UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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CROWN CORK & SEAL COMPANY, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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CROWN CORK & SEAL COMPANY, INC.
1997 STOCK-BASED INCENTIVE COMPENSATION PLAN
(Working Restatement including Amendments Nos. 1 and 2)
1. Purpose of the Plan
The purpose of the Plan is to assist the Company, its Subsidiaries and
Affiliates in attracting and retaining valued employees by offering them a
greater stake in the Company's success and a closer identity with it, and to
encourage ownership of the Company's stock by such employees.
2. Definitions
2.1 "Affiliate" means any entity other than the Subsidiaries in
which the Company has a substantial direct or indirect equity interest, as
determined by the Board.
2.2 "Award" means an award of Deferred Stock, Restricted Stock,
Options or SARs under the Plan.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Common Stock" means the common stock of the Company, par value
$5.00 per share, or such other class or kind of shares or other securities
resulting from the application of Section 10.
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2.6 "Company" means Crown Cork & Seal Company, Inc., a Pennsylvania
corporation, or any successor corporation.
2.7 "Committee" means the committee designated by the Board to
administer the Plan under Section 4. The Committee shall have at least two
members, each of whom shall be a member of the Board, a Disinterested Person and
an Outside Director
2.8 "Deferred Stock" means an Award made under Section 6 of the Plan
to receive Common Stock at the end of a specified Deferral Period.
2.9 "Deferral Period" means the period during which the receipt of a
Deferred Stock Award under Section 6 of the Plan will be deferred.
2.10 "Disinterested Person" means a person who meets the definition
of a "Non-Employee Director" under Rule 16b-3(b)(3) promulgated by the
Securities and Exchange Commission under the 1934 Act (as effective on November
1, 1996), or any successor definition adopted by the Securities and Exchange
Commission.
2.11 "Employee" means an officer or other key employee of the
Company, a Subsidiary or an Affiliate including a director who is such an
employee.
2.12 "Fair Market Value" means, on any given date, the mean between
the highest and lowest prices of actual sales of shares of Common Stock on the
principal national securities exchange on which the Common Stock is listed on
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such date or, if Common Stock was not traded on such date, on the last preceding
day on which the Common Stock was traded.
2.13 "Holder" means an Employee to whom an Award is made.
2.14 "Incentive Stock Option" means an Option intended to meet the
requirements of an incentive stock option as defined in section 422 of the Code
and designated as an Incentive Stock Option.
2.15 "1934 Act" means the Securities Exchange Act of 1934, as
amended.
2.16 "Non-Qualified Option" means an Option not intended to be an
Incentive Stock Option, and designated as a Non-Qualified Option.
2.17 "Option" means any stock option granted from time to time under
Section 8 of the Plan.
2.18 "Outside Director" means a member of the Board who: (i) is not
a current employee of the Company, its Subsidiaries or Affiliates; (ii) is not a
former employee of the Company, its Subsidiaries or Affiliates who receives
during the year compensation for prior services with the Company, its
Subsidiaries or Affiliates (other than benefits under a tax-qualified retirement
plan); (iii) has not been an officer of the Company, its Subsidiaries or
Affiliates; and (iv) does not receive any remuneration from the Company, its
Subsidiaries or Affiliates (either directly or indirectly) in any capacity other
than as director. The requirements of
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this Section shall be interpreted and applied in a manner consistent with the
requirements of Treasury Regulation ss.1.162-27(e)(3), including, without
limitation, the rules respecting "de minimis remuneration" contained therein.
2.19 "Plan" means the Crown Cork & Seal Company, Inc. 1997
Stock-Based Incentive Compensation Plan herein set forth, as amended from time
to time.
2.20 "Restricted Stock" means Common Stock awarded by the Committee
under Section 7 of the Plan.
2.21 "Restriction Period" means the period during which Restricted
Stock awarded under Section 7 of the Plan is subject to forfeiture.
2.22 "SAR" means a stock appreciation right awarded by the Committee
under Section 9 of the Plan.
