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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001008654-01-500011.txt : 20010329
<SEC-HEADER>0001008654-01-500011.hdr.sgml : 20010329
ACCESSION NUMBER: 0001008654-01-500011
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 8
CONFORMED PERIOD OF REPORT: 20001230
FILED AS OF DATE: 20010328
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-K
SEC ACT:
SEC FILE NUMBER: 001-11657
FILM NUMBER: 1581949
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
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>f10k00.txt
<DESCRIPTION>FORM 10K
<TEXT>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 30, 2000
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.)
14901 South Orange Blossom Trail
Orlando, Florida 32837
(Address of principal executive offices) (ZipCode)
Registrant's telephone number, including area code:
(407) 826-5050
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -----------------------
Common Stock, $0.01 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 .
---- ----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
----
Aggregate market value of the Registrant's voting stock held by
non-affiliates, based upon the closing price of said stock on the
New York Stock Exchange-Composite Transaction Listing on March
20, 2001 ($24.45 per share): $1,374,541,494.
As of March 20, 2001, 57,872,738 shares of the Common Stock,
$0.01 par value, of the Registrant were outstanding.
Documents Incorporated by Reference:
Portions of the Annual Report to Shareholders for the year ended
December 30, 2000 are incorporated by reference into Parts I, II
and IV of this Report.
Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held May 17, 2001 are incorporated by
reference into Part III of this Report.
<PAGE>
PART I
Item 1. Business
(a) General Development of Business
Tupperware Corporation ("Registrant"), a $1.1 billion
multinational company, is one of the world's leading direct
sellers, supplying premium food storage, preparation and serving
items to consumers in more than 100 countries through its
Tupperware* brand, and premium beauty and skin care products
through its BeautiControl* brand primarily in North America. The
Registrant is a Delaware corporation that was organized on
February 8, 1996 in connection with the corporate reorganization
of Premark International, Inc. ("Premark"). In the
reorganization, the businesses of the Registrant and certain
other assets and liabilities of Premark and its subsidiaries were
transferred to the Registrant. On May 31, 1996, the Registrant
became a publicly held company through the pro rata distribution
by Premark to its shareholders of all of the outstanding shares
of common stock of the Registrant. On October 18, 2000 the
Registrant acquired 100% of the stock of BeautiControl,
Inc. ("BeautiControl").
BUSINESS OF TUPPERWARE CORPORATION
Registrant is a worldwide direct selling consumer products
company engaged in the manufacture and sale of Tupperware
products and BeautiControl cosmetics, and conducts its business
through two business lines, Tupperware and BeautiControl. Each
business manufactures and markets a broad line of high quality
products. The financial information about the Registrant's
markets as set forth in Note 12 Segment Information on pages 97
and 98 of the Annual Report to Shareholders for the year ended
December 30, 2000 is incorporated by reference into this Report.
I. PRINCIPAL PRODUCTS
Tupperware. The core of Tupperware's product line consists
of food storage containers that preserve freshness through the
well-known Tupperware seals. Tupperware also has an established
line of food preparation and serving containers, kitchen gadgets,
children's educational toys, microwave products and gifts. The
line of Tupperware products has expanded over the years with
products such as Modular Mates* containers, Fridge Stackables*
containers, One Touch* canisters, the Rock 'N Serve* line, the
Ultraplus* line and OvenWorks* line, the Expressions line, the
Legacy Serving line, FridgeSmart* containers, the E-Series*
knives, Vitalic* cookware, the TupperMagic* line, and many
specialized containers.
In recent years, Tupperware has expanded its offerings in
the food preparation and serving areas through the addition of a
number of products, including double colanders, tumblers and
mugs, mixing and serving bowls, cake and cheese servers, oven
cooking, microwaveable cooking, reheating and serving products,
and kitchen utensils.
Tupperware continues to introduce new designs and colors in
its product lines and to extend existing products into new
markets around the world. The development of new products varies
in different markets in order to address differences in cultures,
lifestyles, tastes and needs of the markets. New products
introduced in 2000 included a wide range of products in all four
geographic areas, including many using Walt Disney Company movie
and cartoon characters under a license. Some of the other new
products are the FreezeSmart* line, Regalia line, AccessMates*
containers, Oceano* bathroom accessories, Forget Me Not*
containers, E-Series* steak knives, rice polisher and new
licenses for the Pokemon** characters, Barbie*** character and
Barnie**** character. New product development and introduction
will continue to be an important part of Tupperware's strategy.
Products sold by Tupperware are primarily produced by
Tupperware in its manufacturing facilities around the world. In
some markets, Tupperware sources certain products from third
parties and/or contracts with local manufacturers to manufacture
its products, many of which are produced utilizing high-quality
molds that are generally supplied by Tupperware. Promotional
items provided at product demonstrations include items obtained
from outside sources.
BeautiControl. BeautiControl manufactures and sells skin
care products, cosmetics, nail care products, toiletries,
fragrances, beauty supplements and related products using the
direct sales method. BeautiControl sells its products through
independent sales persons called "Consultants" (or
"Distributors"), who purchase the products from BeautiControl and
then sell them directly to consumers in the home or workplace.
Products and image services are provided to clients via an
independent sales force primarily in the United States; however,
it is expanding into other geographical areas, namely, Latin
America.
Registrant has decided to discontinue BeautiControl's Taiwan
and Hong Kong beauty operations as well as the small Eventus
nutritional supplement business that were in operation when
BeautiControl was acquired by Registrant. Registrant will
concentrate on enhancing the North American beauty business and
getting started in Latin America. Registrant anticipates it will
start sales in Mexico in the second quarter this year.
Registrant plans to convert some current Tupperware managers and
set them up as BeautiControl Consultants. Registrant believes
this will give a quick start to the BeautiControl line without
causing disruption to the Tupperware business.
II. MARKETS
Tupperware. Tupperware's business is operated on the basis
of four geographic markets: Europe (Europe, Africa and the Middle
East), Asia Pacific, Latin America, and the United States.
Tupperware has operations in more than 80 countries and its
products are sold in more than 100 foreign countries and in the
United States. For the past five fiscal years, sales in foreign
countries represented, on average, 84 percent of total revenues
from the sale of Tupperware products.
Market penetration varies throughout the world. Several
"developing" areas that have low penetration, such as Latin
America, Asia and Eastern (Central) Europe, provide significant
growth potential for Tupperware. Tupperware's strategy continues
to include expansion into new markets throughout the world.
BeautiControl. BeautiControl's products consist of skin
care, cosmetics, nail care, toiletries, fragrances, and related
products.
BeautiControl also has a health and beauty supplements line,
Within Beauty*, which includes hair and nail supplements, skin
condition supplements and supplements designed for the different
stages of a woman's life.
III. DISTRIBUTION OF PRODUCTS
Tupperware. Tupperware's products are distributed worldwide
primarily through the "direct selling" method of distribution, in
which products are sold to consumers outside traditional retail
store channels. The distributorship system is intended to
facilitate the timely distribution of products to the consumer,
and to establish uniform practices regarding the use of
Tupperware trademarks and the administrative arrangements with
Tupperware, such as order entering and delivering, paying and
recruiting, and training of dealers.
Tupperware products distributed under the direct selling
method are primarily sold directly to Distributors or Dealers
throughout the world. Distributors are granted the right to
market Tupperware products using the demonstration and other non-
traditional retail methods and to utilize the Tupperware
trademark. The vast majority of Tupperware's distribution system
is composed of Distributors, Managers and Dealers (known in the
United States as Consultants) who are independent contractors and
not employees of Tupperware. In certain limited circumstances,
Tupperware acquires ownership of distributorships for a period of
time, until an independent Distributor can be installed, in order
to maintain market presence.
In addition to the introduction of new products and
development of new geographic markets, a key element of
Tupperware's strategy is expanding its business by enlarging the
number of Distributors and Dealers. Under the Tupperware system,
Distributors recruit, train, and motivate a large sales force to
cover the Distributor's geographic area. Managers are developed
and promoted by Distributors to assist the Distributors in
recruiting, training, and motivating Dealers, while continuing to
hold their own demonstrations.
As of December 30, 2000, the Tupperware distribution system
had 1,846 Distributors, 53,914 Managers, and 1,036,651 Dealers
worldwide.
Tupperware relies primarily on the "demonstration" method of
sales, which is designed to enable the purchaser to appreciate
through demonstration the features and benefits of Tupperware
products. Demonstrations, which are sometimes referred to as
"Tupperware parties," are held in homes, offices, social clubs
and other locations. In excess of 15 million demonstrations were
held in 2000 worldwide. Tupperware products are also promoted
through brochures mailed to persons invited to attend Tupperware
parties and various other types of demonstrations. Sales of
Tupperware products are supported by Tupperware through a program
of sales promotions, sales and training aids and motivational
conferences for the independent sales force. In addition, to
support its sales force, Tupperware utilizes catalogs, television
and magazine advertising, which helps increase its sales levels
with hard-to-reach customers.
In 2000, Tupperware accelerated its implementation in the
U.S. of its integrated direct access strategies to allow
consumers to obtain Tupperware products other than by attending a
Tupperware party and to enhance its core party plan business.
Tupperware also began introducing these strategies outside the
U.S. These strategies include television shopping, mall
showcases and the Internet, which for the first time included the
option of personal websites for the U.S. sales force.
The distribution of products to consumers is primarily the
responsibility of Distributors, who often maintain their own
inventory of Tupperware products, the necessary warehouse
facilities, and delivery systems; however, in some situations,
Tupperware will perform the warehousing and selling function
paying the Distributor a commission for their sales activity. In
certain markets, Tupperware offers Distributors the use of a
delivery system of direct product shipment to consumers or
Dealers, which is intended to reduce the Distributor's investment
in inventory and enable Distributors to be more cost-efficient.
BeautiControl. BeautiControl's skin care, cosmetics, and
related products are sold through Consultants who are independent
contractors, not employees of BeautiControl. As of December 30,
2000, the total Consultant count was 47,384.
Consultants may sell BeautiControl products one-on-one, to
groups of people or through home demonstrations called Skin Care
and Color Parties or Clinics ("Clinics"). Additionally,
Consultants are encouraged to market the products through
personal consultations and product brochure sales in order to
utilize multiple selling opportunities.
In order to provide immediate product delivery, Consultants
may maintain a small inventory of products.
BeautiControl maintains BeautiNet Plus* in the United
States, an on-line service provided to Consultants which enables
Consultants to place orders and recruit on-line.
IV. COMPETITION
Tupperware. There are two primary competitive factors which
affect Registrant's business: (i) competition with other "direct
sales" companies for sales personnel and demonstration dates; and
(ii) competition in all the markets for food storage and serving
containers, toys, and gifts in general as well as cosmetics.
Also, Tupperware has tried to differentiate itself from its
competitors through price, quality of products (lifetime warranty
on most Tupperware products), and new products. Tupperware
believes it holds a significant market share in each of these
markets in many countries.
BeautiControl. There are many competitors in the cosmetics
business and the principal bases of competition generally are
marketing, price, quality and newness of products. BeautiControl
has attempted to differentiate itself and its products from the
industry in general through the use of a number of value-added
services and by being technologically at the forefront of the
industry.
V. EMPLOYEES
Registrant employs approximately 7,000 people, of whom
approximately 1,500 are based in the United States. Tupperware's
work force is not unionized in the United States. In certain
countries, its work force is covered by collective arrangements
negotiated with the unions or decreed by statute. The terms of
most of these arrangements are determined on an annual
basis. Additionally, approximately 130 manufacturing employees
in an Australian mold manufacturing operation are covered by a
collective bargaining agreement, which expires in 2003. Also,
approximately 125 manufacturing employees in the Philippine
manufacturing operation are covered by a collective bargaining
agreement, which runs through 2002; however, annual wage and
benefit provisions are negotiated annually. There have been no
work stoppages or threatened work stoppages by the workforce in
over five years and Registrant believes its relations with its
employees to be good. The independent Consultants, Dealers,
Managers and Distributors engaged in the direct sale of
Tupperware and BeautiControl products generally are not employees
of Registrant.
VI. RESEARCH AND DEVELOPMENT
Registrant incurred expenses of approximately $12.8 million,
$12.3 million, and $13.8 million for fiscal years ended 2000,
1999, and 1998, respectively, on research and development
activities for new products.
VII. RAW MATERIALS
Tupperware. Products manufactured by Tupperware require
plastic resins meeting its specifications. These resins are
purchased through various arrangements with a number of large
chemical companies located throughout Tupperware's markets. As a
result, Tupperware has not experienced difficulties in obtaining
adequate supplies and generally has been successful in mitigating
the effects of increases in resin market prices. Research and
development relating to resins used in Tupperware products is
performed by both Tupperware and its suppliers.
BeautiControl. Materials used in BeautiControl's skin care,
cosmetic and beauty supplements products consist primarily of
readily available ingredients, containers and packaging
materials. Such raw materials and components used in goods
manufactured and assembled by BeautiControl are available from a
number of sources. To date, BeautiControl has been able to
secure an adequate supply of raw materials and components for its
manufacturing and it endeavors to maintain relationships with
backup suppliers in an effort to ensure that no interruptions
occur in its operations.
VIII. TRADEMARKS AND PATENTS
Tupperware. Tupperware considers its trademarks and patents
to be of material importance to its business; however, except for
the Tupperware* trademark, Tupperware is not dependent upon any
single patent or trademark, or group of patents or
trademarks. The Tupperware* trademark is registered on a
country-by-country basis. The current duration for such
registration ranges from five years to ten years; however, each
such registration may be renewed an unlimited number of times.
The patents and trademarks used in Tupperware's business are
registered and maintained on a worldwide basis, with a variety of
durations. Tupperware has followed the practice of applying for
design and utility patents with respect to most of its
significant patentable developments. The licensed characters
from the licensors referenced under the caption "Principal
Products" are becoming an important part of Tupperware's business
and those licenses have various durations.
BeautiControl. BeautiControl has registered all its
trademarks and servicemarks in the United States and has
registered or is in the process of registering its principal
trademarks and servicemarks in many other countries.
BeautiControl has the exclusive direct selling right to
distribute the skin condition analysis product, "BeautiControl
Skin Sensor", worldwide with the option to renew this exclusive
right each year. BeautiControl is licensed to use the following
trademarks: "Skinlogics"*****, "Sunlogics"***** and
"Nailogics"*****. The Company has a patent on the formulae for
its "REGENERATION and REGENERATION5", alpha-hydroxy acid-based,
products. The licenses for these products are an important part
of BeautiControl's business and these licenses have various
durations.
(Words followed by * are registered and unregistered
Trademarks of the Registrant.)
(Words followed by ** are registered Trademarks of Nintendo
of America Inc.)
(Words followed by *** are registered Trademarks of Mattel,
Inc.)
(Words followed by **** are registered Trademarks of Lyons
Partnership L.P.)
(Words followed by ***** are registered Trademarks of Matrix
Essentials, Inc.)
IX. ENVIRONMENTAL LAWS
Compliance with federal, state and local environmental
protection laws has not had in the past, and is not expected to
have in the future, a material effect upon Registrant's capital
expenditures, liquidity, earnings or competitive position.
X. OTHER
Tupperware. Sales do not vary significantly on a quarterly
basis; however, third quarter sales are generally lower than the
other quarters in any year due to vacations by Tupperware's
Dealers and their customers, as well as Tupperware's reduced
promotional activities during such quarter. Sales generally
increase in the fourth quarter as it includes traditional gift-
giving occasions in many of Tupperware's markets and as children
return to school and households refocus on activities that
include the use of Tupperware's products.
BeautiControl. BeautiControl is not subject to any
seasonality to any significant extent.
General. Generally, there are no working capital practices
or backlog conditions which are material to an understanding of
Registrant's business. Registrant's business is not dependent on
a small number of customers, nor is any of its business subject
to renegotiation of profits or termination of contracts or
subcontracts at the election of the United States government.
XI. EXECUTIVE OFFICERS OF THE REGISTRANT
Following is a list of the names and ages of all the
Executive Officers of the Registrant, indicating all positions
and offices with the Registrant held by each such person, and
each such person's principal occupations or employment during the
past five years. Each such person has been elected to serve
until the next annual election of officers of the Registrant
(expected to occur on May 17, 2001).
<TABLE>
Positions and Offices Held and Principal Occupations
of Employment During Past Five Years
<CAPTION>
Name and Age Office and Experience
<S> <C>
Gerald M. Crompton, age 57 Senior Vice President, Product
Marketing, Worldwide since November
1997 after serving as Vice
President, Marketing, Worldwide
since January 1996. Prior thereto,
he served as Vice President,
Product Development for Tupperware
Europe, Africa and Middle East
since December 1995.
Judy B. Curry, age 38 Vice President and Controller
since August 2000. Prior thereto,
she served as Vice President and
Chief Financial Officer of
Tupperware Products S.A. in
Fribourg, Switzerland since June
1999 after being the Assistant
Controller of Tupperware Worldwide
since April 1998 and Director of
Financial Reporting and Analysis
since January 1995.
Karel A. De Vydt, age 50 Vice President and Chief
Information Officer since January
1999. Prior thereto, he served as
Director of Information Technology
Worldwide from August 1997 after
being the Director of Information
Technology for Tupperware Europe,
Africa and Middle East since June
1995.
R. Glenn Drake, age 48 President, Tupperware North
America since January 2000. Prior
thereto, he served as Managing
Director, Tupperware Canada from
September 1998 after serving as
Area Vice President of Tupperware
North America from July 1995.
Lillian D. Garcia, age 44 Senior Vice President, Human
Resources since December 1999.
Prior thereto, she was Vice
President Human Resources since
April 1999 after serving as Vice
President, Human Resources,
Tuppeware Latin America since
October 1998. Prior thereto, she
served as Vice President, Human
Resources, Tupperware Europe,
Africa and Middle East since
October 1995.
E.V. Goings, age 55 Chairman and Chief Executive
Officer since October 1997 after
serving as President and Chief
Operating Officer since March
1996. Prior thereto, he served as
Executive Vice President of Premark
International, Inc. and President
of Tupperware Worldwide since
November 1992. Mr. Goings serves
as a Director of SunTrust Bank,
Central Florida, N.A., Boys and
Girls Clubs of America, and Rollins
College.
David T. Halversen, age 56 Senior Vice President, Business
Development and Communications since
November 1996. Prior thereto, he
served as Senior Vice President,
Planning, Business Development and
Financial Relations since March 1996.
He previously served as Vice President,
Business Development and Planning since
February 1995.
Richard W. Heath, age 58 Senior Vice President, Beauty
and Nutritional Products, since
October 2000. Prior thereto, he
served as President and Chief
Executive Officer of BeautiControl,
Inc. since January 1981.
Charles H. R. Henry, age 50 Vice President, Process Reengineering
since January 1999. Prior thereto, he
served as Regional Vice President,
Tupperware Europe, Africa and Middle
East since February 1996 after serving
as Managing Director, Southern Africa
since January 1994.
Alan D. Kennedy, age 70 President since April 1998. Prior
thereto, he was an independent
consultant since 1996, and from 1989
to 1996 served as President and Chief
Executive Officer of Nature's Sunshine
Products, Inc.
Steven R. Kroos, age 52 Chosen to become President,
Asia Pacific on April 1, 2001 after
serving as President Tupperware Japan
since January 1,1997. Prior thereto,
he served as President Tupperware
Korea and Vice President Regional
Operations, Korea, Taiwan and China
from January 1, 1994 to December 31,
1996.
Anne E. Naylor, age 51 Vice President, Internal Audit
since October 1999. Prior thereto,
she served as Executive Director,
Business Analysis and Audit,
Cummins Engine Company from May
1995.
Gaylin L. Olson, age 55 President, Tupperware Latin
America since September 1998 after
serving as Senior Vice President,
Worldwide since September 1996.
Prior thereto he served as
President, U.S. from December
1995.
Michael S. Poteshman, age 37 Vice President, Investor
Relations and Treasurer since
August 2000. Prior thereto, he
served as Vice President and
Controller since January 1998 after
serving as Assistant Controller
since March 1996. Prior thereto,
he served as Director, Accounting
and Reporting Standards for Premark
International, Inc. since September
1993.
Thomas M. Roehlk, age 50 Senior Vice President, General
Counsel and Secretary since
December 1995.
James E. Rose, Jr., age 58 Senior Vice President, Taxes
and Government Affairs since March
1997 after serving as Vice
President, Taxes and Government
Affairs since March 1996. Prior
thereto, he served as Vice
President, Taxes and Government
Affairs for Premark International,
Inc., since January 1986.
Hans J. Schwenzer, age 64 Senior Vice President,
Tupperware Worldwide since May
1996. He also serves as President,
Tupperware Germany; President,
Sales Programs and Promotions,
Tupperware Europe, Africa and
Middle East; and Regional General
Manager, Russia since 1990.
Christian E. Skroeder, age 52 Group President, Tupperware
Europe, Africa and Middle East
since April 1998. Prior thereto,
he served as President, Tupperware
Europe, Africa and Middle East
since 1995.
Jose R. Timmerman, age 52 Senior Vice President,
Worldwide Operations since August
1997 after serving as Vice
President Worldwide Operations
since October 1993.
Paul B. Van Sickle, age 61 Executive Vice President and
Chief Financial Officer since
September 1999. Prior thereto, he
served as Executive Vice President
since March 1997 after serving as
Senior Vice President, Finance and
Operations since November 1992.
Robert W. Williams, age 57 President, Tupperware Asia
Pacific since April 1995. Mr.
Williams intends to retire March
31, 2001.
</TABLE>
Item 2. Properties
The principal executive office of the Registrant is owned by
the Registrant and is located in Orlando, Florida. The
Registrant owns and maintains Tupperware manufacturing plants in
Belgium, Brazil, France, Greece, Japan, Korea, Mexico, the
Philippines, Portugal, South Africa, and the United States, and
leases manufacturing facilities in India, Venezuela and China.
The Registrant owns and maintains the BeautiControl headquarters
in Texas and leases its manufacturing facilities in Texas.
Registrant conducts a continuing program of new product design
and development at its facilities in Florida, Texas, Japan
and Belgium. None of the owned principal properties is subject
to any encumbrance material to the consolidated operations of the
Registrant. The Registrant considers the condition and extent of
utilization of its plants, warehouses and other properties to be
good, the capacity of its plants and warehouses generally to be
adequate for its needs, and the nature of the properties to be
suitable for its needs.
Item 3. Legal Proceedings
A number of ordinary-course legal and administrative
proceedings against the Registrant are pending. In addition to
such proceedings, there are certain proceedings that involve the
discharge of materials into or otherwise relating to the
protection of the environment. Certain of such proceedings
involve federal environmental laws such as the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as well as state and local laws. The Registrant establishes
reserves with respect to certain of such proceedings. Because of
the involvement of other parties and the uncertainty of potential
environmental impacts, the eventual outcomes of such actions and
the cost and timing of expenditures cannot be estimated with
certainty. It is not expected that the outcome of such
proceedings, either individually or in the aggregate, will have a
materially adverse effect upon Registrant.
As part of the 1986 reorganization involving the formation
of Premark International, Inc., Premark was spun-off by Dart &
Kraft, Inc. and Kraft Foods, Inc. assumed any liabilities arising
out of any legal proceedings in connection with certain divested
or discontinued former businesses of Dart Industries Inc., a
subsidiary of the Registrant, including matters alleging product
liability and environmental liability. The assumption of
liabilities by Kraft Foods, Inc. remains effective subsequent to
the distribution of the equity of the Registrant to Premark
shareholders.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The stock price information set forth in Note 14: "Quarterly
Financial Summary (Unaudited)" appearing on page 99 of the Annual
Report to Shareholders for the year ended December 30, 2000, is
incorporated by reference into this Report. The information set
forth in Note 15: "Rights Agreement" on page 100 of the Annual
Report to Shareholders for the year ended December 30, 2000 is
incorporated by reference into this Report. As of March 20,
2001, the Registrant had 11,532 shareholders of record.
Item 6. Selected Financial Data
The information set forth under the caption "Selected
Financial Data" on pages 58 through 61 of the Annual Report to
Shareholders for the year ended December 30, 2000, is
incorporated by reference into this Report.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" set
forth on pages 62 through 75 of the Annual Report to Shareholders
for the year ended December 30, 2000, is incorporated by
reference into this Report.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk
The information set forth under the caption "Market Risk" on
page 73 of the Annual Report to Shareholders for the year ended
December 30, 2000, is incorporated by reference into this Report.
