<PAGE> This report contains 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 March 31, 1998
---------------
Commission File Number 1-8036
------
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,
Lionville, PA 19341-0645
------------------------------------- ----------------------
(Address of principal executive (Zip Code)
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 .
--- ---
March 31, 1998 -- 16,980,762
-----------------------------------------------------------------
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
<PAGE> Page 2
Index
Form 10-Q for the
Quarter Ended March 31, 1998
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations
for the Three Months ended March 31, 1998 and
March 31, 1997 3
Condensed Consolidated Balance Sheets
at March 31, 1998 and December 31, 1997 4
Condensed Consolidated Statements of Cash Flows
for the Three Months ended March 31, 1998
and March 31, 1997 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
Item 3. Quantitative and Qualitative Disclosure
about Market Risk 13
Part II - Other Information
Item 1. Legal Proceedings 14
Item 6. Exhibits and reports on Form 8-K 14
SIGNATURES 15
Index to Exhibits F-1
Page 3
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
The West Company, Incorporated and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION> Quarter Ended
March 31, 1998 March 31, 1997
--------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 105,200 100 % $114,700 100 %
Cost of goods sold 73,900 70 82,000 71
------------------------------------------------------------------------------------------------
Gross profit 31,300 30 32,700 29
Selling, general and administrative expenses 16,800 16 18,000 16
Acquired research and development 28,200 27 - -
Other income, net (600) - (300) -
------------------------------------------------------------------------------------------------
Operating profit (loss) (13,100)(13) 15,000 13
Interest expense 1,200 1 1,400 1
------------------------------------------------------------------------------------------------
Income (loss) before income taxes (14,300)(14) 13,600 12
and minority interests
Provision for income taxes 5,400 5 5,200 5
------------------------------------------------------------------------------------------------
Income (loss) from consolidated operations (19,700)(19) % 8,400 7 %
---- ----
Equity in net income of affiliated companies - -
------------------------------------------------------------------------------------------------
Net income (loss) $ (19,700) $ 8,400
------------------------------------------------------------------------------------------------
Net income (loss) per share:
Basic $ (1.19) $ .51
Assuming dilution $ (1.19) $ .51
Average shares outstanding 16,603 16,408
Average shares assuming dilution 16,603 16,551
See accompanying notes to consolidated financial statements.
</TABLE>
Page 4
<PAGE>
The West Company, Incorporated and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
ASSETS March 31, 1998 Dec. 31, 1997
-------------- -------------
<S> <C> <C>
Current assets:
Cash, including equivalents $ 66,400 $ 52,300
Accounts receivable 70,000 60,400
Inventories 43,200 38,300
Current deferred income tax benefits 9,700 9,400
Other current assets 10,200 10,300
--------------------------------------------------------------------------
Total current assets 199,500 170,700
--------------------------------------------------------------------------
Net property, plant and equipment 201,600 202,200
Investments in affiliated companies 14,400 22,700
Goodwill 60,500 51,600
Intangibles and other assets 32,400 30,700
--------------------------------------------------------------------------
Total Assets $508,400 $ 477,900
--------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 600 $ 700
Notes payable 40,300 900
Accounts payable 18,600 18,600
Salaries, wages, benefits 11,900 13,400
Income taxes payable 9,600 5,400
Other current liabilities 23,700 19,000
--------------------------------------------------------------------------
Total current liabilities 104,700 58,000
--------------------------------------------------------------------------
Long-term debt, excluding current portion 84,900 87,400
Deferred income taxes 29,900 30,100
Other long-term liabilities 24,800 24,700
--------------------------------------------------------------------------
Shareholders' equity 264,100 277,700
<PAGE> Page 5
Total Liabilities and Shareholders' Equity $508,400 $ 477,900
--------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
Page 6
<PAGE>
The West Company Incorporated and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Quarter Ended
March 31, 1998 March 31, 1997
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income, plus net non-cash items $ 14,400 $ 15,900
Changes in assets and liabilities (6,000) (4,900)
--------------------------------------------------------------------------------------
Net cash provided by operating activities 8,400 11,000
--------------------------------------------------------------------------------------
Cash flows from investing activities:
Property, plant and equipment acquired (7,600) (6,300)
Proceeds from sale of assets 800 200
Payment for acquisition, net of cash acquired (6,900) -
Customer advances, net of repayments (900) (300)
--------------------------------------------------------------------------------------
Net cash used in investing activities (14,600) (6,400)
--------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from other long-term debt - 100
Repayment of long-term debt (2,400) (300)
Notes payable, net 23,900 (400)
Dividend payments (2,500) (2,300)
Sale of common stock, net 1,400 800
--------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 20,400 (2,100)
--------------------------------------------------------------------------------------
Effect of exchange rates on cash (100) (900)
--------------------------------------------------------------------------------------
Net increase in cash, including equivalents $ 14,100 $ 1,600
--------------------------------------------------------------------------------------
Certain items in operating activities have been reclassified for 1997
to conform with 1998 classifications.
See accompanying notes to consolidated financial statements.
</TABLE>
Page 7
<PAGE>
The West Company, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The interim consolidated financial statements for the quarter
ended March 31, 1998 should be read in conjunction with the
consolidated financial statements and notes thereto of The West
Company, Incorporated appearing in the Company's 1997 Annual
Report on Form 10-K. The year-end condensed balance sheet data
was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting
principles. Interim results are based on the Company's accounts
without audit.
1. Interim Period Accounting Policy
---------------------------------
In the opinion of management, the unaudited Condensed
Consolidated Balance Sheet as of March 31, 1998 and the
related unaudited Consolidated Statement of Operations and
the unaudited Condensed Consolidated Statement of Cash Flows
for the three month period then ended and for the comparative
period in 1997 contain all adjustments, consisting only of
normal recurring accruals, necessary to present fairly the
financial position as of March 31, 1998 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.
Operating Expenses
------------------
To better relate costs to benefits received or activity in an
interim period, certain operating expenses have been
annualized for interim reporting purposes. Such expenses
include depreciation due to use of the half year convention,
certain employee benefit costs, annual quantity discounts,
and advertising.
Income Taxes
-------------
The tax rate used for interim periods is the estimated annual
effective consolidated tax rate, based on the current
estimate of full year results (excluding the charge for
acquired research and development), except that taxes
applicable to operating results in Brazil and prior year
adjustments, if any, are recorded as identified.
Net Loss Per Share
---------------------
In the first quarter 1998 because of the reported net loss, the
incremental shares from potential issuance of common stock
under the Company's stock option and award plans are not
included in average shares assuming dilution.
