<PAGE> This report contains 12 pages (including cover page)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1994
-----------------------
Commission File Number 0-5884
-----------
THE WEST COMPANY, INCORPORATED
(Exact name of registrant as specified in its charter)
----------------------------------------------------------------------------
Pennsylvania 23-1210010
------------------------------------- ------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification Number)
101 Gordon Drive, PO Box 645, 19341-0645
Lionville, PA ----------------------
------------------------------------- (Zip Code)
Address of principal executive
offices)
Registrant's telephone number, including area code 610-594-2900
------------
N/A
----------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
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 twelve months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
---------- --------
September 30, 1994 - - - 16,059,890
- - -------------------------------------------------------------------------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<PAGE>
Index
Form 10-Q for the
Quarter Ended September 30, 1994
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Income for the Three and Nine Months
ended September 30, 1994 and October 3, 1993 3
Condensed Consolidated Balance Sheets as of September 30, 1994
and December 31, 1993 4
Condensed Consolidated Statements of Cash Flows for the Nine
Months ended September 30, 1994 and October 3, 1993 5
Notes to Interim Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Part II - Other Information
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES
<PAGE>
Item 1. Financial Statements
The West Company, Incorporated and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<TABLE>
<CAPTION> Three Months Ended Nine Months Ended
Sept. 30, 1994 Oct. 3, 1993 Sept. 30, 1994 Oct. 3, 1993
--------------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 87,400 100 % $81,900 100 % $266,000 100 % $255,900 100 %
Cost of goods sold 62,000 71 57,800 71 181,900 68 180,800 71
----------------------------------------------------------------------------------------------------
Gross profit 25,400 29 24,100 29 84,100 32 75,100 29
Selling, general and
administrative expenses 15,600 18 15,100 18 48,000 18 45,800 18
Other (income) expense, net (200) - 600 1 1,000 1 (100) -
----------------------------------------------------------------------------------------------------
Operating profit 10,000 11 8,400 10 35,100 13 29,400 11
Interest expense 1,100 1 700 1 2,400 1 2,100 1
----------------------------------------------------------------------------------------------------
Income before income taxes and
minority interests 8,900 10 7,700 9 32,700 12 27,300 10
Provision for income taxes 3,200 4 2,800 3 12,100 4 10,400 4
Minority interests 300 - 300 - 1,400 1 1,100 -
----------------------------------------------------------------------------------------------------
Income from consolidated operations 5,400 6 % 4,600 6 % 19,200 7 % 15,800 6 %
Equity in net income
of affiliated companies 200 200 900 800
---------------------------------------------------------------------------------------------------
Income before cumulative effect of
change in accounting method 5,600 4,800 20,100 16,600
Cumulative effect to January 1, 1993 of the
change in accounting for income taxes - - - 1,000
----------------------------------------------------------------------------------------------------
Net income $ 5,600 $ 4,800 $ 20,100 $ 17,600
----------------------------------------------------------------------------------------------------
Net income per share:
Income before cumulative effect
of change in accounting method $ .35 $ .30 $ 1.26 $ 1.05
Cumulative effect of change in
accounting method - - - .06
$ .35 $ .30 $ 1.26 $ 1.11
- - ----------------------------------------------------------------------------------------------------
Average shares outstanding 16,049 15,879 16,000 15,817
The Company adopted Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, in 1993.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The West Company, Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
<A> <C> <C>
ASSETS Sept. 30, 1994 Dec. 31, 1993
------------------ ----------
Current assets:
Cash, including equivalents $ 15,400 $ 5,200
Accounts receivable 53,900 43,300
Inventories 37,700 34,500
Other current assets 12,800 10,200
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Total current assets 119,800 93,200
---------------------------------------------------------------------------
Net property, plant and equipment 188,900 172,800
Investments in affiliated companies 22,200 17,800
Intangibles and other assets 32,800 23,600
---------------------------------------------------------------------------
Total Assets $363,700 $307,400
---------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 13,000 $ 5,400
Notes payable 14,100 2,300
Accounts payable 14,100 14,100
Other current liabilities 32,300 25,000
---------------------------------------------------------------------------
Total current liabilities 73,500 46,800