Item 8. Financial Statements and Supplementary Data
(a) The following Consolidated Financial Statements of
Tupperware Corporation and Report of Independent Certified Public
Accountants set forth on pages 76 through 100, and on page 101,
respectively, of the Annual Report to Shareholders for the year
ended December 30, 2000 are incorporated by reference into this
Report:
Consolidated Statements of Income, Shareholders' Equity
and Cash Flows - Years ended December 30, 2000,
December 25, 1999, and December 26, 1998;
Consolidated Balance Sheets - December 30, 2000, and
December 25, 1999;
Notes to the Consolidated Financial Statements; and
Report of Independent Certified Public Accountants.
(b) The supplementary data regarding quarterly results of
operations contained in Note 14: "Quarterly Financial Summary
(Unaudited)" of the Notes to the Consolidated Financial
Statements of Tupperware Corporation on page 99 of the Annual
Report to Shareholders for the year ended December 30, 2000, is
incorporated by reference into this Report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information as to the Directors of the Registrant set
forth under the sub-caption "Board of Directors" appearing under
the caption "Election of Directors" on pages 3 through 5 of the
Proxy Statement relating to the Annual Meeting of Shareholders to
be held on May 17, 2001, is incorporated by reference into this
Report. The information as to the Executive Officers of the
Registrant is included in Part I hereof under the caption
"Executive Officers of the Registrant" in reliance upon General
Instruction G to Form 10-K and Instruction 3 to Item 401(b) of
Regulation S-K.
Item 11. Executive Compensation
The information set forth under the caption "Compensation of
Directors" on page 16 of the Proxy Statement relating to the
Annual Meeting of Shareholders to be held on May 17, 2001, and
the information on pages 9 through 11 of such Proxy Statement
relating to executive officers' compensation is incorporated by
reference into this Report.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information set forth under the captions "Security
Ownership of Certain Beneficial Owners" on page 7 and "Security
Ownership of Management" on page 6 of the Proxy Statement
relating to the Annual Meeting of Shareholders to be held on May
17, 2001, is incorporated by reference into this Report.
Item 13. Certain Relationships and Related Transactions
The information set forth under the caption "Indebtedness of
Management" on page 7 and 8 of the Proxy Statement relating to
the Annual Meeting of Shareholders to be held on May 17, 2001, is
incorporated by reference into this Report.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports On
Form 8-K
(a) (1) List of Financial Statements
The following Consolidated Financial Statements of
Tupperware Corporation and Report of Independent Certified Public
Accountants set forth on pages 76 through 100 and on page 101,
respectively, of the Annual Report to Shareholders for the year
ended December 30, 2000, are incorporated by reference into this
Report by Item 8 hereof:
Consolidated Statements of Income, Shareholders' Equity and
Cash Flows - Years ended December 30, 2000, December 25, 1999,
and December 26, 1998;
Consolidated Balance Sheets - December 30, 2000 and
December 25, 1999;
Notes to the Consolidated Financial Statements; and
Report of Independent Certified Public Accountants.
(a) (2) List of Financial Statement Schedules
The following consolidated financial statement schedule
(numbered in accordance with Regulation S-X) of Tupperware
Corporation is included in this Report:
Report of Independent Certified Public Accountants on
Financial Statement Schedule, page 17of this Report; and
Schedule II-Valuation and Qualifying Accounts for each of
the three years ended December 30, 2000, page 18 of this Report.
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions, are
inapplicable, or the information called for therein is included
elsewhere in the financial statements or related notes contained
or incorporated by reference herein.
(a) (3) List of Exhibits: (numbered in accordance with Item 601
of Regulation S-K)
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
*1 Underwriting Agreement (Attached to Form
S-3 (No. 333-12125) Registration Statement
as Exhibit 1 filed with the Commission on
September 16, 1996, and incorporated herein
by reference).
*2 Distribution Agreement by and among Premark
International, Inc., Tupperware
Corporation and Dart Industries Inc.
(Attached as Exhibit 2 to Tupperware
Corporation's Registration Statement on
Form 10 (No. 1-11657) filed with the
Commission on March 4, 1996, and
incorporated herein by reference).
*3.1 Amended and Restated Certificate of
Incorporation of Tupperware Corporation
(Attached as Exhibit 3.1 to Form 10
(No. 1-11657) filed with the Commission
on March 4, 1996, and incorporated herein
by reference).
*3.2 Amended and Restated By-laws of Tupperware
Corporation as amended May 11, 1999
(Attached as Exhibit 3.2 to Form 10-Q for
the second quarter of 1999 filed with the
Commission on August 9, 1999, and
incorporated herein by reference).
*4.1 Rights Agreement, by and between Tupperware
Corporation and the rights agent named
therein (Attached as Exhibit 4 to Form 10
(No. 1-11657), filed with the Commission
on March 4, 1996, and incorporated herein
by reference).
*4.2 Indenture dated as of October 1, 1996, among
Tupperware Corporation and The First National
Bank of Chicago, as Trustee, (Attached as
Exhibit 4(a) to Tupperware Corporation's
Registration Statement on Form S-3 (No.
333-12125), filed with the Commission on
September 25, 1996, and incorporated
herein by reference).
*4.3 Form of Debt Securities (Attached as
Exhibit 4(b) to Tupperware Corporation's
Registration Statement on Form S-3
(No. 333-12125), filed with the Commission
on September 25, 1996, and incorporated
herein by reference).
*4.4 Form of Warrant Agreement, including form
of Warrant Certificate (Attached as
Exhibit 4(a) to Tupperware Corporation's
Registration Statement on Form S-3
(No. 333-12125) filed with the Commission
on September 25, 1996, and incorporated
herein by reference).
10.1 Tupperware Corporation 1996 Incentive
Plan as amended through August 10, 2000.
*10.2 Tupperware Corporation Directors' Stock
Plan as amended November 12, 1998
(Attached as Exhibit 10.2 to Form 10-K
(No. 1-11657) filed with the Commission
on March 24, 1999, and incorporated
herein by reference).
*10.3 Form of Change of Control Agreement
(Attached as Exhibit 10.2 to Form 10-Q
for the third quarter of 1999 filed with
the Commission on November 8, 1999, and
incorporated herein by reference).
*10.4 Tax Sharing Agreement between Tupperware
Corporation and Premark International, Inc.
(Attached as Exhibit 10.3 to Form 10
(No. 1-11657), filed with the Commission
on May 22, 1996, and incorporated herein by
reference).
*10.5 Employee Benefits and Compensation
Allocation Agreement between Tupperware
Corporation and Premark International, Inc.
(Attached as Exhibit 10.4 to Form 10
(No. 1-11657), filed with the Commission
on March 4, 1996, and incorporated herein
by reference).
*10.6 Credit Agreement dated May 16, 1996
(Attached as Exhibit 10.8 to the
Registrant's Registration Statement
on Form 10 (No. 1-11657), filed with the
Commission on May 22, 1996 as Exhibit
10.8, and incorporated herein by reference).
*10.7 Form of Franchise Agreement between a
subsidiary of the Registrant and
distributors of Tupperware products in
the United States (Attached as Exhibit
10.10 to the Registrant's Annual Report
on Form 10-K for the year ended December
28, 1996, filed with the Commission on
March 25, 1997, and incorporated herein
by reference).
*10.8 First Amendment dated August 8, 1997
to Credit Agreement dated May 16, 1996
(Attached as Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K
for the year ended December 27, 1997,
and filed with the Commission on March
24, 1998, and incorporated herein
by reference).
*10.9 Loan Agreement, Promissory Note,
and Stock Pledge Agreement dated
November 13, 1998, between a subsidiary
of Tupperware and E.V. Goings (Attached
as Exhibit 10.9 to the Registrant's
Annual Report on Form 10-K for the year
ended December 26, 1998 filed with the
Commission on March 24, 1999, and
incorporated herein by reference).
*10.10 Management Stock Purchase Plan (Attached
to Form S-8 (No. 333-48650) as Exhibit 4.3
filed with the Commission on October 26,
2000 and incorporated herein by reference).
10.11 Form of Promissory Note between Tupperware
and various executives.
10.12 Form of Stock Pledge Agreement between
Tupperware and various executives.
*10.13 Tupperware Corporation 2000 Incentive Plan
as amended through August 10, 2000 (Filed
on Form S-8 (No. 333-50012) on November 15,
2000, and incorporated herein by reference.)
13 Pages 58 through 102 of the Annual Report
to Shareholders of the Registrant for the
year ended December 30, 2000.
21 Subsidiaries of Tupperware Corporation as
of March 20, 2001.
23 Manually signed Consent of Independent
Certified Public Accountants to the
incorporation of their report by reference
into the prospectus contained in specified
registration statements on Form S-8 and
Form S-3.
24 Powers of Attorney.
</TABLE>
*Document has heretofore been filed with the Commission and is
incorporated by reference and made a part hereof.
The Registrant agrees to furnish, upon request of the Commission,
a copy of all constituent instruments defining the rights of
holders of long-term debt of the Registrant and its consolidated
subsidiaries.
(b) Reports on Form 8-K
During the quarter ended December 30, 2000, the Registrant
did not file any reports on Form 8-K.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Tupperware Corporation
Our audits of the consolidated financial statements referred
to in our report dated February 20, 2001 appearing in the 2000
Annual Report to Shareholders of Tupperware Corporation (which
report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K) also included an
audit of the Financial Statement Schedule listed in Item 14(a)(2)
of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements.
PricewaterhouseCoopers LLP
Orlando, Florida
February 20, 2001
<TABLE>
TUPPERWARE CORPORATION
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 30, 2000
(In millions)
<CAPTION>
Col. A Col. B Col. C Col. D Col. E
------ ------ ------ ------ ------
Additions
---------
Balance Charged Charged Balance
at to Costs to at End
Beginning and Other Deductions of
of Period Expenses Accounts Period
--------- -------- -------- ---------- -------
<S> <C> <C> <C> <C> <C>
Allowance for
doubtful
accounts,
current and
long term:
Year ended
December 30, $53.4 $13.9 $0.1 $(5.3)<F1> $59.7
2000
$(2.4)<F2>
Year ended
December 25, 77.4 8.6 0.1 (25.3)<F1> 53.4
1999
(7.4)<F2>
Year ended
December 26, 81.9 15.0 (0.5) (22.3)<F1> 77.4
1998
3.3<F2>
Valuation
allowance
for deferred tax
assets:
Year ended
December 30, 30.8 1.0 - - 31.8
2000
Year ended
December 25, 23.9 6.9 - - 30.8
1999
Year ended
December 26, 14.4 9.5 - - 23.9
1998
<FN>
<F1> Represents write-offs less recoveries.
<F2> Foreign currency translation adjustment.
</FN>
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
(Registrant)
By / s/ E.V. GOINGS
- --------------------------
E.V. Goings
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the date
indicated.
Signature Title
/s/ E.V. Goings Chairman of the Board of Directors,
- ------------------------- Chief Executive Officer and
E.V. Goings Director
(Principal Executive Officer)
/s/ Paul B. Van Sickle Executive Vice President and Chief
- ------------------------- Financial Officer
Paul B. Van Sickle (Principal Financial Officer)
/s/ Judy B. Curry Vice President and Controller
- ------------------------- (Principal Accounting Officer)
Judy B. Curry
* Director
Rita Bornstein, Ph.D
* Director
Clifford J. Grum
* Director
Betsy D. Holden
* Director
Joe R. Lee
* Director
Bob Marbut
* Director
Angel R. Martinez
* Director
David R. Parker
* Director
Robert M. Price
* Director
Joyce M. Roche
* Director
M. Anne Szostak
*By /s/ Thomas M. Roehlk
----------------------------
Thomas M. Roehlk
Attorney-in-fact
March 20, 2001
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
10.1 Tupperware Corporation 1996
Incentive Plan as amended through
August 10, 2000
10.11 Form of Promissory Note between
Tupperware and various executives.
10.12 Form of Stock Pledge Agreement
between Tupperware and various
executives.
13 Pages 58 through 102 of the
Annual Report to Shareholders
of the Registrant for the year
ended December 30, 2000
21 Subsidiaries of Tupperware
Corporation as of March 20, 2001
23 Manually signed Consent of
Independent Certified Public
Accountants to the incorporation
of their report by reference into the
prospectus contained in specified
registration statements on Form S-8
and Form S-3
24 Powers of Attorney
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10100.txt
<DESCRIPTION>1996 INCENTIVE PLAN AS AMENDED
<TEXT>
EXHIBIT 10.1
TUPPERWARE CORPORATION
1996 INCENTIVE PLAN
(As amended August 18, 1999 and August 10, 2000)
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
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 existed with
respect 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.
(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.
(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;
(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).
(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.
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.
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) 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 (unless another period is specified by the
Committee in the option agreement) may thereafter be exercised
by the estate of the optionee for a period of three years from
the date of such death; provided, however, that if the optionee
is at least sixty years of age at the time of death and has
fifteen years service with the Company, such Stock Option may
thereafter be exercised by the estate of the optionee for a
period of six years from the date of such death. In no event,
however, may a Stock Option be exercisable beyond the stated
expiration date of such Stock Option. 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; provided, however, that if such optionee had
retired from the Company prior to the date of death, the estate
of the optionee shall continue to have the benefit of the vesting
and exercisability benefits specified by Section 6.4(i).
(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 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 Years of
Age at Continued Continued
Retirement Vesting Exercisability
Following Following
Retirement 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, 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.
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.''
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.
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
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.
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 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.
17.4 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.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>3
<FILENAME>ex1011.txt
<DESCRIPTION>FORM OF PROMISSORY NOTE
<TEXT>
EXHIBIT 10.11
FORM OF PROMISSORY NOTE
between Tupperware and various executives
$___________ [Date]
FOR VALUE RECEIVED, ________[Name]__________________
(the "Maker") promises to pay to the order of Dart Industries
Inc., a Delaware corporation (which together with any successor,
assignee or endorsee is hereinafter referred to as the "Holder"),
at its office at 14901 South Orange Blossom Trail, Orlando,
Florida 32837, or at such other place as the Holder may
designate in writing, in lawful money of the United States of
America, the principal sum of _________ and No/100 Dollars
($______), together with interest on the principal amount of this
Note as described below and in accordance with the following
terms and provisions:
1. Interest Rate. Interest will accrue on the
outstanding principal balance of this Note at the rate of 5.96%
per annum, compounded quarterly as provided below.
2. Interest Payments. Accrued interest will be
calculated quarterly in arrears on the ____day of each February,
May, August and November after the date hereof, commencing on
___________, _____, and such accrued interest will be added to the
outstanding principal balance of this Note. All determinations
of interest under this Note will be calculated for actual days
elapsed on the basis of a year of 365 or 366 days, as applicable.
Cash dividends payable to the Maker on the Tupperware Corporation
("Tupperware") common stock pledged by the Maker pursuant to the
Pledge Agreement referred to below shall be applied on the date
such dividends are paid to the Associated Interest (as defined
below) with respect to each of the principal installments
described in Section 3 below in proportion to the original
principal amount included in each such installment, taking into
account all payments prior to such date.
3. Principal Payments. For so long as the Maker
remains on the active payroll of Tupperware or any of its
wholly-owned subsidiaries (collectively, the "Company"), payment
of the principal of this Note will be made in three installments
on the fifth, sixth and eighth anniversaries of the date of this
Note. Twenty-five percent (25%) of the original principal balance
of this Note will be due and payable on each of the fifth and sixth
anniversaries of the date hereof, together in each case with all
accrued and unpaid interest on such portion of the original
principal balance of this Note, including any such interest that
was added to the original principal balance of this Note in
accordance with Section 2 above (the "Associated Interest"). On
the eighth anniversary of the date of this Note, the entire
remaining outstanding principal balance together with all accrued
and unpaid interest will be due and payable. Notwithstanding the
foregoing, in the event of (a) death or disability of the Maker,
the outstanding principal balance of this Note and all accrued
and unpaid interest hereunder will be due and payable on the
earlier of the repayment schedule set forth above or three years
after the date of death or disability, (b) retirement of the
Maker at age 55 or older with at least ten years of service with
the Company or its predecessors, the outstanding principal
balance of this Note and all accrued and unpaid interest
hereunder will be due and payable on the earlier of the repayment
schedule set forth above or two years after the date of
retirement, and (c) retirement of the Maker after age 60 with at
least fifteen years of service with the Company or its
predecessors, the outstanding principal balance of this Note and
all accrued and unpaid interest hereunder will be due and payable
on the earlier of the repayment schedule set forth above or six
years after the date of retirement.
4. Security and Purpose of Loan. The Maker's payment
and performance of all the terms and conditions of this Note are
secured by a stock pledge agreement of even date herewith
executed by the Maker and the Holder (the "Pledge Agreement").
The loan evidenced by this Note is made to assist the Maker in
satisfying the terms and conditions of the Company's Management
Stock Purchase Plan (the "Plan"). The Maker will use all
proceeds of the loan to purchase shares of common stock of
Tupperware pursuant to the Plan and for no other purpose.
5. Disbursement of Proceeds. Maker hereby authorizes
and directs Holder to disburse all proceeds of the Loan evidenced
by this Note directly to Tupperware, or to such account as
Tupperware may direct, for application solely to the purchase
price for common stock to be acquired from Tupperware pursuant to
the Plan. Disbursement when so made shall constitute value given
to the Maker in an amount equal to the initial principal sum of
this Note.
6. Prepayment. This Note may be prepaid in whole or
in part at any time without penalty. Voluntary prepayments shall
be applied first to Associated Interest and then to principal of
the installment payments required under this Note in the order of
their maturities.
7. Default and Accelerated Maturity. If any amount
under this Note or under the Pledge Agreement is not paid when
due and such default continues for five (5) days thereafter, the
entire principal balance of this Note and all accrued interest
thereon will become immediately due and payable. If any
covenant, term, condition or other provision in this Note or in
the Pledge Agreement is not performed, fulfilled, satisfied or
met as promised or required, and such failure does not constitute
a monetary default triggering acceleration under the preceding
sentence, then the Holder will notify the Maker of the default.
If the default is not fully rectified and cured within fifteen
(15) days after the date of the notice, the entire principal
balance of this Note and all accrued interest thereon will
become immediately due and payable.
Without limiting the generality of the foregoing, the
entire outstanding principal balance of this Note, together with
all accrued and unpaid interest thereon, will become immediately
due and payable without notice on the following dates:
(a) the date of any voluntary or involuntary
termination of the Maker's employment with the Company, except
as otherwise provided in Section 3 above; and
(b) the date on which a bankruptcy or insolvency
proceeding is initiated by or against the Maker or the Maker
makes an assignment for the benefit of creditors.
8. Right of Setoff. The Maker expressly agrees that,
if a default or accelerated maturity occurs pursuant to Section 7
of this Note, the Holder has a right of setoff to satisfy the
debt evidenced by this Note. The right of set-off will entitle
the Holder (a) to withhold any payments owing from the Company to
the Maker, including but not limited to salary and bonus payments,
pension and retirement benefits, and expense reimbursements, and
(b) to draw upon any account maintained by the Company or its
agent for the benefit of the Maker or in the Maker's name. The
Holder will provide written notice to the Maker prior to
exercising this right of setoff.
9. Late Charge. The Maker will pay to the Holder a
late charge equal to five percent (5%) of any amount due under
this Note but not received by the Holder within fifteen (15) days
after the due date. The Maker agrees that the late charge will
be collected not as a penalty, but as compensation to the Holder
for the costs of collecting the late payment. This provision
will not be construed to extend the due date for any amount
required to be paid under this Note. The Holder will have no
obligation to accept any late payment not accompanied by the
required late charge.
10. Waiver, Extensions. Presentment, demand, notice
of dishonor, the homestead exemption, and all other exemptions
provided the Maker are waived. No delay, failure or omission by
the Holder in exercising any of its rights hereunder or at law or
in equity (including, without limitation, the right of
acceleration) will be construed as a novation of this Note or
will operate as a waiver or prevent the subsequent exercise of
any or all of such rights. Acceptance by the Holder of any sum
payable under this Note, whether before, on or after the due date
of such payment, will not be a waiver of the Holder's right to
require prompt payment when due of all other sums payable under
this Note or to exercise any of the Holder's rights, powers or
remedies under this Note. No extension of the time for any
payment under this Note will operate to release, discharge,
modify, or otherwise affect the liability of the Maker unless the
Holder agrees in writing.
11. Collection Costs, Documentary Stamp Tax and Other
Expenses. The Maker will pay all costs, fees and expenses
(including court costs and attorneys' fees) incurred by the Holder
in collecting or attempting to collect any amount that becomes due
under this Note or in seeking legal advice with respect to a
default under this Note. In addition, the Maker will pay all
costs and expenses arising out of the execution and delivery of
this Note,including but not limited to all documentary stamp
taxes and other taxes that may be charged or imposed by local,
state or federal governments.
12. Governing Law; Usury. This Agreement will be
governed by Florida law. It is the intention of the Maker and
the Holder to comply with the usury laws of the United States
and the State of Florida. Accordingly, it is agreed that,
notwithstanding any provision in this Note to the contrary, this
Note will not require the payment of, or permit the collection
of, interest in excess of the maximum permitted by law.
13. Notices. All notices, requests, demands and other
communications with respect to this Note will be in writing and
will be delivered by hand, by telecopy, sent prepaid by air
courier or sent by the United States mail, certified, postage
prepaid, return receipt requested, at the addresses designated
below:
If to Holder: Dart Industries Inc.
14901 South Orange Blossom Trail
Orlando, Florida 32837
Attn: Vice President and Secretary
Fax: 407-826-4505
If to Maker: _____________________
_____________________
_____________________
_____________________
Any notice, request, demand or other communication delivered or
sent in such manner will be deemed given or made when actually
received by the intended recipient. Rejection or other refusal
to accept, or the inability to deliver because of a changed
address of which no notice was given, will be deemed to be
receipt of the notice, request, demand or other communication
sent. The Maker or the Holder may change its address by
notifying the other party of the new address in any manner
permitted by this section.
14. Amendments Only in Writing. This Note or any
provision hereof may be waived, changed, modified or discharged
only by an agreement in writing signed by the Maker and the
Holder.
15. Time of Essence. TIME IS OF THE ESSENCE with
respect to the performance by the Maker of each of its
obligations hereunder.
IN WITNESS WHEREOF, the Maker has duly executed this
Note.
_______________________________
Name:
_______________________________
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>4
<FILENAME>ex1012.txt
<DESCRIPTION>FORM OF STOCK PLEDGE AGREEMENT
<TEXT>
EXHIBIT 10.12
FORM OF STOCK PLEDGE AGREEMENT
between Tupperware and various executives
THIS STOCK PLEDGE AGREEMENT dated as of __________,
______ (this "Agreement") by and between __________________ (the
"Pledgor") and Dart Industries Inc., a Delaware corporation (the
"Secured Party"), recites and provides:
RECITALS
The Pledgor has executed and delivered a promissory note of
even date herewith (the "Note") made by the Pledgor payable to
the order of the Secured Party in the principal amount of
$__________, together with accrued interest thereon at the rate
set forth therein. The Pledgor has agreed to pledge and deliver
to the Secured Party, as security for the payment of the
indebtedness evidenced by the Note, ______ shares of common stock
of Tupperware Corporation, a Delaware corporation (the
"Company"), in accordance with the terms and conditions set forth
in this Agreement.
PLEDGE AGREEMENT
NOW, THEREFORE, the parties to this Agreement agree as
follows:
1. Pledge of Collateral. The Pledgor hereby assigns and
delivers to the Secured Party, with appropriate stock powers in
the form of Exhibit A hereto-endorsed in blank, _________ shares
of common stock of the Company. Such securities, and any
replacements or substitutions thereof, all dividends and
distributions thereon, all accessions thereto, and all proceeds
thereof, are referred to in this document as the "Collateral."
All of the Collateral will be held by the Secured Party subject
to the terms and conditions of this Agreement.