Page 8
<PAGE>
The West Company, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
(Continued)
2. Inventories at March 31, 1998 and December 31, 1997 are
summarized as follows:
(in thousands) 1998 1997
-------- --------
Finished goods $ 17,700 $ 15,800
Work in process 10,300 8,100
Raw materials 15,200 14,400
-------- --------
$ 43,200 $ 38,300
-------- --------
-------- --------
3. The carrying value of property, plant and equipment at March
31, 1998 and December 31, 1997 is determined as follows:
(in thousands) 1998 1997
-------- --------
Property, plant and equipment $434,000 $428,600
Less accumulated depreciation 232,400 226,400
-------- --------
Net property, plant and equipment $201,600 $202,200
-------- --------
-------- --------
4. In 1998, the Company adopted Statement of Financial Accounting
Standard (SFAS) No. 130, Reporting Comprehensive Income,
which establishes standards for the disclosure of comprehensive
income and its components. Comprehensive income is the total
of net income and other revenue, expenses, gains and losses
for the period which are excluded from net income under
generally accepted accounting principles. For the three
months ended March 31, 1998 and 1997, the Company's
comprehensive income (loss) is as follows:
March 31, 1998 March 31, 1997
-------------- --------------
Net income (loss) $(19,700) $8,400
Foreign currency
translation adjustments (2,600) (5,800)
--------- ---------
Comprehensive income (loss) $(22,300) $2,600
--------- ---------
--------- ---------
In 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 131, "Disclosure About Segments of an Enterprise
and Related Information." As required by the standard, the
Company will begin reporting under SFAS No. 131 in its
Annual Report.
5. Common stock issued at March 31, 1998 was 17,165,104 shares,
of which 184,342 shares were held in treasury. Dividends of
$.15 per common share were paid in the first quarter of 1998
and a dividend of $.15 per share payable to holders of
record on April 22, 1998 was declared on March 10, 1998.
6. The Company has accrued the estimated cost of environmental
compliance expenses related to soil or ground water
contamination at current and former manufacturing
facilities. The ultimate cost to be incurred by the Company
and the timing of such payments cannot be fully determined.
However, based on consultants' estimates of the costs of
remediation in accordance with applicable regulatory
requirements, the Company believes the accrued liability of
$1.5 million at March 31, 1998 is sufficient to cover the
future costs of these remedial actions, which will be
carried out over the next two to five years. The Company
has not anticipated any possible recovery from insurance or
other sources.
7. At March 31, 1998 the cumulative number of employees
terminated in accordance with the restructuring plan
announced on March 29, 1996 was 225 and total payout of
severance and
<PAGE>
Page 9
The West Company, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
(Continued)
benefits was $6.8 million. Restructuring activities, except
for the sale of one building and certain excess equipment
and payout of remaining severance, have been completed.
8. On March 31, 1998, the Company acquired for approximately
BPS 20 million ($33.5 million at March 31, 1998) the
remaining 70% interest in DanBioSyst U.K. Ltd. ("DBS"),
making DBS a wholly-owned subsidiary. This transaction is
accounted for by the purchase method, and was financed with
cash of $9.4 million, 320,406 shares of restricted common
stock valued at $8.7 million, and short-term notes of $15.4
million. Based on a preliminary appraisal of the assets
acquired, the allocation of the purchase price has been
estimated as follows:
(in millions)
Current assets 1.3
Equipment and leasehold improvements .8
In-process research & development 28.2
Other intangibles .4
Goodwill 2.8
Estimated in-process research and development was written
off at the date of acquisition. The purchase price allocation
will be finalized in the second quarter of 1998 and
operating results of DBS will be consolidated beginning on
April 1, 1998.
Page 10
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and
--------------------------------------------------------------
Results of Operations.
----------------------
Results of Operations for the Quarter Ended March 31, 1998 Versus
-----------------------------------------------------------------
March 31, 1997.
------------------------
Net Sales
---------
Net sales for the first quarter of 1998 were $105.2 million, an
8% decrease compared with sales for the same quarter in 1997.
The anticipated sales decline is attributed primarily to lower
sales and a reduction in several key healthcare customers' product
sales. Additionally, customers' inventory reductions impacted
first quarter 1998 sales. Also, the strong U.S. dollar impacted
sales, excluding this effect sales for the first quarter declined
6% when compared with the first quarter of 1997.
Gross Profit
------------
Gross profit margin for the first quarter was 29.8% of net sales
compared with 28.5% for the same period in 1997. The Company
continues to benefit from cost savings programs and margins on
sales of contract services increased substantially compared with
1997's first quarter.
Selling, General and Administrative
-----------------------------------
Selling, general and administrative (SG&A) expenses decreased by
$1.3 million for the quarter and as a percentage of net sales
rose slightly. SG&A expenses decreased primarily because of the
impact of the strong U.S. dollar, lower pension costs due to
higher income on pension plan assets, and lower expenses
associated with bad debts and other claims.
Acquired Research and Development
---------------------------------
The information contained in Note 8 to the Consolidated Financial
Statements, which is incorporated herein by reference, describes
the Company's acquisition of DanBioSyst U.K. Ltd., and the
estimated allocation of the purchase price based on preliminary
appraisal work. Acquired in-process research and development
estimated at $28.2 million was expensed, as required by
Statement of Financial Accounting Standards (SFAS) No. 2, at the
date of purchase.
<PAGE>
Page 11
Management's Discussion and Analysis of Financial Condition
----------------------------------------------------------
and Results of Operations.(Continued)
--------------------------------------
Other Income and Expense
--------------------------
Other income increased in the first quarter 1998 compared with
the same quarter in 1997, reflecting interest income earned on
higher average temporary cash investments during the period.
Interest Expense
--------------------------------------------------------------
Lower interest rates and lower average debt levels reduced
interest expense by $.2 million in 1998 compared with first
quarter 1997.
Minority interest and the Company's equity in net income of
affiliated companies for both comparable reporting periods were
less than $.1 million. For the first quarter 1998, operating
results improved at Daikyo Seiko, Ltd., a Japanese Company in
which the Company owns a 25% equity stock, due to increased sales
and margins. The increase was offset by operating losses and an
unfavorable exchange rate impact at the Company's affiliates in
Mexico.
Taxes
-----
The effective tax rate for the first quarter 1998 was 39%,
excluding the charge for acquired research and development. For
the first quarter of 1997, the effective tax rate was 38.5%.
This is higher than the actual effective rate of 23.2% at year
end 1997, which was significantly affected by two events: a tax
reorganization of the Company's German subsidiaries, and
repatriation of cash dividends from certain subsidiaries, which
resulted in a net benefit of $7.9 million to the Company.
Excluding this net benefit, the 1997 effective tax rate was 37%.
An increase in the statutory tax rate of France, enacted in the
fourth quarter 1997, has increased the effective tax rate in 1998
for the Company.
Net Income/Loss
----------------
The net loss for the first quarter 1998 was $19.7 million, or
$1.19 per share. The loss is a result of a charge of
$28.2 million, or $1.70 per share, for the estimate of acquired
research and development associated with the acquisition of
DanBioSyst U.K. Ltd. Excluding this charge, net income for the
quarter was $8.5 million, or $.51 per share. This compares with
net income of $8.4 million, or $.51 per share, in the first
quarter of 1997.
<PAGE>
Page 12
Financial Position
------------------
Working capital at March 31, 1998 was $94.8million compared with
Management's Discussion and Analysis of Financial Condition
----------------------------------------------------------
and Results of Operations.(Continued)
--------------------------------------
$112.7 million at December 31, 1997. The working capital ratio
at March 31, 1998 was 1.91 to 1. Cash provided by operations and
available cash balances were used to fund capital expenditures,
repay debt and make dividend payments.
