SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM 10-Q
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to_______
Commission file number 1-7834
SEALED AIR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-1682767
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Park 80 East 07663-5291
Saddle Brook, New Jersey (Zip Code)
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (201) 791-7600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
There were 42,173,982 shares of the registrant's common stock, par value $0.01
per share, outstanding as of October 31, 1995.
<TABLE>
PART I
FINANCIAL INFORMATION
SEALED AIR CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
For the Three Months and Nine Months Ended September 30, 1995 and 1994
(In thousands of dollars except per share data)
(Unaudited)
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $178,536 $131,121 $533,977 $375,343
Cost of sales 116,104 83,189 347,584 235,199
Gross profit 62,432 47,932 186,393 140,144
Marketing, administrative and
development expenses 35,561 26,574 107,742 77,689
Operating profit 26,871 21,358 78,651 62,455
Other income (expense):
Interest income 59 254 589 859
Interest expense (4,445) (3,649) (14,735) (16,074)
Other, net (266) (840) ( 2,293) (3,178)
Other income (expense), net (4,652) (4,235) (16,439) (18,393)
Earnings before income taxes 22,219 17,123 62,212 44,062
Income taxes 8,777 6,814 24,574 17,536
Earnings before early redemption
of subordinated notes 13,442 10,309 37,638 26,526
Early redemption of subordinated
notes, net of income taxes - - - (5,576)
Net Earnings $ 13,442 $ 10,309 $ 37,638 $ 20,950
Earnings per common share:
Before early redemption of
subordinated notes $ .32 $ .26 $ .90 $ .67
Early redemption of subordinated
notes, net of income taxes - - - (0.14)
Net earnings per common share $ .32 $ .26 $ .90 $ .53
Weighted average number of
shares outstanding (000) 42,156 39,914 42,003 39,856
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
SEALED AIR CORPORATION
Consolidated Balance Sheets
September 30, 1995 and December 31, 1994
(In thousands of dollars except share data)
(Unaudited)
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,628 $ 11,153
Accounts receivable, less allowance for
doubtful accounts of $5,273 in 1995 and
$3,970 in 1994 121,274 91,321
Other receivables 6,419 3,866
Inventories 54,214 38,259
Prepaid expenses 1,889 1,009
Deferred taxes 7,644 6,223
Total current assets 199,068 151,831
Property and equipment:
Land and buildings 76,628 67,226
Machinery and equipment 168,252 141,981
Leasehold improvements 6,435 5,029
Furniture and fixtures 13,114 12,224
Construction in progress 9,650 5,864
274,079 232,324
Less accumulated depreciation and amortization 109,990 96,154
Property and equipment, net 164,089 136,170
Patents, patent applications and rights, less
accumulated amortization of $13,168 in 1995
and $11,819 in 1994 14,533 9,647
Excess of cost over fair value of net assets
acquired, less accumulated amortization of
$7,014 in 1995 and $4,715 in 1994 42,627 19,710
Other assets 24,968 13,759
$ 445,285 $ 331,117
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
SEALED AIR CORPORATION
Consolidated Balance Sheets
September 30, 1995 and December 31, 1994 (Continued)
(In thousands of dollars except share data)
(Unaudited)
<CAPTION>
September 30, December31,
1995 1994
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
installments of long-term debt $ 46,680 $ 30,508
Accounts payable 46,690 43,009
Accrued interest 1,841 1,323
Other accrued liabilities 47,647 44,647
Income taxes payable 17,123 16,577
Total current liabilities 159,981 136,064
Long-term debt, less current
installments 168,552 155,293
Deferred income taxes 18,037 17,215
Other non-current liabilities 11,409 11,533
Total liabilities 357,979 320,105
Shareholders' equity:
Common stock, $.01 par value. Authorized
60,000,000 shares in 1995 and 35,000,000
shares in 1994, issued 42,333,340 shares
in 1995 and 20,086,518 shares in 1994 424 201
Additional paid-in capital 154,894 114,686
Retained earnings (deficit) (68,398) (106,036)
Accumulated translation adjustment 6,973 6,126
Less deferred compensation and cost ($226
in 1995 and $248 in 1994) of 224,758 shares
in 1995 and 119,306 in 1994 of common
stock held as treasury stock 6,587 3,965
Shareholders' equity 87,306 11,012
$445,285 $331,117
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
SEALED AIR CORPORATION AND SUBSIDIARIES
Consolidated Statements (abbreviated) of Cash Flows
For the Nine Months Ended September 30, 1995 and 1994
(In thousands of dollars)
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Cash Flows From Operating Activities:)
Net earnings $37,638 $20,950
Adjustments to net earnings to reconcile to net
cash provided by operating activities:
Early redemption of subordinated notes 5,576
Depreciation and amortization 25,648 18,200
Deferred credits - income taxes and other (900) (487)
Net losses on disposals of fixed assets 246 450
Other, net (1,435) 1,891
Cash provided (used) by changes in:
Receivables (18,562) (15,876)
Inventories (6,058) (2,944)
Prepaid expenses (880) 345)
Accounts payable (6,900) 7,578)
Accrued interest 518 (9,165)
Other accrued liabilities 5,676 1,757
Income taxes payable 1,186 7,667
Net cash provided by operating activities 36,177 35,942
Cash Flows From Investing Activities:
Capital expenditures for property and equipment (13,652) (14,207)
Proceeds from sales of property and equipment 371 67
Net cash utilized in purchase of subsidiaries (24,157) (6,587)
Net cash used in investing activities (37,438) (20,727)
Cash Flows From Financing Activities:
Proceeds from long-term debt 64,924 187,420)
Payments of long-term debt (78,520) (204,737)
Net proceeds on notes 11,141 472
Subordinated debt redemption premium - (8,048)
Net cash used in financing activities (2,455) (24,893)
Effect of exchange rate changes on cash and cash
equivalents 191 388
Cash and Cash Equivalents:
Decrease during the period (3,525) (9,290)
Balance, beginning of period 11,153 $19,392)
Balance, end of period $ 7,628 $10,102)
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest $13,997 $24,792)
Income taxes $24,028 $13,338)
See accompanying notes to consolidated financial statements.
</TABLE>
SEALED AIR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1995 and 1994
(Unaudited)
(1) Principles of Consolidation
The consolidated financial statements include the accounts of Sealed Air
Corporation and its subsidiaries (collectively, the "Company").
All significant intercompany transactions and balances have been eliminated
in consolidation. In management's opinion, all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of the
results of operations for the periods ended September 30, 1995 have been made.
Where appropriate, financial statement amounts for prior periods have been
reclassified to conform with their 1995 presentation.
(2) Acquisition
On January 10, 1995, the Company acquired Trigon Industries Limited
("Trigon"), a privately owned, New Zealand based manufacturer of flexible
packaging materials, for 882,930 newly issued shares of common stock valued
at $35.70 per share (1,765,860 valued at $17.85 per share on a post-split
basis) and $25,496,000 in cash primarily provided by proceeds from borrowings
under the Company's credit facility with Bankers Trust Company, as agent for
a syndicate of banks, representing a purchase price of approximately $57
million. The net assets of Trigon acquired included property and equipment of
approximately $28,400,000, intangible assets of approximately $43,000,000
including trademarks, non-compete agreements, and the excess of cost over the
fair value of net assets acquired, $20,000,000 of net indebtedness, and
working capital of approximately $12,000,000. Such acquisition is being
accounted for as a purchase.