---------------------------------------------------------------------------
Long-term debt, excluding current portion 23,200 24,600
Deferred income taxes 21,100 18,400
Other long-term liabilities 20,500 18,600
Minority interests 14,700 10,900
Shareholders' equity 210,700 188,100
---------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 363,700 $307,400
---------------------------------------------------------------------------
Shareholders' equity per share $ 13.12 $ 11.82
---------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The West Company Incorporated and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1994 October 3, 1993
---------------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income, plus net non-cash items $38,800 $ 34,200
Changes in assets and liabilities (6,100) (12,000)
---------------------------------------------------------------------------
Net cash provided by operating activities 32,700 22,200
---------------------------------------------------------------------------
Cash flows from investing activities:
Property, plant and equipment acquired (18,000) (26,900)
Proceeds from sales of assets 900 8,000
Payments for acquisitions,
net of cash acquired (8,200) -
---------------------------------------------------------------------------
Net cash used in investing activities (25,300) (18,900)
---------------------------------------------------------------------------
Cash flows from financing activities:
New long-term debt - 2,300
Repayment of long-term debt (1,300) (3,100)
Notes payable, net 6,300 (800)
Dividend payments (5,300) (4,700)
Capital contribution by minority owner 400 -
Sale of common stock, net 2,300 2,500
---------------------------------------------------------------------------
Net cash provided by (used in)
financing activities 2,400 (3,800)
---------------------------------------------------------------------------
Effect of exchange rates on cash 400 (100)
---------------------------------------------------------------------------
Net increase (decrease) in cash,
including equivalents $10,200 $ (600)
---------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The West Company, Incorporated and Subsidiaries
Notes to Interim Financial Statements
The interim consolidated financial statements for the three and nine month
periods ended September 30, 1994 are based on the Company's accounts
without audit and should be read in conjunction with the consolidated
financial statements and notes thereto of The West Company, Incorporated
appearing in the Company's 1993 Annual Report on Form 10-K.
1.Interim Period Accounting Policy
--------------------------------
In the opinion of management, the unaudited Condensed Consolidated
Balance Sheet as of September 30, 1994 and the related unaudited
Consolidated Statement of Income for the three and nine months periods
then ended and the unaudited Condensed Consolidated Statement of Cash
Flows for the nine month period then ended and for the comparative
periods in 1993 contain all adjustments, consisting only of normal
recurring accruals, necessary to present fairly the financial position
as of September 30, 1994 and the results of operations and cash flows
for the respective periods. The results of operations for any interim
period are not necessarily indicative of results for the full year.
In the fourth quarter of 1993, the Company standardized its reporting
year end to December 31 thereby eliminating the one month lag for all
international operations. Consequently, the first nine months of 1994,
include the first nine calendar months for all operations, but 1993
comparative information reflects the nine months from December 1992
through August 1993 for all international subsidiaries.
Operating Expenses
------------------
Certain operating expenses have been annualized for interim reporting
purposes.
Income Taxes
------------
The tax rate used for interim periods is the estimated annual effective
consolidated tax rate, based on current estimates of full year results,
except that taxes applicable to operating results in Brazil are recorded
on a basis discrete to the period, and prior year adjustments, if any,
are recorded as identified.
<PAGE>
The West Company, Incorporated and Subsidiaries
Notes to Interim Financial Statements
(Continued)
2. Inventories at September 30, 1994 and December 31, 1993 are summarized
as follows:
Audited
(in thousands) 1994 1993
----- -------
Finished goods $ 16,800 $ 14,100
Work in process 5,300 4,700
Raw materials and supplies 15,600 15,700
------ ------
$ 37,700 $ 34,500
------ ------
------ ------
3. The carrying value of property, plant and equipment is determined as
follows:
Audited
(in thousands) 1994 1993
-------- -------
Property, plant and equipment $ 360,700 $ 322,800
Less accumulated depreciation 171,800 150,000
------- -------
Net property, plant and equipment $ 188,900 $ 172,800
------- -------
------- -------
4. Common stock issued at September 30, 1994 was 16,844,735 shares, of
which 784,845 shares were held in treasury. Dividends of $.11 per
common share were paid in each quarter of 1994.