On March 30, 1998, the Company borrowed $24.5 million under a
short-term money market facility to finance the
DanBioSyst acquisition, (see disclosure on the acquisition in
Note 8 to the Consolidated Financial Statements). However, the
sellers elected to receive a portion of the purchase price, $15.4
million in short-term notes. This change in payment terms
increased cash and short term notes payable at March 31, 1998.
The Company intends to repay the borrowing under the short-term
facility during the second quarter.
As a result of the borrowing described above, total debt as a
percentage of total invested capital was 32.2% at March 31, 1998,
compared with 24.2% at December 31, 1997.
At March 31, 1998 the Company had available unused lines of
credit of $113.5 million.
This available borrowing capacity and cash flow from operations
is adequate, in the opinion of management, to meet estimated cash
requirements and fund future growth.
Item 3. Quantitative and Qualitative Disclosure about Market Risk
------------------------------------------------------
Not applicable.
Page 13
Part II - Other Information
Item 1. Legal Proceedings
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
__________________________________
(a) See Index to Exhibits on pages F-1 and F-2 of this
Report.
(b) No reports on Form 8-K have been filed for the quarter
ended March 31, 1998.
<PAGE>
Page 14
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)
May 15, 1998 /s/ Steven A. Ellers
------------- ---------------------------------
Date (Signature)
Steven A. Ellers
Senior Vice President,
Finance and Administration
<PAGE> Page 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
<S>
(3) (a) Restated Articles of Incorporation of the
Company, incorporated by reference to Exhibit
(4) to the Company's Registration Statement
on Form S-8 (Registration No. 33-37825).
(3) (b) Bylaws of the Company, as amended and
restated December 13, 1994, incorporated by
reference to the Company's Annual Report on
Form 10-K for the year ended December 31,
1994 (File No. 1-8036).
(4) (a) Form of stock certificate for common stock
incorporated by reference to Exhibit (3) (b)
to the Company's Annual Report on Form 10-K
for the year ended December 31, 1989 (File
No. 1-8036).
(4) (b) Flip-In Rights Agreement between the Company
and American Stock Transfer & Trust Company,
as Rights Agent, dated as of January 16,
1990, incorporated by reference to Exhibit 1
to the Company's Form 8-A Registration
Statement (File No. 1-8036).
(4) (c) Flip-Over Rights Agreement between the
Company and American Stock Transfer & Trust
Company, as Rights Agent, dated as of January
16, 1990, incorporated by reference to
Exhibit 2 to the Company's Form 8-A
Registration Statement (File No. 1-8036).
(9) None.
(10) (a) Non-Qualified Stock Option Plan for Non-
Employee Directors, as amended as of April
28, 1998.
(10) (b) Form of amended and restated agreement
between the Company and certain of its
executive officers.
(10) (c) Schedule of agreements with executive
officers.
(10) (d) Amendment No. 2 to Retirement Plan for
Non-Employee Directors of the Company, dated
April 28, 1998.
(10) (e) Amendment No. 2 to Non-Qualified Deferred
Compensation Plan for Designated Executive
Officers dated April 28, 1998.
<PAGE> Page 16
Exhibit
Number
<S>
(10) (f) Amendment No. 1 Non-qualified Deferred
Compensation Plan for Outside Directors.
(11) Not Applicable.
(12) Not Applicable.
(15) None.
(16) Not applicable.
(18) None.
(19) None.
(22) None.
(23) None.
(24) None.
(27) Financial Data Schedule
(99) None.
</TABLE>
F-2
Exhibit 10 (a)
THE WEST COMPANY, INCORPORATED
1992 NON-QUALIFIED STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
ADOPTED MAY 7, 1992
REFLECTING AMENDMENTS
EFFECTIVE ON APRIL 30, 1996 AND APRIL 28, 1998
<PAGE>
THE WEST COMPANY, INCORPORATED
1992 NON-QUALIFIED STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
Table of Contents
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Administration . . . . . . . . . . . . . . . . . . . . . . 2
4. Shares Subject to the Plan
a) Total Number . . . . . . . . . . . . . . . . . . . . 2
b) Reduction in Number of Shares Available . . . . . . . 2
c) Increase in Number of Shares Available . . . . . . . 3
d) Other Adjustments . . . . . . . . . . . . . . . . . 3
5. Grant of Options . . . . . . . . . . . . . . . . . . . . . 3
6. General Terms
a) Option Price . . . . . . . . . . . . . . . . . . . . 3
b) Option Period . . . . . . . . . . . . . . . . . . . 3
c) Service Period . . . . . . . . . . . . . . . . . . . 4
d) Transfer and Exercise . . . . . . . . . . . . . . . 4
e) Method of Exercise . . . . . . . . . . . . . . . . . 4
f) Issuance of Certificates; Payment of Cash . . . . . 4
7. Change in Control
a) Effect of Change in Control . . . . . . . . . . . . 5
b) Definition . . . . . . . . . . . . . . . . . . . . . 5
8. Amendments and Termination
a) Board Authority . . . . . . . . . . . . . . . . . . 7
b) Prior Stockholder and Optionee Approval . . . . . . 7
9. General Provisions
a) Compliance with Regulations . . . . . . . . . . . . 7
b) Other Plans . . . . . . . . . . . . . . . . . . . . 8
c) Withholding of Taxes . . . . . . . . . . . . . . . . 8
d) Conformity with Law . . . . . . . . . . . . . . . . 8
e) Insufficient Shares . . . . . . . . . . . . . . . . 8
10. Effective Date and Termination . . . . . . . . . . . . . . 9
<PAGE>
THE WEST COMPANY, INCORPORATED
1992 NON-QUALIFIED STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
1. Purpose. The purposes of the Plan are to attract
and retain the services of experienced and
knowledgeable non-employee directors and to
encourage eligible directors of The West Company
to acquire a proprietary and vested interest in
the growth and performance of the Company, thus
enhancing the value of the Company for the benefit
of its stockholders.
2. Definitions. As used in the Plan, the following
terms shall have the meanings set forth below:
a) "Board" means the Board of Directors of the
Company.
b) "Code" means the Internal Revenue Code of
1986, as amended.
c) "Common Stock" means the common stock, par
value $0.25 per share, of the Company.
d) "Company" means The West Company,
Incorporated.
e) "Eligible Director" means each director of
the Company who is not an employee of the
Company or any of the Company's subsidiaries
(as defined in section 424 (f) of the Code).
f) "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
g) "Fair Market Value" means with respect to the
Common Stock on any given date the mean
between the highest and lowest prices of
actual sales of the stock on the principal
national securities exchange on which it is
listed on such date or, if there are no such
sales, on the next preceding date on which a
sale occurred.
<PAGE>
h) "Grant Date" means the date on which an
Option is granted.
i) "Option" means any right granted to an
Optionee allowing such Optionee to purchase
Shares at such price or prices and during
such period or periods as are set forth in
the Plan. All Options shall be non-qualified
options and shall not be qualified for the
favorable tax treatment afforded under
section 422 of the Code.
j) "Option Letter" means a written instrument
evidencing an Option granted hereunder and
signed by an authorized representative of the
Company.
k) "Optionee" means an Eligible Director who
receives an Option under the Plan.
l) "Shares" means shares of Common Stock.
