<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 10-Q
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______to_______
Commission file number 1-7834
SEALED AIR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-1682767
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Park 80 East 07663-5291
Saddle Brook, New Jersey (Zip Code)
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (201) 791-7600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO_____
There were 42,624,246 shares of the registrant's common stock, par value
$0.01 per share, outstanding as of October 31, 1997.
</PAGE>
<PAGE>
<TABLE>
PART I
FINANCIAL INFORMATION
SEALED AIR CORPORATION AND SUBSIDIARIES
Consolidated Statements of Earnings
For the Three Months and Nine Months Ended September 30, 1997 and 1996
(In thousands of dollars except per share data)
(Unaudited)
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $206,303 $196,532 $620,769 $575,578
Cost of sales 128,108 123,406 387,364 361,050
Gross profit 78,195 73,126 233,405 214,528
Marketing, administrative
and development expenses 42,507 40,929 127,417 119,921
Operating profit 35,688 32,197 105,988 94,607
Other income (expense):
Interest income 611 334 965 964
Interest expense (1,525) (3,314) (5,683) (10,653)
Other, net 535 (879) 1,881 (1,269)
Other income (expense), net (379) (3,859) (2,837) (10,958)
Earnings before income taxes 35,309 28,338 103,151 83,649
Income taxes 13,912 11,197 40,642 33,045
Net earnings $ 21,397 $ 17,141 $ 62,509 $ 50,604
Net earnings per common share $ 0.50 $ 0.40 $ 1.47 $ 1.19
Weighted average number of
shares outstanding (000) 42,624 42,473 42,609 42,445
See accompanying notes to consolidated financial statements.
</TABLE>
2
</PAGE>
<PAGE>
<TABLE>
SEALED AIR CORPORATION
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996
(In thousands of dollars except share data)
(Unaudited)
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 25,437 $ 2,985
Accounts receivable, less allowance
for doubtful accounts of $6,233 in
1997 and $5,623 in 1996 127,801 124,204
Other receivables 6,132 8,258
Inventories 62,217 57,231
Prepaid expenses 2,644 1,095
Deferred taxes 12,786 13,193
Total current assets 237,017 206,966
Property and equipment:
Land and buildings 82,005 81,629
Machinery and equipment 201,243 199,275
Leasehold improvements 7,807 8,409
Furniture and fixtures 11,137 12,029
Construction in progress 7,794 6,139
309,986 307,481
Less accumulated depreciation and
amortization 143,025 132,919
Property and equipment, net 166,961 174,562
Patents, patent applications and rights,
less accumulated amortization of
$16,270 in 1997 and $15,139 in 1996 11,155 11,998
Excess of cost over fair value of net assets
acquired, less accumulated amortization
of $17,506 in 1997 and $12,966 in 1996 41,003 47,840
Other assets 27,092 25,753
$483,228 $467,119
See accompanying notes to consolidated financial statements.
</TABLE>
3
</PAGE>
<PAGE>
<TABLE>
SEALED AIR CORPORATION
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996 (Continued)
(In thousands of dollars except share data)
(Unaudited)
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable and current
installments of long-term debt $ 24,599 $ 15,565
Accounts payable 47,295 46,934
Other accrued liabilities 70,872 69,849
Income taxes payable 10,147 15,708
Total current liabilities 152,913 148,056
Long-term debt, less current
installments 48,718 99,900
Deferred income taxes 21,477 19,863
Other non-current liabilities 12,494 12,651
Total liabilities 235,602 280,470
Shareholders' equity:
Preferred stock, no par value. Authorized
1,000,000 shares, none issued in 1997 and 1996 - -
Common stock, $.01 par value. Authorized
125,000,000 shares in 1997 and 60,000,000
shares in 1996, issued 42,782,104 shares in
1997 and 42,747,704 shares in 1996 428 427
Additional paid-in capital 172,120 167,801
Retained earnings 78,530 16,021
Accumulated translation adjustment 740 8,615
251,818 192,864
Less deferred compensation and cost ($158
in 1997 and $227 in 1996) of 157,858 shares
in 1997 and 226,758 shares in 1996 of common
stock held as treasury stock 4,192 6,215
Shareholders' equity 247,626 186,649
$483,228 $467,119
See accompanying notes to consolidated financial statements.
</TABLE>
4
</PAGE>
<PAGE>
<TABLE>
SEALED AIR CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 1997 and 1996
(In thousands of dollars)
(Unaudited)
<CAPTION>
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 62,509 $ 50,604
Adjustments to net earnings to reconcile to net
cash provided by operating activities:
Depreciation and amortization 33,658 29,427
Deferred credits - income taxes and other 1,495 (3,400)
Net losses on disposals of fixed assets 103 47
Other, net (5,506) (3,363)
Cash provided (used) by changes in:
Receivables (8,177) (7,375)
Inventories (7,253) (668)
Prepaid expenses (1,739) (443)
Accounts payable 2,193 (41)
Other accrued liabilities 8,200 12,388
Income taxes payable (5,398) (3,014)
Net cash provided by operating activities 80,085 74,162
Cash Flows From Investing Activities:
Capital expenditures for property and equipment (17,089) (11,816)
Proceeds from sales of property and equipment 204 1,009
Net cash utilized in purchase of subsidiaries (2,744) (30,032)
Net cash used in investing activities (19,629) (40,839)
Cash Flows From Financing Activities:
Proceeds from long-term debt 12,238 99,086
Payments of long-term debt (52,206) (132,080)
Net proceeds on notes payable 5,617 271
Net cash used by financing activities (34,351) (32,723)
Effect of exchange rate changes on cash and cash
equivalents (3,653) (791)
Cash and Cash Equivalents:
Increase (decrease) during the period 22,452 (191)
Balance, beginning of period 2,985 7,661
Balance, end of period $ 25,437 $ 7,470
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest $ 5,307 $ 10,737
Income taxes $ 47,928 $ 35,981
See accompanying notes to consolidated financial statements.
