EXHIBIT 10.3
AGREEMENT
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Date: April 6, 1999
To: J. Gary Kaenzig, Jr.
From: T. J. Dermot Dunphy
This memorandum sets forth our agreement related to your leaving
employment with Sealed Air Corporation and its subsidiary Cryovac, Inc.
(collectively, "Sealed Air").
1. Employment
We confirm that your last date of active employment will be June 11,
1999. Your salary will continue until that date, and your active Sealed
Air employee benefit coverages will also continue until that date
(provided you continue to pay any required premiums). Also, certain
benefit coverages will continue during the period that you are receiving
severance payments (see Section 3). If you have any questions regarding
Sealed Air employee benefits, please refer to the appropriate summary plan
descriptions or call Roger Deverman at Sealed Air's Park 80 office in
Saddle Brook, New Jersey.
You have advised that you will not be a candidate for appointment as an
officer of Sealed Air Corporation at the annual meeting of the Board of
Directors on May 21, 1999, even though you will continue to serve as an
employee until June 11, 1999.
2. Unused Vacation Payment
You will receive a lump sum payment for any 1999 vacation time (up to
25 days) remaining unused as of your last date of active employment, in
accordance with Sealed Air's Duncan, SC policy. Since you were hired prior
to January 1, 1983, you also will be paid the additional vacation
committed at the time of accrual conversion. This payment for unused
vacation will be made in the month following your last day of active
employment.
3. Severance Benefits
a) You will receive one and one-half weeks of pay for each full year of
service plus an additional 13 weeks of pay for a total of 55 weeks of
severance pay. You will
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receive severance pay at your current base pay level of $26,191.67
per month during the period commencing immediately after your last
date of active employment and ending on June 30, 2000.
b) Until June 30, 2000, you will continue to participate in Sealed Air's
employee benefit coverages with respect to medical, dental, and life,
provided you continue to make the required contributions and the
plans continue to be available to employees.
c) The period that you receive severance payments hereunder will be
considered active employment for the purpose of determining your
eligibility to participate in the Sealed Air Corporation
Post-Retirement Medical and Life Insurance program. The period that
you receive severance payments hereunder will also be considered
service and active employment under the W. R. Grace & Co. Stock
Incentive Plans, subject to the approval of such modification by the
Organization and Compensation Committee (the "Compensation
Committee") of the Board of Directors of Sealed Air Corporation. The
period that you receive severance payments hereunder will be
considered service for the purpose of determining the timing of
payments of deferred compensation under the Sealed Air Corporation
Deferred Compensation Plan for Cryovac Employees and your stock
deferrals under the W. R. Grace & Co. 1994-1996 Long Term Incentive
Program as assumed by Sealed Air.
It is the intent of the Company that the provisions of this paragraph
(c) put you in the same position as an active employee who retires at
the date your severance payments end with regard to the specific plan
provisions mentioned above.
You agree that you shall be solely responsible for any federal,
state, or local income taxes or property taxes that accrue as a
result of the above.
4. Continuation of Medical and Dental Coverage After Severance Period
At the time you are to receive your last severance payment, you will be
notified of your right to elect coverage under the Sealed Air medical and
dental plans by paying the full cost of such coverage (which is sometimes
called "COBRA coverage") for a period of up to 18 months after your
severance payments cease.
5. Health Care Spending Account and Dependent Care Account
If you currently participate in the Health Care Spending Account and
the Dependent Care Spending Account, you may continue to participate until
the end of 1999.
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6. Long Term Disability, Accidental Death and Dismemberment, Thrift Plan,
Profit-Sharing Plan and Deferred Compensation
Your participation in the Long Term Disability (LTD) Plan, the
Accidental Death and Dismemberment Plan, and contributions to the Thrift
Plan (401K) shall end on June 30, 1999. You may continue to repay Thrift
Plan loan balances, if any, during the period you receive periodic
severance payments. You may apply for conversion of the LTD Plan to a
private plan by making application for such conversion no later than 10
days following your last day of active employment.
You will not be eligible for a 1999 contribution to the Profit-Sharing
Plan, since you will not be actively employed (as provided in that plan)
on December 31, 1999.
