EXHIBIT 10.3


 


SEALED AIR CORPORATION


PERFORMANCE-BASED
COMPENSATION PROGRAM


(as amended for the 2008
fiscal year)


(Revised February 18, 2010)


 


In
order to entitle Sealed Air Corporation (the “Corporation”) to deduct for U.S.
income tax purposes the compensation expense resulting from certain
performance-based compensation provided to certain officers and other eligible
employees (as defined below) pursuant to awards under the Corporation’s 2005
Contingent Stock Plan or under annual cash bonus arrangements, the following
are the terms under which such awards may be granted to such eligible employees
as provided in Internal Revenue Code Section 162(m) and the
regulations thereunder, as the same may be amended from time to time (“Section 162(m)”):


 


I.  Eligible Employees:


 


The
class of employees eligible for awards under this program (“eligible employees”)
consists of the chief executive officer of the Corporation, the other four most
highly compensated executive officers of the Corporation, and other officers and
key employees of the Corporation or any of its subsidiaries selected by the
committee of the Board of Directors (the “Committee”) that is authorized by the
Board of Directors to establish and administer performance goals under this
program.  The Committee will be comprised
of “outside directors” as that term is defined in Section 162(m).


 


II.  Performance-based Awards of Common Stock:


 


Performance-based awards
payable in shares of the Corporation’s Common Stock under the 2005 Contingent
Stock Plan of Sealed Air Corporation or a successor plan can be made based upon
achievement of pre-established objective goals during a performance period
(which may be the calendar year) established by the Committee, consistent with
the requirements of Section 162(m). 
If such goals are achieved, then an eligible employee may be granted one
or more awards payable in shares of Common Stock under the 2005 Contingent
Stock Plan during the 12-month period following the performance period in an
aggregate amount up to the pre-established award level. For purposes of clarification only,
performance-based awards of common stock under this Performance-Based
Compensation Program do not include “Performance Share Units,” which are
separately addressed under the terms of the 2005 Contingent Stock Plan.


 


The
maximum amount of performance-based awards payable in shares of the Corporation’s
Common Stock under the 2005 Contingent Stock Plan to any eligible employee
under this program during any 12-month period may not exceed two-tenths of 1%  (0.2%) of the issued and outstanding shares of the
Corporation’s Common Stock at the beginning of such period.  The Committee retains the sole and exclusive
discretion to set pre-established award levels for awards under the Corporation’s
2005 Contingent Stock Plan at an amount less than the maximum level specified
in the prior sentence and to reduce (including a reduction to zero) any award
payable in shares of Common Stock under the 2005 Contingent Stock Plan that is
otherwise payable under the program.


 


III.  Performance-based Awards of Cash:


 


Performance-based
awards of cash under the Corporation’s annual cash bonus arrangements can be
made to eligible employees based upon achievement of pre-established objective
goals during a calendar year performance period.  If such goals are achieved, the eligible
employee may be granted an annual cash bonus for such year in an amount of up
to  the greater of one percent (1%) of the Corporation’s net earnings
for that fiscal year or $2 million, provided, however, that the Committee in
its sole and exclusive discretion may reduce (including a reduction to zero)
any award to be made in cash to any eligible employee that is otherwise payable
under the program for such year.  At the
sole and exclusive discretion of the Committee, an annual cash bonus may be
paid although such goals have not been achieved if the eligible employee dies
or becomes disabled during the performance period or a “change in control” (as
defined in the 2005 Contingent Stock Plan) occurs during the performance
period.


 


IV.  Pre-established Objective Goals:


 


A.  Performance-based awards under this program
will require attainment of objective, pre-established goals based on one or
more of the following criteria: 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, 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 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 Corporation’s
cost of capital); and the ratio of net sales to net working capital; share
price; or any combination of the foregoing goals.  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 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 generally accepted accounting principles, and other
unusual or non-recurring items as defined by the Committee when the goals are
established.


 


B.  Pre-established goals and award levels will
be established by the Committee in writing during the first 90 days of the
performance period (or during the first 25% of the performance period if the
performance period is less than a year), provided that the outcome is
substantially uncertain at the time the Committee establishes the goal. Except
as specified in this program, performance goals may not be changed once
set.  No awards under the 2005 Contingent
Stock Plan or cash payments will be made until the Committee has certified that
the performance goals have been met.


 


V.  Additional Provisions:


 


A.  The limits on awards made under the 2005
Contingent Stock Plan and in cash are cumulative, that is, the Corporation may
grant to any eligible employee in any year awards up to the specified limits
both for Common Stock and for cash. 
While the limits are annual, performance-based awards need not be made
every year, and the Committee shall have the discretion to determine the
intervals between successive performance-based awards.


 


B.  In the event of any change in the Corporation’s
capitalization, such as through a stock split, stock dividend,
recapitalization, merger or consolidation, appropriate adjustments will be made
by the Board of Directors to the maximum amount of performance-based awards
payable in shares of the Corporation’s Common Stock during any 12-month period
to an eligible employee, to the pre-established award level for any award
payable in shares of the Corporation’s Common Stock, to the amount of any
performance-based award payable in shares of the Corporation’s Common Stock
that has been approved by the Committee before such change occurred but not yet
made as of such change, and to any pre-established goal that is based upon the
Corporation’s capitalization, such as earnings per share.


 


C.  The Committee shall be entitled at its
discretion to approve awards under the 2005 Contingent Stock Plan, cash bonuses
or compensation under any other compensation plan or arrangement that does not
meet the requirements of Section 162(m) and thus may be partly or
fully non-deductible by the Corporation for U.S. income tax purposes.


 


D.  Except as provided above and subject to the
stockholder approval requirements of Section 162(m), the Committee shall
have complete power and authority to amend, suspend or terminate any or all
terms of the performance-based compensation program, except that it may not
alter performance goals or increase pre-established award levels once they have
been established for a performance period. 
The Committee shall have full authority to administer the
performance-based compensation program and to interpret the program’s terms and
establish rules for the administration of the program, although the
Committee may consider recommendations from the Chief Executive Officer of the
Corporation or from directors who are not members of the Committee.  The Committee’s determinations under the
program shall be final.


 


E.  An eligible employee’s rights and interests
under the program may not be assigned or transferred by the eligible
employee.  To the extent an eligible
employee acquires a right to receive an award under the program, such right
shall be no greater than the right of any unsecured general creditor of the
Corporation.  Nothing contained in the
program shall be deemed to create a trust of any kind or any fiduciary
relationship between the Corporation and an eligible employee.  Designation as an eligible employee under the
program shall not entitle the employee to continued employment with or, if
applicable, continuation as an officer of the Corporation or any of its
subsidiaries.


 


F.  The program shall be construed and governed
in all respects under the laws of the United States to the extent applicable
and, to the extent such laws are not applicable, under the laws of the State of
New Jersey.


 


The
foregoing terms of the amended performance-based compensation program shall
become effective as of the Corporation’s 2008 fiscal year, subject to the
approval by the affirmative vote of a majority of votes cast by the
stockholders of the Corporation at the 2008 annual meeting of stockholders.