The following table presents selected financial information (unaudited) for the
Company and Trigon on a pro forma basis as if such acquisition had occurred on
January 1, 1994. Such information combines consolidated earnings statement
data for the Company for the year ended December 31, 1994 with consolidated
income statement data of Trigon for the twelve months ended September 30,
1994. Such information gives effect to pro forma adjustments necessary to
account for the acquisition as a purchase, principally for the amortization
of the excess of cost over fair value of net assets acquired and other
intangible assets, specific cost reductions which management expects to
realize from the combined operations,
interest expense on borrowings incurred to finance the acquisition, and
additional shares issued in the acquisition.
(Amount in thousands, except per common share data) 1994
Net sales $591,529
Earnings(1) 39,050
Earnings per common share(1)(2) $0.94
(1) Before reflecting the after-tax charge of $5,576,000 or $0.14 per share, to
the Company's earnings in 1995 arising from the early redemption in July 1995 of
the Company's 12-5/8% Senior Subordinated Notes.
(2) Earnings per share restated to reflect September 1995 stock split. (See
note 4)
Pro forma results are not necessarily indicative of future results or of the
results that would have occurred had the acquisition actually taken place on
January 1, 1995.
SEALED AIR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1995 and 1994
(Unaudited)
(3) Income Taxes
An explanation of the difference between the effective income tax rate and
statutory U.S. federal income tax rate expressed as a percentage of earnings
before income taxes for the nine months ended September 30, 1995 and 1994
follows:
1995 1994
Statutory U.S. federal income tax rate 35.0% 35.0%
Provision for foreign withholding taxes and
additional U.S. taxes on the accumulated
earnings of foreign subsidiaries 1.4 2.1
Tax effect of U.S. expenses not subject to
tax benefit 1.0 0.3
State income taxes, net of U.S. federal
income tax benefit 4.1 4.0
Taxes on foreign earnings at other than the
statutory U.S. federal income tax rate (0.7) (1.5)
Other miscellaneous items (1.3) (0.1)
Effective income tax rate 39.5% 39.8%
(4) Stock Split
On September 29, 1995, the Company distributed a two-for-one stock split in the
nature of a stock dividend ("stock split") to the holders of record of the
Company's common stock at the close of business on September 15, 1995. As a
result, a transfer was made from additional paid-in capital to common stock in
an amount equal to the aggregate par value of the shares of common stock issued
pursuant to this stock split. Appropriate adjustments to earnings per share,
weighted average number of shares outstanding, common stock issued and common
stock held as treasury stock have been reflected for all periods presented
Management's Discussion and Analysis
of Results of Operations and Financial Condition
Results of Operations
The Company's net sales increased 36% in the third quarter and 42% in the first
nine months of 1995 compared with the 1994 periods. Approximately two-fifths of
the increase in net sales in the 1995 periods reflect the net sales of products
of Trigon Industries Limited ("Trigon"), which the Company acquired in early
January 1995. Trigon is a New Zealand-based manufacturer of flexible packaging
materials, primarily sold for food packaging and as durable mailers and bags, as
well as specialty adhesive products. The increase in net sales also reflects
higher average selling prices for certain products, increased unit volume in the
Company's major classes of products, and the additional net sales of other
businesses acquired in 1994. Foreign currency translation contributed modestly
to the increase in net sales in the third quarter and first nine months of 1995.
Net sales from domestic operations increased 17% in the third quarter and 21% in
the first nine months of 1995 compared to the respective 1994 periods primarily
due to higher average selling prices for certain products, the added net sales
of Trigon's U.S. operations, and higher unit volume in certain of the Company's
major classes of products.
Net sales from foreign operations increased 89% in the third quarter and 98% in
the first nine months of 1995 compared to the 1994 periods. Such increase was
due primarily to the added net sales of Trigon's operations outside of the
United States, the added net sales of other foreign businesses acquired during
1994 as discussed below, increased unit volume in the Company's major classes of
products, higher average selling prices for certain products, and the modest
contribution of foreign currency translation.
Net sales of engineered products, primarily Instapak(r) products and thick
polyethylene foams, increased 18% in the third quarter and 23% in the first nine
months of 1995 primarily due to increased unit volume of Instapak(r) products,
higher average selling prices for certain products and, to a lesser extent in
the nine-month period, the added net sales of fabricated packaging materials
produced by a small French company that the Company acquired in May 1994.
Net sales of surface protection and other cushioning products, primarily air
cellular products, other polyethylene foam products and protective and durable
mailers and bags, increased 39% in the third quarter and 46% in the first nine
months of 1995 due primarily to the added net sales of Trigon's durable mailer
and bag products, higher average selling prices for certain products, the added
net sales of businesses acquired during 1994, including air cellular and other
protective packaging products produced by companies that the Company acquired in
Norway and Italy in September 1994 and late in December 1994, and increased unit
volume of certain products.
Net sales of food packaging products increased 74% in the third quarter and 88%
in the first nine months of 1995 primarily due to the added net sales of
Trigon's food packaging products, the added net sales of an English manufacturer
of absorbent food pads that the Company acquired in July 1994, and increased
unit volume.
Net sales of other products increased to $5,817,000 from $2,937,000 in the third
quarter of 1994 and to $16,943,000 from $8,714,000 in the first nine months of
1994 primarily due to the added net sales of Trigon's specialty adhesive
products.
Cost of sales increased 40% in the third quarter and 48% in the first nine
months of 1995 primarily reflecting the Company's higher level of net sales and
certain higher raw material costs.
Gross profit increased 30% in the third quarter and 33% in the first nine months
of 1995 reflecting the Company's higher level of net sales partially offset by
the higher cost of sales discussed above. As a percent of net sales, gross
profit declined from 36.6% to 35.0% in the third quarter and from 37.3% to
34.9% in the first nine months primarily due to certain higher raw material
costs and changes in product mix, including the effect of the added products of
Trigon and the businesses that the Company acquired in 1994.
Marketing, administrative and development expenses increased 34% in the third
quarter and 39% in the first nine months of 1995, primarily reflecting the
Company's higher level of net sales, the added marketing, administrative and
development expenses of Trigon and other acquired businesses, and costs
associated with integrating the Trigon acquisition and other recent
acquisitions. As a percentage of net sales, marketing, administrative and
development expenses declined modestly in the 1995 periods compared with the
1994 periods.
Operating profit increased 26% in the third quarter and first nine months of
1995 primarily reflecting the Company's higher net sales and the effect of the
changes in costs and expenses discussed above.
Interest expense, which is the principal component of other expense, net,
increased to $4,445,000 in the third quarter and decreased to $14,735,000 in the
first nine months of 1995 compared to $3,649,000 and $16,074,000, respectively,
in the 1994 periods. Although the Company had higher levels of outstanding
indebtedness in the 1995 periods for the reasons discussed below under
"Liquidity and Capital Resources", such borrowings bear lower effective interest
rates than those to which the Company was subject in the 1994 periods, primarily
due to the refinancing in 1994 of the Company's 12-5/8% Senior Subordinated
Notes (the "12-5/8% Notes").
The Company's effective income tax rate decreased to 39.5% in the first nine
months of 1995 from 39.8% for the first nine months of 1994 primarily reflecting
lower tax provisions required.
Net earnings for the third quarter of 1995 increased 30% to $13,442,000, or
$0.32 per share, compared with net earnings of $10,309,000, or $0.26 per
share, for the third quarter of 1994. Before reflecting the effect in the first
nine months of 1994 of an after-tax charge to earnings arising from the early
redemption of the 12-5/8% Notes, earnings for the first nine months of 1995
increased 42% to $37,638,000, or $0.90 per share, compared with earnings of
$26,526,000, or $0.67 per share, for the first nine months of 1994. The Company
incurred an extraordinary after-tax charge to earnings of $5,576,000, or $0.14
per share, in connection with the early redemption in 1994 of the 12-5/8% Notes,
which affected net earnings in the first nine months of 1994.