</TABLE>
5
</PAGE>
<PAGE>
SEALED AIR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997 and 1996
(Unaudited)
(1) Principles of Consolidation
The consolidated financial statements include the accounts of Sealed Air
Corporation and its subsidiaries (the "Company"). All significant
intercompany transactions and balances have been eliminated in
consolidation. In management's opinion, all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of the
results of operations for the periods presented have been made.
Where appropriate, financial statement amounts for prior periods have
been reclassified to conform with their 1997 presentation.
(2) Income Taxes
An explanation of the differences between the effective income tax rate
and statutory U.S. federal income tax rate expressed as a percentage of
earnings before income taxes for the nine months ended September 30,
1997 and 1996 follows:
1997 1996
Statutory U.S. federal income tax rate 35.0% 35.0%
Provision for foreign withholding taxes and
additional U.S. taxes on the accumulated
earnings of foreign subsidiaries 0.3 1.0
Tax effect of U.S. expenses not subject to
tax benefit 0.5 0.2
State income taxes, net of U.S. federal
income tax benefit 4.2 4.2
Taxes on foreign earnings at other than the
statutory U.S. federal income tax rate 0.0 (0.2)
Other miscellaneous items (0.6) (0.7)
Effective income tax rate 39.4% 39.5%
(3) Earnings Per Share
Earnings per common share are computed on the basis of the weighted
average number of shares of common stock outstanding during the year,
including shares issued for contingent stock awards and non-cash
compensation.
6
</PAGE>
<PAGE>
SEALED AIR CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997 and 1996
(Unaudited)
(3) Earnings Per Share (continued)
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share", which is required to be adopted
on December 31, 1997. Such statement is not expected to have a
significant impact on the Company's consolidated financial statements.
(4) Merger of Packaging Business of W.R. Grace & Co.
On August 14, 1997, the Company and W.R. Grace & Co. announced they had
entered into a definitive agreement to combine Grace's packaging
business with the Company to create a new publicly owned company, to be
called Sealed Air Corporation. The transaction, which is expected to be
completed in early 1998, is intended to be a tax-free transaction that
will be accounted for under the reverse purchase method of accounting.
The definitive agreement is subject to customary conditions, including
approval of both companies' shareholders and certain regulatory
approvals. The Company anticipates that most of the costs to complete
this transaction will be incurred in the fourth quarter of 1997 and in
1998.
7
</PAGE>
<PAGE>
Management's Discussion and Analysis
Results Of Operations and Financial Condition
Results of Operations
Net sales increased 5% in the third quarter and 8% in the first nine
months of 1997 compared to the third quarter and first nine months of
1996. The increase in net sales was due primarily to increased unit
volume in the Company's major classes of products in the 1997 periods
and, in the nine month period, the added net sales of businesses
acquired during 1996. Foreign currency translation had a negative
effect on the increase in net sales in all major classes of products in
the 1997 periods. Excluding the negative effect of foreign currency
translation, the increase in net sales would have been 9% and 10%
compared with the third quarter and first nine months of 1996,
respectively.
Net sales from domestic operations increased 7% in the third quarter and
first nine months of 1997 compared to the 1996 periods primarily due to
increased unit volume.
Net sales from foreign operations increased 2% in the third quarter and
10% in the first nine months of 1997 compared to the 1996 periods.
These increases in net sales were due primarily to increased unit
volume, partially offset by the negative effect of foreign currency
translation. Excluding the negative effect of foreign currency
translation, the increase in net sales from foreign operations would
have been 12% and 16% compared with the third quarter and first nine
months of 1996, respectively. The increase in net sales from foreign
operations in the first nine months also reflected the added net sales
of businesses acquired during 1996.
8
</PAGE>
<PAGE>
Management's Discussion and Analysis
Results Of Operations and Financial Condition
Net sales of engineered products, primarily Instapak (R) products and
specialty polyethylene foams, increased 7% in the third quarter and 8%
in the first nine months of 1997 primarily due to increased unit volume.
Net sales of surface protection and other cushioning products, primarily
air cellular products, other polyethylene foam products and protective
and durable mailers and bags, increased 5% in the third quarter and 10%
in the first nine months of 1997 primarily due to increased unit volume.
The increase in the first nine months of 1997 also reflected the added
net sales of businesses acquired during 1996.
Net sales of food packaging products increased 1% in the third quarter
but decreased 1% in the first nine months compared with the 1996
periods. In the third quarter of 1997, the increase primarily reflected
changes in product mix. For the first nine months of 1997, the transfer
of certain food packaging products during 1996 to a small unconsolidated
joint venture in Australia more than offset increases in unit volume of
certain products.
Net sales of other products increased 8% in the first nine months of
1997, primarily due to the added net sales of businesses acquired during
1996 and increased unit volume. Net sales of other products decreased
4% in the third quarter of 1997 primarily due to lower sales of certain
non-packaging products compared to the third quarter of 1996.
Cost of sales increased 4% in the third quarter and 7% in the first nine
months of 1997 primarily reflecting the Company's higher level of net
sales partially offset by the effect of certain lower raw material costs.
