under any other
Loan Document. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Company hereunder
and thereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provisions of this Agreement or any
applicable Multicurrency Addendum; provided that such participation agreement
--------
may provide that such Lender will not agree to any modification, amendment or
waiver of this Agreement or any applicable Multicurrency Addendum described in
clause (i), (ii), (iii) or (iv) of Section 9.04 without the consent of the
Participant. The Company agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of
Section 2.13, 2.15 and 2.19 with respect to its
83
<PAGE>
participating interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Lender may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of its
rights and obligations under this Agreement or under any Multicurrency
Addendum or any other Loan Document (including all or a portion of its
Commitment and the Loans at the time owing to it), and such Assignee shall
assume (and the transferor Lender shall thereupon be released from) such
rights and obligations, pursuant to an Assignment and Acceptance executed by
such Assignee and such transferor Lender, with (and subject to) the subscribed
consent of the Company (which consent shall not be unreasonably withheld) and
the Agent (and, in the case of any assignment of a Commitment, the Fronting
Banks); provided that (a) if an Assignee is an Affiliate of such transferor
--------
Lender, no such consent shall be required; (b) the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Agent) shall not be less than $10,000,000 (or, if less than
$10,000,000, the amount of such Lender's Commitment); and (c) any such
assignment may, but need not, include rights of the transferor Lender in
respect of outstanding Competitive Loans.
(d) Any Lender may at any time assign all or any portion of its
rights under this Agreement and the other Loan Documents to a Federal Reserve
Bank. No such assignment shall release the transferor Lender from its
obligations hereunder. In order to facilitate such an assignment to a Federal
Reserve Bank, each Borrower shall, at the request of the transferor Lender,
duly execute and deliver to the transferor Lender a promissory note or notes
evidencing the Loans made to such Borrower by the transferor Lender hereunder.
(e) No Assignee, Participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Section 2.13 or
2.19 than such Lender would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Company's prior
written consent or by reason of the provisions of Section 2.20 or at a time
when the
84
<PAGE>
circumstances giving rise to such greater payment did not exist.
SECTION 9.06. Collateral. Each of the Lenders represents to the
----------
Agent and each of the other Lenders that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
SECTION 9.07. Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the State of New York. Each
Letter of Credit shall be governed by, and shall be construed in accordance
with, the laws or rules designated in such letter of credit, or if no such
laws or rules are designated, the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce, Publication No.
500 (the "Uniform Customs") and, as to matters not governed by the Uniform
Customs, the laws of the State of New York.
SECTION 9.08. Counterparts; Integration. This Agreement may be
-------------------------
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.09. Conversion of Currencies. (a) If, for the purpose
------------------------
of obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures in
the relevant jurisdiction the first currency could be purchased with such
other currency on the Business Day immediately preceding the day on which
final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
--------------------
"Judgment Currency") other than the currency in which such sum is stated to be
-----------------
due hereunder (the "Agreement Currency"), be discharged only to the extent
------------------
that, on the Business Day following receipt by the Applicable Creditor of
85
<PAGE>
any sum adjudged to be so due in the Judgment Currency, the Applicable
Creditor may in accordance with normal banking procedures in the relevant
jurisdiction purchase the Agreement Currency with the Judgment Currency; if
the amount of the Agreement Currency so purchased is less than the sum
originally due to the Applicable Creditor in the Agreement Currency, such
Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Applicable Creditor against such loss. The
obligations of the Borrowers contained in this Section 9.09 shall survive the
termination of this Agreement and the payment of all other amounts owing
hereunder.
SECTION 9.10. Confidentiality. The Agent, each Fronting Bank and
---------------
each of the Lenders agrees to keep confidential any financial information
delivered by the Company hereunder which the Company clearly indicates in
writing to be confidential information; provided that nothing herein shall
--------
prevent the Agent or any Lender or Fronting Bank from disclosing such
information (i) to the Agent or any Lender or Fronting Bank, (ii) to any
affiliate of the Agent or any Lender or Fronting Bank or any actual or
potential purchaser, participant, assignee or transferee of any Lender's (or
Fronting Bank's) rights or obligations hereunder that agrees in writing to be
bound by this Section 9.10, (iii) upon order of any court or administrative
agency, (iv) upon the request or demand of any regulatory agency or authority
having (or claiming) jurisdiction over such party, (v) which has been publicly
disclosed, (vi) which has been obtained from any Person that is not a party
hereto or an affiliate of any such party, (vii) in connection with the
exercise of any remedy hereunder, (viii) to the certified public accountants
or legal counsel
86
<PAGE>
for any Lender or Fronting Bank (on a confidential basis) or (ix) as otherwise
expressly contemplated by this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
TUPPERWARE CORPORATION
By__________________________
Name:
Title:
14901 South Orange Blossom Trail
Orlando, Florida 32837
Telephone number:
Facsimile number:
87
<PAGE>
DART INDUSTRIES INC.,
By__________________________
Name:
Title:
CHEMICAL BANK, individually and
as Agent
By____________________________
Name:
Title:
270 Park Avenue
New York, New York 10017
Attention: Timothy J. Storms
Telephone: (212) 270-1166
Facsimile number: (212) 270-6125
Copy to:
Chase Securities Inc.