The foregoing earnings per share figures have been restated to reflect the
effect of a two-for-one stock split in the nature of a stock dividend
distributed on September 29, 1995 to holders of record of the Company's common
stock at the close of business on September 15, 1995.
Liquidity and Capital Resources
The Company's principal sources of liquidity are cash flows from operations and
amounts available under the Company's existing lines of credit. The Company has
met, and currently expects that it will continue to meet, substantially all of
its working capital and capital expenditure requirements as well as its debt
servicing requirements with funds provided by operations and borrowings made
either under its available lines of credit or otherwise.
Cash flows from operating activities amounted to $36,177,000 in the first nine
months of 1995 compared with $35,942,000 for the 1994 period primarily due to
changes in operating assets and liabilities which partially offset the effect of
the Company's increased net earnings and higher levels of depreciation and
amortization arising out of the Company's operations during the 1995 period.
Among the Company's operating assets and liabilities, the increases in accounts
receivable, inventories and accounts increased during the first nine months of
1995 were due primarily to the Company's higher level of net sales, the
additional amounts attributable to Trigon's operations and the timing of
payments. Notes payable and current installments of long-term debt increased to
$46,680,000 at September 30, 1995 from $30,508,000 at December 31, 1994
primarily due to the addition of Trigon's operations to the Company's financial
statements, additional borrowings and the timing of maturities of long-term
debt.
Net cash used in investing activities amounted to $37,438,000 in the first nine
months of 1994 compared with $20,727,000 for the first nine months of 1994. The
increase in net cash used in investing activities primarily reflects net cash
used to pay a portion of the purchase price of the Trigon acquisition. Capital
expenditures amounted to $13,652,000 in the first nine months of 1995 compared
with $14,207,000 in the 1994 period.
Net cash used in financing activities amounted to $2,455,000 in the first nine
months of 1995 compared with $24,893,000 in the 1994 period. The lower amount of
net cash used in financing activities in the first nine months of 1995 primarily
reflects the absence in the 1994 period of the redemption premium that was
incurred in 1994 in connection with the early redemption of the 12-5/8% Notes
and a lower level of net repayments of outstanding debt. Long-term debt, less
current installments, increased to $168,552,000 at September 30, 1995 from
$155,293,000 at December 31, 1994, primarily due to additional net borrowings of
$25,496,000 incurred in connection with the Trigon acquisition, the assumption
of approximately $20,000,000 of Trigon's indebtedness and borrowings made
primarily for working capital purposes, partially offset by certain repayments
made in the first nine months of 1995.
At September 30, 1995, the Company had working capital of $39,087,000, or 9% of
total assets, compared with $15,767,000, or 5% of total assets, at December 31,
1994. The increase in working capital was due primarily to increases in
accounts receivable and inventories which were partially offset by increases in
notes payable, current installments of long-term debt and accounts payable,
which were primarily due to the effect of the Trigon acquisition, the Company's
higher level of operations and the timing of payments and debt maturities as
discussed above.
The Company's ratio of current assets to current liabilities (current ratio) was
1.2 at June 30, 1995 and 1.1 at December 31, 1994. The Company's ratio of
current assets less inventory to current liabilities (quick ratio) was 0.9
September 30, 1995 and 0.8 at December 31, 1994.
The Company's principal credit facility is an unsecured 1994 credit agreement,
as amended, with Bankers Trust Company, as agent for a syndicate of banks (the
"1994 Credit Facility"), which provides for a $200 million revolving credit
facility (the "1994 Revolving Credit Facility") and a term loan (the "1994 Term
Loan") in the original aggregate principal amount of $100 million, both of which
terminate on June 30, 1999. At September 30, 1995, the Company's available
lines of credit (including the 1994 Revolving Credit Facility) amounted to
approximately $239,000,000 of which approximately $121,000,000 were unused.
Such lines of credit permit the Company and certain of its subsidiaries to make
borrowings for working capital and other corporate purposes.
The 1994 Term Loan is repayable at the rate of $20,000,000 aggregate principal
amount each year in equal quarterly installments through June 30, 1999. There
is no required annual minimum paydown provision under the 1994 Revolving Credit
Facility, but the available commitment under that Facility will be reduced by
$25 million on each of June 30, 1997 and June 30, 1998. The Company currently
intends to make principal payments due under the 1994 Credit Facility primarily
out of funds provided by operations.
The Company's obligations under the 1994 Credit Facility and certain other loans
and other lines of credit bear interest at floating rates. The Company has
entered into certain interest rate cap agreements that are designed to limit the
Company's exposure to rising interest rates. The 1994 Credit Facility provides
for changes in interest rate margins based on certain financial criteria and
imposes certain limitations on the operations of the Company that include
restrictions on the incurrence of additional indebtedness, the creation of
liens, the making of investments and capital expenditures, dispositions of
property or assets, certain transactions with affiliates, and the payment by the
Company of cash dividends to its stockholders as well as certain financial
covenants including requirements as to interest coverage and debt leverage. The
Company was in compliance with these requirements as of September 30, 1995.
The Company expects that the payment of principal and interest on its
indebtedness will remain a significant use of the Company's funds for the
foreseeable future. The ability of the Company to make payments of principal
and interest on its indebtedness, and to comply with the financial covenants
(discussed above) to which it is subject is dependent on the Company's future
performance and business growth, which are subject to financial, economic,
competitive and other factors affecting the Company, many of which may be
beyond the Company's control.
The Company's shareholders' equity increased to $87,306,000 at September 30,
1995 from $11,012,000 at December 31, 1994 primarily as a result of the
Company's net earnings for the first nine months of 1995, the value of shares
of common stock issued in connection with the Trigon acquisition, and the value
of shares of common stock issued during the first nine months of 1995 for
non-cash compensation. The Company's deficit in retained earnings arose from
the payment in 1989 of a special cash dividend to the Company's shareholders,
which deficit has been reduced by accumulated net earnings subsequent to the
payment of such dividend.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Exhibit Number Description
4 Second Amendment to Credit Agreement among the Company,
certain of its subsidiaries, Bankers Trust Company, as agent,
and various financial institutions dated as of July 21, 1995.
10.1 Contingent Stock Plan of the Company, as currently in effect.
10.2 Restricted Stock Plan for Non-Employee Directors of the
Company, as currently in effect.
27 Financial Data Schedule.
b. Reports on Form 8-K.
On August 10, 1995, the Company filed Amendment No. 1 on Form
8-K/A to its Current Report on Form 8-K, Date of Report January 10, 1995. Such
Amendment included the following financial statements and pro forma financial
information filed pursuant to item 7 of such Report:
A. Consolidated Financial Statements of Trigon Industries Limited (in New
Zealand Dollars)
Consolidated Income Statement for the year to June 30, 1994
Consolidated Balance Sheet as at June 30, 1994
Notes to the accounts
Consolidated Statement of Cash Flows for the year ended June 30, 1994
Report of Independent Chartered Accountants dated August 26, 1994
(December 21, 1994 as to certain information in notes 16, 23 and 24)
B. Unaudited Interim Financial Information of Trigon Industries Limited
(In New Zealand dollars):
Consolidated income Statements for the quarters ended September 30,
1994 and 1993
Consolidated Balance Sheet as of September 30, 1994
Notes to unaudited consolidated condensed financial information
C. Unaudited Financial Information of Sealed Air Corporation (certain
information previously presented in the Company's press release made public
on January 19, 1995)
Unaudited Consolidated Condensed Statement of Earnings for the years ended
December 31, 1994 and 1993.
Unaudited Consolidated Condensed Balance Sheet, December 31, 1994 and 1993
Notes to unaudited to consolidated condensed financial information.
