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THE WEST COMPANY (LOGO)
A Partner
in the Daikyo *
Pharma-Gummi * West Group
_______________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_______________
Lionville, PA 19341
April 5, 1994
To The Shareholders of
The West Company, Incorporated
The Annual Meeting of the Shareholders of The West Company, Incorporated
will be held at the Company's headquarters at 101 Gordon Drive, Lionville,
Pennsylvania 19341, on Tuesday, May 3, 1994, at 9:30 A.M., for the following
purposes:
(1) to elect four directors in Class I (term expiring in 1997);
(2) to approve the appointment of Coopers & Lybrand as independent
accountants for 1994; and
(3) to transact such other business as may properly be brought before the
meeting,
all as set forth in the Proxy Statement accompanying this notice.
Only shareholders of record at the close of business on March 11, 1994
will be entitled to notice of and to vote at the meeting.
Please date, sign and return the enclosed proxy in the enclosed
envelope, whether or not you expect to attend the meeting in person.
By Order of the Board of Directors,
John R. Gailey III
Secretary
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PROXY STATEMENT
_______________
THE WEST COMPANY, INCORPORATED
101 Gordon Drive
Lionville, Pennsylvania 19341
_______________
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of The West
Company, Incorporated (the "Company") for use at the Annual Meeting of
Shareholders to be held at the Company's headquarters, 101 Gordon Drive,
Lionville, Pennsylvania, on Tuesday, May 3, 1994, at 9:30 A.M. Proxies may
be revoked at any time prior to the exercise thereof by giving written notice
to the Secretary of the Company or by a later-dated proxy executed by the
person executing the prior proxy and filed with the Company or otherwise
presented at the meeting. The proxy and this proxy statement are being
mailed to shareholders on or about April 5, 1994.
Shareholders of record at the close of business on March 11, 1994 will
be entitled to vote at the meeting. On that date, there were 15,958,726
shares of the Company's Common Stock (the "Common Stock") outstanding. Each
outstanding share will entitle the holder to one vote on all business of the
meeting. Shareholders attending the Annual Meeting may vote their shares in
person whether or not a proxy has been previously executed and returned. If
the accompanying proxy card is signed and returned to the Company, and not
revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the persons designated as
proxy holders on the proxy card will vote FOR election of the nominees listed
below as directors and FOR the proposal to approve the appointment of
independent public accountants more fully described in this proxy statement.
Directors are elected by a plurality vote of all votes cast at the
meeting. A shareholder may withhold votes from any or all nominees by
notation to that effect on the accompanying form of proxy. The affirmative
vote of a majority of the votes cast by holders of Common Stock entitled to
vote is required for approval of the appointment of independent accountants.
Votes cast by proxy or in person at the meeting will be counted by
persons appointed by the Company to act as judges of election. The judges of
election will treat abstentions and broker non-votes as present for purposes
of determining the presence of a quorum. Because directors are elected by a
plurality of votes, abstentions and broker non-votes will not have an impact
on their election. Abstentions and broker non-votes will not be counted in
tabulating the number of votes cast on approval of the appointment of
independent accountants.
In the event that any of the nominees becomes unavailable, which the
Company does not expect, it is intended that, pursuant to the accompanying
proxy, votes will be cast for such substitute nominee or nominees as may be
designated by the Board of Directors upon the recommendation of the
Nominating and Corporate Structure Committee. The Board of Directors is not
aware of any matters to be presented at the meeting other than those set
forth in the accompanying notice. If any other matters properly come before
the meeting, the persons named in the enclosed proxy will vote in accordance
with their best judgment.
In addition to solicitation by mail, directors, officers and other
employees of the Company may solicit proxies personally and by telephone.
The cost of soliciting proxies will be borne by the Company.
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SHARE OWNERSHIP OF
MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 15, 1994, certain
information concerning each person known to the Company to have been the
beneficial owner of more than 5% of the Common Stock.
<TABLE>
<CAPTION>
Amount and Percent
Name and Address of Nature of Beneficial of
Beneficial Owner Ownership(1) Class
- -------------------- --------------------- ---------
<S> <C> <C>
Jean Wike Faust.................................. 1,261,734(2) 7.9%
16 Fox Chase Road
Malvern, PA 19355
Mitchell Hutchins Institutional Investors Inc.... 995,500(3) 6.3%
1285 Avenue of the Americas
New York, NY 10019
TriMark Investment Management Inc................ 998,000 6.3%
One First Canadian Place, Suite 5600
P.O. Box 487
Toronto, Ontario Canada M5X 1E5
Franklin H. West................................. 920,939(4) 5.8%
111 North 49th Street
Philadelphia, PA 19139
William S. West.................................. 1,283,492(4)(5) 8.0%
101 Gordon Drive
Lionville, PA 19341
J. Roffe Wike, II................................ 1,739,554(2)(6) 10.9%
1435 Walnut Street
Philadelphia, PA 19102
Wilmington Trust Company......................... 1,348,440(7) 8.5%
1100 North Market Street
Wilmington, DE 19890
</TABLE>
_______________
(1) Based on information furnished to the Company by the respective
shareholders. Except as indicated below, the Company is informed that
the beneficial owners have sole voting and sole investment power over the
shares shown opposite their names.
(2) Includes 226,000 shares held by a trust of which Mrs. Faust is the sole
beneficiary. J. Roffe Wike, II, the brother of Mrs. Faust, has sole
investment and voting power over such shares in his capacity as trustee.
Also includes 582,954 shares held by a trust as to which Mrs. Faust and
Mr. Wike share voting and investment power.
(3) Represents shared voting and investment power.
