-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TWJIu2pSVnRPBXag0wywYzTWR3V6dyNcMJxNBl6f2Yo3GF6m+tP5vLXBP07z3uW0 doEe3SmqZGEnEQl3ruFSQg== 0000950144-99-012422.txt : 19991108 0000950144-99-012422.hdr.sgml : 19991108 ACCESSION NUMBER: 0000950144-99-012422 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990925 FILED AS OF DATE: 19991105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TUPPERWARE CORP CENTRAL INDEX KEY: 0001008654 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 364062333 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11657 FILM NUMBER: 99741911 BUSINESS ADDRESS: STREET 1: 14901 S ORANGE BLOSSOM TRAIL CITY: ORLANDO STATE: FL ZIP: 32802-2353 BUSINESS PHONE: 4078265050 MAIL ADDRESS: STREET 1: P O BOX 2353 CITY: ORLANDO STATE: FL ZIP: 32802 10-Q 1 TUPPERWARE CORPORATION 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the 39 weeks ended September 25, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number 1-11657 TUPPERWARE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 36-4062333 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P.O. BOX 2353, ORLANDO, FLORIDA 32802 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (407) 826-5050 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of November 3, 1999, 57,657,512 shares of the Common Stock, $0.01 par value, of the Registrant were outstanding. ================================================================================ 2 TABLE OF CONTENTS
PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Statements of Income (Unaudited) for the 13 week periods ended September 25, 1999 and September 26, 1998 ............................................. 2 Consolidated Statements of Income (Unaudited) for the 39 week periods ended September 25, 1999 and September 26, 1998 .............................................. 3 Consolidated Balance Sheets (Unaudited) as of September 25, 1999 and December 26, 1998............................. 4 Consolidated Statements of Cash Flows (Unaudited) for the 39 week periods ended September 25, 1999 and September 26, 1998 .............................................. 6 Notes to Consolidated Financial Statements (Unaudited) ................ 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................ 11 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ...................................... 19 SIGNATURES ..................................................................... 20
The financial statements of the Registrant included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the Commission). Although certain information normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted, the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Annual Report on Form 10-K of the Registrant for its fiscal year ended December 26, 1998. The consolidated financial statements included herein reflect all adjustments, consisting only of normal recurring items, which, in the opinion of management, are necessary to present a fair statement of the results for the interim periods presented. The results for interim periods are not necessarily indicative of trends or results to be expected for a full year. 3 TUPPERWARE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
13 WEEKS ENDED --------------------------------------- SEPTEMBER 25, SEPTEMBER 26, 1999 1998 -------------- --------------- (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Net sales ............................................. $ 211.9 $ 217.4 ---------- ---------- Costs and expenses: Cost of products sold .............................. 79.1 90.6 Delivery, sales and administrative expense ............................ 121.7 127.0 Interest expense ................................... 6.0 7.6 Interest income .................................... (0.5) (0.3) Other expense, net ................................. 1.0 1.1 ---------- ---------- Total costs and expenses ........................ 207.3 226.0 ---------- ---------- Income (loss) before income taxes ..................... 4.6 (8.6) Provision for (benefit from) income taxes ............. 1.1 (2.1) ---------- ---------- Net income (loss) ..................................... $ 3.5 $ (6.5) ========== ========== Net income (loss) per common share: Basic .............................................. $ 0.06 $ (0.11) ========== ========== Diluted ............................................ $ 0.06 $ (0.11) ========== ==========
See accompanying Notes to Consolidated Financial Statements (Unaudited). 2 4 TUPPERWARE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
39 WEEKS ENDED --------------------------------------- SEPTEMBER 25, SEPTEMBER 26, 1999 1998 -------------- --------------- (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Net sales ............................................. $ 734.1 $ 769.1 ---------- ---------- Costs and expenses: Cost of products sold .............................. 256.3 295.3 Delivery, sales, and administrative expense ............................ 398.3 412.1 Interest expense ................................... 17.1 18.2 Interest income .................................... (1.7) (1.7) Re-engineering charge .............................. 15.1 -- Other expense, net ................................. 2.4 3.0 ---------- ---------- Total costs and expenses ......................... 687.5 726.9 ---------- ---------- Income before income taxes ............................ 46.6 42.2 Provision for income taxes ............................ 11.0 10.3 ---------- ---------- Net income ............................................ $ 35.6 $ 31.9 ========== ========== Net income per common share: Basic ............................................. $ 0.62 $ 0.54 ========== ========== Diluted ........................................... $ 0.62 $ 0.54 ========== ==========
See accompanying Notes to Consolidated Financial Statements (Unaudited). 3 5 TUPPERWARE CORPORATION CONSOLIDATED BALANCE SHEETS ASSETS (UNAUDITED)
SEPTEMBER 25, DECEMBER 26, 1999 1998 -------------- ------------ (IN MILLIONS) Cash and cash equivalents ............................. $ 29.8 $ 23.0 Accounts receivable ................................... 127.7 125.0 Less allowances for doubtful accounts .............. (26.7) (32.7) ---------- ---------- 101.0 92.3 Inventories ........................................... 153.4 157.1 Deferred income tax benefits .......................... 57.4 55.5 Prepaid expenses and other assets ..................... 49.9 57.7 ---------- ---------- Total current assets ............................... 391.5 385.6 ---------- ---------- Deferred income tax benefits .......................... 93.5 84.7 Property, plant, and equipment ........................ 946.5 972.9 Less accumulated depreciation ...................... (702.4) (701.9) ---------- ---------- 244.1 271.0 Long-term receivables, net of allowances of $34.4 million at September 25, 1999 and $41.4 million at December 26, 1998 .................. 40.1 40.3 Other assets .......................................... 49.1 41.8 ---------- ---------- Total assets ....................................... $ 818.3 $ 823.4 ========== ==========
See accompanying Notes to Consolidated Financial Statements (Unaudited). 4 6 TUPPERWARE CORPORATION CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY (UNAUDITED)
SEPTEMBER 25, DECEMBER 26, 1999 1998 ------------- ------------ (Dollars in millions except per share amounts) Accounts payable ...................................... $ 52.5 $ 85.3 Short-term borrowings and current portion of long-term debt ..................................... 92.1 18.7 Accrued liabilities ................................... 164.3 186.1 ---------- ---------- Total current liabilities .......................... 308.9 290.1 Long-term debt ........................................ 296.4 300.1 Accrued post retirement benefit cost .................. 38.3 38.4 Other liabilities ..................................... 59.2 59.0 Shareholders' equity: Preferred stock, $0.01 par value, 200,000,000 shares authorized; none issued .................... -- -- Common stock, $0.01 par value, 600,000,000 shares authorized; 62,367,289 shares issued ....... 0.6 0.6 Capital surplus ...................................... 20.1 19.5 Subscription receivable .............................. (7.7) (7.7) Retained earnings .................................... 454.0 457.2 Treasury stock, 4,728,905 shares at September 25, 1999, and 4,753,287 shares at December 26, 1998, at cost ...................... (141.2) (142.0) Unearned portion of restricted stock issued for future service ................................ (0.5) (1.4) Accumulated other comprehensive income ............... (209.8) (190.4) ---------- ---------- Total shareholders' equity ......................... 115.5 135.8 ---------- ---------- Total liabilities and shareholders' equity ......... $ 818.3 $ 823.4 ========== ==========
See accompanying Notes to Consolidated Financial Statements (Unaudited). 5 7 TUPPERWARE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
39 WEEKS ENDED ---------------------------------- SEPTEMBER 25, SEPTEMBER 26, 1999 1998 ------------- ------------- (IN MILLIONS) Cash flows from operating activities: Net income ...................................................... $ 35.6 $ 31.9 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation ................................................. 42.9 47.4 Loss on sale of assets ....................................... 2.0 1.5 Foreign exchange loss (gain), net ............................ 0.1 (0.5) Non-cash impact of re-engineering charge ..................... 3.1 -- Changes in assets and liabilities: Increase in accounts receivable .............................. (20.5) (8.0) (Increase) decrease in inventories ........................... (5.9) 13.1 Decrease in accounts payable and accrued liabilities ......... (31.0) (13.8) Decrease in income taxes payable ............................. (10.2) (39.3) Increase in net deferred income taxes ........................ (14.5) (2.4) Other, net ................................................... (3.3) (8.4) ---------- ---------- Net cash (used in) provided by operating activities ............. (1.7) 21.5 ---------- ---------- Cash flows used in investing activities: Capital expenditures ......................................... (29.1) (28.0) ---------- ---------- Cash flows from financing activities: Dividend payments to shareholders ............................ (38.1) (39.0) Proceeds from exercise of stock options ...................... 0.3 1.4 Payments to acquire treasury stock ........................... -- (91.6) Net increase in short-term debt .............................. 74.3 133.1 ---------- ---------- Net cash provided by financing activities ....................... 36.5 3.9 ---------- ---------- Effect of exchange rate changes on cash and cash equivalents ................................................... 1.1 (1.1) ---------- ---------- Net increase (decrease) in cash and cash equivalents ............ 6.8 (3.7) Cash and cash equivalents at beginning of year .................. 23.0 22.1 ---------- ---------- Cash and cash equivalents at end of period ...................... $ 29.8 $ 18.4 ========== ==========
See accompanying Notes to Consolidated Financial Statements (Unaudited). 6 8 TUPPERWARE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1: BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. In the opinion of management, the unaudited consolidated financial statements include all adjustments, consisting only of normal recurring items, necessary for a fair presentation of financial position and results of operations. The results of operations of any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. NOTE 2: INVENTORIES Inventories, by component, are summarized as follows (in millions):