D. Unaudited Pro Forma Condensed Consolidating Statement of Earnings for the
year ended December 31, 1994
Unaudited Pro Forma Condensed Consolidating Statement of Earnings for the
year ended December 31, 1994
Unaudited Pro Forma Condensed Consolidating Balance Sheet,
Notes to Unaudited Pro Forma Condensed Consolidating Financial Information
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SEALED AIR CORPORATION
Date: October 31, 1995 By s/Warren H. McCandless
Warren H. McCandless
Senior Vice President-Finance
(Authorized Executive Officer
and Principal Financial Officer)
SECOND AMENDMENT
SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
July 21, 1995, among SEALED AIR CORPORATION, a Delaware corporation (the
"Company"), SEALED AIR B.V., a corporation organized and existing under the
laws of the Netherlands, SEALED AIR LIMITED, a corporation organized and
existing under the laws of England, SEALED AIR HOLDINGS (NZ) LIMITED, a
corporation organized and existing under the laws of New Zealand (each a
"Subsidiary Borrower" and together with the Company, the "Borrowers", and
each a "Borrower"), BANKERS TRUST COMPANY, as Agent (the "Agent") and the
lenders party to the Credit Agreement referred to below. All capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings provided such terms in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Borrowers, various lenders (the "Banks") and the Agent
are parties to a Credit Agreement, dated as of June 8, 1994 (as amended,
modified or supplemented through the date hereof, the "Credit Agreement");
and WHEREAS, the parties hereto wish to further amend the Credit Agreement
as herein provided;
NOW, THEREFORE, it is agreed:
1. Section 3.01(b) of the Credit Agreement is hereby amended by
(i) deleting the reference to "3/8 of 1%" appearing therein and inserting
the reference to "1/4 of 1%" in lieu thereof and (ii) deleting the reference
to "1/4 of 1%" appearing therein and inserting the reference to "1/8 of 1%"
in lieu thereof.
2. The definition of "Applicable Margin" appearing in Section 10.01
of the Credit Agreement is hereby amended by deleting Table B contained therein
in its entirety and inserting the following new Table B in lieu thereof:
Table B
Eurodollar
Applicable Rating Base Rate CD Rate Rate
Period Margin Margin Margin
Category A Period 0% .625% .5%
Category B Period 0% .75% .625%
Category C Period 0% .875% .75%
Category D Period 0% 1.125% 1%
Category E Period .125% 1.25% 1.125%
3. This Amendment is limited as specified and shall not constitute
a modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
4. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Company and the Agent.
5. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
6. This Amendment shall become effective on the date (the
"Amendment Effective Date") when the Borrowers, the Agent and each of the Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of telecopier) the
same to the Agent at its Notice Office.
7. From and after the Amendment Effective Date, all references in
the Credit Agreement and each of the Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Consent to be duly executed and delivered as of the date
first above written.
SEALED AIR CORPORATION
By s/Warren H. McCandless
Title: Senior Vice President - Finance
SEALED AIR B.V.
By s/William V. Hickey
Title: Managing Director
SEALED AIR LIMITED
By s/William V. Hickey
Title: Attorney-In-Fact
SEALED AIR HOLDINGS (NZ)
LIMITED
By s/William V. Hickey
Title: Director
BANKERS TRUST COMPANY,
Individually and as Agent
By s/ Dana Klein
Title: Vice President
ABN AMRO BANK N.V. NEW YORK
BRANCH
By s/John W. Deegan
Title: Vice President
By s/David W. Stack
Title: AVP
THE BANK OF NOVA SCOTIA
By s/Stephen Lockhart
Title: Vice President
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By s/Brian O'Leary
Title: Vice-President
By s/Sean Mounier
Title: First Vice President
NATIONSBANK, N.A. (CAROLINAS)
By s/Scott A. Jackson
Title: Vice President
UNITED JERSEY BANK
By s/Lawrence F. Zema
Title: Vice President & Regional
Manager
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By s/Frederick Kammler
Title: Vice President
By s/
Title:
CREDIT LYONNAIS, NEW YORK
BRANCH
By s/Mary E. Collier
Title: Vice President & Manger
CORESTATES BANK, N.A.
By s/Thomas J. McDonnall
Title: Vice President
THE FIRST NATIONAL BANK OF
BOSTON
By s/ Paula Zaiken
Title: Director
FLEET BANK N.A.
By s/Dorothy E. Bambach
Title: Senior Vice President
THE NORTHERN TRUST COMPANY
By s/ Deborah D. Thomas
Title: Vice President
TORONTO DOMINION (NEW YORK),INC.
By s/ Jorge Garcia
Title: Vice President
MIDLAND BANK PLC (NEW YORK
BRANCH)
By s/ Rochelle Forster
Title: Authorized Signatory
CONTINGENT STOCK PLAN
OF
SEALED AIR CORPORATION,
AS AMENDED
Section 1. Purpose. The purpose of the Contingent Stock
Plan (the "Plan") of Sealed Air Corporation (the "Corporation") is to assist
the Corporation and its subsidiaries in attracting and retaining employees of
outstanding competence by providing an incentive which permits those employees
responsible for the Corporation's growth to share directly in that growth and
to further the identity of their interests with those of the stockholders of
the Corporation.
Section 2. Administration. The Plan shall be administered by
a committee (the "Committee") composed of not less than three persons chosen
from time to time by the Board of Directors of the Corporation (the "Board")
from among those directors of the Corporation who are not, and have not been
for at least one year, employees of the Corporation or its subsidiaries. In
addition to the powers granted to the Committee as elsewhere set forth in the
Plan, and subject to the terms and conditions of the Plan, the Committee is
authorized to interpret the Plan, to adopt and revise rules and regulations
relating to the Plan and the conduct of the business of the Committee, and to
make all determinations that it believes necessary or advisable for the
operation and administration of the Plan. All decisions and determinations by
the Committee with respect to the Plan shall be final, binding and conclusive
upon all parties, including the Corporation, its stockholders and all employees
of the Corporation and of its subsidiaries. If no Committee is appointed by
the Board or if the Committee shall for any reason cease or become unable to
act, the Board shall act as the Committee. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any award ("Award") of a right to purchase shares of the $.01 par value
Common Stock of the Corporation (the "Common Stock") granted pursuant to the
Plan.
Section 3. Stock Available. The stock subject to the Plan
shall be such authorized but unissued or treasury shares of Common Stock as
shall from time to time be determined by the Committee. The total amount of
Common Stock which may be issued pursuant to the Plan is 6,400,000 shares,
subject, however, to adjustment in accordance with the provisions of Section
15. In the event that any Common Stock issued pursuant to the Plan is
reacquired by the Corporation upon the exercise of an option described in
Section 8, the shares of Common Stock so acquired will again become available
for issuance pursuant to the Plan.
Section 4. Eligibility. Each employee of the Corporation
or any subsidiary of the Corporation, including officers, whom the Committee
determines is in a position to make a significant contribution to the growth
and success of the Corporation shall be eligible to participate under the Plan
("Employee"). An Employee may receive more than one Award under the Plan.
Section 5. Terms, Conditions and Form of Purchase
Agreements. The Committee shall have exclusive jurisdiction, except as
otherwise limited by the Plan, to grant all Awards, to select the Employees to
be granted Awards, to determine the number of shares of Common Stock to be
covered by an Award, to determine the time or times for the grant of Awards,
to determine the Issue Price (as such term is defined in Section 7) of the
shares of Common Stock which are the subject of an Award, to determine the
duration of the Corporation's option described in Section 8, to prescribe the
form or forms of agreement for the purchase of the Common Stock which is the
subject of an Award ("Purchase Agreement"), to modify any such form of Purchase
Agreement, and to have full authority with respect to all other matters
relating to the Plan except those matters as are expressly reserved herein to
the stockholders of the Corporation. The Committee shall inform the
appropriate officers of the Corporation of its determinations, and such
officers shall inform the Employee to whom an Award has been made of the grant
of such Award. The Committee may authorize any officer of the Corporation to
enter into Purchase Agreements on behalf of the Corporation and to take all
other action necessary or desirable to effectuate the determinations of the
Committee. Purchase Agreements, which need not be identical, shall be in
writing and shall not contain provisions inconsistent with provisions of the
Plan.
