<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 [X]
Filed by a Party other than the Registrant [ ]
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 Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
SEALED AIR CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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 16, 1997
------------------
The Annual Meeting of Stockholders of Sealed Air Corporation, a Delaware
corporation (the "Company"), will be held on May 16, 1997 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 a proposed amendment of the certificate
of incorporation of the Company so as to increase the authorized
number of shares of Common Stock that the Company may issue from
60,000,000 to 125,000,000;
3. to ratify the appointment of KPMG Peat Marwick LLP as the
independent auditors of the Company for the fiscal year ending
December 31, 1997; 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 19, 1997 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 1996 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 26, 1997
<PAGE> 3
SEALED AIR CORPORATION
PARK 80 EAST
SADDLE BROOK, NEW JERSEY 07663-5291
PROXY STATEMENT
DATED MARCH 26, 1997
------------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 1997
------------------------
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 16, 1997 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 certificate of incorporation to increase the number of shares of Common
Stock authorized for issuance thereunder, 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 26, 1997.
<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 19, 1997,
42,593,346 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 19, 1997 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, the
adoption of the proposed amendment to the Company's certificate of incorporation
requires the affirmative vote of a majority of the outstanding shares of Common
Stock, and 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.
The following table sets forth, as of March 15, 1997, 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 6, 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>
Janus Capital Corporation(1)........................ 3,495,100 8.2%
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4923
FMR Corp.(2)........................................ 4,746,500 11.1%
82 Devonshire Street
Boston, Massachusetts 02109
John K. Castle...................................... 11,736
Lawrence R. Codey................................... 4,600
T. J. Dermot Dunphy................................. 1,090,258(3)(4) 2.6%
Charles F. Farrell, Jr.............................. 23,400(4)
David Freeman....................................... 4,400
Elmer N. Funkhouser III............................. 198,222(3)(4)
William V. Hickey................................... 256,890(3)
Warren H. McCandless................................ 70,533(3)
Alan H. Miller...................................... 500,510(4) 1.2%
Robert L. San Soucie................................ 10,200(4)
Dale Wormwood....................................... 70,416(3)
All directors and executive officers as a group (21
persons).......................................... 2,830,621(5) 6.6%
</TABLE>
- ---------------
(1) An Amendment No. 1 to Schedule 13G dated February 10, 1997 was filed by
Janus Capital Corporation indicating beneficial ownership of such 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.
(2) An Amendment No. 2 to Schedule 13G dated February 14, 1997 was filed by FMR
Corp. ("FMR") indicating sole voting power as to 25,500 shares and sole
dispositive power as to 4,746,500 shares. Such Schedule 13G indicates that
Fidelity Management & Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR, beneficially owns 4,630,400 of such shares (as to which
shares Edward C.
2
<PAGE> 5
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 116,100 shares, of which Mr. Johnson and FMR have sole
dispositive power over 116,100 shares and sole voting power over 25,500
shares. Such Schedule 13G states that members of the family of Mr. Johnson
may be deemed to control FMR.
(3) This figure includes approximately 67,308, 13,290, 11,422, 7,833, 8,416 and
231,945 shares of Common Stock held in the Company's Profit-Sharing Plan
trust fund with respect to which Messrs. Dunphy, Hickey, Funkhouser,
McCandless and Wormwood 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,
1997, approximately 2,275,090 shares of Common Stock were held in the trust
fund under such Plan, constituting approximately 5.3% of the outstanding
shares of Common Stock. The Company has been advised that Bankers Trust
Company, the trustee of such Plan, does not deem itself the beneficial owner
of the shares of Common Stock held as trustee of such Plan.
(4) The number of shares held by Mr. Dunphy includes 80,800 shares held by him
as custodian for certain of his children and 11,000 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. The shares held by Mr. Miller are
held indirectly through a limited partnership for which he shares voting and
investment power. Mr. San Soucie shares investment and voting power as to
3,120 of the shares beneficially owned by him with his wife.