3. Administration. Subject to the terms of the Plan,
the Board shall have the power to interpret the
provisions and supervise the administration of the
Plan.
4. Shares Subject to the Plan.
a) Total Number. Subject to adjustment as
provided in this Section, the total number of
Shares as to which Options may be granted
under the Plan shall be 200,000 Shares. Any
Shares issued pursuant to Options hereunder
may consist, in whole or in part, of
authorized and unissued Shares or treasury
Shares.
b) Reduction in Number of Shares Available.
1) The grant of an Option shall reduce the
Shares as to which Options may be
granted by the number of Shares subject
to such Option.
2) Any Shares issued by the Company under
any other stock option plan of the
Company shall not reduce the Shares
available for grants under this Plan.
<PAGE>
c) Increase in Number of Shares Available. The
lapse, expiration, cancellation, or other
termination of an Option that has not been
fully exercised shall increase the number of
Shares as to which Options may be granted by
the number of Shares that have not been
issued upon exercise of such Option.
d) Other Adjustments. The total number and kind
of Shares available for Options under the
Plan, the number and kind of Shares subject
to outstanding Options, and the exercise
price for such Options shall be appropriately
adjusted by the Board for:
i) any increase or decrease in the number
of outstanding Shares resulting from a
stock dividend, subdivision, combination
of Shares, reclassification, or other
change in corporate structure or
capitalization affecting the Shares,
ii) any conversion of the Shares into or
exchange of the Shares for other shares
as a result of any merger or
consolidation (including a sale of
assets), or
iii) any other event such that an adjustment
is made reasonably necessary to maintain
the proportionate interest of the
Optionee.
5. Grant of Options. On the first working day
following the Annual Meeting of Shareholders, from
1997 through 2001, inclusive, each person who is
an Eligible Director on such date shall be granted
an Option to acquire 1,500 Shares.
6. General Terms. The following provisions shall
apply to each Option.
a) Option Price. The purchase price per Share
purchasable under an Option shall be 100% of
the Fair Market Value of a Share on the Grant
Date.
<PAGE>
b) Option Period. Each Option granted shall
expire 5 years from its Grant Date, and shall
be subject to earlier termination as
hereinafter provided.
c) Service Period. Each Option granted under
the Plan shall become exercisable by the
Optionee only after the completion of one
year of Board service immediately following
the Grant Date, except that such Option shall
become immediately exercisable upon the
Optionee's retirement from the Board in
accordance with the Company's Retirement Plan
for Non-Employee Directors. As used in this
Section (c) and in Section (e) below, the
term "one year" shall mean the period
commencing on the Grant Date and ending on
the day immediately preceding the date of the
next Annual Meeting of Shareholders.
d) Transfer and Exercise. No Option shall be
transferable by the Optionee except by will
or the laws of descent and distribution. In
the event of the death or any other
termination of Board service of an Optionee
except for retirement under the Company's
normal policy for retirement of directors
from office or except for removal for cause,
the Option, if otherwise exercisable by the
Optionee at the time of such termination, may
be exercised within six months after such
termination. In the event of the retirement
of an Optionee, the Option, if otherwise
exercisable by the Optionee at the time of
retirement, may be exercised within three
years after retirement; provided, however,
that if the Optionee dies during the three
year period after retirement, the Option may
be exercised until the earlier of the end of
such three year period or six months after
death. In the event of removal for cause,
all previously granted Options shall be of no
further force and effect.
e) Method of Exercise. Any Option may be
exercised, after one year has elapsed since
grant, by the Optionee in whole or in part at
such time or times and by such methods as the
Board may specify. The applicable Option
Letter may provide that the Optionee may make
payment of the Option price in cash, Shares,
or such other consideration as the Board may
<PAGE>
specify, or any combination thereof, having a
Fair Market Value on the exercise date equal
to the total Option price.
f) Issuance of Certificates; Payment of Cash.
Only whole Shares shall be issuable upon
exercise of Options. Any right to a
fractional Share shall be satisfied in cash.
Upon payment to the Company of the option
price, the Company shall deliver to the
Optionee a certificate for the number of
whole Shares and a check for the Fair Market
Value on the date of exercise of the
fractional share to which the Optionee is
entitled.
7. Change in Control.
a) Effect of Change in Control. Notwithstanding
anything in this Agreement to the contrary,
all Options shall become immediately
exercisable upon the occurrence of a Change
in Control, provided that if a proposed
transaction involving a Change in Control is
affirmatively recommended by a majority of
the Board to the Company's shareholders, the
Company may, at any time on or after the
third business day preceding the consummation
of such transaction, with respect to the any
unexercisable Option which is or may become
exercisable prior to such consummation,
require the surrender of the Option by the
Optionee upon the payment by the Company to
the Optionee in cash of an amount equal to
the difference between the option price, and
the Fair Market Value of the Shares which are
subject to purchase under the terms thereof.
b) Definition. For purposes of this Plan, a
"Change in Control" shall mean a change in
control of a nature that would be required to
be reported in response to Item 1 of the
Current Report on Form 8-K as in effect on
April 28, 1998 pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934,
as amended (the "Act"), provided, that,
without limitation, a Change in Control shall
be deemed to have occurred if:
i) any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Act),
other than:
<PAGE>
(a) the Company,
(b) any Person who on the date hereof
is a director or officer of the
Company, or
(c) a trustee or fiduciary holding
securities under an employee
benefit plan of the Company,
ii) is or becomes the beneficial owner,
(as defined in Rule 13-d3 under the
Act), directly or indirectly, of
securities of the Company representing
more than 50% of the combined voting
power of the Company s then outstanding
securities; or
iii) during any period of two consecutive
years during the term of the Plan,
individuals who at the beginning of such
period constitute the board of directors
of the Company cease for any reason to
constitute at least a majority thereof,
unless the election of each director who
was not a director at the beginning of
such period has been approved in advance
by directors representing at least two-
thirds of the directors then in office
who were directors at the beginning of
the period; or
iv) the shareholders of the Company approve:
(A) a plan of complete liquidation of
the Company; or (B) an agreement for the
sale or disposition of all or
substantially all of the Company's
assets; or (C) a merger, consolidation,
or reorganization of the Company with or
involving any other corporation, other
than a merger, consolidation, or
reorganization that would result in the
voting securities of the Company
outstanding immediately prior thereto
continuing to represent (either by
remaining outstanding or by being
converted into voting securities of the
surviving entity), at least fifty
percent (50%) of the combined voting
power of the voting securities of the
Company (or the surviving entity, or an
entity which as a result of such
transaction owns the Company or all or
<PAGE>
substantially all of the Company's
assets either directly or through one or
more subsidiaries) outstanding
immediately after such merger,
consolidation, or reorganization.