9
</PAGE>
<PAGE>
Management's Discussion and Analysis
Results Of Operations and Financial Condition
As a result, cost of sales as a percent of net sales decreased modestly
compared to the respective 1996 periods.
Marketing, administrative and development expenses increased 4% in the
third quarter and 6% in the first nine months of 1997 primarily
reflecting the Company's higher level of net sales. As a percent of net
sales, marketing, administrative and development expenses decreased
modestly compared to the 1996 periods.
Operating profit increased 11% in the third quarter and 12% in the first
nine months of 1997 primarily reflecting the Company's higher level of
net sales and the changes in costs and expenses discussed above.
Interest expense, which is the principal component of other income
(expense), net, decreased to $1,525,000 in the third quarter and to
$5,683,000 in the first nine months of 1997 compared to $3,314,000 and
$10,653,000 in the third quarter and first nine months of 1996,
respectively, primarily reflecting the decrease in the Company's average
outstanding indebtedness.
The Company's effective income tax rate was 39.4% in the third quarter
and first nine months of 1997 and 39.5% in the 1996 periods.
Net earnings increased 25% to $21,397,000, or $0.50 per share, in the
third quarter and 24% to $62,509,000, or $1.47 per share, in the first
nine months of 1997 compared with net earnings of $17,141,000, or $0.40
per share, and $50,604,000, or $1.19 per share, in the third quarter and
first nine months of 1996 primarily reflecting the Company's higher
10
</PAGE>
<PAGE>
Management's Discussion and Analysis
Results Of Operations and Financial Condition
level of operating profit and lower interest expense.
On August 14, 1997, the Company and W.R. Grace & Co. announced they had
entered into a definitive agreement to combine Grace's packaging
business with the Company to create a new publicly owned company, to be
called Sealed Air Corporation. The transaction is expected to be
completed in early 1998. The Company anticipates that most of the costs
to complete this transaction will be incurred in the fourth quarter of
1997 and in 1998.
Liquidity and Capital Resources
The Company's principal sources of liquidity are cash flows from
operations and amounts available under the Company's existing lines of
credit. The Company has met, and currently expects that it will
continue to meet, substantially all of its working capital and capital
expenditure requirements as well as its debt servicing requirements with
funds provided by operations and borrowings made either under its
available lines of credit or otherwise.
Net cash provided by operating activities amounted to $80,085,000 in the
first nine months of 1997 compared with $74,162,000 for the 1996 period.
In each period, changes in operating assets and liabilities partially
offset the Company's increased net earnings and higher levels of
depreciation and amortization. The changes in operating assets and
liabilities were primarily due to the timing of cash receipts and
payments and the Company's higher level of operations. The
strengthening of the U.S. dollar had a negative effect on cash and cash
equivalents in the third quarter of 1997.
11
</PAGE>
<PAGE>
Management's Discussion and Analysis
Results Of Operations and Financial Condition
Net cash used in investing activities amounted to $19,629,000 and
$40,839,000 for the first nine months of 1997 and 1996, respectively.
Cash used for capital expenditures amounted to $17,089,000 in the first
nine months of 1997 compared with $11,816,000 in the 1996 period
primarily due to the timing of capital expenditures. The higher level
of net cash used in investing activities in the 1996 period primarily
reflects the higher amount of cash used for acquisitions made in such
period.
Net cash used in financing activities amounted to $34,351,000 in the
first nine months of 1997 compared with $32,723,000 in the first nine
months of 1996. Net repayments of long-term debt in the 1997 and 1996
periods more than offset borrowings incurred in such periods.
At September 30, 1997, the Company's working capital amounted to
$84,104,000, or 17% of total assets, compared with $58,910,000, or 13%
of total assets, at December 31, 1996. This increase in working capital
was due primarily to an increase in cash and a decrease in income taxes
payable, partially offset by an increase in notes payable and current
installments of long-term debt. Cash increased primarily due to
operating cash flows which exceeded cash used for investing and
financing activities during the 1997 period. Income taxes payable
decreased primarily due to the timing of payments. Notes payable and
current installments of long-term debt increased due primarily for the
reasons discussed below.
The Company's ratio of current assets to current liabilities (current
ratio) was 1.6 at September 30, 1997 and 1.4 at December 31, 1996. The
Company's
12
</PAGE>
<PAGE>
Management's Discussion and Analysis
Results Of Operations and Financial Condition
ratio of current assets less inventory to current liabilities (quick
ratio) was 1.1 at September 30, 1997 and 1.0 at December 31, 1996.
The Company's outstanding debt consists primarily of various foreign
loans and borrowings under lines of credit. Long-term debt, less
current installments, decreased to $48,718,000 at September 30, 1997
from $99,900,000 at December 31, 1996 reflecting the net repayment of
long-term indebtedness. Notes payable and current installments of long-
term debt increased to $24,599,000 at September 30, 1997 from
$15,565,000 at December 31, 1996 primarily due to the timing of
scheduled debt maturities and working capital borrowings. At September
30, 1997, the Company's available lines of credit amounted to
approximately $261,852,000 of which approximately $233,712,000 were
unused. Such lines of credit, which include an unsecured $200 million
revolving credit facility with Bankers Trust Company, as agent for a
syndicate of banks (the "BT Credit Agreement"), permit the Company and
certain of its subsidiaries to borrow for working capital and other
corporate purposes.