SEPTEMBER 25, DECEMBER 26, 1999 1998 ------------- ------------ Finished goods .................................................. $ 72.4 $ 74.5 Work in process ................................................. 34.2 31.7 Raw materials and supplies ...................................... 46.8 50.9 ---------- ---------- Total inventories ............................................ $ 153.4 $ 157.1 ========== ==========
NOTE 3: NET INCOME PER COMMON SHARE Basic per share information is calculated by dividing net income by the weighted average number of shares outstanding. Diluted per share information is calculated by also considering the impact of potential common stock on both net income and the weighted average number of shares outstanding. The weighted average number of shares used in the basic earnings per share computations was 57.5 million for both the 13 and 39 weeks ended September 25, 1999, compared with 57.6 million and 58.5 million for the 1998 periods. The only difference in the computation of basic and diluted earnings per share is the inclusion of 0.4 million and 0.3 million, respectively, for the quarter and year-to-date period in 1999 and 0.5 million for the quarter and year-to-date period in 1998 of shares of potential common stock. Options to purchase 2.4 million and 2.0 million shares of common stock in the third quarter of 1999 and 1998, respectively, and 3.1 million and 2.0 million shares of common stock in the nine-month period of 1999 and 1998, respectively, were outstanding but not 7 9 NOTE 3: NET INCOME PER COMMON SHARE (CONTINUED) included in the computation of diluted earnings per share because the options' exercise prices were greater than the average market price of the common shares during the respective period and, therefore, would have been anti-dilutive if included. The Company's potential common stock consists of employee and director stock options and restricted stock. NOTE 4: OTHER COMPREHENSIVE INCOME In addition to net income, comprehensive income includes certain amounts recorded directly in equity. The components of comprehensive income, net of related income tax effects, for the 13 week and 39 week periods ended September 25, 1999 and September 26, 1998, were as follows (in millions):
13 WEEKS ENDED 39 WEEKS ENDED ------------------------- -------------------------- SEPT. 25, SEPT. 26, SEPT. 25, SEPT. 26, 1999 1998 1999 1998 ---------- ---------- ---------- ---------- Net income (loss) $ 3.5 $ (6.5) $ 35.6 $ 31.9 Foreign Currency translation adjustments including tax benefit (provision) of $1.1 and $(4.0) for the 13 weeks and 39 weeks ended September 25, 1999, respectively, and $2.0 and $1.3 for the comparable 1998 periods (4.9) 1.8 (19.4) (2.6) ---------- ---------- ---------- ---------- Comprehensive (loss) income $ (1.4) $ (4.7) $ 16.2 $ 29.3 ========== ========== ========== ==========
Accumulated other comprehensive income is comprised solely of foreign currency translation adjustments. NOTE 5: RE-ENGINEERING PROGRAM In July 1999, the Company announced a re-engineering program designed to improve operating profit return on sales over three years through improved organizational alignment, a higher gross margin percentage, and reduced operating expenses. In conjunction with implementing the first phase of this program, the Company recorded a $15.1 million pre-tax charge ($11.6 million after tax, or $0.20 per basic and diluted common share) in the second quarter of 1999. The re-engineering charge falls in the following categories of expenditures and relates to activities in the Company's geographic segments as indicated below (in millions): Severance $ 9.0 Europe $ 7.1 Asset write down 3.1 Asia Pacific 4.0 Other 3.0 Latin America 4.0 ------ ------ Total $ 15.1 Total $ 15.1 ====== ======
8 10 NOTE 5: RE-ENGINEERING PROGRAM (CONTINUED) The severance costs relate primarily to the approximately 200 employees whose positions are being eliminated as a result of the decision to close the Spanish and Argentine manufacturing plants and to restructure the Japanese manufacturing operation and the area headquarters in Europe and Asia Pacific. The asset write downs relate primarily to the plant closures. The expenses included in the other category are primarily for non-asset write down costs of exiting facilities and professional fees associated with accomplishing the re-engineering actions. The liability balance as of September 25, 1999, was as follows (in millions): Balance at March 27, 1999 $ -- Provision 15.1 Cash expenditures (9.0) Non-cash write downs (3.1) ------- Balance at September 25, 1999 $ 3.0 =======
NOTE 6: SEGMENT INFORMATION The Company operates worldwide predominantly in one line of business: the manufacture and distribution, through independent direct sales forces, of plastic food storage and serving containers, microwave cookware, oven cookware and educational toys. Its operations are organized into the four geographic segments included in the following table (in millions):
13 WEEKS ENDED 39 WEEKS ENDED ------------------------------ ------------------------------ SEPT. 25, SEPT. 26, SEPT. 25, SEPT. 26, 1999 1998 1999 1998 ---------- ---------- ---------- ---------- Net sales: Europe $ 83.1 $ 90.6 $ 346.8 $ 358.7 Asia Pacific 59.0 48.2 166.8 145.3 Latin America 37.9 43.6 112.5 148.0 United States 31.9 35.0 108.0 117.1 ========== ========== ========== ========== Total net sales $ 211.9 $ 217.4 $ 734.1 $ 769.1 ========== ========== ========== ==========
9 11 NOTE 6: SEGMENT INFORMATION (CONTINUED)
13 WEEKS ENDED 39 WEEKS ENDED ------------------------------- ------------------------------- SEPT. 25, SEPT. 26, SEPT. 25, SEPT. 26, 1999 1998 1999 1998 ---------- ---------- ---------- ---------- Operating profit (loss): Europe $ 7.9 $ 8.9 $ 77.3 $ 75.9 Asia Pacific 6.5 2.9 14.7 7.6 Latin America 1.6 (6.7) 6.9 (6.2) United States (2.4) (1.5) (5.7) (3.2) ---------- ---------- ---------- ---------- Total operating profit 13.6 3.6 93.2 74.1 Unallocated expenses (3.5) (4.9) (16.1) (15.4) Re-engineering charge -- -- (15.1) -- Interest expense, net (5.5) (7.3) (15.4) (16.5) ========== ========== ========== ========== Income (loss) before income taxes $ 4.6 $ (8.6) $ 46.6 $ 42.2 ========== ========== ========== ==========
The re-engineering charge recorded in the second quarter of 1999 was made in conjunction with the Company's re-engineering program announced on July 19, 1999. The charge is for the cost of closing manufacturing plants in Argentina and Spain, restructuring of the Japanese manufacturing operation and restructuring actions in the area headquarters for Europe and Asia Pacific (See Note 5: Re-engineering Program). NOTE 7: ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) 133, "Accounting for Derivative Instruments and Hedging Activities." This Statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation of the hedge exposure. Depending on how the hedge is used and the designation, the gain or loss due to changes in the fair value is reported either in earnings or in other comprehensive income. Adoption of the statement, which is required for the Company's year 2001 financial statements, will have no impact on the accounting treatment for derivatives the Company currently has in place nor the hedging programs it has undertaken. 10 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion of the results of operations for the 13 weeks and 39 weeks ended September 25, 1999, compared with the 13 weeks and 39 weeks ended September 26, 1998, and changes in financial condition during the 39 weeks ended September 25, 1999. NET SALES AND NET INCOME Net sales for the third quarter ended September 25, 1999 were $211.9 million, a decrease of $5.5 million, or 2.6 percent, from $217.4 million in 1998. Net income for the third quarter of 1999 increased $10.0 million to $3.5 million, or $0.06 per share, from a loss of $6.5 million in 1998, or $0.11 per share. A stronger U.S. dollar in 1999 had a slight negative impact of $0.6 million on the sales comparison, but no significant impact on the net income comparison for the quarter. For the year-to-date period, sales were $734.1 million, which was a decline of $35.0 million, or 4.6 percent, from $769.1 million in 1998. Net income of $35.6 million for the 1999 period increased $3.7 million, or 12.0 percent, from 1998 net income of $31.9 million. Excluding the 1999 re-engineering charge, net income compared with 1998 rose $15.3 million, or 48.3 percent, (38.0 percent excluding a favorable foreign exchange impact). For the nine months, the negative impact of foreign exchange was $5.3 million, or 1 percentage point, on the sales comparison and the positive impact on the net income comparison was $2.3 million, or 10 percentage points. The 1999 results include a $15.1 million pre-tax charge ($11.6 million after tax, or $0.20 per share) related to the Company's three-year re-engineering program announced on July 19, 1999. The charge provides for severance and other exit costs associated with the decision to close manufacturing plants in Spain and Argentina, and to restructure manufacturing operations in Japan and the headquarters for Europe and Asia Pacific. The re-engineering project is designed to increase operating profit return on sales by improving organizational alignment, increasing the gross margin percentage, and reducing operating expenses. Third quarter 1999 results include approximately $4.0 million of pre-tax benefits associated with re-engineering actions taken. Of the total 1999 charge, approximately $12.0 million is cash related and is expected to be paid in 1999. Total one-time costs to be incurred in implementing the program are projected to be between $50 million and $75 million, mainly for severance, information technology expenditures, and plant closure costs. For the quarter and nine-month period in 1999, excluding the impact of foreign exchange, the sales improvements in Asia Pacific were more than offset by shortfalls in the other three areas. For both the quarter and nine-month period in 1999, operating profit improved, excluding the impact of foreign exchange, in all areas other than the United States. Unallocated expenses in the third quarter of 1999 decreased $1.4 million, but were $0.7 million higher for the nine-month comparative periods. The quarterly fluctuations were due primarily to the timing of expenses. 11 13 NET SALES AND NET INCOME (CONTINUED) For the third quarter, international operations in 1999 and 1998 generated 85 percent and 84 percent, respectively, of sales and all of the operating profit in both 1999 and 1998. For the nine months, international operations generated 85 percent of sales and all of the operating profit in both 1999 and 1998. COSTS AND EXPENSES The cost of products sold as a percentage of sales was 37.3 percent and 34.9 percent for the third quarter and nine months of 1999, respectively, compared with 41.7 percent and 38.4 percent for the respective 1998 periods. The improvement reflects re-engineering actions taken, the sale of a better mix of products, and the need for a lower level of charges for obsolete inventory. Delivery, sales, and administrative expense as a percentage of sales was 57.4 percent and 54.3 percent of sales in the third quarter and nine-month period of 1999, respectively, compared with 58.4 percent and 53.6 percent in the respective 1998 periods. The decrease in the third quarter comparison was primarily driven by a decrease in spending by Latin America. This decrease was partially offset by an increase in spending for promotions in Europe and the United States for programs to improve sales force activity and recruiting. For the nine-month period, expenses fell, but not in proportion to the sales decrease, reflecting the fact that certain expenses are fixed for a period of time. This was also a factor in the third quarter comparison. NET INTEREST EXPENSE In the third quarter and first nine months of 1999, the Company incurred net interest expense of $5.5 million and $15.4 million, respectively. For the comparable 1998 periods, the Company incurred net interest expense of $7.3 million and $16.5 million, respectively. For both the three- and nine-month period comparisons, the lower net interest expense reflects the placement of a higher proportion of debt offshore in low cost countries. TAX RATE The effective tax rates for the third quarter and first three quarters of 1999 were 23.5 percent compared with 24.5 percent in the comparable 1998 periods and for all of 1998. The effective tax rates are below the U.S. statutory rate, reflecting the availability of excess foreign tax credits along with low foreign effective tax rates. 12 14 REGIONAL RESULTS (DOLLARS IN MILLIONS) EUROPE