Section 6. Exercise of Right to Purchase Shares. An
Employee who has been granted an Award may exercise his right to purchase
shares of Common Stock during the 60 day period beginning immediately after the
grant of the Award, provided that he is still an employee of the Corporation or
of a subsidiary of the Corporation on the date of such exercise. In order to
so exercise such right to purchase, an Employee shall give written notice to
the Corporation of such election. The Issue Price of the shares to be issued
shall be tendered in cash at the time such notice is given. No such right to
purchase shares shall be transferable by an Employee to whom an Award has been
granted.
Section 7. Issue Price of Common Stock. Prior to the
issuance of Common Stock to an Employee pursuant to the Plan, the Employee
shall pay to the Corporation an amount of money per share ("Issue Price") to be
determined by the Committee which shall take into consideration the value of
the services performed and to be performed by the Employee, which amount shall
not be less per share than the par value of the Common Stock nor more than ten
percent (10%) of the fair market value per share thereof. For the purposes of
the foregoing sentence, "fair market value per share" shall mean the last sales
price of the Common Stock as reported on the consolidated transaction reporting
system for New York Stock Exchange listed issues on the day prior to the day on
which an Employee gives notice to the Corporation of his exercise of an award
or, if no sales occurred on such date, the last sales price on the consolidated
transaction reporting system on the most recent day prior to such previous day
on which a sale occurred. If the Common Stock ceases to be listed on the New
York Stock Exchange, Inc., fair market value per share shall be determined in
such manner as shall be selected by the Committee. If the Issue Price (as
determined by the Committee on the date of an award) shall exceed ten per
cent (10%) of the fair market value per share determined as of the day prior to
the exercise date of an award, the Issue Price shall be reduced to an amount
which shall represent ten percent (10%) of the fair market value per share on
such previous day.
Section 8. Option of the Corporation to Reacquire Issued Stock.
Except as provided below, for a period beginning on the date of the grant of
an award and ending on the third anniversary of such date or such later date
as the Committee shall determine, any Common Stock issued pursuant to the Plan
shall be subject to an option in favor of the Corporation to reacquire such
Common Stock at a price per share equal to the Issue Price. Neither the shares
of Common Stock issued pursuant to the Plan nor any interest therein shall be
sold, transferred or encumbered until such option may no longer become
exercisable. The option of the Corporation to reacquire such Common Stock
shall become exercisable only upon the termination of employment of the
Employee with the Corporation or any of its subsidiaries other than as a result
of the Employee's death or permanent and total disability. The decision
whether or not to exercise such option as to all or part of the shares subject
thereto owned by an Employee shall be made by the Committee and communicated to
the President or other appropriate officer of the Corporation who shall be
authorized to take any and all action necessary to effectuate such decision.
Section 9. Exercise of Option to Reacquire Issued Stock. The
option described in Section 8 shall be exercised in whole or part by the
Corporation by its sending, if at all, within 90 days after the Employee's
termination of employment, by registered mail, postage prepaid, written notice
of such exercise to the Employee at the address specified by the Employee for
such purpose, such notice also to set forth the address to which and the date
on which the certificates representing the Common Stock in respect of which the
option is being exercised, duly endorsed for transfer, should be sent. The
date specified shall not be less than ten days nor more than thirty days from
the date of such notice. The Employee or his successor in interest with
respect to such shares shall have no further rights as a stockholder from and
after the date so specified in such notice. If the certificates are duly
delivered in accordance with the written notice, the Corporation shall promptly
send to the Employee its check in repayment of the Issue Price for such shares.
The Corporation shall affix to the certificates any required stock transfer
stamps. If the certificates are not so delivered, the Corporation shall
deposit the required amount of payment in an escrow account in the name of the
Employee to be held therein until such certificates are delivered to the
Corporation and the Corporation shall immediately advise its transfer agent of
such action.
Section 10. Legend on Stock Certificates. Every
certificate of Common Stock issued pursuant to the Plan shall, so long as the
restrictions imposed by the Plan remain in effect, bear a legend in
substantially the following form:
This certificate and the shares represented hereby are held subject
to the terms of the Contingent Stock Plan of Sealed Air Corporation which
Plan provides that the shares issued pursuant thereto are subject to an
option in favor of Sealed Air Corporation to reacquire such shares at a
price which may be significantly lower than their fair market value and
that neither such shares nor any interest therein may be sold, transferred
or encumbered until the expiration of such option. If such option is
exercised, the holder of the shares represented by this certificate will
have no further rights with respect to such shares and this certificate
will be deemed void. A copy of such Plan is available for inspection at
the executive offices of Sealed Air Corporation.
Upon the expiration of the Corporation's option to reacquire shares of Common
Stock, an Employee may surrender to the Corporation the certificate or
certificates representing such shares in exchange for a new certificate or
certificates, free of the above legend.
Section 11. Government and Other Regulations and
Restrictions. The obligation of the Corporation to issue Common Stock upon
execution of a Purchase Agreement shall be subject to all applicable laws,
rules and regulations and to such approvals by governmental agencies as may be
required. Shares of Common Stock acquired pursuant to the Plan shall not be
sold, transferred or otherwise disposed of unless and until either (a) such
shares shall have been registered by the Corporation under the Securities Act
of 1933, as amended (the "Securities Act"), (b) the Corporation shall have
received either a "no action" letter from the Securities and Exchange Commission
or an opinion of counsel acceptable to the Corporation to the effect that such
sale, transfer or other disposition of the shares may be effected without such
registration or (c) such sale, transfer or disposition of the shares is made
pursuant to Rule 144 of the General Rules and Regulations promulgated under the
Securities Act, as the same may from time to time be in effect, and the
Corporation shall have received an opinion of counsel acceptable to the
Corporation to such effect. In the event that at the time a Purchase
Agreement is executed there shall not be on file with the Securities and
Exchange Commission an effective Registration Statement under the Securities
Act covering the shares of Common Stock to be issued pursuant thereto the
Employee will execute and deliver to the Corporation upon receipt by him of
any such shares an undertaking in form and substance satisfactory to the
Corporation that (i) it is his intention to acquire and hold such shares for
investment and not for the resale or distribution thereof, (ii) he will comply
with the Securities Act with respect to such shares, and (iii) he will
indemnify the Corporation for any costs, liabilities and expenses which it may
sustain by reason of any violation of the Securities Act occasioned by any act
on his part with respect to such shares. The Corporation may require that any
certificate or certificates evidencing shares issued pursuant to the Plan bear
a restrictive legend intended to effect compliance with the Securities Act or
any other applicable regulatory measures.
Section 12. Registration of Shares. The Corporation shall
be under no obligation to register any shares of Common Stock under the
Securities Act. However, a Purchase Agreement may make appropriate and
reasonable provision for the registration of Common Stock acquired thereunder.
The Corporation, at its election, may undertake to pay all fees and expenses
of each such registration, other than an underwriter's commission, if any.
Section 13. No Rights in Common Stock. No Employee shall
have any interest in or be entitled to any voting rights or dividends or other
rights or privileges of stockholders of the Corporation with respect to any
shares of Common Stock unless, and until, shares of Common Stock are actually
issued to such Employee following execution of a Purchase Agreement and then
only from the date the Employee becomes the record owner thereof.