2. Certificates. The Pledgor agrees to deliver promptly
to the Secured Party, with stock powers in the form of Exhibit A
hereto endorsed in blank or other appropriate instruments of
assignment, all certificates (if any) representing stock
dividends or stock splits or rights to purchase or subscribe for
additional stock, or other rights, accessions or increments with
respect to any securities constituting a portion of the
Collateral. Such certificates (if any) will be held by the
Secured Party subject to the terms and conditions of this
Agreement.
3. Secured Indebtedness. This pledge of the Collateral
secures all indebtedness of the Pledgor to the Secured Party
evidenced by the Note and all obligations of the Pledgor to the
Secured Party under this Agreement, including any attorneys' fees
and other expenses incurred in the collection of the Note or the
enforcement of this Agreement. Upon payment of the entire
indebtedness of the Pledgor to the Secured Party evidenced by the
Note, this Agreement will terminate and all the Collateral will
be returned and delivered by the Secured Party to the Pledgor.
4. Sale of Collateral. The Pledgor covenants and agrees
that he or she will not sell, assign, transfer, pledge or
otherwise dispose of or create a lien on or security interest
in any of the Collateral so long as it is subject to this
Agreement, except that the Pledgor may, by irrevocable written
notice to the Secured Party, transfer all or any portion of the
Collateral to the Secured Party on a date specified in the notice
(which shall not be earlier than the date on which the Secured
Party receives the notice) and apply the value of the transferred
Collateral to the indebtedness evidenced by the Note in accordance
with the terms of the Note. The value of the transferred
Collateral will be calculated on the basis of the closing price of
the Company's common stock on the New York Stock Exchange on the
date of transfer to the Secured Party.
5. Partial Release of Collateral. When the Pledgor has
paid 25% of the original principal sum of this Note and the
Associated Interest (as defined in the Note), the Secured Party
will promptly release to the Pledgor 25% of the number of shares
of common stock originally pledged hereunder (adjusted for any
stock splits and stock dividends), taking into account any sale
of Collateral pursuant to paragraph 4 hereof. When the Pledgor
has paid 50% of the original principal sum of this Note and the
Associated Interest (as defined in the Note), the Secured Party
will promptly release to the Pledgor 50% of the number of shares
of common stock originally pledged hereunder (adjusted for any
stock splits and stock dividends), taking into account any sale
of Collateral pursuant to paragraph 4 hereof and any previous
release of Collateral pursuant to this paragraph 5. When the
Pledgor has paid 75% of the original principal sum of this Note
and the Associated Interest (as defined in the Note), the Secured
Party will promptly release to the Pledgor 75% of the number of
shares of common stock originally pledged hereunder (adjusted for
any stock splits and stock dividends), taking into account any
sale of Collateral pursuant to paragraph 4 hereof and any
previous release of Collateral pursuant to this paragraph 5. Any
release of Collateral pursuant to this paragraph 5 shall be
subject to the conditions that at the time thereof no default by
the Pledgor shall have occurred and be continuing under the Note
or under this Agreement and that such release will not result in
any violation of Regulation U of the Board of Governors of the
Federal Reserve System.
6. Pledgor's Representation. The Pledgor represents,
warrants and covenants that he or she is the lawful owner of all
of the Collateral, free and clear of all liens or claims of any
sort whatsoever, other than the lien established by this
Agreement, and that he or she will maintain the Collateral free
of all such liens or claims until all indebtedness evidenced by
the Note is fully and finally paid.
7. Further Assurances. The Pledgor covenants and agrees to
execute and deliver or cause to be executed and delivered, and to
do or make or cause to be done or made, upon the request of the
Secured Party, any and all agreements, instruments, acts or
things, supplemental, confirmatory or otherwise, as may
reasonably be required by the Secured Party for the purpose of,
or in connection with, perfecting and completing the pledge of
the Collateral in accordance with the terms and conditions of
this Agreement.
8. Dividends and Voting Rights. So long as there exists
no event of default under this Agreement or under the Note,
subject to the provisions of paragraphs 2 and 9 hereof, the
Pledgor will have and enjoy all rights attaching to the Collateral,
including the right to exercise any and all voting rights and the
right to receive all dividends, subject to Section 2 of the Note.
9. Default and Remedies. In the event of any default by
the Pledgor in the payment of any sum under this Agreement or any
indebtedness of the Pledgor evidenced by the Note which default
continues for a period of five (5) days, or any other default
under the Note or under this Agreement which continues for a
period of fifteen (15) days after written notice given by the
Secured Party to the Pledgor in accordance with the provisions of
the Note, all right, title and ownership in and to the Collateral
will transfer ipso facto to the Secured Party, at its option.
The transfer of the Collateral to the Secured Party will include
all rights attaching to the Collateral, including the right to
receive all dividends and the right to exercise any and all
voting rights. Such transfer and delivery of the Collateral will
be accepted by the Secured Party in full or partial satisfaction
of the outstanding indebtedness evidenced by the Note, which
indebtedness will be reduced by an amount equal to the value of
the Collateral on the date of its delivery to the Secured Party.
The value of the Collateral will be calculated on the basis of
the closing price of the Company's common stock on the New York
Stock Exchange on the date of transfer to the Secured Party. If
the value of the Collateral is insufficient to discharge the
outstanding indebtedness and other costs and expenses owed under
the Note and this Agreement, the Pledgor will remain liable for
the deficiency. If the value of the Collateral exceeds the
outstanding indebtedness and other costs and expenses owed under
the Note and this Agreement, the Secured Party will transfer to
the Pledgor such excess in the form of common stock of the
Company with a cash payment for any fractional share, and
thereafter the Pledgor will have no other or further liability
arising from such indebtedness.
10. Expenses. The Pledgor will pay all costs of collection
and enforcement of this Agreement (including court costs and
attorneys' fees) in the event of default or failure of the
Pledgor to fulfill any term, covenant or condition under this
Agreement.
11. Binding Agreement; Governing Law. This Agreement will
bind the parties hereto and their respective heirs, personal
representatives, successors and assigns. This Agreement will be
governed by Florida law.
12. Notices. All notices, requests, demands and other
communications with respect to this Agreement will be in writing
and will be delivered in the manner and at the addresses
specified in the Note.
IN WITNESS WHEREOF, the Pledgor and the Secured Party have
executed or caused this Agreement to be executed in their names
as of the date first above written.
PLEDGOR
_______________________________
Name:__________________________
SECURED PARTY
DART INDUSTRIES INC.
By:____________________________
Title:_________________________
EXHIBIT A
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell,
assign and transfer to _____________________________ _____ Shares
of Common Stock of Tupperware Corporation, a Delaware
corporation, represented by Certificate No. ___________ (the
"Stock"), standing in the name of the undersigned on the books of
said corporation and does hereby irrevocably constitute and
appoint ___________________________________ as the undersigned's
true and lawful attorney, for it and in its name and stead, to
sell, assign and transfer all or any of the Stock, and for that
purpose to make and execute all necessary acts of assignment and
transfer thereof; and to substitute one or more persons with like
full power, hereby ratifying and confirming all that said
attorney or substitute or substitutes shall lawfully do by virtue
hereof.
Dated: _______________
IMPORTANT ____________________________
The signature must correspond
in every particular, without
alteration, with the name as Name:_______________________
printed on your Certificate.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>ex21.txt
<DESCRIPTION>SUBSIDIARIES OF TUPPERWARE CORPORATION
<TEXT>
EXHIBIT 21
TUPPERWARE CORPORATION
Active Subsidiaries
As of March 20, 2001
The following subsidiaries are wholly owned by Tupperware
Corporation or a subsidiary of Tupperware Corporation
(degree of remoteness from the registrant is shown by
indentations).
Tupperware Corporation
Tupperware Financial Corporation
Dart Industries Inc.
Tupperware Espana, S.A.
Deerfield Land Corporation
Tupperware Far East, Inc.
Tupperware Turkey, Inc.
Dart Far East Sdn. Bhd.
Dart de Venezuela, C.A.
Tupperware Colombia S.A.
Dart do Brasil Industria e Comercio Ltda.
Daypar Participacoes Ltda
Academia de Negocios S/C Ltda.
Tupperware Hellas S.A.I.C.
Tupperware Del Ecuador Cia. Ltda.
Dart Industries Hong Kong Limited
Dart Industries (New Zealand) Limited
Tupperware New Zealand Staff Superannuation Plan
Dart, S.A. de C.V.
Servicios Especializados de Arrendamiento en
Latinoamerica S.A. de C.V.
Dartco Manufacturing Inc.
Tupperware, Industria Lusitana de Artigos Domesticos,
Limitada
Tupperware (Portugal) Artigos Domesticos,Ltda
Premiere Products, Inc.
Premiere Korea Ltd.
Premiere Marketing Company
Exportadora Lerma, S.A. de C.V.
Tupperware Australia Pty. Ltd.
Tupperware Singapore Pte. Ltd.
Newco Logistica e Participacoes Ltda.
Centro de Distribuicao RS Ltda.
Distribuidora Comercial Nordeste de Produtos
Plasticos Ltda.
Distribuidora Comercial Paulista de Plasticos
Ltda.
Centro de Distribuicao Mineira de Produtos de
Plastico Ltda.
Distribuidora Esplanada de Produtos Plasticos
Ltda.
Corcovado-Plast Distribuidora de Artigos
Domesticos Ltda.
Distribuidora Baiana de Produtos Plasticos Ltda.
Uniao Norte Distribuidora de Produtos Plasticos
Ltda
Uniao Sul Comercial de Plasticos Ltda.
Centro Oeste Distribuidora de Produtos Plasticos
Ltda.
Premiere Manufacturing, Inc.
Tupperware U.S., Inc.
Tupperware Distributors, Inc.
Tupperware Factors Inc.
Tupperware.com, Inc.
Tupperware Canada Inc.
Dart Staff Superannuation Fund Pty Ltd.
Importadora Y Distribuidora Importupp Limitada
Tupperware Iberica S.A.
Tupperware (Thailand) Limited
Tupperware Uruguay S.A.
Dart Executive Pension Fund Limited
Dart Pension Fund Limited
Tupperware U.K. Holdings, Inc.
The Tupperware Foundation
Tupperware Products, Inc.
Tupperware de El Salvador, S.A. de C.V.
Tupperware del Peru S.R.L.
Dart Holdings, S. de R.L.
Tupperware Honduras, S. de R.L.
Tupperware de Costa Rica, S.A.
Tupperware de Guatemala, S.A.
Asociacion Nacional de Distribuidores de Productos
Tupperware, A.C.
Tupperware International Holdings Corporation
Tupperware International Holdings BV
Tupperware Israel Ltd.
Tupperware Belgium N.V.
Tupperware France S.A.
Tupperware Polska Sp.zo.o
Dart Argentina S.A.
TWP S.A.
Tupperware Asia Pacific Holdings Private
Limited
Tupperware India Private Limited
Tupperware China, LLC
Tupperware (China) Company Limited
Dart (Philippines), Inc.
Tupperware Realty Corporation
Tupperware Philippines, Inc.
Tupperware Holdings B.V.
Tupperware Services GmbH
Tupperware Nederland Properties B.V.
Tupperware Nederland B.V.
Tupperware Deutschland GmbH
Tupperware Osterreich G.m.b.H.
Tupperware Southern Africa
Proprietary) Limited
Tupperware Products B.V.
Tupperware (Suisse) SA
Tupperware Products S.A.
Tupperware d.o.o.
Tupperware Bulgaria EOOD
Tupperware Eesti OU
UAB "Tupperware"
SIA Tupperware Latvia
Tupperware Luxembourg S.ar.l.
Tupperware Slovakia s.r.o.
Tupperware Morocco
Tupperware Asset Management Sarl
Diecraft Australia Pty. Ltd.
Tupperware Egypt Ltd
Tupperware East Africa Limited
Tupperware Italia S.p.A.
Tupperware General Services N.V.
Japan Tupperware Co., Ltd.
Tupperware Trading Ltd.
Tupperware Czech Republic, spol. s.r.o.
Tupperware United Kingdom & Ireland Limited
Tupperware Nordic A/S
Tupperware Panama, S.A.
Dart Manufacturing India Pvt. Ltd.
Premiere Products Mexico S.de R.L.
BeautiControl Mexico, S.de R.L.
Tupperware Finance Holding Company B.V.
Tupperware Finance Company B.V.
Tupperware Holdings Corporation
Tupperware Home Parties Corporation
Tupperware Export Sales, Ltd.
Tupperware Services, Inc.
Tupperware Holdings Ltd.
BeautiControl, Inc.
BC International Cosmetic & Image Services, Inc.
BeautiControl Canada, Ltd.
BeautiControl International, Inc.
BeautiControl International Services, Inc.
BeautiControl Asia Pacific Inc.
BeautiControl Hong Kong, Inc.
BeautiControl Japan, Inc.
BeautiControl Taiwan, Inc.
Eventus International, Inc.
JLH Properties, Inc.
BeautiControl Cosmeticos do Brasil Ltda.
International Investor, Inc.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>ex23.txt
<DESCRIPTION>CONSENT OF INDEPENDENT CPAS
<TEXT>
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in
the Registration Statement on Form S-8 (No. 333-04871), the
Registration Statement on Form S-8 (No. 333-04869), the
Registration Statement on Form S-8 (No. 333-18331), the
Registration Statement on Form S-8 (No. 333-48650) and the
Registration Statement on Form S-3 (No. 333-12125) of
Tupperware Corporation of our report dated February 20, 2001,
relating to the financial statements which appears in the Annual
Report to Shareholders, which is incorporated in this Annual
Report on Form 10-K. We also consent to the incorporation by
reference of our report dated February 20, 2001, relating to
the Financial Statement Schedule, which appears in this
Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Orlando, Florida
March 21, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>7
<FILENAME>ex24.txt
<DESCRIPTION>POWERS OF ATTORNEY
<TEXT>
EXHIBIT 24
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
director of Tupperware Corporation, a Delaware corporation, (the
"Corporation"), hereby constitutes and appoints Thomas M. Roehlk
and Charles L. Dunlap, true and lawful attorneys-in-fact and
agents of the undersigned, with full power of substitution and
resubstitution, for and in the name, place and stead of the
undersigned, in any and all capacities, to sign the Annual Report
on Form 10-K of the Corporation for its fiscal year ended
December 30, 2000, and any and all amendments thereto, and to
file or cause to be filed the same, together with any and all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and substitutes, full power and
authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises as
fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand and seal this 13th day of March, 2001.
/s/ Rita Bornstein
---------------------------
Rita Bornstein
/s/ Clifford J. Grum
---------------------------
Cliford J. Grum
/s/ Betsy D. Holden
---------------------------
Betsy D. Holden
/s/ Joe R. Lee
---------------------------
Joe R. Lee
/s/ Bob Marbut
---------------------------
Bob Marbut
/s/ Angel R. Martinez
---------------------------
Angel R. Martinez
/s/ David R. Parker
---------------------------
David R. Parker
/s/ Robert M. Price
---------------------------
Robert M. Price
/s/ Joyce M. Roche
---------------------------
Joyce M. Roche
/s/ M. Anne Szostak
---------------------------
M. Anne Szostak
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>8
<FILENAME>segment3.txt
<DESCRIPTION>TUPPERWARE CORPORATION ANNUAL REPORT
<TEXT>
<PAGE>
EXHIBIT 13
[LOGO]
TUPPERWARE CORPORATION
2000 ANNUAL REPORT
<PAGE>
Tupperware Corporation 1
DEAR SHAREHOLDERS,
Strong Results For the Year
I am pleased to report another good year for Tupperware. Once again we succeeded
by building on the fundamental strengths of our Company: our brand, our direct
selling channel, our global beachheads and our cash flow.
In 2000, we achieved strong, double-digit growth in local currency earnings,
excluding re-engineering costs, and a solid gain in sales. Our string of local
currency income increases now has been extended to eight quarters. We continue
on our strategic march toward becoming the world's premier direct selling
company.
We made no changes in direction in 2000. Rather, all of the performance gains
resulted from a sharp focus on capitalizing on our three primary strategic
growth levers: expanding the number of sellers in our system, developing our
integrated direct access channels and adding new products and categories.
More Sales Consultants
We ended 2000, compared with 1999, with a larger sales force in every region. A
highlight was the 10-percent improvement in the United States, our first
year-over-year gain in several years, even in the midst of a full employment
economy. The gain clearly demonstrates how our integrated direct access
strategies are helping to build our core business. At the close of 2000, our
worldwide sales force numbered 1.1 million, up 5 percent from the preceding
year. Importantly, the active sales force was up as well, 2 percent in total.
More Selling Channels - Integrated Direct Access
The development of multiple sales channels has been the key initiative driving
the revitalization of Tupperware over the past couple of years. We are pleased
that our plan is working to accelerate revenue growth by reaching consumers who
are not in contact with a member of our sales force, while at the same time
strengthening our core party plan channel.
The program, which we call "integrated direct access," makes our direct sales
force a vital partner in each of our new platforms: showcases, Internet selling
and television shopping. The essence of this effort has been integrating all of
these channels, initially in the United States and now throughout the world, so
that they work in harmony and build the revenue potential for both the members
of our direct sales force and the Company.
Chairman's Letter
<PAGE>
2 Tupperware Corporation
In 2000, we dramatically expanded our major new selling platform - showcases -
adding locations in the United States and in multiple markets within each of our
international regions. Showcases give customers more choice in how they interact
with Tupperware and purchase our products, and they create expanded horizons for
our sales force. Millions of shoppers visit malls throughout the year in the
United States alone, presenting an outstanding opportunity for introduction to
or reconnection with Tupperware.
The showcase channel is fully integrated with our core direct selling channel.
Our distributors operate the showcases using the independent sales force they
have trained. The sales consultants, in turn, make incremental sales and
generate a growing number of party dating and recruiting leads from this new
channel.
In April 2000, we began offering U.S. sales consultants their own personalized
web sites, which provide their customers with the ability to purchase
Tupperware(R) products conveniently and instantly on a 24-hour basis. The
Internet is a revolutionary communication and sales tool, and in the United
States now reaches more than half of all households. The Internet brings
Tupperware(R) products to people who do not have the opportunity or the desire
to attend a Tupperware home party. It also gives customers who are
geographically distant from their consultants or who are just looking to fill in
their collection of Tupperware(R) the opportunity to purchase our products with
great convenience, and gives the Company a younger, more modern, image.
As with our showcase development, our direct sales force is totally integrated
into our Internet strategy. For every sale made over the Internet, sales
consultants earn a commission at a level commensurate with their net earnings
from their party plan sales, and are provided with strong incentives to utilize
the Internet to expand their businesses and streamline their administrative
tasks.
We further enriched our multiple channel strategy last year by doubling the
number of Tupperware television shows to 12 on the Home Shopping Network.
Television has proved a potent vehicle for promoting our products and increasing
brand awareness among consumers. These shows highlight the benefits of attending
and hosting our Tupperware parties, and also portray the attractive
opportunities for viewers to begin direct selling careers with Tupperware.
Our integrated direct access channels accounted for 8 percent of U.S. sales in
2000, up from 4 percent in 1999.
Chairman's Letter
<PAGE>
Tupperware Corporation 3
More Products and More Product Categories
We continued to emphasize product innovation in 2000 and again met our goal of
obtaining more than 20 percent of our total revenues from products introduced in
the preceding two years. Our ability to perceive and predict market needs and
rapidly design and introduce new products to meet those needs is a cornerstone
of our long-term growth strategy.
Equally significant, we are creating global branded products in addition to
products tailored for a specific culture or market. For example, our
breakthrough food storage product, FridgeSmart(TM), developed in conjunction
with the University of Florida, was successfully introduced worldwide over the
course of 2000. The same was true of our popular salad spinner and E-Series(TM)
knives. Previously, it took five years or more of phased launches to distribute
a new product across all of our world markets.
We have expanded our categories as well as our products. Tupperware products
outside of our traditional areas of food storage, food preparation and food
serving categories, such as children's, microwave, cookware, kitchen gadgets and
knives, now account for over 20 percent of total revenues. A decade ago these
categories contributed virtually none of our revenues.
BeautiControl Acquisition
We added another leg to our growth strategy with the acquisition in October of
BeautiControl, Inc., a 20-year-old company whose vision is to be the premier
direct seller of cosmetics and skin care products. This acquisition gives us a
new, attractive product category in an industry that we know well. In addition,
BeautiControl's marketing structure is built much like Tupperware's, and its
North American direct sales force, numbering approximately 47,000 at the end of
2000, is one of the best trained in the industry.
BeautiControl represents an ideal strategic expansion for Tupperware. Beauty and
skin care is the largest single category in the direct selling industry. In
Latin America, for example, the overall market for personal care products is
estimated to be $18 billion annually, compared with less than $1 billion for
Tupperware product categories. Plus, most beauty and skin care products in Latin
America are sold through the direct channel. BeautiControl adds not only a new
product category, but also a valuable line of consumable products that must be
replaced as used. Tupperware products, by contrast, are long lasting and seldom
need replacing.
BeautiControl is now profitable in North America, and will continue to be led by
its co-founders, Jinger and Dick Heath. We plan to grow BeautiControl by
increasing its North American sales force and by drawing upon Tupperware's
extensive international direct selling experience and operational capabilities.
We plan to launch the BeautiControl line in Mexico in the second quarter of
2001, and then will move into Brazil. In addition, we foresee excellent future
opportunities in Asia Pacific. We warmly welcome BeautiControl's employees and
independent sales force to the Tupperware family.
Chairman's Letter
<PAGE>
4 Tupperware Corporation
Stock Purchase by Tupperware Executives
In October we announced that a group of 33 senior executives would participate
in a voluntary plan to purchase 847,000 shares of the Company's stock.
Executives were given the opportunity to borrow money from the Company for these
purchases, with their loans secured by the stock. These share purchases involve
a substantial financial commitment on the part of the executives. Participation
in the program reflects to a strong degree the management team's confidence in
the Company's future and the value of its stock. This plan enabled our
management team to raise its stock ownership significantly and increase its
incentive for improving Tupperware's performance. In conjunction with this plan,
we repurchased 800,000 shares of our stock in the fourth quarter of 2000 at a
total cost of $14.4 million, or an average price of $18 per share.
In Memoriam
We were saddened by the unexpected and untimely loss of William E. Spears,
senior vice president in charge of worldwide integrated direct access programs.
Bill was a colleague and friend who inspired everyone who had the privilege of
working with him. We will miss his vision and leadership. We offer our deepest
condolences to his family.
Management Change
Robert W. Williams, who has been president of our Asia Pacific business since
1995, has decided to retire as of the end of March 2001. Bob has made tremendous
contributions to our business, for which we are grateful. We wish him the best
in his retirement. Taking over for Bob as president of our Asia Pacific region
is Steven R. Kroos, currently president of Tupperware Japan. Steve has been
successful in running our Japanese business, and before that our operations in
Korea, and we are confident that he will do very well with his new
responsibilities.
New Board Member
In August, we welcomed M. Anne Szostak to the Company's board of directors. Anne
is an executive vice president and corporate director of human resources for
FleetBoston Financial, the nation's seventh largest bank holding company. We
look forward to significant contributions from Anne.
In Conclusion
We believe that we have "cracked the code," creating the template of the future
for direct selling by Tupperware. The convergence of the party plan with
showcases, Internet selling and television shopping, and the new opportunities
from the BeautiControl acquisition will bring increasing value to our
stockholders. On behalf of Tupperware, we thank you for your continuing support.
RICK GOINGS /s/ Rick Goings
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
FEBRUARY 28, 2001
Chairman's Letter
<PAGE>
[TUPPERWARE GRAPHIC]
<PAGE>
6 Tupperware Corporation
BUSINESS OVERVIEW
Overall Performance
As a result of progress made on a number of our initiatives during the year, net
income in 2000 increased by 9 percent to $99.1 million, or $1.71 per share, up
from $91.3 million, or $1.58 per share in 1999, excluding re-engineering costs.
Weak currencies, especially the euro, again impacted our results significantly,
reducing earnings per share by 25 cents. Excluding the impact of foreign
exchange and re-engineering costs, net income increased 30 percent.
Revenues showed good growth for the year, increasing by 8 percent to $1.1
billion, excluding the negative impact of foreign exchange. Sales of
BeautiControl products contributed to results beginning with its acquisition in
October. A change in the distribution model in some Latin American countries,
under which product is now sold directly to the sales force, also contributed
positively.
