def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Sealed Air Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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computed pursuant to Exchange Act Rule 0-11 (set forth the
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Fee paid previously with preliminary materials. |
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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. |
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Form, Schedule or Registration Statement No.: |
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Date Filed: |
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Sealed Air Corporation
200 Riverfront Boulevard
Elmwood Park, NJ 07407-1033
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April 6, 2011
Dear Fellow Stockholder:
It is my pleasure to invite you to attend the Annual Meeting of
Stockholders of Sealed Air Corporation scheduled to be held on
Wednesday, May 18, 2011 at 10:00 a.m., Eastern Time,
at the Teaneck Marriott at Glenpointe, 100 Frank W. Burr
Boulevard, Teaneck, New Jersey 07666. Your Board of Directors
and senior management look forward to greeting you at the
meeting.
At this meeting, you will be asked to elect the entire Board of
Directors of Sealed Air, to approve amendments authorizing
additional shares of common stock to be issued under the 2005
Contingent Stock Plan of Sealed Air Corporation and under the
Sealed Air Corporation 2002 Stock Plan for Non-Employee
Directors and to ratify the selection of KPMG LLP, an
Independent Registered Public Accounting Firm, as the
independent auditor of Sealed Air for 2011. In addition, you
will be asked for an advisory vote on our executive compensation
as disclosed in the proxy statement and on the frequency of
future advisory votes on executive compensation. These matters
are important, and we urge you to vote in favor of the nominees,
the plan amendments, our executive compensation and the
ratification of the appointment of the independent auditor and
for annual votes on our executive compensation in the future.
For your convenience, we are also offering a webcast of the
meeting. If you choose to follow the meeting via webcast, go to
http://ir.sealedair.com
shortly before the meeting time and follow the instructions to
join the event. We will also provide a replay of this meeting
for your reference.
This year as in 2010 we are taking advantage of the Securities
and Exchange Commission rule that allows companies to furnish
proxy materials to their stockholders over the Internet. This
e-proxy
process expedites stockholders receipt of proxy materials,
lowers our costs and reduces the environmental impact of our
Annual Meeting. Today, we sent to most of our stockholders a
Notice of Internet Availability of Proxy Materials containing
instructions on how to access our 2011 proxy statement and 2010
annual report and vote via the Internet. Other stockholders will
receive a copy of the proxy statement and annual report by mail
or e-mail.
Regardless of the number of shares of common stock you own, it
is important that you submit your vote in person or by proxy.
You will find the instructions for voting on the Notice of
Internet Availability of Proxy Materials or proxy card. We
appreciate your prompt cooperation.
On behalf of your Board of Directors, we thank you for your
ongoing support.
Sincerely,
William V. Hickey
President and
Chief Executive Officer
Notice
of Annual Meeting of Stockholders
of
Sealed Air Corporation
We will hold the Annual Meeting of Stockholders of Sealed Air
Corporation, a Delaware corporation, on May 18, 2011 at
10:00 a.m., Eastern Time, at the Teaneck Marriott at
Glenpointe, 100 Frank W. Burr Boulevard, Teaneck, New Jersey
07666. The purposes for the Annual Meeting are to elect Sealed
Airs entire Board of Directors, to approve amendments to
the 2005 Contingent Stock Plan of Sealed Air Corporation and to
the Sealed Air Corporation 2002 Stock Plan for Non-Employee
Directors, to provide for advisory votes of the stockholders on
our executive compensation as disclosed in the attached proxy
statement and on the frequency of future advisory votes on our
executive compensation, to ratify the appointment of the
independent auditor of Sealed Air, and to transact such other
business as may properly come before the meeting. The individual
proposals are:
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Election of Hank Brown as a Director.
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Election of Michael Chu as a Director.
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Election of Lawrence R. Codey as a Director.
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4.
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Election of Patrick Duff as a Director.
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5.
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Election of T. J. Dermot Dunphy as a Director.
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6.
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Election of William V. Hickey as a Director.
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7.
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Election of Jacqueline B. Kosecoff as a Director.
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8.
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Election of Kenneth P. Manning as a Director.
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9.
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Election of William J. Marino as a Director.
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10.
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Advisory vote on executive compensation as disclosed in the
proxy statement.
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11.
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Advisory vote on the frequency of future advisory votes on
executive compensation.
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12.
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Approval of the amended 2005 Contingent Stock Plan of Sealed Air
Corporation.
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13.
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Approval of the amended Sealed Air Corporation 2002 Stock Plan
for Non-Employee Directors.
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14.
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Ratification of the appointment of KPMG LLP as the independent
auditor for the year ending December 31, 2011.
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15.
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In accordance with the Proxy Committees discretion, upon
such other matters as may properly come before the meeting.
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The Board of Directors has fixed the close of business on
March 21, 2011 as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual
Meeting.
We have sent or made available a copy of our 2010 Annual Report
to Stockholders to all stockholders of record. Additional copies
are available upon request.
We invite you to attend the meeting so that management can
discuss business trends with you, listen to your suggestions,
and answer any questions that you may have. Because it is
important that as many stockholders as possible be represented
at the meeting, please review the proxy statement promptly and
carefully and then vote. You may vote by following the
instructions for voting set forth on the Notice of Internet
Availability of Proxy Materials or on your proxy card, or if you
receive a paper copy of the proxy card by mail, you may complete
and return the proxy card in the accompanying post-paid,
addressed envelope. If you attend the meeting, you may vote your
shares personally even though you have previously voted by proxy.
The only voting securities of the Company are the outstanding
shares of its common stock, par value $0.10 per share. The
Company will keep a list of the stockholders of record at its
principal office at 200 Riverfront Boulevard, Elmwood Park, New
Jersey
07407-1033
for a period of ten days prior to the Annual Meeting.
On behalf of the Board of Directors
H.
Katherine White
Secretary
Elmwood Park, New Jersey
April 6, 2011
Important Notice
Regarding the Availability of Proxy Materials
for the Stockholder Meeting to be held on May 18,
2011
Please note that the Companys Notice of Annual Meeting
of Stockholders, Proxy Statement for the Annual Meeting of
Stockholders and 2010 Annual Report are available at:
http://www.ezodproxy.com/sealedair/2011/
Contents
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Annex A
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Annex B
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Annex C
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Annex D
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Annex E
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Back Cover
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SEALED
AIR CORPORATION
200 Riverfront Boulevard
Elmwood Park, New Jersey
07407-1033
PROXY
STATEMENT
Dated April 6, 2011
For the 2011
Annual Meeting of Stockholders
General
Information
We are furnishing this Proxy Statement and related proxy
materials in connection with the solicitation by the Board of
Directors of Sealed Air Corporation (Sealed Air, the
Company, we, us or
our), a Delaware corporation, of proxies to be voted
at our 2011 Annual Meeting of Stockholders and at any
adjournments. We are providing these materials to the holders of
Sealed Air common stock, par value $0.10 per share. We are first
making available or mailing the materials on or about
April 6, 2011.
The Annual Meeting is scheduled to be held:
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Date:
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Wednesday, May 18, 2011
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Time:
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10:00 a.m., Eastern Time
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Place:
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Teaneck Marriott at Glenpointe
100 Frank W. Burr Boulevard
Teaneck, New Jersey 07666
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Your vote is important. Please see the detailed information that
follows.
Questions
and Answers about the Annual Meeting
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Why am I receiving these
materials? |
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We are providing these proxy materials to you in connection with
our Annual Meeting of Stockholders, which will take place on
May 18, 2011. These materials were first made available on
the Internet or mailed to shareholders on or about April 6,
2011. You are invited to attend the Annual Meeting and requested
to vote on the proposals described in this Proxy Statement. |
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Why did I receive a notice in
the mail regarding the Internet availability of proxy materials
instead of a full set of proxy materials? |
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In accordance with rules and regulations adopted by the
Securities and Exchange Commission, or SEC, instead of mailing a
printed copy of our proxy materials to each stockholder of
record, we may furnish proxy materials, including this Proxy
Statement and our 2010 Annual Report to Stockholders, by
providing access to such documents via the Internet. This
e-proxy
process expedites stockholders receipt of proxy materials,
lowers our costs and reduces the environmental impact of our
Annual Meeting. |
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Most stockholders will not receive printed copies of the proxy
materials unless they request them. Instead, we have mailed a
Notice of Internet Availability of Proxy Materials that will
tell you how to access and review all of the proxy materials on
the Internet. The notice also tells you how to vote on the
Internet. If you would like to receive a paper or
e-mail copy
of our proxy materials, you should follow the instructions for
requesting such materials in the notice. |
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What is included in these
materials? |
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These materials include: |
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Our Proxy Statement for the Annual Meeting; and |
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Our 2010 Annual Report to Stockholders, which includes our
audited consolidated financial statements. |
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If you requested or receive printed versions of these materials
by mail, these materials also include the proxy card for the
Annual Meeting. |
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What are the stockholders voting
on? |
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Election of the entire Board of Directors
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The nine nominees are: |
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Hank Brown
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Michael Chu
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Lawrence R. Codey
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Patrick Duff
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T. J. Dermot Dunphy
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William V. Hickey
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Jacqueline B. Kosecoff
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Kenneth P. Manning
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William J. Marino
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Advisory vote on executive compensation
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Advisory vote on frequency of future advisory votes
on executive compensation
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Approval of the Amended 2005 Contingent Stock Plan
of Sealed Air Corporation
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Approval of the Amended Sealed Air Corporation 2002
Stock Plan for Non-Employee Directors
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Ratification of KPMG LLP as the independent auditor
of Sealed Air for 2011
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Who can vote? |
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Stockholders of record of Sealed Air common stock at the close
of business on March 21, 2011, the record date, will be
entitled to vote at the Annual Meeting. Each outstanding share
is entitled to one vote. |
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How do I vote my
shares? |
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Stockholders of record may vote via the Internet or, if you
received a paper proxy card, mail. Also, the proxy card contains
a toll free telephone number that you may use to vote. If you
received a paper proxy card and choose to vote by mail, we have
provided a postage-paid envelope. For your information, voting
via the Internet is the least expensive to the Company, followed
by telephone voting, with voting by mail being the most
expensive. Also, you may help us to save the expense of a second
mailing if you vote promptly. |
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How do I vote via the
Internet? |
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Stockholders of record may vote via the Internet as instructed
on the Notice of Internet Availability of Proxy Materials or
proxy card. We provide voting instructions on the web site for
you to follow. Internet voting is available 24 hours a day.
You will be given the opportunity to confirm that your
instructions have been recorded properly. If you vote via the
Internet, you do not need to return a proxy card. Please see the
notice or proxy card for Internet voting instructions. |
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How do I vote by
telephone? |
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Stockholders of record who receive a proxy card may vote by
calling the toll-free number listed on the proxy card and
following the instructions provided on the telephone line.
Telephone voting is available 24 hours a day.
Easy-to-follow
voice prompts allow you to vote your shares and confirm that
your instructions have been recorded properly. If you vote by
telephone, you do not need to return a proxy card. Please see
the proxy card for telephone voting instructions. |
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How do I vote by mail? |
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If you have received a paper proxy card and choose to vote by
mail, simply mark your proxy card, sign and date it, and return
it in the postage-paid envelope provided. If you sign, date and
mail your proxy card without indicating how you want to vote,
your proxy will be voted as recommended by our Board of
Directors. |
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How will my proxy be
voted? |
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Regardless of the method by which you vote, if you specify the
manner in which your shares are to be voted on a matter, the
shares represented by your proxy will be voted in accordance
with your specification. If you submit a proxy but do not make a
voting specification, your shares will be voted in the manner
recommended by our Board of Directors as shown in this Proxy
Statement and on the proxy card. |
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Can I access the Annual Meeting
materials via the Internet? |
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The Companys Notice of Annual Meeting of Stockholders,
Proxy Statement for the Annual Meeting of Stockholders and 2010
Annual Report are available at: |
http://www.ezodproxy.com/sealedair/2011/
3
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May I change my vote? May I
revoke my proxy? |
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Whatever method you use to vote, you may later revoke your proxy
at any time before it is exercised by: |
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voting via the Internet or telephone at a later time;
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submitting a properly signed proxy card with a later
date; or
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voting in person at the Annual Meeting.
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Can I vote at the Annual
Meeting? |
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The method by which you vote will not limit your right to vote
at the Annual Meeting if you decide to attend in person. Any
stockholder of record may vote in person at the Annual Meeting
whether or not he or she has previously voted. If your shares
are held in street name, that is, in the name of a
bank, broker or other holder of record, you must obtain a
written proxy, executed in your favor, from the record holder to
be able to vote at the meeting. If you hold shares in our
Profit-Sharing Plan or our 401(k) Thrift Plan, you cannot vote
those shares in person at the Annual Meeting; see the question
and answer below. We will treat all shares that have been voted
properly, and all proxies that have not been revoked, as being
present for the purpose of determining the presence of a quorum
at the Annual Meeting. The persons named in the proxy will vote
all of these shares at the meeting. |
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How do I vote if I participate
in Sealed Airs Profit-Sharing Plan or 401(k) Thrift
Plan? |
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For each participant in Sealed Airs Profit-Sharing Plan,
the proxy also serves as a voting instruction card permitting
the participant to provide voting instructions to Fidelity
Management Trust Company (Fidelity), trustee
for the Profit-Sharing Plan, for the shares of common stock
allocated to the participants account in the plan. For
each participant in Sealed Airs 401(k) Thrift Plan, the
proxy also serves as a voting instruction card permitting the
participant to provide voting instructions to Fidelity, which
also acts as trustee for the 401(k) Thrift Plan, for the shares
of common stock allocated to the participants account in
the plan. Internet voting is available to plan participants.
Fidelity will vote the allocated shares in each plan as directed
by each participant who provides voting instructions to it
before 11:59 p.m. (Eastern Time) on May 13, 2011. The
terms of each plan provide that Fidelity will vote shares
allocated to the accounts of participants who do not provide
timely voting instructions in the same proportion as shares it
votes on behalf of participants who do provide timely voting
instructions. |
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What if my broker holds shares
in street name for me? |
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Under the rules of the New York Stock Exchange, Inc., or
NYSE, brokers who hold shares in street name for
customers have the authority to vote on specified items when
they have not received instructions from their customers who are
the beneficial owners of the shares. We understand that, unless
instructed to the contrary by the beneficial owners of shares
held in street name, brokers may exercise this authority to vote
on the ratification of the appointment of the independent
auditor of Sealed Air. For the purpose of determining a quorum,
we will treat as present at the meeting any proxies that are
voted on any matter to be acted upon by the stockholders,
including abstentions or any proxies containing broker non-votes. |
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What if other matters are
presented at the Annual Meeting? |
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If any other matters are properly presented for consideration at
the Annual Meeting, the persons named in the proxy will have the
discretion to vote on those matters for you. We do not know of
any other matters to be presented for consideration at the
Annual Meeting. |
4
Vote
Required for Election or Approval
Introduction
Sealed Airs only voting securities are the outstanding
shares of our common stock. As of the close of business on
March 21, 2011, 160,001,520 shares of common stock
were outstanding, each of which is entitled to one vote at the
Annual Meeting. Only holders of record of common stock at the
close of business on March 21, 2011, the record date, will
be entitled to notice of and to vote at the Annual Meeting. A
majority of the outstanding shares of common stock present in
person or represented by proxy and entitled to vote on any
matters to be considered at the Annual Meeting will constitute a
quorum for the transaction of business at the Annual Meeting.
For the purpose of determining a quorum, we will treat as
present at the meeting any proxies that are voted on any matter
to be acted upon by the stockholders, including abstentions or
any proxies containing broker non-votes. Except as set forth
below with respect to the election of directors, we will treat
abstentions, but not broker non-votes, as votes cast on any
matter.
Election
of Directors: Majority Vote Requirement
Each director will be elected by a vote of the majority of the
votes cast with respect to that director, where a majority of
the votes cast means that the number of shares voted
for a director must exceed the number of votes cast
against the director. We will not count shares voted
to abstain for the purpose of determining whether a
director is elected. Under the Companys Certificate of
Incorporation, its By-laws and the Delaware General Corporation
Law, a director holds office until a successor is elected and
qualified or until his or her earlier resignation or removal. If
any of the nominees that is currently in office is not elected
at the Annual Meeting, then the By-laws provide that the
director shall offer to resign from our Board of Directors. The
Nominating and Corporate Governance Committee will make a
recommendation to our Board whether to accept or reject the
resignation, or whether other action should be taken. Our Board
will consider and act on the recommendation of the Nominating
and Corporate Governance Committee and publicly disclose its
decision and the rationale behind it within 90 days from
the date of the certification of the election results. The
director who offers his or her resignation will not participate
in the decision of the Nominating and Corporate Governance
Committee or of the Board of Directors. If the Board of
Directors accepts such resignation, then the Board can fill the
vacancy resulting from that resignation or can reduce the number
of directors that constitutes the entire Board of Directors so
that no vacancy exists.
Advisory
Vote on Executive Compensation
The advisory vote on executive compensation must be approved by
the affirmative vote of the holders of a majority of the shares
of common stock present in person or represented by proxy at the
Annual Meeting.
Advisory
Vote on Frequency of Future Advisory Votes on Executive
Compensation
The advisory vote on the frequency of future advisory votes on
executive compensation requires affirmative vote of the holders
of a plurality of the shares of common stock present in person
or represented by proxy at the Annual Meeting.
Approval
of the Amended 2005 Contingent Stock Plan of Sealed Air
Corporation
The amended 2005 Contingent Stock Plan of Sealed Air Corporation
must be approved by the affirmative vote of the holders of a
majority of the shares of common stock present in person or
represented by proxy at the Annual Meeting.
5
Approval
of the amended Sealed Air Corporation 2002 Stock Plan for
Non-Employee Directors
The amended Sealed Air Corporation 2002 Stock Plan for
Non-Employee Directors must be approved by the affirmative vote
of the holders of a majority of the shares of common stock
present in person or represented by proxy at the Annual Meeting.
Ratification
of KPMG LLP as Independent Auditor for 2011
The ratification of KPMG LLP as the independent auditor of
Sealed Air for 2011 must be approved by the affirmative vote of
the holders of a majority of the shares of common stock present
in person or represented by proxy at the Annual Meeting.
Other
Matters
Any other matters considered at the Annual Meeting must be
approved by the affirmative vote of the holders of a majority of
the shares of common stock present in person or represented by
proxy at the Annual Meeting.
6
Corporate
Governance
Corporate
Governance Guidelines
The Board has adopted and operates under Corporate Governance
Guidelines that reflect our current governance practices in
accordance with applicable statutory and regulatory
requirements, including those of the SEC and the New York Stock
Exchange, or NYSE. The Corporate Governance Guidelines are
available on our web site at www.sealedair.com.
Independence
of Directors
Under the Corporate Governance Guidelines and the requirements
of the NYSE, the Board must consist of a majority of independent
directors. The Board annually reviews the independence of all
non-employee directors. The Board has established categorical
standards consistent with the corporate governance standards of
the NYSE to assist it in making determinations of the
independence of Board members. We have attached a copy of our
current director independence standards to this Proxy Statement
as Annex A and also posted a copy on our web site at
www.sealedair.com. These categorical standards require
that, to be independent, a director may not have a material
relationship with the Company. Even if a director meets all
categorical standards for independence, the Board reviews other
relationships with the Company in order to conclude that each
independent director has no material relationship with the
Company either directly or indirectly.
The Board of Directors has determined that the following
directors are independent: Hank Brown, Michael Chu, Lawrence R.
Codey, Patrick Duff, Charles F. Farrell, Jr., Jacqueline B.
Kosecoff, Kenneth P. Manning and William J. Marino. In
evaluating the independence of the non-employee directors, the
Board considered the following transactions, relationships or
arrangements:
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During 2010 and 2009, our vision plan provider was Spectera, and
during 2009, the health maintenance organization, or HMO, for
one of our facilities was John Deere/United Healthcare. Both
Spectera and the HMO are affiliates of UnitedHealth Group.
Dr. Kosecoff is the Chief Executive Officer of Prescription
Solutions, a UnitedHealth Group company. During 2010 and 2009,
we paid Spectera approximately $550,000 per year, and during
2009 we paid the HMO approximately $500,000. Spectera will
continue to provide vision plan services during 2011, although
the HMO services were discontinued at the end of 2009. Our Board
determined that these immaterial transactions and relationships
did not impair the independence of Dr. Kosecoff.
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The Company entered into a transaction, effective
January 1, 2009, with the Blue Cross Blue Shield group
regarding the provision of health services in Texas and New York
for approximately 1,200 Company employees, pursuant to which
Horizon Blue Cross Blue Shield of New Jersey has received an
annual administrative fee of approximately $510,000 per year.
This relationship will continue in 2011. Mr. Marino served
as the Chairman, President and Chief Executive Officer and a
director of Horizon Blue Cross Blue Shield of New Jersey until
his retirement on March 1, 2011, and Mr. Codey is a
director of Horizon Blue Cross Blue Shield of New Jersey. Our
Board determined that these immaterial transactions and
relationships did not impair the independence of Mr. Marino
or Mr. Codey.
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During 2008, 2009 and 2010, we purchased colors from Sensient
Technologies Corporation in the amount of less than $200,000 in
each year. We may continue to purchase colors from Sensient
Technologies at a similar level during 2011. One of our
directors, Mr. Manning, serves as Chairman and Chief
Executive Officer of Sensient, and two other of our directors,
Mr. Brown and Mr. Hickey, also serve as directors of
that company. Our Board determined that these immaterial
transactions and relationships did not impair the independence
of Mr. Manning or Mr. Brown.
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7
Code
of Conduct
For many years, we have had a Code of Conduct applicable to the
Company and its subsidiaries. The Code of Conduct applies to all
of our employees and to our officers and directors. We also have
a supplemental Code of Ethics for Senior Financial Executives
that applies to our Chief Executive Officer, Chief Financial
Officer, Controller, Treasurer, and all other employees
performing similar functions. We have posted the texts of the
Code of Conduct and the Code of Ethics for Senior Financial
Executives on our web site at www.sealedair.com. We will
post any amendments to the Code of Conduct and the Code of
Ethics for Senior Financial Executives on our web site. In
accordance with the requirements of the SEC and the NYSE, we
will also post waivers applicable to any of our officers or
directors from provisions of the Code of Conduct or the Code of
Ethics for Senior Financial Executives on our web site. We have
not granted any such waivers.
Board
Oversight of Risk
The Board is actively involved in oversight of risks that could
affect the Company. While the Audit Committee oversees our major
financial risk exposures and the steps we have taken to monitor
and control such exposures, and the Organization and
Compensation Committee considers the potential of our executive
compensation programs to raise material risks to the Company,
the Board as a whole is responsible for oversight of our risk
management processes and the development of our enterprise risk
management program.
Communicating
with Directors
Stockholders and other interested parties may communicate
directly with the non-management directors of the Board by
writing to Non-Management Directors,
c/o Corporate
Secretary, at Sealed Air Corporation, 200 Riverfront Boulevard,
Elmwood Park, New Jersey
07407-1033,
or by sending an email to directors@sealedair.com. In
either case, the chair of the Nominating and Corporate
Governance Committee will receive all correspondence and will
communicate with the other directors about the correspondence.
We have posted information on how to communicate with the
non-management directors on our web site at
www.sealedair.com.
Board
Leadership Structure
For most of the Companys history, the Board has not
designated a chair of the Board, and that remains the case now.
Also, the Board of Directors has not appointed a lead
independent director. The Board considers all of its members
equally responsible and accountable for oversight and guidance
of its activities. Leadership of executive sessions of
non-employee or independent directors rotates among the
non-employee or independent directors, as the case may be, with
each such director given the periodic opportunity to chair these
meetings. After each such session, the director who has chaired
the session meets with our Chief Executive Officer to
communicate any matters addressed at the session. All directors
have the opportunity to request items to be included on the
agendas of upcoming meetings. The leadership structure is
reviewed annually as part of the Boards self-assessment
process, and changes may be made in the future to reflect the
Boards composition as well as our needs and circumstances.
Board
of Directors Overview
Under the Delaware General Corporation Law and the
Companys By-laws, our business and affairs are managed by
or under the direction of the Board of Directors, which
delegates some of its responsibilities to its Committees and to
management.
The Board of Directors generally holds seven regular meetings
per year and meets on other occasions when circumstances
require. Directors spend additional time preparing for Board and
Committee meetings, and we may call upon them for advice between
meetings. Also, we encourage our directors to attend director
education programs.
8
The Corporate Governance Guidelines adopted by the Board provide
that the Board will meet regularly in executive session without
management in attendance. The Board designates a non-employee
director to preside at each executive session. The Board selects
the presiding director at the regular meeting of the Board prior
to the meeting at which a non-employee executive session is
scheduled. The chair of the Nominating and Corporate Governance
Committee serves as the presiding director if no other director
has been selected or if the selected presiding director is
unable to serve.
Under the Corporate Governance Guidelines, we expect directors
to regularly attend meetings of the Board and of all Committees
on which they serve and to review the materials sent to them in
advance of those meetings. We expect nominees for election at
each annual meeting of stockholders to attend the annual
meeting. The nine nominees for election at the Annual Meeting
this year currently serve as directors of the Company, and all
nine of those nominees attended the 2010 Annual Meeting.
During 2010, the Board of Directors held eight meetings,
excluding actions by unanimous written consent, and held five
executive sessions with only non-employee directors in
attendance, one of which was attended by only independent
directors. Each current member of the Board of Directors
attended at least 75 percent of the aggregate number of
meetings of the Board of Directors and of the Committees of the
Board on which the director served during 2010.
The Board of Directors maintains an Audit Committee, a
Nominating and Corporate Governance Committee, and an
Organization and Compensation Committee. The members of these
Committees consist only of independent directors. The Board of
Directors has adopted charters for each of the Committees, which
are reviewed annually by each Committee and the Board of
Directors. The Committee charters are available on our web site
at www.sealedair.com.
Audit
Committee
The principal responsibility of the Audit Committee is to assist
the Board of Directors in fulfilling its responsibilities for
monitoring and overseeing:
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our internal control system, including information technology
security and control,
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our public reporting processes,
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the performance of our internal audit function,
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the annual independent audit of our consolidated financial
statements,
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the integrity of our consolidated financial statements,
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our legal and regulatory compliance, and
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the retention, performance, qualifications, rotation of
personnel and independence of our independent auditor.
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Our independent auditor is directly accountable to the Audit
Committee. The Audit Committee has the authority and
responsibility to select, evaluate, approve terms of retention
and compensation of, and, where appropriate, replace the
independent auditor, subject to ratification of the selection of
the independent auditor by our stockholders at the annual
meeting.
The current members of the Audit Committee are Mr. Brown,
who serves as chair, and Messrs. Chu, Codey, Duff and
Manning. Our Board of Directors has determined that each current
member of the Audit Committee is independent, as defined in the
listing standards of the NYSE, is financially literate, and is
an audit committee financial expert in accordance with the
standards of the SEC. No director is eligible to serve on the
Audit Committee if that director simultaneously serves on the
audit committees of three or more other public companies. The
Audit Committee held eleven meetings in 2010, excluding actions
by unanimous written consent. During 2010, the Audit Committee
met privately with representatives of the independent auditor of
Sealed Air, KPMG LLP, on four occasions, met privately with the
Companys
9
Executive Director of Internal Audit on four occasions, met
privately with the Companys management on four occasions,
and met in private session on one occasion.
Nominating
and Corporate Governance Committee
The principal responsibilities of the Nominating and Corporate
Governance Committee are to:
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identify individuals qualified to become Board members,
consistent with criteria approved by the Board, and recommend to
the Board director nominees for the next annual meeting of
stockholders and director nominees to fill vacancies or
newly-created directorships at other times,
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provide oversight of the corporate governance affairs of the
Board and the Company, including developing and recommending to
the Board the Corporate Governance Guidelines,
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assist the Board in evaluating the Board and its
Committees, and
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recommend to the Board the compensation of non-management
directors.
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The current members of the Nominating and Corporate Governance
Committee are Mr. Marino, who serves as chair, and
Messrs. Brown, Farrell and Manning and Dr. Kosecoff.
Our Board of Directors has determined that each current member
of the Nominating and Corporate Governance Committee is
independent, as defined in the listing standards of the NYSE.
The Nominating and Corporate Governance Committee held four
meetings in 2010, excluding actions by unanimous written
consent. During 2010, the Nominating and Corporate Governance
Committee met in private session on one occasion.
The Nominating and Corporate Governance Committee has the sole
authority to retain and terminate any consulting or search firm
to be used to identify director candidates or assist in
evaluating director compensation and to approve the fees payable
to any such firm. To date, the Nominating and Corporate
Governance Committee has not engaged a firm to assist in
identifying director candidates but, starting in late 2010, the
Nominating and Governance Committee engaged Frederic W.
Cook & Co., Inc. (Cook) to advise the
Nominating and Corporate Governance Committee on director
compensation. Cook also advises the Organization and
Compensation Committee regarding executive compensation.
The Nominating and Corporate Governance Committee will consider
director nominees recommended by our stockholders in accordance
with a policy adopted by the Committee. Recommendations should
be submitted to the Secretary of the Company in writing at
Sealed Air Corporation, 200 Riverfront Boulevard, Elmwood Park,
New Jersey
07407-1033,
along with additional required information about the nominee and
the stockholder making the recommendation. A copy of the policy
is attached to this Proxy Statement as Annex B and posted
on our web site at www.sealedair.com. Information on
qualifications for nominations to the Board and procedures for
stockholder nominations to the Board is included below under
Director Qualifications and Identifying and
Evaluating Nominees for Directors.
Organization
and Compensation Committee
The principal responsibilities of the Organization and
Compensation Committee, which we refer to as the Compensation
Committee, are to assist the Board in fulfilling its
responsibilities relating to:
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compensation of our officers and key employees,
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performance of our Chief Executive Officer and management,
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management development and succession planning,
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administration of our 2005 Contingent Stock Plan, as amended,
including authorizing awards under that plan,
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Company-sponsored tax-qualified retirement plans, and
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matters presented to the stockholders that relate to executive
compensation, including non-binding
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10
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stockholder votes on executive compensation and the frequency of
such non-binding votes, and the actions to be taken in response
to such votes.
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The current members of the Organization and Compensation
Committee are Mr. Farrell, who serves as chair,
Messrs. Chu, Codey and Marino and Dr. Kosecoff. Our
Board of Directors has determined that each current member of
the Compensation Committee is independent, as defined in the
listing standards of the NYSE. The Compensation Committee held
nine meetings in 2010, excluding actions by unanimous written
consent. During 2010, the Compensation Committee met in private
session with other non-employee directors on two occasions.
The Compensation Committee oversees and provides strategic
direction to management with respect to our executive
compensation plans and programs. The Compensation Committee
reviews our Chief Executive Officers performance and
compensation with the other non-employee directors. Based on
that review, the Compensation Committee evaluates the
performance of our Chief Executive Officer, reviews the
Compensation Committees evaluation with him, and makes all
compensation decisions for our Chief Executive Officer. The
Compensation Committee also reviews and approves the
compensation of the other executive officers and other
executives whose base salary equals or exceeds $200,000 per
year. The Compensation Committee makes most decisions regarding
changes in salaries and bonuses during the first quarter of the
year based on Company, business unit or function and individual
performance during the prior year.