(4) Franklin H. West, William S. West and Fidelity Bank, N.A. share the
investment power over the same 746,264 shares which are held by two trusts
of which they are co-trustees. Does not include 54,785 shares owned by
Dr. West's wife and children, as to which he disclaims beneficial
ownership.
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(5) Does not include 228,900 shares owned by Mr. West's wife, as to which he
disclaims beneficial ownership.
(6) Includes options to acquire 3,000 shares. Does not include 7,840 shares
owned by Mr. Wike's wife, as to which he disclaims beneficial ownership.
(7) Includes (i) sole voting power with respect to 440,620 shares and (ii)
shared voting and investment power with respect to 907,820 shares.
The following table sets forth, as of March 15, 1994, information
concerning the beneficial ownership of Common Stock by each director and
nominee for director, each of the Company's executive officers named in the
Summary Compensation Table and all directors and executive officers as a
group. No director or officer owns more than 1% of the outstanding Common
Stock except William S. West, who owns 8.0% of the outstanding Common Stock,
and J. Roffe Wike, II, who, including shares which may be acquired within 60
days, is the beneficial owner of 10.9% of the Common Stock. All directors
and officers as a group are the beneficial owners of 21.9% of the Common
Stock, including shares which may be acquired by them within 60 days.
Additional information concerning the beneficial ownership of Messrs. West
and Wike is contained in footnotes related to the table above.
Shares owned Shares which
directly and may be acquired
Name indirectly(1) within 60 days(2)
---- ------------- ------------------
Tenley E. Albright..................... 0 0
William J. Avery....................... 500 3,000
J. E. Dorsey........................... 1,636 14,000
George W. Ebright...................... 1,000 1,500
George J. Hauptfuhrer, Jr.............. 6,000 3,000
L. Robert Johnson...................... 2,000 3,000
Raymond J. Land........................ 948 16,000
William G. Little...................... 15,217 115,000
John P. Neafsey........................ 2,000 3,000
Walter F. Raab......................... 4,000 3,000
Monroe E. Trout........................ 2,000 1,500
William S. West........................ 1,283,492 0
J. Roffe Wike, II...................... 1,736,554 3,000
Geoffrey F. Worden..................... 1,500(3) 0
Hans Wimmer............................ 111,160 0
Victor E. Ziegler...................... 22,844 49,689
All directors and executive
officers as a group (21 persons).... 3,230,497 330,057
___________
(1) Includes shares allocated to individual accounts under the Company's
Savings Plan and restricted shares granted under the Company's Stock Bonus
Program as follows: Mr. Dorsey - 105 and 306 shares, respectively; Mr.
Land - 199 and 150 shares, respectively; Mr. Little - 536 and 932 shares,
respectively; Mr. Ziegler - 5,592 and 176 shares, respectively; and all
directors and executive officers as a group - 13,350 and 2,359 shares,
respectively.
(2) Stock options available for exercise within 60 days under the Company's
Long-Term Incentive Plan and 1992 Non-Qualified Stock Option Plan for Non-
Employee Directors.
(3) Does not include 500 shares held by Mr. Worden's wife, as to which he
disclaims beneficial ownership.
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BOARD OF DIRECTORS
Meetings by and Committees of the Company's Board of Directors
The Board of Directors, which held six meetings in 1993, has four standing
committees: the Audit Committee, the Finance Committee, the Compensation
Committee and the Nominating and Corporate Structure Committee. All
directors attended more than 75% of the total number of meetings of the Board
and the committees on which they served.
The Audit Committee assists the Board in fulfilling its responsibilities
of ensuring that management is maintaining an adequate system of internal
controls such that there is reasonable assurance that assets are safeguarded
and that financial reports are properly prepared. The Committee's duties
include: (1) recommending annually to the Board a firm of independent
accountants for appointment as auditors of the Company; (2) reviewing the
fees paid to the independent accountants; (3) reviewing with the independent
accountants the scope and results of each annual audit; and (4) reviewing
with the independent accountants and the Company's financial officers
comments and recommendations made by the same. The members of this
Committee, which met four times during the year (including twice as a
combined Audit and Finance Committee), are L. Robert Johnson, Chairman,
George W. Ebright, Walter F. Raab and Geoffrey F. Worden.
The Finance Committee serves as liaison between management and the Board
on important financial transactions and financial policy matters. This
Committee consults with and advises management on financial strategies,
policies and procedures, acquisitions, divestitures, capital expenditure
requests and similar matters, and makes recommendations on such matters to
the Board. The members of this Committee, which met five times during the
year (including twice as a combined Audit and Finance Committee), are William
J. Avery, Chairman, George W. Ebright, L. Robert Johnson, John P. Neafsey and
J. Roffe Wike, II.
The Compensation Committee determines the Company's compensation
arrangements with executive management and reports its actions to the Board
of Directors. In addition, it administers the Company's Long-Term Incentive
Plan. The members of this Committee, which met five times during the year,
are John P. Neafsey, Chairman, George J. Hauptfuhrer, Jr. and Monroe E.
Trout.
The Nominating and Corporate Structure Committee recommends to the Board
nominees to be elected to the Board by the shareholders or by the Board in
the case of vacancies which occur between meetings of shareholders. In
addition, this Committee recommends to the Board appointments to be made to
various Board committees and evaluates all Company policies relating to the
recruitment of directors (such as compensation arrangements) and makes
recommendations to the Board and various Board committees with regard to such
matters. The members of this Committee, which met five times during the
year, are George J. Hauptfuhrer, Jr., Chairman, Tenley E. Albright, Monroe E.
Trout, William S. West and J. Roffe Wike, II.