Cash flow from operations, after capital expenditures but before re-engineering,
was $53 million for 2000. We have averaged $72 million in annual cash flow each
year for the past five years, a level that supports our dividend and the funding
of business needs.
We continued to be financially strong. Our total debt-to-capital ratio was 76
percent at the end of 2000, after the $56 million of borrowings to fund the
BeautiControl acquisition and the $14 million expended for the share repurchase.
We plan to use the growing cash flow generated by the business to reduce debt,
with the expectation of lowering our debt-to-capital ratio to the 45-percent
range by the end of 2002.
Our 2000 pretax interest coverage was 8 times, equaling our 1999 coverage. This
important measure of financial strength places us in the upper third of Standard
& Poor's 500 companies with similar credit ratings.
We invested $46 million in capital expenditures in our business in 2000,
approximately 40 percent of which was used for new molds to support the
manufacture of new products.
Business Overview
<PAGE>
Tupperware Corporation 7
Dividends of $0.88 per share were declared during 2000, unchanged from the
previous year. The dividend yield was 4.3 percent, based on Tupperware's
year-end closing price. The dividend is well protected by our cash flow.
Management's goal is to restore the dividend payout ratio to the targeted
35-percent level through future earnings growth.
We completed the second year of our three-year re-engineering program. We
estimate that the re-engineering initiatives will produce recurring benefits of
$40 to $50 million each year, beginning in 2002. We are well on target toward
meeting this objective and restoring our return on sales to the highly
attractive 19 to 20 percent range last realized in 1996. Return on sales was 16
percent in 2000, before re-engineering costs and the inclusion of BeautiControl,
up from 12 percent just two years ago.
Phase I of the re-engineering program, which involved rationalizing our
manufacturing operations and resizing and realigning some of our regional
offices, was completed in 1999. Phase II of the program, which began in 2000, is
still proceeding. In this phase, we are centralizing our information technology
operations, greatly standardizing our software systems and implementing shared
service centers for appropriate functions and regions. Further, we are
implementing an importer-distributor model in our smaller Latin American markets
- - outside of Mexico and Brazil. Also part of Phase II is the formation of eight
purchasing councils to coordinate our worldwide procurement of several
commodities, ranging from raw materials to printed matter to services. Benefits
of $25 million were realized in 2000, which include $10 million of annual
benefits first realized in 1999. Costs incurred in 2000 totaled $27 million, and
program-to-date costs have been $43 million. Total costs for the program are now
expected to run from $50 to $60 million, as the high end of the spending range
has been trimmed by $15 million from the original forecast made in 1999.
Business Overview
<PAGE>
8 Tupperware Corporation
Regional Review - Europe
Europe, which continues to be the most significant regional contributor to
revenues and income, performed well in 2000, achieving increases in sales and
profits in local currency in spite of the dampened consumer-spending environment
caused by the weak euro. By contrast, most other direct selling companies
experienced sales declines, many by double-digit percentages.
The difficulties experienced in 1999 by all direct sellers in Germany as a
result of government-imposed social security regulations on part-time workers
were successfully addressed. We developed a program that provided assistance to
our sales force to help them comply with these regulations, and, as a result,
enjoyed increases in both our sales and the size of our sales force in Germany,
which is our largest European market.
Sales improved in France through the year after a slow start related to terrible
storms there in late December 1999 and January 2000. We grew in the middle-size
markets of Austria and Scandinavia, where we are expanding our opportunities as
a result of more aggressive recruiting of sales consultants. We made nice
progress in the emerging Russian market as well, where we approached
profitability. Late in 2000, we entered Morocco and Egypt, two countries with
expanding middle classes. Based on our success in similar countries in the
region, we are optimistic about the future of these new Tupperware markets.
We continue to strengthen our competitive position each year in Europe and are
encouraged about our longer-term prospects for modest sales growth in this
region with a strong, mid-20-percent return on sales.
Regional Review
<PAGE>
Tupperware Corporation 9
Regional Review - Asia Pacific
Strong gains were achieved in 2000 in Asia Pacific, with local currency
operating profit up 35 percent over 1999 on a small gain in sales, the result of
aggressive recruiting in recent years, a steady flow of new product
introductions and the one-time benefit of a use-tax abatement incentive. Asia
Pacific's performance was led by continued improvement in Japan, the second
largest economy in the world, where we grew our sales force through record
recruiting, and where we have profited over the past two years from the
increased efficiency of our restructured manufacturing operation and cost
control. Our price points are higher in Japan than elsewhere in the region, and
we have been successful with a number of new high-end products specifically
designed for this market. We achieved these favorable results in spite of a
Japanese economy that remains extremely sluggish.
A number of other markets in the area also performed well in 2000, including
Korea, where we finished the year with another improvement in the size of the
sales force. The economy of the Philippines, the other of the three large
markets in the region, suffered throughout the year from political upheaval and
the resulting social unrest.
The key emerging markets of Indonesia, India and China, which account for almost
half of the world's population, finished the year with rising sales. Although
all three markets are currently relatively small for Tupperware, they are
growing nicely and we see great potential for the future. Indonesia improved its
profitability, and India and China both became profitable for the first time in
2000.
Regional Review
<PAGE>
10 Tupperware Corporation
Regional Review - Latin America
Latin America showed substantial improvement in 2000, reflecting continuing
strong growth in our lead market in the region, Mexico, and the positive impact
on sales of a new distribution model in Brazil. By improving distributor
profitability through centralized order processing and distribution, we have
succeeded in re-focusing distributors' efforts on the key sales drivers of
recruiting, training and motivating their sales forces.
As a result of these factors, the region achieved a double-digit increase in
local currency sales, before the positive impact of the new distribution model,
and a profit increase over 1999 of more than 20 percent, excluding
re-engineering costs. In January 2001, we announced our decision to move to an
importer-distributor model for all of the region's markets, except for Mexico
and Brazil. We expect this change to significantly improve the profitability in
these smaller markets by removing company overhead and stimulating the
entrepreneurial spirit of the importer distributors.
Regional Review - United States
Nowhere has the revitalization of Tupperware taken hold more strongly than in
our home market, which benefited from a larger, more productive sales force, and
the successful expansion of distribution channels as a result of our integrated
direct access strategy. We achieved a double-digit sales increase and a tripling
of operating profit, along with an outstanding 10-percent year-end 2000 sales
force size advantage. This was the first such year-over-year sales force
increase since 1995. The increase was achieved in the midst of the worst
recruiting environment in a generation, as a result of an extremely strong
economy and a low unemployment rate.
Another initiative under way is a new business model for our sales force. This
model includes an Internet ordering capability for our sales force's party plan
orders. We believe using this capability will reduce costs for the sales force
and us, and will free up the sales force's time, allowing them to devote more
effort to productive selling activities.
Regional Review
<PAGE>
Integrated Direct Access... TUPPERWARE - ANYWHERE, ANYTIME.
<PAGE>
[CIRCLE GRAPHIC CONTAINING:]
INTERNET
SHOWCASES
CORE DIRECT SELLING
TELEVISION
SHOPPING
ALLIANCES
<PAGE>
Tupperware Corporation 13
Showcases, the Internet and Home Shopping Network television blossomed in the
past year as new Tupperware sales channels, making our products accessible to a
vastly larger audience and helping build our core party plan business.
Integrated direct access has been one of the most successful new initiatives in
Tupperware's history. It has launched dramatic new income opportunities for our
sales force and brought new and former participants into the party plan
business, and helped us to retain people in our sales force by creating new
party dating and consultant recruitment opportunities.
Designing new sales channels that do not weaken traditional channels has been a
challenge for many companies. Tupperware, however, has met that challenge with
great success. We have developed a multiple channel network of showcase,
e-commerce and television that actually enhances our existing sales force rather
than competes with it.
The use of multiple channels not only allows us to reach new customers and
accelerate our revenue growth, but also to strengthen and lift the performance
of our direct sales force, which participates financially in sales from every
channel.
Integrated Direct Access
<PAGE>
14 Tupperware Corporation
The showcase program began on a test basis in 1998. Its overwhelmingly positive
reception by consumers and our distributors led us to expand the program during
the holiday season to more than 250 malls across the United States in 1999, and
more than 450 malls in 2000. Over 90 percent of our U.S. distributors
participated in showcases in 2000.
Showcases were opened as well in more than a dozen countries in Europe, Latin
America and Asia Pacific in 2000, based on the U.S. model. Our goal over the
next 3 to 5 years is to open, along with our sales force partners, 1,000
year-round showcases in the United States, and year-round and seasonal showcases
in as many of our international markets as local laws and culture permit.
The Internet is our second major new integrated direct access channel. We
launched our e-commerce program in the United States in August 1999, with a
complete redesign of our web site, Tupperware.com, and our first offering of
products for sale via the Internet. The content of the site was designed to
support our direct sales force and promote our brand, which it has done very
effectively.
Integrated Direct Access
<PAGE>
Tupperware Corporation 15
We began with an immediate advantage enjoyed by very few e-commerce companies.
We already had in place a sophisticated and efficient order fulfillment system.
This system, developed to serve our direct sales force, was easily modified to
fulfill Internet orders and continues to function very efficiently, delivering
most orders in 2 to 3 days from receipt.
We have been successful in driving traffic to our web site, and last year
enhanced its attractiveness by offering personalized web sites to all of our
U.S. sales force. This initiative creates sales force sites that sit on top of,
and act as a gateway to, Tupperware.com. These sites allow for personalization
and the ability of customers to buy Tupperware(R) products through the web for
the credit of their sales consultant, further harmonizing our Internet strategy
with the interests of our sales force partners. In fact, the sales force is now
earning commissions for orders placed through Tupperware.com as well.
Integrated Direct Access
<PAGE>
16 Tupperware Corporation
We have created additional incentives for our sales people and their customers
to embrace this initiative. More than 10,000 members of the U.S. sales force now
have their own web sites. We look forward to an increasing percentage of our
80,000-plus U.S. sales people operating their Tupperware-sponsored personal
sites.
Finally, we expanded our Home Shopping Network commitment to 12 one-hour shows
in 2000, double the number in 1999. Our own sales consultants demonstrate
Tupperware(R) products on these shows, providing valuable exposure to our brand,
our products, the party plan and the Tupperware consultant earnings opportunity.
Integrated Direct Access
<PAGE>
Expanding the Marketplace...OUR 40-YEAR GLOBAL TRADITION.
<PAGE>
[GRAPHIC WITH NAMES OF COUNTRIES]
<PAGE>
Tupperware Corporation 19
Consumers can purchase Tupperware(R) products in more than 100 countries
representing every type of economy in the world. We continue to enter new
markets and succeed across a broad cultural spectrum. Our opportunities for
expansion are unlimited.
We have sold Tupperware(R) products in international markets for more than 40
years. Some Tupperware(R) products are tailored for consumers in highly
developed countries, others for consumers in emerging economies and still others
for consumers worldwide. For example, high price-point air and water purifiers
succeed in Japan, as does low price-point melamine tableware in the Philippines.
Our Rock `N Serve(TM) microwave products are popular in all of our geographic
regions, while the OvenWorks(TM) high-end products, which can go from microwave
to conventional oven then to refrigerator and freezer, are enthusiastically
received by consumers in the United States and Europe.
In the latter part of the 1990s and in 2000, we developed a presence in a number
of new markets throughout the world, including China, the Czech Republic, India,
Indonesia, Poland, the Slovak Republic, Slovenia, Turkey and Russia.
Expanding the Marketplace
<PAGE>
20 Tupperware Corporation
We re-entered the market in Mainland China two years ago through a combination
of storefronts and other channels, and are continuing to add sales personnel and
increase sales. China, with its large population, strong family tradition and
relatively undeveloped retail infrastructure, is a country with obvious
long-term potential for Tupperware.
In India, the country with the second largest population in the world, we
reached profitability in 2000, only four years after our market entry. We opened
a manufacturing plant there in the spring of 2000 to meet our growing needs in
that important country.
Our solid position throughout the world is built on the strength of our more
than 1 million sales consultants and the global strength of our brands. In
addition, quality products that meet the different cultural and lifestyle needs
of consumers throughout the world support our growing market power. Our
international strength is built also on the basic social need of all people to
interact with and learn from their fellow human beings, a key underpinning of
the entire direct selling industry.
Expanding the Marketplace
<PAGE>
Growing the Product Line...CREATING FOR CONSUMER NEEDS.
<PAGE>
[CIRCLE GRAPHIC CONTAINING:]
HOME
ORGANIZATION
BEAUTY
KNIVES &
CUTLERY
COOKWARE
AIR/WATER
PURIFICATION
TABLE SERVICE
AND
DECORATION
NEW CHILDREN'S
LINES
CORE
FOOD STORAGE,
PREPARATION
AND SERVING
<PAGE>
Tupperware Corporation 23
We added the exciting new product categories of premium beauty and skin care
last year through the acquisition of BeautiControl, opening new opportunities
for leveraging Tupperware's direct selling channel and international market
strength. We also introduced many new Tupperware products in 2000, again meeting
the goal of obtaining 20 percent of sales from new products introduced in the
past two years.
Our new product strategy is first of all to support and extend our core product
lines of food storage, food preparation and food serving, and then to expand
into new categories that complement these core product lines. Examples of such
new categories opened by Tupperware in recent years include cookware, home
organization and environment, candles and accessories, bath organization,
cutlery and knives, and table service and decoration. Expansion into these
categories has broadened our growth horizons substantially, none more so than
Beauticontrol, which brings us consumable cosmetics and skin care lines.
Growing the Product Line
<PAGE>
Tupperware Corporation 24
Beauticontrol's line of high quality skin care products and cosmetics are
formulated for different skin colors and types and matched to a client's needs
with the assistance of Beauticontrol's exclusive "Skin Sensors" analysis system.
This system enables Beauticontrol's sales consultants to recommend a customized
skin care regimen for each client.
People have become more aware of the need to treat sun-damaged skin, protect
their skin from environmental elements and keep their skin clean and free of
harmful toxins. Beauticontrol's research institute has developed a number of
advanced products to address these issues of beauty and health.
One of Beauticontrol's best-selling skin care products is the Regeneration(R)
Gold Line. This treatment utilizes alpha hydroxy acids and tissue stimulation
compounds to help firm, tighten and smooth skin and minimize lines and wrinkles.
Beauticontrol holds one of only two patents in the world on an alpha hydroxy
skin care product.
Growing the Product Line
<PAGE>
Tupperware Corporation 25
We expanded our core lines as well in 2000, including product extensions for the
revolutionary Fridgesmart(TM) food storage systems that double the life of fresh
produce in a refrigerator. The Fridgesmart(TM) line, developed in conjunction
with the University of Florida, is now being sold very successfully throughout
the world.
Solving consumer problems is an important part of Tupperware's value, and the
drip-less straw seal introduced in 2000 is a prime example. This seal enables
children and adults to transport beverages from one location to another without
spills. Several new, beautiful and cleverly designed food preparation products
help with kitchen tasks, including our new egg slicer, horizontal peeler, whisk,
zester, silicone spatulas and "On The Dot" timer. All incorporate exceptional
Tupperware quality throughout. The peeler, for example, is incredibly sharp and
fitted to the hand for perfect control.
Growing the Product Line
<PAGE>
26 Tupperware Corporation
A wide range of the storage, preparation, microwave, cooking, serving and home
decoration products that were introduced during the year are shown in the
following product showcase. One relatively new and very successful category
among this group is our children's line, which in 2000 added a "Mini
Expressions" toy set, Tupperware baby bottle, divided feeding bowl, toddler's
meal set, "Winnie the Pooh"(*) canteen and "Toy Story 2"(*) line of products. As
the latter two examples illustrate, we have been successful in licensing names
and images that are popular with children for use in our products, including
characters licensed from the Walt Disney Company, as well as Pokemon(R),
Barbie(R) and Barney(R) characters.
Growing the Product Line
<PAGE>
[GRAPHIC SHOWING STRIPED BARS]
<PAGE>
Product Showcase
A Tupperware party started every two seconds somewhere in the world in 2000. Our
parties were attended by 100 million people, who were attracted by the color,
quality of materials, design and utility of our products. Whether they came to
us through parties, showcases, the Internet or television, consumers were
treated to a dazzling array of new Tupperware and BeautiControl products in
2000, some of which are shown on the following pages.
<PAGE>
[PICTURE OF IMPRESSIONS PITCHER]
TUPPERWARE(R) IMPRESSIONS PITCHER
<PAGE>
[PICTURE OF FRIDGESMART COLLECTION]
<PAGE>
[PICTURE OF FRIDGESMART COLLECTION]
FRIDGESMART(TM) COLLECTION
<PAGE>
[GRAPHIC OF LEGACY RICE SERVER]
<PAGE>
[PICTURE OF LEGACY RICE SERVER]
LEGACY RICE SERVER
<PAGE>
[PICTURE OF CARVING FORK AND CHEESE KNIFE]
<PAGE>
[PICTURE OF CARVING FORK AND CHEESE KNIFE]
E-SERIES(TM) CARVING FORK AND CHEESE KNIFE
<PAGE>
[PICTURE OF SPICE LINE]
<PAGE>
[PICTURE OF SPICE LINE]
PREMIUM SPICE LINE
<PAGE>
[PICTURE OF BAKING ESSENTIALS LINE]
<PAGE>
[PICTURE OF BAKING ESSENTIALS LINE]
BAKING ESSENTIALS LINE
<PAGE>
[PICTURE OF CAKE SERVER]
<PAGE>
[PICTURE OF CAKE SERVER]
TUPPERWARE(R) EXPRESSIONS CAKE SERVER
<PAGE>
[PICTURE OF ICING BALL]
ICING BALL
<PAGE>
[PICTURE OF KEEP 'N HEAT CONTAINER]
KEEP `N HEAT(TM) CONTAINER
<PAGE>
[PICTURE OF SALT & PEPPER SHAKER]
<PAGE>
[PICTURE OF SALT & PEPPER SHAKER]
TUPPERWARE(R) EXPRESSIONS SALT AND PEPPER SHAKERS
<PAGE>
[PICTURE OF PRESSURE COOKER]
PERFECT KITCHEN(TM) PRESSURE COOKER
<PAGE>
[PICTURE OF TIMER]
ON THE DOT TIMER
<PAGE>
[PICTURE OF LOTION]
SKINLOGICS(R) CLEANSING LOTION
<PAGE>
[PICTURE OF GOLD EYE REPAIR]
REGENERATION(R) GOLD EYE REPAIR
<PAGE>
[PICTURE OF NAILOGICS(R) NAIL COLOR]
<PAGE>
[PICTURE OF NAILOGICS(R) NAIL COLOR]
NAILOGICS(R) NAIL COLOR
<PAGE>
[PICTURE OF FREEZESMART CONTAINER]
<PAGE>
[PICTURE OF FREEZESMART CONTAINER]
FREEZESMART(TM) WITH DATING DIAL
<PAGE>
[PICTURE OF REFRIGERATOR CONTAINER]
<PAGE>
[PICTURE OF REFRIGERATOR CONTAINER]
FORGET-ME-NOT(TM) REFRIGERATOR CONTAINERS
<PAGE>
[PICTURE OF SPIN 'N SAVE]
SPIN `N SAVE(TM) SALAD SPINNER
<PAGE>
Tupperware Corporation 57
FINANCIAL TABLE OF CONTENTS
<TABLE>
<S> <C>
SELECTED FINANCIAL DATA 58
MANAGEMENT'S DISCUSSION AND ANALYSIS 62
CONSOLIDATED STATEMENTS OF INCOME 76
CONSOLIDATED BALANCE SHEETS 77
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 78
CONSOLIDATED STATEMENTS OF CASH FLOWS 80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 81
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 101
REPORT OF MANAGEMENT 102
OFFICERS AND BOARD OF DIRECTORS 103
CORPORATE INFORMATION 104
</TABLE>
<PAGE>
58 Tupperware Corporation
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2000 1999
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING RESULTS
Net sales: (a)
Europe $ 424.1 $ 489.1
Asia Pacific 242.0 242.3
Latin America 193.0 154.2
United States 201.8 178.2
BeautiControl (b) 12.2 --
- -----------------------------------------------------------------------------------------------------
Total net sales $ 1,073.1 $ 1,063.8
=====================================================================================================
Operating profit (loss):
Europe $ 94.1 $ 110.7
Asia Pacific 44.8 35.0
Latin America 8.0 (c) 12.0
United States 15.6 4.7
BeautiControl (b) 0.1 --
- -----------------------------------------------------------------------------------------------------
Total operating profit (loss) 162.6 162.4
- -----------------------------------------------------------------------------------------------------
Unallocated expenses (27.9)(c) (23.1)(c)
Costs associated with becoming an independent company -- --
Re-engineering and impairment charge (12.5)(c) (15.1)(c)
Interest (expense) income, net (21.1) (20.9)
- -----------------------------------------------------------------------------------------------------
Income (loss) before income taxes and cumulative effect of
accounting changes 101.1 (c) 103.3 (c)
- -----------------------------------------------------------------------------------------------------
Provision for income taxes 26.2 24.3
- -----------------------------------------------------------------------------------------------------
Income (loss) before cumulative effect of accounting changes $ 74.9 (c) $ 79.0 (c)
=====================================================================================================
Net income (pre-1997 pro forma) $ 74.9 (c) $ 79.0 (c)
=====================================================================================================
Earnings per common share (pre-1997 pro forma):(f)
Basic $ 1.30 (c) $ 1.37 (c)
=====================================================================================================
Diluted $ 1.29 (c) $ 1.37 (c)
=====================================================================================================
</TABLE>
a. In October 2000, the Emerging Issues Task Force issued EITF 00-10,
"Accounting for Shipping and Handling Revenues and Costs", which requires
fees billed to customers associated with shipping and handling to be
classified as revenue. Accordingly, Tupperware Corporation (Tupperware, the
Company) has reclassified the revenue related to shipping and handling fees
billed to customers from delivery expense to net sales for all periods
presented.
b. In October 2000, the Company purchased all of the outstanding shares of
BeautiControl, Inc. (BeautiControl), and its results of operations have
been included since the date of acquisition.
c. In 1999, the Company announced a three-year re-engineering program. The
re-engineering and impairment charge line provides for severance and other
exit costs. In addition, unallocated expenses include $7.9 million and $1.0
million for internal and external consulting costs incurred in connection
with the program in 2000 and 1999, respectively. Also in 2000, $6.3 million
was recorded as a reduction to Latin America's operating profit related to
the write-down of inventory and receivables associated with adopting an
importing distributor model for certain countries. Total after-tax impact
of these costs was $24.2 million and $12.3 million in 2000 and 1999,
respectively. See Note 3 to the financial statements.
<PAGE>
Tupperware Corporation 59
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 518.7 $ 546.6 $ 581.7 $ 595.1 $ 540.1 $ 505.1 $ 490.7
211.5 279.0 338.0 355.1 329.3 286.9 268.3
186.8 247.2 268.5 200.6 176.4 154.4 138.7
186.9 176.7 200.5 227.0 247.5 245.8 225.9
-- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------
$1,103.9 $1,249.5 $1,388.7 $1,377.8 $1,293.3 $1,192.2 $1,123.6
=========================================================================================================
$ 123.9 $ 144.6 $ 153.0 $ 156.8 $ 125.0 $ 110.3 $ 92.4
20.2 37.2 61.0 59.4 46.3 40.3 32.9
(16.4) (5.7)(d) 43.3 19.4 15.7 15.7 5.9
4.0 (29.5)(d) 10.4 10.3 16.0 12.5 (139.6)
-- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------
131.7 146.6 267.7 245.9 203.0 178.8 (8.4)(e)
- ---------------------------------------------------------------------------------------------------------
(17.5) (18.0)(d) (16.1) (22.9) (12.0) (17.8) (24.1)
-- -- (9.1) -- -- -- --
-- -- -- -- -- -- --
(22.7) (17.8) (8.0) 1.9 0.2 (12.6) (9.3)
- ---------------------------------------------------------------------------------------------------------
91.5 110.8 (d) 234.5 224.9 191.2 148.4 (41.8)(e)
22.4 28.8 59.8 53.5 42.0 30.5 1.9
- ---------------------------------------------------------------------------------------------------------
$ 69.1 $ 82.0 (d) $ 174.7 $ 171.4 $ 149.2 $ 117.9 $ (43.7)(e)
=========================================================================================================
$ 69.1 $ 82.0 (d) $ 170.4 $ 161.1
========================================================
$ 1.19 $ 1.34 (d) $ 2.75 $ 2.60
========================================================
$ 1.18 $ 1.32 (d) $ 2.71 $ 2.57
========================================================
</TABLE>
d. Includes a $42.4 million pretax charge ($31.3 million after tax): $22.2
million in Latin America, primarily for bad debts in Brazil; $16.0 million
in the United States, primarily for inventory obsolescence; and $4.2
million in unallocated expenses, primarily for corporate downsizing.
e. Includes a $136.7 million pretax charge ($111.4 million after tax)
primarily related to consolidation of manufacturing capacity and
restructuring the U.S. distribution system.
f. In May 1996, the Company became an independent company through the
distribution by Premark International, Inc. (Premark) to its shareholders
of the equity of the Company (the Distribution). The Distribution was
effected through a 1-for-1 distribution of stock. Pro forma net income is
based on historical net income adjusted for pro forma interest expense
related to the increase in borrowings incurred in connection with the
Distribution. Information is not applicable prior to 1995.