The Compensation Committee has the sole authority to retain and
terminate any compensation consultant to be used to assist in
the evaluation of executive compensation and to approve the
consultants fees and retention terms. As noted below,
since November 2006, the Compensation Committee has retained
Cook as its executive compensation consultant. Cook also advises
the Nominating and Corporate Governance Committee regarding
director compensation but does not provide any other services to
the Company. The Company pays Cooks fees. Additional
information on the executive compensation services performed in
2010 by Cook is included in Compensation Discussion and
AnalysisRole of Committee Consultant below.
Compensation
Committee Interlocks and Insider Participation
During 2010, Mr. Chu, Mr. Codey, Mr. Farrell,
Dr. Kosecoff and Mr. Marino served as members of the
Compensation Committee. None of the members of the Compensation
Committee has been an officer or employee of the Company or any
of its subsidiaries. See Corporate
GovernanceIndependence of Directors above for a
description of transactions, relationships or arrangements
concerning Mr. Codey, Dr. Kosecoff and Mr. Marino.
11
Certain
Relationships and Related Person Transactions
Under the Audit Committee charter, the Audit Committee has the
responsibility to review and, if appropriate, approve conflicts
of interest or potential conflicts of interest involving our
senior financial executives and to act, or recommend Board
action, on any other violations or potential violations of our
Code of Conduct by executive officers. Under our Code of
Conduct, the Board reviews any relationships or transactions
that might constitute a conflict of interest for a director.
In 2007, the Board adopted its Related-Person Transactions
Policy and Procedures. The current Related-Person Policy is in
writing and is posted on the Companys web site at
www.sealedair.com. The Related-Person Policy provides for
the review of all relationships and transactions in which the
Company and any of its executive officers, directors and
five-percent stockholders or their immediate family members are
participants to determine whether to approve or ratify such
relationships or transactions, as well as whether such
relationships or transactions might affect a directors
independence or must be disclosed in our proxy statement. All
such transactions or relationships are covered if the aggregate
amount may exceed $120,000 in a calendar year and the person
involved has a direct or indirect interest other than solely as
a director or a less than 10 percent beneficial ownership
interest in another entity. The Related-Person Policy includes a
list of pre-approved relationships and transactions.
Determinations whether to approve or ratify any other
relationship or transaction are based on the terms of the
transaction, the importance of the relationship or transaction
to the Company, whether the relationship or transaction could
impair the independence of a non-employee director, or whether
the relationship or transaction would present an improper
conflict of interest for any director or executive officer of
the Company, among other factors. Information on relationships
and transactions is requested in connection with annual
questionnaires completed by each of our executive officers and
directors.
The Nominating and Corporate Governance Committee has the
responsibility to review and, if appropriate, approve or ratify
all relationships and transactions under the Related-Person
Policy, although the Board has delegated to the chair of the
Nominating and Corporate Governance Committee and to the Chief
Executive Officer of the Company the authority to approve or
ratify specified transactions. For potential conflicts of
interest involving an executive officer, the chair of the
Nominating and Corporate Governance Committee and the chair of
the Audit Committee can agree that only one of those Committees
will address the matter. No director can participate in any
discussion or approval of a relationship or transaction
involving himself or herself (or one of his or her immediate
family members).
Other than transactions that are considered pre-approved under
the Related-Person Policy, the transactions described above
under Corporate GovernanceIndependence of
Directors were ratified or approved in accordance with the
Related-Person Policy.
On December 1, 2010, we completed an early redemption of
$150 million of the outstanding $300 million of senior
unsecured notes due 2014 (the Notes) held by Davis
Selected Advisers, L.P. The notes were redeemed at 127% of the
principal amount, plus unpaid and accrued interest. The
aggregate redemption price was approximately $196 million,
including approximately $5 million of accrued interest, and
was funded with available cash. We originally issued the Notes
in February 2009 in a private offering by and among us,
subsidiaries of Berkshire Hathaway, Inc. ($150 million
principal amount) and Davis Selected Advisers, L.P.
($150 million principal amount).
As noted below under Voting Securities, in a
Schedule 13G/A dated February 14, 2011 filed with the
SEC, Davis Selected Advisers, L.P. indicated that it had sole
voting power with respect to 47,337,047 shares and sole
dispositive power with respect to 51,458,302 shares of the
Companys common stock, which currently would represent
beneficial ownership of approximately 32.2% of the outstanding
shares of common stock. The transactions with Davis Selected
Advisers, L.P., were approved in accordance with the
Related-Person Policy.
12
Director
Compensation
During 2010, annual compensation for our non-employee directors
was comprised of the following components: annual or interim
retainers paid at least 50% in shares of common stock, meeting
and committee fees paid in cash, and other fees for special
assignments or director education programs paid in cash. A
director may defer payment of annual or interim retainers until
retirement from the Board of Directors, as described below. The
following table shows the total compensation for non-employee
directors during 2010:
2010 DIRECTOR
COMPENSATION TABLE
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Fees Earned or
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All Other
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Paid in
Cash1
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Stock
Awards2
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Compensation3
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Total
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Director
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($)
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($)
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($)
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($)
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Hank Brown*
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$
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91,750
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$
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54,300
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$
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0
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$
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146,050
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Michael Chu
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78,250
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54,300
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1,000
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133,550
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Lawrence R. Codey*
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85,250
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54,300
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0
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139,550
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Patrick Duff
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64,500
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54,300
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0
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118,800
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T. J. Dermot Dunphy
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71,250
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54,300
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5,000
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130,550
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Charles F. Farrell, Jr.*
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89,000
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54,300
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0
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143,300
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Jacqueline B. Kosecoff
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71,000
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54,300
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0
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125,300
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Kenneth P. Manning
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82,000
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54,300
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0
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136,300
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William J. Marino*
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36,500
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99,304
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5,000
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140,804
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*
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Chair of committee for all or part of 2010.
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1
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This column reports the amount of cash compensation paid in 2010.
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2
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The amounts shown in the Stock Awards column represent the
aggregate grant date fair value of stock awards granted in the
fiscal year ended December 31, 2010 in accordance with
Financial Accounting Standards Board Accounting Standards
Codification Topic 718, CompensationStock Compensation, or
FASB ASC Topic 718, for the stock portion of the annual
retainers for 2010 under the 2002 Stock Plan for Non-Employee
Directors, described below under Board Retainers and
Form and Payment of Retainers. For additional
information, refer to Directors Stock Plan in
Note 17, Stockholders Equity, of Notes to
our consolidated financial statements included in our Annual
Report on
Form 10-K
for the fiscal year ended December 31, 2010, as filed with
the SEC. Messrs. Codey, Duff, Farrell and Marino received
stock units under the Deferred Compensation Plan described
below. All other directors listed in the table received shares
of common stock. The number of shares or stock units paid as the
equity portion of the annual retainer in 2010 was
2,500 shares. In addition, Mr. Marino elected to have
the cash portion of his annual retainer paid in shares of common
stock, with the number of shares determined by dividing the
amount of the annual retainer so paid ($45,000) by the closing
price of a share of common stock on May 19, 2010, the date
of the 2010 Annual Meeting, at which meeting all of the
non-employee directors were elected, and rounding up to the
nearest whole share. All shares and stock units paid as all or
part of annual retainers in 2010 are fully vested. Directors are
credited with dividend equivalents on stock units, as described
under Deferred Compensation Plan below, which are
not included in the table above.
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3
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The amounts in this column represent matching gifts to
educational institutions during 2010. Directors are permitted to
participate in the Companys matching gift program, whereby
the Company will match gifts to educational institutions on a
dollar for dollar basis to a maximum of $5,000 per participant
in any calendar year, on the same basis as employees.
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13
Director
Compensation Processes
Our director compensation program is intended to enhance our
ability to attract, retain and motivate non-employee directors
of exceptional ability and to promote the common interest of
directors and stockholders in enhancing the value of our common
stock.
The Board reviews director compensation at least annually based
on recommendations by the Nominating and Corporate Governance
Committee. The Nominating and Corporate Governance Committee and
the Board base their determinations on director compensation on
recommendations from our management as well as reviewing
commercially available survey data related to general industry
director compensation trends at companies of comparable size.
The Nominating and Corporate Governance Committee has the sole
authority to engage a consulting firm to evaluate director
compensation and in late 2010 engaged Cook to assist in
establishing director compensation for 2011. Cook also serves as
the independent consultant to the Organization and Compensation
Committee on executive compensation.
Board
Retainers
Under the 2002 Stock Plan for Non-Employee Directors, each
member of the Board of Directors who is neither an officer nor
an employee of the Company and who is elected at an annual
meeting of stockholders receives an annual retainer for serving
as a director. The Board sets the amount of the annual retainer
prior to the annual meeting based on the recommendation of the
Nominating and Corporate Governance Committee.
During the fourth quarter of 2009, following consideration by
the Nominating and Corporate Governance Committee and the Board
of Directors, the Board of Directors amended the 2002 Stock Plan
to give the Board the flexibility to set annual retainers based
on a fixed number of shares of common stock, a fixed amount of
cash, or a combination of shares of common stock and cash. In
December 2009, the members of the Nominating and Corporate
Governance Committee recommended and the Board approved setting
the annual retainer for non-employee directors elected at the
2010 annual meeting at 2,500 shares of common stock plus
$45,000 in cash.
A non-employee director who is elected other than at an annual
meeting is entitled to an interim retainer on the date of
election. The interim retainer is a pro rata portion of the
annual retainer to reflect less than a full year of service.
Form
and Payment of Retainers
We pay at least half of each retainer, whether annual or
interim, in shares of common stock and the remainder in cash,
provided that each non-employee director can elect, prior to
becoming entitled to the retainer, to receive the entire
retainer in shares of common stock. For any portion of an annual
or interim retainer denominated in cash but paid in shares of
common stock, we calculate the number of shares of common stock
to be issued by dividing the amount payable in shares of common
stock by the fair market value per share. The fair market value
per share is the closing price of the common stock on the annual
meeting date or, if no sales occurred on that date, the closing
price on the most recent prior day on which a sale occurred. The
number of shares issued as all or part of an interim retainer is
the amount of cash payable as shares of common stock divided by
the fair market value per share on the date of the
directors election to the Board. If any calculation would
result in a fractional share of common stock being issued, then
we round the number of shares to be issued up to the nearest
whole share.
We issue shares of common stock in payment of the portion of a
retainer that is payable in shares of common stock to the
non-employee director promptly after he or she becomes entitled
to receive it. We pay the portion of an annual retainer payable
in cash in a single payment shortly after the end of the
calendar quarter during which the director is elected. We pay
the portion of an interim retainer payable in cash shortly after
the end of the calendar quarter in which the non-employee
director is elected, except that if the non-employee director is
elected between April 1 and the next annual meeting of
stockholders, then we pay the cash portion of the interim
retainer shortly after the non-employee director is elected.
14
Deferred
Compensation Plan
The Sealed Air Corporation Deferred Compensation Plan for
Directors permits a non-employee director to elect to defer all
or part of the directors annual or interim retainer until
the non-employee director retires from the Board. Each
non-employee director has the opportunity to elect to defer the
portion of the annual or interim retainer payable in shares of
common stock. If a non-employee director makes that election, he
or she may also elect to defer the portion, if any, of the
annual or interim retainer payable in cash. We hold deferred
shares of common stock as stock units in a stock account. Such
stock units may not be transferred by a director. We do not
issue these shares until we pay the non-employee director,
normally after retirement from the Board, so the non-employee
director cannot vote the stock units. We consider deferred
shares, when issued, as issued under the 2002 Stock Plan for
Non-Employee Directors. We credit deferred cash and dividend
equivalents on stock units to an unfunded cash account that
earns interest quarterly at the prime rate less 50 basis
points until paid. During 2010, none of the non-employee
directors who participated in the Deferred Compensation Plan for
Directors received above market earnings on the cash or stock
units credited to his or her account. The non-employee director
can elect to receive the balances in his or her stock and cash
accounts in a single payment during January of the year after
retirement or in five annual installments starting during
January of the year after retirement.
Restrictions
on Transfer
A director may not sell, transfer or encumber shares of common
stock issued under the 2002 Stock Plan for Non-Employee
Directors while the director serves on the Board of Directors,
except that a non-employee director may make gifts of shares
issued under the 2002 Stock Plan to 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, or the directors accounts under
the Deferred Compensation Plan for Directors, if the director
has elected to defer payment of the shares, is entitled to
receive or be credited with any dividends or other distributions
in respect of the shares. The director has voting rights in
respect of the shares issued to the director under the 2002
Stock Plan. Since we hold deferred shares of common stock as
stock units in a stock account, with no shares issued until
payment is made to the non-employee director, directors cannot
vote stock units representing deferred shares of common stock.
The restrictions on the disposition of shares issued pursuant to
the 2002 Stock Plan terminate upon the occurrence of specified
events related to a change of control of the Company.
Other
Fees and Arrangements
During 2010, each member of the Audit Committee, the Nominating
and Corporate Governance Committee and the Organization and
Compensation Committee received a fee of $2,000 per year for
serving as a member of the Committee. The chair of the Audit
Committee received an additional fee of $4,000 per year, and the
chair of each of the Nominating and Corporate Governance
Committee and the Organization and Compensation Committee
received an additional fee of $2,000 per year. Each non-employee
director received a fee of $1,500 for each Board or Committee
meeting attended that was held in person (regardless of whether
the director attended by conference telephone) and a fee of $750
for each Board or Committee meeting attended that was held by
conference telephone. During 2010, non-employee directors who
undertook special assignments at the request of the Board or of
any Committee of the Board, or who attended a director education
program, received a fee of $2,000 per day. All directors are
entitled to reimbursement for expenses incurred in connection
with Board service, including attending Board or Committee
meetings. We pay these fees and reimbursements in cash; these
payments are not eligible for deferral under the Deferred
Compensation Plan for Directors described above. Additionally,
directors are permitted to participate in our matching gift
program, described in Note 3 to the 2010 Director
Compensation Table above, on the same basis as employees.
15
2011 Director
Compensation
As noted above, in late 2010, the Nominating and Corporate
Governance Committee engaged Cook to assist in developing a
philosophy on director compensation and to benchmark the
Companys director compensation against the peer companies
used for executive compensation purposes, described under
Compensation Discussion and AnalysisUse of Peer
Group Data below. Cook recommended that non-employee
director compensation should be generally within the median
range for peer companies and also recommended that the
Nominating and Corporate Governance Committee consider
eliminating meeting fees except in unusual situations.
After considering Cooks recommendations, the Nominating
and Corporate Governance Committee recommended and the Board
approved 2011 annual retainers in the amount of $70,000 payable
in shares of common stock and $60,000 payable in cash (or in
shares of common stock at the election of each director) and
eliminated the payment of meeting fees except in unusual
situations approved by the Board. The chair of the Audit
Committee will receive a fee of $25,000, and other members of
the Audit Committee will receive fees of $10,000. The chair of
the Nominating and Corporate Governance Committee will receive a
fee of $15,000, and other members of the Nominating and
Corporate Governance Committee will receive fees of $7,500. The
chair of the Organization and Compensation Committee will
receive a fee of $20,000, and other members of the Organization
and Compensation Committee will receive fees of $10,000.
Committee fees will be paid in quarterly installments.
Director
Stock Ownership Guidelines
In order to align the interests of directors and stockholders,
we believe that our directors should have a significant
financial stake in the Company. To further that goal, we adopted
stock ownership guidelines for non-employee directors during
2006. The current stock ownership guidelines for non-employee
directors, which are part of our Corporate Governance
Guidelines, require that they hold shares of common stock and
stock units under the Sealed Air Corporation Deferred
Compensation Plan for Directors equal in aggregate value to five
times the amount of the annual retainer payable in cash, or
$225,000 for 2010 and $300,000 for 2011. As of February 1,
2011, all directors had met the guidelines for 2010 and for
2011. Directors first elected after February 18, 2010 have
five years following first election to achieve the guidelines.
In the event of an increase in the amount of the annual retainer
payable in cash, directors serving when the increase is approved
by the Board have two years after such approval to achieve the
increased guideline.
16
Election
of Directors
(Proposals 1-9)
At the Annual Meeting, the stockholders of the Company will
elect the entire Board of Directors to serve for the ensuing
year and until their successors are elected and qualified. The
Board of Directors has approved decreasing the number of
directors from ten, the current number of directors, to nine
effective as of the commencement of the Annual Meeting and has
designated as nominees for election the nine persons named
below, all of whom currently serve as directors of the Company.
Charles F. Farrell, Jr., our tenth director, advised the
Company and the Board of Directors that he wished to retire from
the Board of Directors as of the Annual Meeting.
Mr. Farrell has served on the Companys Board of
Directors since 1971, and the Board thanks him for his many
years of dedicated service and valuable contributions as a
director of the Company.
Shares of common stock that are voted as recommended by the
Board of Directors will be voted in favor of the election as
directors of the nominees named below. If any nominee becomes
unavailable for any reason or if a vacancy should occur before
the election, which we do not anticipate, the shares represented
by a duly completed proxy may be voted in favor of such other
person as may be determined by the holder of the proxy.
Director
Qualifications
Several years ago, the Nominating and Corporate Governance
Committee of the Board adopted its Qualifications for
Nomination to the Board, a copy of which is attached to
this Proxy Statement as Annex C and posted on the
Companys web site at www.sealedair.com. The
Qualifications provide that, in selecting directors, the Board
should seek to achieve a mix of Board members that enhances the
diversity of background, skills and experience on the Board,
including with respect to age, gender, international background,
ethnicity and specialized experience. Directors should have
relevant expertise and experience and be able to offer advice
and guidance to our Chief Executive Officer based on that
expertise and experience. Also, a majority of directors should
be independent under applicable listing standards, Board and
Committee guidelines and applicable legislation. Each director
is also expected to:
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be of the highest ethical character and share the values of the
Company as reflected in its Code of Conduct;
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be highly accomplished in his or her field, with superior
credentials and recognition,
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have sound business judgment, be able to work effectively with
others, have sufficient time to devote to the affairs of the
Company, and be free from conflicts of interest, and
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be independent of any particular constituency and be able to
represent all stockholders of the Company.
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The Board has determined that, as a whole, it must have the
right mix of characteristics and skills and diversity to provide
effective oversight of the Company. Based on an evaluation of
our business and the risks associated with the business, the
Board believes that it should be comprised of persons with
skills in areas such as:
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knowledge of the industries in which we operate,
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financial literacy,
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management of complex businesses,
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international business,
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relevant technology and innovation,
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financial markets,
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manufacturing,
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information technology,
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17
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sales and marketing,
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legislative and governmental affairs,
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legal and regulatory environment, and
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strategic planning.
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The Board conducts a self-assessment process every year and
periodically reviews the diversity of skills and characteristics
needed by the Board in its oversight of the Company, as well as
the effectiveness of the diverse mix of skills and experience.
As part of the review process, the Board considers the skill
areas represented on the Board, those skill areas represented by
directors expected to retire or leave the Board in the near
future, and recommendations of directors regarding skills that
could improve the ability of the Board to carry out its
responsibilities.
Identifying
and Evaluating Nominees for Directors
When the Board or the Nominating and Corporate Governance
Committee has identified the need to add a new Board member with
specific qualifications or to fill a vacancy on the Board, the
chair of the Committee will initiate a search, seeking input
from other directors and senior management, review any
candidates that it has previously identified, and, if necessary,
hire a search firm. The Committee will identify the initial list
of candidates that satisfy the specific criteria, if any, and
otherwise qualify for membership on the Board. At least one
member of the Committee (preferably the chair) and our Chief
Executive Officer will interview each qualified candidate; other
directors will also interview the candidate if practicable.
Based on a satisfactory outcome of those reviews, the Committee
will make its recommendation on the candidate to the Board.
While the Committee has the sole authority to engage a search
firm to identify director candidates, to date it has not engaged
any such firm.
Our By-laws include a procedure that stockholders must follow in
order to nominate a person for election as a director at an
annual meeting of stockholders, other than a nomination
submitted by a stockholder to the Nominating and Corporate
Governance Committee under the policy and procedures described
previously. The By-laws require that timely notice of the
nomination in proper written form including all required
information be provided to the Secretary of the Company. A copy
of our By-laws is posted on our web site at
www.sealedair.com.
Information
Concerning Nominees
The information appearing in the following table sets forth, for
each nominee as a director:
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The nominees business experience for at least the past
five years.
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The year in which the nominee first became a director of the
Company or of the former Sealed Air Corporation. On
March 31, 1998, the Company completed a multi-step
transaction, one step of which was a combination of the Cryovac
business with the former Sealed Air Corporation. The period of
service before that date includes time during which each
director served continuously as a director of the Company or of
the former Sealed Air Corporation.
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The nominees age as of the date of the Annual Meeting.
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Directorships held by each nominee presently and at any time
during the past five years at any public company or registered
investment company.
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The reasons that the Board concluded that the nominee should
serve as our director, at the time we file our proxy statement,
in light of our business and structure.
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There are no family relationships among any of the
Companys directors or officers.
18
Nominees
for Election as Directors
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Hank Brown
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Director since 1997
Audit Committee (Chair)
Nominating and Corporate Governance Committee
Age 71
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Mr. Brown has served as Senior Counsel with the law firm of
Brownstein Hyatt Farber Schreck since June 2008, where he is a
member of the Government Relations and Natural Resources groups.
Previously, Mr. Brown was President of the University of
Colorado from August 2005 until March 2008. Prior to that
service, he was President and Chief Executive Officer of The
Daniels Fund, a charitable foundation, from July 2002 until
August 2005. Mr. Brown is a director of Delta Petroleum
Corporation and Sensient Technologies Corporation. During the
past five years, Mr. Brown was also a director of Guaranty
Bancorp. Previously, Mr. Brown served as a director of
other public companies.
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Mr. Brown has a bachelor of science degree in accounting as
well as a law degree from the University of Colorado. He also
has a master of laws degree in taxation from George Washington
University. Additionally, he is a certified public accountant.
Mr. Brown spent six years serving Colorado in the
U.S. Senate, five consecutive terms in the U.S. House
of Representatives representing Colorados
4th Congressional District and four years in the Colorado
Senate. Mr. Brown was also President of the University of
Northern Colorado and was a Vice President of Monfort of
Colorado, a Fortune 500 company and a major meat packer and
processor. Mr. Brown has extensive leadership experience
gained as a U.S. Senator, president of two universities and
the head of a foundation, all involving management of complex
operations and contributing to strategic planning. He is
knowledgeable about the meat processing business, which is
important for an understanding of our Food Packaging and Food
Solutions business segments. Mr. Brown has experience as a
director of other public companies, which aids in the exchange
of ideas and strategies. Mr. Browns background also
enables him to guide the company in legislative and governmental
affairs and in the legal and regulatory environment.
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Michael Chu
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Director since 2002
Audit Committee
Organization and Compensation Committee
Age 62
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Mr. Chu is Managing Director and Co-Founder of IGNIA Fund,
an investment firm based in Monterrey, Mexico, dedicated to
investing in commercial enterprises serving low-income
populations in developing countries, since July 2007. He is also
Senior Advisor since June 2007 (previously Senior Partner and
Managing Director from August 2000 to June 2007) and
Founding Partner of Pegasus Capital, a private investment firm
deploying equity capital in Latin America. Mr. Chu has been
a Senior Lecturer on the faculty of the Harvard Business School
since July 2003.
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Mr. Chu received his bachelor of arts degree from Dartmouth
College and his masters of business administration with highest
distinction from Harvard Business School. His experience
includes serving as a management consultant with Boston
Consulting Group, in senior management positions with
U.S. corporations and as an executive and limited partner
with Kohlberg Kravis Roberts & Co., a private equity
firm. Additionally, he is director emeritus of ACCION
International, a non-profit corporation dedicated to
microfinance in Latin America and a member of the investment
committee of ACCION Investments. Mr. Chu previously served
as the President and Chief Executive Officer of ACCION
International. He brings to the Board extensive international
experience, particularly in the increasingly important region of
Latin America, where Mr. Chu grew up. Mr. Chu has
proven leadership capabilities and an entrepreneurial vision, as
demonstrated by his roles with IGNIA and Pegasus Capital. He
also has experience as a chief financial officer and extensive
involvement in mergers and acquisitions.
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19
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Lawrence R. Codey
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Director since 1993
Audit Committee
Organization and Compensation Committee
Age 66
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Mr. Codey is a retired President and Chief Operating
Officer of Public Service Electric and Gas Company (PSE&G),
a public utility. Currently, Mr. Codey serves as a director
of New Jersey Resources Corporation, a natural gas holding
company, where he is lead director and chairs the executive
committee and also serves on the governance and audit
committees. Further, he serves as a director of Horizon Blue
Cross Blue Shield of New Jersey, a health insurance company,
where he chairs the audit committee and is a member of the
governance committee. Mr. Codey also serves on the board of
United Water Resources, a subsidiary of Suez Environnement,
where he chairs the compensation committee of that subsidiary
and is a member of the audit committee. Neither Horizon Blue
Cross Blue Shield of New Jersey nor United Water Resources is a
public company.
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Mr. Codey received his bachelor of science degree from St.
Peters College, a juris doctor degree from Seton Hall
School of Law, and a masters in business administration from
Rutgers University. In addition, he completed the Advanced
Management program at Harvard Universitys School of
Business. Mr. Codeys career at PSE&G started as
a trial attorney and then as a Vice President in charge of
preparation and presentation of utility rate proceedings before
both federal and state regulatory bodies. Thereafter,
Mr. Codey was in charge of the gas business unit electric
business unit and subsequently electric business unit.
Mr. Codey previously served on the Board of Directors of
Public Service Enterprise Group, an energy holding company of
which PSE&G was its largest subsidiary. Mr. Codey has
served on numerous governmental and non-governmental boards and
commissions, including the EPA Clean Air Act Advisory Committee
under both President George W. Bush and President William J.
Clinton. In addition to the knowledge gained from his experience
as our director, Mr. Codey has a broad background of
experience and education in the areas of executive management,
general management, legal and regulatory matters, finance,
accounting, human resource management, legislative and
governmental affairs, environmental affairs, and operations. He
has been accountable for the performance of large, complex,
multi-disciplined organizations and brings that discipline to
the Board. Mr. Codey also brings to the Board the
experience of a director who has served in various leadership
capacities across an array of companies involved in energy,
utilities and government.
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Patrick Duff
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Director since 2010
Audit Committee
Age 53
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Mr. Duff is a general partner of Prospect Associates, a
private investment firm. Since January 1998, he has been a
director of Gerson Lehrman Group (GLG), a private entity that
helps institutions find, engage and manage experts across a
broad range of industries and disciplines. At GLG, Mr. Duff
is a member of the audit committee and nominating and governance
committee. Previously during the past five years, he served as a
director of Hercules, Inc. While at Hercules, Mr. Duff was
chairman of the audit committee and served on the corporate
governance, nominating and ethics committee, emergency committee
and finance committee.
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Mr. Duff received his bachelor of science degree in
accounting from Lehigh University and a masters of business
administration degree from the Columbia Graduate School of
Business. He taught security analysis at Columbia University
from 1993 until 1999. Formerly, Mr. Duff was a senior
managing director at Tiger Management Corp., an investment
management firm, from 1989 through December 1993, where he was a
member of the management committee. Prior to joining Tiger in
1989, Mr. Duff worked in asset management at Mitchell
Hutchins and Capital Builders Advisory Services. He is a
certified public accountant and a chartered financial analyst.
Mr. Duff has an extensive knowledge of investing, asset
management and financial markets gained from his experience with
Tiger and with prior employers as well as through his teaching
position at Columbia University. He brings a unique perspective
to the Board as a stockholder and investor. In addition, he has
accounting and financial expertise. He also has prior board
experience, including service on a public company board.
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T.J. Dermot Dunphy
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Director since 1969
Age 79
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Mr. Dunphy has been the Chairman of Kildare Enterprises,
LLC, a private equity investment and management firm, since
November 2000. Prior to that, he was Chairman of the Board of
Sealed Air from 1998 to November 2000 and was Chief Executive
Officer of Sealed Air from March 1971 until his retirement in
February 2000.
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Mr. Dunphy graduated from Oxford University and has a
masters of business administration from Harvard Business School.
He has a long and distinguished business career, with a major
emphasis on the packaging industry. Prior to being elected
President of Sealed Air, he worked for Westinghouse Electric
Corporation in several marketing and management roles and then
became President of Custom-Made Packaging, Inc., a small
manufacturer of flexible packaging products. From 1971 until he
retired as Chief Executive Officer in 2000, we grew from a
corporation that had annual sales of approximately
$5 million and a small operating loss, to a highly
profitable corporation with annual sales of approximately
$3.0 billion. Mr. Dunphy is a former director of
FleetBoston Financial Corporation, Public Service Enterprise
Group, Inc., and Noveon, Inc. He was a director of Formica
Corporation and Rockaway Corporation when they were independent
publicly owned companies. Mr. Dunphy was also, for ten
years, a director of Loctite Corporation. The foregoing
directorships were more than five years prior to the date of
this Proxy Statement. Mr. Dunphy has led packaging
companies as chief executive officer for 40 years. He is
highly knowledgeable about our business, the industries in which
we operate and the technology and innovations relevant to us. He
led the development of our international operations with nearly
50% of our sales being overseas by the time of his retirement.
Mr. Dunphy has extensive experience in corporate finance in
his work with both public and private entities. He gained
valuable public company governance knowledge as a director of
numerous public companies and has been on the forefront of
corporate governance issues while leading Sealed Air.
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William V. Hickey
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Director since 1999
Age 66
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Mr. Hickey has been the President and Chief Executive
Officer of Sealed Air since March 2000. He is a director of
Public Service Enterprise Group Incorporated, a public utility,
and Sensient Technologies Corporation, a global manufacturer and
marketer of colors, flavors and fragrances and other specialty
chemicals.
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Mr. Hickey received his bachelor of science degree in
engineering from the United States Naval Academy and his masters
of business administration from the Harvard Business School. He
received a certificate in professional accounting from
Northwestern University and is a certified public accountant. In
addition to his work as a certified public accountant,
Mr. Hickey was a financial executive at a public company
prior to joining Sealed Air. At Sealed Air, prior to his current
appointment, Mr. Hickey served in a variety of increasingly
responsible executive positions, including Controller, Vice
President & General Manager of the Cellu Products
Division and Food Packaging Division, Chief Financial Officer,
Executive Vice President and Chief Operating Officer. Since
Mr. Hickey joined us in 1980, we have grown from net sales
of $78 million to a highly profitable corporation with net
sales of approximately $4.5 billion. Mr. Hickey has
demonstrated exceptional leadership in his ten years as our
President and Chief Executive Officer. His past experience as a
chief financial officer and as controller, coupled with his time
as a certified public accountant, enable him to guide the
financial aspects of the business. Moreover, his experience as a
division manager of Sealed Air gives him hands-on experience
managing our sales, marketing and manufacturing operations.
