Exhibit 10.1

 

SEALED AIR CORPORATION

ANNUAL INCENTIVE PLAN

 

As effective January 1, 2008

 

1.             Purpose.  The purpose of the Annual Incentive Plan (the “Plan”)
is to enhance the ability of Sealed Air Corporation and its subsidiaries
(collectively, the “Company”) to motivate, attract, and retain the services of
individuals upon whose judgment, interest, and special effort the successful
conduct of the Company’s operation is largely dependent.  The Plan furthers
these goals by providing eligible employees of the Company an opportunity to
participate in the Company’s success by earning annual incentive compensation in
the form of a cash bonus (or in certain cases, a stock award) based on the
achievement by the Company of certain pre-established goals and the employees’
contributions towards meeting the goals.

 

2.             Eligibility.  Participation in the Plan will be limited to those
key employees that are selected for participation on an annual basis.  Key
employees selected for participation each year will be notified about their
participation and about the goals and objectives for the year early in the
year.  Newly hired key employees or employees promoted into an eligible role
will be notified about their participation in the Plan in connection with such
hiring or promotion.  Each eligible employee will have a target bonus expressed
as a percentage of base salary, dollar amount or other method of expression.

 

3.             Determination of Annual Bonuses.

 

(a)           Determination of Company-Wide Pool.  The target Company-wide
annual bonus pool for a calendar year will equal the sum of all of the
individual target awards of participating employees for the year.  The funding
of the Company-wide annual bonus pool for the year will be determined as a
percentage of the target pool as follows:

 

(i)

 

Early in the year, the Organization and Compensation Committee (the “Committee”)
of the Board of Directors will establish a schedule based on overall Company
performance for the year (measured by one or more Company-wide financial,
strategic or other goals, with related weightings if more than one goal is
selected), with a threshold level of goal attainment below which no pool would
be funded and a maximum level of goal attainment at or above which a maximum
pool would be funded, in each case subject to subparagraphs (ii), (iii) and
(iv) below. The schedule will be reviewed and may be adjusted each year by the
Committee.

 

 

 

(ii)

 

The Committee will have discretion to fund a portion of the pool if an
extraordinary event occurs that adversely affects Company performance (such as a
natural disaster causing significant business disruption) and the

 

 

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Committee determines nonetheless that the Company performed well relative to its
peers.

 

 

 

(iii)

 

If a Company-wide bonus pool is funded for a year per the applicable schedule
established in subparagraph (i) above, the Committee may in its discretion, upon
consultation with the Chief Executive Officer (“CEO”), adjust the funded pool
for the year up or down by up to 25% of the target pool to recognize quality of
earnings, performance relative to peers, or other facts.

 

 

 

(iv)

 

In addition, a minimum funded pool equal to 25% of the target Company-wide
annual bonus pool will be available to award exceptional business unit or
individual performance, even if Company-wide performance falls below the
threshold level for the year per the schedule established in subparagraph
(i) above.

 

(b)           Allocation of Pool to Corporate, Business Units and Functions. 
The CEO will divide the funded Company-wide pool determined in section (a) above
among Corporate, Business Units and Functions based on a review of each unit’s
performance for the year.  In that regard, each Business Unit and Function will
have its own performance goals (financial, strategic or otherwise) for the year
to be considered in determining the allocation.

 

(c)           Allocation to Individuals.  The funded Company-wide annual bonus
pool for a year will be allocated as individual bonus awards as follows: (i) the
Committee will determine the annual bonus award for the CEO, subject to section
4(b) below; (ii) the Committee, upon recommendation by the CEO, will determine
the annual bonus awards for (A) the Company’s other executive officers, subject
to section 4(b) below to the extent applicable, and (B) any other eligible
employees whose compensation is determined by the Committee; and (iii) annual
bonus awards to all other eligible employees will be determined by the CEO,
applicable Business Unit or Function heads or their respective designees, all in
accordance with Company practices as in effect from time to time, and linked to
individual performance ratings.  A correlation between performance ratings and
payments will be expected.

 

4.             Special Provisions for Senior Management Team.

 

[Note:  The Stock Leverage Opportunity discussed below is subject to stockholder
approval of amendments to the 2005 Contingent Stock Plan at the 2008 Annual
Meeting.]

 

(a)           Stock Leverage Opportunity.  Prior to the start of each year,
officers and senior executives of the Company selected by the Committee will be
given a leveraged opportunity to receive restricted stock or restricted stock
units granted under the Company’s 2005 Contingent Stock Plan in lieu of cash as
part (either 0%, 25%, 50%, 75% or 100%) of their annual bonus award.  The
portion provided in stock may be given a premium to be determined by the
Committee each year and will be rounded up to the nearest whole share.  The
stock price used in the calculation will be the closing sale price of the
Company’s common stock on the New York Stock Exchange Composite Tape on the
first day of the applicable performance year

 

 

 

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on which shares of the Company’s common stock are sold.  The grant date for such
restricted stock will be established by the Committee and will be no earlier
than the date the Committee determines the annual bonus award for an executive
officer and no later than March 15 of the year in which the annual bonuses for
the year are otherwise paid.  Such restricted stock or restricted stock units
will vest 100% on the second anniversary of the grant date or earlier in the
case of death, disability (as defined in the 2005 Contingent Stock Plan) or
retirement from employment by the Company.    All other terms and conditions of
the restricted stock or restricted stock unit award will be set forth in an
Award Grant consistent with the requirements of the 2005 Contingent Stock Plan. 
“Retirement” for this purpose will mean termination of employment after five or
more years of employment with the Company and with years of employment plus age
equal to 70 or more.  Each eligible officer or other senior executive will be
required to complete a stock leverage opportunity election form each year on
which he or she will acknowledge that the annual bonus for the year is subject
to the Company’s Policy on Recoupment of Incentive Compensation.

 

(b)           Maximum Bonuses Under Performance-Based Compensation Program.  For
the CEO and any other participants in the Company’s Performance-Based
Compensation Program during a year, the annual bonus and restricted stock or
restricted stock unit award, if any, under subsection (a) above for the year
will be limited to the maximum bonus or award amount as determined under the
applicable pre-established objective performance formula for the year per the
terms of that program.

 

5.             Timing of Payments.  Annual bonus awards will be determined and
paid no later than March 15 following the applicable performance year.

 

6.             Impact of Termination of Employment.  Except as the Company may
otherwise determine in its discretion, payment to an eligible employee of an
annual bonus for a year is conditioned on the employee remaining continuously
employed with the Company or its subsidiaries and affiliates through the
applicable payment date.

 

7.             Other Provisions.

 

(a)           Payments will be net of applicable taxes and/or withholdings.

 

(b)           Payments will be taken into account for purposes of the Company’s
employee benefit plans and programs only to the extent provided under the terms
of such plans and programs.

 

(c)           Committee and Company management discretion serves as final
authority over the Plan, its interpretation and all incentive awards and their
payment.

 

(d)           This Plan may be modified or discontinued at any time with or
without notice at the discretion of the Company. Participation in this Plan
cannot be construed to constitute a contract of employment or otherwise between
the Company or any of its subsidiaries or affiliates and any of its employees.
Plan participation does not limit the Company from terminating the employment of
an employee at any time, with or without cause or notice. 

 

 

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Participation in the Plan during a year does not imply participation in any
subsequent year.  This Plan shall be administered, interpreted and enforced so
as to ensure its compliance with all applicable laws, and nothing herein is
intended or should be construed to violate any such law.

 

 

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