The BT Credit Agreement provides for changes in borrowing margins based
on financial criteria and imposes certain limitations on the operations
of the Company and its subsidiaries that include restrictions on the
incurrence of additional indebtedness, the creation of liens, the making
of investments, dispositions of property or assets, certain transactions
with affiliates, and the payment by the Company of cash dividends to its
stockholders, as well as financial covenants relating to interest
coverage and debt leverage. The Company was in compliance with these
requirements as of September 30, 1997.
13
</PAGE>
<PAGE>
Management's Discussion and Analysis
Results Of Operations and Financial Condition
Certain of the Company's foreign loans and lines of credit, including
the BT Credit Agreement, bear interest at floating rates. The Company
utilizes interest rate swaps, currency swaps, and other derivative
financial instruments to manage its exposure to fluctuations in interest
rates and foreign exchange rates. The Company does not purchase, hold
or sell derivative financial instruments for trading purposes.
The Company's shareholders' equity increased to $247,626,000 at
September 30, 1997 from $186,649,000 at December 31, 1996 primarily as a
result of the Company's net earnings for the first nine months of 1997,
partially offset by the net change in the accumulated translation
adjustment balance due to the effect of foreign currency translation in
the first nine months of 1997.
14
</PAGE>
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Number Description
2.1 Agreement and Plan of Merger dated as of
August 14,1997 (the "Merger Agreement") by and among
W.R. Grace & Co., Packco Acquisition Corp. and
the Corporation. [Exhibit 2.1 to the
Corporation's Current Report on Form 8-K, Date of Report
August 14, 1997, File No. 1-7834, is incorporated by
reference.]
2.2 Form of Distribution Agreement (the "Distribution
Agreement") by and among Grace, W.R. Grace & Co.-Conn.
("Grace-Conn."), and Grace Specialty Chemicals, Inc.
("Grace Chemicals").[Exhibit 2.2 to the Corporations'
Current Report on Form 8-K, Date of Report August 14, 1997,
File No. 1-7834, is incorporated by reference.]
4.1 Term Sheet for Senior Convertible Preferred Stock of New
Sealed Air (referred to therein as "Newco") (Exhibit E to
the Merger Agreement). [Exhibit 4.1 to the Corporation's
Current Report on Form 8-K/A, Date of Report August 14, 1997,
File No. 1-7834, is incorporated by reference.]
4.2 Amendment No.1 dated August 14, 1997 to the Amended and
Restated Credit Agreement among the Corporation, certain
of its subsidiaries, Bankers Trust Company, as agent, and
various financial institutions, dated as of June 8, 1994 and
amended and restated as of August 22, 1996.
10.1 Form of Employee Benefits Allocation Agreement by and among
Grace, Grace-Conn. and Grace Chemicals. [Exhibit 10.1 to
the Corporation's Current Report on Form 8-K, Date of Report
August 14, 1997, File No. 1-7834, is incorporated by
reference.]
10.2 Form of Tax Sharing Agreement by and among Grace, Grace-Conn.
and the Corporation (Exhibit B to the Distribution Agreement).
[Exhibit 10.2 to the Corporation's Current Report on
Form 8-K, Date of Report August 14, 1997, File No. 1-7834,
is incorporated by reference.]
15
</PAGE>
<PAGE>
10.3 Contingent Stock Plan of the Company, as amended.
10.4 Restricted Stock Plan for Non-Employee Directors of the
Company, as amended.
27 Financial Data Schedule.
(b) Reports on Form 8-K
On August 18, 1997, the Company filed a Current Report on Form 8-K,
Date of Report August 14, 1997, as amended by a Current Report on
Form 8-K/A filed on August 21, 1997, which reported under Item 5
that on August 14, 1997 the Corporation had entered into an
Agreement and Plan of Merger with W.R. Grace & Co., a Delaware
corporation, ("Grace") and Packco Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Grace. No financial
statements were filed with the Report.
16
</PAGE>
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEALED AIR CORPORATION
Date: November 14, 1997 By s/Jeffrey S. Warren
Jeffrey S. Warren
Controller
(Authorized Executive
Officer and Chief
Accounting Officer)
17
</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from the consolidated
statements of earnings for the nine months ended September 30, 1997 and the
consolidated balance sheet at September 30, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000088204
<NAME> SEALED AIR CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 25437000
<SECURITIES> 0
<RECEIVABLES> 134034000
<ALLOWANCES> 6233000
<INVENTORY> 62217000
<CURRENT-ASSETS> 237017000
<PP&E> 309986000
<DEPRECIATION> 143025000
<TOTAL-ASSETS> 483228000
<CURRENT-LIABILITIES> 152913000
<BONDS> 0
0
0
<COMMON> 428000
<OTHER-SE> 247198000
<TOTAL-LIABILITY-AND-EQUITY> 483228000
<SALES> 620769000
<TOTAL-REVENUES> 620769000
<CGS> 387364000
<TOTAL-COSTS> 387364000
<OTHER-EXPENSES> 127417000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5683000
<INCOME-PRETAX> 103151000
<INCOME-TAX> 40642000
<INCOME-CONTINUING> 62509000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62509000
<EPS-PRIMARY> 1.47
<EPS-DILUTED> 0
</TABLE>
Exhibit 4.2
AMENDMENT NO. 1 TO THE AMENDED AND
RESTATED CREDIT AGREEMENT
AMENDMENT dated as of August 14, 1997 to the Amended and
Restated Credit Agreement dated as of June 8, 1994 and as
amended and restated as of August 22, 1996 (the "Credit
Agreement") among Sealed Air Corporation (the "Company"), certain
of its Subsidiaries, the banks party thereto (the "Banks"), the
co-agents named therein and BANKERS TRUST COMPANY, as Agent (the
"Agent").