Positive (negative) Increase Restated foreign Percent (decrease) increase exchange of total 1999 1998 Dollar Percent (decrease) impact 1999 1998 ---- ---- ------ ------- ---------- ------ ---- ---- Quarter: Net sales $ 83.1 $ 90.6 $ (7.5) (8)% (2)% $ (5.8) 39% 42% Operating profit 7.9 8.9 (1.0) (11) 1 (1.1) 58 + Nine Months: Net sales $ 346.8 $ 358.7 $ (11.9) (3)% (2)% $ (5.9) 47% 47% Operating profit 77.3 75.9 1.4 2 1 0.4 83 +
+ Increase of more than 100 percent. The slight decrease in Europe's third quarter sales comparison, excluding the negative impact of weaker currencies throughout the region, was primarily driven by decreases in Germany due to the continued impact of the new social security law and in Scandinavia due to a smaller active sales force. Earlier this year legislation was enacted in Germany which imposes a tax on certain part-time workers. The Company has held meetings with the German sales force to explain the impact of the new legislation, as well as to offer financial assistance in addressing this issue for a period of time to members of the sales force who remain with the Company for a specified period. This issue could have a negative impact on German results in future periods. Partially offsetting these declines are volume-related increases in France and South Africa. For the nine-month comparative periods, before the negative foreign exchange impact, a volume-related sales increase in France was more than offset by a decrease in Germany due to the new legislation as explained above, resulting in a slight decrease in sales. For both the three- and nine-month periods, the slightly better trends in operating earnings compared with the sales trends reflect an improved gross margin and lower operating expenses, which were partially offset by higher spending on promotions. The improvement in the gross margin reflects re-engineering actions taken. The primary cause of the negative impact of foreign exchange on the third quarter and nine-month comparisons was a weaker euro. 13 15 REGIONAL RESULTS (DOLLARS IN MILLIONS) (continued) ASIA PACIFIC
Positive foreign Percent Increase Restated exchange of total 1999 1998 Dollar Percent Increase impact 1999 1998 ---- ---- ------ ------- -------- ------ ---- ---- Quarter: Net sales $ 59.0 $ 48.2 $ 10.8 22% 5% $ 8.0 28% 22% Operating profit 6.5 2.9 3.6 + 81 0.7 48 81 Nine Months: Net sales $ 166.8 $ 145.3 $ 21.5 15% 4% $ 15.7 23% 19% Operating profit 14.7 7.6 7.1 93 53 2.0 16 10
+ Increase of more than 100 percent. Asia Pacific's three- and nine-month sales increase, excluding the favorable impact of foreign exchange, was due to higher volume in Korea, Indonesia, and Australia, partially offset by a decrease in Japan. In Korea and Indonesia, the active sales force was up significantly reflecting the strong recruiting in those markets over the last year in which the sales force earnings opportunity has been particularly attractive. The improvement in Australia was from a more productive sales force. In Japan, strong recruiting results throughout the year have not translated into active sellers which caused the shortfall for the quarter and nine-month period. The significant improvement in operating profit for the quarter and nine-month comparisons, excluding the favorable currency impact, was a result of margin improvements in the majority of the countries in addition to smaller losses in China and India. The margin improvement reflects re-engineering actions taken. Currencies throughout the region strengthened in comparison with the U.S. dollar in both the third quarter and nine-month period. 14 16 REGIONAL RESULTS (DOLLARS IN MILLIONS) (continued) LATIN AMERICA
Positive (negative) Increase Restated foreign Percent (decrease) increase exchange of total 1999 1998 Dollar Percent (decrease) impact 1999 1998 ---- ---- ------ ------- ---------- ------ ---- ---- Quarter: Net sales $ 37.9 $ 43.6 $ (5.7) (13)% (7)% $ (2.8) 18% 20% Operating Profit (loss) 1.6 (6.7) 8.3 + + 0.6 12 nm Nine Months: Net sales $112.5 $148.0 $(35.5) (24)% (15)% $(15.1) 15% 19% Operating Profit (loss) 6.9 (6.2) 13.1 + + 0.7 7 nm
+ Increase of more than 100 percent. nm Not meaningful Latin America's sales decrease for the third quarter 1999, excluding the negative impact of foreign exchange, was mainly due to decreases in Venezuela and Argentina offset by an increase in Mexico. The decrease in Venezuela was due to a smaller sales force resulting mainly from the decision to significantly reduce the number of distributors in that market. The improvement in Mexico was primarily due to price increases. Sales for the nine-month comparative periods also decreased due to the performance of Venezuela and Argentina, in addition to decreases in Brazil, offset by the improvement in Mexico. The decreases in Brazil and Argentina were due to prior year reductions in the number of distributors. The actions taken to reduce the number of distributors in Brazil, Argentina, and Venezuela are designed to enhance the opportunity for profitability of those remaining. The significant improvement in profitability of both periods reflects 1998 efforts to align the cost structure of the region's businesses with expected sales. The impact of foreign exchange on the comparisons reflects weakness in the Brazilian real as well as the Mexican peso for the nine-month comparison. 15 17 REGIONAL RESULTS (DOLLARS IN MILLIONS) (continued) UNITED STATES
Percent Decrease of total 1999 1998 Dollar Percent 1999 1998 ---- ---- ------ ------- ---- ---- Quarter: Net sales $ 31.9 $ 35.0 $ (3.1) (9)% 15% 16% Operating loss (2.4) (1.5) (0.9) (56) nm nm Nine Months: Net sales $ 108.0 $ 117.1 $ (9.1) (8)% 15% 15% Operating loss (5.7) (3.2) (2.5) (79) nm nm
nm Not meaningful In the United States, the sales decreases in both periods were from a smaller sales force reflecting the difficulty of recruiting and motivating consultants in a full employment environment. This factor was somewhat mitigated by continuing improved sales force productivity. Both the three- and nine-month profitability comparisons fell more sharply than sales, as spending on promotions increased in an attempt to stimulate recruiting, activity of the sales force and sales. This was partially offset by improved gross margin percentages reflecting a more favorable mix of sales and a modest price increase. 16 18 FINANCIAL CONDITION Working capital was $82.6 million as of September 25, 1999, compared with $95.5 million as of the end of 1998. The major changes were an increase in short-term borrowings, which was partially offset by lower accounts payable and accrued liabilities and by higher net accounts receivable. The lower accounts payable and accrued liabilities balances reflect a seasonal reduction and working capital management. The higher net receivables balance was the result of higher sales in Asia Pacific and sales late in the quarter in Europe. With regard to the level of short-term borrowings, the Company classifies a portion of its outstanding borrowings that are due within one year by their terms as non-current due to its ability and intent that they be outstanding throughout the succeeding twelve months. Based on the timing of the Company's cash inflows during the year, as well as the overall level of short-term borrowings at the end of each period, a lower amount was classified as current at the end of 1998 than at the end of the third quarter of 1999. Net cash used in operating activities for the third quarter of 1999 was $1.7 million, compared with $21.5 million provided by operating activities in the 1998 period. The difference between years was primarily due to an increase in inventory in 1999 compared with a decrease in 1998, along with a greater increase in accounts receivable in 1999. The $29.1 million of cash used in investing activities was for capital expenditures, primarily for new molds. As of September 25, 1999, the Company had $300 million available under its unsecured multicurrency credit facility, which matures in 2002. The multicurrency credit facility along with $190 million of other foreign uncommitted lines of credit, and cash generated by operating activities, are expected to be adequate to finance any additional working capital needs and capital expenditures. YEAR 2000 ISSUES The Company has studied the "Year 2000" issues affecting its information technology and non-information technology systems and has prepared and completed its plan to address them. The issues are not expected to have a material adverse effect on the Company's operations. Although it believes that its remediation plan has addressed all of its Year 2000 issues, the Company has developed a contingency plan for business critical systems in the event that it has not remediated all issues. The Company estimates that the cost of addressing its Year 2000 issues was $5.3 million. These costs did not have a material effect on the Company's financial position or results of operations in any one period in part because they represented the re-deployment of existing information technology resources, and because they would have been incurred as part of normal software upgrades and replacements. 17 19 YEAR 2000 ISSUES (CONTINUED) The Company formally communicated with significant suppliers and other third party companies doing business with the Company to determine the extent to which the Company's systems and operations are vulnerable to those third parties' failure to remediate their Year 2000 issues. Based on the information received from these third parties, the Company is not aware of any Year 2000 issues of third parties expected to have a material adverse effect on its operations; however, there can be no guarantee that the systems of these other companies will be converted before the turn of the century or that their failure to do so would not have a material adverse effect on the Company. Due to the Company's extensive foreign operations, it is exposed to Year 2000 issues related to the infrastructures of the countries where these operations are located; however, the Company is not aware of any specific issues that have not been addressed through implementation of its plan. FORWARD-LOOKING STATEMENTS Statements contained in this report that are not based on historical facts are forward-looking statements involving risks and uncertainties, including sales force recruiting and activity levels, success of new products and promotional programs, economic and market conditions generally and foreign exchange risk in particular, and other risks detailed in the Company's report on Form 8-K dated February 28, 1997, as filed with the Securities and Exchange Commission. These risks and uncertainties may cause actual results to differ materially from those projected in forward-looking statements. 18 20 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K) (10.1) Tupperware Corporation 1996 Incentive Plan as amended August 18, 1999. (10.2) Form of Change of Control Agreement. (27) Financial Data Schedule for the third quarter of 1999.