5. The Company has accrued the estimated cost of environmental compliance
expenses related to current and former manufacturing facilities. The
ultimate cost to be incurred by the Company cannot be fully
determined; however, based on information currently available, the
Company believes the accrued liability is sufficient to cover the
future costs of required remedial actions.
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial
--------------------------------------------------------------------
Condition and Results of Operations.
---------------------------------------------------
Results of Operations for the Three and Nine Months Ended
-----------------------------------------------------------------------
September 30, 1994 Versus the Comparable 1993 Periods.
-----------------------------------------------------------------------
Net Sales
------------
Net sales for the third quarter 1994 were $5.5 million, or 7%, higher than
the same period in 1993. In the U.S., demand increased for Safety Squeeze,
a closure system used on an over-the-counter pain reliever, and Spout-Pak,
a gable beverage carton fitment sold in consumer products markets. In
addition, higher sales reflect the acquisition of a 51% interest in
Schubert Seals A/S, favorable foreign exchange rate differences, and volume
increases in the Company's core health care markets. Especially notable
was increased demand in Brazil related to the improved economic outlook there.
For the nine months, net sales were $10.1 million higher compared to the
same period in 1993. The variance in the reported periods (see note 1 to
Interim Financial Statement) included in 1993 favorably impacted reported
sales comparisons by $2.1 million. In addition, increased sales reflect
consolidation of sales of companies acquired in 1994, sales to U.S.
consumer products markets and machinery sales. Volume increases were
evident in core health care markets. In part, these increases were offset
by the absence of Tri/West Systems, Inc. sales (sold in the third quarter
of 1993) and unfavorable exchange rate variances due to a stronger U.S.
dollar.
Gross Profit
----------------
Gross profit for the third quarter ended 1994 was $1.3 million, or 5%,
higher compared to the same quarter in 1993. Margins were flat compared to
the 1993 period and the improvement reflects the sales increase. Vacation
closedown at the Company's and its customers' facilities in the quarter
negatively impact comparisons to earlier quarters.
For the nine month period, gross profit margins were 2.2 percentage points
higher in 1994 versus the same period in 1993. Improved operating
efficiencies in the U.S.and higher product demand contributed to the
increase over 1993. Also, the standardization of reporting periods
accounted for $1.6 million of the comparative increase in gross profit, the
majority of which was offset by the unfavorable foreign exchange impact of
a stronger U.S. dollar.
Selling, general and administrative expenses increased by $0.5 million for
the third quarter 1994 versus the same 1993 quarter, and are $2.2 million
higher for the nine months of 1994 compared to 1993. Higher expenses
reflect acquired companies' costs, rental and other expenses related to the
Company's new headquarters facility, and outside service costs. Reporting
period standardization and charitable contributions also negatively
impacted comparisons. Cost savings because of staff reductions over the
last three years are evident in core operations costs.
Other income for the quarter was $0.2 million versus other expense of $0.6
<PAGE>
million in 1993. For the nine month, other expense was $1.0 million
compared with $0.1 millon of other income in the 1993 period.
Implementation of a new economic plan in Brazil, which recently
established the new REAL currency in parity with the U.S. dollar, had the
effect of significantly reducing translation losses primarily in the
quarter. However, interest income earned in Brazil was also lower in
1994 when compared to the same periods in 1993. The other significant
event impacting nine month comparison is the first quarter 1993 gain
from the sale of the Company's former headquarters and research center
facilities.