WITNESSETH:
WHEREAS, Section 8.02 of the Credit Agreement, among other
things, limits the ability of the Company to merge or
consolidate, subject to certain permitted transactions, and
further provides that the Company may not even enter into an
agreement to merge or consolidate at any future time; and
WHEREAS, the Company has requested that the Banks amend
Section 8.02 of the Credit Agreement to eliminate the restriction
on agreements that the Company may enter into with respect to
future transactions, but without prejudicing the Banks' rights to
withhold their consent to the actual consummation of any merger
or consolidation that is not permitted by Section 8.02; and
WHEREAS, the Banks party hereto, subject to the terms and
conditions hereof, are willing to so amend the Credit Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Defined Terms; References. Unless otherwise
specifically defined herein, each term used herein which is
defined in the Credit Agreement has the meaning assigned to such
term in the Credit Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar
reference and each reference to "this Agreement" and each other
similar reference contained in the Credit Agreement shall, after
this Amendment becomes effective, refer to the Credit Agreement
as amended hereby.
Section 2. Amendment of Section 8.02. Section 8.02 is
amended by deleting the parenthetical phrase "(or agree to do any
of the foregoing at any future time)".
Section 3. Representations of Borrowers. Each Borrower
represents and warrants that, assuming this Amendment has become
effective, (i) the representations and warranties of the
Borrowers set forth in Section 6 of the Credit Agreement are true
and correct in all material respects on the date hereof as if
they had been made on the date hereof (it being understood and
agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date)
and (ii) no Default or Event of Default has occurred and is
continuing.
Section 4. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of New
York.
Section 5. Counterparts. This Amendment may be signed in
any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
Section 6. Effectiveness. This Amendment shall become
effective as of the date hereof when the Agent shall have
received from each of the Borrowers and the Required Banks a
counterpart hereof signed by such party or facsimile or other
written confirmation (in form satisfactory to the Agent) that
such party has signed a counterpart hereof.
Section 7. Effect of Amendment. Except as expressly set
forth herein, the amendment contained herein shall not constitute
a waiver or amendment of any term or condition of the Credit
Agreement, and all such terms and conditions shall remain in full
force and effect and are hereby ratified and confirmed in all
respects. Without limiting the generality of the foregoing, the
Borrowers acknowledge and agree that the consummation of any
merger or consolidation or conveyance, sale, lease or other
disposition of property or assets that is not permitted by
Section 8.02 shall constitute an Event of Default.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
SEALED AIR CORPORATION
By: s/ William V. Hickey
Title: President
SEALED AIR B.V.
By: s/ William V. Hickey
Title: Managing Director
SEALED AIR FINANCE B.V.
By: s/ William V. Hickey
Title: Director
SEALED AIR (NZ) LIMITED
By: s/ William V. Hickey
Title: Director
SEALED AIR LIMITED
By: s/ William V. Hickey
Title: Attorney-in-Fact
BANKERS TRUST COMPANY,
Individually and as Agent
By:_____s/_______________________
Title:
ABN AMRO BANK N.V.
Individually and as Co-Agent
By:_____s/________________________
Title:
By:_____s/________________________
Title:
THE BANK OF NOVA SCOTIA
By:______s/_______________________
Title:
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By:______s/_______________________
Title:
By:______s/_______________________
Title:
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE
By:______s/_______________________
Title:
By:______s/_______________________
Title:
CORESTATES BANK, N.A.
By:______s/_______________________
Title:
CREDIT LYONNAIS,
NEW YORK BRANCH,
Individually and as Co-Agent
By:______s/_______________________
Title:
THE FIRST NATIONAL BANK OF BOSTON
By:______s/_______________________
Title:
FLEET NATIONAL BANK
By:______s/_______________________
Title:
MIDLAND BANK PLC, NEW YORK BRANCH
By:______s/_______________________
Title:
NATIONSBANK, N.A.,
Individually and as Co-Agent
By:______s/_______________________
Title:
THE NORTHERN TRUST COMPANY
By:______s/_______________________
Title:
TORONTO DOMINION (NEW YORK), INC.
By:______s/_______________________
Title:
SUMMIT BANK,
Individually and as Co-Agent
By:______s/_______________________
Title:
Exhibit 10.3
CONTINGENT STOCK PLAN
OF
SEALED AIR CORPORATION,
AS AMENDED
Section 1. Purpose. The purpose of the Contingent
Stock Plan (the "Plan"") of Sealed Air Corporation (the
"Corporation") is to assist the Corporation and its subsidiaries
in attracting and retaining employees of outstanding competence
by providing an incentive which permits those employees
responsible for the Corporation's growth to share directly in
that growth and to further the identity of their interests with
those of the stockholders of the Corporation.
Section 2. Administration. The Plan shall be
administered by a committee (the "Committee") composed of not
less than three persons chosen from time to time by the Board of
Directors of the Corporation (the "Board") from among those
directors of the Corporation who are not, and have not been for
at least one year, employees of the Corporation or its
subsidiaries. In addition to the powers granted to the Committee
as elsewhere set forth in the Plan, and subject to the terms and
conditions of the Plan, the Committee is authorized to interpret
the Plan, to adopt and revise rules and regulations relating to
the Plan and the conduct of the business of the Committee, and to
make all determinations that it believes necessary or advisable
for the operation and administration of the Plan. All decisions
and determinations by the Committee with respect to the Plan
shall be final, binding and conclusive upon all parties,
including the Corporation, its stockholders and all employees of
the Corporation and of its subsidiaries. If no Committee is
appointed by the Board or if the Committee shall for any reason
cease or become unable to act, the Board shall act as the
Committee. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the
Plan or any award ("Award") of a right to purchase shares of the
$.01 par value Common Stock of the Corporation (the "Common
Stock") granted pursuant to the Plan.