The Nominating and Corporate Structure Committee will consider nominations
for directors made by shareholders who deliver written notice thereof to the
Secretary of the Company not less than 60 days nor more than 90 days prior to
the meeting of shareholders, except that if the date of the meeting is not
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publicly announced by the Company more than 20 days prior to the meeting, the
notice must be delivered not later than the close of business on the earlier
of (i) the seventh day following the day on which notice of the date of the
meeting was first mailed to shareholders or such public disclosure was made,
whichever occurs first, or (ii) the fourth day prior to the meeting. The
notice must set forth certain information concerning the shareholder and his
nominees, including the following: their names and addresses; a
representation as to the number of shares beneficially owned by the
shareholder and that such shareholder is the holder of record of the
Company's shares and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; a description of
all arrangements or understandings between the shareholder and each nominee
and any other person or persons pursuant to which the nominations are to be
made; such other information as would be required to be included in a proxy
statement soliciting proxies for the election of the nominees; and the
consent of each nominee to serve as a director if so elected. The chairman
of the meeting may refuse to acknowledge the nomination of any person not
made in compliance with the foregoing procedure.
Compensation of Directors
Each director who is not employed by the Company or one of its
subsidiaries receives an annual retainer of $16,000 per year, plus attendance
fees of $1,000 for board meetings and $750 for committee meetings. The
Chairman of the Board receives an annual fee of $35,000, and the chairman of
each board committee receives an annual fee of $3,500. Directors may elect
annually to defer all or any part of their director's fees, which deferred
amounts will be payable upon their termination as a director. In addition,
Geoffrey F. Worden was engaged by the Company during the fiscal year as a
consultant in certain financial matters. The Company paid Mr. Worden a total
of $22,500 in fees for his services.
Each non-employee director who has completed five years of service as a
director will be entitled to receive an annual retirement benefit, commencing
at age 60, of between 50% and 100% of his base annual retainer at the time of
retirement, depending on the length of his service, for a maximum period of
15 years or until his earlier death. Non-employee directors are eligible to
receive annually an option to acquire 1,500 shares of Common Stock under the
Company's 1992 Non-Qualified Stock Option Plan for Non-Employee Directors.
Each option will expire five years from the date of grant.
Transaction with Hans Wimmer
The Company owns approximately 74.5% and Hans Wimmer, a director and
executive officer of the Company, owns approximately 25.5% of the outstanding
equity interests of the following five companies: Pharma Gummi Wimmer West;
Pharma-Metall; Gressenicher Werkzeugbau; Pharma-Gummi France; and Pharma-
Gummi Italia (collectively, the "Five Companies"). In connection with the
acquisition of its present level of ownership in 1986, the Company entered
into a Put and Call Agreement (the "1986 Agreement") with Mr. Wimmer pursuant
to which the Company has the option to purchase, and Mr. Wimmer has the
option to require the Company to purchase, the remaining equity interests of
the Five Companies held by Mr. Wimmer. These options may be exercised by
either party at any time after October 14, 1994 and under certain other
circumstances. Under the 1986 Agreement the purchase price for the remaining
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<PAGE> 7
interests would be determined through an independent valuation in accordance
with a formula specified in the agreement.
In March 1993, the Company and Mr. Wimmer amended and restated the 1986
Agreement to fix the purchase price of the remaining interests at DM
45,000,000 ($27,272,730 at an average 1993 exchange rate of DM 1.65), of
which DM 30,000,000 ($18,181,820) would be payable in cash and the remaining
DM 15,000,000 ($9,090,910) would be payable by delivery of a number of shares
of Common Stock based on the market price of the stock and exchange rates
prevailing at the time of the purchase. The purchase price was determined
primarily by using valuations prepared by management based upon future
earnings derived from the 1993-1995 business plans for the Company's
consolidated European operations. In arriving at the purchase price, the
Board of Directors also considered valuations conducted according to the
formula specified in the 1986 Agreement and a valuation by an independent
expert in the area of acquisition valuations.
The Company and Mr. Wimmer have also entered into a Registration Rights
Agreement to permit a public distribution of the Common Stock which could be
acquired by Mr. Wimmer in an exercise of an option under the amended and
restated put and call agreement. This Agreement gives Mr. Wimmer the right
to require the Company to file a registration statement with the Securities
and Exchange Commission on one occasion during each of the two years
following an exercise of an option under the amended put and call agreement.
In March 1993, Mr. Wimmer's management contracts with each of the Five
Companies were modified to provide for management of the European operations
under the direction of the Company's CEO and Board of Directors. In
connection with the foregoing transactions, the Company and Mr. Wimmer have
also entered into an agreement which provides for an annual incentive bonus
based on consolidated European Division profits.
The terms of the amended and restated put and call agreement and the other
agreements with Mr. Wimmer were determined by arms-length negotiation between
the parties. The Company believes that the fixing of the purchase price and
the changes in the management relationship will eliminate potential conflicts
of interest, thereby permitting the Company to manage more effectively its
European operations and enhance its global business decision-making process.
The Company believes the terms of the agreements were fair and in the best
interest of the Company.
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ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, the terms of which
expire alternatively over a three-year period. The Board proposes the
election of four directors in Class I to serve for three years until the 1997
Annual Meeting and until their successors have been elected and qualified.
The Board's nominees, William J. Avery, George J. Hauptfuhrer, Jr., William
G. Little and Monroe E. Trout, are incumbent directors. Each nominee has
consented to being named and to serve if elected.
Nominees for Director - Term to Expire 1997
William J. Avery Mr. Avery, 53, has been a director since 1992.
He is Chairman of the Board, President and
Chief Executive Officer of Crown Cork & Seal
Company, Inc., a manufacturer of cans, crowns
and machinery.
George J. Hauptfuhrer, Jr. Mr. Hauptfuhrer, 67, has been a director since
1973. He is Of Counsel of Dechert Price &
Rhoads, a law firm where he was a partner,
Chairman and Chief Executive Officer until his
retirement in 1990.