Interest Expense and Minority Interests
------------------------------------------------------
Interest expense for the third quarter of 1994 increased by $0.4 million
compared to the same period in 1993, and the nine month period was $0.3
million higher in 1994 compared to 1993. These increases reflect the May
1994 acquisition and consolidation of Schubert Seals A/S. Year-to-date
interest expense increases are offset, in part, by lower average debt
levels.
Minority interests reflect higher earnings of the Company's subsidiaries in
Europe and the 49% minority ownership in Schubert Seals A/S.
Taxes
--------
The tax rate for the third quarter ended 1994 was 36.3%. This reflects the
reduction of the estimated effective annual tax rate to 37% because of
lower state tax liabilities and shifts in the geographic source of expected
earnings. The effective annual tax rate at the end of 1993 was 38%.
Net Income
---------------
Net income for the third quarter 1994 was $5.6 million, or $.35 per share,
compared to net income for the third quarter 1993 of $4.8 million, or $.30
per share. Net income for nine months was $20.1 million, or $1.26 per
share, compared to net income of $16.6 million, or $1.05 per share (before
the cumulative adjustment of deferred taxes to adopt Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes). The Company's
adoption of SFAS 109 added $1 million, or $.06 per share, to the nine month
1993 earnings.
Financial Position
------------------------
Working capital at September 30, 1994 was $46.3 million, a ratio of 1.63 to
Working capital of $46.4 million at December 31, 1993 reflected a ratio of
1.99 to 1. Higher levels of receivables and cash at September 30, 1994,
reflecting timing of sales in the quarter, were offset by higher short-term
borrowings.
Cash flows provided by operating activities were adequate to fund
acquisition payments for Schubert Seals A/S, Senetics Inc., and
DanBioSyst (UK) Ltd, capital expenditures, long-term debt repayments
and dividends. However, total debt increased as cash balances rose
in the period. Total debt as a percentage of total invested capital was
18.2% at the end of September 30, 1994, compared to 14.0% at the end of
December 31, 1993. The Company recently signed a new long-term
revolving credit facility which makes available $30 million in addition
to existing unused credit facilities of $10 million at September 30, 1994.
<PAGE>
Part II - Other Information
----------------------------
Item 1. Legal Proceedings
Reference is made to certain legal proceedings contained in Part II, Item
1, of the Company's Form 10-Q for the quarter ended June 30, 1994.
Item 6. Exhibits and Reports on Form 8-K
----------------------------------------------
(a) Exhibit 10(a) - The West Company Non-Qualified Deferred
Compensation Plan for Designated Executive Officers
Exhibit 27. Financial Data Schedule.
(b) No reports on Form 8-K have been filed for the three months
ended September 30, 1994.
<PAGE> SIGNATURES
-----------------
Pursuant to the requirements 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.
THE WEST COMPANY, INCORPORATED
-----------------------------------
(Registrant)
November 14, 1994 /s/ R. J. Land
-------------------- -----------------------------------
Date (Signature)
R. J. Land
Sr. Vice President,
Finance and Administration
and Chief Financial Officer
November 14, 1994 /s/ A. M. Papso
-------------------- -----------------------------------
Date (Signature)
A. M. Papso
Vice President and Corporate
Controller
(Chief Accounting Officer)
THE WEST COMPANY
NON-QUALIFIED DEFERRED COMPENSATION
PLAN FOR DESIGNATED EXECUTIVE OFFICERS
--------------------------------------
The West Company (the "Company") hereby adopts this Plan to permit
designated Executive Officers of the Company to defer receipt of a specified
portion of their annual compensation:
1. Eligible Officers: Employees of the Company or its subsidiaries are
-----------------
eligible to make the election set forth in this Plan if they are:(i) employed
in the United States as an Executive Officer of the Company or any of its
subsidiaries, and (ii) designated as an eligible Executive Officer by the
Compensation Committee.
2. Deferrable Compensation: An eligible Executive Officer may elect to
-----------------------
defer any whole percentage of (i) his annual base salary, (ii) cash bonus, or
(ii) both ("Compensation").