8. Amendments and Termination.
a) Board Authority. The Board may amend, alter,
or terminate the Plan, but no amendment,
alteration, or termination shall be made (i)
that would impair or adversely affect the
rights of an Optionee under an Option
theretofore granted, without the Optionee's
consent, or (ii) without the approval of the
stockholders if such approval is necessary to
comply with any tax or regulatory
requirement, including for these purposes any
approval requirement that is a prerequisite
for exemptive relief from Section 16(b) of
the Exchange Act, or if the proposed
alteration or amendment would increase the
aggregate number of Shares that may be issued
upon the exercise of Options (other than
pursuant to Section 4(d)); provided, however,
that in no event shall this Plan be amended
more frequently than once every six months,
other than to comport with changes in the
Code, the Employee Retirement Income Security
Act, or the rules thereunder.
b) Prior Stockholder and Optionee Approval.
Anything herein to the contrary
notwithstanding, in the event that amendments
to the Plan are required in order that the
Plan or any other stock-based compensation
plan of the Company comply with the
requirements of Rule 16b-3 issued under the
Exchange Act as amended from time to time or
any successor rule promulgated by the
Securities and Exchange Commission related to
the treatment of benefit and compensation
plans under Section 16 of the Exchange Act,
the Board is authorized to make such
amendments without the consent of Optionees
or the stockholders of the Company.
General Provisions.
a) Compliance with Regulations. All
certificates for Shares delivered under the
Plan pursuant to the exercise of any Option
shall be subject to such stock transfer
<PAGE>
orders and other restrictions as the Board
may deem advisable under the rules,
regulations, and other requirements of the
Securities and Exchange Commission, any stock
exchange upon which the Shares are then
listed, and any applicable federal or state
securities law, and the Board may cause a
legend or legends to be put on any such
certificates to make appropriate reference to
such restrictions. The Company shall not be
required to issue or deliver any Shares under
the Plan prior to the completion of any
registration or qualification of such Shares
under any federal or state law, or under any
ruling or regulation of any governmental body
or national securities exchange that the
Board in its sole discretion shall deem to be
necessary or appropriate.
b) Other Plans. Nothing contained in the Plan
shall prevent the Board from adopting other
or additional compensation arrangements,
subject to stockholder approval if such
approval is required by applicable law or the
rules of any stock exchange on which the
Common Stock is then listed; and such
arrangements may be either generally
applicable or applicable only in specific
cases.
c) Withholding of Taxes. Each Optionee shall
pay to the Company, upon the Company's
request, all amounts necessary to satisfy the
Company's federal, state and local tax
withholding obligations with respect to the
grant or exercise of any Option.
d) Conformity With Law. If any provision of the
Plan is or becomes or is deemed invalid,
illegal, or unenforceable in any
jurisdiction, or would disqualify the Plan or
any Option under any law deemed applicable by
the Board, such provision shall be construed
or deemed amended in such jurisdiction to
conform to applicable laws or if it cannot be
construed or deemed amended without, in the
determination of the Board, materially
altering the intent of the Plan, it shall be
stricken and the remainder of the Plan shall
remain in full force and effect.
e) Insufficient Shares. In the event there are
insufficient Shares remaining to satisfy all
of the Option grants under Section 5 made on
the same day, such Option grants shall be
reduced pro-rata.
<PAGE>
10. Effective Date and Termination. The Plan became
effective on May 7, 1992 and was to terminate
immediately following the grant of Options in
1996. Pursuant to resolutions adopted by the
Board on March 9, 1996, and approved by the
Company s shareholders at the 1996 Annual Meeting
of Shareholders, the Plan was extended so as to
terminate immediately following the grant of
Options called for by Section 5 above in 2001.
With respect to outstanding Options, the Plan
shall terminate on the date on which all
outstanding Options have expired or terminated.
* * * *
Certified True and Correct Copy of the Plan as Amended
Through April 28, 1998.
Date: _______________________ By: /s/ John R. Gailey III
------------------------------
Vice President,
General Counsel and Secretary
Exhibit 10 (b)
April 28, 1998
[NAME]
[ADDRESS]
Dear _____:
The Board of Directors (the "Board") of the Company and
the Compensation Committee (the "Committee") of the Board
have determined that it is in the best interests of the
Company and its shareholders for the Company to make the
following arrangements with you. These arrangements provide
for compensation to be paid to you in the event you should
leave the employment of the Company under the circumstances
described in this letter.
* * * * *
1. Background. The Board and the Committee recognize that
it is of the utmost importance to the Company to
provide for continuity of management and its
uninterrupted attention and dedication to the affairs
of the Company. Recent experience has indicated that
certain acquisitions or sales of assets or capital
stock of a company are unsettling to the management of
a corporation. Therefore, these arrangements are being
made to help assure the continuing dedication by you to
your duties to the Company notwithstanding the
occurrence of such acquisitions or sales of assets or
capital stock of the Company.
In particular, the Board believes it is important,
should the Company receive such proposals or
contemplate such actions, to enable you, without being
influenced by the uncertainties of your own situation,
to assess such proposals or actions and advise the
Board whether they are in the best interests of the
Company and its shareholders and to take such other
action regarding such actions or proposals as the Board
may determine to be appropriate. The Board also wishes
to demonstrate to its management personnel that the
Company is concerned with their welfare and intends to
see that they are treated fairly.
In view of the foregoing, and in consideration of your
continued employment with the Company, the Company
agrees with you as follows:
<PAGE>
Definitions. As used in this Agreement, the
following terms will have the meanings described
below:
a) "Change in Control" shall mean a change in
control of a nature that would be required to
be reported in response to Item 1 of the
Current Report on Form 8-K as in effect on
April 28, 1998 pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934,
as amended (the "Act"), provided, that,
without limitation, a Change in Control shall
be deemed to have occurred if:
i) any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Act),
other than:
a) the Company,
b) any Person who on the date hereof
is a Employee or officer of the
Company, or
c) a trustee or fiduciary holding
securities under an employee
benefit plan of the Company,
ii) is or becomes the "beneficial owner,"
(as defined in Rule 13-d3 under the
Act), directly or indirectly, of
securities of the Company representing
more than 50% of the combined voting
power of the Company's then outstanding
securities; or
iii) during any period of two consecutive
years during the term of this Agreement,
individuals who at the beginning of such
period constitute the board of Employees
of the Company cease for any reason to
constitute at least a majority thereof,
unless the election of each Employee who
was not a Employee at the beginning of
such period has been approved in advance
by Employees representing at least two-
thirds of the Employees then in office
who were Employees at the beginning of
the period; or
iv) the shareholders of the Company approve:
(A) a plan of complete liquidation of
<PAGE>
the Company; or (B) an agreement for the
sale or disposition of all or
substantially all of the Company's
assets; or (C) a merger, consolidation,
or reorganization of the Company with or
involving any other corporation, other
than a merger, consolidation, or
reorganization that would result in the
voting securities of the Company
outstanding immediately prior thereto
continuing to represent (either by
remaining outstanding or by being
converted into voting securities of the
surviving entity), at least fifty
percent (50%) of the combined voting
power of the voting securities of the
Company (or the surviving entity, or an
entity which as a result of such
transaction owns the Company or all or
substantially all of the Company's
assets either directly or through one or
more subsidiaries) outstanding
immediately after such merger,
consolidation, or reorganization.