2.23 "Retirement" means retirement from the active employment of the
Company, a Subsidiary or an Affiliate pursuant to the relevant provisions of the
applicable pension plan of such entity or as otherwise determined by the Board.
2.24 "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company (or any subsequent
parent of the Company) if each of the corporations other than the last
corporation in the unbroken chain owns stock possession 50% or more of the
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total combined voting power of all classes of stock in one of the other
corporations in such chain.
2.25 "Ten Percent Shareholder" means a person who on any given date
owns, either directly or indirectly (taking into account the attribution rules
contained in section 424(d) of the Code), stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or a
Subsidiary.
3. Eligibility
Any Employee is eligible to receive an Award.
4. Administration and Implementation of Plan
4.1 The Plan shall be administered by the Committee, which shall
have full power to interpret and administer the Plan and full authority to act
in selecting the Employees to whom Awards will be granted, in determining the
type and amount of Awards to be granted to each such Employee, the terms and
conditions of Awards granted under the Plan and the terms of agreements which
will be entered into with Holders.
4.2 The Committee's powers shall include, but not be limited to, the
power to determine whether, to what extent and under what circumstances an
Option may be exchanged for cash, Restricted Stock, Deferred Stock or some
combination thereof; to determine whether, to what extent and under what
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circumstances an Award is made and operates on a tandem basis with other Awards
made hereunder; to determine whether, to what extent and under what
circumstances Common Stock or cash payable with respect to an Award shall be
deferred, either automatically or at the election of the Holder (including the
power to add deemed earnings to any such deferral); and to determine the effect,
if any, of a change in control of the Company upon outstanding Awards; and to
grant Awards (other than Incentive Stock Options) that are transferable by the
Holder.
4.3 The Committee shall have the power to adopt regulations for
carrying out the Plan and to make changes in such regulations as it shall, from
time to time, deem advisable. The Committee shall have the power unilaterally
and without approval of a Holder to amend an existing Award in order to carry
out the purposes of the Plan so long as such an amendment does not take away any
benefit granted to a Holder by the Award and as long as the amended Award
comports with the terms of the Plan. Any interpretation by the Committee of the
terms and provisions of the Plan and the administration thereof, and all action
taken by the Committee, shall be final and binding on Holders.
4.4 The Committee may condition the grant of any Award or the lapse
of any Deferral or Restriction Period (or any combination thereof) upon the
Holder's achievement of a Performance Goal that is established by the Committee
before the grant of the Award. For this purpose, a "Performance Goal"
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shall mean a goal that must be met by the end of a period specified by the
Committee (but that is substantially uncertain to be met before the grant of the
Award) based upon: (i) the price of Common Stock, (ii) the market share of the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (iii)
sales by the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (iv) earnings per share of Common Stock, (v) return on shareholder
equity of the Company, (vi) costs of the Company, its Subsidiaries or Affiliates
(or any business unit thereof), (vii) cash flow of the Company, its Subsidiaries
or Affiliates (or any business unit thereof), (viii) return on total assets of
the Company, its Subsidiaries or Affiliates (or any business unit thereof), (ix)
return on invested capital of the Company, its Subsidiaries or Affiliates (or
any business unit thereof), (x) return on net assets of the Company, its
Subsidiaries or Affiliates (or any business unit thereof), (xi) operating income
of the Company, its Subsidiaries or Affiliates (or any business unit thereof),
or (xii) net income of the Company, its Subsidiaries or Affiliates (or any
business unit thereof). The Committee shall have discretion to determine the
specific targets with respect to each of these categories of Performance Goals.
Before granting an Award or permitting the lapse of any Deferral or Restriction
Period subject to this Section, the Committee shall certify that an individual
has satisfied the applicable Performance Goal.
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5. Shares of Stock Subject to the Plan
5.1 Subject to adjustment as provided in Section 10, the total
number of shares of Common Stock available for Awards under the Plan shall be
5,000,000 shares.
