Exhibit 10 (e)
EXECUTIVE
INCENTIVE
BONUS
PLAN
1997
The Incentive Bonus Plan for 1997 is based on the following
concepts:
* Excellent service to our customers will create
shareholder value.
* Employees must share in the Company s success.
* Return on Shareholders Equity (ROE) is the measurement
of success for the total corporation.
Here's how the plan works:
TARGET BONUS
The target bonus opportunity is a specific percentage of
your base salary (as of December 31, 1997) and represents
the amount of bonus you will receive if 100% of all
performance factors are achieved.
PERFORMANCE FACTORS
There are two performance factors which are used to
calculate bonuses:
* 80% of the bonus calculation will depend on our
achievement of the Return on Equity (ROE) target
committed to in the Company s business plan for 1997.
* 20% of the bonus calculation will be based on
achievement of our corporate goals related to the
development of new business for The West Company.
BONUS CALCULATION
When the Company s ROE results exceed the target, your bonus
will increase as results improve. If the results at least
reach the threshold but fall short of the target, your bonus
will be something less than your target bonus opportunity.
The following scale will be used for calculating bonuses:
% of Goal % of Bonus
Achieved Achieved
125 -maximum- 150
120 135
115 120
110 110
105 105
100 -target- 100
95 95
90 90
85 70
80 50
Below 80 0
Please notice that as the performance of these two factors
exceeds 110% of goal, your bonus opportunity accelerates
considerably.
BONUS PAYOUTS
Once the year's results are confirmed, your bonus award will
be calculated applying appropriate tax deductions. Of the
after-tax amount, 75% will be paid in cash (check) and 25%
will be converted into shares of common stock of The West
Company. These shares will be deposited with an investment
firm where accounts are maintained for our Stock Bonus Plan.
We encourage you to retain these shares so as to accumulate
shares toward your personal stock ownership objective and to
take advantage of the Incentive Share opportunities of the
Stock Bonus Plan. Here are the highlights of the Stock Bonus
Plan and information on your personal stock ownership
guideline.
EXAMPLE
An executive earning $120,000, whose target bonus is 30%,
would have his/her bonus calculated as follows if the
Company reaches 112% of its ROE target and 100% of the
new business development goals are achieved.
Target Bonus %Achieved Bonus % Bonus $
ROE 80% x Bonus = Opp. x (from scale) = Earned x Salary = Earned
NBD Target Bonus Bonus % Bonus $
Goals 20% x Bonus = Opp. x % Achieved = Earned x Salary = Earned
ROE 80% x 30% = 24% x 114% = 27.4% x $120,000 = $32,832
NBD
Goals 20% x 30% = 6% x 100% = 6% x $120,000 = $7,200
TOTAL BONUS EARNED 33.4% $40,032
STOCK BONUS PLAN
25% of your after-tax annual bonus is paid in shares of
The West Company common stock.
Participants may elect to commit shares ( Bonus
Shares ) to long-term holding by depositing those
shares into an authorized account. Shares will be held
in the participant's name.
If a participant commits to long-term holding, a number
of restricted shares ("Incentive Shares") equal to 25%
of the committed bonus shares will be issued to the
participant.
The incentive shares will be legended so that the
restrictions lapse at the end of four years from the
date of issuance, so long as the bonus shares are
continuously held by the participant during that four
year period.
If a participant retires under The West Company s
Salaried Employees' Retirement Plan, the restrictions
will lapse, so long as the bonus shares have been
retained continuously. He/she will be entitled to
receive a portion of the Incentive Shares according to
the following schedule:
25% with at least one but less than two years
continuous ownership of the Bonus Shares.
50% with at least two but less than three years
continuous ownership of the Bonus Shares.
75% with at least three but less than four years
continuous ownership of the Bonus Shares.
Participants will receive dividends from Bonus Shares
and restricted shares as they are declared. These
dividends will be reinvested in stock of The West
Company.
Ownership records will be reviewed annually to
verify continuous ownership.
The Plan is authorized under the LONG-TERM INCENTIVE
PLAN.
STOCK OWNERSHIP GUIDE
Your personal stock ownership guideline is ____% of your
base salary and is expected to be achieved in 5-7 years from
the time the Stock Bonus Plan was implemented (1993) or from
the year an individual becomes eligible to participate in
the Incentive Bonus Plan.
MONITORING OUR PROGRESS
Our progress in achieving the ROE target will be
communicated throughout the year, and your manager will
review your individual objectives on a quarterly basis.
Use your TQM skills to lead the organization in
overachieving our business objectives. You will share in the
reward when we succeed.