<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 14a-11(c) or 14a-12
</TABLE>
SEALED AIR CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 1996
------------------
The Annual Meeting of Stockholders of Sealed Air Corporation, a Delaware
corporation (the "Company"), will be held on May 17, 1996 at 11:00 A.M., Eastern
Daylight Savings Time, at the offices of the Company at Park 80 East, Second
Floor, Saddle Brook, New Jersey 07663-5291, for the following purposes:
1. to elect directors;
2. to consider and act upon proposed amendments of the Restricted
Stock Plan for Non-Employee Directors of the Company;
3. to ratify the appointment of KPMG Peat Marwick LLP as the
independent auditors of the Company for the fiscal year ending
December 31, 1996; and
4. to transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 20, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting.
A copy of the Company's 1995 Annual Report to Stockholders has been sent to
all stockholders of record. Additional copies are available upon request.
The Company invites you to attend the meeting so that management can review
the past year with you, listen to your suggestions, and answer any questions you
may have. In any event, because it is important that as many stockholders as
possible be represented at the meeting, please review the attached Proxy
Statement promptly and then complete and return the enclosed proxy in the
accompanying post-paid, addressed envelope. If you attend the meeting, you may
vote your shares personally even though you have previously mailed the enclosed
proxy.
By Order of the Board of Directors
H. KATHERINE WHITE
Secretary
Saddle Brook, New Jersey
March 27, 1996
<PAGE> 3
SEALED AIR CORPORATION
PARK 80 EAST
SADDLE BROOK, NEW JERSEY 07663-5291
PROXY STATEMENT
DATED MARCH 27, 1996
------------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 1996
------------------------
GENERAL INFORMATION
This Proxy Statement is being furnished to the stockholders of Sealed Air
Corporation, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held at the offices of the Company at Park 80 East,
Second Floor, Saddle Brook, New Jersey at 11:00 A.M., Eastern Daylight Savings
Time, on May 17, 1996 and at any adjournments thereof. The enclosed proxy is
being solicited by the Board of Directors of the Company.
In order for shares to be voted at the Annual Meeting, the record owner of
such shares must either duly execute and return a proxy representing such shares
at or before the Annual Meeting or vote such shares in person at the Annual
Meeting. Shares represented by proxies so executed and returned will be treated
as being present for the purpose of determining the presence of a quorum at the
meeting. If a stockholder specifies on the proxy the manner in which such
stockholder's shares are to be voted on a matter, the shares represented by the
proxy will be voted in accordance with such specification. If a stockholder does
not make such a voting specification, such shares will be voted in the manner
recommended by the Board of Directors as indicated in this Proxy Statement and
on the proxy.
Stockholders who own shares through a brokerage firm, bank or other nominee
should expect to be contacted by such institution for voting instructions. Under
the rules of the New York Stock Exchange, Inc., brokers who hold shares in
street name for customers have the authority to vote on certain items when they
have not received instructions from their customers who are the beneficial
owners of such shares. The Company understands that, unless instructed to the
contrary by the beneficial owners of shares held in street name, brokers may
exercise such authority to vote on the election of directors, the amendment of
the Restricted Stock Plan for Non-Employee Directors of the Company, and the
ratification of the appointment of the Company's auditors. Any shares owned
through a brokerage firm, bank or other nominee that are not voted on any of the
matters to be considered at the meeting will not be considered as present and
entitled to vote at the meeting. Proxies marked as abstaining (including proxies
containing broker non-votes) on any matter to be acted upon by the stockholders
will be treated as present at the meeting for the purpose of determining a
quorum but will not be counted as votes cast on such matters.
A stockholder of record giving the enclosed proxy has the power to revoke
it at any time before it is exercised by giving written notice to the Company
bearing a later date than the proxy, by the execution and delivery to the
Company of a subsequently dated proxy, or by voting in person at the Annual
Meeting. Any stockholder may vote in person at the Annual Meeting whether or not
he or she has previously given a proxy.
Each participant in the Company's Profit-Sharing Plan will receive a
separate voting instruction card requesting that the participant provide voting
instructions to Bankers Trust Company, trustee for the Profit-Sharing Plan (the
"Trustee"), for the shares of Common Stock allocated to his or her account in
such Plan. The Trustee will vote such shares as directed by each participant who
provides voting instructions to it. In accordance with the terms of such Plan,
shares allocated to the accounts of participants who do not provide voting
instructions will be voted by the Trustee in the same proportion as shares are
voted for participants who provide voting instructions.
This Proxy Statement and the enclosed proxy are first being mailed to
stockholders on or about March 27, 1996.
<PAGE> 4
VOTING SECURITIES
The only voting securities of the Company are the outstanding shares of its
common stock, par value $0.01 per share ("Common Stock"). As of March 20, 1996,
42,414,205 shares of Common Stock were issued and outstanding. Each stockholder
is entitled to one vote for each share of Common Stock held. Only holders of
record of Common Stock at the close of business on March 20, 1996 will be
entitled to notice of and to vote at the Annual Meeting.
A majority of such outstanding shares present in person or represented by
proxy will constitute a quorum for the transaction of business at the Annual
Meeting. Under the Company's By-Laws and the laws of the State of Delaware,
directors are elected by a majority of the votes cast in the election, and the
adoption of the proposed amendment to the Company's Restricted Stock Plan for
Non-Employee Directors, the ratification of the appointment of auditors and any
other matters to be considered at the Annual Meeting will be decided by the vote
of the holders of a majority of the shares present in person or represented by
proxy at the Annual Meeting.
All share amounts and prices per share in this Proxy Statement have been
adjusted as necessary to reflect a two-for-one split-up of the Common Stock in
the nature of a 100% stock dividend (the "Stock Split") distributed on September
29, 1995 to stockholders of record at the close of business on September 15,
1995.