Mr. Hickeys extensive knowledge of the Company, his
understanding of the businesses we are in and seek to enter, and
his expertise in financial matters, financial markets and
strategic planning, combine to make him a key contributor to the
Board.
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21
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Jacqueline B. Kosecoff
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Director since 2005
Nominating and Corporate Governance Committee
Organization and Compensation Committee
Age 61
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Dr. Kosecoff has been Chief Executive Officer of
Prescription Solutions, a UnitedHealth Group company, a health
and well-being business, since October 2007. She joined
UnitedHealth Group upon its acquisition of PacifiCare Health
Systems, Inc. in 2005. Upon joining United, Dr. Kosecoff
took responsibility for the Medicare Part D business,
pharmacy services for Uniteds senior, legacy PacifiCare
and external prescription benefit manager, as well as the
consumer health product division serving seniors. Prior to that,
Dr. Kosecoff was Executive Vice President, Specialty
Companies, PacifiCare Health Systems, Inc., a consumer health
organization, from July 2002 to December 2005. She is a Director
of CareFusion Corporation, a global medical technology company,
where she serves on the audit and human relations and
compensation committees, and STERIS Corporation, a global
leader in infection prevention, contamination control and
surgical and critical care technologies, where she serves on the
governance and nominating and compliance committees.
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Dr. Kosecoff received a bachelor of arts degree from the
University of California, Los Angeles. She received a master of
science degree in applied mathematics from Brown University and
a Ph.D. degree in research methods from the University of
California, Los Angeles, Graduate School of Education. As CEO of
Prescription Solutions, Dr. Kosecoff has responsibility for
Uniteds Pharmacy Benefit Management services, Specialty
Pharmacy and Consumer Health Products, providing services to
more than 11 million members with annual revenues of
$13.2 billion. Previously she had founded businesses in the
medical field. Dr. Kosecoff was also previously on the
faculty of the Schools of Medicine and Public Health at the
University of California, Los Angeles, where she taught classes
in research methods, evaluation methodology, and the
organization of, and trends in, the health care delivery system,
and supervised doctoral students. Dr. Kosecoff brings to
the Board her outstanding background as a business leader in the
medical field, which is one of the key growth areas being
pursued by Sealed Air. Sealed Air benefits from her experience
in leading complex operations and in strategic planning.
Additionally, Dr. Kosecoff brings an entrepreneurial
direction to the Company.
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Kenneth P. Manning
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Director since 2002
Audit Committee
Nominating and Corporate Governance Committee
Age 69
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Mr. Manning has been Chairman and Chief Executive Officer
of Sensient Technologies Corporation, a global manufacturer and
marketer of colors, flavors and fragrances and other specialty
chemicals, since 1996. At Sensient, he was the architect of that
companys strategic moves overseas and the transformation
of the company from a producer of yeast and other commodities
into a producer of flavor, fragrance and colors for foods,
beverages, cosmetics and pharmaceuticals. Sensient also
manufactures color, ink and other specialty chemicals for inkjet
inks, display imaging systems and other applications. Sensient
now has 70 locations in more than 30 countries. Mr. Manning
is also a director of Sensient. During the past five years,
Mr. Manning was a director of Badger Meter, Inc., a
manufacturer of flow measurement and control products. In all,
Mr. Manning has been a director in five different public
companies.
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Mr. Manning received his bachelor of science degree in
mechanical engineering from Rensselaer Polytechnic Institute and
his master of business administration degree from American
University in operations research. He also has an honorary
doctors degree from Cardinal Stritch University and Marian
University. Prior to joining Sensient, Mr. Manning worked
for W. R. Grace, where he held various executive positions
including: Assistant to the CEO, Vice President of
OperationsEuropean Division, President of the Educational
Products Division, President of Real Estate Division, Vice
PresidentCorporate Technical Group and President and CEO
of the Ambrosia Chocolate Division. Mr. Manning retired
from the United States Naval Reserve as an Aerospace Engineering
Duty Officer with the rank of Rear Admiral. He served on active
duty in the United States Navy from 1963 to 1967 and during his
tenure in the Reserve, was the Commanding Officer of four
different commands. His last assignment was Director of the
Naval Reserve Air System Program. His military awards include
the Legion of Merit. Mr. Manning is a member of the
American Society of Mechanical Engineers and the American
Chemical Society, Navy League, the United States Naval
Institute, the Naval Reserve Association, and the National
Maritime Historic Association. He is also a Knight of Malta.
Mr. Manning has extensive executive experience in
international business, specialty chemicals and the food and
beverage industry, with 18 years as a CEO and an additional
five years as a COO.
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22
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William J. Marino
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Director since 2002
Nominating and Corporate Governance Committee (Chair)
Organization and Compensation Committee
Age 67
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Effective March 1, 2011, Mr. Marino retired from his
position as Chairman, President and Chief Executive Officer of
Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ), a
not-for-profit
health service corporation, a position he had held since January
2010. Horizon BCBSNJ is New Jerseys largest health
insurer, providing coverage for over 3.6 million people.
Prior to becoming Chairman, Mr. Marino was Horizon
BCBSNJs President and Chief Executive Officer since
January 1994. Mr. Marino has served as a director of Sun
Bancorp, Inc. since November 2010.
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Mr. Marino graduated from St. Peters College with a
bachelor of science degree in economics. He joined Horizon
BCBSNJ as Senior Vice President of Health Industry Services in
January 1992, and was responsible for all aspects of managed
care operations in New Jersey, as well as market research,
product development, provider relations and health care
management. Mr. Marino has over 40 years of experience
in the health and employee benefits field, primarily in managed
care, marketing and management. Before joining Horizon BCBSNJ he
was Vice President of Regional Group Operations for New York and
Connecticut for the Prudential, capping a
23-year
career with them. Mr. Marino also serves as a director or
trustee for numerous New Jersey-based cultural and community
organizations. Mr. Marino has extensive experience in the
areas of management and strategic planning, as evidenced by his
career at Horizon BCBSNJ. His area of expertise in health
services is beneficial to the Board, particularly in the medical
applications business. The breadth of his involvement in many
community organizations has given him knowledge of corporate
governance processes and practices and organizational structure
optimization.
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Other
Director Information
On January 11, 2011, Mr. Farrell, Jr., informed
the Company and the Nominating and Corporate Governance
Committee that he will retire and not stand for re-election.
Mr. Farrell will continue to serve as a director until the
Annual Meeting.
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Charles F. Farrell, Jr.
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Director since 1971
Nominating and Corporate Governance Committee
Organization and Compensation Committee (Chair)
Age 80
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Mr. Farrell has been the
President of Crystal Creek Enterprises, Inc., an investment
management and business consulting firm, since 1991. Crystal
Creek specializes in the recovery and growth of medium-sized
manufacturing companies.
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Mr. Farrell received his
bachelor of arts degree from Louisiana State University and his
masters of business administration from Harvard Business School.
He was Chairman of the Board of Tropitone Furniture Co., a
private company, from 1993 until 2007, and remains a director of
that firm. In the past, Mr. Farrell has held directorships
at Luminall Paints, Inc., Abracon, Inc., Cargo Tech, Elasco,
Inc., Dolly, Inc., SECO Manufacturing Co. and The Vecta Group,
Inc., all of which are private companies. Additionally, he has
been on the boards of advisors of Industrial Insulations, Inc.
and Nu Whirl Systems, and is presently on the boards of advisors
of Wedbush Capital Partners, LLC, Calmont Wire and Cable, Inc.
and Lamcone Restaurants, Inc. Mr. Farrell has senior
management experience in plastics processing, including blow
molding, polyurethane molding and other processes. In the food
industry, he has held senior management positions in two major
suppliers of foodservice/food retail equipment. Mr. Farrell
has undertaken leadership roles in multiple acquisitions,
divestitures and restructurings. He has extensive strategic
planning experience, with leadership roles developing growth
plans for numerous companies. Mr. Farrell has expertise in
marketing, particularly in the development of innovative new
products. Through his work with multiple companies, as well as
through serving as the chair of the Organization and
Compensation Committee, he has developed a high level of
understanding of executive compensation matters.
Mr. Farrells experience in multi-plant operations in
processing, complex equipment manufacturing and distribution
enables him to contribute to the oversight of our manufacturing
operations. His in-depth experience in the development and
evaluation of management talent, employee relations and
restructurings has led to contributions in these areas at Sealed
Air.
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23
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers and directors and any
persons owning ten percent or more of the common stock to file
reports with the SEC to report their beneficial ownership of and
transactions in our securities and to furnish the Company with
copies of the reports.
Based solely upon a review of the Section 16(a) reports
furnished to us, along with written representations from or on
behalf of executive officers and directors that no other such
reports were required during 2010, we believe that all required
reports were timely filed during 2010, except that Christopher
C. Woodbridge, a Vice President of the Company, filed a
report two days late with respect to the March 2010 sale of
5,000 shares directly held by him.
Voting
Securities
The only voting securities of the Company are the outstanding
shares of its common stock. As of the close of business on the
record date, March 21, 2011, 160,001,520 shares of
common stock were outstanding, each of which is entitled to one
vote at the Annual Meeting. Only holders of record of common
stock at the close of business on March 21, 2011 will be
entitled to notice of and to vote at the Annual Meeting.
Beneficial
Ownership Table
The following table sets forth the number of outstanding shares
of common stock beneficially owned (as of the record date, or
Schedule 13G date where indicated) and the percentage of
the class beneficially owned (as of the record date):
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by each person known to us to be the beneficial owner of more
than five percent of the then outstanding shares of common stock;
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directly or indirectly by each current director, nominee for
election as a director, and named executive officer who is
included in the Summary Compensation Table below; and
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directly or indirectly by all directors and executive officers
of the Company as a group.
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The number of shares of our common stock owned by each person is
determined under the rules of the SEC, and the information is
not necessarily indicative of beneficial ownership for any other
purpose. Under these rules, beneficial ownership includes any
shares as to which the individual has sole or shared voting
power or investment power and also any shares which the
individual has the right to acquire within 60 days after
March 21, 2011, or May 20, 2011, through the
conversion of a security or other right. Unless otherwise
indicated, each person has sole investment and voting power, or
shares such power with a family member, with respect to the
shares set forth in the following table. The inclusion in this
table of
24
any shares deemed beneficially owned does not constitute an
admission of beneficial ownership of those shares.
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Shares of
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Percentage of
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Common Stock
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Outstanding
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Beneficially
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Shares of Common
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Beneficial Owner
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Owned
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Stock
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Davis Selected Advisers,
L.P.1
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51,458,302
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32.2
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2949 East Elvira Road, Suite 101
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Tucson, Arizona 85706
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BlackRock,
Inc.2
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11,256,649
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7
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40 East 52nd Street
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New York, New York 10022
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Vanguard Group,
Inc.3
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8,059,582
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5
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100 Vanguard Blvd
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Malvern, PA 19355
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Jonathan B. Baker
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103,548
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6,7
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*
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Hank Brown
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24,319
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4
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*
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Michael Chu
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11,980
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4,5
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*
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Lawrence R. Codey
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31,675
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4,5
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*
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Karl R. Deily
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104,220
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6,7,8
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*
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Jean-Marie Deméautis
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74,386
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*
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Patrick Duff
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50,000
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4
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*
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T. J. Dermot Dunphy
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824,657
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5
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*
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Charles F. Farrell, Jr.
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9,399
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4
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*
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William V. Hickey
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1,096,310
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5,6,7
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*
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David H. Kelsey
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110,864
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6,7
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*
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Jacqueline B. Kosecoff
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14,989
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4
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*
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Kenneth P. Manning
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58,523
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*
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William J. Marino
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19,000
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4
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*
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All directors and executive officers as a group (28 persons)
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3,693,707
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9
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2.3
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*
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Less than 1%.
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1
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The ownership information set forth in the table is based on
information contained in a Schedule 13G/A, dated
February 14, 2011, filed with the SEC by Davis Selected
Advisers, L.P. (Davis) with respect to ownership of
shares of common stock, which indicated that Davis had sole
voting power with respect to 47,337,047 shares and sole
dispositive power with respect to 51,458,302 shares.
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2
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The ownership information set forth in the table is based on
information contained in a Schedule 13G/A, dated
February 8, 2011, filed with the SEC by BlackRock, Inc.,
with respect to ownership of shares of common stock, which
indicated that BlackRock, Inc. had sole voting power and sole
dispositive power with respect to 11,256,649 shares.
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3
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The ownership information set forth in the table is based on
information contained in a Schedule 13G, dated
February 10, 2011, filed with the SEC by The Vanguard
Group, Inc., with respect to ownership of shares of common
stock, which indicated that The Vanguard Group, Inc. had sole
voting power with respect to 199,757 shares, sole dispositive
power with respect to 7,859,825 shares and shared
dispositive power with respect to 199,757 shares.
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4
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The number of shares of common stock listed in the table does
not include 75,057 stock units held in the stock accounts of the
non-employee directors under the Sealed Air Corporation Deferred
Compensation Plan for Directors. Each stock unit represents one
share of common stock. Holders of stock units cannot vote the
shares represented by the units; see Director
CompensationDeferred Compensation Plan above. The
stock units so held by non-employee directors are set forth
below.
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Hank Brown
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1,324
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Michael Chu
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4,259
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Lawrence R. Codey
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20,807
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Patrick Duff
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2,500
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Charles F. Farrell, Jr.
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15,634
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Jacqueline B. Kosecoff
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2,322
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William J. Marino
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28,211
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Total
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75,057
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5
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The number of shares of common stock listed for Mr. Chu
includes 2,000 shares for which he shares voting and
investment power with a family member. The number of shares of
common stock listed for Mr. Codey includes
10,875 shares for which he shares voting and investment
power with a family member. The number of shares of common stock
held by Mr. Dunphy includes 64,800 shares held by him
as custodian for a family member and 10,000 shares held by
a charitable foundation
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for which he shares voting and
investment power. The number of shares of common stock listed
for Mr. Hickey includes 3,000 shares for which he
shares voting and investment power with a family member.
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6
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This figure includes restricted stock units awarded to our
executive officers who are retirement-eligible as stock leverage
opportunity (SLO) awards. Under our Annual Incentive Plan, our
executive officers have the opportunity to designate a portion
of their annual bonus to be received as SLO awards under the
2005 Contingent Stock Plan. The numbers of such restricted stock
units held by the named executive officers and by the directors
and executive officers as a group who are retirement eligible
are as follows.
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Jonathan B. Baker
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2,708
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Karl R. Deily
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2,918
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William V. Hickey
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7,664
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Directors and executive officers as a group
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26,511
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The number of shares of common stock listed in the table does
not include 9,406 restricted stock units awarded to
Mr. Kelsey as he is not yet retirement-eligible.
Mr. Kelsey becomes retirement-eligible in June 2011.
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7
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This figure includes shares of common stock held in our
Profit-Sharing Plan trust fund with respect to which our
executive officers individually and as a group may, by virtue of
their participation in the plan, be deemed to be beneficial
owners. As of March 21, 2011, approximately
2,739,644 common stock share equivalents were held in the
trust fund under the plan, representing approximately 1.7% of
the outstanding shares of common stock. The approximate numbers
of share equivalents held by the named executive officers and by
the directors and executive officers as a group under the plan
are set forth below.
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Jonathan B. Baker
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8,264
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Karl R. Deily
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1,484
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William V. Hickey
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32,508
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David H. Kelsey
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941
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Directors and executive officers as a group
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116,388
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8
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This figure includes shares of common stock held in the
Companys 401(k) Thrift Plan trust fund with respect to
which our executive officers individually and as a group may, by
virtue of their participation in the plan, be deemed to be
beneficial owners. As of March 21, 2011, approximately
359,524 common stock share equivalents were held in the
trust fund under the plan, representing approximately 0.2% of
the outstanding shares of common stock. The approximate numbers
of share equivalents held by the named executive officers and by
the directors and executive officers as a group under the plan
are set forth below.
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Karl R. Deily
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875
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Directors and executive officers as a group
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7,303
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9
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This figure includes, without duplication, the outstanding
shares of common stock and restricted stock units referred to in
Notes 5 through 8 above held by our current directors and
executive officers as well as 18,259 shares with respect to
which executive officers who are not named in the above table
share voting and investment power with family members.
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26
Executive
Compensation
Compensation
Discussion and Analysis
2010
in Review
Our business experienced considerable improvement in sales in
2010, with a
year-over-year
growth rate of 6% primarily resulting from an increase in unit
volume growth. In addition, we benefited from our supply chain
productivity improvements and from producing products in our
new, low-cost facilities in developing regions. These factors
were largely offset by higher average petrochemical-based raw
material costs. As a result, our financial results for 2010 did
not meet some of our goals, resulting in lower annual incentive
compensation for 2010. Notwithstanding, we continued to focus on
our
long-term
goals by investing in innovation, introducing new products and
adding new customers while generating a strong level of net cash
provided by operating activities.
Compensation
Philosophy and Objectives
Our executive compensation philosophy is to provide compensation
in the forms and at levels that will permit us to retain and
motivate our existing executives and to attract new executives
with the skills and attributes that we need. The compensation
program is intended to provide appropriate and balanced
incentives toward achieving our annual and long-term strategic
objectives, to support a performance-oriented environment based
on the attainment of goals and objectives intended to benefit us
and our stockholders and to create an alignment of interests
between our executives and our stockholders.
The Compensation Committee is responsible for establishing and
implementing our executive compensation philosophy and for
ensuring that the total compensation paid to our executive
officers and other executives is fair, competitive and motivates
high performance.
Summary
of Compensation Programs
Under our current executive compensation program, which we
implemented in early 2008, the Compensation Committee
establishes each element of compensation for our executive
officers, comprising base salary, annual bonus targets and
long-term incentive compensation targets, close to the median
range based on data from peer companies, as discussed further
below. As a result, both the level and the mix of the total
compensation opportunity are intended to generally approximate
the competitive median range. This design addresses one of our
key goals: to ensure we provide competitive compensation
opportunities so that we can attract and retain executives with
the necessary skills to successfully manage a business of our
size and scope.
Executive officers earn annual incentive and long-term incentive
awards based on achievement of performance goals, which we
establish to support our annual and longer-term financial and
strategic goals. Because annual and long-term incentives make up
a significant portion of each executive officers total
compensation, the program has been designed to pay close to the
median range when target goals are met, provide above-median pay
when our target goals are exceeded, and provide below-median pay
when target goals are not met. These incentive award
opportunities address another of our key goals: to provide a
performance-oriented environment where above-median compensation
can be realized when performance goals are exceeded and
below-median compensation will be paid when performance goals
are not achieved.
Throughout this Proxy Statement, the individuals included in the
Summary Compensation Table below are referred to as the
named executive officers.
Developments
in 2010
Due to the economic environment in late 2008 and early 2009,
there were no annual pay increases in 2009 with limited
exceptions. In the first quarter of 2010, the Compensation
Committee, at the recommendation of management and Cook,
approved positive adjustments to executive salaries and target
27
bonuses due to improved economic conditions, our stronger
financial results in 2009, and increased margins resulting from
the efforts of management and employees, which included
aggressive cost savings programs.
In addition, during the first quarter of 2010, the Compensation
Committee:
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Established new metrics and goals for the 2010 three-year
performance stock unit awards, following a review of historical
compensation and performance, as well as peer benchmarking. The
primary goals for the 2010 three-year awards were based on:
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the three-year cumulative volume growth of net trade
sales, and
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the three-year average return on invested capital.
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Determined that it would limit the use of negative discretion
only to extraordinary circumstances with respect to the two-year
and three-year long-term performance share unit awards granted
to the named executive officers and other officers and key
executives in 2009, in order to establish a grant date fair
value under the accounting rules.
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Established 2010 performance goals under the Annual Incentive
Plan and under the Performance-Based Compensation Program.
Additional information about these goals is discussed below.
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Adopted an amended recoupment policy to require each executive
officer to reimburse the Company for all or a portion of any
annual or long-term incentive compensation paid to the executive
officer based on achievement of financial results that were
subsequently the subject of a restatement due to error or
misconduct regardless of whether the executive officer was
responsible for the error or misconduct so long as no payment or
award or a lower payment or award would have been made to the
officer based on the restated results.
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Reviewed and considered the Companys compensation risk and
the related disclosure requirements.
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Later in 2010, the Compensation Committee approved a revised and
enlarged peer group for purposes of executive compensation
comparison that more accurately reflects the comparable
companies, as discussed further below.
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The 2011 performance goals under the Annual Incentive Plan were
evaluated by the Committee in early 2011 against the actual
performance of the Company during 2010. Based on such review,
the Compensation Committee determined that funding of the 2010
annual bonus pool should be significantly below 2010 target
levels because achievement of our primary goal, adjusted
consolidated operating income, was below target levels and
because other additional goals were not attained.
Role
of Committee Consultant
In November 2006, the Compensation Committee first engaged Cook
to review our executive compensation practices and programs with
respect to the competitiveness of our executive compensation and
the alignment of annual and long-term incentive compensation
with our business objectives, and to make recommendations for
changes in those practices and programs. This review was
undertaken to more directly link performance and annual and
long-term incentive compensation than under the previous
programs and to provide for above-median pay when target goals
are exceeded, pay close to the median range when target goals
are met, and provide below-median pay when target goals are not
met.
Since 2007, Cook has advised the Compensation Committee on the
selection of peer companies, provided the Compensation Committee
with comparative industry trends and peer group data regarding
salary, annual incentive and long-term incentive compensation
levels for our executive officers and other key executives, and
advised the Compensation Committee on our managements
recommended compensation levels. During 2010, Cook also assisted
the Compensation Committee in selecting metrics and goals for
the 2010 annual bonus program and for the 2010 three-year
performance share unit awards, as well as advising the
Compensation Committee on possible changes to the design of
incentive compensation programs and on the risks posed by the
Companys incentive compensation programs.
28
Role
of CEO and Management in Compensation Decisions
The Compensation Committee often directs members of management
to work with Cook to provide executive compensation information
or recommendations to the Compensation Committee. However, the
Compensation Committee has not delegated any of its authority to
determine executive compensation programs, practices or other
decisions to our management. As noted above, the current
executive compensation program was developed and approved by the
Compensation Committee with advice and support from Cook after
consulting with the Chief Executive Officer and the
Companys compensation and legal professionals. The Chief
Executive Officer and other executive officers and compensation
professionals attend portions of meetings as requested by the
Compensation Committee.
In early 2010, the Compensation Committee determined with input
from the Chief Executive Officer that the Company had exceeded
target goals established under the Annual Incentive Plan for
2009. Mr. Hickey recommended, in light of the positive
financial direction of the Company and based on peer group
benchmark information with respect to compensation, that the
Compensation Committee approve adjustments to salary and 2010
cash bonus targets as described below.
While Cook and the Compensation Committee recommended metrics
for the 2010 annual bonus program and the 2010 long-term
incentive program, the Chief Executive Officer and other members
of our management also were consulted in developing the metrics
and establishing the goals for the 2010 annual bonus program and
the 2010 long-term incentive program, as well as for the
Performance-Based Compensation Program for 2010. Such metrics
and goals were approved by the Compensation Committee.
The Chief Executive Officer submits salary and bonus
recommendations to the Compensation Committee for the other
named executive officers as well as for the other executives
whose compensation is set by the Compensation Committee and
recommendations for equity awards for all employees. Following a
review of those recommendations with Cook, the Compensation
Committee approves compensation decisions with such
modifications to the Chief Executive Officers
recommendations as the Compensation Committee considers
appropriate.
Use
of Peer Group Data
Starting in early 2007 the Compensation Committee approved a
peer group that has been used as a factor in setting executive
compensation levels and programs since then. The peer group was
developed based on recommendations from Cook and our management
and comprises public companies in packaging and related
industries that are comparable based on sales, total assets,
numbers of employees and market capitalization. The peer group
has been reviewed by the Compensation Committee annually since
then. In late 2010, the Compensation Committee decided to
enlarge and make revisions to the peer group for 2011 so that
the peer group companies more closely represent public companies
in packaging and related industries that are comparable to us
based on sales, total assets, numbers of employees and market
capitalization.
Prior to January 1, 2011, our peer group included the
following companies:
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Aptar Group Inc.
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Pactiv Corporation (through 2009)*
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Avery Dennison Corporation
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Rexam PLC
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Ball Corporation
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Silgan Holdings Inc.
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Bemis Company, Inc.
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Sonoco Products Co.
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Crown Holdings, Inc.
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Spartech Corporation
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MeadWestvaco Corporation
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*
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Pactiv Corporation was acquired by Reynolds Group Holdings
Limited in November 2010.
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29
As of January 1, 2011, our peer companies are:
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Avery Dennison Corporation
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Packaging Corporation of America
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Ball Corporation
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Pactiv Corporation (through 2009)
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Bemis Company, Inc.
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Rock-Tenn Company
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Crown Holdings, Inc.
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Rockwood Holdings Inc.
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Greif, Inc.
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Silgan Holdings Inc.
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MeadWestvaco Corporation
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Sonoco Products Co.
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Owens-Illinois, Inc.
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Spartech Corporation
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Temple-Inland, Inc.
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The Compensation Committee considers comparative executive
compensation levels and practices based on information from the
peer companies as well as other data provided by Cook related to
general industry executive compensation trends.
In 2010, the Compensation Committee generally established each
element of compensation for the named executive officers,
comprising base salary, annual cash bonus targets and long-term
incentive compensation targets, close to the median range for
persons with comparable positions based on data from the peer
companies. Since each element of compensation is mainly set by
reference to levels at other companies, the Compensation
Committee has not set any fixed relationship between the
compensation of the Chief Executive Officer and that of any
other named executive officer.
Components
of Compensation
For 2010, the elements of total compensation that we paid to our
executive officers, including the named executive officers,
consisted of the following items:
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salaries;
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annual incentive compensation in the form of annual cash bonuses
tied to performance with a stock leverage opportunity (SLO)
available at the election of the officer;
|
|
|
long-term incentive compensation, principally comprising awards
of performance share units under our 2005 Contingent Stock Plan,
as well as awards of restricted stock or restricted stock units;
|
|
|
benefits under our retirement and health and welfare
programs; and
|
|
|
perquisites and other personal benefits.
|
The discussions of annual and long-term incentive compensation
that follow include performance goals and measures for the
Company. These performance goals and measures are disclosed in
the limited context of our compensation programs and should not
be understood to be statements of our expectations or estimates
of future results.
Salaries
We pay salaries because a fixed component of compensation is an
important part of a competitive compensation package. The
Compensation Committee establishes salary levels for executive
officers primarily based on consideration of the median range
for the peer companies, as well as reviews of broad-based
surveys of compensation trends and practices at other industrial
companies in the United States, while also considering
country-specific guidelines for compensation increases and
performance, which are more significant factors for those whose
salary is within or near the median range.
Following the decision not to increase salaries and bonus
targets in 2009, we resumed making salary changes in early 2010.
The Compensation Committee approved a 3.8% increase in
Mr. Hickeys salary, which even after the increase
remained below the median range for chief executive officers of
peer companies. However, his total compensation, including his
annual and long-term incentive compensation,
30
was in line with the median range. The Compensation Committee
decided to grant him long-term incentive compensation awards at
the high end of the median range for chief executive officers of
peer companies rather than increase his salary to the median
range in order to link his total compensation more closely to
our long-term performance. Mr. Kelseys salary
increase was 3.3% and Mr. Deméautiss salary
increase was 3.6%, both based largely on country-specific
guidelines for compensation increases. Mr. Deilys
salary increase was 20% and Mr. Bakers salary
increase was 8.5%, since their 2009 salaries had been below the
median range for their positions and responsibilities.
Salary increases in early 2011 were modest compared with 2010
increases, reflecting caution about economic conditions in 2011
and a desire to keep costs, including compensation costs, under
tight control. The Compensation Committee made no change in
Mr. Hickeys salary. Mr. Kelseys salary
increase was 2.2%, Mr. Deméautiss salary
increase was 1.0%, Mr. Deilys salary increase was
4.2% and Mr. Bakers salary increase was 1.4%.
Mr. Deilys increase was larger relative to the other
named executive officers because his 2010 salary had been below
the median range for his position and responsibilities.
Annual
Incentive Compensation
2010 Cash Bonus and Stock Leverage Opportunity (SLO)
Program. A significant portion of each executive
officers total annual compensation opportunity is made in
the form of a target bonus objective under the Annual Incentive
Plan. The Annual Incentive Plan is intended to drive high
performance results based on clarity of and focus on our
strategic goals, with emphasis on performance and alignment of
the interests of our executive officers with our stockholders.
The program provides the opportunity to earn a significantly
higher annual bonus if target performance is exceeded but the
risk of a significantly lower annual bonus, or even no bonus, if
target performance is not achieved.
The Annual Incentive Plan is based on a Company-wide annual
bonus pool, which is the sum of bonus targets for bonus-eligible
employees for the year. Company goals are established early in
the performance year by the Compensation Committee. After the
end of the year, the Compensation Committee determines how much
of the annual bonus pool will be funded based on achievement of
Company goals. Achievement below the minimum threshold for
performance goals results in no funding, and achievement above
the maximum level results in the maximum funding. The funded
bonus pool can be adjusted up or down 25% by the Compensation
Committee at its discretion based on the quality of earnings or
performance relative to the peer companies. A funded bonus pool
of up to 25% of the annual bonus pool is available at the
discretion of the Compensation Committee even if the
Company-wide goals have not been achieved in order to reward
exceptional business unit or individual performance. Once the
funded bonus pool has been determined, then it is divided among
business units and corporate departments based on success
against goals for each of those groups. Individual performance
is considered in setting the amount of the funded bonus pool
that is earned by individual employees, including each of the
named executive officers.
Under the Annual Incentive Plan, our executive officers also
have the opportunity each year to designate a portion of their
annual bonus to be received as equity awards under the 2005
Contingent Stock Plan, called stock leverage opportunity (SLO)
awards. The portion to be denominated in SLO awards, in
increments of 25% of the annual bonus, may be given a premium to
be determined by the Compensation Committee each year. The stock
price used to calculate the number of shares that can be earned
is the closing price on the first trading day of the performance
year, thereby reflecting stock price changes during the
performance year in the value of the SLO award. Once the amount
of the annual bonus that has been earned has been determined for
each executive officer following the end of the year, the cash
portion is paid out shortly thereafter, and the SLO award is
provided in the form of an award of restricted stock (RS) or
restricted stock units (RSU) under the 2005 Contingent Stock
Plan with a two-year restriction period.
The percentages of salary at which the target bonus objectives
were established for 2010 were based on consideration of the
median ranges established through peer group and general
industry survey data on compensation trends and practices for
each named executive officer. In 2010, for the Chief Executive
Officer, the target cash bonus objective was set at 100% of
annual base salary, for the Chief Financial Officer and Senior
Vice President at 75% of annual base salary, and for the other
executive officers in the range of 39%
31
to 67% of annual base salary, depending on the role and
responsibilities of the officer. The Chief Executive Officer
received the largest relative cash bonus objective compared with
the other named executive officers, primarily reflecting the
results of our review of compensation structure and levels for
other chief executive officers, as well as the fact that he has
a greater opportunity than any other executive officer to affect
our performance.