William G. Little Mr. Little, 51, has been a director, President
and Chief Executive Officer since 1991. He was
Division President of Kendall Inc., a medical
device manufacturer, from 1990 to 1991 and Group
Vice President and Division President of
C.R. Bard, Inc., a medical device
manufacturer, from 1975 to 1990.
Monroe E. Trout, M.D. Dr. Trout, 63, has been a director since 1991.
He is Chairman of the Board, President and
Chief Executive Officer of American Healthcare
Systems, a health care provider. Dr. Trout is
a director of Criticare Inc., Gensia Inc. and
the University of California San Diego
Foundation.
The Board of Directors recommends a vote "FOR" these nominees.
DIRECTORS CONTINUING IN OFFICE
The directors listed below will continue to serve for terms expiring in
1995 and 1996, respectively.
Class II - Term Expiring in 1995
George W. Ebright Mr. Ebright, 56, has been a director since
1992. He is Chairman of the Board of Cytogen
Corp., a biotechnology pharmaceutical company,
where he served as Chief Executive Officer
until 1993. Mr. Ebright is a director of ECRI,
Univax Biologics, Inc. and Arrow International.
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<PAGE> 9
L. Robert Johnson Mr. Johnson, 52, has been a director since
1989. He is Managing General Partner of
Founders Capital Partners, a venture capital
partnership.
John P. Neafsey Mr. Neafsey, 54, has been a director since
1987. He is President of JN Associates,
investment consultants. Mr. Neafsey was
President and Chief Executive Officer of
Greenwich Capital Markets, an investment
banking firm, from 1990 to 1993. Prior to
1990, Mr. Neafsey was Executive Vice President,
Chief Financial Officer and a director of Sun
Company, Inc., an energy resources company.
Hans Wimmer Mr. Wimmer, 64, has been a director since 1979.
He is President of Pharma-Gummi Wimmer West
GmbH.
Geoffrey F. Worden Mr. Worden, 54, was appointed a director by the
Board in November 1993. He has been President
of South Street Capital, Inc., an investment
company, since 1992. Previously, Mr. Worden was
Managing Director of Kidder, Peabody & Co.
Incorporated.
Class III - Term Expiring in 1996
Tenley E. Albright, M.D. Dr. Albright, 58, was appointed a director by
the Board in December 1993. She is a physician
and surgeon and member of the Corporation of
the New England Baptist Hospital, Woods Hole
Oceanographic Institution and the board of
Overseers' Committee to Visit Harvard Medical
School. From 1989 through 1993 Dr. Albright
was Founder, President, then Chairman of the
Institute for Clinical Applications/Vital
Sciences Inc., a cancer research and
development institution. She is a director of
State Street Bank and Trust Company, Whitehead
Institute for Biomedical Research and State
Street Boston Corporation.
Walter F. Raab Mr. Raab, 69, has been a director since 1973.
Prior to his retirement in 1990, he was
Chairman and Chief Executive Officer of AMP
Incorporated, producers of electrical/electronic
connection devices, where he continues to serve
as a director. Mr. Raab is also a director of
Dauphin Deposit Corporation, Air Products &
Chemicals, Inc. and Harris Corporation.
William S. West Mr. West, 66, has been a director since 1958
and Chairman of the Board since July 1985.
Previously, he served as the Company's
President and Chief Executive Officer.
J. Roffe Wike, II Mr. Wike, 67, has been a director since 1962.
Prior to his retirement in January 1994, Mr.
Wike was Senior Partner and a director of Cooke
& Bieler, investment counselors.
Victor E. Ziegler Mr. Ziegler, 63, has been a director since 1991
and Executive Vice President since 1992. He was
Division President, Health Care from 1991 to
1992 and Group President, Manufacturing prior
to 1991.
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EXECUTIVE COMPENSATION
REPORT OF THE BOARD COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors determines the
compensation of each of the Company's executive officers, excluding Hans
Wimmer. The Committee is comprised of three non-employee directors
independent of management. No member of the Committee has any insider or
interlocking relationships with the Company, as those terms are defined in
applicable rules and regulations of the Securities and Exchange Commission.
The discussion of executive compensation that follows does not apply to
Mr. Wimmer whose compensation is determined by the terms of his management
contracts with various European subsidiaries and by a separate agreement with
the Company under which he is entitled to an annual bonus based on European
Division profits. Mr. Wimmer is not entitled to participate in the Company's
annual and long-term incentive programs.
Compensation Philosophy
The Company's executive compensation philosophy is designed to further the
following four objectives: (1) link shareholder and management interests; (2)
reward management for producing superior corporate results relative to
comparable companies; (3) recognize individual performance; and (4) assist
the Company in attracting and retaining key executives of the highest
calibre.
Compensation of executive officers is comprised primarily of base salary,
annual incentive bonus and long-term incentive compensation in the form of
stock options. Base salaries are set to approximate the 50th percentile
level of comparable positions, while total compensation (salary, bonus and
long-term incentives) is targeted to parallel the Company's competitive
financial performance. The Company has a target financial performance
objective of top quartile results, and thus, targets total compensation at
the 75th percentile of comparable positions, subject to meeting annual
corporate and individual performance goals.
The Company's competitive financial performance is measured primarily by
comparing the results of the Company with those of a self-selected peer group
of 12 companies (the "Peer Group"). In establishing executive pay levels,
the Committee compares its executive compensation with compensation data from
surveys of companies in general industry with annual revenues of
approximately $330 million and comparable employee base supplied by
independent compensation consultants. The Committee uses general industry
compensation data because such data is more readily available than
compensation data for the Peer Group and pay and performance levels for the
general industry group have been shown to be similar to those of the Peer
Group.
