Exhibit 10.3
SEALED AIR CORPORATION COMPENSATION DEFERRAL AGREEMENT
FOR CRYOVAC EMPLOYEES
THIS COMPENSATION DEFERRAL AGREEMENT (this "Agreement") is entered into as
of __________________, by and between SEALED AIR CORPORATION, a Delaware
corporation (the "Company"), and ____________________ ("Employee").
1. Statement of Purpose and Intent:
Prior to April 1, 1998, Employee had an account under the W.R. Grace & Co.
Deferred Compensation Plan (the "Prior Grace Plan"), a non-qualified deferred
compensation plan. Effective April 1, 1998, the Company ceased to sponsor the
Prior Grace Plan as a result of a corporate re-organization and spin-off of
certain business units. In order to avoid a taxable distribution from the Prior
Grace Plan that would have occurred as a result of the corporate
re-organization, the Company established and currently sponsors the Sealed Air
Corporation Deferred Compensation Program for Cryovac Employees (the "Cryovac
Plan") to hold and administer accounts of its employees transferred from the
Prior Grace Plan. Effective January 1, 2001, the Company is terminating the
Cryovac Plan and each participant in the Cryovac Plan will receive a
distribution in the full amount of his or her Cryovac Plan account. The Company
is giving each participant in the Cryovac Plan the opportunity, until September
30, 2000, to elect to continue to defer payment of his or her Cryovac Plan
account by entering into a compensation deferral agreement with the Company. The
purpose of this Agreement is to evidence Employee's decision to continue to
defer payment of his or her Cryovac Plan account pursuant to the terms and
conditions set forth herein. It is the intent of the Company that benefits under
this Agreement shall not be taxable to Employee for income tax purposes until
the time actually received by Employee. The provisions of this Agreement shall
be construed and interpreted to effectuate such intent.
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto mutually agree as follows:
2. Definitions:
For purposes of this Agreement, the following terms shall have the
following meanings:
(a) "Account" means the account established and maintained on the books of
the Company to record Employee's interest under this Agreement attributable to
amounts credited to Employee pursuant to paragraph 4(a) below, as adjusted from
time to time pursuant to the terms of this Agreement.
(b) "Beneficiary(ies)" means the person(s) or entity(ies) designated by
Employee under the Prior Grace Plan or the Cryovac Plan to receive any amounts
payable following Employee's death. Employee's designation of a Beneficiary may
be changed under this Agreement in accordance with procedures adopted by the
Committee from time to time. If Employee fails to
designate a Beneficiary or the designated Beneficiary fails to survive Employee,
then the Beneficiary shall be Employee's estate.
(c) "Claim" means a claim for benefits under this Agreement.
(d) "Committee" means the Sealed Air Corporation Retirement Committee.
(e) "Company" means Sealed Air Corporation, a Delaware corporation, and
any successor in interest thereto.
(f) "Prime Rate" means the average of the "prime rates" (as reported in The
Wall Street Journal as the base rate on corporate loans posted by at least 75%
of the nation's 30 largest banks) in effect on the first day of each month
during each semiannual adjustment period (i.e., January 1 through June 30 and
July 1 through December 31).
(g) "Retirement" means Employee's termination of employment with the
Company and its subsidiaries on or after having attained age fifty-five (55).
3. Administration:
The Committee shall be responsible for administering this Agreement. The
Committee shall have all of the powers necessary to enable it to properly carry
out its duties under this Agreement. Not in limitation of the foregoing, the
Committee shall have the power to construe and interpret this Agreement and to
determine all questions that shall arise thereunder. The Committee shall have
such other and further specified duties, powers, authority and discretion as are
elsewhere in this Agreement either expressly or by necessary implication
conferred upon it. The Committee may appoint such agents as it may deem
necessary for the effective performance of its duties, and may delegate to such
agents such powers and duties as the Committee may deem expedient or appropriate
that are not inconsistent with the intent of this Agreement. The decision of the
Committee upon all matters within its scope of authority shall be final and
conclusive on all persons, except to the extent otherwise provided by law.
4. Operation:
(a) Establishment of Account. The Company shall establish and maintain on
its books an Account for Employee. The Account shall be designated by Employee's
name. The initial balance of the Account for Employee shall be established as of
January 1, 2001 in an amount equal to the balance in Employee's account under
the Cryovac Plan as of December 31, 2000.
(b) Account Adjustments. The Account shall be adjusted semiannually on each
June 30 and December 31 at a per annum rate equal to the greater of (i) the
Prime Rate plus two (2) percentage points or (ii) one hundred twenty percent
(120%) of the Prime Rate.
2
(c) Payment of Account.