For participants in the Performance-Based Compensation Program,
including the named executive officers, 2010 goals established
under that Program were also required to be met in order to
receive a 2010 annual bonus; see Compliance with
Section 162(m) of the Internal Revenue Code;
Performance-Based Compensation Program below.
2010 Cash Bonus and SLO Targets. Similar to
2009, the Compensation Committee set the SLO award premium at
25% and established the following annual bonus targets for the
2010 performance period. The SLO award target amounts noted
below were calculated based on the proportion of the 2010 annual
bonus target elected by each executive officer to be received in
the form of an equity award after applying the 25% premium
applicable to SLO awards and based on the closing price of
$22.02 for a share of common stock on January 4, 2010.
Mr. Deméautiss 2010 annual bonus target is
converted from euros; see Note 4 to the Summary
Compensation Table below.
2010 ANNUAL BONUS
TARGETS
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 Annual
|
|
|
Percentage as
|
|
|
SLO
|
Name
|
|
|
Bonus Target
|
|
|
SLO Award
|
|
|
Award Target
|
William V. Hickey
|
|
|
$
|
675,000
|
|
|
|
|
100
|
%
|
|
|
|
38,318 units
|
|
David H. Kelsey
|
|
|
|
348,750
|
|
|
|
|
25
|
%
|
|
|
|
4,950 units
|
|
Jonathan B. Baker
|
|
|
|
175,000
|
|
|
|
|
50
|
%
|
|
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|
4,968 units
|
|
Karl R. Deily
|
|
|
|
240,000
|
|
|
|
|
50
|
%
|
|
|
|
6,812 units
|
|
Jean-Marie Deméautis
|
|
|
|
185,306*
|
|
|
|
|
0
|
%
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Mr. Deméautis is compensated in euros. This amount
reflects an exchange rate of 1.32456 U.S. dollars to one euro.
|
2010 Performance Goals and Achievements. Like
2009, adjusted consolidated operating income was selected as the
primary performance goal for 2010 under the Annual Incentive
Plan as the Compensation Committee believes that achieving
consistently high levels of consolidated operating income year
after year is in the long-term interest of our stockholders.
Also, each business units contribution to consolidated
operating income is readily measurable, thereby permitting the
use of operating income as a consistent metric for the
performance of each of our business units. The target level for
the primary performance goal was based on the economic and
business environment and the Companys 2010 budget when the
target was set in early 2010.
Bonus pool funding for achievement of the primary performance
goal was based on the following payout formula with payments for
achievements between these levels based on a pro rata
calculation:
|
|
|
|
|
|
|
|
|
Percentage of
|
Percentage of
|
|
|
Bonus Pool
|
Target Achieved
|
|
|
to be Funded
|
<93
|
|
|
|
0
|
|
93
|
|
|
|
50
|
|
100
|
|
|
|
100
|
|
103
|
|
|
|
150
|
|
107 or more
|
|
|
|
200
|
|
|
|
|
|
|
|
The Compensation Committee established three additional
performance goals related to 2010 revenue, inventory reduction
and safety results. Achievement related to these three goals
could result in additional discretionary adjustment to the 2010
bonus pool by the Compensation Committee up or down by up to
20%. These additional goals selected for 2010 were considered
key objectives due to their relevance to
32
our long-term strategies for financial performance and growth of
our business and in the interests of generating long-term
stockholder value.
The 2010 targets and performance against the primary and
additional goals are set forth below:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goal
|
Performance Goal
|
|
|
Target
|
|
|
Actual Performance
|
|
|
Achieved
|
2010 Adjusted Consolidated Operating Income
|
|
|
$555 million
|
|
|
$531 million
|
|
|
No
|
2010 Revenue
|
|
|
At least $4,581 million at budgeted exchange rates
|
|
|
$4,506 million
|
|
|
No
|
Inventory Reduction
|
|
|
Reduction of at least $25 million at budgeted exchange rates
|
|
|
Increase of $17
million
|
|
|
No
|
2010 Safety Result (TRIR)
|
|
|
1.04 or better for all currently wholly-owned facilities
|
|
|
0.97
|
|
|
Yes
|
|
|
|
|
|
|
|
|
|
|
As reflected in the table above, we achieved above threshold but
less than target for our primary performance goal and only
achieved one of the three additional performance goals set under
the Annual Incentive Plan. As we did not achieve our target
principal performance goal and only met one of the three
additional goals, the Compensation Committee determined that the
funded bonus pool should be set at 55% of the target for 2010.
The bonuses for the named executive officers were subject to
further discretionary adjustment based on business unit and
individual performance criteria, as discussed below.
In order to ensure that achievement represents the performance
of the core business, the
non-U.S. GAAP
adjusted consolidated operating income target and achievement
were derived from our U.S. GAAP operating profit by
adjusting for specific items approved by the Compensation
Committee, including restructuring and other related charges in
connection with our global manufacturing strategy and a European
manufacturing facility closure, acquisition related expenses,
restructuring credits and the impact of foreign currency
translation to reflect budgeted exchange rates rather than
actual exchange rates for 2010. The revenue and inventory
reduction target and achievements numbers above also reflect
approved adjustments to reflect budgeted exchange rates rather
than the actual exchange rates for foreign currency translations.
During the first quarter of 2011, the Compensation Committee
approved the following 2010 bonus awards under the Annual
Incentive Plan for the named executive officers:
ACTUAL 2010 BONUS
AWARDS
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Total 2010
|
|
|
Percentage
|
|
|
2010
|
|
|
|
|
|
|
Bonus Award
|
|
|
of
|
|
|
Cash Bonus
|
|
|
SLO Award
|
Name
|
|
|
($)
|
|
|
Target
|
|
|
($)
|
|
|
(Shares)1
|
Mr. Hickey
|
|
|
$
|
135,000
|
|
|
|
|
20
|
%
|
|
|
$
|
0
|
|
|
|
|
7,664
|
|
Mr. Kelsey
|
|
|
|
141,235
|
|
|
|
|
40
|
|
|
|
|
105,926
|
|
|
|
|
2,005
|
|
Mr. Baker
|
|
|
|
95,402
|
|
|
|
|
54.5
|
|
|
|
|
47,701
|
|
|
|
|
2,708
|
|
Mr. Deily
|
|
|
|
102,800
|
|
|
|
|
42.8
|
|
|
|
|
51,400
|
|
|
|
|
2,918
|
|
Mr. Deméautis
|
|
|
|
80,8172
|
|
|
|
|
43.6
|
|
|
|
|
80,817
|
|
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
These awards were granted in the form of restricted stock units.
|
|
|
2
|
Mr. Deméautis is compensated in euros. This amount
reflects an exchange rate of 1.32456 U.S. dollar to one euro.
|
In making the 2010 bonus determinations for the named executive
officers, the Compensation Committee, based on the advice of the
Chief Executive Officer, considered the overall compensation
allocation between senior management and other eligible
employees. The Compensation Committee, using their discretionary
authority under the Annual Incentive Plan, determined that
bonuses to be paid to named executive officers and other
officers should be further decreased from the percentage
applicable to the Company-wide annual target bonus pool since
such officers were entitled to receive other components of
compensation, including realized long-term awards from prior
years, not otherwise available to other employees. The
Compensation
33
Committee further considered the following factors for the
individual annual bonus awards for our named executive officers
for 2010:
|
|
|
The bonus award approved for Mr. Hickey, our Chief
Executive Officer, which was 20% of his target bonus, and bonus
award approved for Mr. Kelsey, our Chief Financial Officer,
which was 40% of his target bonus, were each based on the
Company not achieving the primary and most of the additional
performance goals discussed above and the overall financial
results of the Company.
|
|
|
The bonus awards for Mr. Baker, which was 54.5% of his
target bonus, Mr. Deily, which was 42.8% of his target
bonus and Mr. Deméautis, which was 43.6% of his target
bonus, were each based on the operating profits, revenues,
inventory and safety results of their respective business units,
as well as the Company not achieving the primary and most of the
additional performance goals discussed above.
|
2011 Performance Goals. The Compensation
Committee set metrics for the 2011 performance goals similar to
those for 2010, but reset the target levels consistent with the
Companys 2011 performance plan. Moreover, the Compensation
Committee determined that the bonus pool funding levels for
achievement of the primary performance goal for the
Companys officers, including the named executive officers,
would change to the following payout formula (with payments for
achievements between these levels based on a pro rata
calculation):
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
Bonus Pool
|
Percentage of Target Achieved
|
|
|
to be Funded*
|
<80
|
|
|
|
0
|
|
80
|
|
|
|
25
|
|
100
|
|
|
|
100
|
|
110
|
|
|
|
150
|
|
120 or more
|
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The Compensation Committee set the bonus pool funding at
different levels for employees that are not officers.
|
Long
Term Incentive Compensation
2010 Long Term Incentive Compensation
Awards. The executive compensation program
provides for annual awards of performance share units, or PSU
awards, under the 2005 Contingent Stock Plan to the named
executive officers and other executive officers and key
executives. The program is intended to align compensation
closely to our performance while giving the executive officers
the opportunity for exceptional value if performance targets are
exceeded and while continuing to encourage the retention of our
executive officers.
The PSU awards provide for three-year performance periods with a
targeted number of shares to be earned if performance during the
period meets goals set during the first 90 days of the
period. If performance is below defined threshold levels, then
no units will be earned, and if performance exceeds defined
maximum levels, then a maximum number of units (above the target
number) will be earned.
During the first quarter of 2010, the Compensation Committee
established three-year PSU award target levels for the
performance period starting January 1, 2010 for the named
executive officers.
The target award levels were based on a multiple of base salary
divided by the closing price of our common stock on the date the
awards were made, where the multiple of salary was set within
the median range for long-term incentive compensation as a
multiple of salary for executives with similar positions and
responsibilities. As noted previously, Mr. Hickeys
PSU target award levels were at the high end of the median range
for chief executive officers of peer companies in order to link
his total compensation more closely to our long-term performance
and to compensate for a salary at the lower end of the median
range.
The Compensation Committee established new principal goals for
the 2010 three-year PSU awards, which were three-year cumulative
volume growth of net trade sales and three-year average return
on invested capital. In 2008 and 2009, the Compensation
Committee had used cumulative adjusted operating income as a
principal metric for PSU awards, which was also the primary
metric used for the annual bonus
34
program in those years and in 2010. For 2010, the Compensation
Committee decided that using the same metric as the principal
goal for both the annual bonus program and the long-term
incentive program put too much emphasis on a single measure.
Also, the Compensation Committee recognized that sales growth
and the effective use of invested capital drive value for our
stockholders.
For the 2010 three-year PSU awards, the two principal
performance metrics, three-year cumulative volume growth of net
trade sales and three-year average return on invested capital,
are each weighted 50% and calculated separately based on the
targets set for each. The results of each metric will determine
the number of shares earned for that metric. The total award
will be the addition of the total number of shares earned for
each of the two performance metrics.
Three-year cumulative volume growth of net trade sales
includes only the volume component of growth of net trade
sales during the three-year performance period of 2010 through
2012 over base year 2009. The calculation will exclude other
components of growth of net sales, which are the effects of
product price/mix, acquisitions or dispositions and foreign
currency translation. The other components were excluded from
this metric because the intent was to provide incentives to grow
our current business and to measure performance on a constant
dollar basis and because, although important, the product
price/mix component will affect the other performance metric,
return on invested capital.
The three-year cumulative volume growth of net trade sales over
base year 2009 at threshold, target and maximum for the
performance period (fiscal years 2010, 2011 and 2012) are
as follows:
2010 THREE-YEAR
PSU:
VOLUME GROWTH PERFORMANCE GOAL
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Three-Year
|
|
|
Percentage of
|
|
|
|
Volume Growth over
|
|
|
Target Award
|
|
|
|
Base Year 2009
|
|
|
Earned
|
|
|
|
Under 3.75%
|
|
|
|
0%
|
|
Threshold:
|
|
|
3.75%
|
|
|
|
50%
|
|
Target:
|
|
|
7.50%8.00%
|
|
|
|
100%
|
|
Maximum:
|
|
|
11.25% and above
|
|
|
|
200%
|
|
|
|
|
|
|
|
|
|
|
Award levels based on three-year cumulative volume growth of net
trade sales between any two of these levels will be based on a
pro rata calculation of the number of shares earned.
The threshold, target and maximum levels for three-year
cumulative volume growth of net trade sales were based on a
review of our cumulative three-year volume growth (or decline)
during the period from 2003 through 2009 (or a total of five
three-year periods). The target range was set at a level
consistent with the range of the three highest three-year volume
growth rates during this period which were 7.8% for the three
years ending December 31, 2007, 7.7% for the three years
ending December 31, 2006 and 8.0% for the three years
ending December 31, 2005.
Three-year average return on invested capital (ROIC)
represents the three-year cumulative adjusted net operating
profit after core tax (NOPAT) during the performance period
divided by average invested capital for the three-year
performance period. The core tax represents the effective tax
rate after adjustment for permitted exclusions. Invested capital
equals: Total debt + (plus) settlement liability and related
accrued interest + (plus) total stockholders equity
− (less) accumulated other comprehensive
income(less) cash and cash equivalents. The three-year
average ROIC is calculated as follows:
Cumulative Adjusted
NOPAT for 2010 through 2012
Divided
by
Average Quarter End
Invested Capital from December 31, 2009 through
December 31, 2012
That result
divided by
35
Three (years)
The three-year average ROIC at threshold, target and maximum for
the performance period (fiscal years 2010, 2011 and 2012),
subject to permitted exclusions, are as follows:
2010 THREE-YEAR
PSU:
ROIC PERFORMANCE GOAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
Three-Year
|
|
|
Target Award
|
|
|
|
Average ROIC
|
|
|
Earned
|
|
|
|
Under 7.7%
|
|
|
|
0
|
%
|
Threshold:
|
|
|
7.7%
|
|
|
|
50
|
%
|
Target:
|
|
|
9.6%10.0%
|
|
|
|
100
|
%
|
Maximum:
|
|
|
11.5% and above
|
|
|
|
200
|
%
|
|
|
|
|
|
|
|
|
|
Award levels based on three-year average ROIC between any two of
these levels will be based on a pro rata calculation of the
number of shares earned.
The threshold, target and maximum levels for ROIC were set
following a review of historical levels of ROIC for us and for
those of our peer companies for which comparable data was
available.
In order to ensure that achievement represents the performance
of the core business, the calculation of ROIC will exclude the
effect of specified restructuring programs, the effects of
specified acquisitions and dispositions, charges related to
goodwill impairment, specified litigation-related costs,
expenses related to capital market transactions, and the effect
of any accounting changes implemented during the performance
period.
If the threshold level is achieved for either of the principal
goals, then the number of shares earned for each participant can
be increased (if the additional goal set forth below is
achieved) or decreased (if the additional goal set forth below
is not achieved) by up to 10% of the target level at the
discretion of the Compensation Committee. The additional goal is
a 2012 safety result (TRIR) of 1.20 or better, excluding
facilities acquired during the performance period.
The number of shares earned based on the two principal goals
and, if applicable, the additional goal will be rounded up to
the nearest whole share. The Compensation Committee has retained
the discretion in extraordinary circumstances to reduce downward
any award that would otherwise be payable.
2010 Grants of Restricted Stock. In addition
to the PSU awards described above, the Compensation Committee
may continue to make awards of restricted stock or restricted
stock units under the 2005 Contingent Stock Plan to executive
officers from time to time at the Compensation Committees
discretion. During 2010 the Compensation Committee made an award
of 10,000 shares of restricted stock under the 2005
Contingent Stock Plan to Mr. Baker in connection with his
assumption of responsibility for the Companys Asian
operations. This award qualified as performance-based
compensation under the Performance-Based Compensation Program
discussed below.
2011 Long Term Incentive Compensation
Awards. During the first quarter of 2011, the
Compensation Committee established three-year PSU award target
levels for the performance period starting January 1, 2011
for the named executive officers and other officers. Although
the performance metrics are the same as in 2010, the target
levels are increased reflecting a review of our historical
levels for these metrics, as well as consideration of the
Companys 2011 budget and future growth objectives. The
three year
36
cumulative volume growth of net trade sales over base year 2010
at threshold, target and maximum for the performance period
(fiscal years 2011, 2012 and 2013) are as follows:
2011 THREE-YEAR
PSU:
VOLUME GROWTH PERFORMANCE GOAL
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Three-Year
|
|
|
Percentage of
|
|
|
|
Volume Growth Over
|
|
|
Target Award
|
|
|
|
Base Year 2010
|
|
|
Earned
|
|
|
|
Under 7.7%
|
|
|
|
0
|
%
|
Threshold:
|
|
|
7.7%
|
|
|
|
50
|
%
|
Target:
|
|
|
14.9%16.6%
|
|
|
|
100
|
%
|
Maximum:
|
|
|
24.2% and above
|
|
|
|
200
|
%
|
|
|
|
|
|
|
|
|
|
The three-year average ROIC at threshold, target and maximum for
the performance period (fiscal years 2011, 2012 and 2013),
subject to permitted exclusions, are as follows:
2011 THREE-YEAR
PSU:
ROIC PERFORMANCE GOAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
Three-Year
|
|
|
Target Award
|
|
|
|
Average ROIC
|
|
|
Earned
|
|
|
|
Under 8.2%
|
|
|
|
0
|
%
|
Threshold:
|
|
|
8.2%
|
|
|
|
50
|
%
|
Target:
|
|
|
10.1%10.5%
|
|
|
|
100
|
%
|
Maximum:
|
|
|
12.4% and above
|
|
|
|
200
|
%
|
|
|
|
|
|
|
|
|
|
Savings,
Retirement and Health and Welfare Programs
Our named executive officers participate in the retirement
programs available generally to employees in the countries in
which they work because we believe that participation in these
programs and in the other health and welfare programs mentioned
below is an important part of a competitive compensation
package. In the United States, our named executive officers (all
except Mr. Deméautis) participate in two tax-qualified
defined contribution retirement plans, the Profit-Sharing Plan
of Sealed Air Corporation and the Sealed Air Corporation 401(k)
Thrift Plan.
Mr. Deily also participates in the Sealed Air Corporation
Restoration Plan for Cryovac Employees, a tax-qualified defined
benefit plan that covers the employees of our Cryovac operations
who participated in a defined benefit plan maintained by a
previous employer immediately prior to March 31, 1998. The
Restoration Plan for Cryovac Employees is described under
Pension Benefits in 2010 below. Mr. Deily
currently does not have any cumulative benefit under such plan.
We do not offer any non-qualified excess or supplemental benefit
plans or deferred compensation plans to our named executive
officers in the U.S.
Mr. Deméautis participates in the Sealed Air S.A.S.
Participation, a mandatory tax-favored profit-sharing
arrangement in which all employees of the Companys French
subsidiary Sealed Air S.A.S. participate. A statutory formula
determines the amount of the annual contribution and its
allocation among employees. Employer contributions are invested
in a fund managed by a bank independent of Sealed Air S.A.S.
Amounts allocated to each employee cannot be accessed during
employment (with limited exceptions) for five years after they
are contributed.
37
Mr. Deméautis also is eligible for a retirement
indemnity benefit that is provided to all management employees
of Sealed Air S.A.S. under the applicable collective bargaining
agreement. This benefit is described under Pension
Benefits in 2010 below.
All of our named executive officers participate in the health,
life insurance, disability benefits and other welfare programs
that are provided generally to employees in the countries in
which they work.
Perquisites
and Other Personal Benefits
Consistent with our performance-oriented environment, during
2010 the only perquisite we provided to our named executive
officers was the personal use of a Company-leased vehicle.
Employees in the United States who have a Company-leased vehicle
are permitted to purchase the vehicle at the end of the lease
term or upon retirement, if earlier, at a discount from the fair
market value of the vehicle. The only named executive officer
who purchased a vehicle under this program in 2010 was
Mr. Kelsey. Employees who leave for any other reason are
not generally eligible for this discount.
Employment,
Severance and Change in Control Arrangements
Employment and Severance Arrangements. We do
not generally enter into employment agreements or severance
programs covering executive officers or other employees except
in countries outside the U.S. where such agreements or
programs are customary. However, in recent years, most exempt
employees in the U.S. have been required to enter into a
Non-Compete and Confidentiality Agreement with the Company at
the time of hire. The Non-Compete and Confidentiality Agreement
addresses the confidentiality of proprietary Company information
and disclosure and assignment of inventions to the Company and
includes a two-year post-employment non-compete obligation by
the employee with payment to the employee of one to two
months salary as severance pay if his or her employment is
terminated by the Company other than for gross misconduct.
Mr. Kelsey signed a Non-Compete and Confidentiality
Agreement when he was hired.
The collective bargaining agreement that covers
Mr. Deméautis and other management employees in France
provides for a termination indemnity benefit to be paid to
Mr. Deméautis upon the termination of his employment
by the Company other than for gross misconduct.
Except for the arrangements described above, none of the named
executive officers has an agreement or arrangement providing for
severance payments following termination of employment.
Change in Control Arrangements. Our only
change in control arrangements are those in connection with our
equity compensation awards. Prior to May 2008, the 2005
Contingent Stock Plan contained a change in control provision
that provided that restricted stock or restricted stock unit
awards made under the plan would vest upon a change in control
event as defined in the plan. This provision continues to apply
to unvested awards made prior to May 2008. Effective in May
2008, the 2005 Contingent Stock Plan was amended to provide that
restricted stock or restricted stock unit awards made under the
plan vest upon termination of employment within two years
following a change in control as defined in the plan if such
termination is by the Company without cause or by the
participant for good reason (as such terms are defined in the
plan). The amendment was made to avoid automatic triggering of
the change in control provision merely due to the occurrence of
a change in control event even if there were no adverse effect
on the employment of executives and other employees holding
unvested awards. These provisions also apply to SLO awards,
which are made in the form of restricted stock or restricted
stock unit awards.
The 2005 Contingent Stock Plan provides that a participant earns
a pro rata portion of a PSU award if the participants
employment is terminated by the Company without cause or by the
participant for good reason within two years following a change
in control. The earned amount is the greater of the target award
level or the actual level of achievement as of the fiscal
quarter preceding the change in control, and the pro rata
portion is the percentage of the performance period that has
elapsed prior to termination of employment.
38
Executive
Officer Stock Ownership Guidelines
In order to align the interests of directors, executive officers
and stockholders, we believe that our directors and executive
officers should have a significant financial stake in the
Company. To further that goal, we adopted stock ownership
guidelines during 2006 for directors and for executive officers
and other key executives. The stock ownership guidelines for
non-employee directors, which are part of our Corporate
Governance Guidelines, are described above under Director
CompensationDirector Stock Ownership Guidelines. The
guidelines for our executive officers are as follows:
|
|
|
Executive officers are required to hold a multiple of their
salary, where the multiple ranges from five for the Chief
Executive Officer, to three for the Senior Vice Presidents and
two for the other executive officers.
|
|
|
Share equivalents held in the Profit-Sharing Plan and the 401(k)
Thrift Plan are included, but unvested awards under the 2005
Contingent Stock Plan are excluded. Executive officers have five
years from the later of the adoption of the stock ownership
guidelines or their appointment as executive officers to reach
the guidelines.
|
|
|
Until the minimum stock ownership has been reached, executive
officers are expected to retain all shares received as awards
under the Companys equity compensation programs after
payment of applicable taxes.
|
|
|
Once the minimum stock ownership has been reached, executive
officers are expected to retain half of any additional shares
received as awards under our equity compensation programs (after
payment of applicable taxes) until retirement.
|
|
|
The Compensation Committee can approve exceptions to the stock
ownership guidelines for executive officers in the event of home
purchase, higher education expenses, major illness, gifts or
financial hardship.
|
As of March 21, 2011, all of our named executive officers
have met these guidelines.
Compliance
with Section 162(m) of the Internal Revenue Code;
Performance-Based Compensation Program
The Performance-Based Compensation Program of Sealed Air
Corporation (the Program) was approved by our
stockholders at the 2005 annual meeting with amendments approved
by our stockholders at the 2008 annual meeting. The objective of
the Program is to permit the Compensation Committee to make
awards of restricted stock and restricted stock units under our
2005 Contingent Stock Plan and to approve cash bonuses under our
cash bonus arrangements that are subject to the attainment of
pre-established objective performance goals that meet the
requirements of Section 162(m) of the Internal Revenue Code
and are thus fully deductible as performance-based compensation
even if compensation exceeds the $1 million limit of
Section 162(m). Under the current executive compensation
program, the Compensation Committee intends to rely on the
Program for deductibility of annual cash bonuses and SLO awards,
as well as for any other grants of restricted stock or
restricted stock units that may be awarded to participating
executive officers. However, long-term incentive compensation
awards are intended to be made primarily in the form of PSU
awards under the 2005 Contingent Stock Plan, which awards once
earned are intended to qualify as performance-based compensation
under the provisions of the 2005 Contingent Stock Plan rather
than under the Program.
2010 Performance-Based Compensation Program Goals and
Achievements. During the first ninety days of
2010, the Compensation Committee approved pre-established
performance goals for 2010 cash bonuses that would be paid in
2011 to the named executive officers and several other
executives, for SLO awards to be made in connection with 2010
bonuses, and for stock awards that the Compensation Committee
may make in 2011 under the 2005 Contingent Stock Plan to the
same group of officers and executives. The goals and the
achievement levels required to allow the Compensation Committee
to approve bonuses and awards up to the limit provided in the
Program were as follows:
|
|
|
2010 diluted earnings per share (adjusted as described below) of
at least $1.60 per share;
|
39
|
|
|
2010 operating expenses (as adjusted) at budgeted exchange rates
(including selling, general, administrative and research and
development expenses but excluding goodwill impairment charges)
less than or equal to $752 million;
|
|
|
2010 net operating profit after tax (as adjusted) of at
least $419 million;
|
|
|
2010 net income (as adjusted) above $260 million;
|
|
|
2010 operating profit (as adjusted) as a percentage of
2010 net sales at least 12%; or
|
|
|
2010 gross profit (as adjusted) as a percentage of
2010 net sales at least 29%.
|
Based on criteria established at the beginning of the
performance period, the Compensation Committee adjusted the
results on which performance achievements were based to
eliminate the effects of specified items. The adjustments were
intended to ensure that achievements represented the underlying
performance of the core business. The categories of adjustments
that were approved by the Compensation Committee related to loss
on debt redemption, restructuring and other related charges in
connection with our global manufacturing strategy and a European
manufacturing facility closure, acquisition related expenses,
restructuring credits, gains on sale of
available-for-sale
securities, foreign currency exchange gains related to our
Venezuelan subsidiary, the related tax adjustments for each of
such items and the impact of foreign currency translation to
reflect budgeted exchange rates rather than actual exchange
rates for 2010.
During the first quarter of 2011, the Compensation Committee
certified achievement of four of the goals that had been
established for calendar year 2010. This permitted us to pay
fully tax-deductible 2010 cash bonuses of up to
$2.6 million to each of the participating executives and to
make fully tax-deductible SLO awards and other stock awards
under the 2005 Contingent Stock Plan during 2011 in the
aggregate amount of up to approximately 318,404 shares to
each of the participating executives. The Compensation Committee
has the discretion to approve cash bonuses, SLO awards and other
stock awards lower than these maximum levels, including the
possibility of paying no 2010 cash bonuses and making no SLO or
other stock awards to some or all of the executives during 2011.
Since the objective of the Program is to ensure that these 2010
cash bonuses and stock awards are performance-based and thus
tax-deductible, the amounts of 2010 cash bonuses and SLO awards
were established at lower levels based on the processes and
criteria discussed previously under Annual Incentive
Compensation.
The Compensation Committee currently intends that its future
awards of annual and long-term incentive compensation for our
executive officers will qualify as performance-based
compensation under Section 162(m) and thus will be fully
tax-deductible by the Company, although exceptions may be made
in special circumstances such as appointment or recruitment of
an executive officer or as a result of a business combination or
acquisition.
Recoupment
Policy
In early 2008, the Compensation Committee adopted a policy
requiring each executive officer to reimburse the Company for
all or a portion of any annual or long-term incentive
compensation paid to the executive officer based on achievement
of financial results that were subsequently the subject of a
substantial restatement when, in the view of the Companys
Board of Directors, the officer engaged in fraud or misconduct,
or recklessly or negligently failed to prevent the fraud or
misconduct, that caused or significantly contributed to the need
for the restatement and where no payment or award or a lower
payment or award would have been made to the officer based on
the restated results.
In early 2010, the Compensation Committee amended the policy to
require each executive officer to reimburse the Company for all
or a portion of any annual or long-term incentive compensation
paid to the executive officer based on achievement of financial
results that were subsequently the subject of a restatement due
to error or misconduct regardless of whether the executive
officer was responsible for the error or misconduct so long as
no payment or award or a lower payment or award would have been
made to the officer based on the restated results. The Board of
Directors will make the determination whether to
40
seek recovery. The Recoupment Policy is part of our overall risk
management practices to ensure that compensation programs do not
encourage manipulation of financial results.
In addition, the policy provides that our Chief Executive
Officer and Chief Financial Officer shall reimburse the Company
for any compensation or profits from the sale of securities
under Section 304 of the Sarbanes-Oxley Act of 2002. The
policy has been incorporated into SLO and PSU award documents.
Timing
of Award Grants
Starting with the implementation of the current executive
compensation programs in early 2008, PSU awards to be made to
the Companys executive officers under the Companys
2005 Contingent Stock Plan are made during the first
90 days of each year, either at the regularly-scheduled
meeting of the Compensation Committee held in February of each
year or at a special meeting held later but during the first
90 days of the year. In addition, starting in 2009 in
connection with 2008 bonuses, SLO awards are made effective on a
date set by the Compensation Committee in advance but no later
than March 15 to those executive officers who have elected to
receive a portion of their annual bonus as an SLO award. The
date is selected based on when the Compensation Committee
expects that all bonuses will be determined and to allow our
staff sufficient time to assist executive officers to make
required SEC filings for the SLO awards on a timely basis.
To the extent that other awards of restricted stock or
restricted stock units may be made to executive officers, they
are generally made at one of the regularly-scheduled meetings of
the Compensation Committee. Awards are generally effective on
the date of the meeting at which they were approved. However,
when an award is to be made to an executive officer who is
traveling or otherwise not available to make the required filing
regarding such award with the SEC on a timely basis, then at the
meeting the award is given an effective date after the date of
the meeting so that the filing can be made on a timely basis.
Dates for Compensation Committee meetings are usually set during
the prior year, and the timing of meetings and awards is
unrelated to the release of material non-public information.
Compensation
Risks
We believe that risks arising from our compensation policies and
practices for our employees are not reasonably likely to have a
material adverse effect on the Company. In 2010 and again in
early 2011, at the request of the Compensation Committee and
with the assistance of Cook, we evaluated our incentive
compensation plans relative to our enterprise risks and
determined that there were no significant changes to the
compensation risks identified below. We determined, taking into
account advice from Cook, that there were no significant risk
areas from a compensation risk perspective.