The Committee believes that significant share ownership by senior
executives will further the goal of aligning management and shareholder
interests, as well as providing the executives an opportunity and incentive
to realize long-term appreciation of assets. In 1993, the Committee
established guidelines for share ownership of various levels of the Company's
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<PAGE> 11
management. These guidelines call for executives to own, within five to
seven years of attaining their respective positions, an amount of Common
Stock with a market value equal to:
Chief Executive Officer - 500% of Base Salary
Executive Vice President - 300% of Base Salary
Senior Executive - 200% of Base Salary
Although the foregoing share ownership guidelines are not mandatory, the
Committee reviews annually each executive's progress toward meeting his or
her share ownership goal. The Committee has no set policy on failure to
meet the guidelines.
Principal Compensation Elements
Base salaries. Base salaries are reviewed annually, and adjusted as
appropriate. In determining base salaries for Mr. Little and the other
executive officers, the Committee relies primarily on comparative
compensation data, and also takes into consideration management
recommendations and the relative experience of the individual involved.
Annual bonuses. Annual incentive bonuses are paid to executives under the
Company's incentive bonus plan upon achievement of financial, strategic and
management performance goals. Each participant receives 25% of his or her
annual bonus payout (calculated on the estimated amount of bonus to be
received after deduction of income taxes) in the form of Common Stock. Each
participant also receives a number of additional restricted shares equal to
25% of the number of bonus shares received. To encourage retention of stock,
the restricted shares are forfeited if the bonus shares are transferred
within four years of the date of grant.
Bonus awards for each of the executive officers named in the Summary
Compensation Table are based principally (75%) upon a corporate return-on-
shareholders'-equity (ROE) target established by the Committee with the con-
currence of the Board of Directors. Additional weight (25%) is given to
achievement of each individual's specific objectives during the year.
Individual objectives focus on such factors as new product development, new
business initiatives, productivity and quality improvements and are designed
to correlate to the Company's overall strategic objectives for the year.
Individual objectives for Mr. Little are approved by the Compensation
Committee, and objectives for each other executive officer by that
individual's direct supervisor.
Each incentive plan participant's target bonus is a specific percentage of
his or her base salary. Target bonuses range from 30% to 75% of base
salaries for the Company's executive officers generally. Mr. Little's target
bonus is set at 75% of base salary and is fixed by the Committee with the
concurrence of the Board. Other executive officers' targets are set by their
supervisor with the approval of the Committee. Participants receive 90% of
their targeted bonus award upon achievement of 90% of the annual ROE target,
with a maximum of 150% of target bonus if the Company's ROE performance meets
or exceeds the targeted ROE by 125%. No awards are granted if actual ROE
performance is less than 90% of target.
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<PAGE> 12
Long-Term Incentives. The Company's long-term incentive program is
designed to reward management for consistent improvement of shareholder
value, primarily through the use of stock options. Stock options are viewed
as an excellent method of linking management interests with those of
shareholders because the value of a stock option is created by increases in
the market value of the Common Stock, an important indicator of shareholder
value.
Under the Committee's option award policy, a fixed number of shares are
granted each year in amounts estimated to produce competitive long-term
compensation when compared to general industry. Stock option values are
determined using the Black-Scholes valuation method. Although there is no
direct relationship between the size of option awards and the Company's share
ownership guidelines, stock options are considered the primary vehicle to
assist executives in meeting these guidelines.
Establishing Return-on-Equity Goals and Targets
ROE has been selected as the primary measure of performance for the annual
incentive bonus plan because it closely aligns bonus awards with the
financial returns earned by the Company's shareholders. The goal is to
establish annual ROE targets that reflect 75th percentile performance of the
Peer Group. The guidelines used for selecting the Peer Group companies were
both quantitative and qualitative in nature and included such factors as
nature of business, revenues, employee base, technology base, market share,
customer type and customer relationship. The Peer Group is the same group
used in the shareholder return performance chart on page 18.
To monitor the Company's competitive financial performance, the Committee
reviews annually the performance of the Peer Group over the previous three-
to-five year period, as well as recent performance trends as indicated by
trailing twelve-month data. In addition to ROE, the Committee may consider
total return to shareholders, market share gains and other performance
measurement criteria in determining the relative positioning of West's
performance. The Committee also compares its results against the results of
general industry to monitor the performance trends of a larger group of
companies. The Committee then formulates the ROE target for the following
year.
In 1993, the Committee analyzed comparative compensation and financial
performance data compiled by an independent compensation consultant. The
data indicated that, for the 12 months ended June 30, 1993, the Company's
1993 ROE performance target was equal to the Peer Group's actual 75th
percentile performance, while being somewhat below the 75th percentile ROE of
the general industry group. As a result, the Committee believes the relative
positioning of the Company's executive compensation and ROE performance
targets are consistent with the Company's compensation philosophy.
1993 Compensation Actions -- Mr. Little
Mr. Little participates in the same executive compensation programs
provided to the other executive officers. However, his total compensation is
more heavily weighted towards performance-based compensation, specifically
annual incentive bonus and stock options. Mr. Little has more of his total
<PAGE>
<PAGE> 13
compensation at risk to emphasize the direct relationship between changes in
shareholder value and his compensation as Chief Executive Officer.
In 1993, the Committee adjusted Mr. Little's base salary to a level survey
data indicated to be approximately the 50th percentile of the compensation
for comparable CEO positions in general industry.
At the time of his hiring in 1991, Mr. Little was awarded a stock option
for 150,000 shares that vests over a four-year period. The Committee
considered comparable compensation data and competitive market factors in
determining the terms of Mr. Little's stock option.