The following table sets forth, as of March 15, 1996, the number and
percentage of outstanding shares of the Company's Common Stock (i) beneficially
owned by each person known to the Company to be the beneficial owner of more
than five percent of the then outstanding shares of Common Stock, (ii)
beneficially owned, directly or indirectly, by each director and nominee for
election as a director and by each of the executive officers of the Company
named in the Summary Compensation Table set forth on page 7, and (iii)
beneficially owned, directly or indirectly, by all directors and executive
officers of the Company as a group. Except as indicated below, none of the
directors or executive officers listed below beneficially owns more than 1% of
the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
PERCENTAGE
SHARES OF OF
COMMON STOCK OUTSTANDING
BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
---------------------------------------------------- ------------------ ------------
<S> <C> <C>
The Equitable Companies Incorporated(1)............. 2,483,800 5.9%
787 Seventh Avenue
New York, New York 10019
FMR Corporation(2).................................. 2,164,800 5.1%
82 Devonshire Street
Boston, Massachusetts 02109
Janus Capital Corporation(3)........................ 2,309,725 5.4%
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4923
Tiger Management Corporation(4)..................... 2,608,604 6.2%
101 Park Avenue
New York, New York 10178
John K. Castle...................................... 10,536
Lawrence R. Codey................................... 3,400
T. J. Dermot Dunphy................................. 1,095,166(5)(6) 2.6%
Charles F. Farrell, Jr. ............................ 22,200(6)
David Freeman....................................... 3,200
Elmer N. Funkhouser III............................. 200,071(5)(6)
William V. Hickey................................... 262,739(5)
Warren H. McCandless................................ 110,482(5)
Alan H. Miller...................................... 479,210 1.1%
Robert L. San Soucie................................ 9,000(6)
Dale Wormwood....................................... 88,265(5)
All directors and executive officers as a group
(23 persons)...................................... 3,059,545(7) 7.2%
</TABLE>
2
<PAGE> 5
- ---------------
(1) An Amendment No. 8 to Schedule 13G dated February 9, 1996 was filed by The
Equitable Companies Incorporated ("Equitable") and by certain associated
companies, including Alpha Assurances I.A.R.D. Mutuelle, Alpha Assurances
Vie Mutuelle, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle
and Uni Europe Assurance Mutuelle, as a group, and AXA, indicating
beneficial ownership of such shares held by Equitable's subsidiary Alliance
Capital Management, L.P., with sole voting power as to 2,138,100 shares and
sole investment power as to 2,483,800 shares.
(2) A Schedule 13G dated February 14, 1996 was filed by FMR Corp. ("FMR")
indicating sole voting power as to 33,000 shares and sole dispositive power
as to 2,164,800 shares. Such Schedule 13G indicates that Fidelity Management
& Research Company ("Fidelity"), a wholly owned subsidiary of FMR,
beneficially owns 2,088,100 of such shares (as to which shares Edward C.
Johnson 3d, chairman of FMR, and Fidelity Funds each have sole power of
disposition). The power to vote these shares resides with the Boards of
Trustees of Fidelity Funds. Of the shares beneficially owned by FMR,
Fidelity Management Trust Company, a wholly owned subsidiary of FMR, is the
beneficial owner of 74,100 shares, of which Mr. Johnson and FMR have sole
dispositive power over 74,100 shares and sole voting power over 30,400
shares. Members of the family of Mr. Johnson may be deemed to control FMR.
In addition, Fidelity International Limited ("FIL"), an independent company,
has the sole power to vote and to dispose of 2,600 shares. Mr. Johnson
serves as chairman of FIL, and Mr. Johnson and his family have the right to
vote approximately 47% of the total votes of FIL voting stock.
(3) A Schedule 13G dated February 13, 1996 was filed by Janus Capital
Corporation indicating beneficial ownership of 2,309,725 shares, with shared
voting and dispositive power as to such shares. Such Schedule 13G states
that Thomas H. Bailey may be deemed to control Janus Capital Corporation and
to be a beneficial owner of such shares, which beneficial ownership Mr.
Bailey specifically disclaims.
(4) An Amendment No. 4 to Schedule 13G dated February 12, 1996 was filed by
Tiger Management Corporation ("TMC"), Panther Partners, L.P. ("PPLP") and
Panther Management Company, L.P. ("PMCLP") indicating beneficial ownership
of 2,387,604 shares by TMC and 131,000 shares by each of PPLP and PMCLP,
with each such entity having shared voting and dispositive power as to such
shares. Such Amendment No. 4 to Schedule 13G indicates that Julian H.
Robertson, Jr. is the ultimate controlling person of TMC and PMCLP and is
the beneficial owner, with shared voting and dispositive power, of such
2,608,604 shares.
(5) This figure includes approximately 67,116, 13,139, 11,271, 8,265, 7,682 and
251,301 shares of Common Stock held in the Company's Profit-Sharing Plan
trust fund with respect to which Messrs. Dunphy, Hickey, Funkhouser,
Wormwood and McCandless and the executive officers of the Company who
participate in such Plan as a group, respectively, may, by virtue of their
participation in such Plan, be deemed to be beneficial owners. The
participants in such Plan include, in general, all full-time employees of
the Company except employees who are covered by collective bargaining
agreements that do not provide for their participation. As of March 15,
1996, approximately 2,361,167 shares of Common Stock were held in the trust
fund under such Plan, constituting approximately 5.6% of the outstanding
shares of Common Stock. Bankers Trust New York Corporation and its
wholly-owned subsidiary Bankers Trust Company, which subsidiary is the
trustee of such Plan, filed a Schedule 13G dated as of December 31, 1995 in
which both companies disclaimed beneficial ownership of the shares of Common
Stock held by Bankers Trust Company as trustee of such Plan. Beneficial
ownership of such shares by the Profit-Sharing Plan is also disclaimed.
(6) The number of shares held by Mr. Dunphy includes 80,200 shares held by him
as custodian for certain of his children and 3,000 shares held by a
charitable foundation for which he shares voting and investment power. The
number of shares held by Mr. Farrell includes 11,200 shares held in a
revocable retirement trust of which he is the trustee and sole beneficiary.
The number of shares held by Mr. Funkhouser includes 4,800 shares held by
him as custodian for one of his children. Mr. San Soucie shares investment
and voting power as to 3,120 of the shares beneficially owned by him with
his wife.
(7) This figure includes, without duplication, all of the outstanding shares
referred to in notes 5 and 6 above as well as 5,648 shares held by or for
family members of executive officers of the Company who are not named in the
above table.
3
<PAGE> 6
ELECTION OF DIRECTORS
At the Annual Meeting, the stockholders of the Company will elect the whole
Board of Directors to serve for the ensuing year and until their respective
successors are elected and qualify. The Board of Directors has designated as
nominees for election the seven persons named under "Information Concerning
Nominees" below. All such nominees currently serve as directors of the Company.
The shares represented by the enclosed proxy will be voted in favor of the
election as directors of the seven nominees named below unless otherwise
specified on the proxy. If any nominee becomes unavailable for any reason or if
a vacancy should occur before the election (which events are not anticipated),
the shares represented by the enclosed proxy may be voted in favor of such other
person as may be determined by the holders of such proxies.
INFORMATION CONCERNING NOMINEES
The information appearing in the following table sets forth each nominee's
business experience during the past five years, the year in which such nominee
first became a director, and such nominee's age.