With respect to our executive compensation programs, a number of
risk mitigation features are in place, including the following:
|
|
|
The primary metric for the Annual Incentive Plan focuses on
profits (adjusted operating income), and the Compensation
Committee has discretion to adjust bonus pool funding and
individual award payouts.
|
|
|
The principal long-term incentive program for executives is 100%
PSU awards that vest based on achievement of financial goals. No
stock options are used.
|
|
|
The Compensation Committee has discretion in extraordinary
circumstances to reduce long-term incentive (PSU) awards below
the amount otherwise earned.
|
|
|
Pay leverage is reasonable and generally does not exceed 200% of
target.
|
|
|
The Recoupment Policy that applies to executive officers and
other key executives discourages excessive risk taking and
manipulation of financial results.
|
|
|
Our stock ownership guidelines require executives to hold at
least a portion of vested equity awards during employment, thus
discouraging excessive risk taking.
|
41
|
|
|
Starting in early 2010, different metrics are being used for
annual and long-term incentive plans for executives, thus not
placing too much emphasis on a single metric.
|
Compensation
Committee Report
The Organization and Compensation Committee has reviewed and
discussed the Compensation Discussion and Analysis with
management. Based on its review and discussions with management,
the members of the Committee recommended to our Board of
Directors that the Compensation Discussion and Analysis be
included in the Companys 2011 Proxy Statement and
incorporated by reference into the Companys Annual Report
on
Form 10-K
for 2010.
Organization and Compensation
Committee
Charles F. Farrell, Jr., Chair
Michael Chu
Lawrence R. Codey
Jacqueline B. Kosecoff
William J. Marino
Summary
Compensation Table
The following table includes information concerning 2010
compensation for our Chief Executive Officer, Chief Financial
Officer and our three other most highly compensated executive
officers during 2010 who served as such at the end of the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
Name and
|
|
|
|
|
|
Salary
|
|
|
Awards1
|
|
|
Compensation2
|
|
|
Earnings
|
|
|
Compensation3
|
|
|
Total
|
Principal Position
|
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
William V. Hickey
|
|
|
|
2010
|
|
|
|
$
|
670,833
|
|
|
|
$
|
4,218,763
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
50,486
|
|
|
|
$
|
4,940,082
|
|
President and
|
|
|
|
2009
|
|
|
|
|
650,000
|
|
|
|
|
6,812,506
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
50,064
|
|
|
|
|
7,512,570
|
|
Chief Executive Officer
|
|
|
|
2008
|
|
|
|
|
637,500
|
|
|
|
|
7,189,318
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
44,748
|
|
|
|
|
7,871,566
|
|
David H. Kelsey
|
|
|
|
2010
|
|
|
|
|
462,500
|
|
|
|
|
922,755
|
|
|
|
|
105,926
|
|
|
|
|
0
|
|
|
|
|
51,774
|
|
|
|
|
1,542,955
|
|
Senior Vice President
|
|
|
|
2009
|
|
|
|
|
450,000
|
|
|
|
|
1,456,461
|
|
|
|
|
270,844
|
|
|
|
|
0
|
|
|
|
|
44,409
|
|
|
|
|
2,221,714
|
|
and Chief Financial Officer
|
|
|
|
2008
|
|
|
|
|
441,667
|
|
|
|
|
1,969,053
|
|
|
|
|
37,969
|
|
|
|
|
0
|
|
|
|
|
41,440
|
|
|
|
|
2,490,129
|
|
Jonathan B. Baker
|
|
|
|
2010
|
|
|
|
|
343,750
|
|
|
|
|
768,212
|
|
|
|
|
47,701
|
|
|
|
|
0
|
|
|
|
|
45,202
|
|
|
|
|
1,204,865
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Karl R. Deily
|
|
|
|
2010
|
|
|
|
|
350,000
|
|
|
|
|
654,001
|
|
|
|
|
51,400
|
|
|
|
|
0
|
5
|
|
|
|
40,113
|
|
|
|
|
1,095,514
|
|
Vice President
|
|
|
|
2009
|
|
|
|
|
300,000
|
|
|
|
|
1,406,700
|
|
|
|
|
162,000
|
|
|
|
|
0
|
5
|
|
|
|
39,548
|
|
|
|
|
1,908,248
|
|
Jean-Marie
Deméautis4
|
|
|
|
2010
|
|
|
|
|
387,742
|
|
|
|
|
525,925
|
|
|
|
|
80,817
|
|
|
|
|
9,377
|
5
|
|
|
|
25,316
|
|
|
|
|
1,029,177
|
|
Vice President
|
|
|
|
2009
|
|
|
|
|
394,701
|
|
|
|
|
1,022,808
|
|
|
|
|
155,615
|
|
|
|
|
13,405
|
|
|
|
|
27,590
|
|
|
|
|
1,614,119
|
|
|
|
|
|
2008
|
|
|
|
|
415,890
|
|
|
|
|
730,856
|
|
|
|
|
51,502
|
|
|
|
|
153,876
|
|
|
|
|
25,980
|
|
|
|
|
1,378,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The Stock Awards column shows the value of equity awards granted
during the year indicated. The amounts do not correspond to the
actual amounts that may be earned by the named executive
officers. Equity awards include awards of restricted stock (RS)
under the 2005 Contingent Stock Plan during the year. Equity
awards also include SLO awards under the Annual Incentive Plan
and PSU awards granted during the year. RS awards are valued at
the grant date fair value computed in accordance with FASB ASC
Topic 718. SLO awards are valued at the fair value at the
service inception date based on the percentage of the target
bonus to be paid as an SLO award, increased by the 25% premium,
using the closing price of our common stock on the first trading
day of the calendar year, where the service inception date is
the beginning of the calendar year. PSU awards are valued based
on the grant date fair value, which is the date on which the PSU
award was granted by the Compensation Committee. In valuing the
SLO awards and PSU awards, we assumed the probable achievement
of the target levels for the primary performance goals. Pursuant
to SEC rules, the amounts shown exclude the impact of estimated
forfeitures. For additional assumptions made in valuing these
awards and other information, see Note 17,
Stockholders Equity, of Notes to our
consolidated financial statements included in our Annual Report
on
Form 10-K
for the fiscal year ended December 31, 2010. The values of
the PSU awards made in 2010 as of the grant date
|
42
|
|
|
|
|
assuming that the highest level of
performance conditions would be achieved, resulting in an award
equal to 200% of the target, are as follows:
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
PSU Award
|
Mr. Hickey
|
|
|
$
|
6,750,002
|
|
Mr. Kelsey
|
|
|
|
1,627,512
|
|
Mr. Baker
|
|
|
|
891,034
|
|
Mr. Deily
|
|
|
|
1,008,002
|
|
Mr. Deméautis
|
|
|
|
1,051,850
|
|
|
|
|
|
|
|
These values do not include the potential 10% increase that
could be earned if the additional performance goals are
achieved; see Compensation Discussion and
Analysis2010 Long Term Incentive Compensation
Awards. Also, the values shown for Mr. Hickeys
PSU awards do not reflect the cap on the number of shares of
common stock that could be issued of two-tenths of 1% (0.2%) of
the issued and outstanding shares of common stock on January 1
of the year of issuance as described in Note 3 to the
Grants of Plan-Based Awards in 2010 table below. See the Grants
of Plan-Based Awards in 2010 and the Outstanding Equity Awards
at 2010 Fiscal Year-End tables below for additional information
on awards made in 2010, as well as information on awards made in
2008 and 2009. For purposes of illustration, in 2011, the
maximum number of shares that could be issued to a participant
with respect to a performance share unit award would be
approximately 318,404 shares.
|
|
|
|
2
|
The amounts in the Non-Equity Incentive Compensation column for
2010 reflect the cash portion of annual bonuses paid to the
named executive officers for 2010. All named executive officers
except Mr. Deméautis also received SLO awards as all
or part of their annual bonuses for 2010. The values of the SLO
award portion of annual bonuses are included in the Stock Awards
column. For further discussion regarding annual bonus awards in
2010, see Compensation Discussion and Analysis2010
Cash Bonus and Stock Leverage Opportunity (SLO) Program
above.
|
|
|
3
|
The amounts shown in the All Other Compensation column for 2010
are attributable to the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Hickey
|
|
|
Mr. Kelsey
|
|
|
Mr. Baker
|
|
|
Mr. Deily
|
|
|
Mr. Deméautis
|
Personal use of Company-leased car*
|
|
|
$
|
23,311
|
|
|
|
$
|
20,369
|
|
|
|
$
|
18,142
|
|
|
|
$
|
13,775
|
|
|
|
$
|
22,491
|
|
Company contribution to Profit-Sharing Plan
|
|
|
|
19,600
|
|
|
|
|
19,600
|
|
|
|
|
19,600
|
|
|
|
|
19,600
|
|
|
|
|
|
|
Company matching contributions to 401(k) Thrift Plan
|
|
|
|
7,350
|
|
|
|
|
7,661
|
|
|
|
|
7,460
|
|
|
|
|
6,738
|
|
|
|
|
|
|
Company contribution to Sealed Air S.A.S. Participation for 2009
(made in 2010)**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,825
|
|
Discount on purchase of Company-leased car
|
|
|
|
|
|
|
|
|
4,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health club reimbursement
|
|
|
|
225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
50,486
|
|
|
|
$
|
51,774
|
|
|
|
$
|
45,202
|
|
|
|
$
|
40,113
|
|
|
|
$
|
25,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The amounts shown for the cost to the Company for each of the
Company-leased cars include the costs of the lease, maintenance,
fuel and insurance coverage.
|
|
|
|
|
**
|
Since Mr. Deméautis is an employee of one of the
Companys French subsidiaries, he does not participate in
the U.S. Profit-Sharing Plan or the 401(k) Thrift Plan but does
participate in the Sealed Air S.A.S. Participation, which is
described under Compensation Discussion and
AnalysisSavings, Retirement and Health and Welfare
Programs above.
|
|
|
|
|
4
|
For Mr. Deméautis, all amounts in the Summary
Compensation Table other than the amounts in the Stock Award
column, as well as all dollar amounts of compensation noted
elsewhere in this proxy statement for Mr. Deméautis,
except for the value of shares of common stock and equity
awards, represent data converted from euros. For 2010,
compensation was converted at the average exchange rate during
2010 of 1.32456 dollars per euro. For 2009, compensation was
converted at the average exchange rate during 2009 of 1.38942
dollars per euro. For 2008, compensation was converted at the
average exchange rate during 2008 of 1.47124 dollars per euro.
|
|
|
5
|
Mr. Deméautis is the only named executive officer with
a pension benefit. The actuarial present value of his
accumulated benefit at December 31, 2010 was 7,079 euros
(or $9,377) higher than the actuarial present value of his
accumulated benefit at December 31, 2009. Although
Mr. Deily participates in a defined benefit pension plan,
he did not have an accumulated benefit under that plan at
December 31, 2010 or December 31, 2009. See
Pension Benefits in 2010 below for further
information.
|
43
Grants
of Plan-Based Awards in 2010
The following table sets forth additional information concerning
stock awards granted during 2010 under the 2005 Contingent Stock
Plan and the cash and SLO portions of the annual bonus targets
for 2010 performance under the Companys Annual Incentive
Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Possible
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payouts Under
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
Estimated Future Payouts Under
|
|
|
Number of
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards2
|
|
|
Equity Incentive Plan
Awards3
|
|
|
Shares of
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
Date of
|
|
|
|
|
|
|
|
|
Common
|
|
|
of Stock
|
|
|
|
Type of
|
|
|
Grant
|
|
|
Committee
|
|
|
Target
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Stock4
|
|
|
Awards5
|
Name
|
|
|
Award1
|
|
|
Date
|
|
|
Action
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
Mr. Hickey
|
|
|
10SLO
|
|
|
|
2/18/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
843,762
|
|
|
|
|
PSU
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,819
|
|
|
|
|
161,638
|
|
|
|
|
323,276
|
|
|
|
|
|
|
|
|
|
3,375,001
|
|
Mr. Kelsey
|
|
|
Cash
|
|
|
|
2/18/2010
|
|
|
|
|
|
|
|
|
$
|
261,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10SLO
|
|
|
|
2/18/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,999
|
|
|
|
|
PSU
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,486
|
|
|
|
|
38,973
|
|
|
|
|
77,946
|
|
|
|
|
|
|
|
|
|
813,756
|
|
Mr. Baker
|
|
|
Cash
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
87,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10SLO
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109,395
|
|
|
|
|
PSU
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,668
|
|
|
|
|
21,337
|
|
|
|
|
42,674
|
|
|
|
|
|
|
|
|
|
445,517
|
|
|
|
|
RS
|
|
|
|
4/1/2010
|
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
213,300
|
|
Mr. Deily
|
|
|
Cash
|
|
|
|
2/18/2010
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10SLO
|
|
|
|
2/18/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
PSU
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,069
|
|
|
|
|
24,138
|
|
|
|
|
48,276
|
|
|
|
|
|
|
|
|
|
504,001
|
|
Mr. Deméautis
|
|
|
Cash
|
|
|
|
2/18/2010
|
|
|
|
|
|
|
|
|
|
185,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,594
|
|
|
|
|
25,188
|
|
|
|
|
50,376
|
|
|
|
|
|
|
|
|
|
525,925
|
|
|
Cash = cash portion of 2010 annual bonus
10SLO = SLO award portion of 2010 annual bonus
PSU = three-year PSU award for the performance period beginning
January 1, 2010
RS = restricted stock award
|
|
|
|
2
|
This column shows the target awards established in early 2010
for the cash portion of 2010 annual bonuses for each of the
named executive officers under the Companys Annual
Incentive Plan. While the overall funded bonus pool has a 50% of
target threshold level and a 200% of target maximum funding
limit, individual bonus awards can vary as long as the total of
all bonus awards is within the overall funded pool. Actual
payouts for 2010 are shown in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table.
|
|
|
3
|
These columns show target awards established in early 2010 for
the SLO portion of 2010 annual bonuses for each of the named
executive officers under the Companys Annual Incentive
Plan, as well as the threshold, target and maximum awards for
PSU awards for the performance period beginning January 1,
2010 for each of the named executive officers under the 2005
Contingent Stock Plan. The threshold number of shares for PSU
awards is 50% of the target number of shares, and the maximum
number of shares for such awards is 200% of the target number of
shares. The maximum awards shown for the PSU awards do not
include the potential 10% increase that could be earned if the
additional performance goal is achieved; see Compensation
Discussion and Analysis2010 Long Term Incentive
Compensation Awards. The maximum number of shares that can
be issued to any participant in any calendar year with respect
to a PSU award is two-tenths of 1% (0.2%) of the outstanding
shares on January 1 of that calendar year. That restriction may
limit the maximum number of shares that can be issued to
Mr. Hickey on account of the PSU award shown in the table.
For purposes of illustration, in 2011, the maximum number of
shares that could be issued to a participant with respect to a
performance share unit award would be approximately
318,404 shares. Shares, to the extent earned, will be
issued in 2013 for the PSU awards.
|
|
|
4
|
This column shows the numbers of shares of restricted stock
awarded to each of the named executive officers on the grant
date in 2010 shown in the Grant Date column. All awards were
made under the 2005 Contingent Stock Plan.
|
|
|
5
|
This column shows the fair value on the grant date or service
inception date of the equity awards shown in the table computed
in accordance with FASB ASC Topic 718. The grant date fair value
of the restricted stock awards was based on the number of shares
awarded valued at the closing price of the Companys common
stock on the grant date. The fair value on the service inception
date of 10SLO awards was based on the percentage of the target
bonus to be paid as an SLO award, increased by the 25% premium,
using the closing price of the Companys common stock on
January 4, 2010 of $22.02. The grant date fair value date
of the PSU awards was based on the target award amounts valued
at the closing price of the Companys common stock on
March 8, 2010 of $20.88. The value of dividends was
factored into the grant date fair value or the service inception
date fair value for these awards. The amounts shown exclude the
impact of estimated forfeitures.
|
44
Description
of Annual and Long Term Incentive Awards in the Summary
Compensation Table and the Grants of Plan-Based Awards in 2010
Table
Annual Incentive Plan: Cash Bonuses and SLO
Awards. Each of the named executive officers has
a target bonus that is established by the Compensation Committee
during the first quarter of the year. Also, each of the named
executive officers has the opportunity at a time determined by
the Compensation Committee (usually prior to the start of the
performance year) to designate a portion of his annual bonus to
be received as an equity award under the 2005 Contingent Stock
Plan, called a stock leverage opportunity (SLO) award. The
portion to be denominated as SLO awards, in increments of 25% of
the annual bonus, may be given a premium to be determined by the
Compensation Committee each year. The stock price used to
calculate the number of shares that can be earned is the closing
price on the first trading day of the performance year, thereby
reflecting stock price changes during the performance year in
the value of the SLO award.
Once the amount of the annual bonus that has been earned has
been determined for each named executive officer following the
end of the year, the cash portion is paid out shortly
thereafter, and the SLO award is provided in the form of an
award of restricted stock or restricted stock units under the
2005 Contingent Stock Plan that vest on the second anniversary
of the grant date, or earlier in the event of death, disability
or retirement from employment with the Company. The shares
subject to the award are not transferable by the recipient until
the earlier of vesting or the second anniversary of the grant
date. The award is granted on a date determined by the
Compensation Committee, but no later than the March 15 following
the end of the performance year. Retirement for the purpose of
SLO awards and the PSU awards described below means termination
of employment after five or more years of employment and with
years of employment plus age equal to 70 or more, except
termination for cause. If the recipient ceases to be employed by
the Company prior to vesting, then the shares are forfeited,
except for certain circumstances following a change in control.
Each SLO award is made in the form of restricted stock unless
the award would be taxable to the recipient prior to the shares
becoming transferable by the recipient, in which case the SLO
award is made in the form of restricted stock units. Recipients
who hold SLO awards in the form of restricted stock receive
dividends and have the right to vote the shares of restricted
stock. Recipients who hold SLO awards in the form of restricted
stock units have no voting rights until shares are issued to
them but do receive a cash payment in the amount of the
dividends (without interest) on the shares they have earned at
about the same time that shares are issued to them following the
period of restriction.
Performance Share Unit Awards. PSU awards,
which are awarded under the 2005 Contingent Stock Plan, provide
for a minimum two-year performance period with a targeted number
of shares to be earned if performance during the period meets
goals set by the Compensation Committee during the first
90 days of the period. If performance is below defined
threshold levels, then no units will be earned, and if
performance exceeds defined maximum levels, then a maximum
number of units (above the target number) will be earned. PSU
awards are not transferable by the participant until the end of
the performance period and certification by the Compensation
Committee with respect to each performance measure used for the
award. If a participant terminates employment during the
performance period due to death, disability or retirement, then
the participant (or his or her estate) will receive a pro rata
payout following the end of the performance period based on the
portion of the performance period during which the participant
was employed and based on the number of units that would have
been earned by the participant if he or she had remained
employed for the entire performance period prior to applying the
pro rata factor. If the participant leaves employment during the
performance period for any other reason, then the units are
forfeited, except for certain circumstances following a change
in control. At about the same time that shares are issued to
participants following the performance period, participants also
receive a cash payment in the amount of the dividends (without
interest) that would have been paid during the performance
period on the number of shares that they have earned. Holders of
PSU awards have no voting rights as stockholders until shares of
common stock are issued after the end of the performance period.
Restricted Stock and Restricted Stock
Units. Awards of restricted stock and restricted
stock units are made under the 2005 Contingent Stock Plan, which
provides for a vesting period of at least three years after the
grant date. Awards vest earlier in the event of the
participants death or disability. If a participant
45
terminates employment prior to vesting, then the award of
restricted stock or restricted stock units is forfeited, except
for certain circumstances following a change in control. Within
90 days following the date of termination, the Compensation
Committee can waive the forfeiture of all or a portion of an
award. During the vesting period, holders of unvested shares of
restricted stock (but not holders of unvested shares of
restricted stock units) are entitled to receive dividends on the
same basis as dividends are paid to other stockholders and are
entitled to vote the unvested shares.
Outstanding
Equity Awards at 2010 Fiscal Year-End
The following table shows unvested outstanding stock awards
under the 2005 Contingent Stock Plan for the named executive
officers as of December 31, 2010. All market or payout
values in the table are based on the closing price of common
stock on December 31, 2010 of $25.45 per share. The amounts
shown in the table for PSU awards made in 2009 represent the
numbers of shares that would be earned if the maximum level of
the principal goal for each 2009 PSU award was met, and the
amounts shown for the PSU awards made in 2010 represent the
number of shares that would be earned if the target levels of
the principal goals for each 2010 PSU award were met, as we
considered those levels of achievement to be probable at the end
of 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
Award: Market
|
|
|
|
|
|
|
|
|
Awards: Number
|
|
or Payout Value
|
|
|
|
|
Number of
|
|
Market Value of
|
|
of Unearned
|
|
of Unearned
|
|
|
|
|
Shares or Units of
|
|
Shares or Units of
|
|
Shares, Units or
|
|
Shares, Units or
|
|
|
|
|
Common Stock
|
|
Common Stock
|
|
Other Rights
|
|
Other Rights
|
|
|
|
|
That Have Not
|
|
That Have Not
|
|
That Have Not
|
|
That Have Not
|
|
|
Type of
|
|
Vested1
|
|
Vested1
|
|
Vested2
|
|
Vested3
|
Name
|
|
Award
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
Mr. Hickey
|
|
RS
|
|
|
64,000
|
|
|
|
1,628,800
|
|
|
|
|
|
|
|
|
|
|
|
09SLO
|
|
|
57,009
|
|
|
|
1,450,879
|
|
|
|
|
|
|
|
|
|
|
|
10SLO
|
|
|
7,664
|
|
|
|
195,049
|
|
|
|
|
|
|
|
|
|
|
|
09PSU3
|
|
|
|
|
|
|
|
|
|
|
436,364
|
|
|
|
11,105,464
|
|
|
|
10PSU3
|
|
|
|
|
|
|
|
|
|
|
161,638
|
|
|
|
4,113,687
|
|
Mr. Kelsey
|
|
RS
|
|
|
4,000
|
|
|
|
101,800
|
|
|
|
|
|
|
|
|
|
|
|
08SLO
|
|
|
694
|
|
|
|
17,662
|
|
|
|
|
|
|
|
|
|
|
|
09SLO
|
|
|
7,401
|
|
|
|
188,355
|
|
|
|
|
|
|
|
|
|
|
|
10SLO
|
|
|
2,005
|
|
|
|
51,027
|
|
|
|
|
|
|
|
|
|
|
|
09PSU3
|
|
|
|
|
|
|
|
|
|
|
98,254
|
|
|
|
2,500,564
|
|
|
|
10PSU3
|
|
|
|
|
|
|
|
|
|
|
38,973
|
|
|
|
991,862
|
|
Mr. Baker
|
|
RS
|
|
|
10,000
|
|
|
|
254,500
|
|
|
|
|
|
|
|
|
|
|
|
08SLO
|
|
|
275
|
|
|
|
6,999
|
|
|
|
|
|
|
|
|
|
|
|
09SLO
|
|
|
5,033
|
|
|
|
128,090
|
|
|
|
|
|
|
|
|
|
|
|
10SLO
|
|
|
2,708
|
|
|
|
68,919
|
|
|
|
|
|
|
|
|
|
|
|
09PSU3
|
|
|
|
|
|
|
|
|
|
|
58,690
|
|
|
|
1,493,660
|
|
|
|
10PSU3
|
|
|
|
|
|
|
|
|
|
|
21,337
|
|
|
|
543,026
|
|
Mr. Deily
|
|
RS
|
|
|
4,000
|
|
|
|
101,800
|
|
|
|
|
|
|
|
|
|
|
|
RS
|
|
|
32,000
|
|
|
|
814,400
|
|
|
|
|
|
|
|
|
|
|
|
08SLO
|
|
|
549
|
|
|
|
13,972
|
|
|
|
|
|
|
|
|
|
|
|
09SLO
|
|
|
4,427
|
|
|
|
112,667
|
|
|
|
|
|
|
|
|
|
|
|
10SLO
|
|
|
2,918
|
|
|
|
74,263
|
|
|
|
|
|
|
|
|
|
|
|
09PSU3
|
|
|
|
|
|
|
|
|
|
|
68,728
|
|
|
|
1,749,127
|
|
|
|
10PSU3
|
|
|
|
|
|
|
|
|
|
|
24,138
|
|
|
|
614,312
|
|
Mr. Deméautis
|
|
09PSU3
|
|
|
|
|
|
|
|
|
|
|
74,386
|
|
|
|
1,893,123
|
|
|
|
10PSU3
|
|
|
|
|
|
|
|
|
|
|
25,188
|
|
|
|
641,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
For awards shown in these columns, the market values shown above
are based on the closing price of common stock on
December 31, 2010 of $25.45 per share as reported on the
NYSE.
|
The 08SLO awards for all named executive officers except
Mr. Kelsey were made in the form of awards of restricted
stock units that vested and paid on March 13, 2011. Each of
the named executive officers other than Mr. Kelsey is
currently retirement-eligible. Mr. Kelseys 08SLO
award was made in the form of an award of restricted stock that
vested and paid on March 13, 2011.
46
The 09SLO awards for all named executive officers were made in
the form of awards of restricted stock units that vest and pay
on March 10, 2012, or earlier in case of death, disability
or retirement. Each of the currently-employed named executive
officers other than Mr. Kelsey is currently
retirement-eligible, and Mr. Kelsey will become
retirement-eligible in June 2011.
The amounts shown in this column for 10SLO awards are the actual
numbers of shares of restricted stock or restricted stock units
earned by each named executive officer under the stock leverage
opportunity feature of the Annual Incentive Plan for 2010. The
10SLO awards for all named executive officers were made in the
form of awards of restricted stock units that vest and pay on
March 13, 2013, or earlier in case of death, disability or
retirement. Each of the currently-employed named executive
officers other than Mr. Kelsey is currently
retirement-eligible, and Mr. Kelsey will become
retirement-eligible in June 2011.
RS awards vest as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of
|
|
Number of
|
|
Date of
|
Name
|
|
Award
|
|
Shares or Units
|
|
Vesting
|
Mr. Hickey
|
|
|
RS
|
|
|
|
64,000
|
|
|
|
5/20/2011
|
|
Mr. Kelsey
|
|
|
RS
|
|
|
|
4,000
|
|
|
|
2/25/2011
|
|
Mr. Baker
|
|
|
RS
|
|
|
|
10,000
|
|
|
|
4/1/2013
|
|
Mr. Deily
|
|
|
RS
|
|
|
|
4,000
|
|
|
|
2/25/2011
|
|
|
|
|
RS
|
|
|
|
32,000
|
|
|
|
3/16/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
09PSU3 awards are performance share unit awards for the
performance period January 1, 2009 through
December 31, 2011 that vest on December 31, 2011. The
amounts shown in this column for 09PSU3 awards represent the
numbers of shares that would be earned if the maximum level of
the principal goal for these awards was met, since we considered
that level of achievement to be probable at the end of 2010.
|
10PSU3 awards are performance shares unit awards for the
performance period January 1, 2010 through
December 31, 2012 that vest on the latter date. The amounts
shown in this column for 10PSU3 awards represent the target
number of shares, since we considered that level of achievement
to be probable at the end of 2010.
The amounts in this column do not include the potential 10%
increase that could be earned if the additional performance
goals are achieved; see Compensation Discussion and
Analysis2010 Long Term Incentive Compensation Awards.
The maximum number of shares that can be issued to any
participant in any calendar year with respect to a PSU award is
two-tenths of 1% (0.2%) of the outstanding shares on January 1
of that calendar year. This restriction may limit the number of
shares that can be issued to Mr. Hickey on account of his
PSU awards. For purposes of illustration, in 2011, the maximum
number of shares that could be issued to a participant with
respect to a performance share unit award would be approximately
318,404 shares.
|
|
|
|
3
|
The market or payout values shown in this column are based on
the closing price of common stock on December 31, 2010 of
$25.45 per share as reported on the NYSE.
|
47
Stock
Vested in 2010
The following table shows the number of shares acquired by the
named executive officers on vesting of stock awards during 2010,
as well as the value of the shares realized upon vesting. Awards
of restricted stock (RS), restricted stock units (RSU) and
performance share unit (PSU) awards were awarded under the 2005
Contingent Stock Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
Number of Shares
|
|
Value Realized
|
|
|
Type of
|
|
Acquired on Vesting
|
|
on Vesting
|
Name
|
|
Award
|
|
(#)
|
|
($)
|
Mr. Hickey
|
|
RS
|
|
|
60,000
|
|
|
$
|
1,339,200
|
|
|
|
09PSU2
|
|
|
318,404
|
|
|
|
8,103,382
|
|
Mr. Kelsey
|
|
RS
|
|
|
16,000
|
|
|
|
343,840
|
|
|
|
09PSU2
|
|
|
97,254
|
|
|
|
2,475,114
|
|
Mr. Baker
|
|
RS
|
|
|
12,000
|
|
|
|
246,960
|
|
|
|
09PSU2
|
|
|
58,690
|
|
|
|
1,493,661
|
|
Mr. Deily
|
|
09PSU2
|
|
|
68,728
|
|
|
|
1,749,128
|
|
Mr. Deméautis
|
|
RSU
|
|
|
12,000
|
|
|
|
246,960
|
|
|
|
09PSU2
|
|
|
74,386
|
|
|
|
1,893,124
|
|
|
|
|
|
|
|
|
|
|
|
|
The value of awards of restricted stock (RS) and restricted
stock units (RSU) is based on the closing price of common stock
on the vesting date or, if the vesting date were not a trading
date, the first trading day prior to the vesting date. RS and
RSU awards vested on May 17, 2010 for Mr. Hickey,
April 12, 2010 for Mr. Kelsey, and May 7, 2010
for Messrs. Baker and Deméautis. In all cases except
for Mr. Deméautis, the Company withheld a portion of
the vested shares to cover withholding taxes due upon vesting of
shares of restricted stock.
The 2009 two year PSU (09PSU2) awards represent the actual
number of shares earned for the performance period from
January 1, 2009 through December 31, 2010 that vested
on December 31, 2010. The values for such awards are based
on the closing price of common stock on December 31, 2010
of $25.45 per share and represent 200% of target.
Mr. Hickeys award was subject to the share cap
applicable to PSU awards, as discussed in footnote 3 to the
Grants of Plan-Based Awards in 2010 table above.
Pension
Benefits in 2010
Mr. Deméautis. The table below shows
information regarding Mr. Deméautiss 2010
pension benefit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
|
|
|
|
|
|
|
Present
|
|
During
|
|
|
|
|
Number of
|
|
Value of
|
|
Last
|
|
|
|
|
Years Credited
|
|
Accumulated
|
|
Fiscal
|
|
|
|
|
Service
|
|
Benefit
|
|
Year
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
($)
|
|
Mr. Deméautis
|
|
|
Retirement indemnity
|
|
|
|
29.5
|
|
|
$
|
546,217
|
|
|
$
|
0
|
|
Mr. Deméautis is eligible for a retirement indemnity
that is provided to all management employees of our French
subsidiary Sealed Air S.A.S. under the applicable collective
bargaining agreement. The retirement indemnity provides for a
lump sum payment at retirement in the amount of 15 months
of compensation, where the monthly compensation is based on the
average monthly cash compensation (salary plus bonus payments)
during the final 12 months of employment. The normal
retirement age is 65, but the retirement indemnity is available
starting at age 60 with at least 40 years of
employment. Mr. Deméautis would not have been eligible
to receive a retirement indemnity if he had retired on
December 31, 2010, as he did not then meet the minimum age
and service levels to receive the retirement indemnity.