5.2 The maximum number of shares of Common Stock subject to Awards
that may be granted to any Employee shall not exceed 250,000 during any calendar
year (the "Individual Limit"). Subject to Section
5.3 and Section 10, any Award that is canceled or repriced by the
Committee shall count against the Individual Limit. Notwithstanding the
foregoing, the Individual Limit may be adjusted to reflect the effect on Awards
of any transaction or event described in Section 10. 5.3 Any shares issued by
the Company through the assumption or substitution of outstanding grants from an
acquired company shall not (i) reduce the shares available for Awards under the
Plan, or (ii) be counted against the Individual Limit. Any shares issued
hereunder may consist, in whole or in part, of authorized and unissued shares or
treasury shares. If any shares subject to any Award granted hereunder are
forfeited or such Award otherwise terminates without the issuance of such shares
or the payment of other consideration in lieu of such shares, the shares subject
to such Award, to the extent of any such forfeiture or termination, shall again
be available for Awards under the Plan.
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6. Deferred Stock
An Award of Deferred Stock is an agreement by the Company to deliver to
the recipient a specified number of shares of Common Stock at the end of a
specified deferral period or periods. Such an Award shall be subject to the
following terms and conditions:
6.1 Deferred Stock Awards shall be evidenced by Deferred Stock
agreements. Such agreements shall conform to the requirements of the Plan and
may contain such other provisions as the Committee shall deem advisable.
6.2 Upon determination of the number of shares of Deferred Stock to
be awarded to a Holder, the Committee shall direct that the same be credited to
the Holder's account on the books of the Company but that issuance and delivery
of the same shall be deferred until the date or dates provided in Section 6.5
hereof. Prior to issuance and delivery hereunder the Holder shall have no rights
as a stockholder with respect to any shares of Deferred Stock credited to the
Holder's account.
6.3 Amounts equal to any dividends declared during the Deferral
Period with respect to the number of shares covered by a Deferred Stock Award
will be paid to the Holder currently, or deferred and deemed to be reinvested in
additional Deferred Stock, or otherwise reinvested on such terms as are
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determined at the time of the Award by the Committee, in its sole discretion,
and specified in the Deferred Stock agreement.
6.4 The Committee may condition the grant of an Award of Deferred
Stock or the expiration of the Deferral Period upon the Employee's achievement
of one or more Performance Goal(s) specified in the Deferred Stock agreement. If
the Employee fails to achieve the specified Performance Goal(s), the Committee
shall not grant the Deferred Stock Award to the Employee, or the Holder shall
forfeit the Award and no Common Stock shall be transferred to him pursuant to
the Deferred Stock Award. Dividends paid during the Deferral Period on Deferred
Stock subject to a Performance Goal shall be reinvested in additional Deferred
Stock and the lapse of the Deferral Period for such Deferred Stock shall be
subject to the Performance Goal(s) previously established by the Committee.
6.5 The Deferred Stock agreement shall specify the duration of the
Deferral Period taking into account termination of employment on account of
death, disability, Retirement or other cause. The Deferral Period may consist of
one or more installments. At the end of the Deferral Period or any installment
thereof the shares of Deferred Stock applicable to such installment credited to
the account of a Holder shall be issued and delivered to the Holder (or, where
appropriate, the Holder's legal representative) in accordance with the terms of
the Deferred Stock agreement. The Committee may, in its sole discretion,
accelerate the delivery of all
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or any part of a Deferred Stock Award or waive the deferral limitations for all
or any part of a Deferred Stock Award.
7. Restricted Stock
An Award of Restricted Stock is a grant by the Company of a specified
number of shares of Common Stock to the Employee, which shares are subject to
forfeiture upon the happening of specified events. Such an Award shall be
subject to the following terms and conditions:
7.1 Restricted Stock shall be evidenced by Restricted Stock
agreements. Such agreements shall conform to the requirements of the Plan and
may contain such other provisions as the Committee shall deem advisable.
7.2 Upon determination of the number of shares of Restricted Stock
to be granted to the Holder, the Committee shall direct that a certificate or
certificates representing the number of shares of Common Stock be issued to the
Holder with the Holder designated as the registered owner. The certificate(s)
representing such shares shall be legended as to sale, transfer, assignment,
pledge or other encumbrances during the Restriction Period and deposited by the
Holder, together with a stock power endorsed in blank, with the Company, to be
held in escrow during the Restriction Period.