(b) Reports on Form 8-K During the quarter, the Registrant did not file any current reports on Form 8-K. 19 21 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. TUPPERWARE CORPORATION By: /s/ Paul B. Van Sickle ------------------------------------------- Executive Vice President, and Chief Financial Officer By: /s/ Michael S. Poteshman ------------------------------------------- Vice President and Controller Orlando, Florida November 5, 1999 20 EX-10.1 2 INCENTIVE PLAN 1 Exhibit 10.1 TUPPERWARE CORPORATION 1996 INCENTIVE PLAN (as amended August 18, 1999) Article 1. Establishment, Purpose, and Duration 1.1 Establishment of the Plan. Tupperware Corporation, a Delaware corporation (hereinafter referred to as the ''Company''), hereby establishes an incentive compensation plan to be known as the ''Tupperware Corporation 1996 Incentive Plan'' (hereinafter referred to as the ''Plan''), as set forth in this document. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, and Performance Awards. The Plan shall become effective as of the Effective Date, and shall remain in effect as provided in Section 1.3 herein. 1.2 Purpose of the Plan. The purpose of the Plan is to promote the success and enhance the value of the Company by linking the personal interests of Participants to those of the Company's stockholders, and by providing Participants with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Participants upon whose judgment, interest, and special efforts the successful conduct of its operations largely is dependent. 1.3 Duration of the Plan. The Plan shall commence on the Effective Date and shall remain in effect, subject to the right of the Board of Directors to terminate, amend or modify the Plan at any time pursuant to Article 14 herein, until all Shares subject to it shall have been purchased or acquired according to the Plan's provisions. However, in no event may an Award be granted under the Plan on or after May 1, 2006. Article 2. Definitions Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized: (a) ''Award'' means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock, or Performance Awards. (b) ''Award Agreement'' means an agreement entered into by each Participant and the Company, setting forth the terms and provisions applicable to Awards granted to Participants under this Plan. (c) ''Beneficial Owner'' shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. (d) ''Beneficiary'' means a person who may be designated by a Participant pursuant to Article 10 and to whom any benefit under the Plan is to be paid in case of the Participant's death or physical or mental incapacity, as determined by the Committee, before he or she receives any or all of such benefit. (e) ''Board'' or ''Board of Directors'' means the Board of Directors of the Company. (f) ''Cause'' means (i) conviction of a Participant for committing a felony under federal law or the law of the state in which such action occurred, (ii) dishonesty in the course of fulfilling a Participant's employment duties or (iii) willful and deliberate failure on the part of a Participant to perform his employment duties in any -1- 2 material respect, or such other events as shall be determined by the Committee. The Committee shall have the sole discretion to determine whether ''Cause'' exists, and its determination shall be final. (g) ''Change of Control'' of the Company means: i. An acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding Shares (the ''Outstanding Company Common Stock'') or (2) the combined voting power of the then outstanding Shares entitled to vote generally in the election of directors (the ''Outstanding Company Voting Securities''); excluding, however, the following: (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (4) any acquisition by any Person pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (iii) of this definition; or ii. A change in the composition of the Board such that the individuals who, as of the effective date of the Plan, constitute the Board (such Board shall be hereinafter referred to as the ''Incumbent Board'') cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition, that any individual who becomes a member of the Board subsequent to such effective date, whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person or legal entity other than the Board shall not be so considered as a member of the Incumbent Board; or iii. The approval by the stockholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation (''Corporate Transaction'') or, if consummation of such Corporate Transaction is subject, at the time of such approval by stockholders, to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Corporate Transaction pursuant to which (1) all or substantially all of the individuals and entities who are the Beneficial Owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding Shares, and the combined voting power of the then outstanding Shares entitled to vote generally in the election of directors, as the case may be, of the Company resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or such corporation resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership -2- 3 existed withrespect to the Company prior to the Corporate Transaction and (3) individuals who were members of the Incumbent Board will constitute at least a majority of the board of directors of the corporation resulting from such Corporate Transaction; or iv. The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. (h) ''Change of Control Price'' means the higher of (i) the highest reported sales price, regular way, of a share of Common Stock in any transaction reported on the New York Stock Exchange Composite Tape or other national exchange on which such shares are listed or on NASDAQ during the 60-day period prior to and including the date of a Change of Control or (ii) if the Change of Control is the result of a tender or exchange offer or a Corporate Transaction, the highest price per share of Common Stock paid in such tender or exchange offer or Corporate Transaction; provided, however, that (x) in the case of a Stock Option which (A) is held by an optionee who is an officer or director of the Corporation and is subject to Section 16(b) of the Exchange Act and (B) was granted within 240 days of the Change of Control, then the Change of Control Price for such Stock Option shall be the Fair Market Value of the Common Stock on the date such Stock Option is exercised or deemed exercised and (y) in the case of Incentive Stock Options and Stock Appreciation Rights relating to Incentive Stock Options, the Change of Control Price shall be in all cases the Fair Market Value of the Common Stock on the date such Incentive Stock Option or Stock Appreciation Right is exercised. To the extent that the consideration paid in any such transaction described above consists all or in part of securities or other noncash consideration, the value of such securities or other noncash consideration shall be determined in the sole discretion of the Board. (i) ''Code'' means the Internal Revenue Code of 1986, as amended from time to time. (j) ''Commission'' means the Securities and Exchange Commission or any successor agency. (k) ''Committee'' means the committee described in Article 3 or (unless otherwise stated) its designee pursuant to a delegation by the Committee as contemplated by Section 3.3. (l) ''Company'' means Tupperware Corporation, a Delaware corporation, or any successor thereto as provided in Article 16 herein. (m) ''Covered Employee'' has the meaning ascribed thereto in Section 162(m) of the Code and the regulations thereunder. (n) ''Director'' means any individual who is a member of the Board of Directors of the Company. (o) ''Disinterested Person'' means a member of the Board who qualifies as a disinterested person as defined in Rule 16b-3(c)(2), as promulgated by the Commission under the Exchange Act, or any successor definition adopted by the Commission. (p) ''Effective Date'' means May 20, 1996. (q) ''Employee'' means any nonunion employee of the Company or of the Company's Subsidiaries. Directors who are not otherwise employed by the Company shall not be considered Employees under this Plan. (r) ''Exchange Act'' means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto. -3- 4 (s) ''Fair Market Value'' means, except as expressly provided otherwise, as of any given date, the mean between the highest and lowest reported sales prices of the Common Stock on the New York Stock Exchange Composite Tape or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed or on NASDAQ. If there is no regular public trading market for such Common Stock, the Fair Market Value of the Common Stock shall be determined by the Committee in good faith. (t) ''Freestanding SAR'' means a SAR that is granted independently of any Options pursuant to Section 7.1 herein. (u) ''Incentive Stock Option'' or ''ISO'' means an option to purchase Shares, granted under Article 6 herein, which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code. (v) ''Insider'' shall mean an Employee who is, on the relevant date, an officer, director, or ten percent (10%) beneficial owner of the Company, as defined under Section 16 of the Exchange Act. (w) ''Nonqualified Stock Option'' or ''NQSO'' means an option to purchase Shares, granted under Article 6 herein, which is not intended to be an Incentive Stock Option. (x) ''Option'' means an Incentive Stock Option or a Non- qualified Stock Option. (y) ''Option Price'' means the price at which a Share may be purchased by a Participant pursuant to an Option, as determined by the Committee. (z) ''Participant'' means an Employee of the Company who has been granted an Award under the Plan. (aa) ''Performance Award'' means an Award granted to an Employee, as described in Article 9 herein, including Performance Units and Performance Shares. (ab) ''Performance Goals'' means the performance goals established by the Committee prior to the grant of Performance Awards that are based on the attainment of one or any combination of the following: specified levels of earnings per share from continuing operations, operating income, revenues, return on operating assets, return on equity, stockholder return (measured in terms of stock price appreciation) and/or total stockholder return (measured in terms of stock price appreciation and/or dividend growth), achievement of cost control, working capital turns, cash flow, net income, economic value added, segment profit, sales force growth, or stock price of the Company or such subsidiary, division or department of the Company for or within which the Participant is primarily employed and that are intended to qualify under Section 162(m) (4) (c) of the Code. Such Performance Goals also may be based upon the attaining of specified levels of Company performance under one or more of the measures described above relative to the performance of other corporations. Such Performance Goals shall be set by the Committee within the time period prescribed by Section 162(m) of the Code and related regulations. (ac) ''Performance Period'' means a time period during which Performance Goals established in connection with Performance Awards must be met. (ad) ''Performance Unit'' means an Award granted to an Employee, as described in Article 9 herein. (ae) ''Performance Share'' means an Award granted to an Employee, as described in Article 9 herein. -4- 5 (af) ''Restriction Period'' or ''Period'' means the period or periods during which the transfer of Shares of Restricted Stock is limited based on the passage of time and the continuation of service with the Company, and the Shares are subject to a substantial risk of forfeiture, as provided in Article 8 herein. (ag) ''Person'' shall have the meaning ascribed to such term in Section 3(a) (9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a ''group'' as defined in Section 13(d). (ah) ''Restricted Stock'' means an Award granted to a Participant pursuant to Article 8 herein. (ai) ''Share'' means a share of common stock of the Company. (aj) ''Subsidiary'' or ''Subsidiaries'' means any corporation or corporations in which the Company owns directly, or indirectly through subsidiaries, at least fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint ventures) in which the Company owns at least fifty percent (50%) of the combined equity thereof. (ak) ''Stock Appreciation Right'' or ''SAR'' means an Award, granted alone (Freestanding SAR) or in connection with a related Option (Tandem SAR), designated as a SAR, pursuant to the terms of Article 7 herein. (al) ''Tandem SAR'' means an SAR that is granted in connection with a related Option pursuant to Section 7.1 herein, the exercise of which shall require forfeiture of the right to purchase a Share under the related Option (and when a Share is purchased under the Option, the Tandem SAR shall similarly be cancelled). Article 3. Administration 3.1 The Committee. The Plan shall be administered by the Compensation and Directors Committee or such other committee of the Board as the Board may from time to time designate (the ''Committee''), which shall be composed of not less than two Disinterested Persons each of whom shall be an ''outside director'' for purposes of Section 162(m)(4) of the Code, and shall be appointed by and serve at the pleasure of the Board. 3.2 Authority of the Committee. The Committee shall have plenary authority to grant Awards pursuant to the terms of the Plan to officers and employees of the Company and its subsidiaries and Affiliates. Among other things, the Committee shall have the authority, subject to the terms of the Plan: (a) To select the officers and employees to whom Awards may from time to time be granted; (b) To determine whether and to what extent Incentive Stock Options, NonQualified Stock Options, SARs, Restricted Stock and Performance Awards or any combination thereof are to be granted hereunder; (c) To determine the number of Shares to be covered by each Award granted hereunder; (d) To determine the terms and conditions of any Award granted hereunder (including, but not limited to, the option price (subject to Section 6.4 (a)), any vesting condition, restriction or limitation (which may be related to the performance of the Participant, the Company or any subsidiary or Affiliate) and any vesting acceleration or forfeiture waiver regarding any Award and the Shares relating thereto, based on such factors as the Committee shall determine; -5- 6 (e) To modify, amend or adjust the terms and conditions of any Award, at any time or from time to time, including but not limited to Performance Goals, unless at the time of establishment of goals the Committee shall have precluded its authority to make such adjustments; and (f) To determine to what extent and under what circumstances Shares and other amounts payable with respect to an Award shall be deferred. The Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable, to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any agreement relating thereto) and to otherwise supervise the administration of the Plan. 3.3 Action of the Committee. The Committee may act only by a majority of its members then in office, except that the members thereof may (i) delegate to an officer of the Company the authority to make decisions pursuant to Section 6.4, provided that no such delegation may be made that would cause Awards or other transactions under the Plan to cease either to be exempt from Section 16(b) of the Exchange Act or to qualify as ''qualified performance-based compensation'' as such term is defined in the regulations promulgated under Section 162(m) of the Code, and (ii) authorize any one or more of their number or any officer of the Company to execute and deliver documents on behalf of the Committee. 