48
The present value of Mr. Deméautiss accumulated
benefit at December 31, 2010 was calculated assuming a
discount rate of 5.0%. Other relevant assumptions, including the
calculation methodology, were as prescribed by the French
Government.
Mr. Deily. Mr. Deily participates in
the Sealed Air Corporation Restoration Plan for Cryovac
Employees, a tax-qualified defined benefit plan that covers the
employees of our Cryovac operations who participated in a
defined benefit plan maintained by a prior employer immediately
prior to March 31, 1998.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
|
|
|
|
|
|
|
Present
|
|
During
|
|
|
|
|
Number of
|
|
Value of
|
|
Last
|
|
|
|
|
Years Credited
|
|
Accumulated
|
|
Fiscal
|
|
|
|
|
Service
|
|
Benefit
|
|
Year
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
($)
|
|
Mr. Deily
|
|
|
Restoration Plan for Cryovac Employees
|
|
|
|
28.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
The Restoration Plan for Cryovac Employees provides a retirement
benefit that is based on the amount by which the benefit
assuming the participant had remained in the prior
employers defined benefit plan until retirement exceeds
assumed benefits under our Profit-Sharing Plan plus the accrued
benefit as of March 31, 1998 under the prior
employers plan. This calculation resulted in an
accumulated benefit for Mr. Deily of $0 at
December 31, 2010.
The number of years of credited service at December 31,
20109 includes service with the prior employer of
15.2 years for Mr. Deily. The present value of the
accumulated benefit at December 31, 2010 is calculated
assuming a retirement age of 65. The Restoration Plan for
Cryovac Employees provides for normal retirement at age 65
and early retirement at age 55. Mr. Deily is not
eligible for early retirement as he has not yet reached
age 55. Benefits are generally paid as a single life
annuity, but benefits can be paid in other forms, including
joint and survivor annuities and straight life annuities,
although the value of each form of payment is the same.
The normal retirement benefit is a monthly amount equal to the
excess of (i) the sum of 1% of the average of the annual
compensation for the highest five consecutive
12-month
periods during the last 15 years of service (the final
average compensation) plus 0.4 of 1% of the final average
compensation in excess of the average Social Security wage bases
during the 35 years ending with the year in which the
participant attains Social Security retirement age, multiplied
by the years of credited service, over (ii) the accrued
monthly benefit as of March 31, 1998 under the defined
benefit plan maintained by the prior employer plus the
participants assumed accrued benefit under our
Profit-Sharing Plan. The early retirement benefit is calculated
in a similar manner after applying actuarial equivalent factors
to the calculation described in (i) of the preceding
sentence and based on the early retirement factors in effect on
March 31, 1998 under the defined benefit plan maintained by
the prior employer. The participants assumed accrued
benefit under our Profit-Sharing Plan is determined by crediting
8.5% interest to our contribution to the Profit-Sharing Plan
each year from the date of contribution to the date of
determination, summing all of these adjusted contributions, and
converting the result to an annual benefit payable for the life
of the participant. The Restoration Plan for Cryovac Employees
also provides a pre-retirement death benefit in the amount of
75% of the normal retirement benefit under a 75% joint and
survivor annuity that would commence on the participants
65th birthday.
Nonqualified
Defined Contribution and Other Deferred Compensation
Plans
None of the named executive officers participates in a
nonqualified defined contribution or nonqualified deferred
compensation plan.
Payments
Upon Termination or Change in Control
We do not have any severance programs or agreements covering any
of our named executive officers, except for the arrangements
described below and benefits generally available to salaried
employees, also noted below. We also have no programs or
agreements providing any payments or benefits to our named
executive officers in connection with a change in control,
except as part of our equity compensation
49
awards as discussed in more detail below. The following
describes arrangements that address cash payments or other
benefits to certain of our named executive officers following
termination of employment:
|
|
|
Non-Compete and Confidentiality
Agreements: When he was hired, Mr. Kelsey
signed a Non-Compete and Confidentiality Agreement. See the
discussion above in Compensation Discussion and
AnalysisEmployment, Severance and Change in Control
Arrangements for more details. Under this agreement, the
executive would be entitled to two months salary as
consideration for the non-compete and other covenants benefiting
the Company contained in the agreement, payable in case of any
termination of employment by the Company other than for gross
misconduct. Amounts are not payable in case of voluntary
resignation, retirement, disability or death while employed. The
amount each named executive officer would have received had his
employment been terminated as of December 31, 2010 by the
Company (other than for gross misconduct) is as follows:
Mr. Hickey$0; Mr. Kelsey$77,500;
Mr. Baker$0; Mr. Deily$0; and
Mr. Deméautis$0.
|
|
|
Discount on Car Purchases: The Company
generally permits a retiring employee in the U.S. who had
the use of a Company-leased car while employed to purchase the
car at a discount to fair market value. Employees who leave
employment for any other reason are not generally eligible for
this benefit. This benefit is not provided to employees of
Sealed Air S.A.S, including Mr. Deméautis. See the
discussion under Compensation Discussion and
AnalysisPerquisites and Other Personal Benefits for
more details. The discount each named executive officer would
have received had he retired as of December 31, 2010 is as
follows: Mr. Hickey$10,517;
Mr. Kelsey$13,300; Mr. Baker$9,975;
Mr. Deily$7,420; Mr. Deméautis$0.
|
|
|
Termination Indemnity for French Management
Employees: Mr. Deméautis is eligible
for a termination indemnity that is provided to all management
employees of Sealed Air S.A.S. under the applicable collective
bargaining agreement. The termination indemnity would be paid
upon termination by his employer other than for gross
misconduct. It would not be paid if he were to voluntarily
resign, retire or die while employed. If he were to become
disabled while employed, his employer could either terminate his
employment and pay the termination indemnity or permit him to
remain employed until he was eligible for retirement. In the
latter case, during the remainder of his employment, he would
receive Social Security benefits from the French government,
supplemented modestly by his employer for the first
90 days, and then at retirement he would receive the
retirement indemnity described above under Pension
Benefits in 2010. The amount of the termination indemnity
that would have been payable to Mr. Deméautis if his
employment had been terminated as of December 31, 2010 by
the Company other than for gross misconduct or due to his
disability was $579,416.
|
Our incentive award programs include provisions addressing the
extent to which the award becomes vested and payable or is
forfeited upon termination of employment. The following briefly
describes the key features of these provisions. See also
Description of Annual and Long Term Incentive Awards in
the Summary Compensation Table and the Grants of Plan-Based
Awards in 2010 Table above for more details.
|
|
|
Annual Bonus Awards: Under the Annual
Incentive Plan, employees must remain employed through the
applicable payment date in order to be entitled to receive an
annual bonus for a year; otherwise, payment of the annual bonus
is at the discretion of the Company. Bonuses are paid during the
month of March for the prior year, so termination of the named
executive officers as of the end of 2010 would have meant that
they were not entitled to receive a cash bonus or SLO award
based on 2010 performance. For 2010, the Companys usual
practice for employees in the United States was to pay an annual
bonus in the event of termination of employment as of the end of
the year due to death, disability or retirement and not to pay
an annual bonus in the case of involuntary termination due to
gross misconduct. With respect to a voluntary resignation or
other involuntary termination, the payment of an annual bonus is
discretionary depending on the circumstances. For management
employees of Sealed Air S.A.S. who remain employed through the
end of the year, including Mr. Deméautis, annual bonus
awards are generally withheld if employment is terminated at the
end of the year due to gross misconduct and paid if employment
is terminated at that time for any other reason.
|
50
The annual bonus paid (as cash
and/or SLO
award) under the Annual Incentive Plan to each named executive
officer for 2010 was as follows: Mr. Hickey$135,000;
Mr. Kelsey$141,235; Mr. Baker$95,402;
Mr. Deily$102,800; and
Mr. Deméautis$80,793. These amounts may not
represent the amounts that would have been awarded if the named
executive officers had terminated employment at the end of 2010
for any of the reasons noted above.
|
|
|
Restricted Stock and Restricted Stock
Units: These awards will vest in case of death or
disability before the scheduled vesting date and will generally
forfeit for any other termination of employment before the
scheduled vesting date with four exceptions. First, SLO awards
that have been awarded as restricted stock units after the end
of the performance year will vest in full upon retirement.
Second, restricted stock shares or units awarded before May 2008
will vest upon a change in control. Third, restricted stock
shares or units awarded in or after May 2008 will vest upon a
termination of employment by the Company without cause or by the
executive with good reason that occurs within two years after a
change in control. Fourth, within 90 days following the
date of termination, the Compensation Committee can waive the
forfeiture of restricted stock or units.
|
|
|
Performance Share Units: Termination of
employment before the end of the performance period generally
results in the forfeiture of any outstanding PSU awards with two
exceptions. First, in case of death, disability or retirement
before the end of the performance period, a pro rata number of
the PSUs will become payable after the end of the performance
period, based on the actual performance results for the
performance period. Second, in case of a change in control of
the Company followed within two years by a termination of
employment by the Company without cause or by the executive with
good reason, a pro rata number of the PSUs will become payable
as of the date of termination based on target performance (or
actual performance through the quarter prior to the change in
control, if greater).
|
The following table shows the amounts that would have been
payable to the named executive officers under these equity award
programs for a termination of employment as of December 31,
2010, based on the closing price of the Companys common
stock of $25.45 as of that date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of
|
|
Death or
|
|
Involuntary for
|
|
Involuntary
|
|
|
|
CIC single
|
|
CIC + qualifying
|
Name
|
|
award
|
|
disability
|
|
gross misconduct
|
|
(all others)
|
|
Voluntary
|
|
trigger1
|
|
termination1
|
Mr. Hickey
|
|
RS/RSUs
|
|
$
|
1,628,800
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,628,800
|
|
|
|
SLOs2
|
|
|
1,450,879
|
|
|
|
1,450,879
|
4
|
|
|
1,450,879
|
|
|
|
1,450,879
|
|
|
|
0
|
|
|
|
1,450,879
|
|
|
|
PSUs3
|
|
|
6,773,484
|
|
|
|
0
|
|
|
|
6,773,484
|
|
|
|
6,773,484
|
|
|
|
0
|
|
|
|
6,773,484
|
|
Mr. Kelsey
|
|
RS/RSUs
|
|
|
101,800
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
101,800
|
|
|
|
0
|
|
|
|
SLOs2
|
|
|
206,017
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
206,017
|
|
|
|
PSUs3
|
|
|
1,997,664
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,997,664
|
|
Mr. Baker
|
|
RS/RSUs
|
|
|
254,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
254,500
|
|
|
|
SLOs2
|
|
|
135,089
|
|
|
|
135,089
|
4
|
|
|
135,089
|
|
|
|
135,089
|
|
|
|
0
|
|
|
|
135,089
|
|
|
|
PSUs3
|
|
|
1,176,774
|
|
|
|
0
|
|
|
|
1,176,774
|
|
|
|
1,176,774
|
|
|
|
0
|
|
|
|
1,176,774
|
|
Mr. Deily
|
|
RS/RSUs
|
|
|
916,200
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
101,800
|
|
|
|
814,400
|
|
|
|
SLOs2
|
|
|
126,639
|
|
|
|
126,639
|
4
|
|
|
126,639
|
|
|
|
126,639
|
|
|
|
0
|
|
|
|
126,639
|
|
|
|
PSUs3
|
|
|
1,370,856
|
|
|
|
0
|
|
|
|
1,370,856
|
|
|
|
1,370,856
|
|
|
|
0
|
|
|
|
1,370,856
|
|
Mr. Deméautis
|
|
PSUs3
|
|
|
1,475,760
|
|
|
|
0
|
|
|
|
1,475,760
|
|
|
|
1,475,760
|
|
|
|
0
|
|
|
|
1,475,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The amounts shown in the column labeled CICsingle
trigger represent the amounts that would have been paid to
the named executive officers if a change in control had occurred
at the end of 2010 without termination of their employment. The
amounts shown in the column labeled CIC + qualifying
termination represent the additional amounts that would
have been paid to the named executive officers if a change in
control had occurred within the two-year period ending
December 31, 2010 and a qualifying termination of
employment had occurred at the end of 2010.
|
|
|
2
|
The amounts shown in these rows represent the amounts that would
have been paid to the named executive officer connection with
the 2009 SLO award for Mr. Hickey and the 2008 and 2009 SLO
awards for Messrs. Kelsey, Baker and Deily.
|
|
|
3
|
The amounts shown in these rows represent the amounts that would
have been paid to the named executive officer in connection with
their 2009 three-year PSU awards assuming maximum performance
under the principal performance goal for the applicable
performance period, including for the column labeled CIC +
qualifying termination, which assumes maximum performance
in accordance with the change in control provisions of the 2005
Contingent Stock Plan. These amounts also assume target
performance under the principal performance goals for the 2010
three-year PSU awards.
|
51
|
|
|
|
|
Messrs. Hickey, Baker, Deily
and Deméautis are retirement-eligible under the terms of
these PSU awards, so any voluntary or involuntary termination of
employment on December 31, 2010 would be treated as a
retirement except for an involuntary termination for gross
misconduct. Mr. Kelsey was not retirement-eligible at the
end of 2010.
|
|
|
|
|
4
|
SLO awards held by retirement-eligible officers are not
forfeited upon an involuntary termination for gross misconduct.
However, depending on the circumstances, the Recoupment Policy
might require the named executive officer to reimburse the
Company for all or part of this award.
|
The benefits described or referenced above are in addition to
benefits available generally to salaried employees of the
Company upon termination of employment, such as, for employees
in the United States, distributions under the Sealed Air
Corporation 401(k) Thrift Plan and the Profit-Sharing Plan of
Sealed Air Corporation, non-subsidized retiree medical benefits,
disability benefits and accrued vacation pay and, for
Mr. Deméautis, benefits under the Sealed Air S.A.S.
Participation and other generally available health and welfare
benefits for employees of Sealed Air S.A.S.
52
Equity
Compensation Plan Information
The following table provides information as of December 31,
2010 with respect to shares of common stock that may be issued
under the 2005 Contingent Stock Plan of Sealed Air Corporation
and the Sealed Air Corporation 2002 Stock Plan for Non-Employee
Directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
Number of Securities
|
|
|
|
Number of Securities to be
|
|
|
Exercise Price of
|
|
|
Remaining Available for
|
|
|
|
Issued Upon Exercise of
|
|
|
Outstanding
|
|
|
Future Issuance Under
|
|
|
|
Outstanding Options,
|
|
|
Options,
|
|
|
Equity Compensation
|
|
|
|
Warrants and Rights
|
|
|
Warrants, and Rights
|
|
|
Plans1
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by
stockholders2
|
|
|
3,235,994
|
|
|
|
|
|
|
|
1,810,851
|
|
Equity compensation plans not approved by stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total2
|
|
|
3,235,994
|
|
|
|
|
|
|
|
1,810,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Excludes securities reflected in column (a).
|
|
|
2
|
Consists of the 2005 Contingent Stock Plan of Sealed Air
Corporation and the 2002 Stock Plan for Non-Employee Directors.
Column (a) includes the following as of December 31,
2010:
|
|
|
|
|
|
1,263,456 restricted stock units awarded under the 2009 two-year
PSU award. This number reflects an assumption that such awards
are paid out based upon the achievement of the highest level of
performance conditions, resulting in an award equal to 200% of
the target.
|
|
|
|
1,253,778 restricted stock units awarded under the 2009
three-year PSU award. This number reflects an assumption that
such awards are paid out based upon the achievement of the
highest level of performance conditions, resulting in an award
equal to 200% of the target.
|
|
|
|
476,829 restricted stock units awarded under the 2010 three-year
PSU award. This number reflects an assumption that such awards
are paid out based upon the achievement of the target level of
performance conditions, resulting in an award equal to 100% of
the target.
|
|
|
|
115,400 shares of restricted stock and restricted stock units
awarded under the 2005 Contingent Stock Plan but not yet issued
as of December 31, 2010.
|
|
|
|
51,474 restricted stock shares and restricted stock units
awarded as 2010 SLO awards.
|
|
|
|
75,057 deferred stock units held by non-employee directors.
|
There is no exercise price for shares or units awarded under the
2005 Contingent Stock Plan. There was no exercise price for
deferred stock units credited to the accounts of non-employee
directors in 2010. As of December 31, 2010, there were
1,761,303 shares available for future awards under the 2005
Contingent Stock Plan and 49,548 shares available for
future awards under the 2002 Directors Stock Plan.
53
Advisory
Vote on Executive Compensation (Proposal 10)
The recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the
Dodd-Frank
Act) enables our stockholders to vote to approve, on an
advisory or non-binding basis, the compensation of our named
executive officers as disclosed in this proxy statement in
accordance with SEC rules.
Our compensation program is intended to provide appropriate and
balanced incentives toward achieving our annual and long-term
strategic objectives, to support a performance oriented
environment based on the attainment of goals and objectives
intended to benefit us and our stockholders and to create an
alignment of interests between our executives and our
stockholders. This approach has resulted in our ability to
motivate our existing executives and to attract new executives
with the skills and attributes that we need. Please refer to
Executive CompensationCompensation Discussion and
AnalysisSummary of Compensation Programs for an
overview of the compensation of our named executive officers.
We are asking for stockholder approval of the compensation of
our named executive officers as disclosed in this proxy
statement in accordance with SEC rules, which disclosures
include the disclosures under Executive
CompensationCompensation Discussion and Analysis,
the compensation tables and the narrative discussion following
the compensation tables. This vote is not intended to address
any specific item of compensation, but rather the overall
compensation of our named executive officers and the policies
and practices described in this proxy statement.
Accordingly, stockholders are being asked to vote on the
following resolution:
RESOLVED, that the stockholders of Sealed Air Corporation
approve, on an advisory basis, the overall executive
compensation philosophy, policies and practices of the Company
as disclosed in this proxy statement.
This vote is advisory and therefore not binding on the Company,
the Compensation Committee or the Board of Directors. However,
the Board of Directors and the Compensation Committee value the
opinions of our stockholders and to the extent there is any
significant vote against the named executive officer
compensation as disclosed in this proxy statement, we will
consider our stockholders concerns, and the Compensation
Committee will evaluate whether any actions are necessary to
address those concerns.
Recommendation of
the Board of Directors
Our Board of Directors recommends a vote FOR the approval of
our overall executive compensation philosophy, policies and
practices as disclosed in this proxy statement.
54
Advisory
Vote on Frequency of Future Advisory Votes on Executive
Compensation (Proposal 11)
The Dodd-Frank Act also enables our stockholders to vote, on an
advisory or non-binding basis, on how frequently they would like
to cast an advisory vote on the compensation of our named
executive officers. By voting on this proposal, stockholders may
indicate whether they would prefer an advisory vote on named
executive officer compensation once every one, two, or three
years.
After careful consideration of the frequency alternatives, the
Board of Directors believes that advisory votes on our executive
officer compensation should be conducted every year so that
stockholders may annually express their views on the
Companys executive compensation program in a timely manner
and provide ongoing communication with our Compensation
Committee and our Board of Directors on executive compensation
and corporate governance matters.
The Board of Directors will carefully consider the outcome of
the vote when making future decisions regarding the frequency of
advisory votes on executive compensation. However, because this
vote is advisory and not binding, the Board of Directors may
decide that it is in the best interests of the Company and its
stockholders to hold an advisory vote more or less frequently
than the alternative that is selected by our stockholders.
Recommendation of
the Board of Directors
Our Board of Directors recommends a vote for the approval of
an ANNUAL advisory vote on the compensation of our named
executive officers.
55
Approval
of the Amended 2005 Contingent Stock Plan of Sealed Air
Corporation (Proposal 12)
The Compensation Committee and our Board of Directors amended
the 2005 Contingent Stock Plan of Sealed Air Corporation (the
2005 Contingent Stock Plan) on February 17,
2011, and the Board of Directors is submitting the amended 2005
Contingent Stock Plan to our stockholders for approval. The sole
purpose for the amendment of the 2005 Contingent Stock Plan and
the request for stockholder approval at this time is to increase
the number of shares of common stock reserved for issuance under
the 2005 Contingent Stock Plan from 8,000,000 shares to
12,000,000 shares.
Background
On May 20, 2005, the Companys stockholders approved
the 2005 Contingent Stock Plan of Sealed Air Corporation (the
2005 Contingent Stock Plan). The 2005 Contingent
Stock Plan has been further amended since then, including
amendments approved by the Companys stockholders on
May 20, 2008. The 2005 Contingent Stock Plan provides for
awards of equity-based compensation, including restricted stock,
restricted stock units, performance share units, stock leverage
opportunity (SLO) awards and cash awards measured by share
price, to executive officers and other key employees of the
Company and its subsidiaries, as well as to
U.S.-based
key consultants to the Company. The 2005 Contingent Stock Plan
is intended to provide and has provided an incentive to permit
those officers, employees and consultants responsible for the
Companys growth to share directly in that growth, to
motivate them by means of appropriate incentives to achieve the
Companys long-range goals, and to further the identity of
their interests with those of the stockholders of the Company.
The Compensation Committee and the Board of Directors wish to
continue the operation of the 2005 Contingent Stock Plan by
authorizing additional shares of common stock for awards under
the 2005 Contingent Stock Plan.
Description
of the Material Terms of the 2005 Contingent Stock Plan as
Amended
The 2005 Contingent Stock Plan is set forth in Annex D,
which is incorporated herein by reference. The principal
provisions of the 2005 Contingent Stock Plan are summarized
below:
Administration. The 2005 Contingent Stock Plan
is administered by the Compensation Committee, which comprises
at least three non-employee directors, none of whom may receive
any awards under the 2005 Contingent Stock Plan. The
Compensation Committee selects participants to receive awards
and determines the time, types and sizes of awards to be granted
and the terms and conditions of awards. The Compensation
Committee may also condition awards under the 2005 Contingent
Stock Plan upon achievement of performance measures under any
other plan adopted by the Company, including the
Performance-Based Compensation Program, described below.
Participants. The Compensation Committee may
grant awards other than performance share units to any officer,
key employee or
U.S.-based
consultant of the Company or any of its direct or indirect
subsidiaries in which the Company holds a significant interest.
Performance share units may only be granted to officers or key
employees.
Shares Available. At the time of its
adoption in 2005, the 2005 Contingent Stock Plan provided for
the issuance of 5,000,000 shares of Common Stock, as
adjusted for a
two-for-one
stock split in 2007, which is subject to further adjustment by
the Compensation Committee in the event of future changes in
corporate capitalization or corporate transactions. The 2008
amendment to the 2005 Contingent Stock Plan provided for the
issuance of an additional 3,000,000 shares of common stock,
or a total of 8,000,000 shares of common stock, which is
subject to adjustment as provided in the preceding sentence. The
proposed amendment to the 2005 Contingent Stock Plan will
increase the number of shares that can be issued to 12,000,000,
subject to any adjustments as noted previously. Shares of common
stock that are reacquired by the Company or are never issued due
to a forfeiture (described below) or are reacquired by the
Company or withheld in satisfaction of tax withholding with
respect to an
56
award again become available for awards under the 2005
Contingent Stock Plan. Cash awards do not count against the
total amount of common stock that may be issued under the 2005
Contingent Stock Plan.
As of December 31, 2010, there were approximately
1,761,303 shares of common stock available for future
awards under the 2005 Contingent Stock Plan. Approval of the
amended 2005 Contingent Stock Plan by the stockholders will
increase the number of shares currently available for
equity-based compensation to officers, key employees and key
U.S.-based
consultants by an additional 4,000,000 shares, or
approximately 2.5% of the issued and outstanding shares of
common stock as of March 21, 2011.
Awards. The awards that may be granted under
the 2005 Contingent Stock Plan are described below:
Restricted Stock: an award of shares of common
stock that is subject to a risk of forfeiture during a vesting
period of at least three years, as determined by the
Compensation Committee. As noted previously, SLO awards are
subject to a two-year vesting period. Also, the 2005 Contingent
Stock Plan will permit the Compensation Committee to approve
exceptions to the three-year vesting period in connection with
recruitment of an employee or as a result of a business
combination or acquisition. A participant receiving restricted
stock is the beneficial owner of such shares with the right to
receive dividends and to vote the shares during the vesting
period.
Restricted Stock Units: an award of a right to
receive shares of common stock at the end of a vesting period of
at least three years, as determined by the Compensation
Committee, and subject to a risk of forfeiture during the
vesting period. As noted above in connection with restricted
stock awards, SLO awards and certain other awards are not
subject to the three-year minimum vesting period. The
Compensation Committee may provide that restricted stock units
receive cash dividend equivalents payable in cash during the
vesting period, but a participant holding restricted stock units
will not have the right to vote the shares covered by the award
until the shares have been issued to the participant following
the end of the vesting period.
Cash Award: an award payable in cash measured
by the value of a specific number of shares of common stock at
the end of a vesting period of at least three years, as
determined by the Compensation Committee, and subject to a risk
of forfeiture during the vesting period. Cash awards may not be
made during any calendar year measured in the aggregate by more
than 200,000 shares of common stock. The Compensation
Committee is permitted to approve exceptions to the three-year
vesting period in connection with recruitment of an employee or
as a result of a business combination or acquisition. These
awards are primarily made outside of the U.S. to participants in
a limited number of countries.
Performance Share Units: an award subject to a
vesting period and to achievement of performance goals, as
determined by the Compensation Committee, that provides for the
right to receive a specified number of shares of common stock
for each performance share unit at the end of the vesting period
and upon achievement of the performance goals. The number of
shares of common stock that may be issued to a participant with
respect to performance share unit awards during any calendar
year is two-tenths of 1% (0.2%) of the issued and outstanding
shares of the common stock on January 1 of such calendar year.
For 2011, that would amount to approximately 318,404 shares
of common stock. The Compensation Committee may provide that
performance share unit awards receive cash dividend equivalents
earned during the performance or vesting periods and payable in
cash, but a participant holding a performance share unit award
will not have the right to vote the shares covered by the award
until the shares have been issued to the participant following
the end of the performance and vesting periods.
Vesting; Change in Control. A vesting period
will end earlier than the period determined by the Compensation
Committee upon the death or disability of the participant or if
the participants employment with the Company terminates
within the two year period following a change in control as
defined in the 2005 Contingent Stock Plan if such termination is
by the Company without cause or by the participant for good
reason (as such terms are defined in the 2005 Contingent Stock
Plan). The 2005 Contingent Stock Plan also provides that, for a
change in control during the performance period applicable to a
performance
57
share unit award, a pro rata payment on account of that award
will be made if the participants employment terminates
under the circumstances described in the preceding sentence.
Neither an award nor any interest in an award can be sold,
transferred, pledged or encumbered until the vesting period has
ended without forfeiture of the award. Termination of a
participants employment (or retention as a consultant, if
applicable) during the vesting period will result in the
forfeiture of the award unless the Compensation Committee
affirmatively determines not to seek forfeiture of all or part
of the award within 90 days following such termination.
Performance Measures. The Compensation
Committee may establish performance goals under the 2005
Contingent Stock Plan applicable to an award of performance
share units. Goals may be established on a corporate-wide basis
or with respect to one or more business units, divisions or
subsidiaries, and may be either in absolute terms or relative to
the performance of one or more comparable companies or an index
covering multiple companies. For the purpose of determining
whether a goal has been attained, the Compensation Committee may
exclude the impact of charges, credits and related costs for
restructurings, discontinued operations, extraordinary items,
debt redemption or retirement, and the cumulative effects of
accounting changes, each as defined by U.S. generally
accepted accounting principles, and other unusual or
non-recurring items as defined by the Compensation Committee
when the goals are established. For awards of performance share
units that are intended to qualify as performance-based
compensation under Section 162(m) of the Internal Revenue
Code, the grant of the award and all other determinations
related to the award by the Compensation Committee must comply
with the applicable requirements of Section 162(m).
Other Information. The Compensation Committee
may amend or terminate the 2005 Contingent Stock Plan, except
that the Compensation Committee may not, without further
approval of the stockholders, expand the number of shares
available for issuance under the 2005 Contingent Stock Plan or
the classes of individuals eligible for awards under the 2005
Contingent Stock Plan. In addition, if the Securities Exchange
Act of 1934 or the rules of the New York Stock Exchange require
the Company to obtain approval of the stockholders for any
amendment, then the Company will seek such approval. If the
proposed amendment to the 2005 Contingent Stock Plan is approved
by the stockholders, the Company expects to file a registration
statement under the Securities Act of 1933 with respect to the
4,000,000 additional shares of common stock that may be issued
under the 2005 Contingent Stock Plan.
The 2005 Contingent Stock Plan has a term of ten years from the
date of its initial approval by the Companys stockholders
on May 20, 2005, although the 2005 Contingent Stock Plan
will terminate earlier if no shares of common stock remain
available for awards under the 2005 Contingent Stock Plan. Upon
termination of the 2005 Contingent Stock Plan, any awards then
outstanding shall remain in effect in accordance with their
terms.
New
Plan Benefits
None of the additional shares of common stock subject to the
proposed amendment to the 2005 Contingent Stock Plan will be
issuable in connection with any award granted prior to
stockholder approval of the amendment. Future awards under the
2005 Contingent Stock Plan are subject to the discretion of the
Compensation Committee, and therefore it is not possible to
identify the persons who will receive awards under the 2005
Contingent Stock Plan in the future, nor the amount of any such
future awards.
The Board of Directors recommends a vote FOR the amended 2005
Contingent Stock Plan of Sealed Air Corporation.
58
Approval
of the Amended Sealed Air Corporation 2002 Stock Plan for
Non-Employee Directors (Proposal 13)
Our Board of Directors approved an amendment to the 2002 Stock
Plan for Non-Employee Directors (the 2002 Directors
Stock Plan) on February 17, 2011, to increase the
number of shares of common stock reserved for issuance under the
2002 Directors Stock Plan from 200,000 shares to
400,000 shares. subject to the approval of our
stockholders. We are submitting the amended 2002 Directors
Stock Plan to our stockholders for approval of such amendment.
Background
Our 2002 Stock Plan For Non-Employee Directors was approved by
our stockholders on May 17, 2002, and subsequently amended
by the Board of Directors in the fourth quarter of 2009 and the
second quarter of 2010. Each non-employee director of the
Company is eligible to receive retainers under the
2002 Directors Stock Plan. With respect to the current
nominees for election to the Board of Directors at the Annual
Meeting, every nominee except Mr. Hickey (a total of eight
nominees) would be eligible to receive a retainer under the
2002 Directors Stock Plan.
Description
of the Material Terms of the 2002 Directors Stock Plan as
Amended
The amended 2002 Directors Stock Plan is set forth in
Annex E, which is incorporated herein by reference. The
principal provisions of the amended 2002 Directors Stock
Plan are summarized below, with the amendment noted:
Retainers. The 2002 Directors Stock Plan
provides for payment in shares of common stock of all or a
portion of the retainers paid to each non-employee director for
serving as a director of the Company. Annual retainers are paid
to each non-employee director elected at our annual meeting, and
interim retainers are paid to a non-employee director elected at
any other time. We pay at least half of each retainer, whether
annual or interim, in shares of common stock and the remainder
in cash, provided that each non-employee director can elect,
prior to becoming entitled to the retainer, to receive the
entire retainer in shares of common stock.