Subject to the provisions of Section 3(c) above, your deferred
compensation accounts will be paid to you in accordance with your original
elections.
7. Bonuses
Your 1999 bonus will be prorated based on the months of your active
employment during 1999. Your bonus will be based on the corporate and
business unit performance for the entire bonus period as well as your
individual performance during the portion of the year during which you
were actively employed. Any payments will be made at the same time as such
payments are made to active employees. You will not be eligible for a
bonus for 2000.
8. Contingent Stock Award
On April 2, 1998, you were awarded the right to purchase 23,500 shares
of Sealed Air Common Stock under the Contingent Stock Plan of Sealed Air
Corporation. As provided in such Plan, such shares were issued subject to
Sealed Air's right to reacquire such shares if your employment ended prior
to June 1, 2001. The period ending on May 31, 2001 is referred to in this
letter agreement as the "Repurchase Period". Subject to the approval of
the Compensation Committee, Sealed Air will forego its right to repurchase
such shares of Common Stock upon termination of your employment on the
terms and conditions set forth below.
The 23,500 shares referred to in the preceding paragraph (the "Retained
Shares") will remain subject to Sealed Air's option to repurchase such
shares at your purchase price of $1 per share through the Repurchase
Period. Such option will become exercisable if you breach any of your
obligations referred to in Section 9 during the Repurchase Period. You
agree that Sealed Air also shall be entitled to enforce any other rights
or remedies available to it upon any such breach. You agree that you will
not sell, transfer or encumber the Retained Shares during the Repurchase
Period. You also agree that Sealed Air may place a legend on the
certificate representing the Retained Shares indicating (1) that during
the Repurchase Period the Retained Shares cannot be sold,
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transferred or encumbered and (2) that Sealed Air has the right to
repurchase the Retained Shares in the event of your breach of such
obligations during the Repurchase Period. Upon any of the changes in the
Common Stock described in Section 15 of the Contingent Stock Plan, the
restriction, option and legend described in this paragraph shall apply to
any securities issued in connection with any such change in respect of the
Retained Shares. Following the expiration of the Repurchase Period, if you
have complied with such obligations, you may surrender to Sealed Air the
certificate representing the Retained Shares in exchange for a new
certificate free of the legend or for a statement from Sealed Air
representing the Retained Shares in book entry form free of such legend.
9. Obligations under "1970 Agreement" and State Law
Because of your management role in Cryovac's business for a number of
years and your position since March 31, 1998 as one of Sealed Air
Corporation's senior officers, you hold significant confidential
proprietary information of Sealed Air, such as information about Sealed
Air's finances, business plans and programs, research and development
projects, products, manufacturing processes, raw materials, suppliers,
customers, marketing and sales. You acknowledge and agree that disclosure
to or use by anyone other than Sealed Air of such information could cause
substantial damage to Sealed Air. You understand and agree that, after you
cease to be employed by Sealed Air, you will remain subject to the
obligations under the agreement that you signed on August 17, 1970 with W.
R. Grace & Co., a Connecticut corporation, (the "1970 Agreement"), with
Sealed Air the successor "Company" in the 1970 Agreement. You also
understand that this memo will not affect your obligations under the South
Carolina Uniform Trade Secrets Law or any other applicable obligations
that may limit your disclosure or use of Sealed Air's confidential
information.
10. Company Car
You may purchase your company car when you leave active employment on
the terms available to employees who leave employment in good standing. If
you do not choose to purchase your company car, you agree to make
arrangements to return the car to Sealed Air no later than July 16, 1999
at the Duncan, SC facility.
11. Entire Agreement
This letter agreement and the "1970 Agreement" set forth the entire
agreement between you and Sealed Air concerning the subject matters
discussed therein.
Agreed: SEALED AIR CORPORATION
/s/ J. Gary Kaenzig, Jr.
- ------------------------------ By /s/ T.J. Dermot Dunphy
-------------------------------
April 6, 1999 Chairman of the Board and
- ------------------------------ Chief Executive Officer
Date
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