Section 14. Subsidiaries. The subsidiaries of the
Corporation referred to in the Plan are those corporations 50 per cent or more
of whose outstanding voting stock is owned or controlled, directly or
indirectly, by the Corporation and those partnerships and joint ventures in
which the Corporation owns directly or indirectly a 50 percent or more interest
in the capital account or earnings.
Section 15. Adjustments. In the event of changes in the
Common Stock of the Corporation after the effective date of the Plan by reason
of any stock dividend, split-up, combination of shares, reclassification,
recapitalization, merger, consolidation, reorganization, or liquidation: (a)
the restrictions and the option provided in Section 8 and the requirement of a
legend on stock certificates provided in Section 10 shall apply to any
securities issued in connection with any such change in respect of stock which
has been awarded under the Plan and (b) appropriate adjustments shall be made by
the Committee as to (i) the number of shares to be delivered and the price per
share to be paid by the Corporation upon the exercise, in whole or in part, of
the option provided in Section 8, (ii) the number of shares to be delivered and
the Issue Price where such change occurred after the date of the Award but
before the date the stock covered by the Award is delivered and (iii) the number
and class of shares available under the Plan in the aggregate. Notwithstanding
any other provisions of the Plan, in the event that (i) the Corporation is
merged into or consolidated with another corporation or other entity and as a
result of such merger or consolidation less than 70% of the combined voting
power of the outstanding voting securities of the surviving or resulting
corporation or other entity shall, after giving effect to such merger or
consolidation, be "beneficially owned" (within the meaning of Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act") in the aggregate, directly or indirectly, by the former
stockholders of the Corporation (excluding from such computation any such
securities beneficially owned, directly or indirectly, by "affiliates" of the
Corporation (as defined in Rule 12b-2 under the Securities Exchange Act) and any
such securities to beneficially owned, directly or indirectly, by a party to
such merger or consolidation), (ii) the Corporation shall sell all or
substantially all of its assets, (iii) any "person" is or becomes the
"beneficial owner" (as the terms "person" and "beneficial owner" are used in
Sections 13(d) and 14(d) of the Securities Exchange Act), directly or
indirectly, of securities of the Corporation representing 30% or more of the
combined voting power of the Corporation's ten outstanding securities, (iv)
as a result of any solicitation subject to Rule 14a-11 under the Securities
Exchange Act (or any successor rule thereto) one or more persons not
recommended by or opposed for election to the Board of Directors by one-third
or more of the directors of the Corporation then in office is or are elected a
director of the Corporation, or (v) the Corporation shall become subject for
any reason to a voluntary or involuntary dissolution or liquidation, then, in
any such event, as of the close of business at the principal executive office
of the Corporation on the business day immediately preceding the date on which
such event occurs, for purposes of the Plan and to the extent that the
provisions of the Plan remain applicable to shares awarded under the Plan, the
option provided for in Section 8 of the Plan shall cease without further act to
be exercisable with respect to any securities subject to an Award under the
Plan, the restrictions provided for in Section 8 of the Plan shall without
further act expire and cease to apply to any securities subject to an Award
under the Plan, the requirement of a legend on stock certificates provided for
in Section 10 of the Plan shall without further act expire and cease to apply
to any securities subject to an Award under the Plan, and each Employee holding
shares issued under the Plan shall thereupon have the right to receive an
unlegended certificate as set forth in the last sentence of Section 10 of the
Plan.
Section 16. Successors. The provisions of the Plan shall
be binding upon and inure to the benefit of all successors of any person
receiving Common Stock of the Corporation pursuant to the Plan, including,
without limitation, the estate of such person and the executors, administrators
or trustees thereof, the heirs and legatees of such person, and any receiver,
trustee in bankruptcy or representative of creditors of such person.
Section 17. Indemnification of Committee Members. In
addition to such other rights of indemnification as they may have as directors
or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against all costs and expenses reasonably
incurred by them in connection with any action, sit or proceeding to which
they or any of them may be party by reason of any action taken or failure to
act under or in connection with the Plan, and against all amounts paid by them
in settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except a judgment based upon
a finding of bad faith, provided that upon institution of any such action, suit
or proceeding, the Committee member desiring indemnification shall give the
Corporation an opportunity, at its own expense, to conduct and defend the
same.
Section 18. Corporation's Right to Terminate Employment.
Nothing contained in the Plan or in any Purchase Agreement shall confer upon any
Employee a right to continue in the employ of the Corporation or any of its
subsidiaries or interfere in any way with the right of the Corporation or any
of its subsidiaries to terminate the employment of any Employee at any time,
without cause.
Section 19. Tax Withholding. Each Purchase Agreement
incident to the Plan shall make appropriate provisions for the withholding of
any Federal, state or local taxes and any other charges that may be required
by law to be withheld by reason of an Award, the issuance of Common Stock
pursuant to the Plan or the reacquisition of such Common Stock by the
Corporation.
Section 20. Action by Corporation. Neither the existence
of the Plan nor the issuance of Common Stock pursuant thereto shall impair the
right of the Corporation or its stockholders to make or effect any adjustments,
recapitalizations or other change in the Common Stock referred to in Section 15,
any change in the Corporation's business, any issuance of debt obligations or
stock by the Corporation or any grant of options on stock of the Corporation.
Section 21. Reliance on Reports. Each member of the
Committee shall be fully justified in relying or acting in good faith upon any
reports or other information furnished in connection with the Plan by any person
or persons. In no event shall any person who is or shall have been a member of
the Committee be liable for any determination made or other action taken or any
omission to act in reliance upon any such report or information or for any
action taken or failure to act, if in good faith.
Section 22. Expenses. The expenses of administering the Plan
shall be borne by the Corporation.
Section 23. Pronouns. Masculine pronouns and other words
of masculine gender shall refer to both men and women.
Section 24. Termination and Amendment of the Plan. The
Committee shall have complete power and authority to amend, suspend or terminate
the Plan and, if suspended, reinstate any and all provisions of the Plan except
that without further approval of the stockholders of the Corporation and except
as otherwise provided in Section 15, (i) the number of shares available for
issuance under the Plan either in the aggregate or to any one person shall not
be increased, (ii) the minimum three year period specified in Section 8 shall
not be decreased, (iii) the class of persons eligible to receive awards under
the Plan shall not be expanded, and (iv) the minimum Issue Price shall not be
decreased. Any Common Stock issued under the Plan with respect to which the
period specified in or pursuant to Section 8 has not expired on or before the
date of termination of the Plan shall remain subject to reacquisition by the
Corporation pursuant to Section 8 until the expiration of such period.
Section 25. Effective Date. The Plan shall become effective on
May 21, 1976.
RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
OF
SEALED AIR CORPORATION
Section 1. Purpose. The Restricted Stock Plan for Non-Employee
Directors (the "Plan") of Sealed Air Corporation (the "Corporation") is designed
to enhance the ability of the Corporation to attract and retain Non-Employee
Directors (as defined in Section 3) of exceptional ability and to promote the
common interest of directors and stockholders in enhancing the value of the
Corporation's Common Stock. It is the intention of the Plan to provide for
payment in shares of the Corporation's common stock, par value $0.01 per share
("Common Stock"), of all or a portion of the annual retainer paid to each
Non-Employee Director for serving as a director of the Corporation.
Section 2. Stock Available. The stock subject to the Plan
shall be such authorized but unissued or treasury shares of Common Stock as
shall from time to time be available for issuance pursuant to the Plan. The
total amount of Common Stock which may be issued pursuant to the Plan is 200,000
shares, subject to adjustment in accordance with the provisions of Section 7.
