Exhibit 10 (e)
EXECUTIVE
INCENTIVE
BONUS
PLAN
1998
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, 1998) 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:
* 75% 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 1998.
* 25% of the bonus calculation will be based on achievement of our
corporate goals related to the development of new business for The
West Company.
1. our success in growing West's current business revenues through new
business
2. our success with increasing West's revenues through new business
opportunities (acquisitons, mergers, licensing agreements, etc.)
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:
EPS % of Bonus
Achieved Achieved
$2.80 -maximum- 150
2.74 140
2.68 130
2.63 120
2.57 110
2.51 -target- 100
2.45 90
2.39 80
2.34 70
2.28 60
2.22 50
Below $2.22 0
Interim EPS amounts will be calculated usisng $.01 = 1.67%
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 achieves an EPA of $2.52 and is
awarded 100% for revenue growth.
Target Bonus% Achieved Bonus % Bonus $
EPS 75% x Bonus = Opp. x (from scale) = Earned x Salary = Earned
Rev. Target Bonus Bonus $
Growth 25% x Bonus = Opp. x % Achieved = Earned x Salary = Earned
EPS 75% x 30% = 22.5% x 101.67% = 22.88 x 120,000 = $27,456
Rev.
Growth 25% x 30% = 7.5% x 100% = 7.5% x 120,000 = $9,000
TOTAL BONUS EARNED 30.38% $36,456
STOCK BONUS PLAN
o 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.
o 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.
o 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.
o 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.
o 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.
o Ownership records will be reviewed annually to verify continuous
ownership.
o 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.
ELIGIBIILITY
Eligibility and the amount and type of awards under this plan are solely at the
discretion of management and are not guaranteed under any circumstances.
Participants must be active employees on December 31, 1998 to be eligible for
bonus payment consideration.