7.3 During the Restriction Period the Holder shall have the right to
receive dividends from and to vote the shares of Restricted Stock.
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7.4 The Committee may condition the grant of an Award of Restricted
Stock or the expiration of the Restriction Period upon the Employee's
achievement of one or more Performance Goal(s) specified in the Restricted Stock
Agreement. If the Employee fails to achieve the specified Performance Goal(s),
the Committee shall not grant the Restricted Stock to the Employee, or the
Holder shall forfeit the Award of Restricted Stock and the Common Stock shall be
forfeited to the Company.
7.5 The Restricted Stock agreement shall specify the duration of the
Restriction Period and the performance, employment or other conditions
(including termination of employment on account of death, disability, Retirement
or other cause) under which the Restricted Stock may be forfeited to the
Company. At the end of the Restriction Period the restrictions imposed hereunder
shall lapse with respect to the number of shares of Restricted Stock as
determined by the Committee, and the legend shall be removed and such number of
shares delivered to the Holder (or, where appropriate, the Holder's legal
representative). The Committee may, in its sole discretion, modify or accelerate
the vesting and delivery of shares of Restricted Stock.
8. Options
Options give an Employee the right to purchase a specified number of
shares of Common Stock from the Company for a specified time period at a fixed
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price. Options may be either Incentive Stock Options or Non-Qualified Stock
Options. The grant of Options shall be subject to the following terms and
conditions:
8.1 Option Grants: Options shall be evidenced by Option agreements.
Such agreements shall conform to the requirements of the Plan, and may contain
such other provisions as the Committee shall deem advisable.
8.2 Option Price: The price per share at which Common Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but,
in the case of grants of Incentive Stock Options, shall be not less than the
Fair Market Value of a share of Common Stock on the date of grant. In the case
of any Incentive Stock Option granted to a Ten Percent Shareholder, the option
price per share shall not be less than 110% of the Fair Market Value of a share
of Common Stock on the date of grant. The option price per share for
Non-Qualified Options may be less than the Fair Market Value of a share of
Common Stock on the date of grant.
8.3 Term of Options: The Option agreements shall specify when an
Option may be exercisable and the terms and conditions applicable thereto. The
term of an Option shall in no event be greater than fifteen years (five years in
the case of an Incentive Stock Option granted to a Ten Percent Shareholder and
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ten years in the case of all other Incentive Stock Options) and no Option may be
exercisable sooner than six months from its date of grant.
8.4 Incentive Stock Options: Each provision of the Plan and each
Option agreement relating to an Incentive Stock Option shall be construed so
that each Incentive Stock Option shall be an incentive stock option as defined
in section 422 of the Code, and any provisions of the Option agreement thereof
that cannot be so construed shall be disregarded. In no event may a Holder be
granted an Incentive Stock Option which does not comply with such grant and
vesting limitations as may be prescribed by section 422(b) of the Code.
Incentive Stock Options may not be granted to employees of Affiliates.
8.5 Restrictions on Transferability: No Incentive Stock Option shall
be transferable otherwise than by will or the laws of descent and distribution
and, during the lifetime of the Holder, shall be exercisable only by the Holder.
Upon the death of a Holder, the person to whom the rights have passed by will or
by the laws of descent and distribution may exercise an Incentive Stock Option
only in accordance with this Section 8.
8.6 Payment of Option Price: The option price of the shares of
Common Stock upon the exercise of an Option shall be paid in full in cash at the
time of the exercise or, with the consent of the Committee, in whole or in part
in Common Stock valued at Fair Market Value on the date of exercise. With the
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consent of the Committee, payment upon the exercise of a Non-Qualified Option
may be made in whole or in part by Restricted Stock (based on the fair market
value of the Restricted Stock on the date the Option is exercised, as determined
by the Committee). In such case the Common Stock to which the Option relates
shall be subject to the same forfeiture restrictions originally imposed on the
Restricted Stock exchanged therefor.