<TABLE>
<CAPTION>
DIRECTOR
NAME BUSINESS EXPERIENCE SINCE AGE
- ---------------------------- ------------------------------------------------ -------- ---
<S> <C> <C> <C>
John K. Castle(2) Chairman and Chief Executive Officer of Castle 1971 55
Harlan, Inc., a merchant banking firm, and of
Branford Castle, Inc., a holding company.
Director of INDSPEC Chemical Corporation,
Quantum Restaurant Group, Inc. and UNC, Inc.
Lawrence R. Codey(1) President and Chief Operating Officer since 1993 51
September 1991 and previously Senior Vice
President-Electric Business Unit of Public
Service Electric and Gas Company, a public
utility. Director of Public Service Enterprise
Group Incorporated, the Trust Company of New
Jersey and United Water Resources Inc.
T. J. Dermot Dunphy President and Chief Executive Officer of the 1969 63
Company. Director of Public Service Enterprise
Group Incorporated and Summit Bancorp.
Charles F. Farrell, Jr.(1) President of Crystal Creek Partners, an 1971 65
investment management and business consulting
firm. Director of Luminall Paints, Inc.(3)
David Freeman(2) President and Chief Executive Officer of Loctite 1993 51
Corporation, a manufacturer of adhesives and
sealants. He has held senior management
positions with Loctite Corporation for more than
five years. Director of Loctite Corporation.
Alan H. Miller(2) Private investor. Until his retirement in 1984 62
December 1994, President and Chief Executive
Officer of Laird, Inc., a manufacturer of
specialty folding cartons and special commercial
printing and a distributor of rigid plastics.
Director of The Laird Group, PLC.
Robert L. San Soucie(1) Managing Director and President of MRV Financial 1971 68
Associates, a financial and management
consulting firm.
</TABLE>
4
<PAGE> 7
- ---------------
(1) Member of the Audit Committee of the Board of Directors. Mr. San Soucie
serves as the chairman of such committee.
(2) Member of the Organization and Compensation Committee of the Board of
Directors. Mr. Miller serves as the chairman of such committee.
(3) Mr. Farrell has advised the Company that from September 1990 to May 1991, he
served as chief operating officer of The Exhibit Place, Inc., a corporation
not affiliated with the Company, and that an involuntary petition in
bankruptcy was filed with respect to that corporation in mid-1991.
5
<PAGE> 8
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors maintains an Audit Committee and an
Organization and Compensation Committee. The members of such committees are
directors who are neither officers nor employees of the Company. The Board of
Directors has not established a nominating committee.
The principal responsibilities of the Audit Committee are to advise the
Board of Directors as to the selection of auditors, to confer with the firm
appointed to audit the books and accounts of the Company and its subsidiaries
and to determine, and from time to time report to the Board of Directors upon,
the scope of such auditing.
The principal responsibilities of the Organization and Compensation
Committee are to determine the compensation of the officers of the Company and
of the other employees of the Company or any of its domestic subsidiaries with a
base annual salary of $90,000 or more, to administer the Company's Contingent
Stock Plan and to authorize the issuance of shares of the Company's Common Stock
under the Contingent Stock Plan, to perform the duties and responsibilities of
the Board of Directors under the Company's Profit-Sharing Plan (except the
authority to determine the amount of the Company's annual contribution to such
Plan) and its Thrift and Tax-Deferred Savings Plan, and to consider and advise
the Board of Directors from time to time with respect to the organization and
structure of the management of the Company. Additional information about such
Plans is set forth under "Executive Compensation" below.
During 1995, the Board of Directors held seven meetings, the Audit
Committee held three meetings, and the Organization and Compensation Committee
held four meetings (excluding in each case actions by unanimous written
consent). All members attended at least 75% of the aggregate number of meetings
of the Board and the committees on which they served.
DIRECTORS' COMPENSATION
Each member of the Board of Directors who is neither an officer nor an
employee of the Company (each a "Non-Employee Director") receives an annual
retainer fee for serving as a director. The Restricted Stock Plan for
Non-Employee Directors provides for the payment of such annual retainer in
shares of the Company's Common Stock. (See "Amendment of the Restricted Stock
Plan for Non-Employee Directors -- The Directors Stock Plan (as currently in
effect).") During 1995, Messrs. Codey, Farrell, Freeman, Miller and San Soucie
each received an annual retainer grant of 600 shares of Common Stock (after
giving effect to the Stock Split) following their election at the 1995 Annual
Meeting of Stockholders.
In addition, each member of the Audit Committee and of the Organization and
Compensation Committee receives a retainer fee of $2,000 per year for serving as
a member of such committee. The chairman of each such committee receives an
additional retainer fee for serving as such, which the Board of Directors
increased during 1995 from $1,500 per year to $2,000 per year. Each Non-Employee
Director also receives a fee for each Board or committee meeting attended.
During 1995, such meeting attendance fee was increased from $750 per meeting to
$1,000 per meeting. These fees are paid in cash in quarterly installments and
were last adjusted in 1987. All directors are reimbursed for expenses incurred
in attending Board or committee meetings.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) CONTINGENT
-------------------- STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(2) COMPENSATION(3)
- ---------------------------------- ----- -------- -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
T. J. Dermot Dunphy............... 1995 $363,600 $340,000 $1,590,000 $ 29,481
President and Chief 1994 363,600 300,000 -0- 29,000
Executive Officer 1993 363,600 240,000 1,350,000 31,752
William V. Hickey................. 1995 $217,767 $150,000 $ 795,000 $ 23,081
Executive Vice 1994 186,933 110,000 -0- 22,600
President and Chief 1993 177,267 65,000 450,000 24,907
Operating Officer
Elmer N. Funkhouser III........... 1995 $211,600 $ 95,000 $ -0- $ 26,481
Senior Vice 1994 210,267 92,000 -0- 26,000
President 1993 203,600 60,000 450,000 28,752
Dale Wormwood..................... 1995 $184,433 $ 95,000 $ -0- $ 24,531
Senior Vice 1994 177,433 80,000 -0- 24,050
President 1993 170,267 70,000 485,000 25,993
Warren H. McCandless.............. 1995 $184,433 $ 75,000 $ -0- $ 22,881
Senior Vice 1994 177,433 75,000 -0- 22,400
President-Finance 1993 170,267 62,000 450,000 24,239
</TABLE>
- ---------------
(1) Annual compensation is reported in this table before deducting amounts
deferred pursuant to Section 401(k) of the Internal Revenue Code, as amended
(the "Code"), under the Company's Thrift and Tax-Deferred Savings Plan (the
"Thrift Plan") or other amounts excludible from income for tax purposes.
Perquisites, other personal benefits, securities and property paid or
accrued during each year not otherwise reported did not exceed for any named
executive officer the lesser of $50,000 or 10% of the annual compensation
reported in the Summary Compensation Table for that individual.