(i) Termination of Employment Before Retirement. If Employee
terminates employment with the Company prior to Retirement for
any reason other than Employee's death (including, for example,
as a result of Employee's long term disability), the balance in
Employee's Account as of the last day of the month following the
month in which such termination of employment occurs (the
"Payment Date") shall be paid to Employee on or around the
Payment Date in a single cash payment. For purposes of this
subparagraph, the Account shall be adjusted for earnings from
the date of the last adjustment under paragraph 4(b) above
through the Payment Date, using for such purpose the adjustment
rate that was in effect under paragraph 4(b) for the immediately
preceding semi-annual adjustment period. Notwithstanding the
foregoing, if Employee's employment is terminated other than due
to the Employee's voluntary resignation or termination by the
Company for "cause" (as determined by the Company in its
reasonable discretion consistent with Company policies), any
portion of Employee's Account attributable to deferral elections
made under the Prior Grace Plan for 1989 or prior periods shall
be paid in accordance with the method previously elected under
the Prior Grace Plan.
(ii) Retirement; Age 70. In the event of Employee's Retirement, or in
the event Employee attains age seventy (70) while still employed
with the Company or any of its subsidiaries, Employee shall be
paid the balance of Employee's Account in accordance with the
method previously elected by Employee under the Prior Grace Plan
or the Cryovac Plan. (The Prior Grace Plan permitted
participants to elect lump sum payments or quarterly
installments over a period selected by Employee of 2-10 years,
15 years or 20 years.) Payments shall begin as soon as
practicable following Retirement or attainment of age seventy
(70), as applicable. In addition, the Account shall be adjusted
(A) from the last semi-annual adjustment date through the first
payment date, using for such purpose the adjustment rate that
was in effect under paragraph 4(b) for the immediately preceding
semi-annual adjustment period, and (B) if installments have been
elected, during the applicable payment period in a manner
consistent with the provisions of paragraph 4(b) above.
(iii) Death. If Employee dies while in service and before commencement
of benefits under this Agreement at age 70, then the Company
shall pay Employee's Beneficiary an amount equal to the greater
of (A) Employee's Account balance as of the date of death or (B)
Employee's survivor benefit identified on Exhibit A attached
hereto. (The amount of survivor benefit set forth on Exhibit A
is not subject to adjustment pursuant to paragraph 4(b) above.)
Such amount shall be paid in accordance with the method of
payment that would have been applicable in the case of
Employee's Retirement. If Employee dies after having commenced
receiving installment
3
payments, the remaining installments shall be paid to the
Beneficiary as and when they would have otherwise been paid to
Employee.
(iv) Change in Payment Method. Employee may change his or her payment
method election applicable under paragraph 4(c)(ii) above by
making the change on such forms, at such times and pursuant to
such procedures as the Committee may establish from time to
time; provided, however, that such change of election shall not
become effective until the sixth (6th) month following the date
such change of election is made.
(v) Unforeseeable Emergency. Prior to Employee's termination of
employment with the Company, Employee may, in the Committee's
sole discretion, receive a withdrawal from Employee's Account in
the case of an "unforeseeable emergency". If Employee requests a
payment pursuant to this paragraph, he or she shall have the
burden of proof of establishing, to the Committee's
satisfaction, the existence of such "unforeseeable emergency",
and the amount of the payment needed to satisfy the same. In
that regard, Employee shall provide the Committee with such
financial data and information as the Committee may request. If
the Committee determines that a payment should be made to
Employee under this paragraph such payment shall be made within
a reasonable time after the Committee's determination of the
existence of such "unforeseeable emergency" and the amount of
payment so needed. As used herein, the term "unforeseeable
emergency" means a severe financial hardship to Employee
resulting from a sudden and unexpected illness or accident of
Employee or of a dependent of Employee, loss of Employee's
property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond
the control of Employee. The circumstances that shall constitute
an "unforeseeable emergency" shall depend upon the facts of each
case, but, in any case, payment may not be made to the extent
that such hardship is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, or (ii)
by liquidation of Employee's assets, to the extent the
liquidation of such assets would not itself cause severe
financial hardship. Examples of what are not considered to be
"unforeseeable emergencies" include the need to send Employee's
child to college or the purchase of a home. Withdrawals of
amounts because of an "unforeseeable emergency" shall not exceed
an amount reasonably needed to satisfy the emergency need.
(d) Other Payment Provisions. Any payment hereunder shall be subject to
applicable payroll and withholding taxes. In the event any amount becomes
payable under the provisions of this Agreement to Employee, a Beneficiary or
other person who is a minor or an incompetent, whether or not declared
incompetent by a court, such amount may be paid directly to the minor or
incompetent person or to such person's fiduciary (or attorney-in-fact in the
case of an incompetent)
4
as the Committee, in its sole discretion, may decide, and the Committee shall
not be liable to any person for any such decision or any payment pursuant
thereto.