Section 3. Eligibility. Each Non-Employee Director of the
Corporation shall be eligible to participate in the Plan. As used in the Plan,
the term "Non-Employee Director" shall include any person who, at the time of
his or her election to the Board of Directors of the Corporation, is not an
officer or employee of the Corporation or any of its Subsidiaries (as such term
is defined in Section 16). Any Non-Employee Director who becomes an officer or
employee of the Corporation or any of its Subsidiaries shall cease to be
eligible to participate in the Plan for so long as such person remains as such
an officer or employee.
Section 4. Grants of Shares. Grants of shares of Common
Stock available for issuance under the Plan shall be made as follows:
(a) Initial Grants. On the date any Non-Employee Director
is first elected a director of the Corporation on or after the Effective Date
(as defined in Section 20) of the Plan, such Non-Employee Director shall
receive a grant of 500 shares of Common Stock pursuant to the Plan; provided
that such grant shall not be made to a Non-Employee Director who was, within
twelve (12) months immediately preceding his or her election as a director, an
officer or employee of the Corporation or any of its Subsidiaries.
(b) Annual Grants. On the date on which each
Non-Employee Director is elected a director of the Corporation at each annual
meeting of the stockholders of the Corporation, held on or after the Effective
Date of the Plan, such Non-Employee Director shall receive a grant of shares of
Common Stock pursuant to the Plan calculated by dividing $15,000 by the Fair
Market Value Per Share (as defined in Section 4(d)) of the Corporation's
Common Stock at the close of business on such date. In the event that such
quotient is other than a round lot of shares of the Corporation's Common Stock,
the number of shares to be issued to such Non-Employee Director pursuant to such
grant shall be rounded up or down to the next nearest round lot in accordance
with Section 4(e).
(c) Interim Grants. In the event that, on or after
the Effective Date of the Plan, any Non-Employee Director is elected a director
at other than an annual meeting of the stockholders of the Corporation, in
addition to any shares of Common Stock granted to such director pursuant to
Section 4(a), such Non-Employee Director shall also receive on the date of such
Non-Employee Director's election a grant of shares of Common Stock pursuant to
the Plan calculated by (i) dividing $15,000 by the Fair Market Value Per Share
of the Corporation's Common Stock at the close of business on such date and (ii)
multiplying such quotient by a fraction the numerator of which shall be the
number of days remaining from the date of such Non-Employee Director's election
to the date of the next annual meeting of the stockholders of the Corporation
provided for in accordance with the By-Laws of the Corporation as then in effect
and the denominator of which shall be 365. In the event that such product is
other than a round lot of shares of the Corporation's Common Stock, the number
of shares to be issued to such Non-Employee Director pursuant to such grant
shall be rounded up or down to the next nearest round lot in accordance with
Section 4(e).
(d) Fair Market Value Per Share. As used in the Plan,
the term "Fair Market Value Per Share" shall mean the last sales price of the
Common Stock as reported on the composite transaction reporting system for New
York Stock Exchange listed issues on the day on which a grant is made pursuant
to the Plan or, if no sales occurred on such date, the last sales price on such
composite transaction reporting system on the most recent day prior to such day
on which a sale occurred.
(e) Rounding. In the event that rounding of a grant
is required pursuant to Section 4(b) or 4(c), an odd lot of 50 or more shares
of Common Stock shall be rounded to the next highest round lot and an odd lot
of less than 50 shares of Common Stock shall be rounded to the next lowest
round lot.
(f) Non-Transferability of Grants. No grant of shares
of Common Stock pursuant to the Plan shall be transferable by the recipient of
such grant, and no shares of Common Stock issued pursuant to the Plan, or any
interest therein, may be sold, transferred, pledged, encumbered or otherwise
disposed of (including without limitation by way of gift or donation) by the
Non-Employee Director to whom such shares are issued as long as such
Non-Employee Director shall remain a director of the Corporation.
(g) Execution of Agreement. Each grant of Common Stock
pursuant to this Section 4 shall be contingent upon and subject to (i) payment
by such Non-Employee Director pursuant to Section 5 of the Issue Price for the
shares covered by such grant and (ii) the execution by the Non-Employee Director
of a document agreeing to hold the shares of Common Stock covered by such grant
in accordance with the terms and conditions of the Plan (including without
limitation Sections 4(f) and 13) and containing such other terms and conditions
as may be required by counsel to the Corporation in order to comply with federal
or state securities laws or other legal requirements.
Section 5. Issue Price of Common Stock. Prior to the
issuance of Common Stock to a Non-Employee Director pursuant to the Plan,
the Non-Employee Director shall pay to the Corporation an amount of money
per share ("Issue Price") equal to the lesser of (a) $1.00 per share and (b)
ten percent (10%) of the Fair Market Value Per Share thereof; provided,
however, that such amount shall not be less per share than the par value per
share of the Common Stock. The Issue Price for shares of Common Stock granted
pursuant to the Plan shall be tendered to the Corporation within thirty (30)
days after notice of the amount thereof is given by the Corporation to the
recipient of such shares.
Section 6. Change in Control. Notwithstanding any other
provision of the Plan, in the event that (i) the Corporation is merged into
or consolidated with another corporation or other entity and as a result of
such merger or consolidation less than 70% of the combined voting power of
the outstanding voting securities of the surviving or resulting corporation
or other entity shall, after giving effect to such merger or consolidation,
be "beneficially owned" (within the meaning of Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Securities Exchange
Act")) in the aggregate, directly or indirectly, by the former stockholders
of the Corporation (excluding from such computation any such securities
beneficially owned, directly or indirectly, by "affiliates" of the
Corporation (as defined in Rule 12b-2 under the Securities Exchange Act) and
any such securities so beneficially owned, directly or indirectly, by a
party to such merger or consolidation), (ii) the Corporation shall sell
all or substantially all of its assets, (iii) any "person" is or becomes the
"beneficial owner" (as the terms "person" and "beneficial owner" are used in
Sections 13(d) and 14(d) of the Securities Exchange Act), directly or
indirectly, of securities of the Corporation representing 30% or more of the
combined voting power of the Corporation's then outstanding securities, (iv)
as a result of any solicitation subject to Rule 14a-11 under the Securities
Exchange Act (or any successor rule thereto) one or more persons not
recommended by or opposed for election to the Board of Directors by one-third
or more of the directors of the Corporation then in office is or are elected
a director of the Corporation, or (v) the Corporation shall become subject
for any reason to a voluntary or involuntary dissolution or liquidation,
then, in any such event, as of the close of business at the principal
executive office of the Corporation on the business day immediately preceding
the date on which such event occurs, for purposes of the Plan and to the
extent that the provisions of the Plan remain applicable to shares granted
under the Plan, the restriction provided for in Section 4(f) of the Plan
shall without further act expire and cease to apply to any securities granted
under the Plan, the requirement of a legend on stock certificates provided
for in Section 9 of the Plan shall without further act expire and cease to
apply to any securities granted under the Plan, and each Non-Employee
Director holding shares issued under the Plan shall thereupon have the right
to receive an unlegended certificate as set forth in the last sentence of
Section 9 of the Plan.
Section 7. Adjustments. In the event of changes in the
Common Stock of the Corporation after the Effective Date of the Plan by
reason of any stock dividend, split-up, combination of shares,
reclassification, recapitalization, merger, consolidation, reorganization or
liquidation: (a) the restrictions provided in Section 4(f) and the
requirement of a legend on stock certificates provided in Sections 9 and
10(d) shall apply to any securities issued in connection with any such change
in respect of stock which has been granted under the Plan and (b) appropriate
adjustments shall be made by the Board of Directors as to (i) the number of
shares to be delivered and the Issue Price where such change occurred after
the date of the grant but before the date the stock covered by the grant is
delivered and (ii) the number and class of shares available under the Plan in
the aggregate, which changes shall be made in the same manner as such items
are adjusted for purposes of the Contingent Stock Plan of Sealed Air
Corporation as then in effect.