Under the 2002 Directors Stock Plan, the Board of Directors
sets the amount of the annual retainer prior to each annual
meeting. Upon adjournment of the annual meeting, each
non-employee director who has been elected a director at that
annual meeting is entitled to receive an annual retainer. A
non-employee director who is elected other than at an annual
meeting is entitled to an interim retainer on the date of
election. The interim retainer is a pro rata portion of the
annual retainer to reflect less than a full year of service.
The Board of Directors can establish annual retainers based on a
fixed number of shares of common stock, a fixed amount of cash,
or a combination of shares of common stock and cash, with at
least half of each retainer, whether annual or interim, in
shares of common stock and the remainder in cash. The number of
shares of common stock issued as all or part of an annual
retainer is calculated by dividing the amount payable in shares
of common stock by the closing price of the common stock on the
annual meeting date or, if no sales occurred on that date, the
closing price on the most recent prior day on which a sale
occurred (the Fair Market Value Per Share). The
number of shares issued as all or part of an interim retainer is
the amount payable in shares of common stock divided by the Fair
Market Value Per Share on the date of election. If any
calculation would result in a fractional share of common stock
being issued, then the number of shares to be issued will be
rounded up to the nearest whole share. No fractional shares of
common stock will be issued under the 2002 Directors Stock
Plan.
Each grant of common stock pursuant to the 2002 Directors
Stock Plan is contingent upon and subject to the execution by
the non-employee director of a document agreeing to hold the
shares of common stock covered by such grant in accordance with
the terms and conditions of the 2002 Directors Stock Plan.
59
The Sealed Air Corporation Deferred Compensation Plan for
Directors permits a non-employee director to elect to defer all
or part of the directors annual or interim retainer
subject to the terms of such Plan.
Restrictions on Transfer. A director may not
sell, transfer or encumber shares of common stock issued under
the 2002 Directors Stock Plan while the director serves on the
Board of Directors, except that a non-employee director may make
gifts of shares issued under the 2002 Directors Stock Plan to
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 and the transferee
executes an agreement agreeing to be bound by the restrictions
applicable to such shares. The restrictions on the disposition
of shares issued pursuant to the 2002 Stock Plan terminate upon
the occurrence of specified events related to a change of
control of the Company.
Available Shares and Adjustments. The
2002 Directors Stock Plan authorizes the issuance of up to
200,000 shares of common stock for awards under the Plan.
As of December 31, 2010, there were approximately 49,548
shares of common stock available for future grants, under the
2002 Directors Stock Plan. The proposed amendment to the
2002 Director Stock Plan increases the number of shares
authorized for issuance under the Plan to 400,000 shares of
common stock. The number and class of shares issuable under the
2002 Directors Stock Plan and the number of shares to be
delivered as part or all of a retainer are subject to adjustment
by the Board in the event of changes in the common stock of the
Company by reason of any stock dividend,
split-up,
combination of shares, reclassification, recapitalization,
merger, consolidation, reorganization or liquidation.
Amendment and Termination of Plan. The Board
of Directors may from time to time amend the 2002 Directors
Stock Plan or discontinue the Plan or any provisions thereof.
However, no amendment or modification of the Plan may, without
the approval of the stockholders of the Company,
(i) increase the number of shares of Common Stock available
for issuance under the Plan, (ii) modify the requirements
as to eligibility for participation under the Plan; or
(iii) change the provision of the Plan that deals with
amendment or termination of the Plan.
Other information. If the proposed amendment
to the 2002 Directors Plan is approved by the stockholders, the
Company expects to file a registration statement under the
Securities Act of 1933 with respect to 200,000 additional shares
of common stock that may be issued under the 2002 Directors
Stock Plan.
New
Plan Benefits
Currently, there are eight non-employee directors or nominees
who are eligible to participate in the 2002 Directors Stock
Plan in 2011. Because the number of shares of stock subject to
awards to be granted at the 2011 Annual Meeting of Stockholders
is based on the fair market value of our common stock on the
date of the Annual Meeting of Stockholders, such number is not
currently determinable. Each eligible non-employee director will
be compensated as described above under the Section entitled
Director Compensation.
The 2011 annual retainer payable to each non-employee director
is $70,000 payable in shares of common stock and $60,000 payable
in cash (or in shares of common stock at the election of each
non-employee director). The annual retainer payable to each
non-employee director in 2011 is not contingent upon the
approval of this amendment by the stockholders.
The Board of Directors recommends a vote FOR this
proposal.
60
Selection
of Independent Auditor (Proposal 14)
The Audit Committee has approved the retention of KPMG LLP, an
Independent Registered Public Accounting Firm, as the
independent auditor of Sealed Air to examine and report on the
Companys consolidated financial statements and the
effectiveness of the Companys internal control over
financial reporting for the fiscal year ending December 31,
2011, subject to ratification of the retention by the
stockholders at the Annual Meeting. KPMG has acted as the
independent auditor of Sealed Air since 1998, and the Audit
Committee considers the firm to be well qualified. In the
absence of contrary specification, the Proxy Committee will vote
proxies received in response to this solicitation in favor of
ratification of the appointment.
We expect that representatives of KPMG will be present at the
Annual Meeting. The KPMG representatives will have the
opportunity to make a statement if they desire to do so, and we
expect that they will be available to respond to appropriate
questions.
The Board of Directors recommends a vote FOR this
proposal.
Principal
Independent Auditor Fees
The following table sets forth the aggregate fees billed to the
Company by KPMG LLP for professional services rendered for the
fiscal years ended December 31, 2010 and 2009:
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|
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|
|
|
|
|
|
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2010
|
|
|
2009
|
|
|
Audit
Fees1
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|
$
|
6,030,000
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|
|
$
|
6,381,000
|
|
Audit-Related
Fees2
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|
79,000
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|
|
|
87,000
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|
Tax Fees3
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|
|
614,000
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|
|
|
1,012,000
|
|
All Other Fees
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Total Fees
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|
$
|
6,723,000
|
|
|
$
|
7,480,000
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|
|
|
|
1
|
2010 and 2009 audit fees include services for the audit of the
annual consolidated financial statements, audit of the
effectiveness of internal control over financial reporting,
review of quarterly consolidated financial statements, statutory
audits, comfort letters and consents, and review of
documentation filed with the SEC.
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|
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2
|
Includes services relating to the audits of our employee benefit
plans and assistance with statutory matters in 2010 and 2009.
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3
|
Includes global tax compliance services and services for special
projects.
|
Audit
Committee Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy that requires the
Committee or a member of the Committee to pre-approve all
engagements with Sealed Airs independent auditor. Each
year, the Audit Committee must approve the independent
auditors retention to audit the Companys financial
statements, subject to ratification by the stockholders at the
annual meeting. The Audit Committee also approves the estimated
fees associated with the audit before the audit begins. The
Audit Committee or a member of the Committee also pre-approves
any engagement of an auditing firm other than the independent
auditor to perform a statutory audit for any of our
subsidiaries. The Audit Committee or its chair pre-approved all
services provided by KPMG LLP during 2010.
61
Report
of the Companys Audit Committee
The Audit Committee of the Board is responsible for providing
independent, objective oversight of our financial reporting
processes and internal controls. The Audit Committee operates
under a written charter approved by the Board of Directors. A
copy of the current charter is available on the Companys
web site at www.sealedair.com.
Management is responsible for our system of internal control and
financial reporting processes, for the preparation of
consolidated financial statements in accordance with
U.S. generally accepted accounting principles and for the
annual report on our internal control over financial reporting.
The independent auditor is responsible for performing an
independent audit of the Companys consolidated financial
statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States) (PCAOB) and
for issuing a report on the financial statements and the
effectiveness of our internal control over financial reporting.
The Audit Committees responsibility is to monitor and
oversee these processes.
In connection with these responsibilities, the Audit Committee
met with management and KPMG LLP, the independent auditor of
Sealed Air, to review and discuss the December 31, 2010
audited consolidated financial statements. Our management
represented that we had prepared the consolidated financial
statements in accordance with U.S. generally accepted
accounting principles. The Audit Committee discussed with KPMG
the matters required by Statement on Auditing Standards
No. 61, as amended, Communication With Audit
Committees.
The Audit Committee received from KPMG the written communication
that is required by PCAOB Rule 3526, Communication
with Audit Committees Concerning Independence, and the
Audit Committee discussed with KPMG that firms
independence. The Audit Committee also considered whether
KPMGs provision of non-audit services and the audit and
non-audit fees paid to KPMG were compatible with maintaining
that firms independence. On the basis of these reviews,
the Audit Committee determined that KPMG has the requisite
independence.
Management completed the documentation, testing and evaluation
of our system of internal control over financial reporting as of
December 31, 2010 as required by Section 404 of the
Sarbanes-Oxley Act of 2002. The Audit Committee received
periodic updates from management and from KPMG at Committee
meetings throughout the year and provided oversight of the
process. Prior to filing the Companys Annual Report on
Form 10-K
for the year ended December 31, 2010 with the SEC, the
Audit Committee also reviewed managements report on the
effectiveness of our internal control over financial reporting
contained in our
Form 10-K,
as well as the Report of Independent Registered Public
Accounting Firm provided by KPMG, also included in our
Form 10-K.
KPMGs report included in our
Form 10-K
related to its audit of our consolidated financial statements
and the effectiveness of our internal control over financial
reporting.
Based upon the Audit Committees discussions with
management and the independent auditor and the Audit
Committees review of the information provided by and the
representations of management and the independent auditor, the
Audit Committee recommended to the Board of Directors that the
audited consolidated financial statements as of and for the year
ended December 31, 2010 be included in our Annual Report on
Form 10-K
for the year ended December 31, 2010, to be filed with the
SEC. The Audit Committee also selected KPMG as our independent
auditor for the fiscal year ending December 31, 2011,
subject to ratification of the selection by our stockholders.
Audit Committee
Hank Brown, Chair
Michael Chu
Lawrence R. Codey
Patrick Duff
Kenneth P. Manning
62
Stockholder
Proposals for the 2012 Annual Meeting
Our By-laws set forth the procedures you must follow in order to
present any business at an annual meeting of our stockholders,
other than proposals governed by
Rule 14a-8
under the Securities Exchange Act of 1934, as amended. In
addition to any other applicable requirements, for business to
be properly brought before the 2012 annual meeting by a
stockholder, the stockholder must have given timely notice
thereof in proper written form including all required
information to the Secretary of the Company at 200 Riverfront
Boulevard, Elmwood Park, New Jersey
07407-1033,
directed to the attention of the Secretary. To be timely, we
must receive a stockholders notice to the Secretary at our
principal office between January 19, 2012 and our close of
business on February 18, 2012, provided that, if the 2012
annual meeting is called for a date that is not within
30 days before or 60 days after May 18, 2012,
then the Company must receive the notice from the stockholder no
later than the tenth day following the day on which the date of
such meeting is publicly disclosed. We have posted a copy of our
By-laws on our web site at www.sealedair.com. Our By-laws
do not limit your ability to use the provisions of
Rule 14a-8,
which sets forth an alternative means of submitting proposals.
Delivery
of Documents to Security Holders Sharing an
Address
SEC rules permit the delivery of one annual report to security
holders and proxy statement, or one Notice of Internet
Availability of Proxy Materials, to two or more security holders
who share an address unless we have received contrary
instructions from one or more of the security holders. This
delivery method is known as householding.
Householding may provide printing and mailing cost savings. Any
stockholder of record at a shared address to which a single copy
of the documents was delivered who wishes to receive a separate
copy of an annual report to security holders and proxy
statement, or a separate Notice of Internet Availability of
Proxy Materials, as applicable, can contact us by calling
Shareholder Services
at (201)791-7600,
by sending a letter to Sealed Air Corporation, Shareholder
Services, 200 Riverfront Boulevard Elmwood Park, NJ 07407 or by
sending us an
e-mail
at investor.relations@sealedair.com and we will promptly
deliver to you the requested documents. Stockholders of record
who wish to receive separate copies of these documents in the
future can also contact us as stated above. Stockholders of
record who share an address and are receiving multiple copies of
the annual reports to security holders and proxy statements or
Notices of Internet Availability of Proxy Materials can contact
us as stated above to request delivery of a single copy of such
documents. Stockholders who hold their shares in street
name, that is, through a bank, broker or other holder of
record, and who wish to change their householding instructions
or obtain copies of these documents should follow the
instructions on their voting instruction forms or contact the
holders of record.
63
Other
Matters
The expenses of preparing, printing and mailing this notice of
meeting and proxy material, making them available over the
Internet, and all other expenses of soliciting proxies will be
borne by us. Georgeson Inc. will solicit proxies by personal
interview, mail, telephone, facsimile,
e-mail,
Internet 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 these persons. We
will pay Georgeson a fee of $14,000 covering its services and
will reimburse Georgeson for payments made to brokers and other
nominees for their expenses in forwarding soliciting material.
In addition, our directors, officers and employees, who will
receive no compensation in addition to their regular salary or
other compensation, may solicit proxies by personal interview,
mail, telephone, facsimile,
e-mail,
Internet or other means of electronic transmission.
On behalf of the Board of Directors
H. Katherine White
Secretary
Elmwood Park, New Jersey
April 6, 2011
64
Annex A
SEALED AIR
CORPORATION
STANDARDS FOR DIRECTOR INDEPENDENCE
October 23, 2008
Under the Corporate Governance Guidelines adopted by the Board
of Directors of Sealed Air Corporation and the requirements of
the New York Stock Exchange (NYSE), the Board of Directors must
consist of a majority of independent directors. Its three
standing committeesthe Audit Committee, the Nominating and
Corporate Governance Committee, and the Organization and
Compensation Committeeare composed entirely of directors
who are independent.
For a director to be deemed independent, the Board
of Directors must affirmatively determine, based on all relevant
facts and circumstances, that the director has no material
relationships with the Company (either directly or as a partner,
shareholder or officer of an organization that has a
relationship with the Company). To assist with the determination
of independence, the Board of Directors has established
categorical standards consistent with the corporate governance
standards of the NYSE. These categorical standards require that,
to be independent, a director may not have a material
relationship with the Company. Even if a director meets all
categorical standards for independence described below, the
Board of Directors reviews all other relationships with the
Company in order to conclude that each independent director has
no material relationship with the Company.
The Board of Directors annually reviews the independence of all
non-employee directors. The Company identifies the directors
that it has determined to be independent and discloses the basis
for that determination in its annual proxy statement for the
election of directors.
Material
Relationships with the Company
A director would be deemed to have a material relationship with
the Company in any of the following circumstances:
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the director is or has been within the last three years an
employee, or has an immediate family member who is or has been
within the last three years an executive officer, of the Company
or any of its subsidiaries;
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|
the director has received, or a member of the directors
immediate family has received, during any twelve-month period
within the last three years, more than $120,000 in direct
compensation from the Company or any of its subsidiaries other
than director and committee fees and pension or other forms of
deferred compensation for prior service (provided that such
compensation is not contingent in any way on continued service
and provided further that compensation received by a director
for former service as an interim chairman or executive officer
or by an immediate family member for service as an employee
other than an executive officer need not be considered);
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(i) the director is, or has a member of the directors
immediate family who is, a current partner of a firm that is the
internal or external auditor of the Company or any of its
subsidiaries, (ii) the director is a current employee of
such a firm, (iii) the director has an immediate family
member who is a current employee of such a firm and who
personally works on the audit of the Company or any of its
subsidiaries, or (iv) the director was, or has a member of
the directors immediate family who was, within the last
three years (but is no longer) a partner or employee of such a
firm and personally worked on the audit of the Company or any of
its subsidiaries;
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the director is employed, or has a member of the directors
immediate family who is employed, or has been within the last
three years employed, as an executive officer of another company
where any of the Companys present executive officers at
the same time serves or served on that companys
compensation committee;
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A-1
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|
the director is an employee, or has a member of the
directors immediate family who is an executive officer, of
another company that makes payments to, or receives payments
from, the Company and its subsidiaries for property or services
in an amount which, in any of the last three fiscal years,
exceeded the greater of $1 million or 2% of such other
companys consolidated gross revenues; or
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the director serves as an executive officer of a charitable
organization to which the Company has contributed, in any one
year within the preceding three years, in excess of the greater
of $1 million or 2% of the charitable organizations
consolidated gross revenues.
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Material
Relationships with an Executive Officer
Consistent with the expectation that non-employee directors will
not have professional or financial relationships (including
side-by-side
investments) that could impair their independence, a director
will be deemed to have a material relationship with the Company
and not be considered independent, if any of the following apply:
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|
the director receives, or has an immediate family member who
receives, any direct compensation from an executive officer or
any immediate family member of an executive officer of the
Company;
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|
an entity affiliated with the director or with an immediate
family member of a director receives any payment from any
executive officer of the Company, other than in a routine,
commercial or consumer transaction with terms no more favorable
than those customarily offered to similarly-situated persons;
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the director or an immediate family member of a director
receives, or is affiliated with an entity that receives, any
payment, whether direct or indirect, for legal, accounting,
financial or other professional services provided to an
executive officer of the Company or an immediate family member
of an executive officer; and
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the director or an immediate family member of a director is a
current executive officer of a tax-exempt organization that
receives contributions from an executive officer of the Company,
in an amount that exceeds the lesser of $100,000 or 1% of the
tax exempt organizations consolidated gross revenues in
that fiscal year.
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Relationships
That Are Not Material
A director generally will not be deemed to have a material
relationship with the Company and will be considered
independent, if any of the following, when viewed singularly,
apply:
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a transaction in which the directors interest arises
solely from the directors position as a director of
another corporation or organization that is a party to the
transaction, and the director did not participate in furtherance
or approval of the transaction and the transaction was
negotiated on an arms length basis;
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a transaction in which the directors interest arises
solely from the directors ownership of an equity or
limited partnership interest in the other party to the
transaction, so long as the aggregate ownership of all
directors, director nominees, executive officers and five
percent stockholders of the Company (together with their
immediate family members) does not exceed 5% of the equity or
partnership interests in that other party;
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a transaction in which the directors interest arises
solely from the directors status as an employee or
non-controlling equity owner of a company to which the Company
was indebted at the end of the Companys last full fiscal
year in an aggregate amount not in excess of 5% of the
Companys total consolidated assets;
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A-2
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ownership by the director of equity or other securities of the
Company, as long as the director is not the beneficial owner,
directly or indirectly, of more than 10% of any class of the
Companys equity securities;
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the receipt by the director of compensation for service as a
member of the Board of Directors or any committee thereof,
including regular benefits received by other non-employee
directors;
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any other relationship or transaction that is not listed above
and in which the amount involved does not exceed $120,000;
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any immediate family member of the director having any of the
above relationships; and
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any relationship between the Company and a non-immediate family
member of the director.
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Definitions
For purposes of these standards:
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An executive officer means an officer
for the purposes of
Rule 16a-1(f)
under the Securities Exchange Act of 1934.
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An immediate family member includes a persons
spouse, parents, children, siblings, mothers and
fathers-in-law,
sons and
daughters-in-law,
brothers and
sisters-in-law,
and anyone (other than tenants and domestic employees) who
shares such persons home. When applying the three-year
look-back provisions above, the Company need not consider
individuals who are no longer immediate family members as a
result of legal separation or divorce, or those who have died or
become incapacitated.
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Directors have an affirmative obligation to inform the Board of
any material changes in their circumstances or relationships
that may impact their designation by the Board as
independent. This obligation includes all business
relationships between, on the one hand, directors or members of
their immediate family, and, on the other hand, the Company and
its affiliates or members of senior management and their
affiliates, whether or not such business relationships are
subject to any other approval requirements of the Company.
A-3
Annex B
POLICY AND
PROCEDURE FOR STOCKHOLDER NOMINATIONS TO THE BOARD
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1.
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The Nominating and Corporate Governance Committee will consider
director candidates recommended by stockholders for open
positions on the Board. This policy addresses the consideration
of director candidates recommended by stockholders for
nomination by the Board.
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2.
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Recommendations should be submitted to the Secretary of the
Corporation in writing, along with a statement signed by the
candidate acknowledging that:
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a.
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the candidate, if elected, will serve as a director of the
Corporation and will represent all stockholders of the
Corporation in accordance with applicable laws and the
Corporations charter and by-laws; and
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b.
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the candidate, if elected, will comply with the
Corporations Code of Conduct for directors, Corporate
Governance Guidelines, and any other applicable rule,
regulation, policy or standard of conduct applicable to the
Board of Directors and its individual members.
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In addition, each candidate must submit a fully completed and
signed Questionnaire for Directors and Officers on the
Corporations standard form and provide any additional
information requested by the Corporation, including any
information that would be required to be included in a proxy
statement in which the candidate is named as a nominee for
election as a director and information showing that the
candidate meets the Boards qualifications for nomination
as a director and for service on the committees of the Board.
Also, a candidate must be available for interviews with members
of the Corporations Board as provided in the
Corporations process for identifying and evaluating
nominees for director.
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3. |
In addition to the information to be provided by the candidate,
at the time of submitting the recommendation, the stockholder
making the recommendation should submit the following
information in writing:
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a.
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the name and address of the stockholder as they appear in the
Corporations books and the class and number of shares of
the Corporations stock held beneficially and of record by
the stockholder; and
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b.
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a description of all arrangements or understandings among the
stockholder and the candidate and any other persons (naming
them) pursuant to which the recommendation is being made by the
stockholder.
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4.
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A stockholder who wishes to recommend a candidate for election
as a director at the next annual meeting of stockholders must
submit the information described in items 2 and 3 above for
receipt by the Secretary of the Corporation sufficiently in
advance of the Boards approval of nominations for the
annual meeting to permit the Nominating and Corporate Governance
Committee and the Board to complete its evaluation of the
candidate, which will generally be no later than 120 days
prior to the first anniversary of the Corporations
previous annual meeting of stockholders.
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5.
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Candidates who are recommended by a stockholder at a time when
there are no open positions on the Board and are considered
qualified candidates by the Nominating and Corporate Governance
Committee may be placed on the rolling list of candidates for
open Board positions maintained by that Committee, generally for
a period of up to 24 months from the date that the
recommendation was received by the Secretary of the Corporation.
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6.
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Candidates recommended by stockholders will be evaluated by the
Nominating and Corporate Governance Committee on the same basis
as candidates identified by other means, including consideration
of the qualifications for nomination to the Board most recently
approved by the Board.
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7.
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Any director nomination submitted by a stockholder for
presentation by the stockholder at an annual or special meeting
of stockholders must be made in accordance with the advance
notice requirements contained in Section 2.12 of the
Corporations by-laws.
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B-1
Annex C
QUALIFICATIONS
FOR NOMINATION TO THE BOARD
The Nominating and Corporate Governance Committee will consider
the following factors, at a minimum, in recommending to the
Board potential new Board members or the continued service of
existing members:
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1.
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Directors should be of the highest ethical character and share
the values of Sealed Air Corporation as reflected in its Code of
Conduct.
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2.
|
Directors should be highly accomplished in their respective
fields, with superior credentials and recognition.
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3.
|
In selecting Directors, the Board should seek to achieve a mix
of Board members that enhances the diversity of background,
skills and experience on the Board, including with respect to
age, gender, international background, ethnicity and specialized
experience.
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4.
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Each Director should have relevant expertise and experience and
be able to offer advice and guidance to the chief executive
officer based on that expertise and experience.
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5.
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In selecting Directors, the Board should generally seek active
and former executives of public companies and of other complex
organizations, including government, educational and other not
for profit institutions, or persons with specialized expertise
in a discipline that is relevant to service as a Director of
Sealed Air Corporation.
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6.
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The majority of Directors should be independent under applicable
listing standards, Board and Committee guidelines and any
applicable legislation.
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7.
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Each Director should be financially literate, and
some should be considered financial experts as
described in applicable listing standards, legislation and Audit
Committee or Board guidelines.
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8.
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Each Director should have sound business judgment, be able to
work effectively with others, have sufficient time to devote to
the affairs of the Company, and be free from conflicts of
interest. Also, all Directors should be independent of any
particular constituency and be able to represent all
stockholders of the Company.
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9.
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Each new Director should confirm his or her willingness and
ability to serve for a number of years as a Director prior to
retirement from the Board, although the Board has not adopted a
retirement age for Directors.
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10.
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The Nominating and Corporate Governance Committee will also
consider any other factors related to the ability and
willingness of a new member to serve or an existing member to
continue his or her service.
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Annex D
2005 CONTINGENT
STOCK PLAN
OF
SEALED AIR CORPORATION
As Proposed to Be Amended on May 18, 2011
Section 1. Purpose. The
purpose of the 2005 Contingent Stock Plan of Sealed Air
Corporation is to assist the Corporation and its Subsidiaries in
attracting and retaining employees and
U.S.-based
consultants of outstanding competence by providing an incentive
that permits those employees and consultants responsible for the
Corporations growth to share directly in that growth, to
motivate those employees and consultants by means of appropriate
incentives to achieve the Corporations long-range goals,
and to further the identity of their interests with those of the
stockholders of the Corporation.
Section 2. Definitions. Capitalized
terms used in this Plan have the meanings specified in this
Section 2:
Award means a grant to a Participant of
Restricted Stock, Restricted Stock Units, Performance Share
Units or a Cash Award, or any combination thereof.
Award Grant means the written agreement
confirming an Award and setting forth the terms and conditions
thereof. Award Grants need not be identical and shall not
contain provisions inconsistent with provisions of the Plan.
Board of Directors means the Board of
Directors of the Corporation.
Cash Award means an Award, subject to a
Period of Restriction, that is granted to a participant under
the Plan and provides for the right to receive cash as provided
in the Award Grant, where the amount of such cash is measured by
the Fair Market Value on the date that the Period of Restriction
ends times the number of shares of Common Stock covered by the
Cash Award.
Cause means any of the following as determined by
the Committee: (i) an act of gross negligence or willful
misconduct significantly injurious to the Corporation or any
Subsidiary, (ii) gross dereliction of duties after notice
to the Participant and failure to correct the deficiencies
within a thirty (30) day period thereafter, or
(iii) fraud in the Participants capacity as an
employee or consultant.
Change in Control means, and shall be deemed
to have occurred upon, any of the following events:
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(1)
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Any Person becomes the beneficial owner (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of 30% or more of the
combined voting power of the Outstanding Voting Securities;
provided, however, that, for purposes of this definition, the
following acquisitions shall not constitute a Change in Control:
(i) any acquisition directly from the Corporation,
(ii) any acquisition by the Corporation, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any Subsidiary, or
(iv) any acquisition pursuant to a Corporate Transaction
that complies with subsections (3)(A), (3)(B) and (3)(C) of this
definition;
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(2)
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Continuing Directors cease for any reason to constitute at least
a majority of the Board of Directors;
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(3)
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Consummation of a Corporate Transaction unless, following such
Corporate Transaction, (A) all or substantially all of the
individuals and entities that were the beneficial owners of the
Outstanding Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly,
more than 50% of the then-outstanding combined voting power of
the then-outstanding voting securities entitled to vote
generally in the election of directors (or, for a non-corporate
entity, equivalent governing body) of the entity resulting from
such Corporate Transaction (including, without limitation, an
entity that, as a
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result of such transaction, owns the Corporation or all or
substantially all of the Corporations assets either
directly or through one or more subsidiaries) in substantially
the same proportions as their ownership of the Outstanding
Voting Securities immediately prior to such Corporate
Transaction, (B) no Person (excluding any corporation
resulting from such Corporate Transaction or any employee
benefit plan (or related trust) of the Corporation or such
corporation resulting from such Corporate Transaction)
beneficially owns, directly or indirectly, 30% or more of the
combined voting power of the then-outstanding voting securities
of such entity, except to the extent that such ownership existed
prior to the Corporate Transaction, and (C) at least a
majority of the members of the board of directors (or, for a
non-corporate entity, equivalent governing body) of the entity
resulting from such Corporate Transaction were Continuing
Directors at the time of the execution of the initial agreement
or of the action of the Board of Directors providing for such
Corporate Transaction; or
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(4)
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The stockholders of the Corporation give approval of a complete
liquidation or dissolution of the Corporation.
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Either the Committee or the Board of Directors, upon
recommendation of the Committee, may terminate, amend, or modify
this definition or determine that it does not apply to a
specific transaction that would otherwise be a Change in Control
at any time prior to the date of a Change in Control. The
provisions and application of this definition may not be
terminated, amended or modified and the Committee may not waive
its application to a specific transaction, however, on or after
the date of a Change in Control to affect adversely any Award
theretofore granted under the Plan without the written consent
of each Participant with respect to such Awards made to such
Participant.
Code means the Internal Revenue Code of 1986,
as amended.
Committee means the Organization and
Compensation Committee of the Board of Directors described in
Section 4 or any committee or other person or persons
designated by the Board of Directors to administer the Plan.
Common Stock means the Corporations
authorized Common Stock, par value $0.10 per share, except as
this definition may be modified as provided in Section 13.
Consultant means an individual who is a
consultant to the Corporation or a Subsidiary and who resides in
the United States of America.
Continuing Director means a director of the
Corporation who is serving as such on the Effective Date and any
person who is approved as a nominee or elected to the Board of
Directors by a majority of the Continuing Directors who are then
members of the Board of Directors of the Corporation, but
excluding, for this purpose, any such person whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation
of proxies or consent by or on behalf of a Person other than the
Board of Directors.
Corporate Transaction means a reorganization,
merger, statutory share exchange, consolidation, sale of all or
substantially all of the Corporations assets, or the
acquisition of assets or stock of another entity by the
Corporation, or other corporate transaction involving the
Corporation or any of its Subsidiaries.
Corporation means Sealed Air Corporation, a
Delaware corporation, or any successor thereto.
Date of Termination means the first day
occurring on or after the date of grant of an Award on which the
Participant is not performing services as an Employee or
Consultant, regardless of the reason for the cessation of
services; provided that a cessation of services shall not be
deemed to occur by reason of a transfer of a Participant between
the Corporation and a Subsidiary or between two Subsidiaries;
and further provided that a Participants services shall
not be considered terminated while the Participant is on an
approved leave of absence from the Corporation or a Subsidiary.
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Director means any member of the Board of
Directors who is not an Employee.
Disability shall mean permanent and total
disability as determined in each case by the Committee in its
discretion, which determination shall be final. Notwithstanding
the foregoing, for any Awards that constitute nonqualified
deferred compensation within the meaning of Section 409A(d)
of the Code and provide for an accelerated payment in connection
with any Disability, Disability shall have the same meaning as
set forth in any regulations, revenue procedure, revenue rulings
or other pronouncements issued by the Secretary of the United
States Treasury pursuant to Section 409A of the Code,
applicable to such arrangements.