Section 3. Stock Available. The stock subject to the
Plan shall be such authorized but unissued or treasury shares of
Common Stock as shall from time to time be determined by the
Committee. The total amount of Common Stock which may be issued
pursuant to the Plan is 6,400,000 shares, subject, however, to
adjustment in accordance with the provisions of Section 15. In
the event that any Common Stock issued pursuant to the Plan is
reacquired by the Corporation upon the exercise of an option
described in Section 8, the shares of Common Stock so acquired
will again become available for issuance pursuant to the Plan.
Section 4. Eligibility. Each employee of the
Corporation or any subsidiary of the Corporation, including
officers, whom the Committee determines is in a position to make
a significant contribution to the growth and success of the
Corporation shall be eligible to participate under the Plan
("Employee"). An Employee may receive more than one Award under
the Plan.
Section 5. Terms, Conditions and Form of Purchase
Agreements. The Committee shall have exclusive jurisdiction,
except as otherwise limited by the Plan, to grant all Awards, to
select the Employees to be granted Awards, to determine the
number of shares of Common Stock to be covered by an Award, to
determine the time or times for the grant of Awards, to determine
the Issue Price (as such term is defined in Section 7) of the
shares of Common Stock which are the subject of an Award, to
determine the duration of the Corporation's option described in
Section 8, to prescribe the form or forms of agreement for the
purchase of the Common Stock which is the subject of an Award
("Purchase Agreement"), to modify any such form of Purchase
Agreement, and to have full authority with respect to all other
matters relating to the Plan except those matters as are
expressly reserved herein to the stockholders of the Corporation.
The Committee shall inform the appropriate officers of the
Corporation of its determinations, and such officers shall inform
the Employee to whom an Award has been made of the grant of such
Award. The Committee may authorize any officer of the
Corporation to enter into Purchase Agreements on behalf of the
Corporation and to take all other action necessary or desirable
to effectuate the determinations of the Committee. Purchase
Agreements, which need not be identical, shall be in writing and
shall not contain provisions inconsistent with provisions of the
Plan.
Section 6. Exercise of Right to Purchase Shares. An
Employee who has been granted an Award may exercise his right to
purchase shares of Common Stock during the 60 day period
beginning immediately after the grant of the Award, provided that
he is still an employee of the Corporation or of a subsidiary of
the Corporation on the date of such exercise. In order to so
exercise such right to purchase, an Employee shall give written
notice to the Corporation of such election. The Issue Price of
the shares to be issued shall be tendered in cash at the time
such notice is given. No such right to purchase shares shall be
transferable by an Employee to whom an Award has been granted.
Section 7. Issue Price of Common Stock. Prior to the
issuance of Common Stock to an Employee pursuant to the Plan, the
Employee shall pay to the Corporation an amount of money per
share ("Issue Price") to be determined by the Committee which
shall take into consideration the value of the services performed
and to be performed by the Employee, which amount shall not be
less per share than the par value of the Common Stock nor more
than ten percent (10%) of the fair market value per share
thereof. For the purposes of the foregoing sentence, "fair
market value per share" shall mean the last sales price of the
Common Stock as reported on the consolidated transaction
reporting system for New York Stock Exchange listed issues on the
day prior to the day on which an Employee gives notice to the
Corporation of his exercise of an award or, if no sales occurred
on such date, the last sales price on the consolidated
transaction reporting system on the most recent day prior to such
previous day on which a sale occurred. If the Common Stock
ceases to be listed on the New York Stock Exchange, Inc., fair
market value per share shall be determined in such manner as
shall be selected by the Committee. If the Issue Price (as
determined by the Committee on the date of an award) shall exceed
ten per cent (10%) of the fair market value per share determined
as of the day prior to the exercise date of an award, the Issue
Price shall be reduced to an amount which shall represent ten
percent (10%) of the fair market value per share on such previous
day.
Section 8. Option of the Corporation to Reacquire
Issued Stock. Except as provided below, for a period beginning
on the date of the grant of an award and ending on the third
anniversary of such date or such later date as the Committee
shall determine, any Common Stock issued pursuant to the Plan
shall be subject to an option in favor of the Corporation to
reacquire such Common Stock at a price per share equal to the
Issue Price. Neither the shares of Common Stock issued pursuant
to the Plan nor any interest therein shall be sold, transferred
or encumbered until such option may no longer become exercisable.
The option of the Corporation to reacquire such Common Stock
shall become exercisable only upon the termination of employment
of the Employee with the Corporation or any of its subsidiaries
other than as a result of the Employee's death or permanent and
total disability. The decision whether or not to exercise such
option as to all or part of the shares subject thereto owned by
an Employee shall be made by the Committee and communicated to
the President or other appropriate officer of the Corporation who
shall be authorized to take any and all action necessary to
effectuate such decision.
Section 9. Exercise of Option to Reacquire Issued
Stock. The option described in Section 8 shall be exercised in
whole or part by the Corporation by its sending, if at all,
within 90 days after the Employee's termination of employment, by
registered mail, postage prepaid, written notice of such exercise
to the Employee at the address specified by the Employee for such
purpose, such notice also to set forth the address to which and
the date on which the certificates representing the Common Stock
in respect of which the option is being exercised, duly endorsed
for transfer, should be sent. The date specified shall not be
less than ten days nor more than thirty days from the date of
such notice. The Employee or his successor in interest with
respect to such shares shall have no further rights as a
stockholder from and after the date so specified in such notice.