The Company's actual ROE for 1993 was 101% of the ROE target established
under the annual incentive bonus plan. Accordingly, the Committee authorized
a bonus award of $259,189 for Mr. Little for 1993, which represents 101% of
his target bonus. Mr. Little received a portion of his bonus in the form of
1,727 bonus shares. He was also granted 432 restricted shares of Common
Stock under the stock bonus program as incentive to retain his bonus shares.
1993 Compensation Actions -- Other Executive Officers
During 1993, each of the Company's other executive officers received an
additional grant of stock options under the Company's Long-Term Incentive
Plan consistent with the Committee's option policy. The option grants were
based on 75th percentile comparative pay data.
Each of the Company's other executive officers received salary adjustments
to bring his or her base salary in line with median market practice as
evidenced by executives with similar responsibilities in companies of
comparable size in general industry. The Committee believes this level has
been substantially achieved with the salary increases (average 5%) that were
approved and took effect for the executive officers during the year.
The Committee authorized annual incentive bonus awards for the executive
officers that were at 101% of target, reflecting performance consistent with
the targets established for the year and accomplishment of individual
objectives.
JOHN P. NEAFSEY, Chairman
GEORGE J. HAUPTFUHRER, JR.
MONROE E. TROUT
<PAGE>
<PAGE> 14
Compensation of Named Executives
General
The following table sets forth, for 1991, 1992 and 1993, compensation
provided by the Company to each of the named executives in all capacities in
which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------
Annual Compensation Awards
------------------------------------------- ------------------------------ All
Name Other Restricted Securities Other
and Annual Stock Underlying Compen-
Principal Salary(A) Bonus(A) Compen- Award(s)(B) Options sation(C)
Position Year ($) ($) sation($) ($) (#) ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William G. Little(D) 1993 343,176 259,189 4,329 10,774 0 10,621
President and Chief 1992 331,828 250,000 3,164 10,375 0 6,230
Executive Officer 1991 178,855 150,000 -- 0 150,000(E) 98
Hans Wimmer(D) 1993 214,753 510,370 8,865 0 0 0
President, Pharma- 1992 196,803 494,000 -- 0 0 0
Gummi Wimmer 1991 -- -- -- -- -- --
West GmbH
Victor E. Ziegler 1993 212,271 107,379 4,095 4,389 12,000 12,880
Executive Vice 1992 206,992 100,754 2,993 0 12,000 10,732
President 1991 179,274 43,000 -- 117,225 9,000 9,800
J. E. Dorsey(D) 1993 191,880 105,796 3,674 4,315 8,000 3,979
Group President 1992 125,864 61,500 2,402 2,760 6,000 0
1991 -- -- -- -- -- --
Raymond J. Land(D) 1993 180,874 92,605 3,674 3,741 8,000 4,732
Senior Vice 1992 172,221 88,193 2,685 0 8,000 977
President, Finance 1991 31,760 0 -- 0 0 0
and Chief Financial
Officer
</TABLE>
_________________
(A) Amounts shown reflect salary and bonuses earned by the named executives
for the applicable fiscal year and include the value of any restricted and
unrestricted shares awarded under the Company's Stock Bonus Program.
Bonuses are paid in the fiscal year following the fiscal year for which
they are earned. Mr. Wimmer's 1993 and 1992 compensation was paid in
Deutsche Marks, as follows: Salary DM 354,342 and DM 307,012,
respectively; and Bonus DM 842,110 and DM 770,640, respectively. The U.S.
dollar figures shown are based on an average 1993 exchange rate of 1.65
and an average 1992 exchange rate of 1.56.
(B) Restricted stock awards are made in the fiscal year following the fiscal
year for which they are earned. Restricted stock awards vest four years
from the grant date. Values are determined by multiplying the number of
shares awarded by the closing market price of the Common Stock on the
grant date, which was $20.75 for 1992 awards and $24.94 for 1993 awards.
Dividends were paid on restricted shares.
The following table contains information relating to the outstanding
holdings of restricted stock of the named executives at December 31, 1993.
The table does not include restricted stock granted in 1994 with respect
to 1993 service. Values are determined by multiplying the number of
shares by $24.50, the December 31, 1993 closing price for the Company's
Common Stock.
<PAGE>
<PAGE> 15
Current Market
Number of Value of
Restricted Restricted
Name Shares Held Shares Held
---- ----------- --------------
William G. Little.......... 500 $12,250
Hans Wimmer................ 0 --
Victor E. Ziegler.......... 0 --
J. E. Dorsey............... 133 3,259
Raymond J. Land............ 0 --
(C) Includes for 1993, 1992 and 1991: (i) term life insurance premiums paid
by the Company for Mr. Little--$1,485, $1,866 and $98, respectively; Mr.
Ziegler--$1,910, $1,607 and $1,307, respectively; Mr. Dorsey--$19 and $0,
respectively; and Mr. Land--$977, $0 and $0, respectively; (ii) universal
life insurance premiums paid by the Company for Mr. Ziegler in the amount
of $4,608, $4,211 and $3,820, respectively; and Mr. Dorsey--$856 and $0,
respectively; and (iii) Company contributions under the Savings Plan for
Mr. Little--$8,488, $4,364, and $0, respectively; Mr. Ziegler--$6,362,
$4,914 and $4,673, respectively; Mr. Dorsey--$3,105 and $0, respectively;
and Mr. Land--$4,497 and $842, respectively.
(D) Information is provided only for fiscal years during which the
individual served as an executive officer. Messrs. Little, Land and
Dorsey commenced their employment with the Company on May 20, 1991,
October 7, 1991 and April 21, 1992, respectively. Mr. Wimmer became an
executive officer of the Company in 1992.
(E) Mr. Little's option vests over a four-year period.
Stock Options
The following table provides information concerning the grant of stock
options in 1993 under the Company's Long-Term Incentive Plan.
