EXHIBIT 99
ITEMS 2 AND 5 OF THE COMPANY'S CURRENT REPORT ON FORM 8-K
FILED APRIL 15, 1998, FILE NO. 1-12139
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 31, 1998, the Registrant, a Delaware corporation
formerly known as W. R. Grace & Co., and Sealed Air Corporation
(US), a Delaware corporation formerly known as Sealed Air
Corporation ( Sealed Air ), completed a series of related
transactions as a result of which:
(1) the Registrant s specialty chemicals business was
separated from its packaging business, the packaging business was
contributed to one wholly owned subsidiary ( Cryovac ), and the
specialty chemicals business was contributed to another wholly
owned subsidiary ( New Grace ), pursuant to a Distribution
Agreement dated as of March 30, 1998 among the Registrant, W. R.
Grace & Co.-Conn. ( Grace-Conn. ) and New Grace;
(2) the Registrant and Cryovac borrowed approximately
$1.259 billion under the New Credit Agreements (as defined below)
and transferred substantially all of those funds to New Grace and
Grace-Conn. (the Cash Transfer ); a portion of the Cash Transfer
was used by New Grace and Grace-Conn. to repay substantially all
of Grace-Conn. s outstanding debt, certain of which was
guaranteed by the Registrant;
(3) the Registrant distributed all of the outstanding
shares of common stock of New Grace to the Registrant s
stockholders;
(4) the Registrant recapitalized its outstanding shares of
common stock into a new common stock and Series A convertible
preferred stock (the Recapitalization ); and
(5) a subsidiary of the Registrant merged into Sealed Air
with Sealed Air being the surviving corporation (the Merger ),
pursuant to an Agreement and Plan of Merger dated as of August
14, 1997 among the Registrant, Sealed Air, and a subsidiary of
the Registrant (the Merger Agreement ).
The Merger and the related transactions described above were
approved by the Registrant s stockholders at a special meeting
held on March 20, 1998, and the Merger was approved by Sealed
Air s stockholders at a special meeting held on March 23, 1998.
As a result of these transactions, New Grace became a separate
publicly owned corporation named W. R. Grace & Co., and the
Registrant, which now operates the businesses of Sealed Air and
Cryovac, was renamed Sealed Air Corporation. As used in this
Form 8-K, New Sealed Air refers to the Registrant after giving
effect to the Merger.
In the Recapitalization, the outstanding shares of the
Registrant s common stock were converted into 40,647,803 shares
of new common stock and 36,000,000 shares of Series A convertible
preferred stock. On a per share basis, each share of the
Registrant s common stock outstanding on March 31, 1998 was
converted into the right to receive 0.536 of a share of new
common stock and 0.475 of a share of Series A convertible
preferred stock. In addition, outstanding options to purchase
common stock of the Registrant that were held by Cryovac's
employees were converted into options to purchase approximately
489,307 shares of the Registrant s common stock.
Pursuant to the Merger Agreement, each of the 42,624,246
shares of Sealed Air s common stock outstanding on March 31, 1998
was converted into the right to receive one share of the
Registrant s new common stock.
As a result of these transactions, the Registrant s former
stockholders received, in the aggregate, approximately 63% of the
capital stock of the Registrant, and the former Sealed Air
stockholders received the remaining 37%.
The Registrant has appointed First Chicago Trust Company of
New York (the Exchange Agent ) to serve as Exchange Agent with
respect to the shares issued in the Recapitalization and the
Merger. The Exchange Agent has mailed to each stockholder of
record of the Registrant s common stock outstanding on March 31,
1998 a letter of transmittal and instructions for surrendering
their common stock certificates for shares of the Registrant s
new common and Series A convertible preferred stock. No
fractional shares of the Registrant s new common or Series A
convertible preferred stock will be issued. Instead, the
Exchange Agent will distribute to the Registrant s stockholders
otherwise entitled to receive such fractional shares the pro-rata
cash proceeds realized from a sale of those shares in the open
market, net of sales expenses.
The terms and conditions of the Merger Agreement, the
Distribution Agreement and related agreements were determined
through negotiations among the parties thereto as described under
the heading The Reorganization and Merger Background in the
Joint Proxy Statement/Prospectus dated February 13, 1998 (the
Joint Proxy Statement/Prospectus ), which was filed by the
Registrant with the Securities and Exchange Commission (the
SEC ) on the same date as part of the Registrant s Registration
Statement on Form S-4 (Registration No. 333-46281).
The separation of the Registrant s specialty chemicals and
packaging businesses, the spinoff of New Grace, the
Recapitalization and the Merger, as well as the principal terms
of the Merger Agreement, the Distribution Agreement and related
agreements, are described under the heading The Distribution and
Merger Agreements in the Joint Proxy Statement/Prospectus, which
description is incorporated herein by reference. The Merger
Agreement, filed with the SEC as Exhibit 2.1 to the Registrant s
Form 8-K on August 18, 1997, and the Distribution Agreement,
attached as Exhibit 2.2 hereto, are incorporated herein by
reference, and the description of their terms herein is qualified
in its entirety by reference to the said agreements.