3.4 Decisions Binding. Any determination made by the Committee or pursuant to delegated authority pursuant to the provisions of the Plan with respect to any Award shall be made in the sole discretion of the Committee or such delegate at the time of the grant of the Award or, unless in contravention of any express term of the Plan, at any time thereafter. All decisions made by the Committee or any appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and Plan Participants. Article 4. Shares Subject to the Plan 4.1 Number of Shares. Subject to adjustment as provided in Section 4.3 herein, the total number of Shares available for grant under the Plan shall be six million one hundred thousand (6,100,000); provided, however, that if during the term of the Plan the Company repurchases Shares, additional Options may be granted equal to the number of Shares so repurchased, except that no more than one million five hundred thousand (1,500,000) additional Shares shall be authorized for Options under this proviso; and provided further that the total number of available Shares that may be used for Restricted Stock Awards under the Plan shall be limited to three hundred thousand (300,000). No Participant may be granted Awards covering in excess of 10% of the Shares available for issuance over the life of the Plan. Shares subject to an Award under the Plan may be authorized and unissued shares or may be treasury shares. The following rules will apply for purposes of the determination of the number of Shares available for grant under the Plan: (a) While an Award is outstanding, it shall be counted against the authorized pool of Shares, regardless of its vested status. (b) The grant of an Option or Restricted Stock shall reduce the Shares available for grant under the Plan by the number of Shares subject to such Award. (c) The grant of a Tandem SAR shall not reduce the number of Shares available for grant by the number of Shares subject to the related Option (i.e., there is no double counting of Options and their related Tandem SARs). -6- 7 (d) The grant of a Freestanding SAR shall reduce the number of Shares available for grant by the number of Freestanding SARs granted. (e) The Committee shall reduce the appropriate number of Shares from the authorized pool where a Performance Award is payable in Shares. 4.2 Lapsed Awards. If any Award granted under this Plan is cancelled, forfeited, terminates, expires, or lapses for any reason (with the exception of the termination of a Tandem SAR upon exercise of the related Option or the termination of a related Option upon exercise of the corresponding Tandem SAR), any Shares subject to such Award again shall be available for the grant of an Award under the Plan. However, in the event that prior to the Award's cancellation, forfeiture, termination, expiration, or lapse, the holder of the Award at any time received one or more ''benefits of ownership'' pursuant to such Award (as defined by the Commission, pursuant to any rule or interpretation promulgated under Section 16 or any successor rule of the Exchange Act), the Shares subject to such Award shall not be made available for regrant under the Plan to Insiders, but shall be available for regrants under the Plan to Participants who are not Insiders. 4.3 Adjustments in Authorized Shares and Prices. In the event of any change in corporate capitalization, such as a stock split or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Committee or Board may make such substitution or adjustments in the aggregate number and class of shares reserved for issuance under the Plan, in the number, kind and option price of shares subject to outstanding Stock Options or SARs, in the number and kind of shares subject to other outstanding Awards granted under the Plan and/or such other equitable substitution or adjustments as it may determine to be appropriate in its sole discretion; provided, however, that the number of shares subject to any Award shall always be a whole number. Such adjusted option price shall also be used to determine the amount payable by the Company upon the exercise of any Tandem SAR. Article 5. Eligibility and Participation 5.1 Eligibility. Persons eligible to be granted Awards under this Plan include all Employees of the Company and its Subsidiaries, as determined by the Committee, including Employees who are members of the Board, but excluding Directors who are not Employees. 5.2 Actual Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible Employees, those to whom Awards shall be granted and shall determine the nature and amount of each Award. Article 6. Stock Options 6.1 Grant of Options. Stock Options may be granted alone or in addition to other Awards granted under the Plan and may be of two types: Incentive Stock Options and Nonqualified Stock Options. Any Stock Option granted under the Plan shall be in such form as the Committee may from time to time approve. The Committee shall have the authority to grant any optionee Incentive Stock Options, Nonqualified Stock Options or both types of Stock Options (in each case with or without Stock Appreciation Rights); provided, however, that grants hereunder are subject to the aggregate limit on grants to individual Participants set forth in Article 4. Incentive Stock Options may be granted only to employees of the Company and any ''subsidiary corporation'' (as such term is defined in Section 424(f) of the Code). To the extent that any Stock Option is not designated as an Incentive Stock Option or even if so designated does not qualify as an Incentive Stock Option, it shall constitute a Nonqualified Stock Option. -7- 8 6.2 Award Agreement. Stock Options shall be evidenced by option agreements, the terms and provisions of which may differ. An option agreement shall indicate on its face whether it is intended to be an agreement for an Incentive Stock Option or a Nonqualified Stock Option. The grant of a Stock Option shall occur on the date the Committee by resolution selects an individual to be a Participant in any grant of a Stock Option, determines the number of Shares to be subject to such Stock Option to be granted to such individual and specifies the terms and provisions of the Stock Option, or such later date as the Committee designates. The Company shall notify a Participant of any grant of a Stock Option, and a written option agreement or agreements shall be duly executed and delivered by the Company to the Participant. Such agreement or agreements shall become effective upon execution by the Company and the Participant. 6.3 Incentive Stock Options. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered nor shall any discretion or authority granted under the Plan be exercised so as to disqualify the Plan under Section 422 of the Code or, without the consent of the optionee affected, to disqualify any Incentive Stock Option under such Section 422. 6.4 Terms and Conditions. Stock Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions as the Committee shall deem desirable: (a) Option Price. The option price per Share purchasable under a Stock Option shall be determined by the Committee and set forth in the option agreement, and shall not be less than the Fair Market Value of the Common Stock subject to the Stock Option on the date of grant. Options may not be repriced without shareholder approval. (b) Option Term. The term of each Stock Option shall be fixed by the Committee, but no Incentive Stock Option shall be exercisable more than 10 years after the date the Stock Option is granted. (c) Exercisability. Except as otherwise provided herein, Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee. If the Committee provides that any Stock Option is exercisable only in installments, the Committee may at any time waive such installment exercise provisions, in whole or in part, based on such factors as the Committee may determine. In addition, the Committee may at any time accelerate the exercisability of any Stock Option. (d) Method of Exercise. Subject to the provisions of this Article 6, Stock Options may be exercised, in whole or in part, at any time during the option term by giving written notice of exercise to the Company specifying the number of Shares subject to the Stock Option to be purchased. Such notice shall be accompanied by payment in full of the purchase price by certified or bank check or such other instrument as the Company may accept. If approved by the Committee, payment, in full or in part, may also be made in the form of delivery of unrestricted Shares already owned by the optionee of the same class as the Shares subject to the Stock Option (based on the Fair Market Value of the shares on the date the Stock Option is exercised), or by certifying ownership of such Shares by the Participant to the satisfaction of the Company for later delivery to the Company as specified by the Committee; provided, however, that, in the case of an Incentive Stock Option the right to make a payment in the form of already owned Shares of the same class as the Shares subject to the Stock Option may be authorized only at the time the Stock Option is granted. In the discretion of the Committee, payment for any Shares subject to a Stock Option may also be made pursuant to a ''cashless exercise'' by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price, and, if requested, the amount of any federal, state, local or foreign withholding taxes. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. -8- 9 No shares shall be issued until full payment therefor has been made. An optionee shall have all of the rights of a stockholder of the Company holding the class or series of Shares that is subject to such Stock Option (including, if applicable, the right to vote the shares and the right to receive dividends), when the optionee has given written notice of exercise and has paid in full for such Shares. (e) Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares. (f) Nontransferability of Stock Options. No Stock Option shall be transferable by the optionee other than (i) by will or by application of the laws of descent and distribution; or (ii) in the case of a Nonqualified Stock Option, pursuant to (a) a domestic relations order issued by a tribunal of competent jurisdiction or (b) a gift to members of such optionee's immediate family, whether directly or indirectly or by means of a trust or partnership or otherwise, if expressly permitted under the applicable option agreement. All Stock Options shall be exercisable, subject to the terms of this Plan, during the optionee's lifetime, only by the optionee or by the guardian or legal representative of the optionee or, in the case of a Nonqualified Stock Option, its alternative payee pursuant to such domestic relations order, it being understood that the term ''holder'' and ''optionee'' include the guardian and legal representative of the optionee named in the option agreement and any person to whom an option is transferred by will or the laws of descent and distribution or, in the case of a Nonqualified Stock Option, pursuant to a domestic relations order or a gift permitted under the applicable option agreement. (g) Termination by Death. Unless otherwise determined by the Committee, if an optionee's employment terminates by reason of death, any Stock Option held by such optionee shall become immediately and fully exercisable and may thereafter be exercised for a period of one year (or such other period as the Committee may specify in the option agreement) from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. Notwithstanding any provision herein to the contrary, unless otherwise determined by the Committee, if an optionee dies after termination of the optionee's employment, any Stock Option held by such optionee may thereafter be exercised, to the extent such Stock Option was exercisable as of the date of such death, for a period that expires on the earliest of (i) the first anniversary of the date of such death, (ii) the last date on which the optionee would have been entitled to exercise such Stock Option had the optionee not died or (iii) the date on which the stated term of such Stock Option expires. (h) Termination by Reason of Disability. Unless otherwise determined by the Committee, if an optionee's employment terminates by reason of Disability, any Stock Option held by such optionee, if not fully vested and exercisable as of the date of such termination, shall continue to vest according to such Stock Option's stated vesting schedule and may thereafter be exercised by the optionee, to the extent it was exercisable at the time of termination or thereafter becomes exercisable, or on such accelerated basis as the Committee may determine, for a period of three years (or such shorter period as the Committee may specify in the option agreement) from the date of such termination of employment or until the expiration of the stated term of such Stock Option, whichever period is the shorter; provided, however, that if the optionee dies within such period, any unexercised Stock Option held by such optionee shall continue to be exercisable to the extent to which it was exercisable at the time of death for the remainder of such period, or for a period of 12 months from the date of such death, or until the expiration of the stated term of such Stock Option, whichever period is the shortest. In the event of termination of employment by reason of Disability, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Nonqualified Stock Option. (i) Termination by Reason of Retirement. Unless otherwise determined by the Committee, if an optionee's employment terminates by reason of retirement, the following vesting and exercisability terms will apply. For purposes of this Plan, an optionee shall be deemed to have terminated employment by reason of retirement if such optionee is -9- 10 age 55 years or older with 10 or more years of service with the Company, has given due notice (as determined by the Committee), and has entered into an agreement, the form and content of which shall be specified by the Committee, not to compete with the Company and its Affiliates for a period of one year following such retirement.