b) "Constructive Termination" will mean the
occurrence of any of the following events
(provided that you have not agreed in writing
that any of these events will apply to you):
i) the Company requires you to assume any
duties inconsistent with, or the Company
makes a significant diminution or
reduction in the nature or scope of your
authority or duties from, those assigned
to or held by you on the date of this
Agreement;
ii) a material reduction in your annual
salary or incentive compensation
opportunities;
iii) a relocation of your site of employment
to a location more than 50 miles from
your site of employment on the date of
this Agreement;
iv) the Company fails to provide you with a
reasonable number of paid vacation days
at least equal to the number of paid
vacation days to which you were entitled
in the last full calendar year prior to
the execution of this Agreement;
<PAGE>
v) the Company fails to provide you with
substantially the same fringe benefits
that were provided to you immediately
prior to the date of this Agreement, or
with a package of fringe benefits that,
though one or more of such benefits may
vary from those in effect immediately
prior to the execution of this
Agreement, is substantially at least as
beneficial to you in all material
respects as such prior fringe benefits
taken as a whole; or
vi) a successor of the Company does not
assume the Company's obligations under
this Agreement, expressly or as a matter
of law.
vii) Notwithstanding the foregoing, no
Constructive Termination will be deemed
to have occurred under any of the
following circumstances:
a) You will have consented in writing
or given a written waiver to the
occurrence of any of the events
enumerated in clauses (i) through
(vi) above;
b) You will have failed to give the
Company written notice stating your
intention to claim Constructive
Termination and the basis for that
claim at least 10 days in advance
of the effective date of the
resignation; or
c) The event constituting a
Constructive Termination has been
cured or reserved by the Company
prior to the effective date of your
resignation.
c) "Retirement Plan" will mean The West Company,
Incorporated Employees Retirement Plan, and
any successor plan thereto.
d) "Savings/Deferred Comp Plan" will mean The
West Company Salaried Employees Savings
Plan, The West Company Non-Qualified Deferred
Compensation Plan for Designated Executive
Officers and any other similar plan
established from time to time that may allow
executive officers to defer taxation of
compensation.
<PAGE>
3. Termination following a Change in Control. You will be
entitled to the benefits specified in Section 4 if, at
any time within two years after a Change in Control has
occurred, your employment by the Company is terminated
a) by the Company, other than by reason of death,
disability, continuous willful misconduct to the
detriment of the Company, or retirement at your
normal retirement date under the Retirement Plan,
or
b) as a result of your resignation within 30 days
following your Constructive Termination. You will
not be entitled to the benefits specified in
Section 4 if your employment terminates for any
other reason (including your voluntary resignation
after a Change in Control but without a
Constructive Termination) or if, at any time
thereafter, you are in breach of any of your
obligations under this Agreement.
4. Benefits Payable upon Termination of Employment. Upon
termination of employment as set forth in Section 3,
you will be entitled to the following benefits:
a) Severance Compensation. You will be entitled to
severance compensation in an amount equal to three
times the sum of
i) your highest annual base salary rate in
effect during the year of the termination of
your employment, plus
ii) the annual bonus paid or payable for the
fiscal year immediately preceding a Change in
Control or upon the termination of your
employment (whichever amount is greater);
provided, however, that if at any time before the third
anniversary of the termination of your employment, you
either (x) elect retirement under the Retirement Plan,
or (y) could have been compelled to retire under the
Retirement Plan if you had remained employed by the
Company, your severance compensation under this
paragraph 4(a) will be reduced by an amount equal to
the product obtained by multiplying such severance
compensation by a fraction of the numerator of which is
the number of days elapsed from the date of termination
of your employment until the date on which either of
the events described in clauses (x) or (y) first
occurs, and the denominator of which is 1095.
<PAGE>
The severance compensation paid hereunder will not be
reduced to the extent of any other compensation for
your services which you receive or are entitled to
receive from any other employment consistent with the
terms of this Agreement.
b) Equivalent of Vested Savings/Deferred Comp Plan
Benefit. The Company will pay to you the
difference, if any, between
i) the benefit you would be entitled to receive
under the Savings/Deferred Comp Plan if the
Company's contributions to the
Savings/Deferred Comp Plan were fully vested
upon the termination of your employment and
ii) the benefit you are entitled to receive under
the terms of the Savings/Deferred Comp Plan
upon termination of your employment.
Any such benefit will be payable at such time and in
such manner as benefits are payable to you under the
Savings/Deferred Comp Plan.
c) Unvested Shares. All shares of the Company s
stock awarded to you pursuant to any Company
benefit plan, but which are unvested, will vest
immediately upon termination of your employment.
The provisions of this Section 4c. will supersede
the terms of any stock award made to you under any
such plan to the extent there is an inconsistency
between the two.
d) Employee and Executive Benefits. You will be
entitled to a continuation of all hospital, major
medical, medical, dental, life and other insurance
benefits not otherwise addressed in this Agreement
in the same manner and amount to which you were
entitled on the date of a Change in Control or on
the date of Constructive Termination of your
employment (whichever benefits are more favorable
to you) until the earlier of
i) a period of 36 months after termination of
your employment,
ii) your retirement under the Retirement Plan, or
iii) your eligibility for similar benefits with a
new employer
Assistance in finding new employment will be made
available to you by the Company if you so request.
Upon termination of your employment, Company cars must
be returned to the Company.
<PAGE>
e) Certain Reduction of Payments. It is possible
that if you were to receive the full amount of the
payments or benefits described in the previous
paragraphs of this Section 4, some of those
payments or benefits could be subject to a "golden
parachute" excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended (the
"Excise Tax").
Furthermore, such payments or benefits could cause
other payments made or benefits provided to you
outside this Agreement to be subject to the Excise
Tax. Because payments or benefits subject to the
Excise Tax are not deductible by the Company,
paying benefits subject to the Excise Tax can
substantially reduce the benefits you actually
receive while increasing the cost of those
benefits.
Accordingly, any payments or other benefits to
which you become entitled because of a Change in
Control, whether under this Agreement or
otherwise, will be reduced, but only to the extent
necessary to insure that none of those payments is
an "excess parachute payment" within the meaning
of Section 280G(b) of the Internal Revenue Code.
The amount of any necessary reduction will be
determined by the accounting firm that was the
Company's independent auditors immediately prior
to a Change in Control (or in default thereof, an
accounting firm mutually agreed upon by the
Company and you), within 15 days after your
termination of employment. All determinations by
the accounting firm will be binding on you and the
Company.
Any such reduction will be made (i) first to
payments of severance compensation under Section
4(a) made at the most distant point in time
following your termination of employment, and (ii)
then, to the extent practicable, to other payments
or benefits (whether or not under this Agreement)
made at the most distant point in time following
your termination of employment. Only payments or
benefits that would otherwise be subject to the
Excise Tax will be reduced.
The costs of the accounting firm's supplying the
calculations and determinations described in this
Section 4(e) will be borne solely by the Company.
<PAGE>
5. Payment of Severance Compensation. The severance
compensation set forth in Section 4a. will be payable
in 36 equal monthly installments commencing on the
first day of the month following the month in which
your employment terminates. However, you may elect in
writing, in accordance with the provisions of this
Section, to receive your severance compensation in a
lump sum at a later time or in installments in amounts
and at times elected by you, but your election will not
entitle you to receive severance compensation sooner
than permitted by the preceding sentence.