(5) This figure includes, without duplication, all of the outstanding shares
referred to in notes 3 and 4 above as well as 12,400 shares for which voting
and investment power is shared by an executive officer of the Company and
3,580 shares held by or for family members of executive officers of the
Company who are not named in the above table.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Securities Exchange Act") requires the Company's executive officers and
directors and any persons owning ten percent or more of the Company's Common
Stock to file reports with the Securities and Exchange Commission to report
their beneficial ownership of and transactions in the Company's Common Stock and
to furnish the Company with copies of such reports. Based upon a review of such
reports filed with the Company, along with written representations from certain
executive officers and directors that no such reports were required during 1996,
the Company believes that all such reports were timely filed during 1996, except
that in February 1997 Alan H. Miller filed a late report covering six open
market purchases of Common Stock by his wife through her separate brokerage
account during 1996 and earlier years, totalling 6,500 shares (after adjusting
for subsequent stock splits). Such report noted that such filing should not be
deemed an admission by Mr. Miller that he was the beneficial owner of such
shares purchased by his wife for the purposes of Section 16(a) under the
Securities Exchange Act.
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.
3
<PAGE> 6
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 following table sets forth each nominee's business experience during
the past five years and other information concerning such nominees.
<TABLE>
<CAPTION>
DIRECTOR
NAME BUSINESS EXPERIENCE SINCE AGE
- ---------------------------- ------------------------------------------------ -------- ---
<S> <C> <C> <C>
John K. Castle(2) Chairman and Chief Executive Officer of Castle 1971 56
Harlan, Inc., a merchant banking firm, and of
Branford Castle, Inc., a holding company.
Director of Commemorative Brands, Inc., Morton's
Restaurant Group, Inc., Statia Terminals
International, N.V., and UNC, Inc.
Lawrence R. Codey(1) President and Chief Operating Officer of Public 1993 52
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 Chairman of the Board and Chief Executive 1969 64
Officer of the Company. Director of Public
Service Enterprise Group Incorporated, Summit
Bancorp and Summit Bank.
Charles F. Farrell, Jr.(1) President of Crystal Creek Partners, an 1971 66
investment management and business consulting
firm.
David Freeman(2) Chairman and Chief Executive Officer of Loctite 1993 52
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 63
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 69
Associates, a financial and management
consulting firm.
</TABLE>
- ---------------
(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.
4
<PAGE> 7
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 $100,000 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), its Thrift and Tax-Deferred Savings Plan and certain other retirement
plans maintained or contributed to by the Company, 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.
During 1996, the Board of Directors held ten 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 except Mr. Freeman, who attended 71% of
such meetings.
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 (the "Directors Stock Plan") provides for the payment of
such retainer in the form of an annual grant of 1,200 shares of the Company's
Common Stock to each eligible director who is elected at each annual meeting of
stockholders. The Directors Stock Plan also provides for interim grants to any
Non-Employee Director who is elected at any time other than at an annual meeting
in the amount of 100 shares for each full 30-day period until the next annual
meeting. During 1996, each director other than Mr. Dunphy received an annual
grant of 1,200 shares of Common Stock at a price of $1.00 per share following
his election at the 1996 Annual Meeting of Stockholders.
Shares of Common Stock issued under the Directors Stock Plan may not be
sold, transferred or encumbered while the director serves on the Board of
Directors, except that Non-Employee Directors may transfer shares issued under
the Directors Stock 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 remains a director of the Company. During this period,
the director is entitled to receive any dividends or other distributions in
respect of such shares and has voting rights in respect of such shares. The
restrictions on the disposition of shares issued pursuant to the Directors Stock
Plan terminate upon the occurrence of any of certain events related to change of
control of the Company that are specified in the Directors Stock Plan.
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 of $2,000 per year for serving as such. Each
Non-Employee Director also receives a fee of $1,000 for each Board or committee
meeting attended. These fees are paid in cash in quarterly installments. All
directors are reimbursed for expenses incurred in attending Board or committee
meetings. Also, during 1996 Mr. San Soucie was paid an additional cash fee of
$3,000 in connection with a special assignment.