3. Election to Defer:
-----------------
(a) An eligible Executive Officer who desires to defer payment of any
portion of his Compensation in any calendar year shall notify the Company's
Secretary in writing on or before December 15 of the prior year, stating how
much of his Compensation shall be deferred. An election so made shall be
irrevocable and shall apply to each calendar year thereafter until the Executive
Officer shall, on or before any December 15, notify the Company's Secretary in
writing that a different election shall apply to the following calendar years,
which election shall likewise continue in effect until similarly changed. For
1994 only, an eligible Executive Officer may elect to defer Compensation earned
after the date the Executive Officer notifies the Company's Secretary in writing
of the amount of his Compensation he elects to defer.
(b) An eligible Executive Officer who elects to defer Compensation to
the Plan during a calendar year shall be deemed to have waived his right to
participate in The West Company Savings Plan for that year and, accordingly,
shall be ineligible to participate in the Savings Plan.
4. Matching Contributions: The Company will contribute to the Plan an
----------------------
amount equal to 50% of the first 6% of base salary an Executive Officer elects
to defer. Matching contributions shall not be made for deferrals of base salary
in excess of 6% or any portion of a cash bonus deferred by an Executive Officer.
5. Investment of Deferred Compensation Accounts:
--------------------------------------------
(a) Allocations: The Company shall establish an "A" Account and a
-----------
"B" Account for each Executive Officer contributing to the Plan. An Executive
Officer's Compensation deferred pursuant to Paragraph 3 during a month shall be
<PAGE>
allocated to his "A" Account as of the last day of that month. Company matching
contributions made pursuant to Paragraph 4 during a month shall be allocated to
his "B" Account as of the last day of the month.
(b) Investment: Each Executive Officer shall direct the investment
----------
of his "A" Account and "B" Account among the Investment Funds offered under the
Plan by complying with administrative procedures established by the Company. An
Executive Officer's election shall specify the whole percentage of his "A"
Account and "B" Account to be invested in an Investment Fund. An Executive
Officer's election shall remain in effect until a new election is made. An
Executive Officer may change an election of Investment Funds or transfer
existing Account balances among Investment Funds once per month by complying
with the administrative procedures established by the Company. The Company
shall establish procedures to review the investment elections made by an
Executive Officer and shall retain the authority to override any investment
election if it determines, in its sole discretion, that such an override is in
the Company's best interests.
(c) Investment Funds. An Executive Officer may invest amounts
----------------
credited to his "A" Account and "B" Account among the Investment Funds selected
by the Company. The Company shall make available to each Executive Officer
literature summarizing the investment characteristics of each Investment Fund.
(d) Valuation of Participant Accounts. Any increase or decrease in
----------------------------------
the fair market value of an Investment Fund shall be computed and credited to or
deducted from the Accounts of all Executive Officers who invested in the
Investment Fund in accordance with policies and procedures established by the
Company.
(e) Indemnity. By electing to defer Compensation pursuant to the
----------
Plan, each Executive Officer hereby recognizes and agrees that the Company and
any other individual responsible for administering the Plan (including the
Company's Secretary or any trustee responsible for holding assets under the
Plan) (collectively, the "Administrators") are in no way responsible for the
investment performance of the Executive Officer's Account.
6. Vesting:
-------
(a) Regular Vesting: An Executive Officer shall always be 100%
---------------
vested in the Compensation deferred pursuant to Paragraph 3. An Executive
Officer shall be 40% vested in matching contribution made on his behalf under
Paragraph 4 after two years of employment with the Company or any of its
subsidiaries. An Executive Officer's vested interest in such matching
contributions will increase by 20% per year of employment, so that he is 100%
vested after five years of employment with the Company or any of its
subsidiaries. A "year of employment" will be credited to an Executive Officer
for each 12 month period, beginning on his date of hire by the Company or any of
its subsidiaries (and each anniversary thereof), during which he is continuously
employed by the Company or any of its subsidiaries.