<PAGE>
60 Tupperware Corporation
SELECTED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2000 1999
- --------------------------------------------------------------------------------------------
<S> <C> <C>
PROFITABILITY RATIOS
Operating profit as a percent of sales:
Europe 22.2% 22.6%
Asia Pacific 18.5 14.4
Latin America 4.1 7.8
United States 7.8 2.6
BeautiControl (b) 1.1 --
Total operating profit 15.2 15.3
Return on average equity (g,h) 52.6 60.5
Return on average invested capital (g,h) 17.8 19.5
FINANCIAL CONDITION
Working capital $ 96.6 $ 61.3
Property, plant and equipment, net 233.1 242.9
Total assets 849.4 796.1
Short-term borrowings and current portion of long-term debt 26.9 43.9
Long-term debt 358.1 248.5
Shareholders' equity 123.9 145.3
Current ratio 1.35 1.20
Long-term debt-to-equity (g) 289.0% 171.0%
Total debt-to-capital (g) 75.6% 66.8%
OTHER DATA
Net cash provided by operating activities $ 86.1 $ 113.0
Capital expenditures 46.3 40.9
Depreciation 52.1 55.6
COMMON STOCK DATA (g)
Dividends declared per share $ 0.88 $ 0.88
Dividend payout ratio (j) 68.2% 64.2%
Average common shares outstanding (thousands):
Basic 57,692 57,519
Diluted 57,974 57,870
Year-end book value per share $ 2.14 $ 2.52
Year-end price/earnings ratio 15.8 12.3
Year-end market/book ratio 9.5 6.7
Year-end shareholders (thousands) 12.7 14.1
</TABLE>
g. Due to the change in the Company's capital structure in connection with the
Distribution, this information is not applicable or not meaningful for the
omitted periods.
h. Returns on average equity and invested capital are calculated using net
income (pre-1997 pro forma net income) and the monthly balances of equity
and invested capital beginning at the date of the Distribution. Invested
capital equals equity plus debt.
i. Includes $105.0 million of the $150.0 million of 8.375 percent notes that
were called at par on February 1, 1994.
<PAGE>
Tupperware Corporation 61
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
23.9% 26.5% 26.3% 26.3% 23.1% 21.8% 18.8%
9.5 13.3 18.0 16.7 14.1 14.1 12.3
nm nm 16.1 9.7 8.9 10.2 4.3
2.1 nm 5.2 4.5 6.5 5.1 nm
-- -- -- -- -- -- --
11.9 11.7 19.3 17.8 15.7 15.0 nm
47.5 30.5 65.0
17.6 17.1 32.6
$ 95.5 $ 103.3 $ 156.2 $ 88.1 $ 72.9 $ (49.6) $ (11.3)
271.0 293.0 331.0 317.7 310.2 277.2 250.8
823.4 847.2 978.5 944.0 882.6 785.1 661.1
18.7 -- 25.3 83.8 58.3 139.9(i) 19.3
300.1 236.7 215.3 0.4 0.5 45.6 153.3
135.8 214.2 305.5 415.6 395.1 163.3 68.2
1.33 1.34 1.43 1.20 1.18 0.90 0.97
221.0% 110.5% 70.5%
70.1% 52.5% 44.1%
$ 118.1 $ 161.8 $ 150.5 $ 179.2 $ 142.7 $ 150.3 $ 152.0
46.2 67.5 96.0 69.3 72.9 85.6 80.0
64.0 66.1 65.3 61.3 55.7 44.7 50.1
$ 0.88 $ 0.88 $ 0.44(j)
74.6% 66.7% 32.5%
58,235 61,334 62,016
58,736 61,827 62,806
$ 2.36 $ 3.51 $ 4.90
13.6 20.7 20.1
6.8 7.8 11.1
15.6 20.5 21.6
</TABLE>
j. The Company initiated regular quarterly dividends of $0.22 per share
beginning in the third quarter of 1996. The dividend payout ratio is
dividends declared per share divided by diluted earnings per share. 1996
assumes four quarterly dividend declarations.
nm - Not meaningful.
<PAGE>
62 Tupperware Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the results of operations for 2000 compared
with 1999 and 1999 compared with 1998, and changes in financial condition during
2000. The Company's fiscal year ends on the last Saturday of December. Fiscal
2000 consisted of 53 weeks compared with 52 weeks in 1999. This information
should be read in conjunction with the consolidated financial information
provided on pages 76 to 102 of this Annual Report.
In October 2000, the Emerging Issues Task Force issued EITF 00-10, "Accounting
for Shipping and Handling Revenues and Costs", which requires fees billed to
customers associated with shipping and handling to be classified as revenue.
Accordingly, the Company has reclassified the revenue related to the shipping
and handling fees billed to customers from delivery expense to net sales for all
periods presented and restated sales and percent of sales information where
appropriate in the following tables and discussion.
In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements", which provided guidance related to revenue recognition based on
interpretations and practices followed by the SEC. SAB No. 101 was effective for
the Company's fourth quarter 2000. The Company is in compliance with the
provisions of SAB No. 101, and adoption of the provisions did not have an impact
on the consolidated financial statements.
RESULTS OF OPERATIONS
NET SALES AND NET INCOME. Net sales in 2000 were $1,073.1 million, an increase
of $9.3 million, or 1 percent, from $1,063.8 million in 1999. Excluding a $72.8
million negative impact of foreign exchange, net sales increased 8 percent over
1999. In local currency, all areas reported improved sales. Included in 2000 are
the results of BeautiControl, Inc. (BeautiControl), since the acquisition in
October 2000. Also impacting sales is a modification in the distribution model
for three countries in Latin America. In these countries, sales are now made
directly to the sales force with distributors compensated through commission
payments. This model results in sales being recorded at an amount that includes
the margin that previously was realized by the distributors, although there is
no impact on operating profit. Excluding the impact of this new model, the
BeautiControl sales and the impact of foreign exchange, net sales increased 5
percent over 1999.
In 2000, net income decreased 5 percent to $74.9 million from $79.0 million in
1999. Included in the 2000 results were $26.7 million ($24.2 million after tax)
of re-engineering and impairment costs related to the three-year program
announced in 1999. The re-engineering and impairment charge of $12.5 million, in
addition to $6.3 million of operating expense, provides for severance and other
exit costs primarily related to the decision to begin operating the Latin
America businesses, other than Mexico and Brazil, under an importing distributor
model. This change is expected to improve the Company and distributor value
chains while retaining a structure for growth. In addition, $7.9 million was
incurred for internal and external consulting costs to design and execute the
re-engineering actions. Foreign exchange had a $14.2 million negative impact on
the comparison. Excluding re-engineering and impairment costs in both years and
the impact of foreign exchange, net income increased 30 percent, with
improvements coming from all areas.
Net sales in 1999 of $1,063.8 million were 4 percent lower than 1998 net sales,
reflecting decreases from operations in all areas except Asia Pacific, which had
a significant improvement. Excluding the $19.7 million negative foreign exchange
impact, 1999 sales decreased 2 percent.
In 1999, net income increased 14 percent to $79.0 million from $69.1 million in
1998. Included in the 1999 results were $16.1 million ($12.3 million after tax)
of re-engineering costs. The re-engineering
<PAGE>
Tupperware Corporation 63
and impairment charge of $15.1 million provided 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 additional $1.0 million expense
incurred was for internal and external consulting costs to design and execute
the re-engineering actions. Excluding the re-engineering costs, net income
increased to $91.3 million, or 32 percent. All areas except Europe reported
improved earnings. The decline in Europe was primarily due to higher expenses
related to addressing a change in German social security legislation and higher
promotion expense incurred to stimulate sales growth. Foreign exchange did not
have an impact on net income.
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. Re-engineering costs incurred to
date total $42.9 million. The annual benefit of the actions when they are fully
implemented is expected to be approximately $40 million to $50 million. Total
one-time costs to be incurred through 2001 in implementing the program are
projected to be between $50 million and $60 million, mainly for severance, plant
closure costs and other costs.
In 2000, unallocated corporate expenses increased to $27.9 million from $23.1
million in 1999. The increase was due to the inclusion of more internal and
external consulting costs for the re-engineering program. In 1999,unallocated
corporate expenses increased to $23.1 million from $17.5 million in 1998. The
increase was primarily due to accrual for bonuses, which were not incurred in
1998, higher expenses for integrated direct access programs and the inclusion of
the costs for the re-engineering program.
In 2000, 80 percent of sales and 90 percent of the Company's operating profit
was generated by international operations. In 1999, 83 percent of sales and 97
percent of the operating profit was generated by international operations.
COSTS AND EXPENSES. The cost of products sold in relation to sales was 33.3
percent, 34.3 percent and 36.8 percent, in 2000, 1999 and 1998, respectively.
All areas reported improved margins in 2000 primarily due to the sale of a
greater proportion of high-margin products and lower manufacturing costs. The
lower manufacturing costs were a result of the savings generated from the
re-engineering efforts, and were partially offset by higher raw material prices
and a weaker euro. All areas reported improved margins in 1999, also primarily
due to the sale of a greater proportion of high-margin products, and lower
manufacturing costs. Europe's cost of products sold improved only slightly due
to lower sales volumes in Germany. Delivery, sales and administrative expense as
a percentage of sales was 53.9 percent, 52.3 percent and 52.8 percent, in 2000,
1999 and 1998, respectively. The increase in cost in 2000 was due to higher
operating expenses from the implementation of the new distribution center model
in Latin America, as well as higher internal and external consulting costs for
re-engineering. The decrease in the 1999 expenses compared with 1998 as a
percent of sales was due to lower operating expenses partially offset by higher
promotion expense.
TAX RATE. The effective tax rate for 2000, 1999 and 1998, was 25.9 percent, 23.5
percent and 24.5 percent, respectively. The 2000 rate increase reflects the
impact from the re-engineering and impairment costs. Excluding the impact of
re-engineering and impairment costs for which no tax benefit was recognized, the
effective tax rate was 22.5 percent. The 2000 and 1999 effective rate decreases
were the result of the benefit of much lower foreign effective rates only
partially offset in 1999 by the absence of a reduction in a valuation allowance
against federal deferred tax assets.
NET INTEREST. The Company had $21.1 million of net interest expense in 2000,
compared with $20.9 million in 1999 and $22.7 million in 1998. The 2000 increase
resulted from higher borrowing levels due to the acquisition of BeautiControl
and the repurchase of common shares in the fourth quarter. The 2000 increase was
partially offset by lower interest rates from carrying a higher proportion of
debt offshore, and also from shifting the offshore debt to lower cost countries
with lower interest rates, which also accounted for the decrease in 1999
compared with 1998.
<PAGE>
64 Tupperware Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
REGIONAL RESULTS 2000 VS. 1999
<TABLE>
<CAPTION>
(Dollars in millions) 2000 1999
- ----------------------------------------------------------------------
<S> <C> <C>
Net sales:
Europe $ 424.1 $ 489.1
Asia Pacific 242.0 242.3
Latin America 193.0 154.2
United States 201.8 178.2
BeautiControl 12.2 --
- ----------------------------------------------------------------------
Total net sales $1,073.1 $1,063.8
======================================================================
Operating profit:
Europe $ 94.1 $ 110.7
Asia Pacific 44.8 35.0
Latin America 8.0(b) 12.0
United States 15.6 4.7
BeautiControl 0.1 --
- ----------------------------------------------------------------------
Total operating profit $ 162.6 $ 162.4
======================================================================
</TABLE>
a. 2000 actual compared with 1999 translated at 2000 exchange rates.
b. Includes $6.3 million of costs associated with the write-down of inventory
and receivables related to adopting an importing distributor model for
certain countries.
nm - Not meaningful.
na - Not applicable.
<PAGE>
Tupperware Corporation 65
<TABLE>
<CAPTION>
INCREASE NEGATIVE
(DECREASE) RESTATED(A) FOREIGN PERCENT OF TOTAL
- ---------------------- INCREASE EXCHANGE ------------------
DOLLAR PERCENT (DECREASE) IMPACT 2000 1999
- -----------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$(65.0) (13)% 1% $(68.2) 39% 46%
(0.3) -- 1 (2.9) 23 23
38.8 25 27 (1.7) 18 14
23.6 13 13 na 19 17
12.2 na na na 1 na
- -----------------------------------------------------------------------------
$ 9.3 1% 8% $(72.8) 100% 100%
=============================================================================
$(16.6) (15)% 1% $(17.3) 58% 68%
9.8 28 35 (1.7) 27 22
(4.0) (33) (32) (0.2) 5 7
10.9 nm nm na 10 3
0.1 na na na -- na
- -----------------------------------------------------------------------------
$ 0.2 --% 14% $(19.2) 100% 100%
=============================================================================
</TABLE>
<PAGE>
66 Tupperware Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
EUROPE
Excluding the impact of weaker currencies, the sales increase for 2000 was due
to increases in Germany and Scandinavia, driven by larger sales forces and
improved productivity. Also contributing to the sales increase was growth in the
emerging Russian market. These increases were partially offset by declines in
Switzerland, Belgium and Greece due to smaller active sales forces. In 1999,
Germany, the region's largest market, experienced a decline in sales due to the
impact of legislation that imposes a tax on certain part-time workers. The
Company held meetings in 1999 with the German sales force to explain the impact
of the new legislation, as well as to offer financial assistance in addressing
this issue to members of the sales force who remain with the Company for a
specified period. As a result of these actions, and effective recruiting
programs, Germany's sales were $184.8 million in 2000, an increase of 3 percent
in local currency. In 1999, restated for the negative foreign exchange impact of
$30.3 million, sales were $178.9 million. The Company does not expect the
legislation to impact Germany's 2001 results. The German market also accounts
for a substantial portion of Europe's operating profit. In local currency,
operating profit improved slightly over 1999 due to improvements in Germany and
Scandinavia, partially offset by declines in Switzerland, Spain and the United
Kingdom. The increase was the result of the higher sales levels, as well as a
slightly higher gross margin percentage, partially offset by higher operating
expenses.
ASIA PACIFIC
Japan was the main contributor to the sales increase in 2000, in addition to
improvements in Australia, Thailand and the new market of India. These increases
were driven by promotional programs, as well as larger, more productive sales
forces. Offsetting these improvements was a decline in the Philippines, due to
the economic and political situation that continued throughout 2000. The
significant improvement in operating profit was driven by higher gross margins,
primarily due to an increase in Japan, as well as the focus on cost reductions.
Also contributing to the area's increase was a benefit of a use tax incentive of
$4.7 million, which resulted from a change in legal structure. A weaker
Philippine peso and Australian dollar were primarily responsible for the
negative impact of foreign exchange on sales and operating profit comparisons.
<PAGE>
Tupperware Corporation 67
LATIN AMERICA
Beginning in the first quarter of 2000, the distribution model for Brazil,
Argentina and Venezuela was modified. In these markets, sales are now made
directly to the sales force with distributors compensated through commission
payments. Although there is no impact on operating profit, this model results in
sales being recorded at an amount that includes the margin that previously was
realized by the distributors. This change increases distributor profitability
and enables them to focus less on administrative tasks and more on recruiting,
training and motivating their sales forces. Excluding the impact of the change
in the distribution center model and foreign exchange, net sales increased 14
percent due to increases in Mexico and Brazil. Mexico's increase was due to
strong promotional programs and higher sales force productivity. In Brazil, the
number of distributors has significantly increased, leading to a larger sales
force and increased sales. The impact of foreign exchange on the sales
comparison reflected the weakening of Central American currencies.
In the fourth quarter of 2000, the Company decided to begin operating the Latin
America businesses, other than Mexico and Brazil, under an importing distributor
model. This change is expected to improve the Company and distributor value
chains while retaining a structure for growth. The decrease in operating profit
in 2000 is due to a $6.3 million charge for the related write-down of inventory
and accounts receivable, operating expenses in Brazil incurred to implement the
new distribution center model and a decline in Argentina due to lower sales
volumes and higher costs.
UNITED STATES
The 13-percent sales increase for the year was attributable to a more productive
sales force and the integrated direct access (IDA) initiatives, which are a
convergence of the core party plan business with showcases, the Internet and
television sales. The IDA initiatives directly contributed approximately 35
percent of the sales increase, and represented 8 percent of total sales. Despite
difficulty in recruiting and motivating consultants in a full employment
environment, the total sales force grew 10 percent over 1999, reflecting the
success of recruiting initiatives and benefits of the IDA channels. Operating
profit more than tripled in 2000 primarily driven by the increase in sales
volume and the related increase in gross profits. The gross margin percentage
increased slightly over 1999, and operating expenses decreased as a percent of
sales.
BEAUTICONTROL
In October 2000, the Company completed the acquisition of BeautiControl, a party
plan direct seller that markets premium cosmetics and skin care products through
a highly trained independent sales force. On a pro forma basis, comparing all of
October through December 2000 with the same 1999 period, sales were 10 percent
higher and profit was up substantially. Subsequent to the acquisition, the
Company announced the closure of BeautiControl's Taiwan and Hong Kong
subsidiaries and discontinued its Eventus nutritional supplement product line.
In 2001, the Company will focus on enhancing the North American beauty business,
and starting operations in Latin America. By late second quarter of 2001, the
Company expects to launch operations in Mexico.
<PAGE>
68 Tupperware Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
REGIONAL RESULTS 1999 VS. 1998
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------
<S> <C> <C>
Net sales:
Europe $ 489.1 $ 518.7
Asia Pacific 242.3 211.5
Latin America 154.2 186.8
United States 178.2 186.9
- ------------------------------------------------------------------------
Total net sales $1,063.8 $1,103.9
========================================================================
Operating profit (loss):
Europe $ 110.7 $ 123.9
Asia Pacific 35.0 20.2
Latin America 12.0 (16.4)
United States 4.7 4.0
- ------------------------------------------------------------------------
Total operating profit (loss) $ 162.4 $ 131.7
========================================================================
</TABLE>
a. 1999 actual compared with 1998 translated at 1999 exchange rates.
nm - Not meaningful.
na - Not applicable
EUROPE
The sales decline in Europe was primarily due to lower volume in Germany, which
was driven by the impact of new social security tax legislation. The United
Kingdom and Scandinavia also had lower sales volumes. Offsetting these declines
was a significant sales increase in France in addition to improvement in Italy.
The German market had a sequential sales improvement, comparing fourth quarter
1999 with fourth quarter 1998, due primarily to recruiting programs that had a
positive impact on the sales force trends. Germany had sales of $209.2 million
in 1999 compared with $241.2 million in 1998. Foreign exchange had a $9.4
million negative impact on the comparison. The decrease in the area's operating
profit primarily reflected the lower sales level along with higher operating
expense partially offset by a slightly higher gross margin percentage. Operating
expenses in Germany increased in 1999 due to the reimbursement of a portion of
the social security tax, as well as higher promotion expenses incurred to
stimulate sales growth.
ASIA PACIFIC
Asia Pacific led the areas with a 4-percent increase in sales and a 49-percent
increase in operating profit, excluding the favorable impact of exchange rates.
The sales increase was primarily due to improvements in Korea, Australia,
Indonesia, the Philippines and India, and was driven by the economic recovery in
Korea in addition to an increase in the total sales force as a result of
successful recruiting programs. Partially offsetting this improvement was a
decline in Japan. Difficulties in the local economy and a less active sales
force contributed to the decline in Japan, although there was improvement in the
fourth quarter. The improvement in area's operating profit was due to the focus
on cost reduction measures and higher sales volumes, in addition to smaller
losses in China and India. Currencies throughout the region strengthened in
comparison with the U.S. dollar.
<PAGE>
Tupperware Corporation 69
<TABLE>
<CAPTION>
POSITIVE
INCREASE (NEGATIVE)
DECREASE RESTATED(A) FOREIGN PERCENT OF TOTAL
- -------------------- INCREASE EXCHANGE -----------------
DOLLAR PERCENT (DECREASE) IMPACT 1999 1998
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$(29.6) (6)% (1)% $(23.9) 46% 47%
30.8 15 4 20.8 23 19
(32.6) (18) (9) (16.6) 14 17
(8.7) (5) (5) na 17 17
- -------------------------------------------------------------------------
$(40.1) (4)% (2)% $(19.7) 100% 100%
=========================================================================
$(13.2) (11)% (7)% $ (5.2) 68% 94%
14.8 73 49 3.3 22 15
28.4 nm nm 1.7 7 nm
0.7 17 17 na 3 3
- -------------------------------------------------------------------------
$ 30.7 23% 23% $ (0.2) 100% nm
=========================================================================
</TABLE>
LATIN AMERICA
In local currency, Latin American sales decreased 9 percent as declines in
Venezuela, Argentina and Brazil offset improved performance in Mexico. These
declines were due to a smaller sales force resulting mainly from the decision to
significantly reduce the number of distributors in those markets in order to
enhance the opportunity for profitability of those remaining. The improvement in
Mexico was primarily due to price increases. Operating profits improved
significantly to $12.0 million profit versus a $16.4 million operating loss. The
increase was due to cost reductions, a higher gross margin percentage and lower
promotion expenses. The impact of foreign exchange on the sales comparisons
reflected weakness in the Brazilian real and the Mexican peso.
UNITED STATES
The 5-percent sales decrease for the year was primarily the result of a smaller
sales force reflecting the difficulty of recruiting and motivating consultants
in a full employment environment. This factor was somewhat mitigated by further
improvements in sales force productivity and by sales through the integrated
direct access channels. In the fourth quarter, IDA, mainly showcases, accounted
for 7 percent of U.S. sales. Higher operating profit is primarily being driven
by improved gross margin percentages, reflecting a more favorable mix of sales
and a modest price increase. A decrease in operating expenses partially offset
by an increase in promotional spending associated with additional recruiting
programs also contributed to the operating profit increase.
<PAGE>
70 Tupperware Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES. Working capital increased to $96.6 million as
of December 30, 2000 compared with $61.3 million as of December 25, 1999 and
$95.5 million as of December 26, 1998. The current ratio was 1.4 to 1 at the end
of 2000 compared with 1.2 to 1 at the end of 1999 and 1.3 to 1 at the end of
1998. In 2000, working capital increased from a higher level of net inventories
and cash, as well as lower accrued liabilities and current portion of long-term
debt. The increase in inventory has a seasonal component, and reflects higher
sales levels and a modest increase in raw material inventory in light of
increasing prices. The level of short-term borrowings reflects the Company's
classification of 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
remain 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 higher amount was classified
as current at the end of 1999 than at the end of 2000.
In 1999, working capital decreased from a lower level of net inventories
reflecting the Company's reduction initiatives, partially offset by an increase
in accounts receivable, primarily reflecting higher December 1999 sales in
Europe compared with December 1998, and a higher current portion of long-term
debt.