5
<PAGE> 8
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............... 1996 $363,600 $390,000 $ -0- $ 29,000
Chairman of the Board 1995 363,600 340,000 1,590,000 29,000
and Chief Executive Officer 1994 363,600 300,000 -0- 29,000
William V. Hickey................. 1996 $226,100 $200,000 $ -0- $ 22,600
President and Chief 1995 217,767 150,000 795,000 22,600
Operating Officer............... 1994 186,933 110,000 -0- 22,600
Elmer N. Funkhouser III........... 1996 $217,433 $120,000 $ -0- $ 26,000
Senior Vice President 1995 211,600 95,000 -0- 26,000
1994 210,267 92,000 -0- 26,000
Dale Wormwood..................... 1996 $200,600 $115,000 $ -0- $ 23,364
Senior Vice President (4) 1995 184,433 95,000 -0- 24,050
1994 177,433 80,000 -0- 24,050
Warren H. McCandless.............. 1996 $191,433 $ 50,000 $ -0- $ 22,400
Senior Vice 1995 184,433 75,000 -0- 22,400
President-Finance (4) 1994 177,433 75,000 -0- 22,400
</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 an 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, 1996 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 - $3,330,000, Mr.
Hickey - $2,564,100, Mr. Wormwood - $915,750 and Mr. McCandless - $811,688.
As of such date, such awards, all of which were granted with an original
vesting period of three years, which has been extended in certain cases,
vested as follows:
<TABLE>
<CAPTION>
1997 1998 1999
------ ------ ----
<S> <C> <C> <C>
T. J. Dermot Dunphy............................ -0- 80,000 -0-
William V. Hickey.............................. 21,600 40,000 -0-
Elmer N. Funkhouser III........................ -0- -0- -0-
Dale Wormwood.................................. 22,000 -0- -0-
Warren H. McCandless........................... 19,500 -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.
6
<PAGE> 9
(3) Includes Company contributions to the Company's Profit-Sharing Plan,
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 1996, such amounts were as follows:
<TABLE>
<CAPTION>
PROFIT- THRIFT INSURANCE
SHARING PLAN PLAN PREMIUMS
------------ ------ ---------
<S> <C> <C> <C>
T. J. Dermot Dunphy..................... $ 15,000 $4,500 $ 9,500
William V. Hickey....................... 15,000 4,500 3,100
Elmer N. Funkhouser III................. 15,000 4,500 6,500
Dale Wormwood........................... 15,000 3,814 4,550
Warren H. McCandless.................... 15,000 4,500 2,900
</TABLE>
The Company's Profit-Sharing Plan and its Thrift Plan are broad-based
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 3 to the table under "Voting Securities" above.
(4) Mr. McCandless and Mr. Wormwood retired from their positions as officers of
the Company at the end of 1996. Mr. Wormwood continues to be employed
part-time by the Company.
REPORT OF ORGANIZATION AND COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Compensation Philosophy
The Company's executive compensation program consists of salaries, annual
bonuses tied to performance, and awards under the Company's Contingent Stock
Plan. The Company's executive compensation philosophy is to provide salaries
that are modest when compared with manufacturing companies of comparable size
and annual bonuses that are higher than those provided by such companies. The
Company also makes substantial awards of Common Stock under the Contingent Stock
Plan as long-term incentive compensation to its executives when the Committee
feels such awards are appropriate. In reaching its decisions, the Committee is
guided by its own judgment and those sources of information (including
compensation surveys) that the Committee considers reliable.
This program is designed to provide appropriate incentives toward achieving
the Company's annual and long-term strategic objectives, to support a
performance-oriented environment based on the attainment of goals and objectives
intended to benefit the Company and its stockholders, to create an identity of
interests between the Company's executives and its stockholders, and to attract,
retain and motivate key executives. The Committee believes that this program
effectively provides these incentives as shown by the Company's long-term record
of growth and enhancement of stockholder value.
Salaries and Annual Bonuses
The Committee is responsible for setting the compensation of the Company's
executive officers, including the executive officers listed in the Summary
Compensation Table above, and other employees of the Company or any of its
domestic subsidiaries with base salaries of $100,000 or more. The Committee
conducts an annual compensation review during the first quarter of each year.
The Company's Chief Executive Officer submits salary and bonus recommendations
to the Committee for the other executive officers and employees whose
compensation is set by the Committee. Following a review of those
recommendations, the Committee approves cash bonuses for the prior year and
salary rates and cash bonus objectives for the current year for the other
executive officers and employees with such modifications to the Chief Executive
Officer's recommendations as the Committee considers appropriate. Also, the
Committee may adjust salaries for specific executive officers or employees at
other times during the year, such as when there are significant changes in the
responsibility of such officers or employees.