(2) Represents the fair market value on the date of award made under the
Company's Contingent Stock Plan after deducting the purchase price of the
shares covered by such award. The total number of unvested shares held by
each of the named executive officers as of December 31, 1995 is set forth in
the following table, and the fair market values of such unvested shares as
of such date are as follows: Mr. Dunphy: $5,600,000; Mr. Hickey: $2,240,000;
and each of Mr. Funkhouser, Mr. Wormwood, and Mr. McCandless: $1,120,000.
Such awards, all of which were granted with a vesting period of three years,
vest as follows:
<TABLE>
<CAPTION>
1996 1997 1998
------- ---- ------
<S> <C> <C> <C>
T. J. Dermot Dunphy........................... 120,000 -0- 80,000
William V. Hickey............................. 40,000 -0- 40,000
Elmer N. Funkhouser III....................... 40,000 -0- -0-
Dale Wormwood................................. 40,000 -0- -0-
Warren H. McCandless.......................... 40,000 -0- -0-
</TABLE>
During the vesting period, pursuant to the terms of such Plan, recipients
of awards are entitled to receive any dividends or other distributions with
respect to the unvested shares they hold.
7
<PAGE> 10
(3) Includes Company contributions to the Company's Profit-Sharing Plan,
employer matching contributions under the Company's Thrift Plan, and
premiums paid by the Company for supplemental universal life insurance
policies owned by the named executive officers. For 1995, such amounts were
as follows:
<TABLE>
<CAPTION>
PROFIT- INSURANCE
SHARING THRIFT PREMIUMS
------- ------ ---------
<S> <C> <C> <C>
T. J. Dermot Dunphy....................... $15,481 $4,500 $ 9,500
William V. Hickey......................... 15,481 4,500 3,100
Elmer N. Funkhouser III................... 15,481 4,500 6,500
Dale Wormwood............................. 15,481 4,500 4,550
Warren H. McCandless...................... 15,481 4,500 2,900
</TABLE>
The Company's Profit-Sharing Plan and its Thrift Plan are broad-based
qualified defined contribution plans. Contributions to the Profit-Sharing
Plan are made only by the Company. Further information about the
Profit-Sharing Plan is discussed in note 5 to the table under "Voting
Securities" above.
REPORT OF ORGANIZATION AND COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Company's executive compensation program consists of salaries, annual
bonuses tied to performance, and periodic awards under the Company's Contingent
Stock Plan. The Company's executive compensation philosophy is to provide
executive salaries that, based upon such sources of information (including
compensation surveys) as the Committee considers to be reliable and its own
judgment, are intended to be relatively modest when compared with manufacturing
companies of comparable size and annual bonuses that are intended to be somewhat
higher than those provided by such other companies. The Committee believes that
the compensation paid to the named executive officers is consistent with that
intention. It is also part of the Company's philosophy to make substantial
awards of Common Stock under the Contingent Stock Plan as long-term incentive
compensation to the named executive officers as well as to other executives
when, in the judgment of the Committee, it is appropriate to do so.
This program is designed to provide appropriate incentives toward the
achievement of the Company's annual and long-term strategic objectives, to
support a performance-oriented environment based on the attainment of goals and
objectives that are intended to benefit the Company and its stockholders, to
create an identity of interests between the Company's executive officers and the
stockholders, and to attract, retain and motivate key executives who are
important to the Company's long-term success. The Committee believes that this
program effectively provides these incentives as evidenced by the Company's
long-term record of growth and enhancement of stockholder value.
Salaries and Annual Bonuses
As noted elsewhere in this Proxy Statement, the Committee is responsible
for determining the compensation of the executive officers of the Company as
well as other executives with base salaries in excess of $90,000. The Committee
conducted an annual compensation review during the first quarter of 1995. In
connection with such review, the Company's chief executive officer submitted
recommendations to the Committee with respect to the other named executive
officers as well as the other executives whose compensation is determined by the
Committee. Following a review of such recommendations, the Committee approved
1994 cash bonuses and 1995 salary rates for the named executive officers as well
as such other executives with such modifications to the chief executive
officer's recommendations as the Committee deemed appropriate, none of which
were material. Salary adjustments for the named executive officers are
determined principally by growth of or changes in the responsibilities of the
particular named executive officer as well as by the Committee's evaluation of
changes in the market demand for executives of the capability and experience
employed by the Company in the context of the total compensation paid to the
particular named executive officer.
8
<PAGE> 11
The Committee evaluates the performance of the chief executive officer,
reviews its evaluation with him, and based on such evaluation and review
determines his compensation and performance and bonus objectives. The Committee
and the chief executive officer believe that his annual compensation should be
weighted somewhat toward annual incentive compensation in the form of cash
bonuses rather than salary but that, on an overall basis, his compensation
should be weighted more heavily toward long-term incentive compensation derived
from equity ownership in the Company through the Contingent Stock Plan.
Accordingly, Mr. Dunphy's salary remained at the same rate in 1995 as that
established in 1991. Salary increases in 1995 for the other executive officers
named in the Summary Compensation Table ranged from 0% to 18.9%. These salary
increases were based primarily upon the factors discussed above, with the
largest increase being made to Mr. Hickey as a consequence of his expanded
responsibilities as Executive Vice President and Chief Operating Officer of the
Company.
In connection with the annual compensation review conducted in the first
quarter of 1995, based upon recommendations submitted to the Committee by the
chief executive officer and the Committee's determination of Mr. Dunphy's
performance objectives, the Committee also established 1995 annual cash bonus
objectives that were tied to corporate and personal performance goals for 1995.
The Committee endeavors to set such annual cash bonus objectives at a level that
links a substantial portion of each individual's annual cash compensation to the
attainment of such performance goals, with the intention of providing
appropriate incentives to their attainment.
The principal measure of corporate performance that is used to establish
annual cash bonuses is the extent to which the Company's business plan for the
year in question is attained. Such business plan is developed prior to the
beginning of such year by management and approved by the Board of Directors. No
single measure of financial performance is relied upon exclusively to measure
attainment of the Company's business plan. However, the greatest weight is given
to the achievement of budgeted targets for net sales, operating profit, net
earnings, and measures of expense control and balance sheet management including
cash flow measures such as earnings before taxes, interest, depreciation and
amortization (commonly referred to as "EBITDA"). The Company does not make its
business plan public, nor does the Company make public projections of its
financial performance. Accordingly, the specific financial targets upon which
such annual cash bonus objectives are based are not publicly available. However,
in 1995, the Company achieved and, in certain respects, substantially exceeded
its principal financial objectives.