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
Individual Grants
- ------------------------------------------------------------------------
Number of
Securities % of
Underlying Total Grant
Options Options Date
Granted to Granted to Exercise Present
Employees Employees Price(B) Expiration Value(C)
Name in 1993(A) in 1993 ($/Sh) Date ($)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William G. Little 0 -- -- -- --
Hans Wimmer 0 -- -- -- --
Victor E. Ziegler 12,000 6.4% 20.81 3/1/98 66,360
J. E. Dorsey 8,000 4.3% 20.81 3/1/98 44,240
Raymond J. Land 8,000 4.3% 20.81 3/1/98 44,240
</TABLE>
- ---------------
(A) Option grants are for a five-year term and first became exercisable six
months after the date of grant.
(B) The exercise price of $20.81 represents the average of the highest and
lowest reported sale price on March 2, 1993 (the date of grant). The
exercise price (and any applicable withholding taxes) may be paid in cash,
shares of Common Stock valued at fair market value on the date of exercise
<PAGE>
<PAGE> 16
or pursuant to a cashless exercise procedure under which the optionee
provides irrevocable instructions to a brokerage firm to sell the
purchased shares and to remit to the Company, out of the sale proceeds, an
amount equal to the exercise price plus all applicable withholding taxes.
(C) The estimated value has been determined by application of the Black-
Scholes option pricing model, based upon the terms of the option grant and
the Company's stock price performance history as of the date of grant
(March 2, 1993). The key assumptions set forth below used in the
valuation are based upon historical experience, and are not a forecast of
future stock price performance or volatility or of future dividend policy.
No adjustments have been made for forfeitures or non-transferability.
Dividend Yield: 1.8%
Volatility: .235
Risk-Free Rate of Return: 5.93%
Expected Exercise Period: 5 Years
1993 Stock Option Exercises
The following table provides information relating to the exercise of stock
options by the named executives in 1993, as well as the number and value of
their unexercised options as of December 31, 1993.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value
Realized Number of Shares Value of
Shares (Market Value Underlying Unexercised
Acquired Less Any Unexercised In-the-Money
on Exercise Options Held at Options at
Name Exercise(#) Price)($) 12/31/93(#) 12/31/93($)(A)(B)
- --------------------------------------------------------------------------------------------------------
Not Not
Exercisable Exercisable Exercisable Exercisable
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William G. Little 0 -- 85,000 60,000 796,875 562,500
Hans Wimmer 0 -- 0 0 -- --
Victor E. Ziegler 13,000 137,313 49,689 0 311,101 --
J. E. Dorsey 0 -- 14,000 0 60,780
Raymond J. Land 0 -- 16,000 0 76,400 --
</TABLE>
_______________
(A) The value of unexercised options represents the difference between the
closing price of the Company's Common Stock on December 31, 1993 ($24.50)
and the exercise price of each unexercised option held by the named
executives.
(B) All option grants to the named executives other than Mr. Little are for a
five-year term and first became exercisable six months after the date of
grant. Mr. Little was granted an option in 1991, which vests over a four-
year period.
<PAGE>
<PAGE> 17
Retirement Plan
The Company's Salaried Employees' Retirement Plan (the "Retirement Plan")
is a non-contributory defined benefit plan. It provides for normal
retirement at age 65 and permits early retirement in certain cases. Benefits
are based upon years of service and compensation (including salary, bonuses
and stock award distributions ("Covered Compensation")) for the five
consecutive calendar years within the ten years prior to retirement during
which the compensation was the highest.
The Internal Revenue Code limits the maximum annual benefit which may be
paid to any individual from the Retirement Plan's trust fund and the amount
of compensation that may be recognized. Under the Company's Supplemental
Employees' Retirement Plan (the "Supplemental Plan"), the Company will make
supplemental, unfunded payments to offset any reductions in benefits that may
result from such limitations.
The following table shows the estimated annual retirement benefits payable
(before reduction by the offset for Social Security payments) under the
Retirement Plan and the Supplemental Plan at normal retirement date to all
eligible employees, including the named executives, in specified remuneration
and years of service classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Five Year Years of Service
Average ------------------------------------------------------------------
Compensation 15 20 25 30 35
------------ -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 125,000 $ 35,625 $ 47,500 $ 59,375 $ 62,500 $ 65,625
150,000 42,750 57,000 71,250 75,000 78,750
175,000 49,875 66,500 83,125 87,500 91,875
200,000 57,000 76,000 95,000 100,000 105,000
225,000 64,125 85,500 106,875 112,500 118,125
250,000 71,250 95,000 118,750 125,000 131,250
300,000 85,500 114,000 142,500 150,000 157,500
400,000 114,000 152,000 190,000 200,000 210,000
450,000 128,250 171,000 213,750 225,000 236,250
500,000 142,500 190,000 237,500 250,000 262,500
550,000 156,750 209,000 261,250 275,000 288,750
600,000 171,000 228,000 285,000 300,000 315,000
650,000 185,250 247,000 308,750 325,000 341,250
700,000 199,500 266,000 332,500 350,000 367,500
750,000 213,750 285,000 356,250 375,000 393,750
</TABLE>
Amounts shown are calculated on a straight-line annuity basis. Under the
Retirement Plan, credited years of service and Covered Compensation for 1993
are 18 years and $593,176 for Mr. Little, 33 years and $313,025 for Mr.
Ziegler, 1 year and $253,380 for Mr. Dorsey, and 2 years and $269,067 for Mr.
Land.
<PAGE>
<PAGE> 18
Employment and Other Agreements
The Company has entered into an employment agreement with Mr. Little under
which Mr. Little serves as President and CEO of the Company for a base annual
salary determined in accordance with Company compensation review policies.