The Committee bases its decisions on adjustments to salary and cash bonus
objectives principally on changes in the responsibilities of the particular
executive and on the Committee's evaluation of the market
7
<PAGE> 10
demand for executives of the capability and experience employed by the Company
in relation to the total compensation paid to the particular executive. The
Committee sets annual cash bonus objectives at a level that links a substantial
portion of each individual's annual cash compensation to attaining the
performance objectives discussed below in order to provide appropriate
incentives to attaining such objectives.
Cash bonuses are determined based upon the attainment of corporate and
individualized performance objectives for the year in question. The Committee
does not apply a fixed weighting to corporate or individual performance goals in
deciding the amount of cash bonuses, although the Committee generally places
greater emphasis on financial performance than on other personal performance
objectives.
The principal measure of corporate performance used to establish annual
cash bonuses is the extent to which the Company achieves its business plan for
the year in question. Such business plan is developed by management and approved
by the Board of Directors before the beginning of such year. The Committee does
not rely exclusively on any single measure of financial performance to measure
achievement 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 such
as earnings before taxes, interest, depreciation and amortization (commonly
called "EBITDA"). The Company does not make its business plans public, nor does
the Company make public projections of its financial performance. Accordingly,
the specific financial targets upon which annual cash bonuses are based are not
publicly available. Executives other than the Chief Executive Officer are also
evaluated based upon their attainment of individualized management objectives
within their particular areas of responsibility. For each executive officer who
has overall responsibility for an operating unit of the Company, such
individualized objectives include the operating unit's achievement of its own
financial targets.
During the first quarter of 1996, the Committee conducted a compensation
review for the executive officers named in the Summary Compensation Table other
than the Chief Executive Officer, in connection with which the Company's Chief
Executive Officer submitted recommendations to the Committee for 1995 cash
bonuses, 1996 salary adjustments and 1996 cash bonus objectives. The Committee
approved such recommendations with such modifications as the Committee deemed
appropriate, none of which was material. A further adjustment of salary was made
by the Committee during 1996 for Mr. Hickey in connection with his election to
the office of President of the Company. Salary increases in 1996 for the
executive officers named in the Summary Compensation Table (other than the Chief
Executive Officer, who is discussed below) ranged from 3.4% to 13.6%. These
salary increases were based primarily upon the factors discussed above, with the
largest increase being made to Mr. Hickey because of his expanded
responsibilities as President of the Company.
Cash bonuses for 1996 for the executive officers named in the Summary
Compensation Table were determined by the Committee during the first quarter of
1997. These bonuses reflected the Company's achievement of its principal
financial objectives during 1996 and the Committee's evaluation of each
individual's degree of attainment of that individual's other performance goals
for 1996.
Compensation of the Chief Executive Officer
The Committee evaluates the performance of the Chief Executive Officer,
reviews its evaluation with him, and based on that evaluation and review decides
his compensation and performance and bonus objectives. The Committee and the
Chief Executive Officer believe that his cash 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
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 1996 as was established in 1991.
The Committee bases its determination of the annual cash bonus for the
Chief Executive Officer on the corporate performance goals discussed above and
the Chief Executive Officer's leadership in providing strategic direction to the
Company, in developing and maintaining an effective management team for the
Company and in communicating and implementing a strong corporate culture and
vision within and outside the Company. As a result of the annual compensation
review conducted in the first quarter of 1997, based
8
<PAGE> 11
upon the Company's achievement of its principal financial objectives during 1996
and Committee's determination of Mr. Dunphy's attainment of his other
performance objectives for 1996, the Committee established Mr. Dunphy's 1996
annual cash bonus at the level shown in the Summary Compensation Table.
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 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, or such longer
period as may be determined by the Committee, to repurchase the shares upon
payment of an amount equal to the price at which such shares were issued, which
to date has always been $1.00 per share. This option is exercisable by the
Company only upon the termination of an employee's employment during such 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 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 or other periodic awards to individuals who have been determined to be
eligible to participate in the Plan. However, the Committee regularly 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.