Years of Continued Years of Continued Age at Vesting Following Exercisability Retirement Retirement Following Retirement 55-59 1 2 60-64 2 3 65 or more 3 3
With respect to any grants of a Stock Option occurring after August 18, 1999, and notwithstanding any inconsistent provision contained in the first paragraph of this Section 6.4(i), the following vesting and exercisability terms shall apply. Any optionee who has attained the age of 60 years or older with 15 or more years of service with the company, and who meets the other conditions specified by the second sentence of the first paragraph of the Section 6.4(i), shall have 6 years of continued vesting and exercisability following retirement. Notwithstanding the foregoing, if the optionee dies within such period of continued exercisability, any unexercised Stock Option held by such optionee shall continue to be exercisable to the extent to which it was exercisable at the time of death for the remainder of such period, or for a period of 12 months from the date of such death, or until the expiration of the stated term of such Stock Option, whichever period is the shortest. In the event of termination of employment by reason of retirement, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Nonqualified Stock Option. (j) Other Termination. Unless otherwise determined by the Committee: (A) if an optionee incurs a voluntary termination of Employment, any Stock Option held by such optionee, to the extent then exercisable, or on such accelerated basis as the Committee may determine, may be exercised for the lesser of thirty days from the date of such termination of Employment or the balance of such Stock Option's term; and (B) if an optionee incurs a termination of Employment because such optionee's Employment is terminated by the Company or an Affiliate, other than by reason of retirement or Disability or for Cause, any Stock Option held by such optionee, to the extent then exercisable, or becomes exercisable during the one-year period following termination of employment by the Company or an Affiliate, or on such accelerated basis as the Committee may determine, may be exercised for the lesser of one year from the date of such termination of Employment or the balance of such Stock Option's term; provided, however, that if the optionee dies within such thirty-day or one- year period, as the case may be, any unexercised Stock Option held by such optionee shall continue to be exercisable to the extent to which it was exercisable at the time of death for the remainder of such period, or for a period of 12 months from the date of such death, or until the expiration of the stated term of such Stock Option, whichever period is the shortest. Notwithstanding the foregoing, if an optionee incurs a Termination of Employment at or after a Change of Control, other than by reason of death, Disability or Retirement, any Stock Option held by such optionee shall be exercisable for the lesser of (1) six months and one day from the date of such termination of Employment, and (2) the balance of such Stock Option's term. In the event of termination of Employment, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Nonqualified Stock Option. (k) Termination for Cause. Unless otherwise determined by the Committee, if an optionee incurs a Termination of Employment for Cause, all Stock Options held by such optionee shall thereupon terminate. (l) Change of Control Cash-Out. Notwithstanding any other provision of the Plan, during the 60-day period from and after a Change of Control (the ''Exercise Period''), unless the Committee shall determine otherwise at the time of grant, -10- 11 an optionee shall have the right, whether or not the Stock Option is fully exercisable and in lieu of the payment of the exercise price for the Shares being purchased under the Stock Option and by giving notice to the Company, to elect (within the Exercise Period) to surrender all or part of the Stock Option to the Company and to receive cash, within 30 days of such notice, in an amount equal to the amount by which the Change of Control Price per Share shall exceed the exercise price per Share under the Stock Option (the ''Spread'') multiplied by the number of Shares granted under the Stock Option as to which the right granted under this Section 6.4(l) shall have been exercised; provided, however, that if the Change of Control is within six months of the date of grant of a particular Stock Option held by an optionee who is an officer or director of the Company and is subject to Section 16(b) of the Exchange Act no such election shall be made by such optionee with respect to such Stock Option prior to six months from the date of grant. However, if the end of such 60-day period from and after a Change of Control is within six months of the date of grant of a Stock Option held by an optionee who is an officer or director of the Company and is subject to Section 16(b) of the Exchange Act, such Stock Option shall be cancelled in exchange for a cash payment to the optionee, effected on the day which is six months and one day after the date of grant of such Option, equal to the Spread multiplied by the number of Shares granted under the Stock Option. Article 7. Stock Appreciation Rights 7.1 Grant of SARs. Subject to the terms and conditions of the Plan, a SAR may be granted to an Employee at any time and from time to time as shall be determined by the Committee. The Committee may grant Freestanding SARs, Tandem SARs, or any combination of these forms of SAR. In the case of a Nonqualified Stock Option, Tandem SARs may be granted either at or after the time of grant of such Stock Option. In the case of an Incentive Stock Option, Tandem SARs may be granted only at the time of grant of such Stock Option. The Committee shall have complete discretion in determining the number of SARs granted to each Participant (subject to Article 4 herein) and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to such SARs. However, the grant price of a Freestanding SAR shall be at least equal to the Fair Market Value of a Share on the date of grant of the SAR. The grant price of Tandem SARs shall equal the Option Price of the related Option. In no event shall any SAR granted hereunder become exercisable within the first six (6) months of its grant. SARs may not be repriced without stockholder approval. 7.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR shall terminate and no longer be exercisable upon the termination or exercise of the related Stock Option. A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable. Notwithstanding any other provision of this Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO; (i) the Tandem SAR will expire no later than the expiration of the underlying ISO; (ii) the value of the payout with respect to the Tandem SAR may be for no more than one hundred percent (100%) of the difference between the Option Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to the ISO exceeds the Option Price of the ISO. 7.3 Exercise of Freestanding SARs. Subject to the other provisions of this Article 7, Freestanding SARs may be exercised upon whatever terms and conditions the Committee, at its sole discretion, imposes upon them. 7.4 SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the grant price, the term of the SAR, and such other provisions as the Committee shall determine. -11- 12 7.5 Term of SARs. The term of a SAR granted under the Plan shall be determined by the Committee, at its sole discretion; provided, however, that such term shall not exceed ten (10) years. 7.6 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: (a) The excess of the Fair Market Value of a Share on the date of exercise over the grant price of the SAR; by (b) The number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof. 7.7 Rule 16b-3 Requirements. Notwithstanding any other provision of the Plan, the Committee may impose such conditions on exercise of a SAR (including, without limitation, the right of the Committee to limit the time of exercise to specified periods) as may be required to satisfy the requirements of any rule or interpretation promulgated under Section 16 (or any successor rule) of the Act. 7.8 Nontransferability of SARs. No SAR granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by application of the laws of descent and distribution. Further, all SARs granted to a Participant under the Plan shall be exercisable during his or her lifetime only by such Participant. Notwithstanding the foregoing, at the discretion of the Committee, an Award Agreement may permit the transferability of a SAR by a Participant solely to members of the Participant's immediate family or trusts for the benefit of such persons. Article 8. Restricted Stock 8.1 Administration. Shares of Restricted Stock may be awarded either alone or in addition to other Awards granted under the Plan. The Committee shall determine the officers and employees to whom and the time or times at which grants of Restricted Stock will be awarded, the number of shares to be awarded to any Participant (subject to the aggregate limit on grants to individual Participants set forth in Article 4), the conditions for vesting, the time or times within which such Awards may be subject to forfeiture and any other terms and conditions of the Awards, in addition to those contained in Section 8.3. The Committee may, prior to grant, condition the vesting of Restricted Stock upon continued service of the Participant. The provisions of Restricted Stock Awards need not be the same with respect to each recipient. 8.2 Awards and Certificates. Shares of Restricted Stock shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of one or more stock certificates. Any certificate issued in respect of shares of Restricted Stock shall be registered in the name of such Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form: ''The sale or other transfer of the Shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer as set forth in the Tupperware Corporation 1996 Incentive Plan, and in a Restricted Stock Agreement. A copy of the Plan and such Restricted Stock Agreement may be obtained from Tupperware Corporation.'' -12- 13 The Committee may require that the certificates evidencing such Shares be held in custody by the Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of Restricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award. 8.3 Terms and Conditions. Shares of Restricted Stock shall be subject to the following terms and conditions: (a) Subject to the provisions of the Plan and the Restricted Stock Agreement referred to in Section 8.3(f), during the Restricted Period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber shares of Restricted Stock, except that, if expressly provided in the Restricted Stock Agreement, a Participant may, during the Restriction Period, transfer shares of Restricted Stock to members of the Participant's immediate family or trusts or partnerships for the benefit of such persons. Within these limits, the Committee may provide for the lapse of restrictions based upon period of service in installments or otherwise and may accelerate or waive, in whole or in part, restrictions based upon period of service. Notwithstanding the foregoing, any Restricted Stock Award granted hereunder shall have a Restriction Period of not less than three years, except that an aggregate amount of Restricted Stock Awards not exceeding one-third of the Shares available for use as Restricted Stock Awards pursuant to Section 4.1 of the Plan may be issued without a minimum Restriction Period. (b) Except as provided in this paragraph (b) and paragraph (a), above, and the Restricted Stock Agreement, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a stockholder of the Company holding the class or series of Shares that is the subject of the Restricted Stock, including, if applicable, the right to vote the shares and the right to receive any cash dividends. Unless otherwise determined by the Committee in the applicable Restricted Stock Agreement, dividends payable in Shares shall be paid in the form of Restricted Stock of the same class as the Shares with which such dividend was paid, held subject to the vesting of the underlying Restricted Stock. In the event that any dividend constitutes a ''derivative security'' or an ''equity security'' pursuant to Rule 16(a) under the Act, such dividend shall be subject to a vesting period equal to the longer of: (i) the remaining vesting period of the Shares of Restricted Stock with respect to which the dividend is paid; or (ii) six months. The Committee shall establish procedures for the application of this provision. (c) Except to the extent otherwise provided in the applicable Restricted Stock Agreement and paragraphs (a) and (d) of this Section 8.3 and Section 13.1(b), upon a Participant's Termination of Employment for any reason during the Restriction Period, all Shares still subject to restriction shall be forfeited by the Participant. (d) Except to the extent otherwise provided in Section 13.1(b), in the event that a Participant retires or such Participant's employment is involuntarily terminated (other than for Cause), the Committee shall have the discretion to waive, in whole or in part, any or all remaining restrictions with respect to any or all of such Participant's shares of Restricted Stock. (e) If and when any applicable Restriction Period expires without a prior forfeiture of the Restricted Stock, unlegended certificates for such shares shall be delivered to the Participant upon surrender of the legended certificates. (f) Each Award shall be confirmed by, and be subject to, the terms of a Restricted Stock Agreement. -13- 14 Article 9. Performance Awards 9.1 Grant of Performance Awards. Subject to the terms of the Plan, Performance Awards may be granted to eligible Employees at any time and from time to time, as shall be determined by the Committee, and may be granted either alone or in addition to other Awards granted under the Plan. The Committee shall have complete discretion in determining the number, amount and timing of Awards granted to each Participant. Such Performance Awards may take the form determined by the Committee, including without limitation, cash, Shares, Performance Units and Performance Shares, or any combination thereof. Performance Awards may be awarded as short-term or long-term incentives. 