Crown Holdings (CCK) Announces Job Cuts, Will Buyback $800M Through FY14
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On December 14, 2012, Crown Holdings, Inc. (NYSE: CCK)) entered into Amendment No. 1 to the Amended and Restated Rights Agreement (the “Amendment”) with Wells Fargo Bank, N.A. (“Wells Fargo”) pursuant to which the Final Expiration Date, as defined in the Amended and Restated Rights Agreement, dated as of December 9, 2004, between the Company and Wells Fargo (the “Rights Agreement”), was accelerated from August 10, 2015 to December 14, 2012. As a result of the Amendment, the Rights Agreement and the underlying common stock purchase rights embodied thereby expired and terminated effective as the close of business on December 14, 2012.
The foregoing summary description of the Amendment is not complete and is qualified in its entirety by reference to text of the Amendment, a copy of which is attached hereto as Exhibit 4.1 and incorporated herein by reference.
In connection with the Amendment, the Board of Directors (the “Board”) approved a Shareholder Rights Plan Policy governing the adoption of any shareholder rights plan in the future. The Policy is included in the Company’s Corporate Governance Guidelines which are available on the Company’s website.
On December 13, 2012, the Company committed to a restructuring plan for its European operations subject to confirmation following completion of consultation processes with employee representatives. The plan, which was in response to the Company’s ongoing monitoring of manufacturing capacity, is expected to be completed in 2013 and is designed to reduce manufacturing capacity and headcount.
The total estimated charge for the plan, primarily cash costs for employee severance, is expected to range between $40 million and $50 million. The majority of the charge is expected to be recorded in the fourth quarter of 2012 with cash payments commencing in 2013.
The Board has authorized the repurchase of up to $800 million of the Company’s common stock through the end of 2014. Stock repurchases pursuant to this authorization may be made in the open market or through privately negotiated transactions, and at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions.
This new authorization supersedes the Company’s previously announced $600 million share repurchase authorization dating from 2010. As of September 30, 2012, the Company had repurchased approximately $200 million of its common stock during 2012 and currently has an ongoing share repurchase for an aggregate of $50 million of Crown’s common stock under the $600 million authorization.
The foregoing summary description of the Amendment is not complete and is qualified in its entirety by reference to text of the Amendment, a copy of which is attached hereto as Exhibit 4.1 and incorporated herein by reference.
In connection with the Amendment, the Board of Directors (the “Board”) approved a Shareholder Rights Plan Policy governing the adoption of any shareholder rights plan in the future. The Policy is included in the Company’s Corporate Governance Guidelines which are available on the Company’s website.
On December 13, 2012, the Company committed to a restructuring plan for its European operations subject to confirmation following completion of consultation processes with employee representatives. The plan, which was in response to the Company’s ongoing monitoring of manufacturing capacity, is expected to be completed in 2013 and is designed to reduce manufacturing capacity and headcount.
The total estimated charge for the plan, primarily cash costs for employee severance, is expected to range between $40 million and $50 million. The majority of the charge is expected to be recorded in the fourth quarter of 2012 with cash payments commencing in 2013.
The Board has authorized the repurchase of up to $800 million of the Company’s common stock through the end of 2014. Stock repurchases pursuant to this authorization may be made in the open market or through privately negotiated transactions, and at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions.
This new authorization supersedes the Company’s previously announced $600 million share repurchase authorization dating from 2010. As of September 30, 2012, the Company had repurchased approximately $200 million of its common stock during 2012 and currently has an ongoing share repurchase for an aggregate of $50 million of Crown’s common stock under the $600 million authorization.
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