In addition to the corporate performance goals discussed above, the
Company's chief executive officer is evaluated based on his demonstration of
leadership in providing strategic direction to the Company, in developing and
maintaining an effective management team for the Company, and on his
effectiveness in communicating and implementing a strong corporate culture and
vision both within and outside of the Company. The other named executive
officers are also evaluated based upon their attainment of individualized
management goals within their particular areas of responsibility which, in the
case of the named executive officers who have overall responsibility for
operating units of the Company, include such operating unit's achievement of its
own financial targets.
Bonus awards for 1995 were determined in the first quarter of 1996 based on
an evaluation of the Company's financial performance during 1995 against its
1995 business plan as well as the Committee's evaluation of each individual's
degree of attainment of such individual's other performance goals for 1995. The
Committee does not apply fixed weightings to corporate or personal performance
goals in determining the amount of cash bonus awards, although the Committee
generally places greater emphasis on financial performance than on other
personal performance objectives.
As a consequence, following a review of recommendations made to the
Committee by the Company's chief executive officer and after weighing the degree
of attainment of these objectives in 1995 as well as the degree of attainment by
each of the named executive officers of their other 1995 goals and objectives,
and following the Committee's review and evaluation of Mr. Dunphy's performance,
the Committee awarded the cash bonuses to each of the named executive officers
for 1995 that are set forth in the Summary Compensation Table, made 1996 salary
adjustments for such individuals, and set 1996 annual cash bonus objectives for
such individuals with such modifications to the chief executive officer's
recommendations as the
9
<PAGE> 12
Committee deemed appropriate, none of which were material. Such 1995 cash
bonuses were based primarily on the factors discussed above.
Contingent Stock Plan
The Company's Contingent Stock Plan, which has been in effect since 1976,
is intended to provide an effective method of motivating performance of key
employees, including executive officers of the Company, and of creating an
identity of interests in participating employees with the interests of the
stockholders. The Plan provides for the award of shares of Common Stock to such
key employees of the Company or any of its subsidiaries as the Committee
determines to be eligible for awards. It is expected that recipients of awards
will retain a substantial portion of the shares awarded to them in order to
foster an identity of interests with the stockholders of the Company.
Shares of Common Stock issued under this Plan are subject to an option in
favor of the Company for three years after they are awarded to repurchase the
shares upon payment of an amount equal to the price at which such shares were
issued, which in all cases to date has been $1.00 per share. This option is
exercisable by the Company only upon the termination of an employee's employment
during such three-year period other than as a result of death or total
disability. Such option terminates upon the occurrence of any of certain events
related to change of control of the Company that are specified in the Plan.
Shares of Common Stock issued pursuant to this Plan may not be sold, transferred
or encumbered by the employee while the Company's option to repurchase the
shares remains in effect.
Awards are made under the Contingent Stock Plan both to reward short-term
performance with equity-based compensation and to motivate the recipient's
long-term performance. The Committee has not followed the practice of making
annual awards to individuals who have been determined to be eligible to
participate in the Plan. However, the Committee periodically reviews the stock
ownership of key employees and, when it deems it appropriate, makes awards under
the Plan to reflect the contributions of those individuals to specific Company
achievements and to provide motivation toward the achievement of additional
strategic objectives.
Based on such a review made in 1995, the Committee made awards in 1995 to
Messrs. Dunphy and Hickey, which awards are listed in the Summary Compensation
Table. In making such awards, the Committee took account of the contributions of
each of such individuals to the growth and profitability of the Company in 1994,
including their contributions in carrying out the acquisition in early 1995 of
Trigon Industries Limited.
Since the vesting of awards under the Contingent Stock Plan is not subject
to the attainment of performance objectives, it is possible that awards under
this Plan to named executive officers, when taken in conjunction with their
annual compensation, could become subject to the limitations of Section 162(m)
of the Internal Revenue Code of 1986, as amended, under which the Company may
deduct in any year beginning after December 31, 1993, subject to certain
exceptions, only $1 million of compensation payable to any named executive
officer. Under the terms of the Contingent Stock Plan, a recipient of an award
has the right to elect to be taxed, for Federal income tax purposes, on the
amount of income attributable to the award in the year in which the award is
accepted. If such election is not made, the amount of income attributable to
such award is determined and is taxable in the year in which such award vests. A
portion of the compensation attributable to awards made in 1995 and earlier
years to certain named executive officers may not be deductible by the Company.
The Company is considering alternatives to minimize or eliminate the effect of
nondeductible compensation in connection with awards under the Contingent Stock
Plan. The Company does not expect the limitations on deductibility to have a
material impact on its financial condition.
Stock Performance
While the Committee takes note of the performance of the Company's Common
Stock in its compensation decisions, it does not consider such performance to be
a principal determinant in making such decisions since total return to
stockholders reflected in the performance of the Company's stock price is
subject to factors affecting the securities markets that are unrelated to the
Company's performance.
10
<PAGE> 13
The Committee believes that, by measuring management's performance and
compensating management based upon factors relating to the Company's growth and
profitability and the contributions of each of its executives to the achievement
of the Company's objectives, appropriate incentives are provided to align
management's interests with the long-term growth and development of the Company
as well as the interests of its stockholders. The Committee also believes that
there are many ways by which the named executive officers as well as other
executives in the Company contribute to building a successful company and that,
while the results of those efforts may eventually appear in the financial
statements or be reflected in the Company's stock price, many of the long-term
strategic decisions made in pursuing the Company's growth and development may
have little visible impact in the short term.
The Committee notes that the performance of the Company's Common Stock in
the five-year period ending December 31, 1995 has exceeded that of both the
Standard & Poor's 500 Stock Index and the peer group index shown in the
performance table appearing below. Stockholders of the Company who held shares
of the Company's Common Stock throughout the period had a total return of 348%
(or an annual compounded return of 35.0%). This total return compares to a
five-year total return of 113.2% (or an annual compounded return of 16.4%) for
the Standard & Poor's 500 Stock Index and a five-year total return of 63.8% (or
an annual compounded return of 10.4%) for the peer group index shown in the
performance table appearing below.
Organization and Compensation Committee
of the Board of Directors
Alan H. Miller, Chairman
John K. Castle
David Freeman
11
<PAGE> 14
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
None of the members of the Organization and Compensation Committee has been
an officer or employee of the Company or any of its subsidiaries. Until the end
of 1983, Mr. Miller was the President of Cellu-Products Company, a corporation
that the Company acquired in October 1983.
Mr. Codey is the President and Chief Operating Officer of Public Service
Electric and Gas Company. Mr. Dunphy is a member of the Organization and
Compensation Committee of the Board of Directors of Public Service Enterprise
Group Incorporated, the parent company of Public Service Electric and Gas
Company. Such committee administers the compensation program for executive
officers of Public Service Electric and Gas Company.