9.2 Performance Goals. (a) The Committee shall set Performance Goals at its discretion which, depending on the extent to which they are met, will determine the number and/or value of Performance Awards that will be paid out to the Participants, and may attach to such Performance Awards one or more restrictions, including, without limitation, a requirement that Participants pay a stipulated purchase price for each Performance Share, or restrictions which are necessary or desirable as a result of applicable laws or regulations. Each Performance Award may be confirmed by, and be subject to, a Performance Award Agreement. (b) The Committee shall have the authority at any time to make adjustments to Performance Goals for any outstanding Performance Awards which the Committee deems necessary or desirable unless at the time of establishment of goals the Committee shall have precluded its authority to make such adjustments. (c) Performance Periods shall, in all cases, exceed six (6) months in length. 9.3 Value of Performance Units/Shares. (a) Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. (b) Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant. 9.4 Earning of Performance Awards. After the applicable Performance Period has ended, the holder of Performance Awards shall be entitled to receive the payout earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals have been achieved, except as adjusted pursuant to Section 9.2(b) or as deferred pursuant to Article 11. 9.5 Timing of Payment of Performance Awards. Payment of earned Performance Awards shall be made in accordance with terms and conditions prescribed or authorized by the Committee. The Committee may permit the Participants to elect to defer or the Committee may require the deferral of, the receipt of Performance Awards upon such terms as the Committee deems appropriate. 9.6 Nontransferability. Performance Awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by application of the laws of descent and distribution. Further, a Participant's rights under the Plan shall be exercisable during the Participant's lifetime only by the Participant or the Participant's Beneficiary. Notwithstanding the foregoing, at the discretion of the Committee, an Award Agreement may permit the transferability of a Performance Award by a Participant solely to members of the Participant's immediate family or trusts or partnerships for the benefit of such persons. 9.7 Termination. Performance Awards shall be subject to the following terms and conditions: (a) Except to the extent otherwise provided in the applicable Performance Award Agreement, if any, and Sections 9.7(b) and 13.1(c), upon a Participant's Termination of Employment for any reason during the -14- 15 Performance Period or before any applicable Performance Goals are satisfied, the rights to the shares still covered by the Performance Award shall be forfeited by the Participant. (b) Except to the extent otherwise provided in Section 13.1(c), in the event that a Participant's employment is terminated (other than for Cause), or in the event a Participant retires, the Committee shall have the discretion to waive, in whole or in part, any or all remaining payment limitations (other than, in the case of Performance Awards with respect to which a Participant is a Covered Employee, satisfaction of any applicable Performance Goals unless the Participant's employment is terminated by reason of death or disability) with respect to any or all of such Participant's Performance Awards. Article 10. Beneficiary 10.1 Designation. Each Participant under the Plan may, from time to time, name any Beneficiary or Beneficiaries (who may be named contingently or successively). Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and shall be effective only when filed by the Participant in writing with the Company during the Participant's lifetime. Any such designation shall control over any inconsistent testamentary or inter vivos transfer by a Participant, and any benefit of a Participant under the Plan shall pass automatically to a Participant's Beneficiary pursuant to a proper designation pursuant to this Section 10.1 without administration under any statute or rule of law governing the transfer of property by will, trust, gift or intestacy. 10.2 Absence of Designation. In the absence of any such designation contemplated by Section 10.1, benefits remaining unpaid at the Participant's death shall be paid pursuant to the Participant's will or pursuant to the laws of descent and distribution. Article 11. Deferrals The Committee may permit a Participant to elect, or the Committee may require at its sole discretion subject to the proviso set forth below, any one or more of the following: (i) the deferral of the Participant's receipt of cash, (ii) a delay in the exercise of an Option or SAR, (iii) a delay in the lapse or waiver of restrictions with respect to Restricted Stock, or (iv) a delay of the satisfaction of any requirements or goals with respect to Performance Awards; provided, however, the Committee's authority to take such actions hereunder shall exist only to the extent necessary to reduce or eliminate a limitation on the deductibility of compensation paid to the Participant pursuant to (and so long as such action in and of itself does not constitute the exercise of impermissible discretion under) Section 162(m) of the Code, or any successor provision thereunder. If any such deferral is required or permitted, the Committee shall establish rules and procedures for such deferrals, including provisions relating to periods of deferral, the terms of payment following the expiration of the deferral periods, and the rate of earnings, if any, to be credited to any amounts deferred thereunder. Article 12. Rights of Employees 12.1 Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue in the employ of the Company. For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Subsidiaries (or between Subsidiaries) shall not be deemed a termination of employment. 12.2 Participation. No Employee shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award. -15- 16 Article 13. Change of Control 13.1 Impact of Event. Notwithstanding any other provision of the Plan to the contrary, in the event of a Change of Control: (a) Any Stock Options or SARs outstanding as of the date such Change of Control is determined to have occurred, and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, however, that in the case of the holder of Stock Options or SARs who is actually subject to Section 16(b) of the Exchange Act, such Stock Options or SARs shall have been outstanding for at least six months at the date such Change of Control is determined to have occurred. (b) The restrictions and deferral limitations applicable to any Restricted Stock shall lapse, and such Restricted Stock shall become free of all restrictions and become fully vested and transferable to the full extent of the original grant. (c) All Performance Awards shall be considered to be earned and payable in full, and any deferral or other restriction shall lapse and such Performance Units shall be settled in cash as promptly as is practicable. Article 14. Amendment, Modification, and Termination 14.1 Amendment, Modification, and Termination. At any time and from time to time, the Board may terminate, amend, or modify the Plan. However, no amendment, alteration or discontinuation shall be made which would disqualify the Plan from the exemption provided by Rule 16b-3, and no such amendment shall be made without the approval of the Company's stockholders to the extent such approval is required by law or agreement. 14.2 Awards Previously Granted. No termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award except such an amendment made to cause the Plan or Award to qualify for the exemption provided by Rule 16b-3. The Committee shall have the right to replace any previously-granted Award under the Plan with an Award equal to the value of the replaced Award at the time of replacement, without obtaining the consent of the Participant holding such Award. Subject to the above provisions, the Board shall have authority to amend the Plan to take into account changes in law and tax and accounting rules as well as other developments, and to grant Awards which qualify for beneficial treatment under such rules without stockholder approval. Article 15. Withholding 15.1 Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any taxable event arising under or as a result of this Plan. 15.2 Share Withholding. With respect to withholding required and/or permitted upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any other taxable event hereunder, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares (or by surrendering Shares previously owned which have been held for longer than six months) having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax -16- 17 which could be imposed on the transaction. All elections shall be irrevocable, made in writing, signed by the Participant, and elections by Insiders shall additionally comply with the requirements established by the Committee. Article 16. Successors All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, spin-off, or otherwise, of all or substantially all of the business and/or assets of the Company. Article 17. Legal Construction 17.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 17.2 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 17.3 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. With respect to Insiders, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent any provision of the plan or action by the Committee fails to comply with Section 17.3, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. Notwithstanding any other provision set forth in the Plan, if required by any rule or interpretation promulgated under Section 16 of the Exchange Act, any ''derivative security'' or ''equity security'' offered pursuant to the Plan to any Insider may not be sold or transferred for at least six (6) months after the date of grant of such Award. The terms ''equity security'' and ''derivative security'' shall have the meanings ascribed to them in the then-current Rule 16(a) under the Exchange Act. Notwithstanding any other provision of the Plan or agreements made pursuant thereto, the Company shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to fulfillment of all of the following conditions: i. Listing or approval for listing upon notice of issuance, of such shares on the New York Stock Exchange, Inc., or such other securities exchange as may at the time be the principal market for the Shares; ii. Any registration or other qualification of such Shares under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification which the Committee shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and iii. Obtaining any other consent, approval, or permit from any state or federal governmental agency which the Committee shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable. -17- 18 17.4 Pooling. Notwithstanding anything in the Plan to the contrary, if any right granted pursuant to this Plan would make a Change of Control transaction ineligible for pooling-of-interests accounting under APB No.16 that but for the nature of such grant would otherwise be eligible for such accounting treatment, the Committee shall have the ability to substitute for the cash payable pursuant to such grant Common Stock with a Fair Market Value equal to the cash that would otherwise be payable hereunder. 17.5 Governing Law. To the extent not preempted by Federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware. -18- EX-10.2 3 FORM OF CHANGE OF CONTROL AGREEMENT 1 Exhibit 10.2 CHANGE OF CONTROL EMPLOYMENT AGREEMENT AGREEMENT by and between TUPPERWARE CORPORATION, a Delaware corporation (the "Company") and ________________________ (the "Executive"), dated as of the ___ day of ________, 19___. The Board of Directors of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. Certain Definitions. (a) The "Effective Date" shall be the first date during the Protection Period (as defined in Section 1(b)) on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control or (ii) otherwise arose in connection with or anticipation of the Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment. (b1) The "Protection Period" shall be the period commencing on the date hereof and ending on the third anniversary of such date; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), the Protection Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the 2 Renewal Date the Company shall give notice to the Executive that the Protection Period shall not be so extended. 2. Change of Control. For the purpose of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or (b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation (a "Corporate Transaction"), in each case, unless, following such Corporate Transaction, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common -2- 3 Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Corporate Transaction) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Corporate Transaction and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction were members of the Incumbent Board at the time of the execution of the initial agreement, or at the time of the action of the Board, providing for such Corporate Transaction; or (d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the third anniversary of such date (the "Employment Period"). 4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date -3- 4 and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from the Executive's primary residence immediately prior to such relocation. For purposes of Section 4(a)(i)(A) such position, authority, duties and responsibilities shall be regarded as not commensurate if, as a result of a Change of Control, (I), the Company becomes a direct or indirect subsidiary of another corporation or becomes controlled, directly or indirectly, by an unincorporated entity (such ultimate parent corporation or unincorporated entity is hereinafter referred to as a "parent company"), or (II) all or substantially all of the assets of the Company are acquired by another corporation or corporations or unincorporated entity or entities owned or controlled, directly or indirectly, by another corporation or unincorporated entity (such ultimate parent corporation or unincorporated entity is also hereinafter referred to as a "parent company"), unless, in each case, (x) Section 11 (c) of this Agreement shall have been complied with by any such parent company and (y) the Executive shall have assumed a position with such parent company and the Executive's position, authority, duties and responsibilities with such parent company are at least commensurate in all material respects with the most significant of those held, exercised and assigned with the Company at any time during the 90-day period immediately preceding the Effective Date, or (III) the Company becomes owned or controlled, directly or indirectly, by more than one other corporation and/or unincorporated entity, as the case may be, which are not owned or controlled, directly or indirectly, by a single parent company or more than one unrelated corporation or unincorporated entity acquires a significant portion of the assets of the Corporation and such unrelated corporations or unincorporated entities, as the case may be, are not owned or controlled, directly or indirectly, by a single parent company. (ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at -4- 5 educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company. (b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed at least annually and shall be increased at any time and from time to time as shall be substantially consistent with increases in base salary generally awarded in the ordinary course of business to other peer executives of the Company and its affiliated companies. