Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Modification to Certain Compensation Arrangements for CEO
On December 10, 2020, Edward L. Doheny II, President and Chief Executive Officer of Sealed Air Corporation (the “Company”), entered into a letter agreement with the Company (the “Letter Agreement”) adjusting certain compensation arrangements that were included in his original offer letter agreement with the Company dated September 5, 2017 (the “2017 Offer Letter”).
Under the 2017 Offer Letter, Mr. Doheny is eligible to receive a reimbursement for 100% of the loss on sale of his home in Milwaukee, WI, capped at $300,000, should he choose to sell that home by September 18, 2020 (i.e., within three years after his original start date). The Letter Agreement extends the period for this home sale loss protection until September 18, 2022 (i.e., within five years after his original start date). The Board of Directors of the Company believes that the extension of this home sale loss protection was appropriate given the disruptions to real estate markets caused by the pandemic.
Under the 2017 Offer Letter, Mr. Doheny was granted 70,000 performance-vesting restricted stock units (the “new hire PSUs”), which are scheduled to vest on December 31, 2020 if either of the following two performance conditions is achieved: (i) the Company’s cumulative total stockholder return for 2018-2020 is in the top 33% of its peers (using the same peers and methodology under the Company’s annual PSU awards) and the Company’s stock price as of December 31, 2020 equals at least $60/share, or (ii) the Company’s stock price as of December 31, 2020 equals at least $75/share. The 2017 Offer Letter provides that the stock price as of December 31, 2020 for this purpose will be determined using a 30-day arithmetic mean of closing prices. The Board of Directors of the Company determined that the new hire PSUs should be modified in light of business disruptions caused by the pandemic and to further encourage Mr. Doheny’s continued retention and focus on future stock price performance. As a result, the Letter Agreement provides that the new hire PSUs are adjusted as follows:
•Half of the award – 35,000 units – is converted to an award of time-vesting restricted stock units (RSUs) vesting on September 18, 2022 (i.e., the fifth anniversary of his original start date).
•The remaining half of the award – 35,000 units – will remain PSUs that are subject to the original performance conditions, but measured as of September 18, 2022 rather than December 31, 2020 (with the Company’s stock price for that purpose determined using a 30-day arithmetic mean of closing prices as of September 18, 2022).
Vesting of the adjusted RSUs and PSUs is subject to Mr. Doheny’s continued employment with the Company through September 18, 2022, subject to treatment upon termination of employment consistent with the 2017 Offer Letter.
The foregoing description of the Letter Agreement is qualified in its entirety by reference to the full text of the Letter Agreement attached to this Current Report on Form 8-K as Exhibit 10.1, which is incorporated herein by reference.