8.7 Termination by Death: If a Holder's employment by the Company, a
Subsidiary or Affiliate terminates by reason of death, any Option granted to
such Holder may thereafter be exercised (to the extent such Option was
exercisable at the time of death or on such accelerated basis as the Committee
may determine at or after grant) by, where appropriate, the Holder's transferee
or by the Holder's legal representative, for a period of 6 months from the date
of death or until the expiration of the stated term of the Option, whichever
period is shorter.
8.8 Termination by Reason of Retirement or Disability:
(A) If a Holder's employment by the Company, a Subsidiary or
Affiliate terminates by reason of disability (as determined by the Committee),
any unexercised Option granted to the Holder may thereafter be exercised by the
Holder (or, where appropriate, the Holder's transferee or legal representative),
to the extent it was exercisable at the time of termination or on such
accelerated basis as the Committee may determine at or after grant, for a period
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of 24 months or such shorter term as determined by the Committee (3 months in
the case of an Incentive Stock Option) from the date of such termination of
employment or until the expiration of the stated term of the Option, whichever
period is shorter.
(B) If a Holder's employment by the Company, a Subsidiary or
Affiliate terminates by reason of Retirement, any unexercised Option granted to
the Holder may thereafter be exercised by the Holder (or, where appropriate, the
Holder's transferee or legal representative), to the extent it was exercisable
at the time of termination or on such accelerated basis as the Committee may
determine at or after grant, for a period of up to five years or such shorter
term as determined by the Committee (3 months in the case of an Incentive Stock
Option) from the date of such termination of employment or until the expiration
of the stated term of the Option, whichever period is shorter.
8.9 Other Termination: If a Holder's employment by the Company,
Subsidiary or Affiliate terminates for any reason other than death, disability
or Retirement, all unexercised Options awarded to the Holder shall terminate on
the date of such termination of employment.
9. Stock Appreciation Rights
SARs give the Employee the right to receive, upon exercise of the SAR,
the increase in the Fair Market Value of a specified number of shares of Common
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Stock from the date of grant of the SAR to the date of exercise. The grant of
SARs shall be subject to the following terms and conditions:
9.1 SARs are rights to receive a payment in cash, Common Stock,
Restricted Stock or Deferred Stock as selected by the Committee. The value of
these rights, which are determined by the appreciation in the number of shares
of Common Stock subject to the SAR, shall be evidenced by SAR agreements. Such
agreements shall conform to the requirements of the Plan and may contain such
other provisions as the committee shall deem advisable. An SAR may be granted in
tandem with all or a portion of a related Option under the Plan ("Tandem SAR"),
or may be granted separately ("Freestanding SAR"). A Tandem SAR may be granted
either at the time of the grant of the Option or at any time thereafter during
the term of the Option and shall be exercisable only to the extent that the
related Option is exercisable. In no event shall any SAR be exercisable with the
first six months of its grant.
9.2 The base price of a Tandem SAR shall be the option price under
the related Option. The base price of a Freestanding SAR shall be not less than
100% of the Fair Market Value of the Common Stock, as determined by the
Committee, on the date of grant of the Freestanding SAR.
9.3 An SAR shall entitle the recipient to receive a payment equal to
the excess of the Fair Market Value of the shares of Common Stock covered
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by the SAR on the date of exercise over the base price of the SAR. Such payment
may be in cash, in shares of Common Stock, in shares of Deferred Stock, in
shares of Restricted Stock or any combination, as the Committee shall determine.
Upon exercise of a Tandem SAR as to some or all of the shares of Common Stock
covered by the grant, the related Option shall be canceled automatically to the
extent of the number of shares of Common Stock covered by such exercise, and
such shares shall no longer be available for purchase under the Option pursuant
to Section 8. Conversely, if the related option is exercised as to some or all
of the shares of Common Stock covered by the grant, the related Tandem SAR, if
any, shall be canceled automatically to the extent of the number of shares of
Common Stock covered by the Option exercise.