(e) Statements of Account. Employee shall receive an annual statement of
Employee's Account balance.
5. Amendment, Modification and Termination of this Agreement:
The Chief Executive Officer or the Chief Financial Officer of the Company
shall have the right and power at any time and from time to time to amend this
Agreement in whole or in part and at any time to terminate this Agreement;
provided, however, that no such amendment or termination shall reduce the amount
actually credited to Employee's Account or Employee's survivor benefit under
this Agreement on the date of such amendment or termination, or further defer
the due dates for the payment of such amounts, without the consent of Employee;
and further provided that no such amendment may be made that would adversely
affect the rights or benefits of Employee under the Agreement without the
consent of Employee.
6. Claims Procedures:
(a) General. In the event that Employee has a Claim under this Agreement,
such Claim shall be made by Employee's filing a notice thereof with the
Committee within ninety (90) days after Employee first has knowledge of such
Claim. Once Employee has submitted a Claim to the Committee, Employee shall be
afforded a reasonable opportunity to state Employee's position and to present
evidence and other material relevant to the Claim to the Committee for its
consideration in rendering its decision with respect thereto. The Committee
shall render its decision in writing within ninety (90) days after the Claim is
referred to it, unless special circumstances require an extension of such time
within which to render such decision, in which event such decision shall be
rendered no later than one hundred eighty (180) days after the Claim is referred
to it. A copy of such written decision shall be furnished to Employee.
(b) Notice of Decision of Committee. If Employee's Claim is denied by the
Committee, Employee shall be provided with written notice thereof, which notice
shall set forth:
(i) the specific reason(s) for the denial;
(ii) specific reference to pertinent provision(s) of this Agreement
upon which such denial is based;
(iii) a description of any additional material or information necessary
for Employee to perfect such Claim and an explanation of why such material
or information is necessary; and
(iv) an explanation of the procedure hereunder for review of such
Claim;
all in a manner calculated to be understood by Employee.
5
(c) Review of Decision of Committee. Employee shall be afforded a
reasonable opportunity for a full and fair review of the decision of the
Committee denying the Claim. Such review shall be by the Committee. Such appeal
shall be made within ninety (90) days after Employee received the written
decision of the Committee and shall be made by the written request of Employee
or Employee's duly authorized representative of the Committee. In the event of
appeal, Employee or Employee's duly authorized representative may review
pertinent documents and submit issues and comments in writing to the Committee.
The Committee shall review the following:
(i) the initial proceedings of the Committee with respect to such
Claim;
(ii) such issues and comments as were submitted in writing by Employee
or Employee's duly authorized representative; and
(iii) such other material and information as the Committee, in its sole
discretion, deems advisable for a full and fair review of the decision of
the Committee.
The Committee may approve, disapprove or modify the decision of the Committee,
in whole or in part, or may take such other action with respect to such appeal
as it deems appropriate. The decision of the Committee with respect to such
appeal shall be made promptly, and in no event later than sixty (60) days after
receipt of such appeal, unless special circumstances require an extension of
such time within which to render such decision, in which event such decision
shall be rendered as soon as possible and in no event later than one hundred
twenty (120) days following receipt of such appeal. The decision of the
Committee shall be in writing and in a manner calculated to be understood by
Employee and shall include specific reasons for such decision and set forth
specific references to the pertinent provisions of this Agreement upon which
such decision is based. Employee shall be furnished a copy of the written
decision of the Committee. Such decision shall be final and conclusive upon all
persons interested therein, except to the extent otherwise provided by
applicable law.
7. Applicable Law:
This Agreement 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 New Jersey.
8. Miscellaneous:
Employee's rights and interests under this Agreement may not be assigned or
transferred by Employee. This Agreement shall be an unsecured, unfunded
arrangement. To the extent Employee acquires a right to receive payments from
the Company under this Agreement, such right shall be no greater than the right
of any unsecured general creditor of the Company. Nothing contained herein shall
be deemed to create a trust of any kind or any fiduciary relationship between
the Company and Employee. This Agreement shall be binding on the Company and any
successor in interest of the Company.
6
[signature page follows]
7
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its duly authorized officers and its corporate seal to be hereunto affixed, and
Employee has hereunto set his hand, all as of the day and year first above
written.
SEALED AIR CORPORATION
By:
--------------------------------------
Name:
--------------------------------
Title:
--------------------------------
"Company"
-----------------------------------------
Name:
------------------------------------
"Employee"