No awards were made under the Plan during 1996 to the executive officers
named in the Summary Compensation Table. However, each of such executive
officers owns a substantial number of shares of the Company's Common Stock, and
those executive officers who remain employed by the Company are eligible to
receive future awards under the Plan in the discretion of the Committee.
Compliance with Section 162(m) of the Internal Revenue Code
Although the Company's programs for salary adjustments, cash bonuses and
awards under the Contingent Stock Plan are designed to provide incentives toward
achieving the Company's strategic objectives, none of such compensation programs
is based upon the attainment of objective performance goals that have been
approved by the stockholders of the Company prior to payment. Thus, compensation
associated with awards under the Contingent Stock Plan to the executive officers
named in the Summary Compensation Table, when taken together with their other
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 for federal income tax purposes no more than $1 million of annual
compensation paid to any such executive officer. The compensation related to
awards made under the Contingent Stock Plan to three of the named executive
officers that were scheduled to vest during 1996, when added to other
compensation paid to such officers in 1996, would have been partially
non-deductible to the Company under Section 162(m). With the approval of the
Committee, the vesting schedules for such awards were amended so that the
Company's options to repurchase the shares covered by such awards were extended
into subsequent years. As a result, the Company believes that non-deductible
compensation under Section 162(m) in 1996 and 1997, if any, will be minimal.
The Committee's policy is to structure executive compensation to be
deductible without limitation where doing so will further the purposes of the
Company's executive compensation program. Thus, the Committee may authorize
additional extensions of vesting dates for awards under the Contingent Stock
Plan or it may recommend for stockholder approval new compensation plans that
are designed to be exempt from the
9
<PAGE> 12
limitations of Section 162(m). However, the Committee believes that compensation
of its executive officers cannot always be based upon fixed formulas and that
the prudent use of discretion in determining compensation is in the best
interests of the Company and its stockholders. In some cases, the Committee in
the exercise of such discretion may approve executive compensation that is not
fully deductible. However, 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 as 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.
Since management compensation is 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, the Committee
believes that appropriate incentives are provided to align management's
interests with the long-term growth and development of the Company and the
interests of its stockholders. The Committee also believes that there are many
ways by which its executive officers and other executives contribute to building
a successful company. While the results of those efforts may eventually appear
in the financial statements or be reflected in the Company's stock price, many
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, 1996 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 268%
(or an annual compounded return of 29.8%). This total return compares to a
five-year total return of 101% (or an annual compounded return of 15.0%) for the
Standard & Poor's 500 Stock Index and a five-year total return of 14% (or an
annual compounded return of 2.6%) 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
10
<PAGE> 13
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, 1996 the
cumulative total return on an investment of $100 assumed to have been made on
December 31, 1991 in the Company's Common Stock (after giving effect to
two-for-one stock splits effected in 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 CHEMI-
CALS (SPE-
CIALTY)/CONTAINERS-
PAPER INDEX
MEASUREMENT PERIOD SEALED AIR CORPO- A]COMPOSITE S&P
(FISCAL YEAR COVERED) RATION 500
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 111.05 96.66 107.43
1993 139.78 89.94 118.11
1994 160.22 94.09 119.63
1995 247.51 96.69 164.03
1996 367.96 113.65 201.24
</TABLE>
11
<PAGE> 14
AMENDMENT TO CERTIFICATE OF INCORPORATION
Currently, the Company's certificate of incorporation authorizes the
issuance of 60,000,000 shares of Common Stock and 1,000,000 shares of preferred
stock. There were 42,593,346 shares of Common Stock outstanding on March 19,
1997 (excluding 181,058 shares held in the Company's treasury). Of the
authorized but unissued shares of Common Stock, 892,448 are currently reserved
for future issuance under the Company's Contingent Stock Plan, the Directors
Stock Plan and in connection with certain non-material acquisitions that have
been completed with deferred purchase prices. No shares of preferred stock are
currently issued or outstanding.