You must elect to receive amounts in installments or to
defer payments by filing a written election with the
Company. Such election must specify the time at which
payments are to be made and the amounts of such
payments. Your election to receive installment
payments or to defer payments will not be valid unless
it is made prior to the time you are entitled to
receive any payments under this Agreement. The last
such election in effect on the day before a termination
of employment will be controlling. No election may be
made on or after termination of employment.
The payment of deferred amounts must commence no
earlier than the first business day of the calendar
year following the termination of your employment and
no later than the third calendar year following the
attainment of normal retirement age under the
Retirement Plan.
6. Non-Disclosure and Confidentiality. You agree that you
will keep secret and maintain in confidence all
confidential information of the Company and will not
use such information other than for the Company's
benefit or disclose such information to anyone outside
of the Company, either during or after your employment
with the Company.
You also will promptly deliver to the Company on the
termination of your employment with the Company, or at
any time the Company requests, all memoranda, notes,
records and other documents (and all copies thereof)
relating to the Company's business or confidential
matters which you then have or control.
All inventions, improvements, new ideas and techniques
which relate to the Company's business which you make
or conceive during your employment with the Company or
within six months thereafter will be the Company's
property. Without additional compensation to you, you
will promptly inform the Company of such inventions,
improvements, ideas and techniques, and will assist the
Company in preserving them and will not disclose them
to anyone else without the Company's consent.
<PAGE>
You understand that, as used in this Section, the term
"confidential information of the Company" includes all
information of a technical, commercial or other nature
of or about the Company (such as formulae, trade
secrets, customer lists and know-how) not made
available to the general public.
7. Legal Fees. The Company will pay all legal fees and
expenses which you may incur as a result of the
Company's contesting the validity or enforceability of
this Agreement.
8. Payments Final. In the event of a termination of your
employment under the circumstances described in this
Agreement, the arrangements provided for by this
Agreement, or any other agreement between the Company
and you in effect at that time and by any other
applicable plan of the Company in which you then
participate will constitute the entire obligation of
the Company to you, and performance of that obligation
will constitute full settlement of any claim that you
might otherwise assert against the Company on account
of such termination.
The Company's obligation to pay you under this
Agreement will be absolute and unconditional and will
not be affected by any circumstance, including without
limitation, any set-off, counterclaim, defense or other
rights the Company may have against you or anyone else
as long as you are not in beach of your obligations
under this Agreement.
9. Non-Competition. In view of the importance to the
Company of your continued employment and the harm that
the Company would suffer if a competitor obtained your
services, you will not, during the term of your
employment by the Company and for a period of one year
thereafter, whether or not a Change in Control occurs,
directly or indirectly, either alone or with others,
own, manage, operate, or control any business, or be
employed by any company in that part of its business,
which directly or indirectly competes with the Company,
its subsidiaries or affiliates in any part of the
United States.
The foregoing will not prevent your owning any security
registered under the Securities Exchange Act of 1934.
It is understood that a business competes with the
Company if it manufactures competitive products for
itself or for sale to others.
10. Duration of Agreement. This Agreement may not be
terminated by either party, except that (a) this
Agreement may be terminated at any time by the mutual
<PAGE>
written consent of you and the Company, and (b) the
Company may also terminate this Agreement at the end of
each successive two-year period commencing on the date
of this Agreement. The Company may terminate this
Agreement under clause (b) of this Section 10 by giving
you written notice at least one year in advance of such
termination, except that such termination and written
notice will not be effective unless you will be
employed by the Company on the termination date.
11. Miscellaneous.
a) In consideration for the benefit of having the
protection afforded by this Agreement, you agree
that the provisions of Sections 6 and 9 of this
Agreement apply to you, and you will be bound by
them, whether or not a Change in Control occurs or
you actually receive the benefits specified in
Section 4.
b) This Agreement will be binding upon and inure to
the benefit of you, your personal representatives
and heirs and the Company and any successor of the
Company, but neither this Agreement nor any rights
arising hereunder may be assigned or pledged by
you.
c) The invalidity or unenforceability in any respect
of any provision of this Agreement will not affect
the validity or enforceability of such provision
in any other respect or the validity or
enforceability of any other provision.
d) This Agreement will be governed and construed in
accordance with the laws of the Commonwealth of
Pennsylvania.
e) This Agreement will constitute the entire
agreement and understanding between the Company
and you with respect to the subject matter hereof
and merges and supersedes all prior discussions,
agreements and understandings between the Company
and you with respect to such matters.
12. This Agreement amends, restates and supersedes the
agreement between you and the Company dated as of
_________ , (the Prior Agreement ), and the Prior
Agreement shall be null and void and have no further
effect.
If you are in agreement with the foregoing, please so
indicate by signing and returning to the Company the
enclosed copy of this letter, whereupon this letter will
constitute a binding agreement between you and the Company
and our mutual intention to be legally bound as of the date
<PAGE>
and year first written above.
Very truly yours,
THE WEST COMPANY, INCORPORATED
By:_________________________________
William G. Little
Chairman of the Board,
President and Chief Executive Officer
Accepted and agreed to:
______________________________
[NAME]
Exhibit 10 (c)
SCHEDULE OF AGREEMENTS WITH EXECUTIVE OFFICERS
----------------------------------------------
The Company has entered into agreements with the
following individuals. Such agreements are substantially
identical in all material respects to the form of agreement set
forth in Exhibit (10) (h).
George R. Bennyhoff
Jerry E. Dorsey
Steven A. Ellers
John R. Gailey III
Stephen M. Heumann
Lawrence P. Higgins
Donald E. Morel Jr.
Anna Mae Papso
Exhibit 10 (d)
THE WEST COMPANY, INCORPORATED
AMENDMENT TO THE RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
The West Company, Incorporated (the Company ) hereby
adopts effective as of April 28, 1998 this Amendment (this
Amendment ) to the Company s Retirement Plan for Non-
Employee Directors (the Plan ).
The Plan is hereby amended:
1. to delete the existing Paragraph 11.1 and add a new
Paragraph 11.1, which shall read in its entirety as follows:
Notwithstanding any other provision of this
Plan, in the event of a Change in Control (as
defined herein), each Director in service on the
Board immediately prior to the effective time of
the Change in Control shall, at the Director s
option, be entitled to (a) the maximum benefits
available to any Director under this Plan, without
regard to the length of service by that Director,
or (b) a lump sum payment in the amount of the
present value of an annuity equal to one hundred
percent (100%) of the Director s Base Retainer
paid annually for fifteen years, such lump sum
payment to be in lieu of any payment under
Articles V or VI.
2. to delete the existing Paragraph 11.2 and add a new
Paragraph 11.2, which shall read in its entirety as follows:
Within sixty (60) days following a Change in
Control as defined herein, a Participant or
surviving spouse who is already receiving payments
under the Plan at the time of a Change in Control
will be paid a lump sum equal to the present value
of the remaining annuity payments as of the date
of Change in Control.