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with the Company. (ii) Incentive Awards. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual incentive award (the "Annual Incentive Award") and a long-term incentive award (the "Long-Term Cash Incentive Award" and together with the Annual Incentive Award, the "Incentive Awards") in cash at least equal to the average annualized (for any fiscal year consisting of less than twelve full months or with respect to which the Executive has been employed by the Company for less than twelve full months) annual incentive award and long-term cash incentive award, respectively (together, the "Recent Incentive Awards"), paid or payable, including by reason of any deferral, to the Executive by the Company and its affiliated companies in respect of the three fiscal -5- 6 years immediately preceding the fiscal year in which the Effective Date occurs; provided, however, that for any year of such three-year period in which the actual incentive awards were less than the target level of such incentive awards, then the target levels of such incentive awards shall be used for purposes of the foregoing formula. Each such Annual Incentive Award and Long-Term Cash Incentive Award shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Incentive Award or the Long- Term Cash Incentive Award, as the case may be, is awarded, unless the Executive shall elect to defer the receipt of such Annual Incentive Award or Long-Term Cash Incentive Award. (iii) Profit Sharing, Thrift, Savings and Pension Plans. In addition to Annual Base Salary and Incentive Awards payable as hereinabove provided, the Executive shall be entitled to participate during the Employment Period in all profit sharing, thrift, savings and pension plans, practices, policies and programs generally applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with profit sharing opportunities (measured with respect to both regular and special profit sharing opportunities), thrift opportunities, savings opportunities and pension benefits opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies. (iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent generally applicable to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or if more favorable to the Executive, those -6- 7 provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies. (v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies. (vi) Perquisites. During the Employment Period, the Executive shall be entitled to perquisites in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies. (vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies. (viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies. 5. Termination of Employment. (a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that -7- 8 the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of "Disability" set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" means the absence of the Executive from the Executive's duties with the Company on a substantially full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably). (b) Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean: (i) the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in -8- 9 good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. (c) Good Reason; Window Period. The Executive's employment may be terminated (i) during the Employment Period by the Executive for Good Reason or (ii) during the Window Period by the Executive for any reason or for no reason. For purposes of this Agreement, the "Window Period" shall mean that 30-day period immediately following the first anniversary of the Effective Date. For purposes of this Agreement, "Good Reason" shall mean (i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (iii) the Company's requiring the Executive to be based at any office or location other than that described in Section 4(a)(i)(B) hereof; (iv) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or (v) any failure by the Company or any successor to comply with and satisfy Section 11(c) of this Agreement, provided -9- 10 that such successor has received at least ten days prior written notice from the Company or the Executive of the requirements of Section 11(c) of this Agreement. For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive. (d) Notice of Termination. Any termination by the Company for Cause, or by the Executive during the Window Period or for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause, as the case may be, shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. (e) Date of Termination. "Date of Termination" shall mean (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive during the Window Period or for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause, Disability or death, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be. 6. Obligations of the Company upon Termination. (a) Good Reason or during the Window Period; Other than for Cause or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment either for -10- 11 Good Reason or during the Window Period, the Company shall have the following obligations. (i) The Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts: (A) the amount equal to the product of (x) three and (y) the sum of the Executive's Annual Base Salary and the Executive's Highest Incentive Award; provided, however, that such amount shall be paid in lieu of, and the Executive hereby waives the right to receive, any other amount of severance relating to salary or bonus continuation to be received by the Executive upon such termination of employment under any severance plan, policy or arrangement of the Company; and (B) the amount equal to the product of (x) the sum of the maximum Annual Incentive Award and the maximum Long-Term Incentive Award that would have been available to the Executive under the applicable incentive plans of the Company and the policies and procedures thereunder for the fiscal year of the Company in which the Change of Control occurs or, if greater, the fiscal year in which the Date of Termination occurs and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365; and (C) the amount of the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid and the amount of any compensation previously deferred by the Executive (together with any accrued interest thereon) and not yet paid by the Company and any accrued vacation pay of the Executive not yet paid by the Company. For purposes of this Agreement, the aggregate of the amounts described in clauses (A), (B) and (C) of this Section 6(a) shall hereafter be referred to as the "Special Termination Amount" and the term "Highest Annual Award" shall mean the greater of (1) the sum of the Annual Incentive Award and the Long-Term Incentive Award paid or payable, including by reason of any deferral, to the Executive (and annualized for any fiscal year consisting of less than twelve full months or for which the Executive has been employed for less than twelve full months) for the most recently completed fiscal year during the Employment Period, if any, and (2) the Recent Incentive Awards. The sum of the amounts described in clauses (B) and (C) of this Section 6(a) shall be hereinafter referred to as the "Accrued Obligations". -11- 12 (ii) For the remainder of the Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Executive and, where applicable, the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the Executive's employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Company and its affiliated companies generally applicable to other peer executives and their families during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families (for purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to have retired on the last day of such period); provided, however, that with respect to medical benefits, the Company shall continue, for the lifetime of the Executive, medical benefits for the Executive and the Executive's family no less favorable than the medical benefits provided to the Executive under the Tupperware Corporation Benefits Plan (or any successor plan thereto) during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect at any time thereafter generally with respect to any other peer executives of the Company and its affiliated companies and their families; and, provided, further, that, in the event the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under any employer provided plan, the medical and other welfare benefits described herein shall not be provided by the Company during such applicable period of eligibility, but shall resume if such period of eligibility shall terminate. (iii) To the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"). (b) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the -12- 13 Executive's legal representatives under this Agreement, other than the payment by the Company of the Special Termination Amount, provided however, that the amount of such payment determined under Section 6(a)(i)(A) shall be adjusted as follows. The amount set forth in clause (A) shall be offset in all cases by the basic life insurance benefit paid or payable in respect of the Executive's death and, in addition, if the death occurs after the one year anniversary following the Change of Control, it shall be offset by the amount of any salary payments made to the Executive for any periods of employment following the Change of Control. The Special Termination Amount shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided generally by the Company and any of its affiliated companies to surviving families of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to family death benefits, if any, as in effect generally with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death generally with respect to other peer executives of the Company and its affiliated companies and their families. (c) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than the payment by the Company of the Special Termination Amount. The Special Termination Amount shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter through the Date of Termination generally with respect to other peer executives of the Company and its affiliated companies and their families. -13- 14 (d) Cause; Other than for Good Reason or during the Window Period. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive, in each case to the extent theretofore unpaid. If the Executive terminates employment during the Employment Period, excluding a termination either for Good Reason or without any reason during the Window Period, this Agreement shall terminate without further obligations to the Executive, other than for the Accrued Obligations, all of which such Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. 7. Non-exclusivity of Rights. Except as explicitly modified or otherwise explicitly provided by this Agreement, (i) nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any other agreements with the Company or any of its affiliated companies and (ii) amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program except as explicitly modified by this Agreement. 8. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and, except as provided in Section 6(d)(ii) of this Agreement, such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including -14- 15 as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). 9. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that as a result, directly or indirectly, of any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), the Executive would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to promptly receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes on the Payment, the Executive is in the same after-tax position as if no Excise Tax had been imposed upon the Executive. (b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether or when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determinations, shall be made by the accounting firm of PriceWaterhouseCoopers LLP (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross- Up Payment, as determined pursuant to this Section 9, shall be paid to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting -15- 16 Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim, and, (iv) permit the Company to participate in any proceedings relating to such claim; -16- 17 provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross- Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days -17- 18 after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or by application of the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions -18- 19 of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: ___________________________ c/o Tupperware Corporation 14901 South Orange Blossom Trail Orlando, Florida 32837 If to the Company: Tupperware Corporation 14901 South Orange Blossom Trail Orlando, Florida 32802 Attention: General Counsel Mailing Address: P.O. Box 2353 Orlando, Florida 32802-2353 or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) The Executive's or the Company's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision of this Agreement. -19- 20 (f) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and, subject to Section 1(a) hereof, prior to the Effective Date, may be terminated by either the Executive or the Company at any time. Moreover, if prior to the Effective Date, the Executive's employment with the Company terminates, then the Executive shall have no further rights under this Agreement. From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof. IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. (Executive) TUPPERWARE CORPORATION By -20- EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TUPPERWARE CORPORATION'S THIRD QUARTER 1999 FINANCIAL STATEMENTS AS FILED IN ITS QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-25-1999 DEC-27-1998 SEP-25-1999 29,800 0 127,700 26,700 153,400 391,500 946,500 702,400 818,300 308,900 296,400 0 0 600 114,900 818,300 734,100 734,100 256,300 256,300 2,400 5,700 17,100 46,600 11,000 35,600 0 0 0 35,600 0.62 0.62
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