Mr. Little also is entitled to participate in the Company bonus plans. The
employment term may be ended by the Company upon two years' notice of
termination but may be terminated earlier by the Company for cause, or due to
disability or death.
Mr. Wimmer receives a base salary and bonus based on consolidated European
Division profits under an agreement with the Company and management contracts
with certain of the Company's European subsidiaries. Mr. Wimmer is entitled
to receive a pension upon his retirement in the amount of DM 360,000
($218,182 at an average 1993 exchange rate of DM 1.65) per year.
The Company has entered into agreements with each of the named executive
officers other than Mr. Wimmer, which provide for benefits in the event of
employment termination following a change in control of the Company. These
agreements are designed to assist the Company in attracting and retaining
highly qualified executives and to help ensure that if the Company is faced
with an unsolicited tender offer proposal, its executives will continue to
manage the Company without being unduly distracted by the uncertainties of
their personal affairs and thereby will be better able to assist in
evaluating such a proposal in an objective manner.
Each agreement provides that the executive is entitled to receive
severance compensation if, within two years following a change in control of
the Company, he resigns following a constructive termination of his
employment or his employment is terminated by the Company other than by
reason of death, disability, willful misconduct, or normal retirement. Such
severance compensation includes the immediate vesting of the executive's
interest, if any, in the Company's employee benefit plans, continuing salary
and bonus payments at the level prior to termination and continuation of
certain health and welfare benefits for up to three years following such
termination. A "change in control" is defined generally as a change in a
majority of the Company's Board of Directors or purchase of more than 51% of
the Company's stock. Each agreement also provides that during the term of
the executive's employment with the Company and for a period of one year
thereafter, whether or not a change in control of the Company occurs, the
executive will neither be employed by any competitor of the Company nor
compete with the Company in any part of the United States (any market or
territory, in the case of Mr. Little). The payment of severance compensation
is not conditioned upon the executive seeking other employment nor is it
subject to reduction in the event the executive secures other employment
consistent with the agreement.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following graph compares for fiscal years 1989 through 1993 the yearly
change in the cumulative total returns to holders of Common Stock with the
cumulative total return of the Standard & Poor's 400 Industrials--Limited
Index (the "S&P 400") and of a company-selected peer group. Cumulative total
return to shareholders is measured by dividing total dividends (assuming
dividend reinvestment) plus per-share price change for the period by the
share price at the beginning of the period. The Company's cumulative
shareholder return is based on an investment of $100 on December 31, 1988 and
is compared to the cumulative total return of the S&P 400 Index and peer-
group index over the period with a like amount invested.
<PAGE>
<PAGE> 19
The peer-group companies were selected by the Company based principally on
nature of business, revenues, employee base, technology base, market share,
customer type and customer relationship. The peer group was developed
initially as part of an assessment of the Company's executive compensation
levels. The peer group is composed of Amphenol Corp., Andrew Corp., Applied
Magnetics, Augat Inc., Beckman Instruments, C.R. Bard, CTS Corp., Millipore
Corp., Pall Corp., Perkin-Elmer, Sealed Air and Thomas & Betts.
$200-|--------------------------------------------------------------------|
-| |
-| S|
-| |
$180-|-------------------------------------------------------------------W|
-| S |
-| P|
-| S WP |
$160-|--------------------------------------------------------------------|
-| |
-| P |
-| |
$140-|--------------------------------------------------------------------|
-| |
-| WS S W |
-| |
$120-|--------------------------------------------------------------------|
-| |
-| |
-| P |
$100-|WSP------------------------P----------------------------------------|
-| W |
-| |
-| |
$ 80-|-------------|-------------|-------------|-------------|------------|
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93
88 89 90 91 92 93
-- -- -- -- -- --
W = West Company 100 129 85 133 164 182
S = S & P 400 100 129 128 168 177 193
P = Peer Group 100 105 103 150 165 173
<PAGE>
<PAGE> 20
APPOINTMENT OF AUDITORS
At the Annual Meeting, the Company's shareholders will be asked to approve
the appointment of Coopers & Lybrand, independent accountants, as auditors of
the Company for 1994. If the Company's shareholders do not approve the
appointment of Coopers & Lybrand, the Board of Directors will consider the
appointment of other auditors. A representative of Coopers & Lybrand is
expected to be present at the Annual Meeting and will have the opportunity to
make a statement, if he desires to do so, and to respond to questions from
shareholders.
The Board of Directors recommends that the shareholders vote FOR the
appointment of Coopers & Lybrand. If approval is withheld, the Board will
reconsider its selection.
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1995 Annual Meeting of Shareholders must be
received by the Office of the Secretary of the Company, 101 Gordon Drive,
Lionville, Pennsylvania 19341-0777, no later than December 1, 1994 for
inclusion in the proxy statement and form of proxy.
<PAGE>
<PAGE> 21
PROXY THE WEST COMPANY, INCORPORATED
101 Gordon Drive, Lionville, Pennsylvania 19341
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William S. West and George J. Hauptfuhrer,
Jr. as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of common stock of The West Company, Incorporated, held of record by the
undersigned on March 11, 1994, at the annual meeting of shareholders to
be held on May 3, 1994 or any adjournment thereof.
This Proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction
is made, this Proxy will be voted FOR Proposals 1 and 2.
(To be Signed on Reverse Side)
<PAGE>
<PAGE> 22
/X/ Please mark your votes as in this example.
1. Election of Class I Directors
/ / FOR / / WITHHELD
For except vote withheld from the following nominee(s)
__________________________________________________________
NOMINEES: William J. Avery, George J. Hauptfuhrer, Jr.,
William G. Little, Monroe E. Trout
2. Approval of Independent Accountants
/ / FOR / / AGAINST / / ABSTAIN
SIGNATURE(S)___________________________________ DATE______________
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
<PAGE>