The Company has a $300.0 million unsecured multicurrency credit facility that
expires on August 8, 2002, and $280.0 million of foreign uncommitted lines of
credit. As of December 30, 2000, the Company had $129.9 million available under
the multicurrency credit facility and $204.0 million available under the foreign
lines of credit. The multicurrency credit facility, the foreign uncommitted
lines of credit and cash generated by operating activities are expected to be
adequate to finance working capital needs and capital expenditures. The total
debt-to-capital ratio at the end of 2000 was 75.6 percent compared with 66.8
percent at the end of 1999. The increase in debt primarily reflects the
borrowings in the fourth quarter of 2000 associated with the acquisition of
BeautiControl, the increase in working capital and the common stock repurchase.
<PAGE>
Tupperware Corporation 71
OPERATING ACTIVITIES. Cash provided by operating activities was $86.1 million in
2000, compared with $113.0 million in 1999 and $118.1 million in 1998. The 2000
decrease in cash flow reflects a decrease in accrued liabilities versus an
increase in 1999, as well as an increase in net inventories in 2000 versus a
decrease in 1999. This impact was partially offset by a smaller increase in
accounts receivable. The 1999 decrease in cash flow reflects a smaller decrease
in inventories, and an increase in accounts receivable, partially offset by an
increase in net income and cash taxes in excess of the effective tax rate to a
lower extent than in 1998. Cash flow reflects the payment of $11.4 million and
$11.1 million of re-engineering and impairment costs in 2000 and 1999,
respectively.
INVESTING ACTIVITIES. For 2000, 1999 and 1998, respectively, capital
expenditures totaled $46.3 million, $40.9 million and $46.2 million. The most
significant individual component of capital spending was new molds. The increase
in capital spending in 2000 was due to the purchase of an operating software
system, partially offset by the steadily decreasing level of spending on plant
and equipment in light of the Company's manufacturing productivity improvements.
Capital expenditures are expected to be between $45 million and $50 million in
2001.
In October 2000, the Company completed the acquisition of BeautiControl,
purchasing all of the 7,231,448 common shares for $7 per share. The purchase
price, net of cash acquired, was $56.3 million and included the shares acquired,
the settlement of in-the-money stock options as well as transaction costs.
DIVIDENDS. During 2000, 1999 and 1998, the Company declared dividends of $0.88
per share of common stock totaling $50.9 million, $50.7 million and $51.6
million, respectively.
SUBSCRIPTIONS RECEIVABLE. In 1998, the Company made a non-recourse, non-interest
bearing loan of $7.7 million (the loan) to its chairman and chief executive
officer (chairman), the proceeds of which were used by the chairman to buy in
the open market 400,000 shares of the Company's common stock (the shares). The
shares are pledged to secure the repayment of the loan. The loan has been
recorded as a subscription receivable and is due November 12, 2006, with
voluntary prepayments permitted subsequent to November 12, 2002. Ten percent of
any annual cash bonus awards are being applied against the balance of the loan.
As the loan is reduced by voluntary payments after November 12, 2002, the lien
against the shares will be reduced. The subscription receivable is being reduced
as payments are received. As of December 30, 2000, the loan balance was $7.6
million.
In October 2000, a subsidiary of the Company adopted a Management Stock Purchase
Plan (the MSPP), which provides for eligible executives to purchase Company
stock. Under the MSPP, subsidiaries of the Company have issued full recourse
loans for $13.6 million to 33 senior executives to purchase 847,000 common
shares from treasury stock.
SHARE REPURCHASES. In conjunction with the MSPP, in order to minimize the
increase in the number of shares outstanding, the Company repurchased in the
open market 800,000 shares of common stock in the fourth quarter of 2000 for
$14.4 million, or an average of $18 per share.
In 1998, the Company repurchased 3.5 million shares in the open market,
completing a 5.0 million share repurchase program announced in 1996. Share
repurchases in 1998 cost $93.1 million, or an average of $27 per share.
<PAGE>
72 Tupperware Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
YEAR 2000 ISSUES
The Company studied the "Year 2000" issues affecting its information technology,
non-information technology systems and the issues with third party companies and
other significant suppliers, and implemented a plan to address them. Year 2000
issues have not had a material adverse effect on the Company's operations. The
cost of addressing its Year 2000 issues was approximately $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.
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. Although the Company
believes that it successfully avoided any significant disruption from the Year
2000 issue, it will continue to monitor all critical systems for the appearance
of delayed complications or disruptions, problems relating to the leap year and
problems encountered through suppliers, customers and other third parties with
whom the Company deals.
EURO IMPLEMENTATION
On January 1, 1999, several European countries that are members of the European
Monetary Union adopted one common currency - the euro. To date there has been no
significant impact from the adoption of the euro, and none is expected. The
incremental cost to the Company of addressing the euro conversion has not been
material.
IMPACT OF INFLATION
Inflation as measured by consumer price indices has continued at a low level in
most of the countries in which the Company operates.
<PAGE>
Tupperware Corporation 73
MARKET RISK
One of the Company's market risks is its exposure to the impact of interest rate
changes. The Company has elected to manage this risk through the maturity
structure of its borrowings. Under its present policy, the Company has set a
target of having approximately half of its borrowings with extended terms.
A significant portion of the Company's sales and profits comes from its
international operations. Although these operations are geographically
dispersed, which partially mitigates the risks associated with operating in
particular countries, the Company is subject to the usual risks associated with
international operations. These risks include local political and economic
environments, and relations between foreign and U.S. governments.
Another economic risk of the Company, which is associated with its operating
internationally, is the exposure to fluctuations in foreign currency exchange
rates on the earnings, cash flows and financial position of the Company's
international operations. The Company is not able to project in any meaningful
way the possible effect of these fluctuations on translated amounts or future
earnings. This is due to the Company's constantly changing exposure to various
currencies, the fact that all foreign currencies do not react in the same manner
in relation to the U.S. dollar and the large number of currencies involved,
although the Company's most significant exposure is to the euro.
Although this currency risk is partially mitigated by the natural hedge arising
from the Company's local manufacturing in many markets, a strengthening U.S.
dollar generally has a negative impact on the Company. In response to this fact,
the Company uses financial instruments, such as cross-currency interest rate
swaps, forward contracts and local currency borrowings to hedge its exposure to
certain foreign exchange risks associated with a portion of its investment in
international operations. In addition to hedging against the balance sheet
impact of changes in exchange rates, the hedge of investments in international
operations also has the effect of hedging a portion of the cash flows from those
operations. The Company also hedges with forward contracts and currency options
certain other exposures to various currencies arising from non-permanent
intercompany loans and forecasted purchase commitments.
NEW PRONOUNCEMENTS
The Company is required to adopt the provisions of Financial Accounting
Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) 133,
"Accounting for Derivative Instruments and Hedging Activities", and SFAS 138
"Accounting for Certain Derivative Instruments and Certain Hedging Activities",
as of the beginning of its 2001 fiscal year. These statements establish
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 fair value is reported either in
earnings or in other comprehensive income. Adoption of the statements will have
no significant impact on the accounting treatment and financial results related
to the hedging programs the Company has undertaken.
<PAGE>
74 Tupperware Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a listing of the Company's outstanding derivative financial
instruments as of December 30, 2000 and December 25, 1999.
<TABLE>
<CAPTION>
FORWARD CONTRACTS 2000 1999
- ------------------------------------------------------------------------------------------------------------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
CONTRACT CONTRACT
RATE OF RATE OF
(DOLLARS IN MILLIONS) BUY SELL EXCHANGE BUY SELL EXCHANGE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Euro with U.S. dollars $ 90.2 0.9091 $70.2 1.0340
Japanese yen with U.S. dollars 49.2 109.0744 19.2 101.3265
Mexican pesos with U.S. dollars 33.9 9.8267 17.5 9.5463
Australian dollars with U.S. dollars 13.3 0.5559 12.7 0.6457
Philippine pesos with U.S. dollars 9.5 51.8567 13.6 40.9280
Swiss francs with U.S. dollars 8.3 1.6488 21.1 1.5677
Singapore dollars with U.S. dollars 4.6 1.7139 4.8 1.6688
Greek drachma with U.S. dollars 4.4 370.5800 3.1 324.9300
Danish krona with U.S. dollars 3.2 8.1195
Canadian dollars with U.S. dollars 1.4 1.5086 3.9 1.4718
German marks with U.S. dollars 24.4 1.9333
Euro for U.S. dollars $40.0 0.9103 $ 4.6 1.0470
Swiss francs for U.S. dollars 11.8 1.6508 19.3 1.5631
Mexican pesos for U.S. dollars 9.7 9.8156 21.3 10.3200
Japanese yen for U.S. dollars 8.0 107.0402 17.5 101.8794
British pounds for U.S. dollars 4.5 1.4763
South Korean won for U.S. dollars 1.5 1,130.5000
Philippine pesos for U.S. dollars 1.2 51.8500
German marks for U.S. dollars 4.2 1.9368
Other currencies 4.2 4.4 various 16.2 7.6 various
- ------------------------------------------------------------------------------------------------------------------------
Total $222.2 $81.1 $206.7 $ 74.5
========================================================================================================================
</TABLE>
<PAGE>
Tupperware Corporation 75
<TABLE>
<CAPTION>
CROSS CURRENCY INTEREST RATE SWAPS 1999
- ---------------------------------------------------------------------------
(DOLLARS IN MILLIONS) WEIGHTED
AVERAGE
AMOUNT AT CONTRACT RATE
CURRENCY OWED INCEPTION OF EXCHANGE
- ---------------------------------------------------------------------------
<S> <C> <C>
Euro $65.5 1.0650
Japanese yen 14.2 141.3300
Swiss francs 10.0 1.5000
- ---------------------------------------------------------------------------
Total $89.7
===========================================================================
</TABLE>
The Company's derivative financial instruments at December 30, 2000 and December
25, 1999, consisted solely of the financial instruments summarized above. All of
the contracts mature within 12 months. Related to the forward contracts, the
"buy" amounts represent the U.S. dollar equivalent of commitments to purchase
foreign currencies and the "sell" amounts represent the U.S. dollar equivalent
of commitments to sell foreign currencies, all translated at the year-end market
exchange rates for the U.S. dollar. All forward contracts are hedging
cross-currency intercompany loans that are not permanent in nature, balance
sheet exposures or forcasted purchase commitments. As of the end of fiscal 2000,
the Company had no cross currency interest rate swaps.
FORWARD-LOOKING STATEMENTS
Certain written and oral statements made or incorporated by reference from time
to time by the Company or its representatives in this report, other reports,
filings with the Securities and Exchange Commission, press releases, conferences
or otherwise, are "forward-looking statements" within the meaning of the Private
Securities Litigation Report Reform Act of 1995 ("the Act"). Investors should
also be aware that while the Company does, from time to time, communicate with
securities analysts, it is against the Company's policy to disclose to them any
material nonpublic information or other confidential commercial information.
Accordingly, shareholders should not assume that the Company agrees with any
statement or report issued by any analyst irrespective of the content of the
confirming financial forecasts or projections issued by others.
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, integration of the BeautiControl business, expansion of the
BeautiControl business into foreign markets, expansion of the Company's
integrated direct access initiatives into foreign markets, economic and market
conditions generally and foreign exchange risk in particular and other risks
detailed in the Company's Securities and Exchange Commission filings. These
risks and uncertainties may cause actual results to differ materially from those
projected in forward-looking statements.
<PAGE>
76 Tupperware Corporation
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------------------
(In millions, except per share amounts) DEC. 30, 2000 DEC. 25, 1999 DEC. 26, 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 1,073.1 $ 1,063.8 $ 1,103.9
- ----------------------------------------------------------------------------------------------------------
Costs and expenses:
Cost of products sold 358.4 365.1 406.3
Delivery, sales and administrative expense 578.4 556.8 583.4
Interest expense 22.9 23.0 24.8
Interest income (1.9) (2.1) (2.1)
Re-engineering and impairment charge 12.5 15.1 --
Other expense, net 1.7 2.6 --
- ----------------------------------------------------------------------------------------------------------
Total costs and expenses 972.0 960.5 1,012.4
- ----------------------------------------------------------------------------------------------------------
Income before income taxes 101.1 103.3 91.5
Provision for income taxes 26.2 24.3 22.4
- ----------------------------------------------------------------------------------------------------------
Net income $ 74.9 $ 79.0 $ 69.1
==========================================================================================================
Net income per common share:
Basic $ 1.30 $ 1.37 $ 1.19
==========================================================================================================
Diluted $ 1.29 $ 1.37 $ 1.18
==========================================================================================================
</TABLE>
See Notes to the Consolidated Financial Statements.
<PAGE>
Tupperware Corporation 77
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Dollars in millions, except per share amounts) DEC. 30, 2000 DEC. 25, 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 32.6 $ 24.4
Accounts receivable, less allowances of $27.7 million in 2000
and $22.5 million in 1999 112.5 114.4
Inventories 144.1 136.7
Deferred income tax benefits 47.1 48.5
Prepaid expenses and other 36.1 46.5
- ----------------------------------------------------------------------------------------------------------------
Total current assets 372.4 370.5
- ----------------------------------------------------------------------------------------------------------------
Deferred income tax benefits 123.2 107.9
Property, plant and equipment, net 233.1 242.9
Long-term receivables, net of allowances of $28.4 million in 2000
and $28.0 million in 1999 31.2 34.2
Goodwill, net of amortization of $0.2 million in 2000 57.7 2.9
Other assets 31.8 37.7
- ----------------------------------------------------------------------------------------------------------------
Total assets $ 849.4 $ 796.1
================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 88.6 $ 87.8
Short-term borrowings and current portion of long-term debt 26.9 43.9
Accrued liabilities 160.3 177.5
- ----------------------------------------------------------------------------------------------------------------
Total current liabilities 275.8 309.2
- ----------------------------------------------------------------------------------------------------------------
Long-term debt 358.1 248.5
Accrued post-retirement benefit cost 37.4 37.0
Other liabilities 54.2 56.1
Commitments and contingencies (Note 13)
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
Paid-in capital 21.7 20.3
Subscriptions receivable (21.2) (7.7)
Retained earnings 493.7 484.0
Treasury stock, 4,483,151 and 4,701,740 shares at cost in 2000
and 1999, respectively (125.5) (140.2)
Unearned portion of restricted stock issued for future service (0.4) (0.6)
Accumulated other comprehensive loss (245.0) (211.1)
- ----------------------------------------------------------------------------------------------------------------
Total shareholders' equity 123.9 145.3
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 849.4 $ 796.1
================================================================================================================
</TABLE>
See Notes to the Consolidated Financial Statements.
<PAGE>
78 Tupperware Corporation
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
----------------------------------------------
(In millions, except per share amounts) SHARES DOLLARS SHARES DOLLARS
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
December 27, 1997 62.4 $0.6 1.4 $ (54.0)
Net income
Other comprehensive income:
Foreign currency translation
adjustments, net of tax
benefit of $3.7 million
Comprehensive income
Cash dividends declared ($0.88 per share)
Stock issued for note receivable
Purchase of treasury stock 3.5 (93.1)
Earned restricted stock, net
Stock issued for incentive
plans and related tax benefits (0.1) 5.1
- -----------------------------------------------------------------------------------------------
December 26, 1998 62.4 0.6 4.8 (142.0)
Net income
Other comprehensive loss:
Foreign currency translation
adjustments, net of tax
provision of $4.2 million
Comprehensive income
Cash dividends declared ($0.88 per share)
Earned restricted stock, net
Stock issued for incentive
plans and related tax benefits (0.1) 1.8
- -----------------------------------------------------------------------------------------------
December 25, 1999 62.4 0.6 4.7 (140.2)
Net income
Other comprehensive loss:
Foreign currency translation adjustments,
net of tax provision of $3.3 million
Comprehensive income
Cash dividends declared ($0.88 per share)
Acquisition of BeautiControl, Inc.
Stock sold under Management
Stock Purchase Plan (0.8) 25.5
Purchase of treasury stock 0.8 (14.4)
Payment of subscription receivable
Earned restricted stock, net
Stock issued for incentive
plans and related tax benefits (0.2) 3.6
- -----------------------------------------------------------------------------------------------
December 30, 2000 62.4 $0.6 4.5 $(125.5)
===============================================================================================
</TABLE>
See Notes to the Consolidated Financial Statements.
<PAGE>
Tupperware Corporation 79
<TABLE>
<CAPTION>
UNEARNED ACCUMULATED
PORTION OF OTHER
RESTRICTED STOCK COMPREHENSIVE TOTAL COMPRE-
PAID-IN SUBSCRIPTIONS RETAINED ISSUED FOR INCOME SHAREHOLDERS' HENSIVE
CAPITAL RECEIVABLE EARNINGS FUTURE SERVICE (LOSS) EQUITY INCOME
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 19.5 $ -- $ 441.4 $ (2.4) $(190.9) $ 214.2
69.1 69.1 $ 69.1
0.5 0.5 0.5
------
$ 69.6
======
(50.9) (50.9)
(7.7) (7.7)
(93.1)
1.0 1.0
(2.4) 2.7
- ---------------------------------------------------------------------------------------
19.5 (7.7) 457.2 (1.4) (190.4) 135.8
79.0 79.0 $ 79.0
(20.7) (20.7) (20.7)
-------
$ 58.3
=======
(50.7) (50.7)
0.8 0.8
0.8 (1.5) 1.1
- ---------------------------------------------------------------------------------------
20.3 (7.7) 484.0 (0.6) (211.1) 145.3
74.9 74.9 $ 74.9
(33.9) (33.9) (33.9)
-------
$ 41.0
=======
(50.9) (50.9)
1.0 1.0
(13.6) (11.8) 0.1
(14.4)
0.1 0.1
0.2 0.2
0.4 (2.5) 1.5
- ---------------------------------------------------------------------------------------
$ 21.7 $(21.2) $ 493.7 $ (0.4) $(245.0) $ 123.9
=======================================================================================
</TABLE>
<PAGE>
80 Tupperware Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------------------
(In millions) DEC. 30, 2000 DEC. 25, 1999 DEC. 26, 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 74.9 $ 79.0 $ 69.1
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 52.1 55.6 64.0
Loss on sale of assets 3.3 3.3 3.4
Foreign exchange loss (gain), net 0.3 0.1 (0.6)
Non-cash re-engineering and impairment costs 13.2 3.1 --
Changes in assets and liabilities:
(Increase) decrease in accounts and notes receivable (9.3) (30.1) 2.2
(Increase) decrease in inventories (17.9) 9.1 29.8
(Decrease) increase in accounts payable
and accrued liabilities (21.2) 6.0 (1.8)
Increase (decrease) in income taxes payable 2.7 0.6 (27.9)
Increase in net deferred income taxes (13.8) (17.7) (15.1)
Other, net 1.8 4.0 (5.0)
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 86.1 113.0 118.1
- --------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Capital expenditures (46.3) (40.9) (46.2)
Purchase of BeautiControl, Inc., net of cash acquired (56.3) -- --
- --------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (102.6) (40.9) (46.2)
- --------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Dividend payments to shareholders (50.8) (50.7) (51.6)
Payments to acquire treasury stock (14.4) -- (93.1)
Payment of long-term debt (15.0) -- --
Proceeds from exercise of stock options 1.0 0.6 1.4
Payment (issuance) of subscription receivable 0.1 -- (7.7)
Net increase (decrease) in short-term debt 105.5 (23.2) 80.9
- --------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 26.4 (73.3) (70.1)
- --------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash
and cash equivalents (1.7) 2.6 (0.9)
- --------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 8.2 1.4 0.9
Cash and cash equivalents at beginning of year 24.4 23.0 22.1
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 32.6 $ 24.4 $ 23.0
==========================================================================================================================
SUPPLEMENTAL DISCLOSURE:
Treasury shares sold for notes receivable $ 13.6 $ -- $ --
==========================================================================================================================
</TABLE>
See Notes to the Consolidated Financial Statements.
<PAGE>
Tupperware Corporation 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the
accounts of Tupperware Corporation and all of its subsidiaries (Tupperware, the
Company). All significant intercompany accounts and transactions have been
eliminated. The Company's fiscal year ends on the last Saturday of December.
Fiscal year 2000 consisted of 53 weeks compared with 52 weeks in 1999.
USE OF ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from these estimates.
CASH AND CASH EQUIVALENTS. The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents.
As of December 30, 2000 and December 25, 1999, $16.5 million and $8.3 million,
respectively, of the cash and cash equivalents included on the consolidated
balance sheets were held in the form of time deposits or certificates of
deposit.
INVENTORIES. Inventories are valued at the lower of cost or market. Inventory
cost includes cost of raw material, labor and overhead. Domestic Tupperware
inventories, approximately 12 percent and 17 percent of total inventories, at
December 30, 2000 and December 25, 1999, respectively, are valued on the
last-in, first-out (LIFO) cost method. The first-in, first-out (FIFO) cost
method is generally used for the remaining inventories. If inventories valued on
the LIFO method had been valued using the FIFO method, they would have been
$13.1 million and $11.9 million higher at the end of 2000 and 1999,
respectively.
INTERNAL USE SOFTWARE DEVELOPMENT COSTS. The Company capitalizes internal use
software development costs as they are incurred and amortizes such costs over
their estimated useful lives of three to five years beginning when the software
is placed in service.
PROPERTY, PLANT AND EQUIPMENT. Properties are initially stated at cost.
Depreciation is determined on a straight-line basis over estimated useful lives.
Generally, the estimated useful lives are 10 to 45 years for buildings and
improvements and 3 to 20 years for machinery and equipment. Upon the sale or
retirement of property, plant and equipment, a gain or loss is recognized. If
the carrying value of an asset, including associated intangibles, exceeds the
sum of estimated undiscounted future cash flows, then an impairment loss is
recognized for the difference between estimated fair value and carrying value.
Expenditures for maintenance and repairs are charged to expense.
GOODWILL. Goodwill represents the excess of cost over the fair value of net
assets acquired and is being amortized over 40 years using the straight-line
method.
REVENUE RECOGNITION. Revenue is recognized when product is shipped to customers.
<PAGE>
82 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SHIPPING AND HANDLING COSTS. In October 2000, the Emerging Issues Task Force
issued EITF 00-10, "Accounting for Shipping and Handling Revenues and Costs",
which requires fees billed to customers associated with shipping and handling to
be classified as revenue, and costs associated with shipping and handling to be
either classified as cost of sales or disclosed in the notes to the financial
statements. Accordingly, the Company has reclassified the revenue related to the
shipping and handling fees billed to customers, which was previously recorded as
a reduction of delivery expense, to net sales for all periods presented. Costs
associated with shipping and handling activities are comprised of outbound
freight and associated direct labor costs and were $70.0 million, $69.0 million
and $76.4 million for 2000, 1999 and 1998, respectively and were recorded in
delivery, sales and administrative expense.
ADVERTISING AND RESEARCH AND DEVELOPMENT COSTS. Advertising and research and
development costs are charged to expense as incurred. Advertising expense
totaled $5.9 million, $8.7 million and $7.2 million in 2000, 1999 and 1998,
respectively. Research and development costs totaled $12.8 million, $12.3
million and $13.8 million, in 2000, 1999 and 1998, respectively.
ACCOUNTING FOR STOCK-BASED COMPENSATION. The Company measures compensation
expense for employee and director stock options as the aggregate difference
between the market and exercise prices of the options on the date that both the
number of shares the grantee is entitled to receive and the purchase price are
known. Compensation expense associated with restricted stock grants is equal to
the market value of the shares on the date of grant and is recorded pro rata
over the required holding period. Pro forma information relating to the fair
value of stock-based compensation is presented in Note 11 to the consolidated
financial statements.
INCOME TAXES. Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to temporary differences between the financial
statement carrying amounts of assets and liabilities and their respective tax
bases. Deferred tax assets also are recognized for credit carryforwards.
Deferred tax assets and liabilities are measured using the enacted rates
applicable to taxable income in the years in which the temporary differences are
expected to reverse and the credits are expected to be used. The effect on
deferred tax assets and liabilities of the change in tax rates is recognized in
income in the period that includes the enactment date. An assessment is made as
to whether or not a valuation allowance is required to offset deferred tax
assets. This assessment includes anticipating future income.
NET INCOME PER COMMON SHARE. The financial statements include "basic" and
"diluted" per share information. 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 were 57.7 million, 57.5 million and 58.2
million, in 2000, 1999 and 1998, respectively. The only difference in the
computation of basic and diluted earnings per share is the inclusion of
potential common stock of 0.3 million in 2000, 0.4 million in 1999 and 0.5
million in 1998. Options to purchase 7.1 million, 2.4 million and 2.6 million
shares of common stock in 2000, 1999 and 1998, respectively, were outstanding
but not 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 periods 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.