9.4 SARs shall be subject to the same terms and conditions
applicable to Options as stated in sections 8.3, 8.5, 8.7, 8.8 and 8.9. SARs
shall also be subject to such other terms and conditions not consistent with the
Plan as shall be determined by the Committee.
10. Adjustments upon Changes in Capitalization
In the event of a reorganization, recapitalization, stock
split, spin-off, split-off, split-up, stock dividend, issuance of stock rights,
combination of shares, merger, consolidation or any other change in the
corporate structure of the Company affecting Common Stock, or any distribution
to stockholders other than a
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cash dividend, the Board shall make appropriate adjustment in the number and
kind of shares authorized by the Plan and any adjustments to outstanding Awards
as it determines appropriate. No fractional shares of Common Stock shall be
issued pursuant to such an adjustment. The Fair Market Value of any fractional
shares resulting from adjustments pursuant to this Section shall, where
appropriate, be paid in cash to the Holder.
11. Effective Date, Termination and Amendment
The Plan shall become effective on February 27, 1997, subject to
shareholder approval. Options granted under the Plan prior to such shareholder
approval shall expressly not be exercisable prior to such approval. The Plan
shall remain in full force and effect until the earlier of 5 years from the date
of its adoption by the Board, or the date it is terminated by the Board. The
Board shall have the power to amend, suspend or terminate the Plan at any time,
provided that no such amendment shall be made without stockholder approval which
shall (i) increase (except as provided in Section 10) the total number of shares
available for issuance pursuant to the Plan; (ii) change the class of employees
eligible to be Holders; (iii) modify the Individual Limit (except as provided
Section 10) or the categories of Performance Goals set forth in Section 4.4; or
(iv) change the provisions of this Section 11. Termination of the Plan pursuant
to this Section 11 shall not affect Awards outstanding under the Plan at the
time of termination.
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12. Transferability
Except as provided below, Awards may not be pledged, assigned or
transferred for any reason during the Holder's lifetime, and any attempt to do
so shall be void and the relevant Award shall be forfeited. The Committee may
grant Awards (except Incentive Stock Options) that are transferable by the
Holder during his lifetime, but such Awards shall be transferable only to the
extent specifically provided in the agreement entered into with the Holder. The
transferee of the Holder shall, in all cases, be subject to the provisions of
the agreement between the Company and the Holder.
13. General Provisions
13.1 Nothing contained in the Plan, or any Award granted pursuant to
the Plan, shall confer upon any Employee any right with respect to continuance
of employment by the Company, a Subsidiary or Affiliate, nor interfere in any
way with the right of the Company, a Subsidiary or Affiliate to terminate the
employment of any Employee at any time.
13.2 For purposes of this Plan, transfer of employment between the
company and its Subsidiaries and Affiliates shall not be deemed termination of
employment.
13.3 Holders shall be responsible to make appropriate provision for
all taxes required to be withheld in connection with any Award, the
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exercise thereof and the transfer of shares of Common Stock pursuant to this
Plan. Such responsibility shall extend to all applicable Federal, state, local
or foreign withholding taxes. In the case of the payment of Awards in the form
of Common Stock, or the exercise of Options or SARs, the Company shall, at the
election of the Holder, have the right to retain the number of shares of Common
Stock whose Fair Market Value equals the amount to be withheld in satisfaction
of the applicable withholding taxes. Agreements evidencing such Awards shall
contain appropriate provisions to effect withholding in this manner.
13.4 Without amending the Plan, Awards may be granted to Employees
who are foreign nationals or employed outside the United States or both, on such
terms and conditions different from those specified in the Plan as may, in the
judgment of the committee, be necessary or desirable to further the purpose of
the Plan.
13.5 To the extent that Federal laws (such as the 1934 Act, the Code
or the Employee Retirement Income Security Act of 1974) do not otherwise
control, the Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of Pennsylvania and construed accordingly.
13.6 The Committee may amend any outstanding Awards to the extent it
deems appropriate. Such amendment may be made by the Committee without the
consent of the Holder, except in the case of amendments adverse to the Holder,
in which case the Holder's consent is required to any such amendment.
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