If the certificates are duly delivered in accordance with the
written notice, the Corporation shall promptly send to the
Employee its check in repayment of the Issue Price for such
shares. The Corporation shall affix to the certificates any
required stock transfer stamps. If the certificates are not so
delivered, the Corporation shall deposit the required amount of
payment in an escrow account in the name of the Employee to be
held therein until such certificates are delivered to the
Corporation and the Corporation shall immediately advise its
transfer gent of such action.
Section 10. Legend on Stock Certificates. Every
certificate of Common Stock issued pursuant to the Plan shall, so
long as the restrictions imposed by the Plan remain in effect,
bear a legend in substantially the following form:
This certificate and the shares represented hereby
are held subject to the terms of the Contingent Stock
Plan of Sealed Air Corporation which Plan provides that
the shares issued pursuant thereto are subject to an
option in favor of Sealed Air Corporation to reacquire
such shares at a price which may be significantly lower
than their fair market value and that neither such
shares nor any interest therein may be sold,
transferred or encumbered until the expiration of such
option. If such option is exercised, the holder of the
shares represented by this certificate will have no
further rights with respect to such shares and this
certificate will be deemed void. A copy of such Plan
is available for inspection at the executive offices of
Sealed Air Corporation.
Upon the expiration of the Corporation's option to reacquire
shares of Common Stock, an Employee may surrender to the
Corporation the certificate or certificates representing such
shares in exchange for a new certificate or certificates, free of
the above legend.
Section 11. Government and Other Regulations and
Restrictions. The obligation of the Corporation to issue Common
Stock upon execution of a Purchase Agreement shall be subject to
all applicable laws, rules and regulations and to such approvals
by governmental agencies as may be required. Shares of Common
Stock acquired pursuant to the Plan shall not be sold,
transferred or otherwise disposed of unless and until either (a)
such shares shall have been registered by the Corporation under
the Securities Act of 1933, as amended (the "Securities Act"),
(b) the Corporation shall have received either a "no action"
letter from the Securities and Exchange Commission or an opinion
of counsel acceptable to the Corporation to the effect that such
sale, transfer or other disposition of the shares may be effected
without such registration or (c) such sale, transfer or
disposition of the shares is made pursuant to Rule 144 of the
General Rules and Regulations promulgated under the Securities
Act, as the same may from time to time be in effect, and the
Corporation shall have received an opinion of counsel acceptable
to the Corporation to such effect. In the event that at the time
a Purchase Agreement is executed there shall not be on file with
the Securities and Exchange Commission an effective Registration
Statement under the Securities Act covering the shares of Common
Stock to be issued pursuant thereto the Employee will execute and
deliver to the Corporation upon receipt by him of any such shares
an undertaking in form and substance satisfactory to the
Corporation that (i) it is his intention to acquire and hold such
shares for investment and not for the resale or distribution
thereof, (ii) he will comply with the Securities Act with respect
to such shares, and (iii) he will indemnify the Corporation for
any costs, liabilities and expenses which it may sustain by
reason of any violation of the Securities Act occasioned by any
act on his part with respect to such shares. The Corporation may
require that any certificate or certificates evidencing shares
issued pursuant to the Plan bear a restrictive legend intended to
effect compliance with the Securities Act or any other applicable
regulatory measures.
Section 12. Registration of Shares. The Corporation
shall be under no obligation to register any shares of Common
Stock under the Securities Act. However, a Purchase Agreement
may make appropriate and reasonable provision for the
registration of Common Stock acquired thereunder. The
Corporation, at its election, may undertake to pay all fees and
expenses of each such registration, other than an underwriter's
commission, if any.
Section 13. No Rights in Common Stock. No Employee
shall have any interest in or be entitled to any voting rights or
dividends or other rights or privileges of stockholders of the
Corporation with respect to any shares of Common Stock unless,
and until, shares of Common Stock are actually issued to such
Employee following execution of a Purchase Agreement and then
only from the date the Employee becomes the record owner
thereof.
Section 14. Subsidiaries. The subsidiaries of the
Corporation referred to in the Plan are those corporations 50 per
cent or more of whose outstanding voting stock is owned or
controlled, directly or indirectly, by the Corporation and those
partnerships and joint ventures in which the Corporation owns
directly or indirectly a 50 percent or more interest in the
capital account or earnings.
Section 15. Adjustments. In the event of changes in
the Common Stock of the Corporation after the effective date of
the Plan by reason of any stock dividend, split-up, combination
of shares, reclassification, recapitalization, merger,
consolidation, reorganization, or liquidation: (a) the
restrictions and the option provided in Section 8 and the
requirement of a legend on stock certificates provided in Section
10 shall apply to any securities issued in connection with any
such change in respect of stock which has been awarded under the
Plan and (b) appropriate adjustments shall be made by the
Committee as to (i) the number of shares to be delivered and the
price per share to be paid by the Corporation upon the exercise,
in whole or in part, of the option provided in Section 8, (ii)
the number of shares to be delivered and the Issue Price where
such change occurred after the date of the Award but before the
date the stock covered by the Award is delivered and (iii) the
number and class of shares available under the Plan in the
aggregate.