The Board of Directors has recommended that the stockholders approve an
increase in the number of authorized shares of Common Stock from 60,000,000 to
125,000,000 shares. Exhibit A to this Proxy Statement contains the text of the
first sentence of Article Fourth of the Company's certificate of incorporation
as proposed to be amended, the only change being the number of authorized shares
of Common Stock. If the proposed amendment becomes effective, the Board of
Directors may issue the additional shares of Common Stock without further
approval of the stockholders except as otherwise required by the applicable
rules of the New York Stock Exchange or other applicable laws or regulations.
The Board of Directors believes it to be in the best interests of the
Company that the Board be in a position to approve the issuance of shares of
Common Stock in the future for such corporate purposes as the Board of Directors
may deem advisable, including financings, acquisitions, stock splits, stock
dividends and management incentive and employee benefit plans. The Company has
no pending arrangements to issue any of the additional shares of Common Stock
that would be authorized as a result of this proposed amendment to the
certificate of incorporation. Since the stockholders have no pre-emptive rights,
the issuance of Common Stock on other than a pro rata basis may reduce each
stockholder's proportionate voting power in relation to that of the stockholders
as a whole.
Proxies received in response to this solicitation will, in the absence of
contrary specifications, be voted in favor of the proposed amendment of the
certificate of incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
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, 1997, 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 this 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 1998 ANNUAL MEETING
In order for stockholder proposals for the 1998 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 26,
1997.
12
<PAGE> 15
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 $5,000 covering its services and
will reimburse Morrow & Co., Inc. for payments made to brokers and other
nominees for their expenses in forwarding soliciting material. In addition,
directors, officers and employees of the Company, who will receive no
compensation in addition to their regular salary, if any, may solicit proxies by
personal interview, mail, telephone, facsimile or other means of electronic
transmission.
The Company does not know of any matters to be presented at the meeting
other than those set forth in this Proxy Statement. However, if any other
matters come before the meeting, it is intended that the holders of the proxies
may use their discretion in voting thereon.
By Order of the Board of Directors
H. KATHERINE WHITE
Secretary
Saddle Brook, New Jersey
March 26, 1997
13
<PAGE> 16
EXHIBIT A
PROPOSED AMENDMENT TO THE FIRST SENTENCE OF ARTICLE FOURTH OF THE CERTIFICATE OF
INCORPORATION*
FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is one hundred twenty-six million (126,000,000), one
hundred twenty-five million (125,000,000) of which shall be common stock with a
par value of One Cent ($.01) per share, amounting in the aggregate to One
Million Two Hundred Fifty Thousand Dollars ($1,250,000), and one million
(1,000,000) of which shall be preferred stock without par value.
- ---------------
* The current text of the first sentence of Article Fourth is as follows:
FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is sixty-one million (61,000,000), sixty million
(60,000,000) of which shall be common stock with a par value of One Cent ($.01)
per share, amounting in the aggregate to Six Hundred Thousand Dollars
($600,000), and one million (1,000,000) of which shall be preferred stock
without par value.
A-1
<PAGE> 17
Please mark your 1386
/X/ 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 ELECTION 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. |
|------------------------------------------------------------------------------|
| FOR WITHHELD FOR AGAINST ABSTAIN |
| |
| 1. Election of 2. Amendment of |
| Directors Certificate of |
| (see reverse) / / / / Incorporation to / / / / / / |
| increase shares |
| For, except vote withheld from the of Common Stock |
| following nominee(s): authorized |
| _______________________________ thereunder. |
| |
| 3. Ratification of the appointment of KPMG Peat |
| Marwick LLP as the independent auditors for |
| the year ending December 31, 1997 / / / / / / |
| |
| 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 26, 1997.
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.
<PAGE> 18
SEALED AIR CORPORATION
PROXY--SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
P The undersigned appoints T.J. Dermot Dunphy, William V. Hickey and H.
Katherine White, or a majority of such thereof as shall act (or if only one
R shall act, then that one) (the "Proxy Committee"), proxies with power of
substitution, to vote all the common stock of Sealed Air Corporation (the
O "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,
X Saddle Brook, New Jersey on May 16, 1997 at 11:00 A.M., Eastern Daylight
Savings Time, and at any adjournments thereof.
Y
(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
REVERSE SIDE AND MAIL IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
-----------
SEE REVERSE
SIDE
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