<PAGE>
Tupperware Corporation 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DERIVATIVE FINANCIAL INSTRUMENTS. The Company uses derivative financial
instruments, principally cross-currency interest rate swaps, over-the-counter
forward exchange contracts and local currency options with major international
financial institutions, to offset the effects of exchange rate changes on net
investments in certain foreign subsidiaries, forecasted purchase commitments and
certain intercompany loan transactions. Gains and losses on instruments
designated as hedges of net investments in a foreign subsidies or intercompany
transactions that are permanent in nature are accrued as exchange rates change,
and are recognized in shareholders' equity, along with any points on forward
exchange contracts, as foreign currency translation adjustments. The net
interest differential on cross-currency interest rate swaps is included within
interest expense. Gains and losses on contracts designated as hedges of
intercompany transactions that are not permanent in nature are accrued as
exchange rates change and are recognized in income. Gains and losses on
contracts designated as hedges of identifiable foreign currency firm commitments
are deferred and included in the measurement of the related foreign currency
transaction. Contracts hedging nonpermanent intercompany transactions and
identifiable foreign currency firm commitments are held to maturity.
The Company is required to adopt the provisions of Financial Accounting
Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) 133,
"Accounting for Derivative Instruments and Hedging Activities", and SFAS 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities",
as of the beginning of its 2001 fiscal year. These statements establish
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 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 fair value is reported either in earnings or in
other comprehensive income. Adoption of the statements will have no significant
impact on the accounting treatment and financial results related to the hedging
programs the Company has undertaken.
FOREIGN CURRENCY TRANSLATION. Results of operations for foreign subsidiaries are
translated into U.S. dollars using the average exchange rates during the year.
The assets and liabilities of those subsidiaries, other than those of operations
in highly inflationary countries, are translated into U.S. dollars using the
exchange rates at the balance sheet date. The related translation adjustments
are "Accumulated other comprehensive income." Foreign currency transaction gains
and losses, as well as translation of financial statements of subsidiaries in
highly inflationary countries, are included in income.
RECLASSIFICATIONS. Certain prior year amounts have been reclassified to conform
with the current year presentation.
<PAGE>
84 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: ACQUISITION
In October 2000, the Company completed the acquisition of BeautiControl, Inc.
(BeautiControl), by purchasing all of the 7,231,448 common shares outstanding
for $7 per share. BeautiControl is a party plan direct seller that markets
premium cosmetics and skin care products through a highly trained independent
sales force in North America. The purchase price, net of cash acquired, was
$56.3 million and included shares acquired, settlement of in-the-money stock
options and other transaction costs. The Company also assumed $5.6 million of
debt. The acquisition has been accounted for under the purchase method of
accounting, and results of operations of BeautiControl have been included in the
consolidated financial statements since October 18, 2000. The total cost of the
acquisition was allocated to the tangible and intangible assets acquired and
liabilities assumed based on their respective fair values. Subsequent to the
acquisition, the Company has closed BeautiControl's Taiwan and Hong Kong
subsidiaries, discontinued its Eventus nutritional supplement product line and
recorded $5.0 million of associated costs. Goodwill recorded in connection with
the transaction was $55.0 million and is being amortized over 40 years using the
straight-line method. On a pro forma basis, if the acquisition would have
occurred January 1, 1999, the results of BeautiControl would not have had a
material impact on consolidated results in 1999 and 2000.
NOTE 3: RE-ENGINEERING PROGRAM
In 1999, the Company announced a three-year re-engineering program designed to
improve operating profit return on sales through improved organizational
alignment, a higher gross margin percentage and reduced operating expenses.
In conjunction with implementing this program, the Company recorded a pretax
re-engineering and impairment charge of $12.5 million in the fourth quarter of
2000 and $15.1 million in the second quarter of 1999.
The Company also incurred $7.9 million and $1.0 million in 2000 and 1999,
respectively, of internal and external consulting costs associated with
designing and executing the re-engineering projects, which are included in
delivery, sales and administrative expense. As part of the organizational
alignment, the Company decided in 2000 that all Latin American countries other
than Mexico and Brazil will be operated under third party importer arrangements.
This decision resulted in the write-down of inventory and accounts receivable
totaling $6.3 million, as well as fixed asset write-downs and severance
payments. The fixed asset write-downs and severance payments are classified as
part of the re-engineering and impairment charge, while the inventory write-down
is included in cost of sales, and the accounts receivable write-down is
classified as delivery, sales and administrative expense. As a result of the
importer arrangements, certain assets will be held for sale, and the fixed asset
write-downs represent the book value in excess of fair market values less
estimated selling expenses. The total after tax cost of the re-engineering
program was $24.2 million in 2000 and $12.3 million in 1999.
<PAGE>
Tupperware Corporation 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The re-engineering charge includes the following categories of expenditures and
relates to activities in the Company's geographic segments as indicated below
(in millions):
<TABLE>
<CAPTION>
2000 1999 2000 1999
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Severance $ 3.1 $ 9.0 Europe $ 0.8 $ 7.1
Fixed asset write-downs 3.7 3.1 Asia Pacific 0.7 4.0
Other 5.7 3.0 Latin America 8.7 4.0
United States 2.3 --
- --------------------------------------------------------------------------------------------------------------
Total $ 12.5 $ 15.1 Total $ 12.5 $ 15.1
==============================================================================================================
</TABLE>
In 2000, the severance costs relate primarily to the approximately 115 employees
whose positions were eliminated as a result of the decision to close the
Argentina distribution center. The fixed asset write-downs and other expenses
relate primarily to the closure of certain Latin America offices associated with
the new importer distribution method.
In 1999, the severance costs relate primarily to the approximately 200 employees
whose positions were 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 fixed 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 December 30, 2000 and December 25, 1999 was as
follows:
<TABLE>
<CAPTION>
(In millions) 2000 1999
- ------------- ------- -------
<S> <C> <C>
Beginning balance $ 0.9 $ --
Provision 12.5 15.1
Cash expenditures:
Severance (3.0) (9.0)
Other (0.5) (2.1)
Non-cash write downs (7.6) (3.1)
- --------------------------------------------------------------------------------------------------------------
Ending balance $ 2.3 $ 0.9
==============================================================================================================
</TABLE>
NOTE 4: INVENTORIES
<TABLE>
<CAPTION>
(In millions) 2000 1999
- ------------- -------- --------
<S> <C> <C>
Finished goods $ 70.4 $ 66.0
Work in process 25.5 27.9
Raw materials and supplies 48.2 42.8
- ---------------------------------------------------------------------------------------------------------------
Total inventories $ 144.1 $ 136.7
===============================================================================================================
</TABLE>
<PAGE>
86 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5: PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
(In millions) 2000 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Land $ 19.9 $ 12.5
Buildings and improvements 169.8 173.2
Machinery and equipment 746.2 758.1
Construction in progress 13.0 10.3
- ---------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 948.9 954.1
Less accumulated depreciation (715.8) (711.2)
- ---------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net $ 233.1 $ 242.9
===============================================================================================================
</TABLE>
NOTE 6: ACCRUED LIABILITIES
<TABLE>
<CAPTION>
(In millions) 2000 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Compensation and employee benefits $ 51.3 $ 55.1
Advertising and promotion 18.9 33.8
Taxes other than income taxes 17.8 18.3
Other 72.3 70.3
- ---------------------------------------------------------------------------------------------------------------
Total accrued liabilities $ 160.3 $ 177.5
===============================================================================================================
</TABLE>
NOTE 7: FINANCING ARRANGEMENTS
Debt
Debt consists of the following:
<TABLE>
<CAPTION>
(In millions) 2000 1999
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
6.84% Series Notes due 2000 $ -- $ 15.0
7.05% Series Notes due 2003 15.0 15.0
7.25% Notes due 2006 100.0 100.0
8.33% Mortgage Note 5.6 --
Short-term borrowings 264.0 161.9
Other 0.4 0.5
- ---------------------------------------------------------------------------------------------------------------
385.0 292.4
Less current portion (26.9) (43.9)
- ---------------------------------------------------------------------------------------------------------------
Long-term debt $ 358.1 $ 248.5
===============================================================================================================
</TABLE>
<PAGE>
Tupperware Corporation 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
(Dollars in millions) 2000 1999
- --------------------- -------- --------
<S> <C> <C>
Total short-term borrowings at year-end $ 264.0 $ 161.9
Weighted average interest rate at year-end 5.8% 5.3%
Average short-term borrowings during the year $ 242.3 $ 217.6
Weighted average interest rate for the year 5.9% 4.6%
Maximum short-term borrowings during the year $ 300.3 $ 258.5
</TABLE>
The average borrowings and weighted average interest rates were determined using
month-end borrowings and the interest rates applicable to them. Of total
short-term year-end borrowings at December 30, 2000, $170.1 million consisted of
outstanding commercial paper. The remaining $93.9 million of short-term
borrowings was loaned by several banks, with $57.1 million in Japanese yen,
$15.3 million in German marks, $11.1 million in Belgian francs and $10.4 million
in various other currencies. As of December 30, 2000, $237.1 million of the
Company's outstanding borrowings that were due within one year by their terms
were classified as non-current due to the Company's ability and intent that
those borrowings be outstanding throughout 2001.
The mortgage note is a ten-year note amortized over a twenty-two year period
with monthly payments of principal and interest of $47,988. The note is secured
by certain real estate, and a balloon payment of $4.4 million is due to be paid
June 1, 2009.
As of December 30, 2000, the Company had $333.9 million of unused lines of
credit, including $129.9 million under the Company's $300.0 million
multicurrency financing facility (the $300 Million Facility) and $204.0 million
available under the $280.0 million foreign uncommitted lines of credit. The $300
Million Facility supports the Company's commercial paper borrowing capability
and expires on August 8, 2002. Interest paid on total debt in 2000, 1999 and
1998 was $21.9 million, $21.6 million and $26.2 million, respectively.
Fair Value of Financial Instruments
Due to their short maturity or their insignificance, the carrying amounts of
cash and cash equivalents, accounts and notes receivable, accounts payable,
accrued liabilities, short-term borrowings and outstanding forward exchange
contracts approximated their fair values at December 30, 2000 and December 25,
1999. The approximate fair value of the Company's $100 million of 7.25 percent
notes due in 2006, determined through reference to market yields, was $97.1
million and $92.5 million as of December 30, 2000 and December 25, 1999,
respectively. The fair value of the remaining long-term debt approximated its
book value at the end of 2000 and 1999.
<PAGE>
88 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Derivative Financial Instruments
Following is a listing of the Company's outstanding derivative financial
instruments as of December 30, 2000 and December 25, 1999:
<TABLE>
<CAPTION>
FORWARD CONTRACTS 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
CONTRACT CONTRACT
RATE OF RATE OF
(Dollars in millions) BUY SELL EXCHANGE BUY SELL EXCHANGE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Euro with U.S. dollars $ 90.2 0.9091 $ 70.2 1.0340
Japanese yen with U.S. dollars 49.2 109.0744 19.2 101.3265
Mexican pesos with U.S. dollars 33.9 9.8267 17.5 9.5463
Australian dollars with U.S. dollars 13.3 0.5559 12.7 0.6457
Philippine pesos with U.S. dollars 9.5 51.8567 13.6 40.9280
Swiss francs with U.S. dollars 8.3 1.6488 21.1 1.5677
Singapore dollars with U.S. dollars 4.6 1.7139 4.8 1.6688
Greek drachma with U.S. dollars 4.4 370.5800 3.1 324.9300
Danish krona with U.S. dollars 3.2 8.1195
Canadian dollars with U.S. dollars 1.4 1.5086 3.9 1.4718
German marks with U.S. dollars 24.4 1.9333
Euro for U.S. dollars $ 40.0 0.9103 $ 4.6 1.0470
Swiss francs for U.S. dollars 11.8 1.6508 19.3 1.5631
Mexican pesos for U.S. dollars 9.7 9.8156 21.3 10.3200
Japanese yen for U.S. dollars 8.0 107.0402 17.5 101.8794
British pounds for U.S. dollars 4.5 1.4763
South Korean won for U.S. dollars 1.5 1,130.5000
Philippine pesos for U.S. dollars 1.2 51.8500
German marks for U.S. dollars 4.2 1.9368
Other currencies 4.2 4.4 various 16.2 7.6 various
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 222.2 $ 81.1 $ 206.7 $ 74.5
============================================================================================================================
</TABLE>
<PAGE>
Tupperware Corporation 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CROSS-CURRENCY INTEREST RATE SWAPS 1999
- ---------------------------------- ---------------------------
(Dollars in millions) WEIGHTED
AVERAGE
AMOUNT AT CONTRACT RATE
Currency owed INCEPTION OF EXCHANGE
- ------------- --------- -------------
<S> <C> <C>
Euro $ 65.5 1.0650
Japanese yen 14.2 141.3300
Swiss francs 10.0 1.5000
- --------------------------------------------------------------------------------------------------------------
Total $ 89.7
==============================================================================================================
</TABLE>
The Company's derivative financial instruments at December 30, 2000 and December
25, 1999, consisted solely of the financial instruments summarized above. All of
the contracts mature within 12 months. Related to the forward contracts, the
"buy" amounts represent the U.S. dollar equivalent of commitments to purchase
foreign currencies and the "sell" amounts represent the U.S. dollar equivalent
of commitments to sell foreign currencies, all translated at the year-end market
exchange rates for the U.S. dollar. All forward contracts are hedging
cross-currency intercompany loans that are not permanent in nature, balance
sheet exposures or forecasted purchase commitments. As of the end of fiscal
2000, the Company had no cross currency interest rate swaps.
The Company's theoretical credit risk for each derivative instrument is its
replacement cost, but management believes that the risk of incurring credit
losses is remote and that such losses, if any, would not be material. The
Company also is exposed to market risk on its derivative instruments due to
potential changes in foreign exchange rates; however, such market risk would be
substantially offset by changes in the valuation of the underlying items being
hedged. For all outstanding derivative instruments, the net accrued loss was
$0.8 million and $3.3 million, at December 30, 2000 and December 25, 1999,
respectively. The aggregate impact of all foreign currency transactions was not
material to the Company's income.
<PAGE>
90 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8: SUBSCRIPTIONS RECEIVABLE
In October 2000, a subsidiary of the Company adopted a Management Stock Purchase
Plan (the MSPP), which provides for eligible executives to purchase Company
stock. Under the MSPP, subsidiaries of the Company have issued full recourse
loans for $13.6 million to 33 senior executives to purchase 847,000 common
shares from treasury stock. The annual interest rate on the loans is 5.96
percent, and all dividends, while the loans are outstanding, will be applied
toward interest due. Under the terms of the MSPP, at scheduled repayment dates,
if the Company's stock price per share is below the executive's per share
purchase price, and the associated loan remains outstanding, the Company will
make cash bonus payments to be applied toward the repayment of the loan. The
cash bonus payments are limited to not more than 25 percent of the outstanding
principle on the loan then due. For each share purchased, a stock option on two
shares of the Company's common stock was granted under the 2000 Incentive Plan.
See Note 11 - Incentive Compensation. The loans have been recorded as
subscriptions receivable, and are secured by the shares purchased. Principal
amounts are due as follows: $3.4 million in 2005, $3.4 million in 2006 and $6.8
million in 2008.
On November 30, 1998, the Company made a non-recourse, non-interest bearing loan
of $7.7 million (the loan) to its chairman and chief executive officer
(chairman), the proceeds of which were used by the chairman to buy in the open
market 400,000 shares of the Company's common stock (the shares). The shares are
pledged to secure the repayment of the loan. The loan has been recorded as a
subscription receivable and is due November 12, 2006, with voluntary prepayments
permitted subsequent to November 12, 2002. Ten percent of any annual cash bonus
awards to the chairman are being applied against the balance of the loan. As the
loan is reduced by voluntary payments after November 12, 2002, the lien against
the shares will be reduced. The subscription receivable is being reduced as
payments are received. In late 2000, the loan and related agreements were
assigned to a subsidiary of the Company.
<PAGE>
Tupperware Corporation 91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9: INCOME TAXES
For income tax purposes, the domestic and foreign components of income (loss)
before taxes were as follows:
<TABLE>
<CAPTION>
(In millions) 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $ 39.0 $ (15.7) $ 24.5
Foreign 62.1 119.0 67.0
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 101.1 $ 103.3 $ 91.5
=============================================================================================================================
</TABLE>
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
(In millions) 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 10.8 $ 8.7 $ (2.1)
Foreign 25.4 26.1 43.9
State 3.6 3.5 1.4
- ----------------------------------------------------------------------------------------------------------------------------
39.8 38.3 43.2
- ----------------------------------------------------------------------------------------------------------------------------
Deferred:
Federal (13.5) (15.9) (10.3)
Foreign 0.8 3.7 (9.3)
State (0.9) (1.8) (1.2)
- ----------------------------------------------------------------------------------------------------------------------------
(13.6) (14.0) (20.8)
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 26.2 $ 24.3 $ 22.4
=============================================================================================================================
</TABLE>
The differences between the provision for income taxes and income taxes computed
using the U.S. federal statutory rate were as follows:
<TABLE>
<CAPTION>
(In millions) 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Amount computed using statutory rate $ 35.4 $ 36.1 $ 32.0
Increase (reduction) in taxes resulting from:
Net benefit from repatriating foreign earnings (18.8) (0.3) (22.0)
Foreign income taxes 10.3 (11.5) 11.1
Other (0.7) -- 1.3
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 26.2 $ 24.3 $ 22.4
=============================================================================================================================
</TABLE>
<PAGE>
92 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In 2000, 1999 and 1998, the Company recognized $0.4 million, $0.2 million and
$0.6 million, respectively, of benefits for deductions associated with the
exercise of employee stock options. These benefits were added directly to
capital surplus, and are not reflected in the provision for income taxes.
Deferred tax assets (liabilities) are composed of the following:
<TABLE>
<CAPTION>
(In millions) 2000 1999
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Depreciation $ (4.3) $ (4.2)
Other (2.6) (2.9)
- --------------------------------------------------------------------------------------------------------------
Gross deferred tax liabilities (6.9) (7.1)
- --------------------------------------------------------------------------------------------------------------
Credit carry forwards 50.7 42.6
Fixed assets basis differences 57.2 60.5
Employee benefits accruals 13.7 21.0
Post-retirement benefits 15.9 15.8
Inventory reserves 16.8 17.3
Bad debt reserves 10.7 3.2
Other accruals 39.3 29.3
- --------------------------------------------------------------------------------------------------------------
Gross deferred tax assets 204.3 189.7
- --------------------------------------------------------------------------------------------------------------
Valuation allowances (31.8) (30.8)
- --------------------------------------------------------------------------------------------------------------
Net deferred tax assets $ 165.6 $ 151.8
==============================================================================================================
</TABLE>
At December 30, 2000, the Company has a domestic net operating loss carry
forward of $7.7 million, which expires in 2018, and foreign net operating loss
carry forwards of $119.9 million. Of the total net operating loss carry
forwards, $62.1 million expire at various dates from 2001 to 2010, while the
remainder have unlimited lives. During 2000, the Company recognized net benefits
of $7.6 million related to foreign net operating loss carry forwards.
Repatriation of foreign earnings would not result in a significant incremental
cost to the Company. At December 30, 2000, the Company had a foreign tax credit
carry forward of $3.6 million, which expires in 2005. At December 30, 2000 and
December 25, 1999, the Company had valuation allowances against certain deferred
tax assets totaling $31.8 million and $30.8 million, respectively. These
valuation allowances relate to tax assets in jurisdictions where it is
management's best estimate that there is not a greater than 50 percent
probability that the benefit of the assets will be realized in the associated
tax returns. The likelihood of realizing the benefit of deferred tax assets is
assessed on an ongoing basis. Consequently, future material changes in the
valuation allowance are possible. The Company paid income taxes in 2000, 1999
and 1998, of $35.5 million, $47.7 million and $65.3 million, respectively.
NOTE 10: RETIREMENT BENEFIT PLANS
PENSION PLANS. The Company has various pension plans covering substantially all
domestic employees and certain employees in other countries. In addition to
providing pension benefits, the Company provides certain post-retirement
healthcare and life insurance benefits for selected U.S. and Canadian employees.
Most employees and retirees outside the United States are covered by government
healthcare programs. Employees may become eligible for these benefits if they
reach normal retirement age while working for the Company and satisfy certain
years of service
<PAGE>
Tupperware Corporation 93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
requirements. The medical plans are contributory, with retiree contributions
adjusted annually, and contain other cost-sharing features, such as deductibles
and coinsurance. The medical plans include an allowance for Medicare for post-65
retirees. The Company has the right to modify or terminate these plans.
The funded status of the plans was as follows:
<TABLE>
<CAPTION>
U.S. plans Foreign plans
- ------------------------------------------------------------------------------------------------------------------------
Pension benefits Post-retirement benefits Pension benefits
------------------- ------------------------ ---------------------
(In millions) 2000 1999 2000 1999 2000 1999
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Change in benefit obligations:
Beginning balance $ 26.3 $ 29.9 $ 36.5 $ 41.0 $ 58.6 $ 64.1
Service cost 1.2 1.2 0.4 0.4 2.4 2.7
Interest cost 2.2 1.9 2.8 2.6 2.5 2.5
Actuarial loss (gain) 3.4 (4.8) 2.7 (4.0) 2.7 (4.4)
Benefits paid (2.2) (1.9) (3.1) (3.5) (6.9) (4.8)
Impact of exchange rates -- -- -- -- (5.7) (1.5)
- ------------------------------------------------------------------------------------------------------------------------
Ending balance 30.9 26.3 39.3 36.5 53.6 58.6
- ------------------------------------------------------------------------------------------------------------------------
Change in plan assets at fair value:
Beginning balance 27.1 25.3 -- -- 29.8 27.4
Actual return on plan assets 0.2 3.6 -- -- 2.1 4.9
Company contributions 1.1 -- 3.1 3.5 2.3 2.1
Plan participant contributions -- -- -- -- 0.2 0.2
Benefits paid (2.2) (1.8) (3.1) (3.5) (6.9) (4.8)
Impact of exchange rates -- -- -- -- (2.7) --
- ------------------------------------------------------------------------------------------------------------------------
Ending balance 26.2 27.1 -- -- 24.8 29.8
- ------------------------------------------------------------------------------------------------------------------------
Funded status of the plan (4.7) 0.8 (39.3) (36.5) (28.8) (28.8)
Unrecognized actuarial
(gain) loss (1.3) (6.6) 1.0 (1.9) (2.1) (5.7)
Unrecognized prior
service benefit (0.1) (0.1) (1.5) (1.7) -- (0.2)
Unrecognized net transaction
(asset) liability -- (0.1) -- -- 0.9 1.5
Impact of exchange rates -- -- -- -- (0.1) 0.5
- ------------------------------------------------------------------------------------------------------------------------
Accrued benefit cost $ (6.1) $ (6.0) $ (39.8) $ (40.1) $ (30.1) $ (32.7)
========================================================================================================================
Weighted average assumptions:
Discount rate 7.5% 7.8% 7.5% 7.8% 4.7% 4.5%
Return on plan assets 9.0 9.0 n/a n/a 5.2 5.3
Salary growth rate 4.5 6.0 n/a n/a 2.3 2.5
</TABLE>
<PAGE>
94 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Plan assets consist primarily of equity securities and corporate and government
bonds. At December 30, 2000 and December 25, 1999, the accumulated benefit
obligations of certain pension plans exceeded those plans' assets. For those
plans, the accumulated benefit obligations were $65.7 million and $41.0 million,
and the fair value of those plans' assets as of December 30, 2000 and December
25, 1999, were $41.3 million and $18.2 million, respectively.