<PAGE>
(b) Vesting After Change of Control of the Company: Notwithstanding
-----------------------------------------------
Paragraph 6(a) above, an Executive Officer shall immediately be 100% vested in
matching contributions made pursuant to Paragraph 4 after a Change of Control of
the Company. A Change of Control of the Company shall be deemed to have
occurred when, in connection with or as the direct or indirect result of a
Control Transaction, either of the following events shall have occurred:
(i) within one year after a Control Transaction, individuals who
were Directors of the Company immediately prior to such Control Transaction
shall cease to constitute a majority of the Board (or of the Board of Directors
of any successor to the Company); or
(ii) any entity or person, either alone or acting in concert with
others, acquires shares of the Company's stock for the purpose of effecting a
change in the Board specified in Paragraph 6(b)(i) above and such acquisition
results in that entity or person, either alone or acting in concert with others,
directly or indirectly owning beneficially 51% or more of the Company's
outstanding shares.
A "Control Transaction" is any acquisition or sale of any assets or capital
stock of the Company, whether or not approved by the Company's Board of
Directors or its shareholders.
7. Payment of Deferred Compensation:
--------------------------------
(a) Distribution Event: An Executive Officer's Accounts (or
------------------
relevant portion thereof) shall be distributed as soon as reasonably feasible
after the appropriate Valuation Date following a Distribution Event. The
following events, and no others, shall constitute Distribution Events:
(i) For allocations to an Executive Officer's "A" Account and
"B" Account, the termination of his employment with the Company and all of its
subsidiaries for any reason, including retirement, death or disability;
(ii) For allocations to an Executive Officer's "A" Account during
each calendar year, the fifth anniversary of the end of that year unless the
Executive Officer elects (by informing the Company's Secretary) before the
fourth anniversary of the end of that year to defer the distribution to a later,
specified date (in which case the distribution shall be made on the date
specified by the Executive Officer); or
(iii) For allocations to an Executive Officer's "A" Account,
the determination by the Compensation Committee that the Executive Officer has
incurred a Hardship. For purposes of this Paragraph, a "Hardship" is a
financial burden of the general type described in Section 10.2 of The West
Company Savings Plan that cannot reasonably be relieved through use of the
Executive Officer's personal assets. To apply for a Hardship distribution, an
Executive Officer must submit a written application to the Company's Secretary
indicating (i) the nature of the hardship, (ii) the amount the Executive Officer
needed to alleviate the hardship, and (iii) the Account from which a
distribution, if approved, shall be made. The Compensation Committee shall
have
<PAGE>
complete and unfettered discretion to approve or deny, for any or no reason,
any application for a Hardship distribution submitted by an Executive Officer.
Amounts allocated to an Executive Officer's "B" Account shall not be
available for distribution under Paragraphs 7(a)(ii) and (iii).
(b) Valuing Accounts for Distributions: The value of an Executive
----------------------------------
Officer's "A" Account and "B" Account shall be determined as of the effective
date of a distribution from the Plan (the "Valuation Date"), which shall be a
date selected by the Company within a administratively reasonable time period
following a Distribution Event. The relevant portion of an Executive Officer's
Account shall then be distributed in accordance with this Paragraph 7.
(c) Form of Distribution: Except as otherwise provided, all
--------------------
distributions from the Plan shall be made in a cash lump sum. For amounts
payable upon termination of employment pursuant to Paragraph 7(a)(i), an
Executive Officer may receive the distribution in a lump sum or in five equal
annual installments. If an installment distribution is elected, the first
installment shall be paid on the January 15 immediately following the
Executive's termination from employment, and the others on January 15 of the
second, third, fourth and fifth years following such termination. The Executive
Officer shall continue to direct the investment of any amount remaining in his
Account and the second to fifth installments shall be adjusted to take into
account any earnings or losses.