COMMON STOCK PERFORMANCE COMPARISON
The following graph compares for the five years ended December 31, 1995 the
cumulative total return on an investment of $100 assumed to have been made on
December 31, 1990 in the Company's Common Stock (after giving effect to
two-for-one stock splits effected in 1992 and 1995 for all periods presented)
with that of comparable investments assumed to have been made on such date in
(a) the Standard & Poor's 500 Stock Index and (b) an arithmetic average of the
chemicals (specialty) segment and the containers-paper segment of such index
(the "peer group index"), the two published Standard & Poor's market segments
with which the Company is usually compared by the investment community.
Total return for each assumed investment assumes the reinvestment of all
dividends on December 31 of the year in which such dividends were paid. The
Company did not pay any cash dividends during this five-year period.
<TABLE>
<CAPTION>
Composite
Chemicals
(Specialty)/
Measurement Period Sealed Air Containers- Composite
(Fiscal Year Covered) Corporation Paper Index a] S&P 500
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 181.00 169.40 130.00
1992 201.00 163.74 139.66
1993 253.00 152.37 153.55
1994 290.00 159.39 155.52
1995 448.00 163.79 213.24
</TABLE>
12
<PAGE> 15
AMENDMENT OF THE RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
During 1995, the Board of Directors conducted a review of the fees paid to
Non-Employee Directors of the Company with a view to making changes to further
align the directors' economic interests with those of the stockholders, to
develop a competitive director compensation package that is designed to enable
the Company to attract, motivate and retain high-caliber individuals to serve as
directors, and to reflect the significant growth of the Company over the last
several years. In conducting this review, the Board reviewed various sources of
information, including studies of directors' compensation paid by other major
corporations.
As a result of this review, during 1995, the Board approved certain
adjustments to the retainer fees paid to Non-Employee Directors for service on
the Board's two standing committees and to the fees paid to Non-Employee
Directors for attending meetings of the Board and its committees. (See
"Directors' Compensation" above.) The Board has also approved, subject to
stockholder approval, certain amendments to the Restricted Stock Plan for
Non-Employee Directors of the Company (the "Directors Stock Plan") that would
have the effect of (a) increasing the retainer fee for service on the Board to
be paid in Common Stock to the Company's Non-Employee Directors, (b) allowing
Non-Employee Directors to make certain transfers of shares received under the
Plan to family members or to indirect forms of ownership in order to facilitate
the tax or estate planning objectives of Non-Employee Directors, and (c)
providing for the adjustment of future awards under the Plan to reflect the
effect of any future stock splits or certain other events affecting the
Company's capital structure. The Board believes that these amendments to the
Plan are reasonable based upon the factors discussed above and recommends that
they be approved by the stockholders.
The Directors Stock Plan, which was approved by the stockholders at the
1991 Annual Meeting, is intended to enhance the ability of the Company to
attract and retain Non-Employee Directors of exceptional ability, to motivate
its Non-Employee Directors, and to promote the common interest of Non-Employee
Directors and stockholders in enhancing the value of the Company's Common Stock.
Each Non-Employee Director is eligible to receive grants of shares under this
Plan, and each of the nominees for director other than Mr. Dunphy is eligible
for awards under the Directors Stock Plan.
Since its adoption, the Plan has been used to provide for the payment of
the annual retainer paid to each Non-Employee Director for serving as a director
of the Company, and the Company intends that, if the proposed amendments to the
Plan discussed below are adopted, the Plan will continue to be used for this
purpose. As discussed more fully below, under the Plan as currently in effect,
each Non-Employee Director receives an annual grant of approximately $15,000 in
market value of Common Stock following election at the Annual Meeting of
Stockholders. Under the proposed amendments to the Plan, the annual Board
retainer would be set at 1,200 shares of Common Stock, to be adjusted for any
subsequent stock splits, and the Plan would provide for proportionate grants to
be made to any Non-Employee Director first elected at other than an annual
meeting based upon the number of 30-day periods remaining until the next
scheduled annual meeting of stockholders. At the $29.625 per share closing price
of the Company's Common Stock on March 15, 1996, the value of a grant of 1,200
shares made on that date under the Plan as proposed to be amended to each of the
six Non-Employee Directors would have been $35,550, and a total of 7,200 shares
would have been awarded to such directors as a group with a total market value
of $213,300. Under the Plan as currently in effect, an annual retainer grant of
500 shares each valued at $14,812.50 would have been awarded to each of the six
Non-Employee Directors based on the March 15, 1996 closing price, and a total of
3,000 shares would have been awarded to such six directors as a group with a
total market value of $88,875.
Although the Directors Stock Plan does not prevent the Board from
exercising its authority to approve the payment of other retainer or meeting
fees to Non-Employee Directors, the adoption of additional plans or arrangements
relating to the compensation of Non-Employee Directors, or the amendment of the
Company's existing cash fees paid to Non-Employee Directors, the Board of
Directors does not currently intend to make any additional changes or to adopt
any additional plans or arrangements relating to the compensation of Non-
Employee Directors if the proposed amendments to the Directors Stock Plan are
approved by the stockholders. However, the Board believes that the current Board
retainer fee paid to Non-Employee Directors is not adequate to meet the
objectives discussed above, and accordingly, if the proposed
13
<PAGE> 16
amendments to the Directors Stock Plan are not approved by the stockholders, the
Board intends to consider making such adjustments as it considers appropriate to
such retainer fee.
The following summary describes the principal features of the Directors
Stock Plan as currently in effect and as proposed to be amended. While the
Company believes that the following discussion provides a fair summary of the
Plan as currently in effect and as proposed to be amended, reference should be
made to the text of such Plan, annexed to this Proxy Statement as Exhibit A, for
a complete statement of the provisions of such Plan as proposed to be amended.
The proposed amendments to the Plan will become effective upon their approval by
the stockholders.
The Directors Stock Plan (as currently in effect)
The Directors Stock Plan currently provides that each Non-Employee Director
of the Company will receive an annual retainer grant consisting of a number of
shares determined by dividing $15,000 by the then current market price per share
of the Company's Common Stock and rounding to the nearest hundred shares upon
election at each annual meeting of the stockholders. An initial grant of 500
shares of Common Stock is awarded to each Non-Employee Director who has not been
an officer or employee within 12 months before his or her election as a Director
upon his or her initial election as a director. In addition to an initial grant
of Common Stock, an interim grant is awarded to any Non-Employee Director who is
elected other than at an annual meeting. The number of shares comprising an
interim grant is determined by taking a fraction of the number of shares
obtained by dividing $15,000 by the then current market price per share, where
the fraction corresponds to the fraction of the annual period remaining from the
date of election until the next annual meeting of stockholders, and rounding the
result to the nearest hundred shares.