3. to delete the existing Paragraph 11.3 and add a new
Paragraph 11.3, which shall read in its entirety as follows:
A "Change in Control" shall mean a change in
control of a nature that would be required to be
reported in response to Item 1 of the Current
Report on Form 8-K as in effect on April 28, 1998
pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Act"),
provided, that, without limitation, a Change in
Control shall be deemed to have occurred if:
(a) any "Person" (as such term is used in
<PAGE>
Sections 13(d) and 14(d) of the Act), other than:
(i) the Company,
(ii) any Person who on the date hereof is a
director or officer of the Company, or
(iii) a trustee or fiduciary holding securities
under an employee benefit plan of the
Company,
(b) is or becomes the "beneficial owner,"
(as defined in Rule 13-d3 under the Act), directly
or indirectly, of securities of the Company
representing more than 50% of the combined voting
power of the Company s then outstanding
securities; or
(c) during any period of two consecutive
years during the term of this Agreement,
individuals who at the beginning of such period
constitute the board of directors of the Company
cease for any reason to constitute at least a
majority thereof, unless the election of each
director who was not a director at the beginning
of such period has been approved in advance by
directors representing at least two-thirds of the
directors then in office who were directors at the
beginning of the period; or
(d) the shareholders of the Company approve:
(A) a plan of complete liquidation of the Company;
or (B) an agreement for the sale or disposition of
all or substantially all of the Company's assets;
or (C) a merger, consolidation, or reorganization
of the Company with or involving any other
corporation, other than a merger, consolidation,
or reorganization that would result in the voting
securities of the Company outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity), at
least fifty percent (50%) of the combined voting
power of the voting securities of the Company (or
the surviving entity, or an entity which as a
result of such transaction owns the Company or all
or substantially all of the Company's assets
either directly or through one or more
subsidiaries) outstanding immediately after such
merger, consolidation, or reorganization.
4. to delete the existing Paragraphs 11.4 and 11.5.
<PAGE>
5. to renumber existing Paragraphs 11.6 and 11.7 as
Paragraphs 11.4 and 11.5, respectively.
6. Except as otherwise set forth in Paragraphs 1 through 6
of this Amendment, the Plan shall remain in full force
and effect in accordance with its terms.
THE WEST COMPANY, INCORPORATED
By: _______________________________
John R. Gailey III, Secretary
Exhibit 10 (e)
THE WEST COMPANY, INCORPORATED
AMENDMENT NO. 2 TO NON-QUALIFIED QUALIFIED DEFERRED COMPENSATION
PLAN FOR DESIGNATED EXECUTIVE OFFICERS
The West Company, Incorporated (the " Company") hereby adopts effective as
of April 28, 1998 this Amendment No. 2 (this " Amendment") to the
Non-Qualified Deferred Compensation Plan For Designated Executive Officers
(the " Plan")
1. The Plan is hereby amended to delete the existing Paragraph 6(b) and
to add a new Paragraph 6(b), which shall read in its entirety as follows:
6....
(b) (i) Notwithstanding Paragraph 6(a) above, an Executive
Officer shall immediately be 100% vested in matching contributions made
pursuant to Paragraph 4 after a Change in Control, as defined below.
(ii) A "Change in Control" shall mean a change in control
of a nature that would be required to be reported in response to Item 1 of
the Current Report on Form 8-K as in effect on April 28, 1998 pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the Act ), provided, that, without limitation, a Change in Control
shall be deemed to have occurred if:
(A) any Person (as such term is used in Sections
13(d) and 14(d) of the Act), other than:
(1) the Company,
(2) any Person who on the date hereof is
a director or officer of the Company, or
(3) a trustee or fiduciary holding
securities under an employee benefit
plan of the Company,
(B) is or becomes the "beneficial owner,"
(as defined in Rule 13-d3 under the Act), directly or indirectly, of
securities of the Company representing more than 50% of the combined
voting power of the Company's then outstanding securities; or
(C) during any period of two consecutive years
during the term of this Agreement, individuals who at the beginning of
such period constitute the board of directors of the Company cease for
any reason to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the
beginning of the period; or
(D) the shareholders of the Company approve:
(A) a plan of complete liquidation of the Company; or (B) an agreement
for the sale or disposition of all or substantially all of the Company's
assets; or (C) a merger, consolidation, or reorganization of the Company
with or involving any other corporation, other than a merger, consolidation,
or reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), at least
<PAGE>
fifty percent (50%) of the combined voting power of the voting securities
of the Company (or the surviving entity, or an entity which as a result
of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
outstanding immediately after such merger, consolidation, or reorganization.
2. Except as otherwise set forth in Paragraph 1 of this Amendment,
the Plan shall remain in full force and effect in accordance with its terms.
THE WEST COMPANY, INCORPORATED
By: _______________________________
John R. Gailey III, Secretary
Exhibit 10 (f)
THE WEST COMPANY, INCORPORATED
AMENDMENT NO. 1 TO NON-QUALIFIED QUALIFIED DEFERRED
COMPENSATION PLAN FOR OUTSIDE DIRECTORS
The West Company, Incorporated (the "Company") hereby adopts effective
as of April 28, 1998 this Amendment No. 1 (this "Amendment") to the
Non-Qualified Deferred Compensation Plan For Outside Directors (the "Plan")
1. The Plan is hereby amended to add a new Paragraph 5(c), which shall
read in its entirety as follows:
5....
(c) (i) In the event of a Change in Control (as defined
herein), the full value of any Director's "B" Account shall be credited to
an "A" Account for that Director. The value of the "B" Account shall be
determined using the Fair Market Value (as defined in Paragraph 5(a)(ii)
hereof) of the Company's common stock on the day before the effective date
of the Change in Control.
(ii) A "Change in Control" shall mean a change in
control of a nature that would be required to be reported in response to
Item 1 of the Current Report on Form 8-K as in effect on April 28, 1998
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Act"), provided, that, without limitation, a Change in
Control shall be deemed to have occurred if:
(A) any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Act), other than:
(1) the Company,
(2) any Person who on the date hereof
is a director or officer of the
Company, or
(3) a trustee or fiduciary holding
securities under an employee
benefit plan of the Company,
(B) is or becomes the "beneficial owner,"
(as defined in Rule 13-d3 under the Act), directly or indirectly, of
securities of the Company representing more than 50% of the combined voting
power of the Company s then outstanding securities; or
(C) during any period of two consecutive years
during the term of this Agreement, individuals who at the beginning of
such period constitute the board of directors of the Company cease for any
reason to constitute at least a majority thereof, unless the election of
each director who was not a director at the beginning of such period has
been approved in advance by directors representing at least two-thirds of
the directors then in office who were directors at the beginning of the
period; or
(D) the shareholders of the Company approve:
(A) a plan of complete liquidation of the Company; or (B) an agreement for
the sale or disposition of all or substantially all of the Company' assets;
or (C) a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation, or
reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), at least fifty percent (50%) of the combined voting
power of the voting securities of the Company (or the surviving entity, or
an entity which as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or through
one or more subsidiaries) outstanding immediately after such merger,
consolidation, or reorganization.
<PAGE>
2. Except as otherwise set forth in Paragraph 1 of this Amendment,
the Plan shall remain in full force and effect in accordance with its terms.
THE WEST COMPANY, INCORPORATED
By: _______________________________
John R. Gailey III, Secretary
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