The costs associated with the plans were as follows:
<TABLE>
<CAPTION>
(In millions) Pension benefits Post-retirement benefits
- --------------------------------------------------------------------------------------------------------------------------
2000 1999 1998 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Components of net periodic benefit cost:
Service cost $ 3.4 $ 4.0 $ 4.1 $ 0.4 $ 0.4 $ 0.3
Interest cost 4.7 4.5 4.7 2.8 2.6 2.7
Actual return on plan assets (1.2) (5.2) (2.3) -- -- --
Net deferral and (amortization) (2.2) 2.4 (0.3) (0.1) (0.1) (0.2)
- --------------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost $ 4.7 $ 5.7 $ 6.2 $ 3.1 $ 2.9 $ 2.8
==========================================================================================================================
</TABLE>
The assumed healthcare cost trend rate was 6 percent where it is expected to
remain. The healthcare cost trend rate assumption has a significant effect on
the amounts reported. A one percentage point change in the assumed healthcare
cost trend rates would have the following effects:
<TABLE>
<CAPTION>
(In millions) One percentage point
- ---------------------------------------------------------------------------------------------------------------
Increase Decrease
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Effect on total of service and interest cost components $ 0.3 $ (0.3)
Effect on post-retirement benefit obligation 4.1 (3.5)
</TABLE>
The Company also has several savings, thrift and profit-sharing plans. Its
contributions to these plans are based upon various levels of employee
participation. The total cost of these plans was $4.5 million in 2000, $3.8
million in 1999 and $4.5 million in 1998.
NOTE 11: INCENTIVE COMPENSATION PLANS
INCENTIVE PLANS. Certain officers and other key employees of the Company
participate in the Tupperware Corporation 2000 and 1996 Incentive Plans (the
Incentive Plans). Annual and long-term performance awards and awards of options
to purchase Tupperware shares and of restricted stock are made under the
Incentive Plans. For the 2000 Incentive Plan, which was approved by the
Company's shareholders in May 2000, the total number of shares initially
available for grant was 4,000,000 and 200,000 shares may be used for restricted
stock awards. For the 1996 Incentive Plan, the total number of shares initially
available for grant was 7,600,000 and 300,000 shares may be used for restricted
stock awards. As of December 30, 2000, shares available for award under the
Incentive Plans totaled 1,454,393, of which 238,693 could be granted in the form
of restricted stock. For options granted in 2000,approximately 1.7 million
shares under option were granted in conjunction with the Management Stock
Purchase Plan. See Note 8 - Subscriptions Receivable.
<PAGE>
Tupperware Corporation 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other than the 157,118 options exchanged for certain BeautiControl options and
issued below the grant date value, all options' exercise prices are equal to the
underlying shares' grant date market values. Outstanding options granted in 1998
on 339,000 shares and options granted in 1999 have vesting dates that are three
years from the date of grant. The remainder of the options granted in 1998 vest
ratably from the second through fifth anniversaries of the date of grant.
Options granted in conjunction with participation under the Management Stock
Purchase Plan vest seven years after date of the grant; however, vesting may be
accelerated beginning three years after the grant date if certain stock
appreciation goals are attained. Other than 34,400 options that vest two years
from the date of the grant, the remainder of the non-MSPP related options
granted in 2000 vest three years from the date of the grant. Outstanding
restricted shares have initial vesting periods ranging from 1 to 5 years. All
outstanding options have exercise periods that are 10 years from the date of
grant.
DIRECTOR PLAN. Under the Tupperware Corporation Director Stock Plan (Director
Plan), non-employee directors may elect to receive their annual retainers in the
form of stock or stock options. Options granted to directors become exercisable
on the last day of the fiscal year in which they are granted, have a term of 10
years and have an exercise price that compensates for the foregone cash
retainer. This amount and the value of stock grants on the date of award have
been recognized as an expense by the Company. The number of shares initially
available for grant under the Director Plan and the number of shares available
as of December 30, 2000, were 300,000 and 190,604, respectively.
Earned performance awards of $12.8 million, $9.3 million and $9.6 million are
included in the consolidated statements of income for 2000, 1999 and 1998,
respectively.
Stock option and restricted stock activity and information about stock options
for the Incentive Plans and the Director Plan are summarized in the following
tables:
<TABLE>
<CAPTION>
Shares subject Average option
Stock options to option price per share
- ---------------------------------------------------------------------------
<S> <C> <C>
Balance at December 27, 1997 3,346,870 $ 27.81
Granted 1,975,402 19.43
Canceled (174,646) 32.84
Exercised (125,413) 11.65
- --------------------------------------------------------
Balance at December 26, 1998 5,022,213 24.75
Granted 1,434,650 18.62
Canceled (233,732) 29.78
Exercised (70,805) 11.42
- --------------------------------------------------------
Balance at December 25, 1999 6,152,326 23.28
Granted 3,818,968 17.11
Canceled (485,262) 22.64
Exercised (115,707) 9.86
- --------------------------------------------------------
Balance at December 30, 2000 9,370,325 $ 20.95
===========================================================================
</TABLE>
<PAGE>
96 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Shares Shares available
Restricted stock outstanding for issuance
- ---------------------------------------------------------------------------
<S> <C> <C>
Balance at December 27, 1997 127,341 134,604
Awarded 59,760 (59,760)
Canceled (7,000) 7,000
Vested (29,728) --
- ---------------------------------------------------------------------------
Balance at December 26, 1998 150,373 81,844
Awarded 11,000 (11,000)
Canceled -- --
Vested (101,711) --
- ---------------------------------------------------------------------------
Balance at December 25, 1999 59,662 70,844
Increase in shares available due to
adoption of 2000 Incentive Plan 200,000
Shares transferred to 1996 Incentive Plan
non-qualified status (23,151)
Awarded 15,000 (15,000)
Canceled (6,000) 6,000
Vested (3,662) --
- ---------------------------------------------------------------------------
Balance at December 30, 2000 65,000 238,693
===========================================================================
<CAPTION>
Stock options outstanding
As of December 30, 2000 Outstanding Exercisable
- ---------------------------------------------------------------------------------------------------
Average Average Average
remaining exercise exercise
Exercise price range Shares life price Shares price
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 8.40 - $11.84 127,015 3.9 $ 10.95 127,015 $ 10.95
12.85 - 15.94 2,164,379 8.3 15.40 430,129 13.30
18.39 - 25.55 5,435,780 8.4 19.40 1,027,930 21.95
26.70 - 34.28 1,108,801 3.3 30.26 727,468 32.08
39.18 - 42.25 534,350 4.9 42.19 534,350 42.19
- ------------------------------- ---------
9,370,325 7.5 $ 20.95 2,846,892 $ 26.54
===================================================================================================
</TABLE>
The Company uses the intrinsic value method of accounting for stock-based
compensation. The Company has estimated the fair value of its option grants. If
these fair value estimates had been used to record compensation expense in the
consolidated statements of income, net income would have been reduced by $5.6
million, $4.5 million and $3.7 million, to $69.3 million, $74.5 million and
$65.3 million, or $1.19, $1.29 and $1.11 per diluted common share ($1.20, $1.30
and $1.12 per basic common share) in 2000, 1999 and 1998, respectively.
The fair value of the stock option grants were estimated using the Black-Scholes
option-pricing model with the following assumptions: dividend yield of 3.5
percent for 2000 and 1999 grants and 3.0 percent for 1998 grants; expected
volatility of 40.0 percent for 2000, 1999 and 1998 grants; risk-free interest
rates of 5.9 percent for 2000 and 1999 and 4.5 percent for 1998; and expected
lives of 5 years for all grants. Compensation expense associated with restricted
stock grants is equal to the fair market value of the shares on the date of
grant and is recognized ratably over the required holding period. Compensation
expense associated with restricted stock grants was not significant.
<PAGE>
Tupperware Corporation 97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12: SEGMENT INFORMATION
The Company manufactures and distributes products primarily through independent
direct sales forces: (1) plastic food storage and serving containers, microwave
cookware and educational toys marketed under the Tupperware brand worldwide, and
organized into four geographic segments; and (2) premium cosmetics and skin care
products marketed under the BeautiControl brand in North America.
<TABLE>
<CAPTION>
(In millions) 2000 1999 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales:
Europe $ 424.1 $ 489.1 $ 518.7
Asia Pacific 242.0 242.3 211.5
Latin America 193.0 154.2 186.8
United States 201.8 178.2 186.9
BeautiControl 12.2 -- --
- -------------------------------------------------------------------------------------------
Total net sales $1,073.1 $1,063.8 $1,103.9
===========================================================================================
Operating profit (loss):
Europe $ 94.1 $ 110.7 $ 123.9
Asia Pacific 44.8 35.0 20.2
Latin America 8.0(a) 12.0 (16.4)(b)
United States 15.6 4.7 4.0(b)
BeautiControl 0.1 -- --
- -------------------------------------------------------------------------------------------
Total operating profit 162.6 162.4 131.7
Unallocated expenses (27.9)(a) (23.1)(a) (17.5)(b)
Re-engineering and impairment charge (12.5)(a) (15.1)(a) --
Interest expense, net (21.1) (20.9) (22.7)
- -------------------------------------------------------------------------------------------
Income before income taxes $ 101.1 $ 103.3 $ 91.5
===========================================================================================
Depreciation and amortization:
Europe $ 17.0 $ 22.0 $ 25.7
Asia Pacific 10.6 11.5 12.0
Latin America 9.9 10.0 12.5
United States 11.6 10.3 11.7
BeautiControl 0.2 -- --
Corporate 2.8 1.8 2.1
- -------------------------------------------------------------------------------------------
Total depreciation and amortization $ 52.1 $ 55.6 $ 64.0
===========================================================================================
</TABLE>
a. The Company announced a three-year re-engineering program in 1999. The
re-engineering and impairment charge line provides for severance and
other exit costs. In addition, unallocated expenses include $7.9
million and $1.0 million for 2000 and 1999, respectively, for internal
and external consulting costs incurred in connection with the program.
Additionally, $6.3 million was recorded as a reduction to Latin
America's operating profit related to the write-down of inventory and
receivables associated with adopting an importing distribution model
for certain countries. Together, the after-tax impact of these costs
was $24.2 million and $12.3 million in 2000 and 1999, respectively. See
Note 3 to the financial statements.
b. Includes a pretax charge totaling $42.4 million ($31.4 million after
tax): $22.2 million in Latin America, primarily for bad debts in
Brazil; $16.0 million in the United States, primarily for inventory
obsolescence; and $4.2 million in unallocated expenses, primarily for
corporate downsizing.
<PAGE>
98 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
(In millions) 2000 1999 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital expenditures:
Europe $ 16.4 $ 14.1 $ 13.1
Asia Pacific 7.2 2.6 5.6
Latin America 7.3 11.5 13.6
United States 6.5 11.5 9.0
BeautiControl -- -- --
Corporate 8.9 1.2 4.9
- -----------------------------------------------------------------------------------------
Total capital expenditures $ 46.3 $ 40.9 $ 46.2
=========================================================================================
Identifiable assets:
Europe $ 228.1 $ 237.6 $ 260.7
Asia Pacific 128.2 139.1 148.4
Latin America 130.8 148.7 165.1
United States 141.7 153.4 151.7
BeautiControl 24.4 -- --
Corporate 196.2 117.3 97.5
- -----------------------------------------------------------------------------------------
Total identifiable assets $ 849.4 $ 796.1 $ 823.4
=========================================================================================
</TABLE>
Sales and operating profit in the preceding table are from transactions with
customers. Inter-area transfers of inventory are accounted for at cost. Sales
generated by product line are not captured in the financial statements, and
disclosure of the information is impractical. Sales to a single customer did not
exceed 10 percent of total sales. Export sales were insignificant. Sales to
customers in Germany were $184.8 million, $209.2 million and $241.2 million in
2000, 1999 and 1998, respectively ($178.9 million and $198.1 million in 1999
and 1998, respectively, at 2000 exchange rates). No other foreign country's
sales were material to the Company's total sales. The accounting policies of the
segments are the same as those described in Note 1 - Summary of Significant
Accounting Policies. The Company evaluates the performance of its segments based
on operating profit. Operating profit for each segment included promotion,
distribution and other expenses directly attributable to the segment and
excluded certain expenses managed outside the reportable segment. Unallocated
expenses are corporate expenses and other items not directly related to the
operations of any particular segment.
Corporate assets consist of cash, goodwill and assets maintained for general
corporate purposes. The United States was the only country with long-lived
assets greater than 10 percent of the Company's total assets at December 30,
2000. As of the end of 2000, 1999 and 1998, respectively, long-lived assets in
the United States were $99.3 million, $109.0 million and $110.3 million.
As of December 30, 2000 and December 25, 1999, the Company's net investment in
international operations was $190.8 million and $223.7 million, respectively.
The Company is subject to the usual economic risks associated with international
operations; however, these risks are partially mitigated by the broad geographic
dispersion of the Company's operations.
NOTE 13: COMMITMENTS AND CONTINGENCIES
The Company and certain subsidiaries are involved in litigation and various
legal matters that are being defended and handled in the ordinary course of
business. Included among these matters are environmental issues. None of the
Company's contingencies are expected to have a material adverse effect on its
financial position, results of operations or cash flow.
<PAGE>
Tupperware Corporation 99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Kraft Foods, Inc., which was formerly affiliated with Premark International,
Inc., the Company's former parent, and Tupperware, has assumed any liabilities
arising out of any legal proceedings in connection with certain divested or
discontinued businesses. The liabilities assumed include matters alleging
product liability, environmental liability and infringement of patents.
OPERATING LEASES. Net rental expense for operating leases totaled $35.0 million
in 2000, $37.0 million in 1999 and $36.7 million in 1998. Approximate minimum
rental commitments under non-cancelable operating leases in effect at December
30, 2000, were: 2001 - $14.5 million; 2002 - $8.3 million; 2003 - $2.7 million;
2004 - $1.0 million; 2005 - $0.7; and after 2005 - $0.3 million.
NOTE 14: QUARTERLY FINANCIAL SUMMARY (UNAUDITED)
Following is a summary of the unaudited interim results of operations for each
quarter in the years ended December 30, 2000 and December 25, 1999.
<TABLE>
<CAPTION>
(In millions, except per share amounts) First quarter Second quarter Third quarter Fourth quarter
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year ended December 30, 2000:
Net sales $ 273.1(a) $ 278.4(a) $ 225.1(a) $ 296.5
Cost of products sold 93.8 93.5 74.8 96.3
Net income 19.2(b) 29.1(b) 4.7(b) 21.9(b)
Net income per share:
Basic 0.33(b) 0.50(b) 0.09(b) 0.38(b)
Diluted 0.33(b) 0.50(b) 0.08(b) 0.38(b)
Dividends declared per share 0.22 0.22 0.22 0.22
Composite stock price range:
High 19.00 24.50 23.13 20.62
Low 14.56 15.50 17.19 15.50
Close 15.81 22.02 18.00 20.44
Year ended December 25, 1999:
Net sales $ 255.1(a) $ 276.9(a) $ 216.2(a) $ 315.6(a)
Cost of products sold 84.1 93.1 79.1 108.8
Net income 17.8 14.3(c) 3.5 43.4(c)
Net income per share:
Basic 0.31 0.25(c) 0.06 0.75(c)
Diluted 0.31 0.25(c) 0.06 0.75(c)
Dividends declared per share 0.22 0.22 0.22 0.22
Composite stock price range:
High 21.44 24.06 25.50 21.13
Low 15.06 17.00 19.13 16.00
Close 19.06 20.44 19.38 16.88
</TABLE>
a. In October 2000, the Emerging Issues Task Force issued EITF 00-10
"Accounting for Shipping and Handling Revenues and Costs", which
requires fees billed to customers associated with shipping and handling
to be classified as revenue. Accordingly, the Company has reclassified
the revenue related to the shipping and handling fees billed to
customers, which was previously recorded as a reduction of delivery
expense, to net sales. For 2000, $4.5 million, $5.8 million and $4.9
million were reclassified in the first, second and third quarters,
respectively. For 1999, $4.2 million, $5.6 million, $4.3 million and
$5.9 million were reclassified in the first, second, third and fourth
quarters, respectively.
b. Includes pretax re-engineering and impairment costs of $2.5 million
($1.9 million after tax), $2.1 million ($1.7 million after tax), $1.8
million ($1.3 million after tax) and $20.3 million ($19.3 million after
tax) for the first, second, third and fourth quarter, respectively.
c. Includes pretax re-engineering costs of $15.1 million in the second
quarter ($11.6 million after tax) and $1.0 million in the fourth
quarter ($0.7 million after tax).
<PAGE>
100 Tupperware Corporation
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15: RIGHTS AGREEMENT
In 1996, the Company adopted a shareholders' rights plan with a duration of 10
years, under which shareholders received a right to purchase one one-hundredth
of a share of preferred stock for each right owned. The rights are exercisable
if 15 percent of the Company's common stock is acquired or threatened to be
acquired, and the rights are redeemable by the Company if exercisability has not
been triggered. Under certain circumstances, if 50 percent or more of the
Company's consolidated assets or earning power are sold, a right entitles the
holder to buy shares of the Company equal in value to twice the exercise price
of each right. Upon acquisition of the Company by a third party, a holder could
receive the right to purchase stock in the acquirer. The foregoing percentage
thresholds may be reduced to not less than 10 percent.
<PAGE>
Tupperware Corporation 101
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF TUPPERWARE CORPORATION:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of Tupperware
Corporation and its subsidiaries at December 30, 2000 and December 25, 1999, and
the results of their operations and their cash flows for each of the three years
in the period ended December 30, 2000, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of Tupperware Corporation's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Orlando, Florida
February 20, 2001
<PAGE>
102 Tupperware Corporation
REPORT OF MANAGEMENT
The management of Tupperware is responsible for the preparation of the financial
statements and other information contained in this Annual Report. The financial
statements were prepared in accordance with generally accepted accounting
principles and include amounts that are based upon management's best estimate
and judgments, as appropriate. PricewaterhouseCoopers LLP has audited these
financial statements and has expressed an independent opinion thereon.
The Company maintains internal control systems, policies and procedures designed
to provide reasonable assurance that assets are safeguarded, transactions are
executed in accordance with management's authorization and properly recorded and
accounting records may be relied upon for the preparation of financial
information. There are inherent limitations in all internal control systems
based on the fact that the cost of such systems should not exceed the benefit
derived. Management believes that the Company's systems provide the appropriate
balance of costs and benefits. The Company also maintains an internal auditing
function that evaluates and reports on the adequacy and effectiveness of
internal accounting controls, policies and procedures.
The Audit and Corporate Responsibility Committee of the Board of Directors is
composed entirely of outside directors. The Committee meets periodically and
independently with management, the vice president of internal audit and
PricewaterhouseCoopers LLP to discuss the Company's internal accounting
controls, auditing and financial reporting matters. The vice president of
internal audit and PricewaterhouseCoopers LLP have unrestricted access to the
Audit and Corporate Responsibility Committee.
Management recognizes its responsibility for conducting the Company's affairs in
a manner that is responsive to the interests of its shareholders and its
employees. This responsibility is characterized in the Code of Conduct, which
provides that the Company will fully comply with laws, rules and regulations of
every country in which it operates and will observe the rules of ethical
business conduct. Employees of the Company are expected and directed to manage
the business of the Company accordingly.
/s/ Rick Goings /s/ Paul B. Van Sickle
Rick Goings Paul B. Van Sickle
Chairman and Chief Executive Vice President
Executive Officer and Chief Financial Officer
<PAGE>
Tupperware Corporation 103
OFFICERS AND BOARD OF DIRECTORS
<TABLE>
<CAPTION>
OFFICERS
<S> <C> <C>
RICK GOINGS MICHAEL S. POTESHMAN JOE R. LEE(2,3)
Chairman of the Board and Vice President, Investor Chairman and Chief Executive
Chief Executive Officer Relations and Treasurer Officer,
Darden Restaurants, Inc.,
GERALD M. CROMPTON THOMAS M. ROEHLK Casual Dining Restaurants
Senior Vice President, Senior Vice President,
Product Marketing Worldwide General Counsel and BOB MARBUT(2(*),3)
Secretary Chairman,
JUDY B. CURRY Hearst-Argyle Television, Inc.,
Vice President and Controller JAMES E. ROSE, JR. Television and
Senior Vice President, Communications
KAREL A. DEVYDT Taxes and Government Affairs
Vice President and Chief ANGEL R. MARTINEZ(2)
Information Officer HANS JOACHIM SCHWENZER Executive Vice President and
Senior Vice President, Chief Marketing Officer,
R. GLENN DRAKE Tupperware Worldwide Reebok International Ltd.,
President, Tupperware North Athletic Apparel
America CHRISTIAN E. SKRODER
Group President, Tupperware DAVID R. PARKER(1(*),3)
LILLIAN D. GARCIA Europe, Africa and Managing Partner,
Senior Vice President, Middle East Interprise Technology
Human Resources Partners, L.P.
JOSE R. TIMMERMAN
DAVID T. HALVERSEN Senior Vice President, ROBERT M. PRICE(1)
Senior Vice President, Worldwide Operations President,
Business Development and PSV, Inc.,
Communications PAUL B. VAN SICKLE Technology Consulting
Executive Vice President Services
RICHARD W. HEATH and Chief Financial Officer
Senior Vice President, JOYCE M. ROCHE(1)
Beauty and Nutritional BOARD OF DIRECTORS President and
Products Chief Executive Officer,
RITA BORNSTEIN, PH.D.(1) Girls Incorporated
CHARLES H.R. HENRY President, Rollins College
Vice President, M. ANNE SZOSTAK(2)
Process Re-engineering RICK GOINGS(3(*)) Executive Vice President and
Chairman of the Board and Corporate Director of
ALAN D. KENNEDY Chief Executive Officer, Human Resources,
President Tupperware Corporation FleetBoston Financial,
Diversified Financial Company
STEVEN R. KROOS CLIFFORD J. GRUM(1)
President, Chairman and Chief
Tupperware Asia Pacific Executive Officer, retired,
Temple-Inland Inc.,
ANNE E. NAYLOR Packaging, Paperboard,
Vice President, Internal Audit Building Products and
Financial Services
GAYLIN L. OLSON
President, Tupperware BETSY D. HOLDEN(2)
Latin America President and
Chief Executive Officer,
Kraft Foods, Inc.,
Food Products
</TABLE>
Numbers denote committee
memberships:
1 Audit and Corporate Responsibility Committee
2 Compensation and Directors Committee
3 Executive Committee
(*) Chairperson
<PAGE>
104 Tupperware Corporation
CORPORATE INFORMATION
CORPORATE OFFICE
Tupperware Corporation
P.O. Box 2353
Orlando, FL 32802-2353
(407) 826-5050
14901 S. Orange Blossom Trail
Orlando, FL 32837
TRANSFER AGENT AND REGISTRAR
Wells Fargo Bank Minnesota, N.A.
Shareholder inquiries should
be directed to the agent at:
Wells Fargo Shareowner Services
161 North Concord Exchange
South St. Paul, MN 55075
or:
P.O. Box 64854
St. Paul, MN 55164-0854
Telephone: (800) 468-9716
or (651) 450-4064
Fax: (651) 450-4033
E-mail:
stocktransfer@wellsfargo.com
Notices regarding changes of address and inquiries regarding lost dividend
checks, lost or stolen certificates and transfers of stock should be directed to
the transfer agent.
COMMON STOCK
Listed in the United States on the New York Stock Exchange and traded under the
symbol TUP.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Orlando, Florida
SEC FILINGS AND OTHER
INFORMATION
Copies of the Annual Report,
filings with the Securities and
Exchange Commission and
press releases maybe
obtained by writing to:
Tupperware Corporation
Investor Relations Department
P.O. Box 2353
Orlando, FL 32802-2353
or by calling: (800) 514-3081
via email:
finrel@tupperware.com
FINANCIAL RELATIONS
Michael S. Poteshman
Vice President,
Investor Relations and
Treasurer
(407) 826-4522
Website:
www.tupperware.com
ANNUAL MEETING
The Annual Meeting of
Shareholders will be held at
1:00 p.m. on Thursday, May 17,
2001, at The Hyatt Regency
Orlando International Airport
Hotel, 9300 Airport Boulevard,
Orlando, Florida.
Note: Except as indicated below, trademarks owned by the Company are
(indicated by the use of (R) or (TM) throughout this report.
HSN is a service mark of the Home Shopping Network, Inc.
(*)(C) Disney
Pokemon is a registered trademark of
Nintendo of America, Inc.
Barbie is a registered trademark of
Mattel, Inc.
Barney is a registered trademark
of Lyons Partnership L.P.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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