Effective Date shall have the meaning set
forth in Section 23.
Employee means any employee of the
Corporation or a Subsidiary who is receiving remuneration for
personal services rendered to the Corporation or Subsidiary,
including any such person who is an officer of the Corporation
or Subsidiary, other than (1) solely as a director of the
Corporation or a Subsidiary, (2) as a consultant,
(3) as an independent contractor, (4) as an individual
who is a leased employee within the meaning of Code
section 414(n), or (5) any other individual engaged by
the Corporation or Subsidiary in a relationship that the
Corporation in its sole discretion characterizes as other than
an employment relationship or who has waived his rights to
coverage as an employee.
Exchange Act means the Securities Exchange
Act of 1934, as amended.
Fair Market Value as of any specified date
means the closing sale price of the Common Stock on the New York
Stock ExchangeComposite Tape on such date or, if there are
no sales on such date, on the next preceding day on which there
are sales. If the Common Stock ceases to be listed on the NYSE,
Fair Market Value shall be determined in such manner as shall be
selected by the Committee.
Good Reason means a termination of employment
by a Participant who is an employee of the Corporation or any
Subsidiary in connection with any of the following: (i) a
material diminution in the Participants annual cash
compensation opportunity (comprised of base salary and target
annual bonus opportunity), (ii) a material diminution in
the Participants authorities, duties or responsibilities
or (iii) a material change in the geographic location at
which the Participant is required to perform services (other
than a change in location as the result of the completion of a
temporary assignment at another location); provided, however,
that (A) the Participant provides notice to the Corporation
of the existence of such condition within ninety (90) days
after the existence of such condition first arose, (B) the
Corporation fails to correct such condition within thirty
(30) days after such notice and (C) the Participant
terminates employment within one year after such condition first
arose.
NYSE means the New York Stock Exchange.
Outstanding Voting Securities means the
outstanding voting securities of the Corporation entitled to
vote generally in the election of directors.
Participant means an Employee or Consultant
selected by the Committee to receive an Award.
Performance-Based Exception means the
performance-based exception set forth in Code section
162(m)(4)(C) from the deductibility limitations of Code
section 162(m).
Performance Goal means a target based on
Performance Measures that is established by the Committee in
connection with an Award of Performance Share Units; Performance
Goals may be established on a corporate-wide basis or with
respect to one or more business units, divisions, or
Subsidiaries, and may be in either absolute terms or relative to
the performance of one or more comparable companies or an index
covering multiple companies.
Performance Measures means criteria
established by the Committee relating to any of the following:
growth in net sales; gross profit; operating profit; net
earnings; measures of cash flow; measures of expense control;
improvement in management of working capital items (inventory,
D-3
accounts receivable or accounts payable); earnings before
interest and taxes (commonly called EBIT); earnings before
interest, taxes, depreciation and amortization (commonly called
EBITDA); earnings per share; sales from newly-introduced
products; successful completion of strategic acquisitions, joint
ventures or other transactions; measures of product quality,
safety, productivity, yield, customer satisfaction or
reliability (on time and complete orders); measures of return on
assets, return on invested capital or return on equity;
shareholder value added (net operating profit after tax (NOPAT),
excluding non-recurring items, less the Corporations cost
of capital); the ratio of net sales to net working capital;
share price; or any combination of the foregoing goals.
Performance Measures may be applied by excluding the impact of
charges, credits and related costs for restructurings,
discontinued operations, extraordinary items, debt redemption or
retirement, and the cumulative effects of accounting changes,
each as defined by U.S. generally accepted accounting
principles, and other unusual or non-recurring items as defined
by the Committee when the goals are established.
Performance Share Units means an Award,
subject to a Period of Restriction and achievement of
Performance Goals, that is granted to a Participant under the
Plan and provides for the right to receive a number of shares of
Common Stock for each Performance Share Unit as specified in the
Award Grant. Performance Share Units may be granted to Employees
who are executive officers or key employees of the Corporation
and its Subsidiaries.
Period of Restriction means the period during
which the transfer of shares of Restricted Stock or any other
Award made under the Plan is limited based on the passage of
time and during which the Restricted Stock or any other Award
made under the Plan may remain subject to a substantial risk of
forfeiture, as provided in Section 7. Performance Share
Units also remain subject to a substantial risk of forfeiture
until the performance period has ended and the Committee has
certified that the applicable Performance Goals have been
achieved.
Person means an individual, entity or group
within the meaning of Section 13(d)(3) or 14(d) (2) of
the Exchange Act.
Plan means this 2005 Contingent Stock Plan of
Sealed Air Corporation.
Restricted Stock means an Award of shares of
Common Stock, subject to a Period of Restriction, that is
granted to a Participant under the Plan. Unless and until any
forfeiture of Restricted Stock, the Participant shall be
entitled to receive cash dividends on such shares and shall be
entitled to vote such shares.
Restricted Stock Unit means an Award, subject
to a Period of Restriction, that is granted to a Participant
under the Plan and provides for the right to receive one share
of Common Stock for each Restricted Stock Unit, as specified in
the Award Grant. The Committee may provide that Restricted Stock
Units receive dividend equivalents payable in cash in the event
that a record date for payment of cash dividends payable on
outstanding shares of Common Stock occurs between the
Participants execution of an Award Grant for Restricted
Stock Units and the issuance of shares on account of such
Restricted Stock Units following the end of the Period of
Restriction.
Securities Act means the Securities Act of
1933, as amended.
Subsidiary means any corporation, limited
liability company, partnership, joint venture or other entity
during any period in which at least a 50% voting or profits
interest is owned, directly or indirectly, by the Corporation,
and any other business venture designated by the Committee in
which the Corporation has a significant interest, as determined
in the discretion of the Committee.
Section 3. Stock
Available. The aggregate number of shares of
Common Stock that may be issued to Participants pursuant to
Awards granted under the Plan is the sum of
(A) 5,000,000 shares plus (B) effective upon
approval of the Corporations stockholders at the 2008
Annual Meeting of Stockholders, 3,000,000 shares plus
(C) effective upon approval of the Corporations
stockholders at the 2011 Annual Meeting of Stockholders,
4,000,000 shares, in each case subject to
adjustment in accordance with the provisions of Section 13.
If any Common Stock issued under the Plan is reacquired by the
Corporation due
D-4
to a forfeiture described in Section 7 or reacquired or
withheld in satisfaction of tax withholding with respect to an
Award, such shares of Common Stock will again become available
for Awards under the Plan. Any shares of Common Stock related to
Awards that terminate by forfeiture, cancellation, or otherwise
without the issuance of such shares shall again be available for
Awards under the Plan. Cash Awards, which are paid in cash, do
not count against the total amount of Common Stock that may be
issued under the Plan, provided that Cash Awards may not be made
during any calendar year measured in the aggregate by more than
100,000 shares of Common Stock. The maximum number of
shares of Common Stock that may be issued to an Employee with
respect to Performance Share Units during any calendar year is
two-tenths of 1% (0.2%) of the issued and outstanding shares of
the Corporations Common Stock on January 1 of such
calendar year. Shares issued under the Plan may be original
issue shares, shares held in treasury, or shares reacquired by
the Corporation under corporate repurchase programs, as
determined by the Chief Executive Officer of the Corporation (or
the Chief Executive Officers designee) from time to time,
unless otherwise determined by the Committee.
Section 4. Administration. The
Plan shall be administered by the Committee, which shall be
composed of not less than three Directors chosen from time to
time by the Board of Directors. No Director shall be eligible or
continue to serve as a member of the Committee unless such
person has been determined to be an independent
director under applicable stock exchange standards and is
an outside director within the meaning of
regulations under Code section 162(m) and a
non-employee director within the meaning of Exchange
Act
Rule 16b-3.
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 take all
actions and 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, Employees,
Consultants, Participants and their estates and beneficiaries.
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 made under the Plan. The Committee may delegate any of its
duties and powers hereunder to the extent permitted by
applicable law.
Section 5. Terms,
Conditions and Form of Award Grants. The
Committee shall have exclusive authority, except as otherwise
limited by the Plan, to select the Employees and Consultants to
be granted Awards, to grant all Awards, to determine the time or
times at which Awards will be granted and the type of Awards to
be granted, to condition the grant of Awards to specific
Participants upon achievement of performance measures under any
other plan or program adopted by the Corporation, 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 limitations, restrictions and conditions
applicable to each Award, to prescribe the form or forms of
Award Grants (which need not be identical), 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. In making determinations
relating to Awards, the Committee may consult with and take into
account the recommendations of the Chief Executive Officer of
the Corporation with respect to Awards made to other Employees
and Consultants. The Committee may also take into account the
nature of the services rendered by such Employees and
Consultants, their present and potential contributions to the
Corporations success and such other factors as the
Committee in its sole discretion shall deem relevant. Awards
need not be uniform among Participants. The receipt of an Award
by a Participant shall not entitle that Participant to receive
an Award in the future. The Committee shall inform the
appropriate officers of the Corporation of its determinations,
and such officers shall inform the Participant to whom an Award
has been made of the grant of such Award. The Committee may
authorize any officer of the Corporation to provide or enter
into Award Grants or other agreements on behalf of the
Corporation and to take all other action necessary or desirable
to effectuate the determinations of the Committee.
Section 6. Acceptance
and Non-Transferability of Awards. A
Participant who has been granted an Award must accept the Award
in accordance with such procedures as the Committee may
establish from
D-5
time to time, including the acceptance of the Award Grant
documentation and any additional documentation that may be
required. No Award shall be transferable by a Participant.
Section 7. Period
of Restriction. Each Award Grant shall
specify the applicable Period of Restriction. Notwithstanding
any provision of the Plan to the contrary, any Award that vests
solely on the basis of the passage of time (e.g., not on the
basis of any performance standards) shall not vest more quickly
than ratably over the three (3) year period ending on the
third anniversary of the Award grant date, except that the Award
may vest sooner under any of the following circumstances as more
specifically set forth in the applicable Award Grant:
(i) the Participants death, (ii) the
Participants Disability, (iii) a Participants
termination of employment with the Corporation and its
Subsidiaries within two (2) years following a Change in
Control either (A) by the Corporation without Cause or
(B) by the Participant for Good Reason, or (iv) in
connection with establishing the terms and conditions of
employment of a Participant necessary for the recruitment of the
Participant or as the result of a business combination or
acquisition by the Corporation or any of its Subsidiaries. The
provisions of the preceding sentence shall not apply to any
Award of Restricted Stock or Restricted Stock Units that is made
to a Participant as a portion of the Participants annual
incentive compensation as part of the stock leverage
opportunity under the Corporations Annual Incentive
Plan, or any similar plan or program as determined by the
Committee applicable to any Participant. In addition, the
Committee may affirmatively determine not to seek forfeiture of
an Award as to all or part of the shares subject thereto and to
permit such Award either to be paid immediately (in whole or in
part) or to continue to vest during the remainder of the
original Period of Restriction subject to satisfaction of
conditions specified by the Committee, which determination must
be made no later than 90 days following the
Participants Date of Termination. Any such determination
shall be communicated to the Chief Executive Officer or other
appropriate officer of the Corporation, who shall be authorized
to take any and all action necessary to effectuate such decision.
Section 8. Performance
Share Units. The Committee may make Awards
consisting of Performance Share Units containing such terms and
conditions and subject to such restrictions and contingencies as
the Committee shall determine, subject to the terms of the Plan.
Performance Share Units shall be conditioned on the achievement
of Performance Goals, based on one or more Performance Measures,
as determined by the Committee, over a performance period not
less than one year prescribed by the Committee. For Performance
Share Units made to Employees that are designed to qualify for
the Performance-Based Exception, the grant of the Performance
Share Units and the determination of Performance Goals shall be
made by the Committee during the applicable periods required
under Code section 162(m) and the Committee shall certify
achievement of the applicable Performance Goals prior to
issuance of shares under each Award of Performance Share Units
as required under Code section 162(m). With respect to
Awards of Performance Share Units that are designed to qualify
for the Performance-Based Exception, the Committee shall have
the discretion to adjust the Awards downward but not upward. If
a Change in Control occurs after a Performance Share Unit has
been granted but before completion of the performance period,
and if the Participants employment with the Corporation
and its Subsidiaries is terminated within two (2) years
following the Change in Control either (A) by the
Corporation without Cause or (B) by the Participant for
Good Reason, then:
(x) the target payout opportunities attainable under such
Award shall be deemed to have been fully earned as of the date
of termination based upon the greater of: (I) an assumed
achievement of all relevant performance goals at the
target level, or (II) the actual level of
achievement of all relevant performance goals against target as
of the Corporations fiscal quarter end preceding the
Change in Control, and
(y) based on such amount, there shall be a pro rata payout
to the Participant within thirty (30) days following the
date of termination of employment based upon the length of time
within the performance period that has elapsed prior to the date
of termination of employment.
Section 9. Issuance
of Shares of Common Stock to
Participants. All shares of Common Stock
issued as Restricted Stock under the Plan shall, so long as the
Period of Restriction imposed by the Plan remains in effect, be
represented by certificates with restrictive legends and shall
be subject to stop-
D-6
transfer orders. Any certificate representing shares of
Restricted Stock for which the Period of Restriction remains in
effect shall be held in custody by the Corporation. Participants
may be required to execute stock powers or other similar
instruments in order to facilitate the return to the Corporation
of Restricted Stock upon forfeiture. Upon the forfeiture of any
Restricted Stock, such shares of Common Stock represented by the
Restricted Stock shall be transferred to the Corporation without
further action by the Participant, unless the Committee in its
sole discretion determines not to seek forfeiture of the Award
in whole or in part. When (i) the Period of Restriction has
ended (or the Committee has determined not to seek forfeiture
following the Date of Termination of the Participant) with
respect to an Award of Restricted Stock, Restricted Stock Units
or Performance Shares Units, (ii) all other conditions
and contingencies have been satisfied with respect to an Award
of Performance Share Units and (iii) the Participant has
complied with any tax withholding requirement described in
Section 18, then the Participant may obtain from the
Corporation a certificate or certificates or a statement from
the Corporation representing such shares in book entry form,
free of all restrictions except those that may be imposed by law.
Section 10. Government
and Other Regulations and Restrictions. The
obligation of the Corporation to issue Common Stock under the
Plan shall be subject to all applicable laws, rules and
regulations and to such approvals by governmental agencies as
may be required.
Section 11. Registration
of Shares. The Corporation shall be under no
obligation to register any shares of Common Stock under the
Securities Act. However, an Award Grant 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 underwriters commission, if
any.
Section 12. No
Rights in Common Stock. No Participant 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
Participant following execution of an Award Grant and, for an
Award of Restricted Stock Units or Performance Share Units,
after the end of the Period of Restriction and, if applicable,
upon the Committees certification of achievement of any
Performance Goals and other conditions established by the
Committee, and then only from the date the Participant becomes
the record owner thereof.
Section 13. Adjustments. In
the event of any change in corporate capitalization, such as a
stock dividend,
split-up,
combination of shares, or reclassification, or a corporate
transaction, such as a merger, consolidation, separation,
including a spin-off, or other distribution of stock or property
of the Corporation, any reorganization, or any partial or
complete liquidation of the Corporation, such adjustment shall
be made in the number and class of shares that may be issued
under the Plan and in the number and class of
and/or price
of shares subject to outstanding Awards granted under the Plan
as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or
enlargement of rights.
Section 14. 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 under 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 15. Corporations
Right to Terminate Employment. Nothing
contained in the Plan or in any Award Grant shall confer upon
any Participant a right to continue in the employ of or as a
consultant to the Corporation or a Subsidiary or interfere in
any way with the right of the Corporation or a Subsidiary to
terminate the employment of any Employee or the consulting
relationship of any Consultant at any time, whether with or
without cause.
Section 16. Effect
on Compensation. Awards received by
Participants shall not be deemed a part of any
Participants compensation for purposes of determining such
Participants payments or benefits
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under any benefit plan, severance program, or severance pay law
of the Corporation, any Subsidiary or any country.
Section 17. Plan
Unfunded. The Plan shall be unfunded. The
Corporation will not create any trust or separate fund in
connection with the Plan. Neither the Corporation nor any of its
Subsidiaries shall have any obligation to set aside funds or
segregate assets to ensure the payment of any Award. The Plan
shall not establish any fiduciary relationship between the
Corporation, any of its Subsidiaries and any Participant or
other person. To the extent any person holds any rights by
virtue of an Award under the Plan, such right shall be no
greater than the right of an unsecured general creditor of the
Corporation and its Subsidiaries.
Section 18. Tax
Withholding. Each Award Grant 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 under the Plan or the reacquisition of
such Common Stock by the Corporation. The Corporation may cause
all or any portion of any tax withholding obligation or other
charges described in the preceding sentence to be satisfied by
the Corporation withholding from the shares of Common Stock
covered by an Award a number of shares (rounded down to the
nearest whole share) with an aggregate Fair Market Value on the
date that such withholding obligation arises equal to the
aggregate amount of such taxes and other charges. Regardless of
any other provision of the Plan, the Corporation may refuse to
issue or to deliver to the Participant certificates or a book
entry statement representing shares covered by an Award until
the Participant to whom the Award was made complies with any
withholding obligation.
Section 19. 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 13, any change in
the Corporations business, any issuance of debt
obligations or stock by the Corporation or any grant of options
on stock of the Corporation.
Section 20. 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 13, the number of shares available for
issuance under the Plan and the class of individuals eligible
for Awards shall not be expanded. In addition, the Corporation
will obtain approval of the stockholders of the Corporation of
any amendment to the Plan for which the Exchange Act or the
rules of the NYSE requires approval by the stockholders of the
Corporation or to the extent the Committee otherwise determines
that stockholder approval is required under applicable law. The
Plan shall have a term of ten years from its Effective Date,
provided, that the Plan shall terminate earlier if no additional
shares of Common Stock remain available for Awards under the
Plan. In the event of Plan termination or expiration, any
then-outstanding Award shall remain in effect under the terms of
its Award Grant.
Section 21. Foreign
Jurisdictions. The Committee may, from time
to time, adopt, amend and terminate under the Plan such
arrangements, not inconsistent with the intent of the Plan, as
it may deem necessary or desirable to make available tax or
other benefits of laws of any foreign jurisdiction to
Participants who are subject to such laws and who receive Awards
under the Plan.
Section 22. Applicable
Law. The Plan shall be construed,
administered, regulated and governed in all respects under and
by the laws of the United States to the extent applicable, and
to the extent such laws are not applicable, by the laws of the
state of Delaware.
Section 23. Effective
Date. The Plan shall become effective as of
May 20, 2005, (the Effective Date) if it is
approved by vote of the stockholders of the Corporation at the
2005 Annual Meeting of Stockholders. On and after the Effective
Date, no Awards shall be granted under the Contingent Stock Plan
of Sealed Air Corporation.
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Section 24. Compliance
With Code Section 409A. It is not
intended that Awards under the Plan shall be subject to the
requirements of Code Section 409A because Awards generally
will be payable as soon as administratively practicable after
the Award becomes vested. However, to the extent that Code
Section 409A does apply to an Award, the Plan is intended
to comply with Code Section 409A, and official guidance
issued thereunder. Notwithstanding any provision of the Plan to
the contrary, the Plan shall be interpreted, operated and
administered consistent with this intent. In that regard,
and notwithstanding any provision of the Plan to the contrary,
the Corporation reserves the right to amend the Plan or any
Award granted under the Plan, by action of the Committee,
without the consent of any affected Participant, to the extent
deemed necessary or appropriate for purposes of maintaining
compliance with
Code Section 409A and the regulations promulgated
thereunder. In addition, any payments under the Plan of an
amount that is deferred compensation under Code
Section 409A in connection with a Participants
termination of employment shall not be made earlier than six
(6) months after the Date of Termination to the extent
required by Code Section 409A(a)(2)(B)(i).
D-9
Annex E
SEALED AIR
CORPORATION
2002 STOCK PLAN
FOR NON-EMPLOYEE DIRECTORS
As Proposed to Be Amended on May 18, 2011
Section 1. Purpose. The
Sealed Air Corporation 2002 Stock Plan for Non-Employee
Directors (the Plan) is designed to enhance the
ability of Sealed Air Corporation (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 Corporations common stock, par
value $0.10 per share (Common Stock). The Plan
provides for payment in shares of the Common Stock of all or a
portion of the Retainer (as defined below) 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 the sum of
(A) 200,000 shares plus (B) effective upon approval of
the Corporations stockholders at the 2011 Annual Meeting
of Stockholders, 200,000 shares, in each case, subject
to adjustment in accordance with the provisions of
Section 9.
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 he or she becomes otherwise entitled to receive a
Retainer under the Plan, is not an officer or employee of the
Corporation or any of its Subsidiaries (as such term is defined
in Section 18). 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. Retainer. Retainers,
which shall be either Annual Retainers or Interim Retainers,
shall be earned by Non-Employee Directors as follows:
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(a) |
Annual Retainers. Upon the adjournment
of each annual meeting of the stockholders of the Corporation,
each Non-Employee Director who has been elected a director of
the Corporation at such meeting shall be entitled to receive an
Annual Retainer in an amount established prior to such annual
meeting by the Board of Directors. The amount of the Annual
Retainer may be expressed in cash, shares of Common Stock or a
combination thereof, as more fully described in
Section 5(a) below.
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(b) |
Interim Retainers. If any Non-Employee
Director is elected a director other than at an annual meeting
of the stockholders of the Corporation, then on the date of such
Non-Employee Directors election such Non-Employee Director
shall be entitled to an Interim Retainer in the amount of
one-twelfth of the Annual Retainer for Non-Employee Directors
elected at the previous annual meeting of the stockholders for
each full
30-day
period during the period commencing on and including the date of
such persons election as a director and ending on and
including the first anniversary of the date of the previous
annual meeting of stockholders.
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(c) |
Plan Periods. The first Plan Period
shall commence upon the election of directors at the 2002 annual
meeting of the stockholders of the Corporation and terminate
upon the election of directors at the 2003 annual meeting of the
stockholders of the Corporation. Subsequent Plan Periods shall
relate to successive similar periods between annual meetings of
the stockholders of the Corporation.
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Section 5. Form
and Payment of Retainers.
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(a) |
The Board may establish the amount of the Annual Retainer either
as an amount of cash, a number of shares of Common Stock or a
combination of an amount of cash and a number of shares of
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Common Stock. Regardless of how expressed, the Board shall also
determine the portion of the Annual Retainer to be payable in
cash and the portion to be payable by delivery of shares of
Common Stock, subject to the following additional rules:
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(i)
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For any portion of the Annual Retainer expressed as cash and
payable by delivery of shares of Common Stock, the number of
shares of Common Stock will be determined in accordance with
Section 5(c) below;
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(ii)
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For any portion of the Annual Retainer expressed as a number of
shares of Common Stock and payable in cash, the amount of cash
payable will be determined in accordance with Section 5(d)
below;
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(iii)
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The Board may permit Non-Employee Directors to elect between
forms of payment in accordance with such rules as the Board may
establish from time to time; and
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(iv)
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Notwithstanding any provision herein to the contrary (including
any Non-Employee Director election), at least 50% of the Annual
Retainer shall be payable as shares of Common Stock.
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(b) |
For any portion of the Annual Retainer payable as cash, payment
shall be made in a single payment as promptly as practicable
after the end of the calendar quarter in which the Plan Period
commences. For any portion of an Interim Retainer payable in
cash, payment shall be made in a single payment as promptly as
practicable after the end of the calendar quarter in which the
Non-Employee Director is elected, provided, that if such
Non-Employee Director is elected between April 1 and the next
annual meeting of stockholders of the Corporation, then such
portion of the Interim Retainer shall be paid as promptly as
practicable after the Non-Employee Director is elected.
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(c) |
For any portion of the Annual Retainer expressed as an amount of
cash and payable as shares of Common Stock (either as required
by the Board or as elected by a Non-Employee Director, if
permitted), the number of shares of Common Stock shall be
calculated by dividing the amount of such portion of the Annual
Retainer by the last sales price of the Common Stock on the
applicable annual meeting date as reported on the consolidated
transaction reporting system for New York Stock Exchange listed
issues on that date or, if no sales occurred on that date, the
last sales price on the consolidated transaction reporting
system on the most recent prior day on which a sale occurred
(the Fair Market Value Per Share). Similarly, for
any portion of an Interim Retainer expressed as an amount of
cash and payable in shares of Common Stock, the number of shares
of Common Stock to be paid shall be calculated using the Fair
Market Value Per Share on the date of election of the
Non-Employee Director who will receive the Interim Retainer. If
the calculation of the portion of an Annual Retainer or an
Interim Retainer to be paid in shares of Common Stock would
result in a fractional share of Common Stock being issued, then
the number of shares to be so paid shall be rounded up to the
nearest whole share. No fractional shares of Common Stock shall
be issued under this Plan, whether as part of an Annual Retainer
or as part of an Interim Retainer.
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(d) |
For any portion of the Annual Retainer expressed as a number of
shares of Common Stock and payable in cash (either as required
by the Board or as elected by a Non-Employee Director, if
permitted), the amount of cash shall be calculated by
multiplying the number of shares of Common Stock by the Fair
Market Value Per Share on the applicable annual meeting date.
Similarly, for any portion of an Interim Retainer expressed as a
number of shares of Common Stock and payable as cash, the amount
of cash shall be calculated using the Fair Market Value Per
Share on the date of election of the Non-Employee Director who
will receive the Interim Retainer.
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(e) |
For any portion of the Annual Retainer or any Interim Retainer
payable as shares of Common Stock, such shares of Common Stock
shall be issued to each applicable Non-Employee Director as
promptly as practicable after the Non-Employee Director becomes
entitled to receive them.
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(f) |
Payment of all or part of a Retainer may be deferred under the
Sealed Air Corporation Deferred Compensation Plan for Directors
or any other applicable plan or arrangement providing for the
deferred payment of retainers that may be in effect from time to
time. Shares of Common Stock which
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a Non-Employee Director becomes entitled to receive under this
Plan and for which payment is deferred under any such deferral
arrangement shall be deemed to be issued under this Plan when
issued.
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Section 6. Non-Transferability
of Grants. Except for gifts of shares
permitted under this Section, 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 have been issued as long as such
Non-Employee Director shall remain a director of the
Corporation. Any Non-Employee Director of the Corporation may
make a gift of 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 conditions that (i) 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, except upon a Change of Control as provided below,
and (ii) the Permitted Transferee shall execute an
agreement with the Corporation on terms acceptable to counsel to
the Corporation providing that such shares shall be subject to
all terms and restrictions of this Plan. For the purpose of this
Section 6, 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.
Section 7. Execution
of Agreement. Each grant of Common Stock
pursuant to this Plan shall be contingent upon and subject to
the execution by the Non-Employee Director of a document
agreeing to hold the shares of Common Stock covered by such
grant in accordance with the terms and conditions of the Plan
(including without limitation Sections 6, 11 and
12) 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 8. Change
of Control.
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(a) |
A Change in Control means, and shall be deemed to
have occurred upon, any of the following events:
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(i)
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Any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act) (a Person) becomes the beneficial owner (within
the meaning of
Rule 13d-3
promulgated under the Securities Exchange Act) of 30% or more of
the combined voting power of the then-outstanding voting
securities of the Corporation entitled to vote generally in the
election of directors (the Outstanding Voting
Securities); provided, however, that, for purposes of this
Section 8(a)(i), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by the
Corporation, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the
Corporation or any Subsidiary, or (iv) any acquisition
pursuant to a transaction that complies with
Sections 8(a)(iii)(A), 8(a)(iii)(B) and 8(a)(iii)(C);
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(ii)
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Individuals who, as of the date hereof, constitute the Board of
Directors (each a Continuing Director) cease for any
reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Corporations stockholders,
was approved by a vote of at least a majority of the Continuing
Directors shall be considered to be a Continuing Director, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than
the Board of Directors;
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(iii)
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Consummation of a reorganization, merger, statutory share
exchange or consolidation or similar transaction involving the
Corporation or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the
Corporation, or the acquisition of assets or stock of another
entity by the Corporation or any of its subsidiaries (each, a
Business Combination), in each case unless,
following such Business Combination, (A) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding
combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors (or, for
a non-corporate entity, equivalent governing body) of the entity
resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction,
owns the Corporation or all or substantially all of the
Corporations assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership of the Outstanding Voting Securities immediately prior
to such Business Combination, (B) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Corporation or
such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of the
combined voting power of the then-outstanding voting securities
of such entity, except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a
majority of the members of the board of directors (or, for a
non-corporate entity, equivalent governing body) of the entity
resulting from such Business Combination were Continuing
Directors at the time of the execution of the initial agreement
or of the action of the Board of Directors providing for such
Business Combination; or
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(iv)
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The stockholders of the Corporation give approval of a complete
liquidation or dissolution of the Corporation.
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The Board of Directors may terminate, amend, or modify this
definition or determine that it does not apply to a specific
transaction that would otherwise be a Change in Control.
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(b) |
Upon any Change in Control, 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 6 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 11 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 unlegended shares as set
forth in the last sentence of Section 11 of the Plan.
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Section 9. Adjustments. In
the event of changes in the Common Stock of the Corporation
after the commencement of the first Plan Period by reason of any
stock dividend,
split-up,
combination of shares, reclassification, recapitalization,
merger, consolidation, reorganization or liquidation:
(a) the restrictions provided in Section 6 and the
requirement of a legend on stock certificates provided in
Sections 11 and 12(d) shall apply to any securities issued
in connection with any such change in respect of stock which has
been issued under the Plan and (b) appropriate adjustments
shall be made by the Board of Directors as to (i) the
number and class of shares available under the Plan in the
aggregate, and (ii) the number of shares to be delivered to
a Non-Employee Director where such change occurred after the
Non-Employee Director was elected but before the date the stock
covered by the applicable Retainer is issued, including deferred
payments under any of the deferral arrangements referred to in
Section 5(c).
Section 10. 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, recapitalization or other change in
the Common Stock referred to in Section 9, any change in
the Corporations business, any issuance of debt
obligations or stock by the Corporation or any grant of options
on stock of the Corporation.
E-4
Section 11. Legend
on Stock Certificates. All shares of Common
Stock issued under the Plan shall, so long as the restrictions
imposed by the Plan (including without limitation
Section 6) remain in effect, be represented by
certificates, each of which shall bear a legend in substantially
the following form:
This certificate and the shares represented hereby are held
subject to the terms of the 2002 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, or for a statement from
the Corporation representing such shares held in book entry form
free of such 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 6 has otherwise ceased to
apply to the shares covered by such certificate.
Section 12. Government
and Other Regulations and Restrictions.
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(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.
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(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 persons
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 Corporations 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.
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(c) |
Resale of Shares. Without limiting the
generality of Section 6, 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 under the
Securities Act, as the same may from time to time be in effect,
and the Corporation shall have received information acceptable
to the Corporation to such effect.
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(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.
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Section 13. No
Right to Continued Membership;
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 14. No
Rights in Common Stock. No Non-Employee
Director 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 15. Tax
Withholding. The Corporatio