Prior to the issuance of Common Stock to an eligible director, the director
must pay the Company an issue price equal to the lesser of $1.00 per share and
ten percent (10%) of the market price per share, but not less per share than the
par value per share of the Common Stock. All grants to date under the Plan have
been made at an issue price of $1.00 per share before giving effect to
subsequent stock splits. Each grant of Common Stock pursuant to the Plan is also
contingent upon and subject to the execution by the Non-Employee Director of an
agreement to hold the shares of Common Stock covered by such grant in accordance
with the terms and conditions of the Plan (including without limitation the
restrictions on disposition provided for in the Plan) and containing such other
terms and conditions as may be required by counsel to the Company in order to
comply with federal or state securities laws or other legal requirements.
Grants of shares of Common Stock pursuant to the Plan are not transferable
by the recipient of such award (except for the right to designate a beneficiary
in the event of death of the recipient prior to issuance of the shares), 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 while such Non-Employee Director remains a director
of the Company. During this period, however, as a stockholder of record, the
Non-Employee Director is entitled to receive any dividends or other
distributions in respect of shares of Common Stock and has voting rights with
respect to such shares.
The restrictions on the disposition of shares issued pursuant to the Plan
terminate upon the occurrence of any of certain events related to change of
control of the Company that are specified in the Plan. No such event that would
lead to the termination of such restrictions on disposition is currently
contemplated by the Company.
The number of shares issuable pursuant to the Plan is subject to adjustment
in the event of changes in the Common Stock of the Company by reason of any
stock dividend, split-up, combination of shares, reclassification,
recapitalization, merger, consolidation, reorganization or liquidation. The Plan
currently authorizes the issuance of 75,000 shares of Common Stock for awards
under the Plan.
The Board of Directors may from time to time amend the Directors Stock Plan
or discontinue the Plan or any provisions thereof. However, no amendment or
modification of the Plan may, without the prior approval of the stockholders of
the Company, (a) increase the number of shares of Common Stock available for
grant
14
<PAGE> 17
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 the Plan that deal with
amendment or termination of the Plan.
The Directors Stock Plan (as proposed to be amended)
The proposed amendments to the Directors Stock Plan are as follows:
(a) The initial grants, annual grants and interim grants described
above that are currently provided for in the Plan would be replaced by the
following grant provisions:
(i) Annual Grants. On each date on or after May 17, 1996 on which
each Non-Employee Director is elected a director of the Company at each
annual meeting of the stockholders of the Company held on or after May
17, 1996, such Non-Employee Director shall receive a grant of 1,200
shares of Common Stock.
(ii) Interim Grants. If, on or after May 17, 1996, any
Non-Employee Director is elected a director at other than an annual
meeting of the stockholders of the Company, such Non-Employee Director
shall receive on the date of such election a pro rata grant of shares of
Common Stock pursuant to the Plan in the amount of 100 shares of Common
Stock for each full 30-day period during the period commencing on and
including the date of such person's election as a director and ending on
and including the date of the next annual meeting of the stockholders of
the Company provided for in accordance with the By-Laws of the Company
as then in effect. No shares shall be included in such grant on account
of any period of less than 30 days.
Under the Plan as proposed to be amended, the initial 500 share grants
referred to above would no longer be made.
(b) The non-transferability provisions of the Plan (Section 4(c))
would be amended to permit Non-Employee Directors to donate or transfer at
cost shares issued under the Plan to certain family members or to trusts or
other forms of indirect ownership so long as the Non-Employee Director
would be deemed a beneficial owner of the shares with a direct or indirect
pecuniary interest in the shares and would retain voting and investment
control over the shares while the Non-Employee Director remained a director
of the Company.
(c) The adjustment provisions of the Plan (Section 7) would be amended
so that, in addition to the other adjustments provided for in the Plan that
are described above, appropriate adjustments would be made by the Board of
Directors as to the number of shares to be delivered pursuant to annual
grants or interim grants made pursuant to the Plan after the record date or
other effective date of any stock dividend, split-up, combination of
shares, reclassification, recapitalization, merger, consolidation,
reorganization or liquidation. No such event that would lead to such an
adjustment is currently contemplated by the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
15
<PAGE> 18
SELECTION OF AUDITORS
The Company, after authorization by the Board of Directors, has appointed
KPMG Peat Marwick LLP ("Peat Marwick") to serve as the Company's auditors for
the fiscal year ending December 31, 1996, subject to the approval of the
stockholders. Proxies received in response to this solicitation will, in the
absence of contrary specification, be voted in favor of ratification of such
appointment. Peat Marwick has acted in such capacity since 1963 and is
considered well qualified. If the proposal to ratify the appointment of Peat
Marwick is not approved, the Board of Directors will reconsider its selection of
auditors.
A representative of Peat Marwick is expected to be present at the Annual
Meeting. Such representative will have the opportunity to make a statement if he
or she desires to do so and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
In order for stockholder proposals for the 1997 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's Proxy Statement, they
must be received by the Company at its principal office in Saddle Brook, New
Jersey, directed to the attention of the Secretary, no later than November 27,
1996.
OTHER MATTERS
The expenses of preparing, printing and mailing this notice of meeting and
proxy material and all other expenses of soliciting proxies will be borne by the
Company. Morrow & Co., Inc., New York, New York, will solicit proxies by
personal interview, mail, telephone, facsimile, telex or other means of
electronic transmission and will request brokerage houses, banks and other
custodians, nominees and fiduciaries to forward soliciting material to the
beneficial owners of the Common Stock held of record by such persons. The
Company will pay Morrow & Co., Inc. a fee of $5,000 covering its services and
will reimburse Morrow & Co., Inc. for payments made to brokers and other
nominees for their expenses in forwarding soliciting material. In addition,
directors, officers and employees of the Company, who will receive no
compensation in addition to their regular salary, if any, may solicit proxies by
personal interview, mail, telephone, facsimile or other means of electronic
transmission.
The Company does not know of any matters to be presented at the meeting
other than those set forth in this Proxy Statement. However, if any other
matters come before the meeting, it is intended that the holders of the proxies
may use their discretion in voting thereon.
By Order of the Board of Directors
H. KATHERINE WHITE
Secretary
Saddle Brook, New Jersey
March 27, 1996
16
<PAGE> 19
EXHIBIT A
RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
OF
SEALED AIR CORPORATION,
AS PROPOSED TO BE AMENDED
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, retain and motivate
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 75,000 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) Annual Grants. On each date on or after May 17, 1996 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 May
17, 1996, such Non-Employee Director shall receive a grant of 1,200 shares
of Common Stock.