Section 16. Change in Control. A "Change in Control"
shall occur when (i) the Corporation is merged into or
consolidated with another corporation or other entity and as a
result of such merger or consolidation less than 70% of the
combined voting power of the outstanding voting securities of the
surviving or resulting corporation or other entity shall, after
giving effect to such merger or consolidation, be "beneficially
owned" (within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act")) in the aggregate, directly or indirectly, by the
former stockholders of the Corporation (excluding from such
computation any such securities beneficially owned, directly or
indirectly, by "affiliates" of the Corporation (as defined in
Rule 12b-2 under the Securities Exchange Act) and any such
securities so beneficially owned, directly or indirectly, by a
party to such merger or consolidation), (ii) the Corporation
shall sell all or substantially all of its assets, (iii) any
"person" is or becomes the "beneficial owner" (as the terms
"person" and "beneficial owner" are used in Sections 13(d) and
14(d) of the Securities Exchange Act), directly or indirectly, of
securities of the Corporation representing 30% or more of the
combined voting power of the Corporation's then outstanding
securities, (iv) as a result of any solicitation subject to Rule
14a-11 under the Securities Exchange Act (or any successor rule
thereto) one or more persons not recommended by or opposed for
election to the Board of Directors by one-third or more of the
directors of the Corporation then in office is or are elected a
director of the Corporation, or (v) the Corporation shall become
subject for any reason to a voluntary or involuntary dissolution
or liquidation, provided, that the combination of the packaging
business of W.R. Grace & Co. with the Corporation through the
Agreement and Plan of Merger approved by the Board of Directors
on August 14, 1997 shall not be deemed a Change of Control for
the purpose of this Section 16. If a Change of Control shall
occur, then 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 Change of Control
occurs, for purposes of the Plan and to the extent that the
provisions of the Plan remain applicable to shares awarded under
the Plan, the option provided for in Section 8 of the Plan shall
cease without further act to be exercisable with respect to any
securities subject to an Award under the Plan, the restrictions
provided for in Section 8 of the Plan shall without further act
expire and cease to apply to any securities subject to an Award
under the Plan, the requirement of a legend on stock certificates
provided for in Section 10 of the Plan shall without further act
expire and cease to apply to any securities subject to an Award
under the Plan, and each Employee holding shares issued under the
Plan shall thereupon have the right to receive an unlegended
certificate as set forth in the last sentence of Section 10 of
the Plan.
Section 17. 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 18. Indemnification of Committee Members. In
addition to such other rights of indemnification as they may have
as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Corporation against all
costs and expenses reasonably incurred by them in connection with
any action, sit or proceeding to which they or any of them may be
party by reason of any action taken or failure to act under or in
connection with the Plan, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Corporation) or paid by
them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith,
provided that upon institution of any such action, suit or
proceeding, the Committee member desiring indemnification shall
give the Corporation an opportunity, at its own expense, to
conduct and defend the same.
Section 19. Corporation's Right to Terminate
Employment. Nothing contained in the Plan or in any Purchase
Agreement shall confer upon any Employee a right to continue in
the employ of the Corporation or any of its subsidiaries or
interfere in any way with the right of the Corporation or any of
its subsidiaries to terminate the employment of any Employee at
any time, without cause.
Section 20. Tax Withholding. Each Purchase Agreement
incident to the Plan shall make appropriate provisions for the
withholding of any Federal, state or local taxes and any other
charges that may be required by law to be withheld by reason of
an Award, the issuance of Common Stock pursuant to the Plan or
the reacquisition of such Common Stock by the Corporation.
Section 21. Action by Corporation. Neither the
existence of the Plan nor the issuance of Common Stock pursuant
thereto shall impair the right of the Corporation or its
stockholders to make or effect any adjustments, recapitalizations
or other change in the Common Stock referred to in Section 15,
any change in the Corporation's business, any issuance of debt
obligations or stock by the Corporation or any grant of options
on stock of the Corporation.
Section 22. Reliance on Reports. Each member of the
Committee shall be fully justified in relying or acting in good
faith upon any reports or other information furnished in
connection with the Plan by any person or persons. In no event
shall any person who is or shall have been a member of the
Committee be liable for any determination made or other action
taken or any omission to act in reliance upon any such report or
information or for any action taken or failure to act, if in good
faith.
Section 23. Expenses. The expenses of administering
the Plan shall be borne by the Corporation.
Section 24. Pronouns. Masculine pronouns and other
words of masculine gender shall refer to both men and women.
Section 25. Termination and Amendment of the Plan.
The Committee shall have complete power and authority to amend,
suspend or terminate the Plan and, if suspended, reinstate any
and all provisions of the Plan except that without further
approval of the stockholders of the Corporation and except as
otherwise provided in Section 15, (i) the number of share
available for issuance under the Plan either in the aggregate or
to any one person shall not be increased, (ii) the minimum three
year period specified in Section 8 shall not be decreased, (iii)
the class of persons eligible to receive awards under the Plan
shall not be expanded, and (iv) the minimum Issue Price shall not
be decreased. Any Common Stock issued under the Plan with
respect to which the period specified in or pursuant to Section 8
has not expired on or before the date of termination of the Plan
shall remain subject to reacquisition by the Corporation pursuant
to Section 8 until the expiration of such period.
Section 26. Effective Date. The Plan shall become
effective on May 21, 1976.
Exhibit 10.4
RESTRICTED STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
OF
SEALED AIR CORPORATION,
AS 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
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. A "Change in Control"
shall occur when (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, provided, that the combination of the
packaging business of W.R. Grace & Co. with the Corporation
through the Agreement and Plan of Merger approved by the Board of
Directors on August 14, 1997 shall not be deemed a Change of
Control for the purpose of this Section 6. If a Change of
Control shall occur, then 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 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 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 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.