Prior to the Merger, Sealed Air was an independent, publicly
owned global manufacturer of a wide range of protective and
specialty packaging materials and systems, and Cryovac was
operated as a division of Grace-Conn. The Registrant intends to
integrate the businesses of Sealed Air and Cryovac to achieve
operating efficiencies. However, specific decisions regarding
the steps to be taken to integrate the two businesses have not
yet been made.
In connection with the transactions described above, the
Registrant entered into a five-Year Credit Agreement and a 364-
Day Credit Agreement (together, the New Credit Agreements ),
each dated as of March 30, 1998, with a syndicate of banks (the
Banks) arranged by ABN AMRO Bank N.V., Bankers Trust Company,
Bank of America National Trust and Savings Association and
NationsBank, N.A. (the Agent Banks ). The initial borrowings of
$1.259 billion under the New Credit Agreements provided the
funds needed for the Registrant and Cryovac to make the Cash
Transfer and to pay certain fees and expenses related to the
Merger and related transactions. All loans outstanding under the
New Credit Agreements are guaranteed by the Registrant s material
domestic subsidiaries, including Sealed Air and Cryovac.
The principal terms of the New Credit Agreements are
described under the heading The New Credit Agreements in the
Joint Proxy Statement/Prospectus, which description is
incorporated herein by reference. The New Credit Agreements are
attached as exhibits hereto and are incorporated herein by
reference. The description herein of their terms is qualified in
its entirety by reference to the New Credit Agreements.
The foregoing discussion is qualified in its entirety by
reference to the Merger Agreement, the Distribution Agreement,
the Employee Benefits Allocation Agreement, and the Tax Sharing
Agreement that are filed as exhibits hereto and are incorporated
herein by reference.
ITEM 5. OTHER EVENTS.
Following the completion of the transactions described in
Item 2 of this Form 8-K, the Board of Directors of the Registrant
(the New Sealed Air Board ) took various actions, certain of
which are described below.
In accordance with the Merger Agreement, four outside
directors of the Registrant immediately prior to the Merger (Hank
Brown, Christopher Cheng, Virginia A. Kamsky and John E. Phipps)
became directors of New Sealed Air and elected as additional
directors the seven individuals who were serving as directors of
Sealed Air immediately prior to the Merger (John K. Castle,
Lawrence R. Codey, T. J. Dermot Dunphy, Charles F. Farrell, Jr.,
David Freeman, Alan H. Miller and Robert L. San Soucie). In
addition, the New Sealed Air Board elected T. J. Dermot Dunphy,
the Chairman and Chief Executive Officer of Sealed Air, as its
Chairman.
The Registrant s Board appointed the following persons to
serve as the officers of the Registrant:
Name Position
T. J. Dermot Dunphy Chief Executive Officer
William V. Hickey President and Chief
Operating Officer
J. Gary Kaenzig, Jr. Executive Vice
President
Bruce A. Cruikshank Senior Vice President
Robert A. Pesci Senior Vice President
Jonathan B. Baker Vice President
James A. Bixby Vice President
Leonard R. Byrne Vice President
Mary A. Coventry Vice President
Jean-Luc Debry Vice President
Paul B. Hogan Vice President
James P. Mix Vice President
Abraham N. Reichental Vice President
Horst Tebbe Vice President - Finance
and Chief Financial
Officer
Alan S. Weinberg Vice President
Jeffrey S. Warren Controller
H. Katherine White Secretary
Linda B. Massengill Assistant Secretary
Barbara A. Pieczonka Assistant Secretary
Each of these individuals except for Messrs. Kaenzig,
Weinberg and Byrne was an officer of Sealed Air prior to the
Merger. Prior to the Merger, Mr. Kaenzig was a Senior Vice
President of the Registrant and President of the Registrant s
packaging business, and Messrs. Weinberg and Byrne were
executives of the Registrant s packaging business.
In connection with the Merger, the Registrant s stockholders
approved an Amended and Restated Certificate of Incorporation
(the New Sealed Air Charter ). The New Sealed Air Charter is
substantially identical to the certificate of incorporation of
Sealed Air, except as described under the heading The New Sealed
Air Charter in the Joint Proxy Statement/Prospectus, which
description is incorporated herein by reference, and except for
three Supermajority Provisions contained in the Registrant s
certificate of incorporation, which are also described therein.
The Registrant sought the approval of its stockholders to repeal
these Supermajority Provisions in connection with their approval
of the Merger. However, the Registrant was unable to obtain the
approval of stockholders owning at least 80% of the outstanding
shares of its common stock, so the Supermajority Provisions
remain in force. The Registrant intends to continue to seek
stockholder approval of the repeal of the Supermajority
Provisions.
The New Sealed Air Board has also adopted Amended and
Restated By-laws (the New Sealed Air By-laws ). The New Sealed
Air By-laws are substantially the same as the Sealed Air By-laws
except as required to reflect the Supermajority Provisions and
the Series A convertible preferred stock.
A summary of the principal differences between the rights of
stockholders of the Registrant and Sealed Air prior to the Merger
and the rights of stockholders of New Sealed Air after the Merger is
provided under the heading "Comparison of Stockholders Rights" in
the Joint Proxy Statement/Prospectus, which summary is incorporated
herein by reference. The New Sealed Air Charter and New Sealed Air
By-laws are attached as Exhibits 3.1 and 3.2, respectively, hereto
and incorporated herein by reference, and the description of
their terms herein is qualified in its entirety by reference to
these documents.