At the time the Executive Officer elects to defer Compensation
pursuant to Paragraph 3, he shall elect whether a distribution pursuant to
Paragraph 7(a)(i) shall be made in a cash lump sum or in five equal annual
installments. This election shall continue in effect until changed by the
Executive Officer, provided that any such change shall be effective only if the
Executive Officer submits appropriate instructions, in accordance with
administrative procedures established by the Company, by December 15 of the year
prior to the year in the Executive Officer becomes entitled to a distribution.
8. Designation of Beneficiary: If a Executive Officer dies prior to
--------------------------
receiving the entire balance of his Account, any balance remaining in his
Account shall be paid in a lump sum to the Executive Officer's designated
beneficiary, or if the Executive Officer has not designated a beneficiary in
writing to the Company's Secretary, to his estate. Any designation of
beneficiary may be revoked or modified at any time by the Executive Officer.
9. Unsecured Obligation of Company: The Company's obligations to
-------------------------------
establish and maintain Accounts for each eligible electing Executive Officer and
to make payments of deferred compensation to him under this Plan shall be the
general unsecured obligations of the Company. The Company shall be under no
obligation to establish any separate fund, purchase any annuity contract, or in
any other way make special provision or specifically earmark any funds for the
payment of any amounts called for under this Plan, nor shall this Plan or any
actions taken under or pursuant to this Plan be construed to create a trust of
any kind, or a fiduciary relationship between the Company and any eligible
Executive Officer, his designated beneficiary, executors or administrators, or
<PAGE>
any other person or entity. If the Company chooses to establish such a fund or
purchase such an annuity contract or make any other arrangement to provide for
the payment of any amounts called for under this Plan, such fund contract or
arrangement shall remain part of the general assets of the Company, and no
person claiming benefits under this Plan shall have any right, title, or
interest in or to any such fund, contract or arrangement.
10. Withholding of Taxes: The rights of a Executive Officer (and his
---------------------
beneficiaries) to payments under this Plan shall be subject to the Company's
obligations at any time to withhold from such payments for any income or other
tax on such payments.
11. Assignability: No portion of a Executive Officer's Account may be
-------------
assigned or transferred in any manner, nor shall any Account be subject to
anticipation or to voluntary or involuntary alienation.
12. Amendments and Termination: This Plan may be amended by a Committee
---------------------------
of the Board of Directors consisting only of Directors not eligible to defer
compensation under this Plan. This Plan may be terminated at any time by the
Board of Directors. No amendment or termination may adversely affect a
Executive Officer's Account existing on the date such amendment or termination
is made, nor any election previously made under the Plan as to compensation for
the calendar year in which the amendment or termination occurs.
13. Effective Date: The Plan shall be effective with respect to
--------------
Executive Officer's Compensation earned after August 30, 1994.
To record the adoption of the Plan, The West Company has caused its
authorized officers to affix its corporate name and seal this 30th day of
August, 1994.
[CORPORATE SEAL] THE WEST COMPANY, INCORPORATED
Attest:------------------------ By:---------------------------------
John R. Gailey III George R. Bennyhoff
Secretary Senior Vice President - Human
Resources
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 15,400
<SECURITIES> 0
<RECEIVABLES> 54,900
<ALLOWANCES> 1,000
<INVENTORY> 37,700
<CURRENT-ASSETS> 119,800
<PP&E> 361,700
<DEPRECIATION> 172,800
<TOTAL-ASSETS> 363,700
<CURRENT-LIABILITIES> 73,500
<BONDS> 23,200
<COMMON> 4,200
0
0
<OTHER-SE> 206,500
<TOTAL-LIABILITY-AND-EQUITY> 363,700
<SALES> 266,000
<TOTAL-REVENUES> 266,000
<CGS> 181,900
<TOTAL-COSTS> 181,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,400
<INCOME-PRETAX> 32,700
<INCOME-TAX> 12,100
<INCOME-CONTINUING> 19,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,100
<EPS-PRIMARY> 1.26
<EPS-DILUTED> 1.26
</TABLE>