(b) Interim Grants. In the event that, on or after May 17, 1996, any
Non-Employee Director is elected a director at other than an annual meeting
of the stockholders of the Corporation, such Non-Employee Director shall
receive on the date of such Non-Employee Director's election a grant of
shares of Common Stock pursuant to the Plan in the amount of 100 shares of
Common Stock for each full 30-day period during the period commencing on
and including the date of such person's election as a director and ending
on and including 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. No shares shall be included in such grant on
account of any such period of less than 30 days.
(c) Non-Transferability of Grants. Except as provided in (i) or (ii)
below, 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.
(i) Each Non-Employee Director may provide the Corporation with a
written designation in form satisfactory to the Corporation's counsel
designating a person or persons ("Beneficiary") entitled to receive
shares to be issued pursuant to a grant of shares under the Plan upon
the death of such Non-Employee Director after such grant but prior to
the issuance of shares pursuant to such grant. The Corporation shall
honor each such written designation, provided that the Beneficiary named
in such designation shall take all steps necessary to comply with the
Plan, including the
A-1
<PAGE> 20
payment of the Issue Price (as defined below) for such shares if not
paid by the Non-Employee Director and the execution of any agreement
reasonably required by counsel to the Corporation in order to comply
with the Plan or with federal or state securities laws or other legal
requirements.
(ii) Any Non-Employee Director of the Corporation may donate or
transfer at cost any such shares to members of the immediate family of
such Non-Employee Director or to a trust or other form of indirect
ownership (a "Permitted Transferee") on the condition that the
Non-Employee Director shall continue to be deemed a beneficial owner of
such transferred shares and retain voting and investment control over
such shares while the Non-Employee Director remains a director of the
Corporation. Any such indirectly-owned shares shall be subject to all
terms and restrictions of this Plan. For the purpose of this Section
4(c)(ii), "immediate family" shall have the meaning given in Rule 16a-1
under the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act"), and "beneficial owner" shall have the meaning given in
Rule 16a-1 under the Securities Exchange Act, other than for purposes of
determining beneficial ownership of more than ten percent of any class
of equity securities.
(d) 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 (or by his or her Beneficiary or Permitted Transferee, as the case
may be) 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(c) 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) 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(c) 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
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expire and cease to apply to any securities granted under the Plan, and each
Non-Employee Director or Permitted Transferee 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(c) 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 pursuant to grants made pursuant
to Section 4(a) or 4(b) on or after the record date or other effective date of
such change, (ii) 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 (iii) 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(c)) 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 and his or her Permitted Transferees 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(c) 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 use its reasonable
commercial efforts to cause the grants of shares of Common Stock to be made
pursuant to this Plan to be registered under the Securities Act of 1933, as
amended (the "Securities Act"), but shall otherwise be under no obligation
to register any shares of Common Stock issued under the Plan under the
Securities Act or otherwise. If, at the time any shares of Common Stock are
issued pursuant to the Plan or transferred to a Permitted Transferee, 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 person 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 person has had access or will, by reason of such
person's service as a director of the Corporation or otherwise, have access
to sufficient information concerning the Corporation to enable him or her
to
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<PAGE> 22
evaluate the merits and risks of the acquisition of shares of the
Corporation's Common Stock pursuant to the Plan, (ii) such person 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 person to acquire and hold such shares for investment and not for the
resale or distribution thereof, (iv) such person will comply with the
Securities Act and the Securities Exchange Act with respect to such shares,
and (v) such person will indemnify the Corporation for any costs,
liabilities and expenses which the Corporation 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(c), 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,
Beneficiary or Permitted Transferee 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
person and then only from the date such person becomes the record owner thereof.
Section 13. Tax Withholding. The Corporation shall make appropriate
provisions for the payment of any Federal, state or local taxes or 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
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<PAGE> 23
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 became effective (the "Effective
Date") on May 17, 1991 and was amended as of February 7, 1996. The amendments to
the Plan set forth herein shall become effective on the date of their approval
by the affirmative vote of a majority of the shares of the Corporation's Common
Stock present in person or represented by proxy and entitled to vote at the
meeting of the stockholders at which such amendments are submitted for approval.
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<PAGE> 24
PROXY
SEALED AIR CORPORATION
PROXY -- SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned appoints T.J. Dermot Dunphy, Robert M. Grace, Jr. and H.
Katherine White, or a majority of such thereof as shall act (or if only one
shall act, then that one) (the "Proxy Committee"), proxies with power of
substitution, to vote all the common stock of Sealed Air Corporation (the
"Company") registered in the name of the undersigned at the Annual Meeting of
Stockholders to be held at the offices of the Company at Park 80 East, Saddle
Brook, New Jersey on May 17, 1996 at 11:00 A.M., Eastern Daylight Savings Time,
and at any adjournments thereof.
(change of address/comments)
Election of Directors, Nominees: ________________________________
J.K. Castle, L.R. Codey, ________________________________
T.J.D. Dunphy, C.F. Farrell, Jr.,
D. Freeman, A.H. Miller, R.L. San Soucie ________________________________
________________________________
(If you have written in the
above space, please mark the
corresponding box on the reverse
side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS. THE PROXY COMMITTEE CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. PLEASE SIGN ON THE THE
REVERSE SIDE AND MAIL IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
-----------
SEE REVERSE
SIDE
-----------
<PAGE> 25
1386
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DESCRIBED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ELECTIION OF ALL NOMINEES FOR DIRECTOR AND FOR PROPOSALS 2 AND 3.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES FOR
DIRECTOR AND FOR PROPOSALS 2 AND 3.
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse)
FOR WITHHELD
/ / / /
For, except vote withheld from the following nominee(s):
________________________________________________________
2. Amendment of Restricted Stock Plan for Non-Employee Directors.
FOR AGAINST ABSTAIN
/ / / / / /
3. Ratification of the appointment of KPMG Peat Marwick LLP as the independent
auditors for the year ending December 31, 1996.
FOR AGAINST ABSTAIN
/ / / / / /
4. In accordance with the Proxy Committee's discretion, upon such other matters
as may properly come before the meeting.
- --------------------------------------------------------------------------------
Please mark this box if you have noted a change of address or any comments in
the space on the reverse side of this card. / /
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof. Receipt is hereby acknowledged of the
Proxy Statement dated March 27, 1996.
SIGNATURE(S)_______________________________________________DATE_________________
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD GIVE FULL TITLE AS SUCH.
IF SIGNING IN A CORPORATE CAPACITY, PLEASE SIGN FULL CORPORATE NAME BY A
DULY AUTHORIZED OFFICER.