10 South LaSalle Street, 23rd Floor
Chicago, IL 60603
Attention: Steven J. Faliski
Telephone: (312) 807-4073
Facsimile number: (312) 443-1964
88
<PAGE>
ABN AMRO BANK N.V., ATLANTA AGENCY
By____________________________
Name:
Title:
By____________________________
Name:
Title:
One Ravinia Drive, Suite 1200
Atlanta, GA 30346-2103
Attention: Roger Hunt
Tel: 770-352-1261
Fax: 770-399-7397
BANK OF AMERICA ILLINOIS,
individually and as Co-Agent
By____________________________
Name:
Title:
1230 Peachtree Street, 38th Floor
Atlanta, GA 30309
Attention: Laurens F. Schaad
Tel: 404-249-6915
Fax: 404-249-6938
BANKERS TRUST COMPANY
By____________________________
Name:
Title:
130 Liberty Street, 28th Floor
New York, NY 10006
Attention: Katherine Judge
Tel: 212-250-4969
Fax: 212-669-1570
89
<PAGE>
CITIBANK, N.A., individually and as
Co-Agent
By____________________________
Name:
Title:
400 Perimeter Center Terrace
N.E., Suite 600
Atlanta, GA 30346
Attention: Flavio Barbosa
Tel: 770-668-8103
Fax: 770-668-8137
COMMERZBANK AG, ATLANTA AGENCY
By____________________________
Name:
Title:
By____________________________
Name:
Title:
1230 Peachtree Street, N.E.
Promenade Two, Suite 3500
Atlanta, GA 30308
Attention: Petra Conroy
Tel: 404-888-6531
Fax: 404-888-6539
CREDIT LYONNAIS CHICAGO BRANCH
By____________________________
Name:
Title:
227 West Monroe St.
Chicago, IL 60606
Attention: David Payne
Tel: 312-220-7310
Fax: 312-641-0527
90
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By____________________________
Name:
Title:
One First National Plaza
Suite 0156, 10th Floor
Chicago, IL 60670
Attention: Edwin A. Adams, Jr.
Tel: 312-732-1601
Fax: 312-732-3885
THE FUJI BANK, LIMITED, NEW YORK BRANCH
By____________________________
Name:
Title:
Two World Trade Center
New York, NY 10048
Attention: Gina Kearns
Tel: 212-898-2058
Fax: 212-912-0516
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By____________________________
Name:
Title:
60 Wall Street
New York, NY 10260
Attention: Jeffrey Hwang
Tel: 212-648-6648
Fax: 212-648-5273
91
<PAGE>
NORTHERN TRUST COMPANY
By____________________________
Name:
Title:
50 South LaSalle St., 11th Floor
Chicago, IL 60676
Attention: John J. Conway
Tel: 312-444-7260
Fax: 312-630-6062
ROYAL BANK OF CANADA
By____________________________
Name:
Title:
One Financial Square, 24th Floor
New York, NY 10005
Attention: Sheryl Greenberg
Tel: 212-428-6476
Fax: 212-428-6459
THE SANWA BANK, LIMITED, ATLANTA AGENCY
By____________________________
Name:
Title:
133 Peachtree St., N.E.
Suite 4950
Atlanta, GA 30303
Attention: Peter Pawlak
Tel: 404-586-6888
Fax: 404-589-1629
92
<PAGE>
THE SUMITOMO BANK, LIMITED,
ATLANTA AGENCY
By____________________________
Name:
Title:
133 Peachtree St., N.E.
Suite 3210
Atlanta, GA 30303
Attention: Thomas Savini
Tel: 404-526-8514
Fax: 404-521-1187
93
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TUPPERWARE
CORPORATION'S FIRST QUARTER 1996 COMBINED FINANCIAL STATEMENTS AS INCLUDED IN
ITS REGISTRATION STATEMENT ON FORM 10. IT IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH COMBINED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> MAR-30-1996
<CASH> 87,400
<SECURITIES> 0
<RECEIVABLES> 197,400
<ALLOWANCES> 26,600
<INVENTORY> 210,000
<CURRENT-ASSETS> 539,200
<PP&E> 939,100
<DEPRECIATION> 626,100
<TOTAL-ASSETS> 948,600
<CURRENT-LIABILITIES> 386,800
<BONDS> 400
0
0
<COMMON> 0
<OTHER-SE> 472,300
<TOTAL-LIABILITY-AND-EQUITY> 948,600
<SALES> 329,000
<TOTAL-REVENUES> 329,000
<CGS> 120,400
<TOTAL-COSTS> 120,400
<OTHER-EXPENSES> (500)
<LOSS-PROVISION> 1,925
<INTEREST-EXPENSE> 900
<INCOME-PRETAX> 43,300
<INCOME-TAX> 11,700
<INCOME-CONTINUING> 31,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,600
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