Section 8. Action by Corporation. Neither the existence
of the Plan nor the issuance of Common Stock pursuant thereto shall impair
the right of the Corporation or its stockholders to make or effect any
adjustments, recapitalizations or other change in the Common Stock referred
to in Section 7, any change in the Corporation's business, any issuance of debt
obligations or stock by the Corporation or any grant of options on stock of the
Corporation.
Section 9. Legend on Stock Certificates. Every
certificate of Common Stock issued pursuant to the Plan shall, so long as
the restrictions imposed by the Plan (including without limitation Section 4
(f)) remain in effect, bear a legend in substantially the following form:
This certificate and the shares represented hereby are held
subject to the terms of the Restricted Stock Plan for
Non-Employee Directors of Sealed Air Corporation, which Plan
provides that neither the shares issued pursuant thereto,
nor any interest therein, may be sold, transferred, pledged,
encumbered or otherwise disposed of (including without
limitation by way of gift or donation) except in accordance
with such Plan. A copy of such Plan is available for
inspection at the executive offices of Sealed Air
Corporation.
Each Non-Employee Director may surrender to the Corporation the certificate or
certificates representing such shares in exchange for a new certificate or
certificates, free of the above legend, at any time after either such
Non-Employee Director has ceased to be a director of the Corporation or the
restriction set forth in Section 4(f) has otherwise ceased to apply to the
shares covered by such certificate.
Section 10. Government and Other Regulations and
Restrictions.
(a) In General. The issuance by the Corporation of any
shares of Common Stock pursuant to the Plan shall be subject to all applicable
laws, rules and regulations and to such approvals by governmental agencies as
may be required.
(b) Registration of Shares. The Corporation shall be under
no obligation to register any shares of Common Stock issued under the Plan under
the Securities Act of 1933, as amended (the "Securities Act"), or otherwise.
In the event that, at the time any shares of Common Stock are issued pursuant
to the Plan, there shall not be on file with the Securities and Exchange
Commission an effective Registration Statement under the Securities Act covering
such shares of Common Stock, the Non-Employee Director to whom such shares are
to be issued will execute and deliver to the Corporation upon receipt by him
or her of any such shares an undertaking, in form and substance satisfactory
to the Corporation, that (i) such Non-Employee Director has had access or will,
by reason of such person's service as a director of the Corporation, have access
to sufficient information concerning the Corporation to enable him or her to
evaluate the merits and risks of the acquisition of shares of the Corporation's
Common Stock pursuant to the Plan, (ii) such Non-Employee Director has such
knowledge and experience in financial and business matters that such person is
capable of evaluating such acquisition, (iii) it is the intention of such
Non-Employee Director to acquire and hold such shares for investment and not
for the resale or distribution thereof, (iv) such Non-Employee Director will
comply with the Securities Act and the Securities Exchange Act with respect to
such shares, and (v) such Non-Employee Director will indemnify the Corporation
for any costs, liabilities and expenses which it may sustain by reason of any
violation of the Securities Act or the Securities Exchange Act occasioned by any
act or omission on his or her part with respect to such shares.
(c) Resale of Shares. Without limiting the generality of
Section 4(f), shares of Common Stock acquired pursuant to the Plan shall not
be sold, transferred or otherwise disposed of unless and until either (i) such
shares shall have been registered by the Corporation under the Securities Act,
(ii) the Corporation shall have received either a "no action" letter from the
Securities and Exchange Commission or an opinion of counsel acceptable to the
Corporation to the effect that such sale, transfer or other disposition of the
shares may be effected without such registration, or (iii) such sale, transfer
or disposition of the shares is made pursuant to Rule 144 of the General Rules
and Regulations promulgated under the Securities Act, as the same may from time
to time be in effect, and the Corporation shall have received an opinion of
counsel acceptable to the Corporation to such effect.
(d) Legend on Certificates. The Corporation may require
that any certificate or certificates evidencing shares issued pursuant to the
Plan bear a restrictive legend, and be subject to stop-transfer orders or other
actions, intended to effect compliance with the Securities Act or any other
applicable regulatory measures.
Section 11. Corporation's Right to Terminate Retention;
Non-Exclusivity. Nothing contained in the Plan shall prevent the Board of
Directors from adopting other or additional compensation arrangements or
modifying existing compensation arrangements for Non-Employee Directors, subject
to stockholder approval if such approval is required by applicable statute,
rule or regulation; and such arrangements may be either generally applicable
or applicable only in specific cases. The adoption of the Plan shall not confer
upon any member of the Board of Directors of the Corporation any right to
continued membership on the Board of Directors of the Corporation.
Section 12. No Rights in Common Stock. No Non-Employee Director
shall have any interest in or be entitled to any voting rights or dividends or
other rights or privileges of stockholders of the Corporation with respect to
any shares of Common Stock granted pursuant to the Plan unless, and until,
shares of Common Stock are actually issued to such Non-Employee Director and
then only from the date the Non-Employee Director becomes the record owner
thereof.
Section 13. Tax Withholding. The Corporation may make such
provisions and take such steps as it may deem necessary or appropriate, and each
Non-Employee Director shall undertake to comply with such requests as may be
made by the Corporation, in respect of the withholding of any Federal, state or
local taxes and any other charges that may be required by law to be withheld by
reason of a grant or the issuance of shares of Common Stock pursuant to the
Plan.
Section 14. No Liability. No member of the Board of
Directors of the Corporation, nor any officer or employee of the Corporation
acting on behalf of the Board of Directors of the Corporation, shall be
personally liable for any action, determination or interpretation taken or
made in good faith with respect to the Plan, and all members of the Board of
Directors and each and any officer or employee of the Corporation acting on
their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation in respect of any such action, determination or
interpretation.
Section 15. Successors. The provisions of the Plan shall
be binding upon and inure to the benefit of all successors of any person
receiving Common Stock of the Corporation pursuant to the Plan, including,
without limitation, the estate of such person and the executors, administrators
or trustees thereof, the heirs and legatees of such person, and any receiver,
trustee in bankruptcy or representative of creditors of such person.
Section 16. Subsidiaries. For the purposes of the Plan,
the term "Subsidiaries" includes those corporations 50 per cent or more of whose
outstanding voting stock is owned or controlled, directly or indirectly, by the
Corporation and those partnerships and joint ventures in which the Corporation
owns directly or indirectly a 50 per cent or more interest in the capital
account or earnings.
Section 17. Expenses. The expenses of administering the
Plan shall be borne by the Corporation.
Section 18. Pronouns. Masculine pronouns and other words
of masculine gender shall refer to both men and women.
Section 19. Termination and Amendment of the Plan. The
Board of Directors may from time to time amend this Plan, or discontinue the
Plan or any provisions thereof; provided that no amendment or modification of
the Plan shall, without the prior approval of the stockholders of the
Corporation:
(a) increase the number of shares of Common Stock
available for grant under the Plan;
(b) materially increase the benefits accruing to
participants under the Plan;
(c) modify the requirements as to eligibility for
participation under the Plan; or
(d) change any of the provisions of this Section 19.
No amendment or discontinuation of the Plan or any provision thereof shall,
without the written consent of the participant, adversely affect any shares
theretofore granted to such participant under the Plan.
Section 20. Effective Date. The Plan shall become
effective (the "Effective Date") on the date of its approval by the affirmative
vote of a majority of the shares of the Corporation's Common Stock entitled to
vote at the meeting of the stockholders at which the Plan is submitted for
approval.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from the consolidated
statement of earnings for the nine months ended September 30, 1995 and the
consolidated balance sheet at September 30, 1995 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000088204
<NAME> SEALED AIR CORPORATION
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
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0
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